Heartland Financial USA (HTLF) Q3 2024 earnings summary

Executive summary

• Net income available to common stockholders rose 35% year-over-year to $62.1M ($1.44 per diluted share) for Q3 2024.

• Adjusted earnings per diluted share were $1.17, with a $29.7M gain from the Rocky Mountain Bank sale and a $9.5M loss on security sales.

• Net interest margin (fully tax-equivalent) increased to 3.78% from 3.18% year-over-year.

• Integration planning with UMB Financial is ongoing, with closing expected in Q1 2025.

• For the nine months ended September 30, 2024, net income available to common stockholders was $149.6M, up 4% year-over-year.

Financial highlights

• Net interest income increased 8% to $157.9M; total revenue was $176.9M, up 2% year-over-year.

• Total assets were $18.27B at September 30, 2024, down 6% from year-end 2023.

• Total loans held to maturity fell 5% to $11.44B, mainly due to the Rocky Mountain Bank sale.

• Total deposits decreased 8% to $14.95B; 68% of deposits were insured or collateralized.

• Noninterest income fell 33% year-over-year, mainly due to higher security losses and lower loan sales.

Outlook and guidance

• Management expects to use cash flow from investments to pay down wholesale deposits and short-term borrowings, supporting net interest margin.

• Continued improvement in tangible common equity and net interest margin is expected as high-cost deposits are paid down.

• The provision for credit losses could remain volatile due to economic uncertainty, higher rates, and credit quality trends.

• Management believes capital and liquidity positions are sufficient to meet obligations and support operations in 2024.

• The merger with UMB Financial is anticipated to close in Q1 2025, with integration planning underway.