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MIL-OSI: Heartland Financial USA, Inc. (“HTLF”) Reports Quarterly Results as of September 30, 2024

Source: GlobeNewswire (MIL-OSI)

Third Quarter Highlights

Quarterly net income available to common stockholders of $62.1 million or $1.44 per common share
Adjusted earnings available to common stockholders of $50.6 million or $1.17 adjusted diluted earnings per common share (non-GAAP), which excludes:
- Gain on sale, net, of $29.7 million due to the sale of Rocky Mountain Bank branches in Montana.
- Loss on security sales of $9.5 million.
- Loss on fixed assets of $2.9 million due to branch closures and write-downs on properties listed for sale.
Common equity to total assets increased to 11.11%; while the tangible common equity ratio (non-GAAP) improved 86 basis points to 8.14%.
Net interest margin, full tax-equivalent (non-GAAP) increased to 3.78% for the quarter ended September 30, 2024 up from 3.73% for the quarter ended June 30, 2024.
Nonperforming loans were $69.9 million or 0.61% of total loans, a decrease of $33.8 million or 33% from the quarter ended June 30, 2024.
- Charge-offs of $32.1 million, of which the majority have been reserved for in prior periods, were recorded for the third quarter.

	For the Quarter Ended									For the Nine Months Ended September 30,
	9/30/2024			6/30/2024			9/30/2023			2024			2023
Earnings Summary:
Net income/(loss) available to common stockholders (in millions)	$	62.1		$	37.7		$	46.1		$	149.6		$	144.2
Diluted earnings/(loss) per common share		1.44			0.88			1.08			3.47			3.37
Annualized return on average assets		1.38	%		0.84	%		0.94	%		1.10	%		1.00	%
Annualized return on average common equity		12.60			8.14			10.47			10.59			11.28
Annualized return on average tangible common equity (non-GAAP)⁽¹⁾		18.32			12.28			16.32			15.77			17.82
Net interest margin		3.73			3.68			3.14			3.65			3.23
Net interest margin, fully tax-equivalent (non-GAAP)⁽¹⁾		3.78			3.73			3.18			3.69			3.27
Efficiency ratio		48.58			65.69			63.77			58.94			61.86
Adjusted efficiency ratio, fully-tax equivalent (non-GAAP)⁽¹⁾		57.98			57.73			59.95			58.16			58.98

Adjusted Earnings Summary (1):
Adjusted earnings available to common stockholders (in millions)	$	50.6		$	49.6		$	48.1		$	152.7		$	148.3
Adjusted diluted earnings per common share		1.17			1.15			1.12			3.54			3.47
Adjusted annualized return on average assets		1.14	%		1.09	%		0.98	%		1.12	%		1.02	%
Adjusted annualized return on average common equity		10.27			10.71			10.92			10.81			11.60
Adjusted annualized return on average tangible common equity		14.98			16.05			17.02			16.09			18.31

(1) Refer to “Non-GAAP Measures” in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to the financial tables for reconciliations to the most directly comparable GAAP measures.

“HTLF delivered a solid third quarter. Net interest margin increased as we continue to pay down high cost wholesale deposits. Our tangible common equity ratio improved to 8.14%. In July we completed the strategic sale of Rocky Mountain Bank in Montana, resulting in a net gain of $29.7 million. We continue to work closely with our partners at UMB on integration planning for our two companies and we’re excited about closing the transaction, expected in Q1 2025.”

Bruce K. Lee, President and Chief Executive Officer, HTLF

DENVER, Oct. 29, 2024 (GLOBE NEWSWIRE) — Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023:

Net income available to common stockholders of $62.1 million compared to $46.1 million, an increase of $16.1 million or 35%.
Earnings per diluted common share of $1.44 compared to $1.08, an increase of $0.36 or 33%.
Adjusted earnings available to common stockholders⁽¹⁾ of $50.6 million or $1.17 per diluted common share compared to $48.1 million or $1.12 per diluted common share, which excludes:
- Gain on sale, net, of $29.7 million due to the sale of Rocky Mountain Bank branches in Montana.
- Loss on security sales of $9.5 million.
- Loss on fixed assets of $2.9 million due to branch closures and write-downs on properties listed for sale.
Net interest income of $157.9 million compared to $145.8 million, an increase of $12.1 million or 8%.
Annualized return on average assets of 1.38% compared to 0.94%. Adjusted annualized return on average assets⁽¹⁾ of 1.14% compared to 0.98%.
Annualized return on average common equity of 12.60% compared to 10.47%. Adjusted annualized return on average common equity⁽¹⁾ of 10.27% compared to 10.92%.
Annualized return on average tangible common equity⁽¹⁾ of 18.32% compared to 16.32%. Adjusted annualized return on average tangible common equity⁽¹⁾ of 14.98% compared to 17.02%.

Rocky Mountain Bank Sale

HTLF Bank closed on the sale of the Rocky Mountain Bank branches in Montana in mid-July to two purchasers, which included loans of $343.8 million, deposits of $531.9 million and fixed assets of $13.8 million. The gain on sale, net, of $29.7 million was realized in the third quarter of 2024.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.73% (3.78% on a fully tax-equivalent basis, non-GAAP) for the third quarter of 2024 compared to 3.68% (3.73% on a fully tax-equivalent basis, non-GAAP) for the second quarter of 2024, and 3.14% (3.18% on a fully tax-equivalent basis, non-GAAP) for the third quarter of 2023.

Total interest income and average earning asset changes for the third quarter of 2024 compared to the third quarter of 2023 were:

Total interest income was $253.8 million compared to $245.4 million, an increase of $8.4 million or 3%, primarily attributable to an increase in yields on average earning assets. During the third quarter of 2024, HTLF recorded $5.3 million in additional interest income for a security that paid off.
Total interest income on a tax-equivalent basis (non-GAAP) was $255.8 million, an increase of $8.2 million or 3%, from $247.6 million. Subsequent to September 30, 2024, the fair value hedges were terminated in favorable market conditions in early October. HTLF recorded $10.3 million of interest income associated with the fair value hedges in the third quarter of 2024 in comparison to $5.6 million in the third quarter of 2023. As a result of the fair value hedge terminations, no additional interest income will be recorded.
Average earning assets decreased $1.60 billion or 9% to $16.84 billion compared to $18.44 billion, primarily due to the sale of $865.4 million of securities during the fourth quarter of 2023, $108.4 million of securities sold during the second quarter of 2024, and $40.3 million of securities sold during the third quarter of 2024. The proceeds were utilized to pay down high-cost wholesale deposits and borrowings.
The average rate on earning assets increased 71 basis points to 6.04% from 5.33%, primarily due to recent interest rate increases on earning assets.

Total interest expense and average interest-bearing liability changes for the third quarter of 2024 compared to the third quarter of 2023 were:

Total interest expense was $95.9 million, a decrease of $3.8 million from $99.7 million, primarily due to a decrease in average interest-bearing liabilities.
The average interest rate paid on interest-bearing liabilities increased 17 basis points to 3.18% from 3.01%.
Average interest-bearing deposits decreased $1.65 billion or 13% to $11.03 billion from $12.68 billion.
The average interest rate paid on interest-bearing deposits decreased 4 basis points to 2.86% from 2.90%.
Average borrowings and term debt increased $478.2 million to $953.9 million from $475.7 million, and the average interest rate paid on borrowings decreased 40 basis points to 5.39% from 5.78%.

Net interest income changes for the third quarter of 2024 compared to the third quarter of 2023 were:

Net interest income totaled $157.9 million compared to $145.8 million, an increase of $12.1 million or 8%.
Net interest income on a tax-equivalent basis (non-GAAP) totaled $159.9 million compared to $147.9 million, an increase of $12.0 million or 8%.

Noninterest Income and Noninterest Expense

Total noninterest income was $19.0 million during the third quarter of 2024 compared to $28.4 million during the third quarter of 2023, a decrease of $9.4 million or 33%. Significant changes within the noninterest income category for the third quarter of 2024 compared to the third quarter of 2023 were:

Service charges and fees decreased $1.5 million or 8% to $17.1 million from $18.6 million, primarily attributable to a decrease in consumer NSF and overdraft fees. In the fourth quarter of 2023, HTLF instituted a new fee policy across our single charter customer base in response to industry changes related to consumer overdraft fees.
Net security losses increased $9.4 million to $9.5 million compared to net security losses of $114,000.
Net gains on sales of loans held for sale decreased to $0 from $905,000, due to HTLF ceasing originations of residential mortgage loans to be sold to the secondary market.
Other noninterest income increased $957,000 to $1.6 million from $619,000, primarily due to an increase in deferred compensation income of $1.0 million to $1.5 million from $433,000.

Total noninterest expense was $85.9 million during the third quarter of 2024 compared to $111.1 million during the third quarter of 2023, a decrease of $25.1 million or 23%. Significant changes within the noninterest expense category for the third quarter of 2024 compared to the third quarter of 2023 were:

Salaries and employee benefits totaled $62.7 million compared to $62.3 million, an increase of $480,000 or 1%. The increase was attributable to higher benefit costs including incentive compensation and benefit expenses partially offset by a reduction of full-time equivalent employees. Full-time equivalent employees totaled 1,725 compared to 1,965, a decrease of 240 or 12%.
Professional fees totaled $17.4 million compared to $13.6 million, an increase of $3.8 million or 28%, primarily due to an increase legal expenses, including those associated with special asset loans.
Gain on sale of assets, net, totaled $26.4 million compared to a loss on sale of assets of $108,000. As discussed earlier, Rocky Mountain Bank, a division of HTLF Bank, was sold during the third quarter of 2024 which generated a gain on sale, net, of $29.7 million.

The effective tax rate was 24.25% for the third quarter of 2024 compared to 21.89% for third quarter of 2023. The following items impacted the third quarter 2024 and 2023 tax calculations:

Various tax credits of $629,000 compared to $1.6 million.
Tax-exempt interest income as a percentage of pre-tax income of 8.92% compared to 13.14%.
Tax benefit of $140,000 compared to a tax expense of $41,000 resulting from the vesting of restricted stock units.
Tax expense of $1.1 million compared to $1.6 million resulting from the disallowed interest expense related to tax-exempt loans and securities.

Total Assets, Total Loans and Total Deposits

Total assets were $18.27 billion at September 30, 2024, compared to $18.81 billion at June 30, 2024, and $19.41 billion at December 31, 2023. Total assets decreased $540.1 million or 3% during the third quarter of 2024 and $1.14 billion or 6% since year-end 2023. Securities represented 27% and 29% of total assets at September 30, 2024, and December 31, 2023, respectively.

Total loans held to maturity were $11.44 billion at September 30, 2024, compared to $11.61 billion at June 30, 2024, and $12.07 billion at December 31, 2023. Loans decreased $167.4 million or 1% during the third quarter of 2024 and $627.7 million or 5% since year-end 2023. Excluding the impact of Rocky Mountain Bank, loans held to maturity decreased $172.4 million or 1% during the third quarter of 2024 and decreased $284.0 million or 2% since year-end 2023.

Significant changes by loan category at September 30, 2024 compared to June 30, 2024 included:

Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, decreased $262.7 million or 4% to $5.99 billion compared to $6.26 billion. Excluding the impact of Rocky Mountain Bank, commercial and business lending decreased $119.4 million or 2%.
Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, decreased $3.3 million, or less than 1%, to $3.58 billion compared to $3.58 billion. Excluding the impact of Rocky Mountain Bank, commercial real estate lending increased $67.0 million or 2%.
Agricultural and agricultural real estate loans decreased $167.2 million or 19% to $701.2 million compared to $868.4 million. Excluding the impact of Rocky Mountain Bank, agricultural and agricultural real estate loans decreased $99.9 million or 12%.
Residential mortgage loans decreased $56.7 million or 7% to $708.0 million compared to $764.7 million. Excluding the impact of Rocky Mountain Bank, residential mortgage loans decreased $25.7 million or 3%.

Significant changes by loan category at September 30, 2024 compared to December 31, 2023 included:

Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, decreased $298.6 million or 5% to $5.99 billion compared to $6.29 billion. Excluding the Rocky Mountain Bank loans sold of $143.3 million, commercial and business lending decreased $155.3 million or 2%.
Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $9.9 million or less than 1% to $3.58 billion compared to $3.57 billion. Excluding the Rocky Mountain Bank loans sold of $70.3 million, commercial real estate lending increased $80.2 million or 2%.
Agricultural and agricultural real estate loans decreased $218.0 million or 24% to $701.2 million compared to $919.2 million. Excluding the Rocky Mountain Bank loans sold of $67.3 million, agricultural and agricultural real estate loans decreased $150.7 million or 16%.
Residential mortgage loans decreased $89.8 million or 11% to $708.0 million compared to $797.8 million. Excluding the Rocky Mountain Bank loans sold of $31.0 million, residential mortgage loans decreased $58.9 million or 7%.

Total deposits were $14.95 billion as of September 30, 2024, compared to $14.96 billion as of June 30, 2024, a decrease of $3.4 million or less than 1%. Total deposits were $14.95 billion as of September 30, 2024, compared to $16.20 billion at December 31, 2023, which was a decrease of $1.25 billion or 8%. Excluding the impact of Rocky Mountain Bank, deposits decreased $9.8 million or less than 1% during the third quarter of 2024 and decreased $716.6 million or 4% since year-end 2023.

Total customer deposits were $14.35 billion as of September 30, 2024, compared to $14.13 billion at June 30, 2024, an increase of $217.6 million or 2%. Excluding the impact of Rocky Mountain Bank, customer deposits increased $211.2 million or 1%. Significant customer deposit changes by category at September 30, 2024, compared to June 30, 2024, included:

Customer demand deposits decreased $367.6 million or 8% to $4.01 billion compared to $4.38 billion. Excluding the impact of Rocky Mountain Bank, customer demand deposits decreased $235.9 million or 6%.
Customer savings deposits increased $270.0 million or 3% to $8.71 billion compared to $8.44 billion. Excluding the impact of Rocky Mountain Bank, customer savings deposits increased $554.4 million or 7%.
Customer time deposits decreased $223.1 million or 12% to $1.63 billion compared to $1.85 billion. Excluding the impact of Rocky Mountain Bank, customer time deposits decreased $107.3 million or 6%.

Total customer deposits were $14.35 billion as of September 30, 2024, compared to $14.86 billion at December 31, 2023, a decrease of $505.1 million or 3%. Excluding the Rocky Mountain Bank customer deposits sold of $531.9 million, customer deposits increased $26.7 million. Significant customer deposit changes by category at September 30, 2024, compared to December 31, 2023, included:

Customer demand deposits decreased $491.1 million or 11% to $4.01 billion compared to $4.50 billion. Excluding the Rocky Mountain Bank customer demand deposits sold of $131.7 million, customer demand deposits decreased $359.3 million or 8%.
Customer savings deposits increased $302.0 million or 4% to $8.71 billion compared to $8.41 billion. Excluding the Rocky Mountain Bank customer savings deposits sold of $284.3 million, customer savings deposits increased $586.3 million or 7%.
Customer time deposits decreased $316.0 million or 16% to $1.63 billion compared to $1.94 billion. Excluding the Rocky Mountain Bank customer time deposits sold of $115.8 million, customer time deposits decreased $200.2 million or 10%.

Total wholesale and institutional deposits were $601.9 million as of September 30, 2024, a decrease of $221.0 million or 27% from $822.9 million at June 30, 2024. Significant wholesale and institutional deposit changes by category at September 30, 2024 compared to June 30, 2024 included:

Wholesale and institutional savings deposits decreased $105.7 million or 33% to $213.0 million compared to $318.6 million.
Wholesale time deposits decreased $115.3 million or 23% to $389.0 million compared to $504.3 million.

Total wholesale and institutional deposits were $601.9 million as of September 30, 2024, which was a decrease of $743.4 million or 55% from $1.35 billion at December 31, 2023. Significant wholesale and institutional deposit changes by category at September 30, 2024 compared to December 31, 2023 included:

Wholesale and institutional savings deposits decreased $181.4 million or 46% to $213.0 million compared to $394.4 million.
Wholesale time deposits decreased $562.0 million or 59% to $389.0 million compared to $950.9 million.

Provision and Allowance

Provision and Allowance for Credit Losses for Loans
Provision for credit losses for loans for the third quarter of 2024 was $8.9 million, an increase of $6.2 million from $2.7 million recorded in the third quarter of 2023.

The allowance for credit losses for loans totaled $106.8 million at September 30, 2024 and $122.6 million at December 31, 2023. The following items impacted the allowance for credit losses for loans at September 30, 2024:

Provision expense for the nine months ended September 30, 2024, totaled $22.3 million. Provision expense was primarily impacted in the third quarter of 2024 by a nonperforming food manufacturing syndication loan currently in bankruptcy proceedings. HTLF recorded a charge-off of $19.2 million for this credit during the third quarter of 2024, of which $10.0 million was reserved for in a prior period.
Net charge-offs of $38.0 million, of which the majority have been reserved for in prior periods, were recorded for the first nine months of 2024.

Provision and Allowance for Credit Losses for Unfunded Commitments
The allowance for unfunded commitments decreased $6.0 million or 36% to $10.5 million at September 30, 2024, from $16.5 million at December 31, 2023. The following impacted HTLF’s allowance for credit losses for unfunded commitments during 2024:

Provision benefit for the nine months ended September 30, 2024, totaled $6.0 million.
Reduction of $82.9 million in unfunded commitments for construction loans, which carry the highest loss rate.
Total unfunded commitments decreased $684.5 million or 15% to $3.94 billion at September 30, 2024 compared to $4.63 billion at December 31, 2023.

Total Provision and Allowance for Lending Related Credit Losses
The total provision expense for lending related credit losses was $6.3 million for the third quarter of 2024 compared to $1.5 million for the third quarter of 2023. The total allowance for lending related credit losses was $117.3 million or 1.02% of total loans at September 30, 2024, compared to $139.0 million or 1.15% of total loans as of December 31, 2023.

Nonperforming Assets

Nonperforming assets were $76.8 million or 0.42% of total assets at September 30, 2024, compared to $110.5 million or 0.57% of total assets at December 31, 2023. Nonperforming assets were reduced by charge-offs of $32.1 million and the return to performing status of a $10.4 million owner occupied commercial real estate loan relationship. The reduction was partially offset by the addition of a $10.1 million non-owner commercial real estate loan relationship. Nonperforming loans were $69.9 million or 0.61% of total loans at September 30, 2024, compared to $97.9 million or 0.81% of total loans at December 31, 2023. At September 30, 2024, loans delinquent 30-89 days were 0.26% of total loans compared to 0.09% of total loans at December 31, 2023. The increase in the 30-89 day delinquencies was due to a single $12.8 million real estate construction loan. Other real estate owned, net, decreased $5.7 million or 46% to $6.8 million at September 30, 2024 from $12.5 million at December 31, 2023.

Non-GAAP Financial Measures

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

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

Adjusted earnings available to common stockholders and adjusted diluted earnings per common share, adjust net income for the gain/loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes these measures enhance the comparability net income available to common stockholders as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
Adjusted annualized return on average assets, adjusts net income for the gain/loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
Annualized net interest margin, fully tax-equivalent, adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources.
Adjusted efficiency ratio, fully tax equivalent, expresses noninterest expenses as a percentage of fully tax-equivalent net interest income and noninterest income. This efficiency ratio is presented on a tax-equivalent basis which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities, and tax credit projects. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items as noted in reconciliation contained in this earnings release.
Net interest income, fully tax equivalent, is net income adjusted for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. Net interest margin, fully tax equivalent, is net interest income adjusted for the tax-favored status of certain loans and securities divided by average earning assets.
Tangible book value per common share is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
Tangible common equity ratio is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by total assets less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength.
Adjusted annualized return on average common equity, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
Annualized return on average tangible common equity is net income excluding intangible amortization calculated as (1) net income excluding tax-effected core deposit and customer relationship intangibles amortization, divided by (2) average common equity less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
Adjusted annualized return on average tangible common equity, adjusts net income available to common stockholders for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
Annualized ratio of core expenses to average assets adjusts noninterest expenses to exclude specific items noted in the reconciliation. Management includes this measure as it is considered to be a critical metric to analyze and evaluate controllable expenses related to primary business operations.

About HTLF

Heartland Financial USA, Inc., is a Denver, Colorado-based bank holding company operating under the brand name HTLF, with assets of $18.27 billion as of September 30, 2024. HTLF’s banks serve customers in the West, Southwest and Midwest regions. HTLF is committed to serving the banking needs of privately owned businesses, their owners, executives and employees. Our core commercial business is supported by a strong retail banking operation, in addition to a diversified line of financial services including treasury management, wealth management and investments. Additional information is available at www.htlf.com.

Safe Harbor Statement

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

Any statements about the company’s expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Forward-looking statements may include information about possible or assumed future results of the company’s operations or performance. These forward-looking statements are generally identified by the use of the words such as “believe”, “expect”, “intent”, “anticipate”, “plan”, “intend”, “estimate”, “project”, “may”, “will”, “would”, “could”, “should”, “may”, “view”, “opportunity”, “potential”, or similar or negative expressions of these words or phrases that are used in this release, and future oral and written statements of the company and its management. Although the company may make these statements based on management’s experience, beliefs, expectations, assumptions and best estimate of future events, the ability of the company to predict results or the actual effect or outcomes of plans or strategies is inherently uncertain, and there may be events or factors that management has not anticipated. Therefore, the accuracy and achievement of such forward-looking statements and estimates are subject to a number of risks, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which the company currently believes could have a material effect on its operations and future prospects, are detailed below and in the risk factors in HTLF’s reports filed with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” section under Item 1A of Part I of the company’s Annual Report on Form 10-K for the year ended December 31, 2023 and updates in HTLF’s Forms 10-Q filed thereafter, and include, among others:

Economic and Market Conditions Risks, including risks related to the deterioration of the U.S. economy in general and in the local economies in which HTLF conducts its operations and future civil unrest, natural disasters, pandemics and governmental measures addressing them, climate change and climate-related regulations, persistent inflation, higher interest rates, supply chain issues, labor shortages, terrorist threats or acts of war;
Credit Risks, including risks of increasing credit losses due to deterioration in the financial condition of HTLF’s borrowers, changes in asset and collateral values due to climate and other borrower industry risks, which may impact the provision for credit losses and net charge-offs;
Liquidity and Interest Rate Risks, including the impact of capital market conditions, rising interest rates and changes in monetary policy on our borrowings and net interest income;
Risks related to the planned merger with UMB Financial Corporation (the “Merger”), the fluctuation of the market value of the merger consideration, risks related to combining our businesses, including expenses related to the Merger and integration of the combined entity, risks that the Merger may not occur, and the risk of litigation related to the Merger;
Operational Risks, including processing, information systems, cybersecurity, vendor, business interruption, and fraud risks;
Strategic and External Risks, including economic, political, and competitive forces impacting our business;
Legal, Compliance and Reputational Risks, including regulatory and litigation risks; and
Risks of Owning Stock in HTLF, including stock price volatility and dilution as a result of future equity offerings and acquisitions.

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

-FINANCIAL TABLES FOLLOW-

CONTACT:

Kevin L. Thompson

Executive Vice President

Chief Financial Officer

(563) 589-1994

kthompson@htlf.com

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
		2024			2023			2024			2023
Interest Income
Interest and fees on loans	$	192,506		$	182,394		$	587,328		$	505,136
Interest on securities:
Taxable		51,116			54,800			145,511			168,948
Nontaxable		5,979			6,584			18,062			18,990
Interest on federal funds sold		—			3			—			3
Interest on deposits with other banks and short-term investments		4,193			1,651			10,244			4,833
Total Interest Income		253,794			245,432			761,145			697,910
Interest Expense
Interest on deposits		82,976			92,744			247,609			231,617
Interest on borrowings		7,378			1,167			25,727			4,437
Interest on term debt		5,543			5,765			16,956			16,756
Total Interest Expense		95,897			99,676			290,292			252,810
Net Interest Income		157,897			145,756			470,853			445,100
Provision for credit losses		6,276			1,516			16,270			9,969
Net Interest Income After Provision for Credit Losses		151,621			144,240			454,583			435,131
Noninterest Income
Service charges and fees		17,100			18,553			51,127			55,316
Loan servicing income		111			278			349			1,403
Trust fees		5,272			4,734			15,847			15,810
Brokerage and insurance commissions		853			692			2,501			2,065
Capital markets fees		2,116			1,845			5,003			8,331
Securities gains (losses), net		(9,520	)		(114	)		(19,573	)		(1,532	)
Unrealized gain on equity securities, net		377			13			605			165
Net gains on sale of loans held for sale		—			905			104			3,786
Income on bank owned life insurance		1,107			858			3,610			3,042
Other noninterest income		1,576			619			5,289			2,489
Total Noninterest Income		18,992			28,383			64,862			90,875
Noninterest Expense
Salaries and employee benefits		62,742			62,262			191,817			186,510
Occupancy		6,318			6,438			19,843			20,338
Furniture and equipment		2,062			2,720			6,554			8,698
Professional fees		17,448			13,616			48,351			41,607
FDIC insurance assessments		3,035			3,313			11,344			9,627
Advertising		1,937			1,633			4,663			6,670
Core deposit intangibles amortization		1,345			1,625			4,258			5,128
Other real estate and loan collection expenses, net		395			481			1,422			984
(Gain) loss on sales/valuations of assets, net		(26,419	)		108			(26,012	)		(2,149	)
Acquisition, integration and restructuring costs		2,026			2,429			9,374			5,994
Partnership investment in tax credit projects		222			1,136			938			1,828
Other noninterest expense		14,816			15,292			43,214			46,307
Total Noninterest Expense		85,927			111,053			315,766			331,542
Income Before Income Taxes		84,686			61,570			203,679			194,464
Income taxes		20,533			13,479			48,077			44,181
Net Income/(Loss)		64,153			48,091			155,602			150,283
Preferred dividends		(2,013	)		(2,013	)		(6,038	)		(6,038	)
Net Income/(Loss) Available to Common Stockholders	$	62,140		$	46,078		$	149,564		$	144,245
Earnings/(loss) per common share-diluted	$	1.44		$	1.08		$	3.47		$	3.37
Weighted average shares outstanding-diluted		43,195,257			42,812,563			43,080,422			42,769,872

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Interest Income
Interest and fees on loans	$	192,506		$	199,161		$	195,661		$	192,861		$	182,394
Interest on securities:
Taxable		51,116			47,381			47,014			54,573			54,800
Nontaxable		5,979			6,042			6,041			6,278			6,584
Interest on federal funds sold		—			—			—			—			3
Interest on deposits with other banks and short-term investments		4,193			3,045			3,006			2,174			1,651
Total Interest Income		253,794			255,629			251,722			255,886			245,432
Interest Expense
Interest on deposits		82,976			80,499			84,134			88,071			92,744
Interest on borrowings		7,378			10,825			7,524			5,874			1,167
Interest on term debt		5,543			5,564			5,849			5,804			5,765
Total Interest Expense		95,897			96,888			97,507			99,749			99,676
Net Interest Income		157,897			158,741			154,215			156,137			145,756
Provision for credit losses		6,276			9,008			986			11,738			1,516
Net Interest Income After Provision for Credit Losses		151,621			149,733			153,229			144,399			144,240
Noninterest Income
Service charges and fees		17,100			16,964			17,063			18,708			18,553
Loan servicing income		111			107			131			158			278
Trust fees		5,272			5,532			5,043			4,905			4,734
Brokerage and insurance commissions		853			894			754			729			692
Capital markets fees		2,116			1,996			891			1,676			1,845
Securities gains (losses), net		(9,520	)		(10,111	)		58			(140,007	)		(114	)
Unrealized gain on equity securities, net		377			133			95			75			13
Net gains on sale of loans held for sale		—			—			104			94			905
Income on bank owned life insurance		1,107			1,326			1,177			729			858
Other noninterest income		1,576			1,366			2,347			1,132			619
Total Noninterest Income		18,992			18,207			27,663			(111,801	)		28,383
Noninterest Expense
Salaries and employee benefits		62,742			65,120			63,955			64,766			62,262
Occupancy		6,318			6,262			7,263			6,509			6,438
Furniture and equipment		2,062			2,155			2,337			2,901			2,720
Professional fees		17,448			15,372			15,531			17,060			13,616
FDIC insurance assessments		3,035			3,340			4,969			10,313			3,313
Advertising		1,937			1,368			1,358			1,677			1,633
Core deposit intangibles amortization		1,345			1,421			1,492			1,611			1,625
Other real estate and loan collection expenses, net		395			515			512			505			481
(Gain) loss on sales/valuations of assets, net		(26,419	)		193			214			2,072			108
Acquisition, integration and restructuring costs		2,026			5,973			1,375			4,365			2,429
Partnership investment in tax credit projects		222			222			494			3,573			1,136
Other noninterest expense		14,816			14,303			14,095			14,933			15,292
Total Noninterest Expense		85,927			116,244			113,595			130,285			111,053
Income Before Income Taxes		84,686			51,696			67,297			(97,687	)		61,570
Income taxes		20,533			11,954			15,590			(27,324	)		13,479
Net Income/(Loss)		64,153			39,742			51,707			(70,363	)		48,091
Preferred dividends		(2,013	)		(2,012	)		(2,013	)		(2,012	)		(2,013	)
Net Income/(Loss) Available to Common Stockholders	$	62,140		$	37,730		$	49,694		$	(72,375	)	$	46,078
Earnings/(loss) per common share-diluted	$	1.44		$	0.88		$	1.16		$	(1.69	)	$	1.08
Weighted average shares outstanding-diluted		43,195,257			43,060,354			42,915,768			42,838,405			42,812,563

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Assets
Cash and due from banks	$	228,719		$	226,735		$	208,176		$	275,554		$	248,756
Interest-bearing deposits with other banks and short-term investments		359,675			147,211			236,190			47,459			99,239
Cash and cash equivalents		588,394			373,946			444,366			323,013			347,995
Time deposits in other financial institutions		1,050			1,340			1,240			1,240			1,490
Securities:
Carried at fair value		4,057,335			4,185,054			4,418,222			4,646,891			5,482,687
Held to maturity, at cost		839,623			842,980			841,055			838,241			835,468
Other investments, at cost		69,511			70,684			68,524			91,277			90,001
Loans held for sale		—			348,761			352,744			5,071			6,262
Loans:
Held to maturity		11,440,917			11,608,309			11,644,641			12,068,645			11,872,436
Allowance for credit losses		(106,797	)		(126,861	)		(123,934	)		(122,566	)		(110,208	)
Loans, net		11,334,120			11,481,448			11,520,707			11,946,079			11,762,228
Premises, furniture and equipment, net		155,140			175,953			176,582			181,070			187,436
Goodwill		576,005			576,005			576,005			576,005			576,005
Core deposit intangibles, net		14,157			15,501			16,923			18,415			20,026
Cash surrender value on life insurance		199,998			199,036			197,671			197,085			196,694
Other real estate, net		6,805			7,533			2,590			12,548			14,362
Other assets		430,155			534,429			516,198			574,772			609,139
Total Assets	$	18,272,293		$	18,812,670		$	19,132,827		$	19,411,707		$	20,129,793
Liabilities and Equity
Liabilities
Deposits:
Demand	$	4,009,218		$	4,244,169		$	4,264,390		$	4,500,304		$	4,792,813
Savings		8,926,192			8,470,416			8,669,221			8,805,597			8,754,911
Time		2,017,806			2,242,005			2,368,555			2,895,813			3,553,269
Total deposits		14,953,216			14,956,590			15,302,166			16,201,714			17,100,993
Deposits held for sale		—			538,308			596,328			—			—
Borrowings		546,219			694,909			650,033			622,255			392,634
Term debt		373,324			372,988			372,652			372,396			372,059
Accrued expenses and other liabilities		259,161			222,025			232,815			282,225			438,577
Total Liabilities		16,131,920			16,784,820			17,153,994			17,478,590			18,304,263
Stockholders’ Equity
Preferred equity		110,705			110,705			110,705			110,705			110,705
Common stock		42,884			42,852			42,784			42,688			42,656
Capital surplus		1,098,837			1,096,619			1,093,207			1,090,740			1,088,267
Retained earnings		1,252,247			1,203,092			1,178,330			1,141,501			1,226,740
Accumulated other comprehensive income/(loss)		(364,300	)		(425,418	)		(446,193	)		(452,517	)		(642,838	)
Total Equity		2,140,373			2,027,850			1,978,833			1,933,117			1,825,530
Total Liabilities and Equity	$	18,272,293		$	18,812,670		$	19,132,827		$	19,411,707		$	20,129,793

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Average Balances
Assets	$	18,439,910		$	19,043,362		$	19,296,638		$	19,667,825		$	20,207,920
Loans, net of unearned		11,584,999			12,010,289			12,021,930			11,938,272			11,800,064
Total deposits		15,148,944			15,562,920			16,042,402			16,709,394			17,507,813
Customer deposits		14,347,965			14,768,407			14,816,652			14,969,948			14,699,235
Earning assets		16,838,131			17,331,435			17,597,068			17,853,957			18,439,010
Interest-bearing liabilities		11,986,220			12,461,957			12,607,745			12,721,680			13,158,631
Common equity		1,962,334			1,863,236			1,832,959			1,729,086			1,746,818
Total stockholders’ equity		2,073,039			1,973,941			1,943,664			1,839,791			1,857,523
Tangible common equity (non-GAAP)⁽¹⁾		1,371,515			1,271,046			1,239,313			1,133,888			1,149,992

Key Performance Ratios
Annualized return on average assets		1.38	%		0.84	%		1.08	%	(1.42		)%		0.94	%
Adjusted annualized return on average assets (non-GAAP)⁽¹⁾		1.14			1.09			1.13			0.96			0.98
Annualized return on average common equity (GAAP)		12.60			8.14			10.90			(16.61	)		10.47
Adjusted annualized return on average common equity (non-GAAP)⁽¹⁾		10.27			10.71			11.50			10.46			10.92
Annualized return on average tangible common equity (non-GAAP)⁽¹⁾		18.32			12.28			16.49			(24.89	)		16.32
Adjusted annualized return on average tangible common equity (non-GAAP)⁽¹⁾		14.98			16.05			17.38			16.38			17.02
Annualized ratio of net charge-offs/(recoveries) to average loans		0.99			0.23			0.08			0.01			0.12
Annualized net interest margin (GAAP)		3.73			3.68			3.52			3.47			3.14
Annualized net interest margin, fully tax-equivalent (non-GAAP)⁽¹⁾		3.78			3.73			3.57			3.52			3.18
Annualized cost of deposits		2.18			2.08			2.11			2.09			2.10
Efficiency ratio (GAAP)		48.58			65.69			62.46			293.86			63.77
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)⁽¹⁾		57.98			57.73			58.77			59.31			59.95
Annualized ratio of total noninterest expenses to average assets (GAAP)		1.85			2.46			2.37			2.63			2.18
Annualized ratio of core expenses to average assets (non-GAAP)⁽¹⁾		2.35			2.30			2.25			2.23			2.08

	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
		2024			2023			2024			2023
Average Balances
Assets	$	18,439,910		$	20,207,920		$	18,924,862		$	20,182,808
Loans, net of unearned		11,584,999			11,800,064			11,871,358			11,602,741
Total deposits		15,148,944			17,507,813			15,583,165			17,567,614
Customer deposits		14,347,965			14,699,235			14,642,347			14,778,030
Earning assets		16,838,131			18,439,010			17,254,023			18,451,907
Interest-bearing liabilities		11,986,220			13,158,631			12,350,640			12,985,665
Common equity		1,962,334			1,746,818			1,886,454			1,710,230
Total stockholders’ equity		2,073,039			1,857,523			1,997,159			1,820,935
Tangible common equity (non-GAAP)(1)		1,371,515			1,149,992			1,294,241			1,111,724

Key Performance Ratios
Annualized return on average assets		1.38	%		0.94	%		1.10	%		1.00	%
Adjusted annualized return on average assets (non-GAAP)⁽¹⁾		1.14			0.98			1.12			1.02
Annualized return on average common equity (GAAP)		12.60			10.47			10.59			11.28
Adjusted annualized return on average common equity (non-GAAP)⁽¹⁾		10.27			10.92			10.81			11.60
Annualized return on average tangible common equity (non-GAAP)⁽¹⁾		18.32			16.32			15.77			17.82
Adjusted annualized return on average tangible common equity (non-GAAP)⁽¹⁾		14.98			17.02			16.09			18.31
Annualized ratio of net charge-offs/(recoveries) to average loans		0.99			0.12			0.43			0.14
Annualized net interest margin (GAAP)		3.73			3.14			3.65			3.23
Annualized net interest margin, fully tax-equivalent (non-GAAP)⁽¹⁾		3.78			3.18			3.69			3.27
Annualized cost of deposits		2.18			2.10			2.12			1.76
Efficiency ratio (GAAP)		48.58			63.77			58.94			61.86
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)⁽¹⁾		57.98			59.95			58.16			58.98
Annualized ratio of total noninterest expenses to average assets (GAAP)		1.85			2.18			2.23			2.20
Annualized ratio of core expenses to average assets (non-GAAP)⁽¹⁾		2.35			2.08			2.30			2.12

(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
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Common Share Data
Book value per common share	$	47.33		$	44.74		$	43.66		$	42.69		$	40.20
Tangible book value per common share (non-GAAP)⁽¹⁾		33.57			30.94			29.81			28.77			26.23
ASC 320 effect on book value per common share		(8.78	)		(10.82	)		(11.18	)		(11.00	)		(16.27	)

Common shares outstanding, net of treasury stock		42,883,865			42,852,180			42,783,670			42,688,008			42,656,303

Capital Ratios
Common equity to total assets		11.11	%		10.19	%		9.76	%		9.39	%		8.52	%
Tangible common equity ratio (non-GAAP)⁽¹⁾		8.14			7.28			6.88			6.53			5.73
Tier 1 leverage ratio		10.77			10.13			9.84			9.44			9.59
Common equity tier 1 ratio⁽²⁾		12.66			11.68			11.40			10.97			11.37
Total risk based capital ratio⁽²⁾		16.34			15.32			14.99			14.53			14.90

Other Selected Trend Information
Effective tax rate		24.25	%		23.12	%		23.17	%		27.97	%		21.89	%
Full time equivalent employees		1,725			1,843			1,888			1,970			1,965

Loans Held to Maturity
Commercial and industrial	$	3,503,093		$	3,541,239		$	3,545,051		$	3,652,047		$	3,591,809
Paycheck Protection Program (“PPP”)		1,582			1,864			2,172			2,777			3,750
Owner occupied commercial real estate		2,489,697			2,555,964			2,545,033			2,638,175			2,429,659
Commercial and business lending		5,994,372			6,099,067			6,092,256			6,292,999			6,025,218
Non-owner occupied commercial real estate		2,455,396			2,434,258			2,495,068			2,553,711			2,656,358
Real estate construction		1,119,922			1,082,726			1,041,583			1,011,716			1,029,554
Commercial real estate lending		3,575,318			3,516,984			3,536,651			3,565,427			3,685,912
Total commercial lending		9,569,690			9,616,051			9,628,907			9,858,426			9,711,130
Agricultural and agricultural real estate		701,211			802,958			809,876			919,184			842,116
Residential mortgage		707,984			733,401			756,021			797,829			813,803
Consumer		462,032			455,899			449,837			493,206			505,387
Total loans held to maturity	$	11,440,917		$	11,608,309		$	11,644,641		$	12,068,645		$	11,872,436

Total unfunded loan commitments	$	3,941,268		$	4,381,565		$	4,537,718		$	4,625,768		$	4,813,798

Deposits
Demand-customer	$	4,009,218		$	4,244,169		$	4,264,390		$	4,500,304		$	4,792,813
Savings-customer		8,713,228			8,151,794			8,269,956			8,411,240			8,190,430
Savings-wholesale and institutional		212,964			318,622			399,265			394,357			564,481
Total savings		8,926,192			8,470,416			8,669,221			8,805,597			8,754,911
Time-customer		1,628,856			1,737,723			1,734,971			1,944,884			1,814,335
Time-wholesale		388,950			504,282			633,584			950,929			1,738,934
Total time		2,017,806			2,242,005			2,368,555			2,895,813			3,553,269
Total deposits	$	14,953,216		$	14,956,590		$	15,302,166		$	16,201,714		$	17,100,993

Total customer deposits	$	14,351,302		$	14,133,686		$	14,269,317		$	14,856,428		$	14,797,578
Total wholesale and institutional deposits		601,914			822,904			1,032,849			1,345,286			2,303,415
Total deposits	$	14,953,216		$	14,956,590		$	15,302,166		$	16,201,714		$	17,100,993

(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) September 30, 2024 calculation is preliminary.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of and for the Quarter Ended
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Allowance for Credit Losses-Loans
Balance, beginning of period	$	126,861		$	123,934		$	122,566		$	110,208		$	111,198
Provision for credit losses		8,871			9,737			3,668			12,750			2,672
Charge-offs		(32,137	)		(7,388	)		(4,093	)		(3,886	)		(3,964	)
Recoveries		3,202			578			1,793			3,494			302
Balance, end of period	$	106,797		$	126,861		$	123,934		$	122,566		$	110,208

Allowance for Unfunded Commitments
Balance, beginning of period	$	13,057		$	13,786		$	16,468		$	17,480		$	18,636
Provision for credit losses		(2,595	)		(729	)		(2,682	)		(1,012	)		(1,156	)
Balance, end of period	$	10,462		$	13,057		$	13,786		$	16,468		$	17,480

Allowance for lending related credit losses	$	117,259		$	139,918		$	137,720		$	139,034		$	127,688

Provision for Credit Losses
Provision for credit losses-loans	$	8,871		$	9,737		$	3,668		$	12,750		$	2,672
Provision for credit losses-unfunded commitments		(2,595	)		(729	)		(2,682	)		(1,012	)		(1,156	)
Total provision (benefit) for credit losses	$	6,276		$	9,008		$	986		$	11,738		$	1,516

Asset Quality
Nonaccrual loans	$	69,115		$	103,123		$	94,800		$	95,426		$	51,304
Loans past due ninety days or more		832			663			611			2,507			511
Other real estate owned		6,805			7,533			2,590			12,548			14,362
Other repossessed assets		—			—			—			—			1
Total nonperforming assets	$	76,752		$	111,319		$	98,001		$	110,481		$	66,178

Nonperforming Assets Activity
Balance, beginning of period	$	111,319		$	98,001		$	110,481		$	66,178		$	66,097
Net loan (charge-offs) recoveries		(28,935	)		(6,810	)		(2,300	)		(392	)		(3,662	)
New nonperforming loans		25,441			48,346			5,470			61,193			19,295
Reduction of nonperforming loans⁽¹⁾		(30,240	)		(28,050	)		(5,692	)		(14,278	)		(14,691	)
OREO/Repossessed assets sales proceeds		(833	)		(168	)		(9,958	)		(2,220	)		(861	)
Balance, end of period	$	76,752		$	111,319		$	98,001		$	110,481		$	66,178

Asset Quality Ratios
Ratio of nonperforming loans to total loans		0.61	%		0.89	%		0.82	%		0.81	%		0.44	%
Ratio of nonperforming assets to total assets		0.42			0.59			0.51			0.57			0.33
Annualized ratio of net loan charge-offs (recoveries) to average loans		0.99			0.23			0.08			0.01			0.12
Allowance for loan credit losses as a percent of loans		0.93			1.09			1.06			1.02			0.93
Allowance for lending related credit losses as a percent of loans		1.02			1.21			1.18			1.15			1.08
Allowance for loan credit losses as a percent of nonperforming loans		152.68			122.23			129.89			125.15			212.70
Loans delinquent 30-89 days as a percent of total loans		0.26			0.25			0.31			0.09			0.12

(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, 2024							June 30, 2024							September 30, 2023
	Average Balance			Interest		Rate		Average Balance			Interest		Rate		Average Balance			Interest		Rate
Earning Assets
Securities:
Taxable	$	4,254,529		$	51,116	4.78	%	$	4,490,407		$	47,381	4.24	%	$	5,726,057		$	54,800	3.80	%
Nontaxable⁽¹⁾		768,483			7,313	3.79			759,234			7,383	3.91			881,162			8,085	3.64
Total securities		5,023,012			58,429	4.63			5,249,641			54,764	4.20			6,607,219			62,885	3.78
Interest on deposits with other banks and short-term investments		355,394			4,193	4.69			194,824			3,045	6.29			142,301			1,651	4.60
Federal funds sold		—			—	—			—			—	—			152			3	7.83
Loans:⁽²⁾
Commercial and industrial⁽¹⁾		3,531,206			65,972	7.43			3,638,004			69,469	7.68			3,610,677			63,001	6.92
PPP loans		1,759			5	1.13			2,242			7	1.26			3,948			11	1.11
Owner occupied commercial real estate		2,527,006			35,189	5.54			2,615,504			37,028	5.69			2,412,501			30,127	4.95
Non-owner occupied commercial real estate		2,474,036			39,536	6.36			2,519,346			39,272	6.27			2,586,011			38,779	5.95
Real estate construction		1,106,387			22,878	8.23			1,093,399			21,770	8.01			1,027,544			19,448	7.51
Agricultural and agricultural real estate		757,745			11,536	6.06			879,707			13,390	6.12			822,957			12,582	6.07
Residential real estate		725,901			9,110	4.99			776,821			9,454	4.89			827,402			9,482	4.55
Consumer		460,959			8,956	7.73			485,266			9,421	7.81			509,024			9,615	7.49
Less: allowance for credit losses		(125,274	)		—	—			(123,319	)		—	—			(110,726	)		—	—
Net loans		11,459,725			193,182	6.71			11,886,970			199,811	6.76			11,689,338			183,045	6.21
Total earning assets		16,838,131			255,804	6.04	%		17,331,435			257,620	5.98	%		18,439,010			247,584	5.33	%
Nonearning Assets		1,601,779							1,711,927							1,768,910
Total Assets	$	18,439,910						$	19,043,362						$	20,207,920
Interest-bearing Liabilities
Savings	$	8,842,494		$	59,307	2.67	%	$	8,834,746		$	55,440	2.52	%	$	8,737,581		$	49,195	2.23	%
Time deposits		2,189,861			23,669	4.30			2,372,653			25,059	4.25			3,945,371			43,549	4.38
Borrowings		580,707			7,378	5.05			881,738			10,825	4.94			103,567			1,167	4.47
Term debt		373,158			5,543	5.91			372,820			5,564	6.00			372,112			5,765	6.15
Total interest-bearing liabilities		11,986,220			95,897	3.18	%		12,461,957			96,888	3.13	%		13,158,631			99,676	3.01	%
Noninterest-bearing Liabilities
Noninterest-bearing deposits		4,116,589							4,355,521							4,824,861
Accrued interest and other liabilities		264,062							251,943							366,905
Total noninterest-bearing liabilities		4,380,651							4,607,464							5,191,766
Stockholders’ Equity		2,073,039							1,973,941							1,857,523
Total Liabilities and Stockholders’ Equity	$	18,439,910						$	19,043,362						$	20,207,920
Net interest income, fully tax-equivalent (non-GAAP)⁽¹⁾⁽³⁾				$	159,907						$	160,732						$	147,908
Net interest spread⁽¹⁾						2.86	%						2.85	%						2.32	%
Net interest income, fully tax-equivalent (non-GAAP^)(1)(3)to total earning assets						3.78	%						3.73	%						3.18	%
Interest-bearing liabilities to earning assets		71.18	%						71.90	%						71.36	%

(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, 2024							September 30, 2023
	Average Balance			Interest		Rate		Average Balance			Interest		Rate
Earning Assets
Securities:
Taxable	$	4,469,258		$	145,511	4.35	%	$	5,927,026		$	168,948	3.81	%
Nontaxable⁽¹⁾		768,782			22,079	3.84			899,613			23,611	3.51
Total securities		5,238,040			167,590	4.27			6,826,639			192,559	3.77
Interest on deposits with other banks and other short-term investments		268,122			10,244	5.10			133,910			4,833	4.83
Federal funds sold		—			—	—			51			3	7.86
Loans:⁽²⁾
Commercial and industrial⁽¹⁾		3,603,668			202,426	7.50			3,547,256			169,552	6.39
PPP loans		2,195			19	1.16			6,718			61	1.21
Owner occupied commercial real estate		2,583,886			107,734	5.57			2,355,545			84,927	4.82
Non-owner occupied commercial real estate		2,514,452			118,657	6.30			2,459,965			105,111	5.71
Real estate construction		1,087,280			65,497	8.05			1,051,298			56,107	7.14
Agricultural and agricultural real estate		838,395			38,682	6.16			835,673			36,191	5.79
Residential mortgage		764,515			28,699	5.01			840,143			28,138	4.48
Consumer		476,967			27,578	7.72			506,143			26,925	7.11
Less: allowance for credit losses-loans		(123,497	)		—	—			(111,434	)		—	—
Net loans		11,747,861			589,292	6.70			11,491,307			507,012	5.90
Total earning assets		17,254,023			767,126	5.94	%		18,451,907			704,407	5.10	%
Nonearning Assets		1,670,839							1,730,901
Total Assets	$	18,924,862						$	20,182,808
Interest-bearing Liabilities
Savings	$	8,828,973		$	169,414	2.56	%	$	9,130,980		$	128,372	1.88	%
Time deposits		2,447,293			78,195	4.27			3,344,434			103,245	4.13
Borrowings		701,548			25,727	4.90			138,157			4,437	4.29
Term debt		372,826			16,956	6.08			372,094			16,756	6.02
Total interest-bearing liabilities		12,350,640			290,292	3.14	%		12,985,665			252,810	2.60	%
Noninterest-bearing Liabilities
Noninterest-bearing deposits		4,306,899							5,092,200
Accrued interest and other liabilities		270,164							284,008
Total noninterest-bearing liabilities		4,577,063							5,376,208
Stockholders’ Equity		1,997,159							1,820,935
Total Liabilities and Stockholders’ Equity	$	18,924,862						$	20,182,808
Net interest income, fully tax-equivalent (non-GAAP)⁽¹⁾⁽³⁾				$	476,834						$	451,597
Net interest spread⁽¹⁾						2.80	%						2.50	%
Net interest income, fully tax-equivalent (non-GAAP)⁽¹⁾⁽³⁾to total earning assets						3.69	%						3.27	%
Interest-bearing liabilities to earning assets		71.58	%						70.38	%

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding.
(3) Refer to “Non-GAAP Measures” in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA
	For the Quarter Ended
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
*Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)*
Earnings available to common stockholders (GAAP)	$	62,140		$	37,730		$	49,694		$	(72,375	)	$	46,078
Plus core deposit intangibles amortization, net of tax⁽²⁾		1,022			1,081			1,131			1,229			1,240
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	63,162		$	38,811		$	50,825		$	(71,146	)	$	47,318

Average common equity (GAAP)	$	1,962,334		$	1,863,236		$	1,832,959		$	1,729,086		$	1,746,818
Less average goodwill		576,005			576,005			576,005			576,005			576,005
Less average core deposit intangibles, net		14,814			16,185			17,641			19,193			20,821
Average tangible common equity (non-GAAP)	$	1,371,515		$	1,271,046		$	1,239,313		$	1,133,888		$	1,149,992
Annualized return on average common equity (GAAP)		12.60	%		8.14	%		10.90	%	(16.61		)%		10.47	%
Annualized return on average tangible common equity (non-GAAP)		18.32	%		12.28	%		16.49	%	(24.89		)%		16.32	%

*Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)*
Net Interest Income (GAAP)	$	157,897		$	158,741		$	154,215		$	156,137		$	145,756
Plus tax-equivalent adjustment⁽¹⁾		2,010			1,991			1,981			2,058			2,152
Net interest income, fully tax-equivalent (non-GAAP)	$	159,907		$	160,732		$	156,196		$	158,195		$	147,908

Average earning assets	$	16,838,131		$	17,331,435		$	17,597,068		$	17,853,957		$	18,439,010

Annualized net interest margin (GAAP)		3.73	%		3.68	%		3.52	%		3.47	%		3.14	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.78			3.73			3.57			3.52			3.18
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.02			0.01			0.02			0.02			0.01

*Reconciliation of Tangible Book Value Per Common Share (non-GAAP)*
Common equity (GAAP)	$	2,029,668		$	1,917,145		$	1,868,128		$	1,822,412		$	1,714,825
Less goodwill		576,005			576,005			576,005			576,005			576,005
Less core deposit intangibles, net		14,157			15,501			16,923			18,415			20,026
Tangible common equity (non-GAAP)	$	1,439,506		$	1,325,639		$	1,275,200		$	1,227,992		$	1,118,794

Common shares outstanding, net of treasury stock		42,883,865			42,852,180			42,783,670			42,688,008			42,656,303
Common equity (book value) per share (GAAP)	$	47.33		$	44.74		$	43.66		$	42.69		$	40.20
Tangible book value per common share (non-GAAP)	$	33.57		$	30.94		$	29.81		$	28.77		$	26.23

*Reconciliation of Tangible Common Equity Ratio (non-GAAP)*
Tangible common equity (non-GAAP)	$	1,439,506		$	1,325,639		$	1,275,200		$	1,227,992		$	1,118,794

Total assets (GAAP)	$	18,272,293		$	18,812,670		$	19,132,827		$	19,411,707		$	20,129,793
Less goodwill		576,005			576,005			576,005			576,005			576,005
Less core deposit intangibles, net		14,157			15,501			16,923			18,415			20,026
Total tangible assets (non-GAAP)	$	17,682,131		$	18,221,164		$	18,539,899		$	18,817,287		$	19,533,762
Tangible common equity ratio (non-GAAP)		8.14	%		7.28	%		6.88	%		6.53	%		5.73	%

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

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
*Reconciliation of Adjusted Efficiency Ratio, fully tax-equivalent (non-GAAP)*
Net interest income (GAAP)	$	157,897		$	158,741		$	154,215		$	156,137		$	145,756
Tax-equivalent adjustment⁽¹⁾		2,010			1,991			1,981			2,058			2,152
Fully tax-equivalent net interest income		159,907			160,732			156,196			158,195			147,908
Noninterest income		18,992			18,207			27,663			(111,801	)		28,383
Securities (gains)/losses, net		9,520			10,111			(58	)		140,007			114
Unrealized gain on equity securities, net		(377	)		(133	)		(95	)		(75	)		(13	)
Adjusted revenue (non-GAAP)	$	188,042		$	188,917		$	183,706		$	186,326		$	176,392

Total noninterest expenses (GAAP)	$	85,927		$	116,244		$	113,595		$	130,285		$	111,053
Less:
Core deposit intangibles amortization		1,345			1,421			1,492			1,611			1,625
Partnership investment in tax credit projects		222			222			494			3,573			1,136
(Gain) loss on sales/valuation of assets, net		(26,419	)		193			214			2,072			108
Acquisition, integration and restructuring costs		2,026			5,973			1,375			4,365			2,429
FDIC special assessment		(267	)		(631	)		2,049			8,145			—
Core expenses (non-GAAP)	$	109,020		$	109,066		$	107,971		$	110,519		$	105,755

Efficiency ratio (GAAP)		48.58	%		65.69	%		62.46	%		293.86	%		63.77	%
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)		57.98	%		57.73	%		58.77	%		59.31	%		59.95	%

*Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)*
Total noninterest expenses (GAAP)	$	85,927		$	116,244		$	113,595		$	130,285		$	111,053
Core expenses (non-GAAP)		109,020			109,066			107,971			110,519			105,755

Average assets	$	18,439,910		$	19,043,362		$	19,296,638		$	19,667,825		$	20,207,920
Total noninterest expenses to average assets (GAAP)		1.85	%		2.46	%		2.37	%		2.63	%		2.18	%
Core expenses to average assets (non-GAAP)		2.35	%		2.30	%		2.25	%		2.23	%		2.08	%

Acquisition, integration and restructuring costs
Salaries and employee benefits	$	58		$	462		$	168		$	1,425		$	94
Occupancy		—			—			—			1,092			—
Furniture and equipment		52			53			—			19			—
Professional fees		1,674			5,385			931			793			1,617
Advertising		—			—			—			28			178
Other noninterest expenses		242			73			276			1,008			540
Total acquisition, integration and restructuring costs	$	2,026		$	5,973		$	1,375		$	4,365		$	2,429

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
*Reconciliation of Adjusted Earnings*
Net income/(loss)	$	64,153		$	39,742		$	51,707		$	(70,363	)	$	48,091
(Gain)/loss from sale of securities		9,520			10,111			(58	)		140,007			114
(Gain)/loss on sales/valuation of assets, net		(26,419	)		193			214			2,072			108
Acquisition, integration and restructuring costs		2,026			5,973			1,375			4,365			2,429
FDIC special assessment		(267	)		(631	)		2,049			8,145			—
Total adjustments		(15,140	)		15,646			3,580			154,589			2,651
Tax effect of adjustments⁽²⁾		3,634			(3,739	)		(866	)		(36,638	)		(628	)
Adjusted earnings	$	52,647		$	51,649		$	54,421		$	47,588		$	50,114

Preferred dividends		(2,013	)		(2,012	)		(2,013	)		(2,012	)		(2,013	)
Adjusted earnings available to common stockholders	$	50,634		$	49,637		$	52,408		$	45,576		$	48,101

Plus core deposit intangibles amortization, net of tax⁽²⁾		1,022			1,081			1,131			1,229			1,240
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	51,656		$	50,718		$	53,539		$	46,805		$	49,341

*Reconciliation of Adjusted Annualized Return on Average Assets*
Average assets	$	18,439,910		$	19,043,362		$	19,296,638		$	19,667,825		$	20,207,920
Adjusted annualized return on average assets (non-GAAP)		1.14	%		1.09	%		1.13	%		0.96	%		0.98	%

*Reconciliation of Adjusted Annualized Return on Average Common Equity*
Average common stockholders’ equity (GAAP)	$	1,962,334		$	1,863,236		$	1,832,959		$	1,729,086		$	1,746,818
Adjusted annualized average common equity (non-GAAP)		10.27	%		10.71	%		11.50	%		10.46	%		10.92	%

*Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity*
Average tangible common equity (non-GAAP)	$	1,371,515		$	1,271,046		$	1,239,313		$	1,133,888		$	1,149,992
Adjusted annualized average tangible common equity (non-GAAP)		14.98	%		16.05	%		17.38	%		16.38	%		17.02	%

*Reconciliation of Adjusted Diluted Earnings Per Common Share*
Weighted average shares outstanding-diluted		43,195,257			43,060,354			42,915,768			42,838,405			42,812,563
Adjusted diluted earnings per common share	$	1.17		$	1.15		$	1.22		$	1.06		$	1.12

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

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
		2024			2023			2024			2023
*Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)*
Earnings available to common stockholders (GAAP)	$	62,140		$	46,078		$	149,564		$	144,245
Plus core deposit intangibles amortization, net of tax⁽²⁾		1,022			1,240			3,236			3,908
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	63,162		$	47,318		$	152,800		$	148,153

Average common equity (GAAP)	$	1,962,334		$	1,746,818		$	1,886,454		$	1,710,230
Less average goodwill		576,005			576,005			576,005			576,005
Less average core deposit intangibles, net		14,814			20,821			16,208			22,501
Average tangible common equity (non-GAAP)	$	1,371,515		$	1,149,992		$	1,294,241		$	1,111,724
Annualized return on average common equity (GAAP)		12.60	%		10.47	%		10.59	%		11.28	%
Annualized return on average tangible common equity (non-GAAP)		18.32	%		16.32	%		15.77	%		17.82	%

*Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)*
Net Interest Income (GAAP)	$	157,897		$	145,756		$	470,853		$	445,100
Plus tax-equivalent adjustment⁽¹⁾		2,010			2,152			5,981			6,497
Net interest income, fully tax-equivalent (non-GAAP)	$	159,907		$	147,908		$	476,834		$	451,597

Average earning assets	$	16,838,131		$	18,439,010		$	17,254,023		$	18,451,907

Annualized net interest margin (GAAP)		3.73	%		3.14	%		3.65	%		3.23	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.78			3.18			3.69			3.27
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.02			0.01			0.02			0.02

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

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
		2024			2023			2024			2023
*Reconciliation of Adjusted Efficiency Ratio, Fully Tax-Equivalent (non-GAAP)*
Net interest income (GAAP)	$	157,897		$	145,756		$	470,853		$	445,100
Tax-equivalent adjustment⁽¹⁾		2,010			2,152			5,981			6,497
Fully tax-equivalent net interest income		159,907			147,908			476,834			451,597
Noninterest income (GAAP)		18,992			28,383			64,862			90,875
Securities (gains)/losses, net		9,520			114			19,573			1,532
Unrealized gain on equity securities, net		(377	)		(13	)		(605	)		(165	)
Adjusted revenue (non-GAAP)	$	188,042		$	176,392		$	560,664		$	543,839

Total noninterest expenses (GAAP)	$	85,927		$	111,053		$	315,766		$	331,542
Less:
Core deposit intangibles amortization		1,345			1,625			4,258			5,128
Partnership investment in tax credit projects		222			1,136			938			1,828
(Gain)/loss on sales/valuation of assets, net		(26,419	)		108			(26,012	)		(2,149	)
Acquisition, integration and restructuring costs		2,026			2,429			9,374			5,994
FDIC special assessment		(267	)		—			1,151			—
Core expenses (non-GAAP)	$	109,020		$	105,755		$	326,057		$	320,741

Efficiency ratio (GAAP)		48.58	%		63.77	%		58.94	%		61.86	%
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)		57.98	%		59.95	%		58.16	%		58.98	%

*Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)*
Total noninterest expenses (GAAP)	$	85,927		$	111,053		$	315,766		$	331,542
Core expenses (non-GAAP)		109,020			105,755			326,057			320,741

Average assets	$	18,439,910		$	20,207,920		$	18,924,862		$	20,182,808
Total noninterest expenses to average assets (GAAP)		1.85	%		2.18	%		2.23	%		2.20	%
Core expenses to average assets (non-GAAP)		2.35	%		2.08	%		2.30	%		2.12	%

Acquisition, integration and restructuring costs
Salaries and employee benefits	$	58		$	94		$	689		$	261
Occupancy		—			—			—			—
Furniture and equipment		52			—			105			—
Professional fees		1,674			1,617			7,990			3,619
Advertising		—			178			—			522
Other noninterest expenses		242			540			590			1,592
Total acquisition, integration and restructuring costs	$	2,026		$	2,429		$	9,374		$	5,994

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
		2024			2023			2024			2023
*Reconciliation of Adjusted Earnings (non-GAAP)*
Net income/(loss)	$	64,153		$	48,091		$	155,602		$	150,283
(Gain)/loss from sale of securities		9,520			114			19,573			1,532
(Gain)/loss on sales/valuation of assets, net		(26,419	)		108			(26,012	)		(2,149	)
Acquisition, integration and restructuring costs		2,026			2,429			9,374			5,994
FDIC special assessment		(267	)		—			1,151			—
Total adjustments		(15,140	)		2,651			4,086			5,377
Tax effect of adjustments⁽²⁾		3,634			(628	)		(981	)		(1,280	)
Adjusted earnings	$	52,647		$	50,114		$	158,707		$	154,380

Preferred dividends		(2,013	)		(2,013	)		(6,038	)		(6,038	)
Adjusted earnings available to common stockholders	$	50,634		$	48,101		$	152,669		$	148,342

Plus core deposit intangibles amortization, net of tax⁽²⁾		1,022			1,240			3,236			3,908
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	51,656		$	49,341		$	155,905		$	152,250

*Reconciliation of Adjusted Annualized Return on Average Assets*
Average assets	$	18,439,910		$	20,207,920		$	18,924,862		$	20,182,808
Adjusted annualized return on average assets (non-GAAP)		1.14	%		0.98	%		1.12	%		1.02	%

*Reconciliation of Adjusted Annualized Return on Average Common Equity*
Average common stockholders’ equity (GAAP)	$	1,962,334		$	1,746,818		$	1,886,454		$	1,710,230
Adjusted annualized return on average common equity (non-GAAP)		10.27	%		10.92	%		10.81	%		11.60	%

*Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity*
Average tangible common equity (non-GAAP)	$	1,371,515		$	1,149,992		$	1,294,241		$	1,111,724
Adjusted annualized return on average tangible common equity (non-GAAP)		14.98	%		17.02	%		16.09	%		18.31	%

*Reconciliation of Adjusted Diluted Earnings Per Common Share*
Weighted average shares outstanding-diluted		43,195,257			42,812,563			43,080,422			42,769,872
Adjusted diluted earnings per common share	$	1.17		$	1.12		$	3.54		$	3.47

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

Third Quarter 2024 Conference Call and Webcast Details

Date:		Tuesday, November 12, 2024
Time:		5:00 p.m. ET
Participant Access:		[Link Here]

GAAP Quarterly Financial Results

	Q3 2024	Q3 2023	Y/Y	Q2 2024	Q/Q
Revenue ($M)	$6,819	$5,800	Up 18%	$5,835	Up 17%
Gross profit ($M)	$3,419	$2,747	Up 24%	$2,864	Up 19%
Gross margin	50%	47%	Up 3 ppts	49%	Up 1 ppt
Operating expenses ($M)	$2,709	$2,533	Up 7%	$2,605	Up 4%
Operating income ($M)	$724	$224	Up 223%	$269	Up 169%
Operating margin	11%	4%	Up 7 ppts	5%	Up 6 ppts
Net income ($M)	$771	$299	Up 158%	$265	Up 191%
Diluted earnings per share	$0.47	$0.18	Up 161%	$0.16	Up 194%

*Non-GAAP() Quarterly Financial Results**

	Q3 2024	Q3 2023	Y/Y	Q2 2024	Q/Q
Revenue ($M)	$6,819	$5,800	Up 18%	$5,835	Up 17%
Gross profit ($M)	$3,657	$2,963	Up 23%	$3,101	Up 18%
Gross margin	54%	51%	Up 3 ppts	53%	Up 1 ppt
Operating expenses ($M)	$1,956	$1,697	Up 15%	$1,847	Up 6%
Operating income ($M)	$1,715	$1,276	Up 34%	$1,264	Up 36%
Operating margin	25%	22%	Up 3 ppts	22%	Up 3 ppts
Net income ($M)	$1,504	$1,135	Up 33%	$1,126	Up 34%
Diluted earnings per share	$0.92	$0.70	Up 31%	$0.69	Up 33%

	Three Months Ended
	September 28, 2024			June 29, 2024			September 30, 2023
GAAP gross profit	$	3,419		$	2,864		$	2,747
*GAAP gross margin*		50	%		49	%		47	%
Stock-based compensation		5			5			6
Amortization of acquisition-related intangibles		233			231			210
Acquisition-related and other costs⁽¹⁾		—			1			—
Non-GAAP gross profit	$	3,657		$	3,101		$	2,963
Non-GAAP gross margin		54	%		53	%		51	%

GAAP operating expenses	$	2,709		$	2,605		$	2,533
*GAAP operating expenses/revenue %*		40	%		45	%		44	%
Stock-based compensation		346			341			347
Amortization of acquisition-related intangibles		352			372			450
Acquisition-related and other costs⁽¹⁾		55			45			39
Non-GAAP operating expenses	$	1,956		$	1,847		$	1,697
Non-GAAP operating expenses/revenue %		29	%		32	%		29	%

GAAP operating income	$	724		$	269		$	224
*GAAP operating margin*		11	%		5	%		4	%
Stock-based compensation		351			346			353
Amortization of acquisition-related intangibles		585			603			660
Acquisition-related and other costs⁽¹⁾		55			46			39
Non-GAAP operating income	$	1,715		$	1,264		$	1,276
*Non-GAAP operating margin*		25	%		22	%		22	%

	Three Months Ended
	September 28, 2024						June 29, 2024						September 30, 2023
GAAP net income / earnings per share	$	771		$	0.47		$	265		$	0.16		$	299		$	0.18
(Gains) losses on equity investments, net		(1	)		—			—			—			(4	)		—
Stock-based compensation		351			0.21			346			0.21			353			0.22
Equity income in investee		(7	)		—			(7	)		—			(3	)		—
Amortization of acquisition-related intangibles		585			0.36			603			0.37			660			0.41
Acquisition-related and other costs⁽¹⁾		56			0.03			46			0.03			39			0.02
Income tax provision		(251	)		(0.15	)		(127	)		(0.08	)		(209	)		(0.13	)
Non-GAAP net income / earnings per share	$	1,504		$	0.92		$	1,126		$	0.69		$	1,135		$	0.70

(*)		In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating expenses/revenue%, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share. AMD uses a normalized tax rate in its computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2024, AMD uses a projected non-GAAP tax rate of 13%, which excludes the tax impact of pre-tax non-GAAP adjustments, reflecting currently available information. AMD also provided adjusted EBITDA, free cash flow and free cash flow margin as supplemental non-GAAP measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables. The non-GAAP financial measures disclosed in this earnings press release should be viewed in addition to and not as a substitute for or superior to AMD’s reported results prepared in accordance with GAAP and should be read only in conjunction with AMD’s Consolidated Financial Statements prepared in accordance with GAAP. These non-GAAP financial measures referenced are reconciled to their most directly comparable GAAP financial measures in the data tables in this earnings press release. This earnings press release also contains forward-looking non-GAAP gross margin concerning AMD’s financial outlook, which is based on current expectations as of October 29, 2024 and assumptions and beliefs that involve numerous risks and uncertainties. Adjustments to arrive at the GAAP gross margin outlook typically include stock-based compensation, amortization of acquired intangible assets and acquisition-related and other costs. The timing and impact of such adjustments are dependent on future events that are typically uncertain or outside of AMD’s control, therefore, a reconciliation to equivalent GAAP measures is not practicable at this time. AMD undertakes no intent or obligation to publicly update or revise its outlook statements as a result of new information, future events or otherwise, except as may be required by law.

	Three Months Ended									Nine Months Ended
	September 28, 2024			June 29, 2024			September 30, 2023			September 28, 2024			September 30, 2023
Net revenue	$	6,819		$	5,835		$	5,800		$	18,127		$	16,512
Cost of sales		3,167			2,740			2,843			8,590			8,236
Amortization of acquisition-related intangibles		233			231			210			694			727
Total cost of sales		3,400			2,971			3,053			9,284			8,963
Gross profit		3,419			2,864			2,747			8,843			7,549
Gross margin		50	%		49	%		47	%		49	%		46	%
Research and development		1,636			1,583			1,507			4,744			4,361
Marketing, general and administrative		721			650			576			1,991			1,708
Amortization of acquisition-related intangibles		352			372			450			1,116			1,449
Licensing gain		(14	)		(10	)		(10	)		(37	)		(28	)
Operating income		724			269			224			1,029			59
Interest expense		(23	)		(25	)		(26	)		(73	)		(79	)
Other income (expense), net		36			55			59			144			148
Income before income taxes and equity income		737			299			257			1,100			128
Income tax provision (benefit)		(27	)		41			(39	)		(38	)		(49	)
Equity income in investee		7			7			3			21			10
Net income	$	771		$	265		$	299		$	1,159		$	187
Earnings per share
Basic	$	0.48		$	0.16		$	0.18		$	0.72		$	0.12
Diluted	$	0.47		$	0.16		$	0.18		$	0.71		$	0.11
Shares used in per share calculation
Basic		1,620			1,618			1,616			1,619			1,613
Diluted		1,636			1,637			1,629			1,638			1,625

	September 28, 2024			December 30, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,897		$	3,933
Short-term investments		647			1,840
Accounts receivable, net		7,241			5,376
Inventories		5,374			4,351
Receivables from related parties		29			9
Prepaid expenses and other current assets		1,547			1,259
Total current assets		18,735			16,768
Property and equipment, net		1,669			1,589
Operating lease right-of-use assets		647			633
Goodwill		24,839			24,262
Acquisition-related intangibles, net		19,572			21,363
Investment: equity method		137			99
Deferred tax assets		1,183			366
Other non-current assets		2,854			2,805
Total Assets	$	69,636		$	67,885

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,530		$	2,055
Payables to related parties		461			363
Accrued liabilities		4,120			3,082
Current portion of long-term debt, net		—			751
Other current liabilities		389			438
Total current liabilities		7,500			6,689
Long-term debt, net of current portion		1,720			1,717
Long-term operating lease liabilities		518			535
Deferred tax liabilities		1,162			1,202
Other long-term liabilities		1,751			1,850

Stockholders’ equity:
Capital stock:
Common stock, par value		17			17
Additional paid-in capital		60,896			59,676
Treasury stock, at cost		(5,812	)		(4,514	)
Retained earnings		1,882			723
Accumulated other comprehensive income (loss)		2			(10	)
Total stockholders’ equity	$	56,985		$	55,892
Total Liabilities and Stockholders’ Equity	$	69,636		$	67,885

(1)		The Data Center segment primarily includes server microprocessors (CPUs), graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), Smart Network Interface Cards (SmartNICs), Artificial Intelligence (AI) accelerators and Adaptive System-on-Chip (SoC) products for data centers.
		The Client segment primarily includes CPUs, APUs, and chipsets for desktop, notebook and handheld personal computers.
		The Gaming segment primarily includes discrete GPUs, and semi-custom SoC products and development services.
		The Embedded segment primarily includes embedded CPUs, GPUs, APUs, FPGAs, System on Modules (SOMs), and Adaptive SoC products.
		From time to time, the Company may also sell or license portions of its IP portfolio.
		All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments, such as amortization of acquisition-related intangible asset, employee stock-based compensation expense, acquisition-related and other costs, inventory loss at contract manufacturer, and licensing gain.

	Three Months Ended									Nine Months Ended
(Millions) (Unaudited)	September 28, 2024			June 29, 2024			September 30, 2023			September 28, 2024			September 30, 2023
GAAP net income	$	771		$	265		$	299		$	1,159		$	187
Interest expense		23			25			26			73			79
Other (income) expense, net		(36	)		(55	)		(59	)		(144	)		(148	)
Income tax provision (benefit)		(27	)		41			(39	)		(38	)		(49	)
Equity income in investee		(7	)		(7	)		(3	)		(21	)		(10	)
Stock-based compensation		351			346			353			1,068			1,006
Depreciation and amortization		171			166			163			499			478
Amortization of acquisition-related intangibles		585			603			660			1,810			2,176
Inventory loss at contract manufacturer		—			—			—			65			—
Acquisition-related and other costs		56			46			39			141			201
Adjusted EBITDA	$	1,887		$	1,430		$	1,439		$	4,612		$	3,920

Trading venue (MIC Code)	Number of shares	Weighted average price / share, EUR*
XHEL	1,382,271	4.54
CEUX	263,565	4.55
BATE	–	–
AQEU	–	–
TQEX	–	–
Total	1,645,836	4.54

	For the Three Months Ended September 30,
	2024					2023
	Average Balance		Average Yield/Rate			Average Balance		Average Yield/Rate
	(Dollars in thousands)
Interest-earning assets:
Loans receivable	$	466,170		5.87	%	$	498,242		5.79	%
Investment securities		96,749		2.09			113,584		2.18
Interest-earning deposits		25,617		5.20			10,066		6.98
Total interest-earning assets	$	588,536		5.22	%	$	621,892		5.15	%

Interest-bearing liabilities:
Savings accounts	$	82,556		1.61	%	$	78,572		0.38	%
NOW accounts		72,787		1.10			55,900		0.48
Money market accounts		75,216		2.29			108,891		2.26
Certificates of deposit		204,019		4.30			194,785		3.73
Total interest-bearing deposits		434,578		2.92			438,148		2.47
Other bank borrowings		5,989		7.75			8,654		8.39
FHLB advances		—		—			1,138		5.23
Total interest-bearing liabilities	$	440,567		2.98	%	$	447,940		2.47	%

	September 30, 2024		June 30, 2024
	(Unaudited)
ASSETS

Cash and Cash Equivalents (Includes Interest-Bearing Deposits with Other Banks of $32,743 and $25,505 at September 30, 2024 and June 30, 2024, Respectively)	$	41,044	$	34,948
Securities Available-for-Sale (amortized cost September 30, 2024: $31,977; June 30, 2024: $30,348, Respectively)		29,934		27,037
Securities Held-to-Maturity (fair value September 30, 2024: $56,584; June 30, 2024: $54,450, Respectively)		65,800		67,302
Other Securities		1,633		1,614
Loans Held-for-Sale		2,268		1,733
Loans Receivable, Net of Allowance for Credit Losses (September 30, 2024: $4,703; June 30, 2024: $4,574, Respectively)		454,039		470,852
Accrued Interest Receivable		1,761		1,775
Premises and Equipment, Net		18,065		18,303
Bank Owned Life Insurance		6,839		6,810
Goodwill		2,990		2,990
Core Deposit Intangible		1,125		1,199
Deferred Tax Asset		1,210		1,181
Real Estate Owned		122		418
Other Assets		1,574		1,350

Total Assets	$	628,404	$	637,512

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES

Deposits:
Non-interest bearing	$	133,293	$	130,334
Interest-bearing		431,267		443,673
Total Deposits		564,560		574,007
Advances from Borrowers for Taxes and Insurance		644		521
Other Borrowings		5,500		7,000
Other Accrued Expenses and Liabilities		3,433		3,181

Total Liabilities		574,137		584,709

SHAREHOLDERS’ EQUITY

Preferred Stock – $0.01 Par Value; 10,000,000 Shares Authorized: None Issued and Outstanding		–		–
Common Stock – $0.01 Par Value; 40,000,000 Shares Authorized: 3,129,668 and 3,144,168 Shares Issued and Outstanding at September 30, 2024 and June 30, 2024, Respectively		32		32
Additional Paid-in Capital		41,822		41,739

	Three Months Ended									Nine Months Ended
(Millions except percentages) (Unaudited)	September 28, 2024			June 29, 2024			September 30, 2023			September 28, 2024			September 30, 2023
GAAP net cash provided by operating activities	$	628		$	593		$	421		$	1,742		$	1,286
Operating cash flow margin %		9	%		10	%		7	%		10	%		8	%
Purchases of property and equipment		(132	)		(154	)		(124	)		(428	)		(407	)
Free cash flow	$	496		$	439		$	297		$	1,314		$	879
Free cash flow margin %		7	%		8	%		5	%		7	%		5	%

	Three Months Ended
	September 30,
	2024			2023
INTEREST INCOME
Loans, including fees	$	6,895		$	7,274
Investment securities		67			150
Mortgage-backed securities		443			473
Other interest-earning assets		336			177
Total interest income		7,741			8,074

INTEREST EXPENSE
Deposits		3,197			2,592
Federal Home Loan Bank borrowings		—			15
Other bank borrowings		117			183
Total interest expense		3,314			2,790
Net interest income		4,427			5,284

RECOVERY OF CREDIT LOSSES		(223	)		—
Net interest income after recovery of credit losses		4,650			5,284

NON-INTEREST INCOME
Gain on sale of loans		96			38
Loss on sale of real estate		(254	)		(34	)
Income on bank owned life insurance		28			26
Service charges on deposit accounts		391			391
Other income		39			13

Total non-interest income		300			434

NON-INTEREST EXPENSE
Compensation and benefits		2,302			2,356
Occupancy and equipment		564			549
Data processing		219			245
Audit and examination fees		132			102
Franchise and bank shares tax		168			156
Advertising		57			143
Professional fees		117			160
Loan and collection		28			60
Amortization core deposit intangible		74			94
Deposit insurance premium		90			91
Other expenses		260			232
Total non-interest expense		4,011			4,188

Income before income taxes		939			1,530
PROVISION FOR INCOME TAX EXPENSE		(2	)		310

NET INCOME	$	941		$	1,220

EARNINGS PER SHARE
Basic	$	0.31		$	0.40
Diluted	$	0.31		$	0.39

	Three Months Ended September 30,
	2024			2023

Selected Operating Ratios⁽¹⁾:
Average interest rate spread		2.23	%		2.68	%
Net interest margin		2.98	%		3.37	%
Return on average assets		0.59	%		0.73	%
Return on average equity		7.23	%		9.46	%

Asset Quality Ratios⁽²⁾:
Non-performing assets as a percent of total assets		0.31	%		0.28	%
Allowance for credit losses as a percent of non-performing loans		258.46	%		403.96	%
Allowance for credit losses as a percent of total loans receivable		1.03	%		1.00	%

Per Share Data:
Shares outstanding at period end		3,129,668			3,133,351
Weighted average shares outstanding:
Basic		3,058,286			3,028,597
Diluted		3,071,716			3,107,834

(1) Ratios for the three-month period are annualized.
(2) Asset quality ratios are end of period ratios.

Category: KB