Heartland Financial USA Inc. (HTLF, Financial) filed Quarterly Report for the period ended 2012-06-30.
Heartland Financial Usa, Inc. has a market cap of $416.8 million; its shares were traded at around $24.76 with a P/E ratio of 12.7 and P/S ratio of 1.7. The dividend yield of Heartland Financial Usa, Inc. stocks is 1.6%. Heartland Financial Usa, Inc. had an annual average earning growth of 1.1% over the past 10 years.
Service charges and fees increased $113 thousand or 3 percent during the quarters under comparison and $336 thousand or 5 percent during the six-month periods under comparison. Service charges on checking and savings accounts recorded during the second quarter of 2012 were $988 thousand compared to $805 thousand during the second quarter of 2011, an increase of $183 thousand or 23 percent. For the six months ended June 30, service charges on checking and savings accounts totaled $1.9 million during 2012 compared to $1.6 million during 2011, an increase of $276 thousand or 17 percent. Overdraft fees were $1.3 million during the second quarter of 2012 compared to $1.4 million during the second quarter of 2011, a decrease of $120 thousand or 9 percent. For the six months ended June 30, overdraft fees totaled $2.5 million during 2012 compared to $2.6 million during 2011, a decrease of $90 thousand or 3 percent. Interchange revenue from activity on bank debit cards, along with surcharges on ATM activity, resulted in service charges and fees of $1.3 million during both the second quarter of 2012 and the second quarter of 2011. These same fees were $2.6 million during the first six months of 2012 compared to $2.4 million during the first six months of 2011, an increase of $141 thousand or 6 percent.
Gains on sale of loans totaled $12.7 million during the second quarter of 2012 compared to $1.3 million during the second quarter of 2011. For the six-month period ended June 30, gains on sale of loans totaled $21.2 million during 2012 compared to $2.7 million during 2011. The volume of loans sold totaled $360.7 million during the second quarter of 2012, more than five times the $65.8 million sold during the second quarter of 2011. For the six months ended June 30, the volume of loans sold totaled $604.6 million during 2012 compared to $146.8 million during 2011. Most of the increase in volume was due to improved interest rates on home mortgages and to the expansion of Heartland's mortgage banking operations through its Heartland Mortgage and National Residential Mortgage operations. Pricing received on the sale of fixed rate residential mortgage loans into the secondary market improved through a bulk delivery method that was implemented during the second quarter of 2011, instead of an individual delivery method that had been used previously. At the same time, secondary market pricing began to be matched with origination pricing through the use of a software tool that assists in hedging the locked rate pipeline position. Heartland believes long term success in the mortgage banking business will depend on its ability to shift toward purchase originations, which will drive revenue when the refinance boom comes to an end. For the second quarter of 2012, refinancing activity represented 58 percent of the total mortgage originations.
Other noninterest income totaled $2.7 million during the first six months of 2012 compared to $45 thousand during the first six months of 2011. Included in other noninterest income during the first quarter of 2012 was $2.0 million in equity earnings which resulted from the sale of two low-income housing projects within partnerships in which Dubuque Bank and Trust Company was a member.
Investing activities used cash of $168.4 million during the first six months of 2012 compared to providing cash of $57.5 million during the first six months of 2011. A net increase in loans and leases used cash of $159.9 million during the first six months of 2012 compared to $22.8 million during the first six months of 2011. Additionally, purchases of securities used cash of $517.8 million during the first six months of 2012 compared to $408.3 million during the first six months of 2011 while the proceeds from securities sales, paydowns and maturities was $503.0 million during the first six months of 2012 compared to $487.0 million during the first six months of 2011.
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Heartland Financial Usa, Inc. has a market cap of $416.8 million; its shares were traded at around $24.76 with a P/E ratio of 12.7 and P/S ratio of 1.7. The dividend yield of Heartland Financial Usa, Inc. stocks is 1.6%. Heartland Financial Usa, Inc. had an annual average earning growth of 1.1% over the past 10 years.
Highlight of Business Operations:
On a tax-equivalent basis, interest income in the second quarter of 2012 was $48.8 million compared to $49.9 million in the second quarter of 2011, a decrease of $1.1 million or 2 percent. For the first six months of 2012, interest income on a tax-equivalent basis was $98.7 million compared to $99.2 million during the same period in 2011, a decrease of $511 thousand or 1 percent. Even though average earning assets increased $270.3 million or 8 percent during the second quarter of 2012 compared to the second quarter of 2011 and $235.5 million or 7 percent during the first six months of 2012 compared to the same period in 2011, this growth did not cover the decline in interest income due to a decrease in the rates earned on these assets. The average interest rate earned on these assets was 5.07 percent during the second quarter of 2012 compared to 5.57 percent during the second quarter of 2011. For the first six months of the year, the average interest rate earned on these assets was 5.19 percent during 2012 compared to 5.57 percent during 2011. The declines in interest income were a result of the interest rates earned on the securities portfolio, which decreased 90 basis points during the quarter ended June 30, 2012, compared to the same quarter in 2011 and 63 basis points during the six months ended June 30, 2012, compared to the same six months in 2011.Service charges and fees increased $113 thousand or 3 percent during the quarters under comparison and $336 thousand or 5 percent during the six-month periods under comparison. Service charges on checking and savings accounts recorded during the second quarter of 2012 were $988 thousand compared to $805 thousand during the second quarter of 2011, an increase of $183 thousand or 23 percent. For the six months ended June 30, service charges on checking and savings accounts totaled $1.9 million during 2012 compared to $1.6 million during 2011, an increase of $276 thousand or 17 percent. Overdraft fees were $1.3 million during the second quarter of 2012 compared to $1.4 million during the second quarter of 2011, a decrease of $120 thousand or 9 percent. For the six months ended June 30, overdraft fees totaled $2.5 million during 2012 compared to $2.6 million during 2011, a decrease of $90 thousand or 3 percent. Interchange revenue from activity on bank debit cards, along with surcharges on ATM activity, resulted in service charges and fees of $1.3 million during both the second quarter of 2012 and the second quarter of 2011. These same fees were $2.6 million during the first six months of 2012 compared to $2.4 million during the first six months of 2011, an increase of $141 thousand or 6 percent.
Gains on sale of loans totaled $12.7 million during the second quarter of 2012 compared to $1.3 million during the second quarter of 2011. For the six-month period ended June 30, gains on sale of loans totaled $21.2 million during 2012 compared to $2.7 million during 2011. The volume of loans sold totaled $360.7 million during the second quarter of 2012, more than five times the $65.8 million sold during the second quarter of 2011. For the six months ended June 30, the volume of loans sold totaled $604.6 million during 2012 compared to $146.8 million during 2011. Most of the increase in volume was due to improved interest rates on home mortgages and to the expansion of Heartland's mortgage banking operations through its Heartland Mortgage and National Residential Mortgage operations. Pricing received on the sale of fixed rate residential mortgage loans into the secondary market improved through a bulk delivery method that was implemented during the second quarter of 2011, instead of an individual delivery method that had been used previously. At the same time, secondary market pricing began to be matched with origination pricing through the use of a software tool that assists in hedging the locked rate pipeline position. Heartland believes long term success in the mortgage banking business will depend on its ability to shift toward purchase originations, which will drive revenue when the refinance boom comes to an end. For the second quarter of 2012, refinancing activity represented 58 percent of the total mortgage originations.
Other noninterest income totaled $2.7 million during the first six months of 2012 compared to $45 thousand during the first six months of 2011. Included in other noninterest income during the first quarter of 2012 was $2.0 million in equity earnings which resulted from the sale of two low-income housing projects within partnerships in which Dubuque Bank and Trust Company was a member.
Investing activities used cash of $168.4 million during the first six months of 2012 compared to providing cash of $57.5 million during the first six months of 2011. A net increase in loans and leases used cash of $159.9 million during the first six months of 2012 compared to $22.8 million during the first six months of 2011. Additionally, purchases of securities used cash of $517.8 million during the first six months of 2012 compared to $408.3 million during the first six months of 2011 while the proceeds from securities sales, paydowns and maturities was $503.0 million during the first six months of 2012 compared to $487.0 million during the first six months of 2011.
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