GlobeNewswire Inc | Jul 27, 2020 04:00PM EDT

July 27, 2020

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 Six Months Ended June 30, June 30, 2020 2019 2020 2019Net incomeavailable tocommon $ 30.1 $ 45.2 $ 50.2 $ 76.7 stockholders(in millions)Dilutedearnings per 0.82 1.26 1.36 2.17 common share Return on 0.84 % 1.55 % 0.73 % 1.35 %average assetsReturn onaverage common 7.69 12.56 6.32 11.13 equityReturn onaveragetangible 11.97 19.52 9.95 17.49 common equity(non-GAAP)^(1)Net interest 3.81 4.06 3.81 4.09 marginNet interestmargin, fully 3.85 4.10 3.85 4.14 tax-equivalent(non-GAAP)^(1)Efficiencyratio,fully-tax 55.75 64.13 58.64 64.52 equivalent(non-GAAP)^(1)

(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 solidnet interest margin and strong efficiency ratio. In addition, we funded $1.2billion of Paycheck Protection Program loans, announced the purchase of fourbanking centers in Phoenix and Scottsdale, Arizona and issued $115 million ofpreferred 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:

-- 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. -- 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. -- 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. -- 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:

-- 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. -- 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. -- 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. -- 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:

-- 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; -- all in-person events and large meetings are canceled and have transitioned to virtual meetings; -- expanded time off program and enhanced health care coverage for COVID-19 related testing and treatments, and -- 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 Total Exposure^ % of Gross Total Exposure^ % of GrossIndustry (1) Exposure^ (1) Exposure^ (1) (1)Lodging $ 490,475 4.38 % $ 498,596 4.47 %Multi-family 474,610 4.24 436,931 3.92 propertiesRetail trade 407,030 3.64 367,727 3.30 Retail 369,782 3.31 408,506 3.66 propertiesRestaurants 255,701 2.29 247,239 2.22 and barsNursing homes/assisted 130,103 1.16 126,267 1.13 livingOil and gas 63,973 0.57 56,302 0.50 Childcare 44,968 0.40 48,455 0.43 facilitiesGaming 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:

-- an increase of $12.1million 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 $4.6million, net of taxes of $1.5million; -- an increase of $13.6million to the allowance for unfunded commitments and a cumulative-effect adjustment to retained earnings totaling $10.2million, net of taxes of $3.4million, and -- 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 Banks 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's Arizona 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:

-- 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.

-- 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.

-- 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:

-- 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:

-- Solar energy tax credits of $798,000 and $911,000 for the second quarter of 2020 and 2019, respectively. -- Federal low-income housing tax credits of $195,000 and $281,000 for the second quarter of 2020 and 2019, respectively. -- New markets tax credits of $75,000 during the second quarter of 2020 compared to $0 in the second quarter of 2019. -- 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. -- 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:

-- 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. -- 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. -- 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%.

-- 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.

-- 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:

-- 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.

-- Savings deposits increased $502.9 million or 8% to $6.81 billion at June 30, 2020, from $6.31 billion at December 31, 2019.

-- 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:

-- 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. -- Annualized net interest margin, fully tax-equivalent, adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. -- Efficiency ratio, fully tax equivalent, expresses noninterest expenses as a percentage of fully tax-equivalent net interest income and noninterest income. This efficiency ratio is presented on a tax-equivalent basis which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities, and tax credit projects. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items as noted in reconciliation contained in this press release. -- Tangible book value per common share is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength. -- Tangible common equity ratio is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by total assets less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength. -- Annualized return on average tangible common equity is net income excluding intangible amortization calculated as (1) net income excluding tax-effected core deposit and customer relationship intangibles amortization, divided by (2) average common equity less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength. -- 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 DetailsHeartland 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.com at least 15 minutes before start time. A replay will be available until July 26, 2021, by logging on to www.htlf.com.

Safe Harbor StatementThis 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 Heartlands 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 Heartlands loan or investment portfolios; demand for loan products and financial services, deposit flows and competition in Heartlands 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; Heartlands ability to implement technological changes as anticipated and to develop and maintain secure and reliable electronic delivery systems; Heartlands 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 pandemics severity, its duration and the extent of its impact on Heartlands 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 Heartlands 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 For the Six Months Ended June 30, June 30, 2020 2019 2020 2019Interest Income Interest and fees $ 107,005 $ 106,027 $ 213,419 $ 206,483 on loansInterest on securities:Taxable 23,362 16,123 45,093 31,999 Nontaxable 3,344 2,554 5,527 5,647 Interest on federal ? ? ? 4 funds soldInterest ondeposits with otherbanks and 54 2,299 775 3,591 short-terminvestmentsTotal Interest 133,765 127,003 264,814 247,724 IncomeInterest Expense Interest on 6,134 16,138 20,716 29,351 depositsInterest onshort-term 61 338 357 1,227 borrowingsInterest on other 3,424 3,819 7,084 7,483 borrowingsTotal Interest 9,619 20,295 28,157 38,061 ExpenseNet Interest Income 124,146 106,708 236,657 209,663 Provision for 26,796 4,918 48,316 6,553 credit lossesNet Interest IncomeAfter Provision for 97,350 101,790 188,341 203,110 Credit LossesNoninterest Income Service charges and 10,972 14,629 22,993 27,423 feesLoan servicing 379 1,338 1,342 3,067 incomeTrust fees 4,977 4,825 9,999 9,299 Brokerage andinsurance 595 1,028 1,328 1,762 commissionsSecurities gains, 2,006 3,580 3,664 5,155 netUnrealized gain/(loss) on equity 680 112 449 370 securities, netNet gains on saleof loans held for 7,857 4,343 12,517 7,519 saleValuationadjustment on 9 (364) (1,556) (953) servicing rightsIncome on bankowned life 1,167 888 1,665 1,787 insuranceOther noninterest 1,995 1,682 4,053 3,349 incomeTotal Noninterest 30,637 32,061 56,454 58,778 IncomeNoninterest Expense Salaries and 50,118 49,895 100,075 100,180 employee benefitsOccupancy 6,502 6,426 12,973 13,033 Furniture and 2,993 3,136 6,101 5,828 equipmentProfessional fees 13,676 14,344 26,149 25,366 Advertising 995 2,609 3,200 4,929 Core deposit andcustomerrelationship 2,696 3,313 5,677 6,155 intangiblesamortizationOther real estateand loan collection 203 162 537 863 expenses, net(Gain)/loss onsales/valuations of 701 (18,286) 717 (21,290) assets, netAcquisition,integration and 673 929 2,049 4,543 restructuring costsPartnershipinvestment in tax 791 1,465 975 1,940 credit projectsOther noninterest 11,091 11,105 22,845 21,781 expensesTotal Noninterest 90,439 75,098 181,298 163,328 ExpenseIncome Before 37,548 58,753 63,497 98,560 Income TaxesIncome taxes 7,417 13,584 13,326 21,894 Net Income $ 30,131 $ 45,169 $ 50,171 $ 76,666 Earnings per common $ 0.82 $ 1.26 $ 1.36 $ 2.17 share-dilutedWeighted averageshares 36,915,630 35,879,259 36,919,555 35,295,407 outstanding-diluted



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 6/30/2019Interest Income Interest and fees $ 107,005 $ 106,414 $ 107,566 $ 110,566 $ 106,027 on loansInterest 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 soldInterest ondeposits with otherbanks and 54 721 953 2,151 2,299 short-terminvestmentsTotal Interest 133,765 131,049 133,202 133,403 127,003 IncomeInterest Expense Interest on 6,134 14,582 16,401 17,982 16,138 depositsInterest onshort-term 61 296 271 250 338 borrowingsInterest on other 3,424 3,660 3,785 3,850 3,819 borrowingsTotal Interest 9,619 18,538 20,457 22,082 20,295 ExpenseNet Interest Income 124,146 112,511 112,745 111,321 106,708 Provision for 26,796 21,520 4,903 5,201 4,918 credit lossesNet Interest IncomeAfter Provision for 97,350 90,991 107,842 106,120 101,790 Credit LossesNoninterest Income Service charges and 10,972 12,021 12,368 12,366 14,629 feesLoan servicing 379 963 955 821 1,338 incomeTrust fees 4,977 5,022 5,141 4,959 4,825 Brokerage andinsurance 595 733 1,062 962 1,028 commissionsSecurities gains, 2,006 1,658 491 2,013 3,580 netUnrealized gain/(loss) on equity 680 (231) 11 144 112 securities, netNet gains on saleof loans held for 7,857 4,660 3,363 4,673 4,343 saleValuationadjustment on 9 (1,565) 668 (626) (364) servicing rightsIncome on bankowned life 1,167 498 1,117 881 888 insuranceOther noninterest 1,995 2,058 2,854 3,207 1,682 incomeTotal Noninterest 30,637 25,817 28,030 29,400 32,061 IncomeNoninterest Expense Salaries and 50,118 49,957 50,234 49,927 49,895 employee benefitsOccupancy 6,502 6,471 5,802 6,594 6,426 Furniture and 2,993 3,108 3,323 2,862 3,136 equipmentProfessional fees 13,676 12,473 11,082 11,276 14,344 Advertising 995 2,205 2,274 2,622 2,609 Core deposit andcustomerrelationship 2,696 2,981 2,918 2,899 3,313 intangiblesamortizationOther real estateand loan collection 203 334 261 (89) 162 expenses, net(Gain)/loss onsales/valuations of 701 16 1,512 356 (18,286) assets, netAcquisition,integration and 673 1,376 537 1,500 929 restructuring costsPartnershipinvestment in tax 791 184 3,038 3,052 1,465 credit projectsOther noninterest 11,091 11,754 11,885 11,968 11,105 expensesTotal Noninterest 90,439 90,859 92,866 92,967 75,098 ExpenseIncome Before 37,548 25,949 43,006 42,553 58,753 Income TaxesIncome 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 $ 0.82 $ 0.54 $ 1.03 $ 0.94 $ 1.26 share-dilutedWeighted averageshares 36,915,630 36,895,591 36,840,519 36,835,191 35,879,259 outstanding-diluted



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 6/30/2019Assets Cash and due $ 211,429 $ 175,587 $ 206,607 $ 243,395 $ 198,664 from banksInterestbearingdeposits withother banks 242,149 64,156 172,127 204,372 443,475 andshort-terminvestmentsCash and cash 453,578 239,743 378,734 447,767 642,139 equivalentsTime depositsin other 3,128 3,568 3,564 3,711 4,430 financialinstitutionsSecurities: Carried at 4,126,351 3,488,621 3,312,796 3,020,568 2,561,887 fair valueHeld tomaturity, atcost, less 90,579 91,875 91,324 87,965 88,166 allowance forcredit lossesOtherinvestments, 35,902 35,370 31,321 29,042 31,366 at costLoans held 54,382 22,957 26,748 35,427 34,575 for saleLoans: Held to 9,246,830 8,374,236 8,367,917 7,971,608 7,853,051 maturityAllowancefor credit (119,937) (97,350) (70,395) (66,222) (63,850) lossesLoans, net 9,126,893 8,276,886 8,297,522 7,905,386 7,789,201 Premises,furniture and 198,481 200,960 200,525 199,235 198,329 equipment,netGoodwill 446,345 446,345 446,345 427,097 427,097 Core depositand customerrelationship 43,011 45,707 48,688 49,819 52,718 intangibles,netServicing 5,469 5,220 6,736 6,271 7,180 rights, netCashsurrender 172,813 172,140 171,625 171,471 170,421 value on lifeinsuranceOther real 5,539 6,074 6,914 6,425 6,646 estate, netOther 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 EquityLiabilities 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 12,708,699 11,174,025 11,044,331 10,469,856 10,108,557 depositsShort-term 88,631 121,442 182,626 107,853 107,260 borrowingsOther 306,459 276,150 275,773 278,417 282,863 borrowingsAccruedexpenses and 174,987 169,178 128,730 149,293 139,823 otherliabilitiesTotal 13,278,776 11,740,795 11,631,460 11,005,419 10,638,503 LiabilitiesStockholders' EquityPreferred 110,705 ? ? ? ? equityCommon stock 36,845 36,807 36,704 36,696 36,690 Capital 844,202 842,780 839,857 838,543 837,150 surplusRetained 723,067 700,298 702,502 670,816 642,808 earningsAccumulatedother 32,558 (26,171) (926) 17,788 5,139 comprehensiveincome/(loss)Total Equity 1,747,377 1,553,714 1,578,137 1,563,843 1,521,787 TotalLiabilities $ 15,026,153 $ 13,294,509 $ 13,209,597 $ 12,569,262 $ 12,160,290 and Equity





HEARTLAND FINANCIAL USA, INC.CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEEDATA For the Quarter Ended 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019Average BalancesAssets $ 14,391,856 $ 13,148,173 $ 12,798,770 $ 12,293,332 $ 11,708,538 Loans, net of 9,186,913 8,364,220 8,090,476 7,883,678 7,648,562 unearnedDeposits 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 Interestbearing 8,155,753 7,841,941 7,513,701 7,174,944 6,872,449 liabilitiesCommon equity 1,574,902 1,619,682 1,570,258 1,541,369 1,442,388 Totalstockholders' 1,580,997 1,619,682 1,570,258 1,541,369 1,442,388 equityTangiblecommon equity 1,083,834 1,125,705 1,087,495 1,062,568 981,878 (non-GAAP)^(1) KeyPerformance RatiosAnnualizedreturn on 0.84 % 0.61 % 1.17 % 1.12 % 1.55 %average assetsAnnualizedreturn on 7.69 4.98 9.56 8.91 12.56 average commonequity (GAAP)Annualizedreturn onaverage 11.97 8.00 14.65 13.78 19.52 tangiblecommon equity(non-GAAP)^(1)Annualizedadjustedreturn onaverage 20.02 14.46 16.22 15.76 21.41 tangiblecommon equity(non-GAAP)^(1)Annualizedratio of net 0.11 0.24 0.04 0.14 0.19 charge-offs toaverage loansAnnualized netinterest 3.81 3.81 3.86 3.98 4.06 margin (GAAP)Annualized netinterestmargin, fully 3.85 3.84 3.90 4.02 4.10 tax-equivalent(non-GAAP)^(1)Efficiencyratio, fully 55.75 61.82 60.31 60.85 64.13 tax-equivalent(non-GAAP)^(1)(1) Refer to "Non-GAAP Measures" in this earnings release for additionalinformation on the usage and presentation of these non-GAAP measures, and referto these financial tables for the reconciliations to the most directlycomparable GAAP measures.



For the Quarter Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019Average BalancesAssets $ 14,391,856 $ 11,708,538 $ 13,770,015 $ 11,489,095 Loans, net of 9,186,913 7,648,562 8,775,566 7,531,360 unearnedDeposits 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 Interestbearing 8,155,753 6,872,449 7,998,847 6,747,990 liabilitiesCommon equity 1,574,902 1,442,388 1,597,292 1,389,612 Totalstockholders' 1,580,997 1,442,388 1,600,340 1,389,612 equityTangiblecommon 1,083,834 981,878 1,104,770 940,217 stockholders'equity KeyPerformance RatiosAnnualizedreturn on 0.84 % 1.55 % 0.73 % 1.35 %average assetsAnnualizedreturn on 7.69 12.56 6.32 11.13 average commonequity (GAAP)Annualizedreturn onaverage 11.97 19.52 9.95 17.49 tangiblecommon equity(non-GAAP)^(1)Annualizedadjustedreturn onaverage 20.02 21.41 17.19 19.37 tangiblecommon equity(non-GAAP)^(1)Annualizedratio of net 0.11 0.19 0.17 0.12 charge-offs toaverage loansAnnualized netinterest 3.81 4.06 3.81 4.09 margin (GAAP)Annualized netinterestmargin, fully 3.85 4.10 3.85 4.14 tax-equivalent(non-GAAP)^(1)Efficiencyratio, fully 55.75 64.13 58.64 64.52 tax-equivalent(non-GAAP)^(1) (1) Refer to "Non-GAAP Measures" in this earnings release for additionalinformation on the usage and presentation of these non-GAAP measures, and referto these financial tables for the reconciliations to the most directlycomparable 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 6/30/2019Common Share DataBook value per $ 44.42 $ 42.21 $ 43.00 $ 42.62 $ 41.48 common shareTangible bookvalue per $ 31.14 $ 28.84 $ 29.51 $ 29.62 $ 28.40 common share(non-GAAP)^(1)Common sharesoutstanding, 36,844,744 36,807,217 36,704,278 36,696,190 36,690,061 net of treasurystockTangible commonequity ratio 7.89 % 8.29 % 8.52 % 8.99 % 8.92 %(non-GAAP)^(1) Other SelectedTrend InformationEffective tax 19.75 % 22.77 % 11.99 % 18.66 % 23.12 %rateFull timeequivalent 1,821 1,817 1,908 1,962 2,040 employees Loans Held to Maturity^(2)Commercial and $ 2,364,400 $ 2,550,490 $ 2,530,809 $ 2,388,861 $ 2,325,025 industrialPaycheckProtection 1,124,430 ? ? ? ? Program ("PPP")Owner occupiedcommercial real 1,433,271 1,431,038 1,472,704 1,392,415 1,354,996 estateCommercial andbusiness 4,922,101 3,981,528 4,003,513 3,781,276 3,680,021 lendingNon-owneroccupied 1,543,623 1,551,787 1,495,877 1,378,020 1,372,343 commercial realestateReal estate 1,115,843 1,069,700 1,027,081 980,298 943,109 constructionCommercial real 2,659,466 2,621,487 2,522,958 2,358,318 2,315,452 estate lendingTotalcommercial 7,581,567 6,603,015 6,526,471 6,139,594 5,995,473 lendingAgriculturaland 520,773 550,107 565,837 571,596 559,054 agriculturalreal estateResidential 735,762 792,540 832,277 823,056 849,576 mortgageConsumer 408,728 428,574 443,332 437,362 448,948 Total loansheld to $ 9,246,830 $ 8,374,236 $ 8,367,917 $ 7,971,608 $ 7,853,051 maturity Total unfundedloan $ 3,065,283 $ 2,782,679 $ 2,973,732 $ 2,659,729 $ 2,530,946 commitments (1) Refer to "Non-GAAP Measures" in this earnings release for additionalinformation on the usage and presentation of these non-GAAP measures, and referto these financial tables for the reconciliations to the most directlycomparable GAAP measures.(2) In conjunction with the adoption of ASU 2016-13, Heartland reclassifiedloan balances to more closely align with FDIC codes. All prior period balanceshave 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 6/30/2019Allowance forCredit Losses-LoansBalance,beginning of $ 97,350 $ 70,395 $ 66,222 $ 63,850 $ 62,639 periodImpact of ASU2016-13 ? 12,071 ? ? ? adoptionProvision for 25,007 19,865 4,903 5,201 4,918 credit lossesCharge-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 $ 119,937 $ 97,350 $ 70,395 $ 66,222 $ 63,850 period Allowance forUnfunded Commitments^(1)Balance,beginning of $ 15,468 $ 248 $ ? $ ? $ ? periodImpact of ASU2016-13 ? 13,604 ? ? ? adoptionProvision for 1,924 1,616 ? ? ? credit lossesBalance, end of $ 17,392 $ 15,468 $ ? $ ? $ ? period Allowance forlending related $ 137,329 $ 112,818 $ 70,395 $ 66,222 $ 63,850 credit losses Provision for Credit LossesProvision forcredit $ 25,007 $ 19,865 $ 4,903 $ 5,201 $ 4,918 losses-loansProvision forcredit 1,924 1,616 ? ? ? losses-unfundedcommitmentsProvision forcreditlosses-held to (135) 39 ? ? ? maturitysecurities^(2)Total provisionfor credit $ 26,796 $ 21,520 $ 4,903 $ 5,201 $ 4,918 losses (1) Prior to the adoption of ASU 2016-13, the allowance for unfundedcommitments was immaterial and therefore prior periods have not been shown inthis table.(2) Prior to ASU 2016-13, there was no requirement to record provision forcredit 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 6/30/2019Asset Quality Nonaccrual $ 91,609 $ 79,280 $ 76,548 $ 72,208 $ 79,619 loansLoans pastdue ninety 1,360 ? 4,105 40 285 days or moreOther real 5,539 6,074 6,914 6,425 6,646 estate ownedOtherrepossessed 29 17 11 13 39 assetsTotalnonperforming $ 98,537 $ 85,371 $ 87,578 $ 78,686 $ 86,589 assets Performingtroubled debt $ 2,636 $ 2,858 $ 3,794 $ 3,199 $ 3,539 restructuredloans NonperformingAssets ActivityBalance,beginning of $ 85,371 $ 87,578 $ 78,686 $ 86,589 $ 84,399 periodNet loan (2,420) (4,981) (730) (2,829) (3,707) charge offsNewnonperforming 26,857 15,796 13,751 6,818 13,688 loansAcquirednonperforming ? ? 3,262 ? 230 assetsReduction ofnonperforming (9,911) (11,937) (5,859) (8,861) (6,246) loans^(1)Net OREO/repossessedassets sales (1,360) (1,085) (1,532) (3,031) (1,775) proceeds andlossesBalance, end $ 98,537 $ 85,371 $ 87,578 $ 78,686 $ 86,589 of period Asset Quality RatiosRatio ofnonperforming 1.01 % 0.95 % 0.96 % 0.91 % 1.02 %loans tototal loansRatio ofnonperformingloans andperforming 1.03 0.98 1.01 0.95 1.06 trouble debtrestructuredloans tototal loansRatio ofnonperforming 0.66 0.64 0.66 0.63 0.71 assets tototal assetsAnnualizedratio of netloan 0.11 0.24 0.04 0.14 0.19 charge-offsto averageloansAllowance forloan creditlosses as a 1.30 1.16 0.84 0.83 0.81 percent ofloansAllowance forlendingrelated 1.49 1.35 0.84 0.83 0.81 credit lossesas a percentof loans^(2)Allowance forloan creditlosses as a 129.01 122.79 87.28 91.66 79.91 percent ofnonperformingloansLoansdelinquent30-89 days as 0.22 0.38 0.33 0.28 0.31 a percent oftotal loans (1) Includes principal reductions, transfers to performing status and transfersto 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 Interest Rate Average Interest Rate Average Interest Rate Balance Balance BalanceEarning 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 depositswith other banks and 210,347 54 0.10 181,320 721 1.60 424,262 2,299 2.17 short-term investmentsFederal funds sold ? ? ? ? ? ? ? ? ? Loans:^(2)(3) Commercial and 2,453,066 30,759 5.04 2,607,513 32,454 5.01 2,436,443 31,991 5.27 industrial^(1)PPP loans 916,405 6,017 2.64 ? ? ? ? ? ? Owner occupied 1,426,019 17,670 4.98 1,433,160 18,581 5.21 1,312,149 18,659 5.70 commercial real estateNon-owner occupied 1,540,958 19,055 4.97 1,472,268 19,530 5.34 1,134,298 17,683 6.25 commercial real estateReal estate 1,100,514 12,589 4.60 1,045,836 12,845 4.94 900,733 13,195 5.88 constructionAgricultural andagricultural real 532,668 6,171 4.66 552,968 7,039 5.12 566,315 7,465 5.29 estateResidential mortgage 795,149 9,586 4.85 819,730 10,421 5.11 872,633 11,129 5.12 Consumer 422,134 5,685 5.42 432,745 6,095 5.66 425,991 6,494 6.11 Less: allowance for (102,675) ? ? (74,723) ? ? (62,685) ? ? loan lossesNet loans 9,084,238 107,532 4.76 8,289,497 106,965 5.19 7,585,877 106,616 5.64 Total earning assets 13,103,159 135,181 4.15 % 11,891,455 132,180 4.47 % 10,552,166 128,271 4.88 %Nonearning Assets 1,288,697 1,256,718 1,156,372 Total Assets $ 14,391,856 $ 13,148,173 $ 11,708,538 Interest Bearing LiabilitiesSavings $ 6,690,504 $ 2,372 0.14 % $ 6,277,528 $ 10,082 0.65 % $ 5,360,355 $ 11,895 0.89 %Time deposits 1,096,386 3,762 1.38 1,146,619 4,500 1.58 1,142,842 4,243 1.49 Short-term borrowings 82,200 61 0.30 141,807 296 0.84 92,977 338 1.46 Other borrowings 286,663 3,424 4.80 275,987 3,660 5.33 276,275 3,819 5.54 Total interest bearing 8,155,753 9,619 0.47 % 7,841,941 18,538 0.95 % 6,872,449 20,295 1.18 liabilitiesNoninterest Bearing LiabilitiesNoninterest bearing 4,501,488 3,547,046 3,287,559 depositsAccrued interest and 153,618 139,504 106,142 other liabilitiesTotal noninterest 4,655,106 3,686,550 3,393,701 bearing liabilitiesEquity 1,580,997 1,619,682 1,442,388 Total Liabilities and $ 14,391,856 $ 13,148,173 $ 11,708,538 EquityNet interest income,fully tax-equivalent $ 125,562 $ 113,642 $ 107,976 (non-GAAP)^(4)Net interest spread^(1) 3.68 % 3.52 % 3.70 %Net interest income,fully tax-equivalent 3.85 % 3.84 % 4.10 %(non-GAAP)^(4) to totalearning assetsInterest bearingliabilities to earning 62.24 % 65.95 % 65.13 % assets (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 loansoutstanding.(3) In conjunction with the adoption of ASU 2016-13, Heartland reclassifiedloan balances to more closely align with FDIC codes. All prior period balanceshave been adjusted.(4) Refer to "Non-GAAP Measures" in this earnings release for additionalinformation on the usage and presentation of these non-GAAP measures, and referto these financial tables for the reconciliations to the most directlycomparable GAAP measures.



HEARTLAND FINANCIAL USA, INC.CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)DOLLARS IN THOUSANDS For the Six Months Ended June 30, 2020 June 30, 2019 Average Interest Rate Average Interest Rate Balance BalanceEarning Assets Securities: Taxable $ 3,253,675 $ 45,093 2.79 % $ 2,193,576 $ 31,999 2.94 %Nontaxable^(1) 360,932 6,996 3.90 357,757 7,148 4.03 Total 3,614,607 52,089 2.90 2,551,333 39,147 3.09 securitiesInterestbearingdeposits withother banks 195,833 775 0.80 321,922 3,591 2.25 and othershort-terminvestmentsFederal funds ? ? ? 278 4 2.90 soldLoans:^(2)(3) Commercial and 2,530,349 63,213 5.02 2,381,953 62,380 5.28 industrial^(1)PPP loans 458,202 6,017 2.64 ? ? ? Owner occupiedcommercial 1,429,560 36,251 5.10 1,285,930 36,190 5.68 real estateNon-owneroccupied 1,506,583 38,585 5.15 1,130,756 35,106 6.26 commercialreal estateReal estate 1,073,175 25,434 4.77 866,548 25,066 5.83 constructionAgriculturaland 542,818 13,210 4.89 567,330 14,668 5.21 agriculturalreal estateResidential 807,440 20,007 4.98 878,691 21,415 4.91 mortgageConsumer 427,439 11,780 5.54 420,152 12,837 6.16 Less:allowance for (88,699) ? ? (62,664) ? ? loan lossesNet loans 8,686,867 214,497 4.97 7,468,696 207,662 5.61 Total earning 12,497,307 267,361 4.30 % 10,342,229 250,404 4.88 %assetsNonearning 1,272,708 1,146,866 AssetsTotal Assets $ 13,770,015 $ 11,489,095 InterestBearing LiabilitiesSavings $ 6,484,016 $ 12,454 0.39 % $ 5,241,428 $ 21,978 0.85 %Time deposits 1,121,502 8,262 1.48 1,089,091 7,373 1.37 Short-term 112,004 357 0.64 143,901 1,227 1.72 borrowingsOther 281,325 7,084 5.06 273,570 7,483 5.52 borrowingsTotal interestbearing 7,998,847 28,157 0.71 % 6,747,990 38,061 1.14 %liabilitiesNoninterestBearing LiabilitiesNoninterestbearing 4,024,267 3,244,161 depositsAccruedinterest and 146,561 107,332 otherliabilitiesTotalnoninterest 4,170,828 3,351,493 bearingliabilitiesStockholders' 1,600,340 1,389,612 EquityTotalLiabilitiesand $ 13,770,015 $ 11,489,095 Stockholders'EquityNet interestincome, fully $ 239,204 $ 212,343 tax-equivalent(non-GAAP)^(4)Net interest 3.59 % 3.74 %spread^(1)Net interestincome, fullytax-equivalent 3.85 % 4.14 %(non-GAAP)^(4)to totalearning assetsInterestbearing 64.00 % 65.25 % liabilities toearning assets (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 loansoutstanding.(3) In conjunction with the adoption of ASU 2016-13, Heartland reclassifiedloan balances to more closely align with FDIC codes. All prior period balanceshave been adjusted.(4) Refer to "Non-GAAP Measures" in this earnings release for additionalinformation on the usage and presentation of these non-GAAP measures, and referto these financial tables for the reconciliations to the most directlycomparable GAAP measures.



HEARTLAND FINANCIAL USA, INC.SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)DOLLARS IN THOUSANDS As of and For the Quarter Ended 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019Total AssetsCitywide $ 2,546,942 $ 2,271,889 $ 2,294,512 $ 2,335,811 $ 2,261,591 BanksNewMexico 1,899,194 1,670,097 1,763,037 1,607,498 1,534,236 Bank &TrustDubuqueBank and 1,849,035 1,591,312 1,646,105 1,547,014 1,680,539 TrustCompanyIllinoisBank & 1,470,000 1,295,984 1,301,172 839,721 852,830 TrustBank ofBlue 1,380,159 1,222,358 1,307,688 1,346,342 1,319,226 ValleyFirstBank & 1,256,710 1,163,181 1,137,714 1,158,320 1,088,796 TrustWisconsinBank & 1,203,108 1,079,582 1,090,412 1,032,016 1,042,463 TrustPremierValley 1,031,899 889,280 903,220 888,401 847,076 BankArizonaBank & 970,775 866,107 784,240 695,236 732,783 TrustMinnesotaBank & 951,236 778,724 718,724 718,035 631,339 TrustRockyMountain 590,764 576,245 532,191 528,094 503,126 BankTotal DepositsCitywide $ 2,147,642 $ 1,868,404 $ 1,829,217 $ 1,895,894 $ 1,833,259 BanksNewMexico 1,698,584 1,451,041 1,565,070 1,413,170 1,346,304 Bank &TrustDubuqueBank and 1,496,559 1,363,164 1,290,756 1,275,131 1,157,881 TrustCompanyIllinoisBank & 1,318,866 1,139,945 1,167,905 768,267 769,577 TrustBank ofBlue 1,138,818 1,008,362 1,016,743 1,091,243 1,077,183 ValleyFirstBank & 959,886 900,399 893,419 903,410 844,793 TrustWisconsinBank & 1,050,766 920,168 941,109 880,217 892,020 TrustPremierValley 869,165 706,479 707,814 719,141 689,384 BankArizonaBank & 865,430 754,464 693,975 578,694 646,728 TrustMinnesotaBank & 820,199 648,560 574,369 600,175 515,310 TrustRockyMountain 519,029 496,465 468,314 462,825 438,349 Bank





HEARTLAND FINANCIAL USA, INC.CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEEDATA For the Quarter Ended 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019Reconciliationof AnnualizedReturn onAverage TangibleCommon Equity(non-GAAP)Net income $ 30,131 $ 20,040 $ 37,851 $ 34,612 $ 45,169 (GAAP)Plus coredeposit andcustomerrelationship 2,130 2,355 2,305 2,291 2,617 intangiblesamortization,net of tax^(1)Net incomeexcludingintangible $ 32,261 $ 22,395 $ 40,156 $ 36,903 $ 47,786 amortization(non-GAAP) Average common $ 1,574,902 $ 1,619,682 $ 1,570,258 $ 1,541,369 $ 1,442,388 equity (GAAP)Less average 446,345 446,345 433,374 427,097 410,642 goodwillLess averagecore depositand customer 44,723 47,632 49,389 51,704 49,868 relationshipintangibles,netAveragetangible $ 1,083,834 $ 1,125,705 $ 1,087,495 $ 1,062,568 $ 981,878 common equity(non-GAAP)Annualizedreturn on 7.69 % 4.98 % 9.56 % 8.91 % 12.56 %average commonequity (GAAP)Annualizedreturn onaverage 11.97 % 8.00 % 14.65 % 13.78 % 19.52 %tangiblecommon equity(non-GAAP) Reconciliationof AnnualizedNet Interest Margin, FullyTax-Equivalent(non-GAAP)Net Interest $ 124,146 $ 112,511 $ 112,745 $ 111,321 $ 106,708 Income (GAAP)Plustax-equivalent 1,416 1,131 1,109 1,140 1,268 adjustment^(1)Net interestincome, fully $ 125,562 $ 113,642 $ 113,854 $ 112,461 $ 107,976 tax-equivalent(non-GAAP) Average $ 13,103,159 $ 11,891,455 $ 11,580,295 $ 11,102,581 $ 10,552,166 earning assets Annualized netinterest 3.81 % 3.81 % 3.86 % 3.98 % 4.06 %margin (GAAP)Annualized netinterestmargin, fully 3.85 3.84 3.90 4.02 4.10 tax-equivalent(non-GAAP)Purchaseaccountingdiscountamortizationon loans 0.16 0.09 0.17 0.23 0.18 included inannualized netinterestmargin

Reconciliationof TangibleBook Value Per Common Share(non-GAAP)Common equity $ 1,636,672 $ 1,553,714 $ 1,578,137 $ 1,563,843 $ 1,521,787 (GAAP)Less goodwill 446,345 446,345 446,345 427,097 427,097 Less coredeposit andcustomer 43,011 45,707 48,688 49,819 52,718 relationshipintangibles,netTangiblecommon equity $ 1,147,316 $ 1,061,662 $ 1,083,104 $ 1,086,927 $ 1,041,972 (non-GAAP) Common sharesoutstanding, 36,844,744 36,807,217 36,704,278 36,696,190 36,690,061 net oftreasury stockCommon equity(book value) $ 44.42 $ 42.21 $ 43.00 $ 42.62 $ 41.48 per share(GAAP)Tangible bookvalue per $ 31.14 $ 28.84 $ 29.51 $ 29.62 $ 28.40 common share(non-GAAP) Reconciliationof TangibleCommon Equity Ratio(non-GAAP)Tangiblecommon equity $ 1,147,316 $ 1,061,662 $ 1,083,104 $ 1,086,927 $ 1,041,972 (non-GAAP) Total assets $ 15,026,153 $ 13,294,509 $ 13,209,597 $ 12,569,262 $ 12,160,290 (GAAP)Less goodwill 446,345 446,345 446,345 427,097 427,097 Less coredeposit andcustomer 43,011 45,707 48,688 49,819 52,718 relationshipintangibles,netTotal tangibleassets $ 14,536,797 $ 12,802,457 $ 12,714,564 $ 12,092,346 $ 11,680,475 (non-GAAP)Tangiblecommon equity 7.89 % 8.29 % 8.52 % 8.99 % 8.92 %ratio(non-GAAP) (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 DATAReconciliation For the Quarter Endedof EfficiencyRatio 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019(non-GAAP)Net interest $ 124,146 $ 112,511 $ 112,745 $ 111,321 $ 106,708 income (GAAP)Tax-equivalent 1,416 1,131 1,109 1,140 1,268 adjustment^(1)Fullytax-equivalent 125,562 113,642 113,854 112,461 107,976 net interestincomeNoninterest 30,637 25,817 28,030 29,400 32,061 incomeSecurities (2,006) (1,658) (491) (2,013) (3,580) gains, netUnrealized(gain)/loss onequity (680) 231 (11) (144) (112) securities,netGain onextinguishment ? ? ? (375) ? of debtValuationadjustment on (9) 1,565 (668) 626 364 servicingrightsAdjustedrevenue $ 153,504 $ 139,597 $ 140,714 $ 139,955 $ 136,709 (non-GAAP) Totalnoninterest $ 90,439 $ 90,859 $ 92,866 $ 92,967 $ 75,098 expenses(GAAP)Less: Core depositand customerrelationship 2,696 2,981 2,918 2,899 3,313 intangiblesamortizationPartnershipinvestment in 791 184 3,038 3,052 1,465 tax creditprojects(Gain)/loss onsales/ 701 16 1,512 356 (18,286) valuation ofassets, netAcquisition,integrationand 673 1,376 537 1,500 929 restructuringcostsAdjustednoninterest $ 85,578 $ 86,302 $ 84,861 $ 85,160 $ 87,677 expenses(non-GAAP)Efficiencyratio, fully 55.75 % 61.82 % 60.31 % 60.85 % 64.13 %tax-equivalent(non-GAAP) Acquisition,integrationand restructuringcostsSalaries andemployee $ 122 $ 44 $ ? $ 100 $ 100 benefitsOccupancy ? ? 11 ? 10 Furniture and 15 24 7 (4) 84 equipmentProfessional 505 996 462 855 624 feesAdvertising 4 89 31 115 52 (Gain)/loss onsales/ ? ? ? ? ? valuations ofassets, netOthernoninterest 27 223 26 434 59 expensesTotalacquisition,integration $ 673 $ 1,376 $ 537 $ 1,500 $ 929 andrestructuringcostsAfter taximpact ondiluted $ 0.01 $ 0.03 $ 0.01 $ 0.03 $ 0.02 earnings pershare^(1) Reconciliationof AdjustedNet Income and AdjustedDiluted EPS(non-GAAP)Net income $ 30,131 $ 20,040 $ 37,851 $ 34,612 $ 45,169 (GAAP)Provision forcredit losses^ 21,169 17,001 3,873 4,109 3,885 (1)Acquisition,integrationand 532 1,087 424 1,185 734 restructuringcosts^(1)Adjusted netincome $ 51,832 $ 38,128 $ 42,148 $ 39,906 $ 49,788 (non-GAAP)Dilutedearnings per $ 0.82 $ 0.54 $ 1.03 $ 0.94 $ 1.26 share (GAAP)Adjusteddilutedearnings per $ 1.40 $ 1.03 $ 1.14 $ 1.08 $ 1.39 share(non-GAAP) Reconciliationof AnnualizedAdjustedReturn on AverageTangibleCommon Equity(non-GAAP)Adjusted netincome $ 51,832 $ 38,128 $ 42,148 $ 39,906 $ 49,788 (non-GAAP)Plus coredeposit andcustomerrelationship 2,130 2,355 2,305 2,291 2,617 intangiblesamortization,net of tax^(1)Adjusted netincomeexcluding $ 53,962 $ 40,483 $ 44,453 $ 42,197 $ 52,405 intangibleamortization(non-GAAP)Averagetangible $ 1,083,834 $ 1,125,705 $ 1,087,495 $ 1,062,568 $ 981,878 common equity(non-GAAP)Annualizedadjustedreturn onaverage 20.02 % 14.46 % 16.22 % 15.76 % 21.41 %tangiblecommon equity(non-GAAP) (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 For the Six Months Ended June 30, June 30, 2020 2019 2020 2019Reconciliationof AnnualizedReturn onAverage TangibleCommon Equity(non-GAAP)Net income $ 30,131 $ 45,169 $ 50,171 $ 76,666 (GAAP)Plus coredeposit andcustomerrelationship 2,130 2,617 4,485 4,862 intangiblesamortization,net of tax^(1)Net incomeexcludingintangible $ 32,261 $ 47,786 $ 54,656 $ 81,528 amortization(non-GAAP) Average common $ 1,574,902 $ 1,442,388 $ 1,597,292 $ 1,389,612 equity (GAAP)Less average 446,345 410,642 446,345 401,207 goodwillLess averagecore depositand customer 44,723 49,868 46,177 48,188 relationshipintangibles,netAveragetangible $ 1,083,834 $ 981,878 $ 1,104,770 $ 940,217 common equity(non-GAAP)Annualizedreturn on 7.69 % 12.56 % 6.32 % 11.13 %average commonequity (GAAP)Annualizedreturn onaverage 11.97 % 19.52 % 9.95 % 17.49 %tangiblecommon equity(non-GAAP) Reconciliationof AnnualizedNet Interest Margin, FullyTax-Equivalent(non-GAAP)Net Interest $ 124,146 $ 106,708 $ 236,657 $ 209,663 Income (GAAP)Plustax-equivalent 1,416 1,268 2,547 2,680 adjustment^(1)Net interestincome, fully $ 125,562 $ 107,976 $ 239,204 $ 212,343 tax-equivalent(non-GAAP) Average $ 13,103,159 $ 10,552,166 $ 12,497,307 $ 10,342,229 earning assets Annualized netinterest 3.81 % 4.06 % 3.81 % 4.09 %margin (GAAP)Annualized netinterestmargin, fully 3.85 4.10 3.85 4.14 tax-equivalent(non-GAAP)Purchaseaccountingdiscountamortizationon loans 0.16 0.18 0.10 0.17 included inannualized netinterestmargin (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 DATAReconciliation of For the Quarter Ended For the Six Months EndedEfficiency Ratio June 30, June 30,(non-GAAP) 2020 2019 2020 2019Net interest $ 124,146 $ 106,708 $ 236,657 $ 209,663 income (GAAP)Tax-equivalent 1,416 1,268 2,547 2,680 adjustment^(1)Fullytax-equivalent 125,562 107,976 239,204 212,343 net interestincomeNoninterest 30,637 32,061 56,454 58,778 incomeSecurities gains, (2,006) (3,580) (3,664) (5,155) netUnrealized (gain)/loss on equity (680) (112) (449) (370) securities, netGain onextinguishment of ? ? ? ? debtValuationadjustment on (9) 364 1,556 953 servicing rightsAdjusted revenue $ 153,504 $ 136,709 $ 293,101 $ 266,549 (non-GAAP) Total noninterest $ 90,439 $ 75,098 $ 181,298 $ 163,328 expenses (GAAP)Less: Core deposit andcustomerrelationship 2,696 3,313 5,677 6,155 intangiblesamortizationPartnershipinvestment in tax 791 1,465 975 1,940 credit projects(Gain)/loss onsales/valuation 701 (18,286) 717 (21,290) of assets, netAcquisition,integration and 673 929 2,049 4,543 restructuringcostsAdjustednoninterest $ 85,578 $ 87,677 $ 171,880 $ 171,980 expenses(non-GAAP)Efficiency ratio,fully 55.75 % 64.13 % 58.64 % 64.52 %tax-equivalent(non-GAAP) Acquisition,integration and restructuringcostsSalaries and $ 122 $ 100 $ 166 $ 716 employee benefitsOccupancy ? 10 ? 1,204 Furniture and 15 84 39 84 equipmentProfessional fees 505 624 1,501 1,048 Advertising 4 52 93 57 (Gain)/loss onsales/valuations ? ? ? 1,003 of assets, netOther noninterest 27 59 250 431 expensesTotalacquisition,integration and $ 673 $ 929 $ 2,049 $ 4,543 restructuringcostsAfter tax impacton diluted $ 0.01 $ 0.02 $ 0.04 $ 0.10 earnings pershare^(1) Reconciliation ofAdjusted NetIncome and Adjusted DilutedEPS (non-GAAP)Net income (GAAP) $ 30,131 $ 45,169 $ 50,171 $ 76,666 Provision for 21,169 3,885 38,170 5,177 credit losses^(1)Acquisition,integration and 532 734 1,619 3,589 restructuringcosts^(1)Adjusted net $ 51,832 $ 49,788 $ 89,960 $ 85,432 income (non-GAAP)Diluted earnings $ 0.82 $ 1.26 $ 1.36 $ 2.17 per share (GAAP)Adjusted dilutedearnings per $ 1.40 $ 1.39 $ 2.44 $ 2.42 share (non-GAAP) Reconciliation ofAnnualizedAdjusted Return on AverageTangible CommonEquity (non-GAAP)Adjusted net $ 51,832 $ 49,788 $ 89,960 $ 85,432 income (non-GAAP)Plus core depositand customerrelationship 2,130 2,617 4,485 4,862 intangiblesamortization, netof tax^(1)Adjusted netincome excludingintangible $ 53,962 $ 52,405 $ 94,445 $ 90,294 amortization(non-GAAP)Average tangiblecommon equity $ 1,083,834 $ 981,878 $ 1,104,770 $ 940,217 (non-GAAP)Annualizedadjusted returnon average 20.02 % 21.41 % 17.19 % 19.37 %tangible commonequity (non-GAAP)

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

HEARTLAND FINANCIAL USA, INC.CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEEDATA As of and For the Quarter Ended 6/30/2020 3/31/ 12/31/ 9/30/ 6/30/ 2020 2019 2019 2019PPP loan balances $ 1,124,430 $ ? $ ? $ ? $ ? Average PPP loan balances 916,405 PPP fee income $ 3,655 $ ? $ ? $ ? $ ? PPP interest income 2,362 ? ? ? ? Total PPP interest income $ 6,017 $ ? $ ? $ ? $ ? Selected ratios excluding PPP loans and interest incomeAnnualized net interest margin 3.90 % ? % ? % ? % ? %(GAAP)Annualized net interest margin,fully tax-equivalent (non-GAAP)^ 3.95 ? ? ? ? (1)Ratio of nonperforming loans to 1.14 ? ? ? ? total loansRatio of nonperforming loans andperforming trouble debt 1.18 ? ? ? ? restructured loans to totalloansRatio of nonperforming assets to 0.71 ? ? ? ? total assetsAnnualized ratio of net loan 0.12 ? ? ? ? charge-offs to average loansAllowance for loan credit losses 1.48 ? ? ? ? as a percent of loansAllowance for lending relatedcredit losses as a percent of 1.69 ? ? ? ? loansLoans delinquent 30-89 days as a 0.26 ? ? ? ? percent of total loans After tax impact of PPP interestincome on diluted earnings per $ 0.13 $ ? $ ? $ ? $ ? share^(1)

As of and For the Six Months Ended June 30, 2020 June 30, 2019PPP loan balances $ 1,124,430 $ ? PPP average loan balances 458,202 ? PPP fee income $ 3,655 $ ? PPP interest income 2,362 ? Total PPP interest income $ 6,017 $ ? Selected ratios excluding PPP loans and interest incomeAnnualized net interest margin (GAAP) 3.85 % ? %Annualized net interest margin, fully tax-equivalent 3.90 ? (non-GAAP)^(1)Annualized ratio of net loan charge-offs to average 0.18 ? loans After tax impact of PPP interest income on diluted $ 0.13 $ ? earnings per share^(1) (1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

About Heartland FinancialHeartland Financial USA, Inc. is a diversified financial services company based in Dubuque, Iowa. Our family of 11 community banks are in the Midwest and Western United States. We have 114 banking centers and each bank serves customers with local decision-making supported by big bank resources. Our community banks offer a complete portfolio of products and services including commercial loans, treasury management, mortgage, checking and savings accounts, retirement planning services, insurance, credit cards and more. Relationships have been the core of our company since its founding in 1981. Thats why were deeply invested in the communities we serve and why our clients often refer to us as their partners.

ContactEVP, Chief Financial Officer Bryan R. McKeagBMcKeag@htlf.com 563.589.1994