Free 7-day Trial
All Articles and Columns »

Heartland Financial USA Inc. Reports Operating Results (10-Q)

August 10, 2009 | About:

Heartland Financial USA Inc. (HTLF) filed Quarterly Report for the period ended 2009-06-30.

Heartland Financial USA Inc. is a multi-bank holding company operating through bank subsidiaries in the states of Iowa Wisconsin Illinois and New Mexico and a federal savings bank subsidiary in Iowa. The Bank Subsidiaries provide full-service retail banking. Deposit products include checking and other demand deposit accounts savings accounts money market accounts individual retirement accounts and other time deposits. Loans include commercial and industrial agricultural real estate mortgage consumer home equity credit cards and lines of credit. Heartland Financial USA Inc. has a market cap of $273.1 million; its shares were traded at around $16.76 with a P/E ratio of 33.52 and P/S ratio of 1.17. The dividend yield of Heartland Financial USA Inc. stocks is 2.39%. Heartland Financial USA Inc. had an annual average earning growth of 4.3% over the past 5 years.

Highlight of Business Operations:

Net income was $4.7 million for the quarter ended June 30, 2009, compared to $4.6 million earned during the second quarter of 2008. Net income available to common stockholders was $3.4 million, or $0.21 per diluted common share, for the quarter ended June 30, 2009, compared to $4.7 million, or $0.29 per diluted common share, earned during the second quarter of 2008. Return on average common equity was 5.74 percent and return on average assets was 0.36 percent for the second quarter of 2009, compared to 8.08 percent and 0.56 percent, respectively, for the same quarter in 2008.

During the second quarter of 2009, net interest income on a tax-equivalent basis increased $3.7 million or 12 percent compared to the same quarter in 2008. Average earning assets increased $362.7 million or 12 percent during the comparable quarterly periods. Noninterest income was $14.7 million during the second quarter of 2009 compared to $8.3 million during the second quarter of 2008, an increase of $6.4 million or 76 percent. Contributing to this increase was a $2.1 million increase in loan servicing income, $1.8 million increase in gains on sale of loans and $1.6 million increase in securities gains. For the second quarter of 2009, noninterest expense totaled $30.5 million, an increase of $4.9 million or 19 percent from the $25.6 million recorded during the same quarter in 2008. The other noninterest expense categories to experience significant increases during the quarters under comparison were FDIC assessments, which increased $2.6 million, and net losses on repossessed assets, which increased $2.5 million.

Net income recorded for the first six months of 2009 was $10.8 million, compared to $10.8 million recorded during the first six months of 2008. Net income available to common stockholders was $8.2 million, or $0.50 per diluted common share, for the six months ended June 30, 2009, compared to $11.0 million, or $0.67 per diluted common share, earned during the first six months of 2008. Return on average common equity was 6.99 percent and return on average assets was 0.45 percent for the first six months of 2009, compared to 9.40 percent and 0.67 percent, respectively, for the same period in 2008.

During the first six months of 2009, net interest income on a tax-equivalent basis increased $7.1 million or 12 percent compared to the same six months in 2008. Average earning assets increased $349.0 million or 12 percent during the comparable six-month periods. Noninterest income was $27.4 million during the first half of 2009 compared to $16.8 million during the first half of 2008, an increase of $10.6 million or 63 percent. Contributing to this increase was a $3.6 million increase in loan servicing income, $3.1 million increase in gains on sale of loans and $4.2 million increase in securities gains. For the first half of 2009, noninterest expense totaled $58.8 million, an increase of $7.5 million or 14 percent from the $51.3 million recorded during the same period in 2008. The largest component of noninterest expense, salaries and employee benefits, increased $1.9 million or 7 percent during the first half of 2009 compared to the first half of 2008. The other noninterest expense categories to experience significant increases during the six-month periods under comparison were FDIC assessments, which increased $3.3 million, and net losses on repossessed assets, which increased $3.0 million.

Net interest income on a tax-equivalent basis totaled $33.4 million during the second quarter of 2009, an increase of $3.6 million or 12 percent from the $29.8 million recorded during the second quarter of 2008. For the six-month period during 2009, net interest income on a tax-equivalent basis was $65.6 million, an increase of $7.1 million or 12 percent from the $58.5 million recorded during the first six months of 2008. These increases occurred as Heartland s interest bearing liabilities repriced downward more quickly than its interest bearing assets. Also contributing to these increases was the $362.7 million or 12 percent growth in average earning assets during the second quarter of 2009 compared to the same quarter in 2008 and the $349.0 million or 12 percent growth in average earning assets during the first six months of 2009 compared to the same six months of 2008.

On a tax-equivalent basis, interest income in the second quarter of 2009 totaled $51.5 million compared to $51.1 million in the second quarter of 2008, an increase of $429 thousand or 1 percent. For the first six months of 2009, interest income on a tax-equivalent basis decreased $978 thousand or 1 percent over the same period in 2008. Nearly half of Heartland s commercial and agricultural loan portfolios consist of floating rate loans that reprice immediately upon a change in the national prime interest rate, thus changes in the national prime rate impact interest income more quickly than if there were more fixed rate loans. The national prime interest rate was 3.25 percent for the first six months of 2009. During the first six months of 2008, the national prime interest rate decreased from 7.25 percent on January 1, 2008, to 5.00 percent at June 30, 2008. A large portion of Heartland s floating rate loans that reprice immediately with a change in national prime have interest rate floors that are currently in effect. Additionally, Heartland had two $50.0 million derivative transactions on the loan portfolio that were at their floor interest rates. One of these derivative transactions matured on April 4, 2009.

Read the The complete Report

Rating: 4.5/5 (2 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide