Highlights

• Quarterly net income available to common stockholders of $31.5 million in comparison with $23.3 million for the first quarter of the prior year, an increase of $8.2 million or 35%
• Diluted earnings per common share of $0.91 in comparison with $0.76 for the first quarter of the prior year, an increase of $0.15 or 20%
• Net interest margin of 4.12%, fully tax-equivalent (non-GAAP)⁽¹⁾ of 4.18%
• Return on average common equity of 9.56% and return on average tangible common equity (non-GAAP)⁽¹⁾ of 15.24%
• Tangible common equity ratio (non-GAAP)⁽¹⁾ of 8.60% in comparison to 7.59% at March 31, 2018
• Efficiency ratio, fully tax-equivalent (non-GAAP)⁽¹⁾ of 65.23% in comparison with 68.21% for the first quarter of 2018
• Completed the sale of Citizens Finance consumer loan portfolios and the sale of two branches at Wisconsin Bank & Trust
• Signed an agreement to sell mortgage servicing rights of Dubuque Bank and Trust Company on April 26, 2019

	Three Months Ended March 31,
	2019				2018
Net income available to common stockholders (in millions)	$	31.5			$	23.3
Diluted earnings per common share	0.91				0.76
Return on average assets	1.13		%		0.97		%
Return on average common equity	9.56				9.32
Return on average tangible common equity (non-GAAP)(1)	15.24				13.85
Net interest margin	4.12				4.19
Net interest margin, fully tax-equivalent (non-GAAP)(1)	4.18				4.26
Efficiency ratio, fully-tax equivalent (non-GAAP)(1)	65.23				68.21

(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 reported improved first quarter results with net income of $31.5 million, which was an impressive increase of $8.2 million or 35 percent over the same quarter of last year. We had a solid net interest margin and improved tangible common equity ratio."

Lynn B. Fuller, executive operating chairman, Heartland Financial USA, Inc.

DUBUQUE, Iowa, April 29, 2019 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income available to common stockholders of $31.5 million, or $0.91 per diluted common share, for the quarter ended March 31, 2019, compared to $23.3 million, or $0.76 per diluted common share, for the first quarter of 2018. Return on average common equity was 9.56% and return on average assets was 1.13% for the first quarter of 2019, compared to 9.32% and 0.97%, respectively, for the same quarter in 2018.

Commenting on Heartland’s first quarter results, Lynn B. Fuller, Heartland’s executive operating chairman, said, "Heartland reported improved first quarter results with net income of $31.5 million, which was an impressive increase of $8.2 million or 35 percent over the same quarter of last year. We had a solid net interest margin and improved tangible common equity ratio."

In keeping with its focus on core businesses and execution of strategic priorities, Heartland completed the sale of two branch locations of Wisconsin Bank & Trust and sold the consumer finance loan portfolios totaling approximately $67 million of Citizens’ Finance Company.  Furthermore, during the quarter, Heartland announced an agreement to sell two branches of Dubuque Bank and Trust Company, which resulted in the reclassification of $20.3 million of loans and $77.0 million of deposits as held for sale.  This transaction, along with two previously announced branch sales at Illinois Bank & Trust and Citywide Banks, is expected to close in the second quarter of 2019. Heartland also reclassified commercial loans with balances of $11.8 million at March 31, 2019, to held for sale as part of a plan to exit a small lease portfolio.

On April 26, 2019, Dubuque Bank and Trust Company signed an agreement to sell substantially all its mortgage servicing rights to PNC Bank, N.A., headquartered in Pittsburgh, Pennsylvania. The servicing rights had an estimated fair value of $37.0 million and a book value of $21.0 million as of March 31, 2019. The portfolio contained approximately 20,300 of serviced residential mortgage loans with unpaid principal balances of $3.35 billion as of March 31, 2019. The serviced loans are primarily owned by Fannie Mae and Freddie Mac. The transaction has been approved by Fannie Mae and Freddie Mac and is expected to close on April 30, 2019. In the agreement, which includes customary terms and conditions, Dubuque Bank and Trust Company will provide interim servicing of the loans until the transfer date, which is expected to be in August 2019.

"During the fourth quarter of 2018, Heartland outsourced mortgage loan originations in many of our markets, and now, as a natural extension, we have decided to sell our mortgage servicing rights," said Bruce K. Lee, Heartland's president and chief executive officer.

After the completion of this transaction, Heartland will continue to originate and service conventional residential mortgages through its PrimeWest Mortgage Corporation subsidiary in Texas.

Net Interest Income Increases, Net Interest Margin Decreases, from First Quarter of 2018

Net interest margin, expressed as a percentage of average earning assets, was 4.12% (4.18% on a fully tax-equivalent basis, non-GAAP) during the first quarter of 2019, compared to 4.28% (4.34% on a fully tax-equivalent basis, non-GAAP) during the fourth quarter of 2018 and 4.19% (4.26% on a fully tax-equivalent basis, non-GAAP) during the first quarter of 2018.

"We are pleased with the continued strength of our fully tax-equivalent net interest margin. Our net interest margin declined 16 basis points from last quarter, which was in line with our expectations due to the sale of our higher yielding consumer finance loan portfolios in the beginning of 2019," Lee said.

Growth in total interest income on a tax-equivalent basis was primarily due to recent increases in market interest rates and the increase in average earning assets. Total interest income for the first quarter of 2019 was $120.7 million compared to $101.2 million recorded in the first quarter of 2018, an increase of $19.5 million or 19%. The tax-equivalent adjustment for income taxes saved on the interest earned on nontaxable securities and loans was $1.4 million for the first quarter of 2019 and $1.5 million for the first quarter of 2018. With these adjustments, total interest income on a tax-equivalent basis was $122.1 million for the first quarter of 2019, an increase of $19.4 million or 19%, compared to total interest income on a tax-equivalent basis of $102.8 million for the first quarter of 2018. Average earning assets increased $1.27 billion or 14% from the first quarter of 2018, which was primarily attributable to the acquisitions completed in 2018. The average rate on earning assets increased 19 basis points to 4.89% for the first quarter of 2019 compared to 4.70% for the same quarter in 2018.

Increases in total interest expense were primarily due to recent increases in market interest rates and deposit growth from recent acquisitions. Total interest expense for the first quarter of 2019 was $17.8 million, an increase of $8.1 million or 84% from $9.6 million in the first quarter of 2018. The average interest rate paid on Heartland's interest bearing liabilities increased to 1.09% for the first quarter of 2019 compared to 0.69% for the first quarter of 2018, which was primarily due to recent increases in market interest rates. Average interest bearing deposits increased $889.5 million or 17% to $6.16 billion for the quarter ended March 31, 2019, from $5.27 billion in the same quarter in 2018, which was primarily attributable to recent acquisitions. The average interest rate paid on Heartland's interest bearing deposits increased 43 basis points to 0.87% for the first quarter of 2019 compared to 0.44% for the same quarter in 2018. Average borrowings increased $38.3 million or 9% to $466.2 million during the first quarter of 2019 from $427.9 million during the same quarter in 2018. The average interest rate paid on Heartland's borrowings was 3.96% for the first quarter of 2019 compared to 3.66% in the first quarter of 2018.

Net interest income was $103.0 million during the first quarter of 2019 compared to $91.6 million during the first quarter of 2018, an increase of $11.4 million or 12%. After the tax-equivalent adjustment discussed above, net interest income on a tax-equivalent basis totaled $104.4 million during the first quarter of 2019 compared to net interest income on a tax-equivalent basis of $93.1 million during the first quarter of 2018, an increase of $11.2 million or 12%.

Noninterest Income and Noninterest Expense Increase from First Quarter 2018

Total noninterest income was $26.7 million during the first quarter of 2019 compared to $24.7 million during the first quarter of 2018, an increase of $2.0 million or 8%. Significant changes by noninterest income category were:

• Service charges and fees increased $2.7 million or 27% to $12.8 million for the first quarter of 2019 compared to $10.1 million for the same quarter of 2018. Service charges related to credit card income increased $1.1 million or 48% to $3.3 million for the first quarter of 2019 from $2.3 million for the same quarter of 2018. The remainder of the increase in service charges was primarily attributable to Heartland's larger customer base as a result of recent acquisitions.
• Net gains on sale of loans held for sale totaled $3.2 million during the first quarter of 2019 compared to $4.1 million during the same quarter in 2018, which was a decrease of $875,000 or 22%, primarily due to the outsourcing of Heartland's legacy mortgage lending operations in the fourth quarter of 2018.

For the first quarter of 2019, total noninterest expense was $88.2 million compared to $83.6 million during the first quarter of 2018, an increase of $4.6 million or 5%. Significant changes by noninterest expense category were:

• Salaries and employee benefits increased $1.6 million or 3% to $50.3 million for the first quarter of 2019 compared to $48.7 million for the same quarter in 2018.
• Professional fees increased $1.9 million or 20% to $11.4 million for the first quarter of 2019 compared to $9.4 million for the same period in 2018.
• Core deposit and customer relationship intangibles amortization increased $979,000 to $2.8 million for the first quarter of 2019 compared to $1.9 million for the first quarter of 2018, which was partially due to the write-off of $329,000 of core deposit intangibles related to the branch sales at Wisconsin Bank & Trust.
• Gains on sales/valuations of assets, net, totaled $3.0 million and $197,000 for the first quarter of 2019 and 2018, respectively, with the increase of $2.8 million primarily attributable to the sale of the Wisconsin Bank & Trust branches.
• Restructuring expenses totaled $3.2 million for the first quarter of 2019 compared to $2.6 million during the first quarter of 2018, which was an increase of $663,000 or 26%. Restructuring expenses in the first quarter of 2019 related to the wind down of Citizens' Finance Company and the legacy mortgage lending operations and consisted of severance and retention payments for employees, software discontinuation fees and expected lease buyouts.
• Other noninterest expenses were $11.2 million for the first quarter of 2019 compared to $9.8 million for the first quarter of 2018, which was an increase of $1.4 million or 14%. Included in this increase was a write-down of $475,000 on a partnership investment that qualifies for solar energy tax credits.

The increases in salaries and employee benefits, professional fees, and the remainder of the increases in core deposit and customer relationship intangibles amortization and other noninterest expenses were primarily attributable to recent acquisitions.

Heartland's effective tax rate was 20.88% for the first quarter of 2019 compared to 18.04% for the first quarter of 2018. Federal low-income housing tax credits included in the determination of Heartland's income taxes totaled $281,000 for the first quarter of 2019 compared to $307,000 for the first quarter of 2018. Included in Heartland's first quarter 2019 tax calculation was a solar energy tax credit totaling $314,000. Tax-exempt interest income as a percentage of pre-tax income declined to 13.35% during the first quarter of 2019 from 20.46% during the first quarter of 2018.

Loans and Deposits Decrease Since December 31, 2018

Total assets were $11.31 billion at March 31, 2019, a decrease of $95.5 million or 1% from $11.41 billion at year-end 2018. Securities represented 22% and 24% of total assets at March 31, 2019, and December 31, 2018, respectively.

Total loans held to maturity were $7.33 billion at March 31, 2019, compared to $7.41 billion at year-end 2018, a decrease of $76.2 million or 1%. During the first quarter of 2019, the sale of two branches at Dubuque Bank and Trust Company was announced, which included $20.3 million of loans that were classified as held for sale at March 31, 2019. Heartland also reclassified commercial loans with balances of $11.8 million at March 31, 2019, to held for sale as part of a plan to exit a small lease portfolio. Exclusive of these transactions, total loans held to maturity decreased $44.0 million or less than 1% since year-end 2018. Loan changes by category were:

• Commercial and commercial real estate loans totaled $5.75 billion at March 31, 2019, compared to $5.73 billion at December 31, 2018, which was an increase of $13.3 million or less than 1%. Excluding $14.9 million of commercial and commercial real estate loans classified as held for sale during the quarter, commercial and commercial real estate loans increased $28.2 million or less than 1% since year-end.
• Agricultural and agricultural real estate loans totaled $544.8 million at March 31, 2019, compared to $565.4 million at year-end, which was a decrease of $20.6 million or 4%. Excluding $6.6 million of agricultural and agricultural real estate loans classified as held for sale during the quarter, agricultural and agricultural real estate loans decreased $14.0 million or 2% since December 31, 2018.
• Residential mortgage loans decreased $43.2 million or 6% to $630.4 million at March 31, 2019, from $673.6 million at year-end. Excluding $2.0 million of residential mortgage loans classified as held for sale during the quarter, residential mortgage loans decreased $41.2 million or 6% since year-end.
• Consumer loans decreased $27.6 million or 6% to $412.6 million at March 31, 2019, compared to $440.2 million at December 31, 2018. Excluding $8.6 million of loans classified as held for sale during the quarter, consumer loans decreased $19.0 million or 4% since year-end.

"We continued to see commercial and commercial real estate loan growth this quarter. The decreases in the residential mortgage and consumer loans were primarily the result of customers refinancing loans due to recent mortgage interest rate decreases," said Lee.

Total deposits were $9.35 billion as of March 31, 2019, compared to $9.40 billion at year-end 2018, a decrease of $43.5 million or less than 1%. The deposits classified as held for sale in conjunction with the branch sale announced at Dubuque Bank and Trust Company totaled $77.0 million at March 31, 2019. Excluding deposits classified as held for sale during the quarter, total deposits increased $33.5 million or less than 1% since December 31, 2018. Deposit changes by category were:

• Demand deposits decreased $145.8 million or 4% to $3.12 billion at March 31, 2019, compared to $3.26 billion at December 31, 2018. Excluding $17.3 million of demand deposits classified as held for sale during the quarter, demand deposits decreased $128.6 million or 4% since year-end 2018.
• Savings deposits increased $38.0 million or 1% to $5.15 billion at March 31, 2019, from $5.11 billion at December 31, 2018. Excluding savings deposits of $47.8 million classified as held for sale during the quarter, savings deposits increased $85.8 million or 2% since year-end 2018.
• Time deposits increased $64.4 million or 6% to $1.09 billion at March 31, 2019 from $1.02 billion at December 31, 2018. Excluding time deposits of $11.9 million classified as held for sale during the quarter, time deposits increased $76.2 million or 7% since year-end 2018.

"Demand deposit balances declined during the first quarter, primarily due to commercial and public fund outflows, which tend to be seasonal. However, non-time deposits represent a healthy 88 percent of total deposits at March 31, 2019," Lee stated.

Nonperforming Assets Increase Since December 31, 2018

Nonperforming assets increased $5.1 million or 6% to $84.4 million or 0.75% of total assets at March 31, 2019, compared to $79.3 million or 0.69% of total assets at December 31, 2018. Nonperforming loans were $79.0 million or 1.08% of total loans at March 31, 2019, compared to $72.7 million or 0.98% of total loans at December 31, 2018.  The increase is primarily related to two agribusiness relationships that were originated in Heartland's Midwestern markets. At March 31, 2019, loans delinquent 30-89 days were 0.47% of total loans compared to 0.21% of total loans at December 31, 2018.

The allowance for loan losses at March 31, 2019, was 0.85% of loans and 79.29% of nonperforming loans, compared to 0.84% of loans and 85.27% of nonperforming loans at December 31, 2018. The provision for loan losses decreased $2.6 million to $1.6 million for the first quarter of 2019 compared to $4.3 million for the same quarter in 2018.

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 common tangible equity is net income available to common stockholders plus  core deposit and customer relationship intangibles amortization, net of tax, divided by average common stockholders' 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 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 stockholders' 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 stockholders' 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 use of equity, financial condition and capital strength.

Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. EDT today. To participate, dial 877-407-0782 at least five minutes before 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 April 28, 2020, by logging on to www.htlf.com.

About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a diversified financial services company with assets of $11.3 billion. The company provides banking, mortgage, private client, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 116 banking locations serving 84 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado, Minnesota, Kansas, Missouri, Texas and California. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.

Safe Harbor Statement
This 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 in the risk factors in Heartland's Annual Report on Form 10-K filed with the Securities and Exchange Commission, contained, among others: (i) the strength of the local and national economy; (ii) the economic impact of past and any future terrorist threats and attacks and any acts of war; (iii) changes in state and federal laws, regulations and governmental policies as they impact the company's general business; (iv) changes in interest rates and prepayment rates of the company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the potential impact of acquisitions and Heartland's ability to successfully integrate acquired banks; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected outcomes of existing or new litigation involving the company; and (xi) changes in accounting policies and practices. 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 Three Months Ended March 31,
	2019				2018
Interest Income
Interest and fees on loans	$	100,456			$	85,651
Interest on securities:
Taxable	15,876				11,577
Nontaxable	3,093				3,579
Interest on federal funds sold	4				—
Interest on deposits with other banks and other short-term investments	1,292				407
Total Interest Income	120,721				101,214
Interest Expense
Interest on deposits	13,213				5,766
Interest on short-term borrowings	889				268
Interest on other borrowings	3,664				3,596
Total Interest Expense	17,766				9,630
Net Interest Income	102,955				91,584
Provision for loan losses	1,635				4,263
Net Interest Income After Provision for Loan Losses	101,320				87,321
Noninterest Income
Service charges and fees	12,794				10,079
Loan servicing income	1,729				1,754
Trust fees	4,474				4,680
Brokerage and insurance commissions	734				907
Securities gains/(losses), net	1,575				1,441
Unrealized gain/(loss) on equity securities, net	258				(28		)
Net gains on sale of loans held for sale	3,176				4,051
Valuation adjustment on servicing rights	(589		)		(2		)
Income on bank owned life insurance	899				614
Other noninterest income	1,667				1,220
Total Noninterest Income	26,717				24,716
Noninterest Expense
Salaries and employee benefits	50,285				48,710
Occupancy	6,607				6,043
Furniture and equipment	2,692				2,749
Professional fees	11,379				9,448
Advertising	2,325				1,940
Core deposit and customer relationship intangibles amortization	2,842				1,863
Other real estate and loan collection expenses	701				732
(Gain)/loss on sales/valuations of assets, net	(3,004		)		(197		)
Restructuring expenses	3,227				2,564
Other noninterest expenses	11,176				9,794
Total Noninterest Expense	88,230				83,646
Income Before Income Taxes	39,807				28,391
Income taxes	8,310				5,123
Net Income	31,497				23,268
Preferred dividends	—				(13		)
Net Income Available to Common Stockholders	$	31,497			$	23,255
Earnings per common share-diluted	$	0.91			$	0.76
Weighted average shares outstanding-diluted	34,699,839				30,645,212

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	3/31/2019				12/31/2018				9/30/2018				6/30/2018				3/31/2018
Interest Income
Interest and fees on loans	$	100,456			$	105,700			$	105,733			$	96,787			$	85,651
Interest on securities:
Taxable	15,876				15,851				14,433				12,270				11,577
Nontaxable	3,093				3,467				3,490				3,584				3,579
Interest on federal funds sold	4				—				—				—				—
Interest on deposits with other banks and other short-term investments	1,292				1,285				1,238				768				407
Total Interest Income	120,721				126,303				124,894				113,409				101,214
Interest Expense
Interest on deposits	13,213				11,826				10,092				7,983				5,766
Interest on short-term borrowings	889				417				464				547				268
Interest on other borrowings	3,664				3,777				3,660				3,470				3,596
Total Interest Expense	17,766				16,020				14,216				12,000				9,630
Net Interest Income	102,955				110,283				110,678				101,409				91,584
Provision for loan losses	1,635				9,681				5,238				4,831				4,263
Net Interest Income After Provision for Loan Losses	101,320				100,602				105,440				96,578				87,321
Noninterest Income
Service charges and fees	12,794				13,660				12,895				12,072				10,079
Loan servicing income	1,729				2,061				1,670				1,807				1,754
Trust fees	4,474				4,599				4,499				4,615				4,680
Brokerage and insurance commissions	734				1,618				1,111				877				907
Securities gains/(losses), net	1,575				48				(145		)		(259		)		1,441
Unrealized gain/(loss) on equity securities, net	258				115				54				71				(28		)
Net gains on sale of loans held for sale	3,176				3,189				7,410				6,800				4,051
Valuation adjustment on servicing rights	(589		)		(58		)		230				(216		)		(2		)
Income on bank owned life insurance	899				587				892				700				614
Other noninterest income	1,667				1,226				1,149				1,167				1,220
Total Noninterest Income	26,717				27,045				29,765				27,634				24,716
Noninterest Expense
Salaries and employee benefits	50,285				46,729				49,921				50,758				48,710
Occupancy	6,607				6,622				6,348				6,315				6,043
Furniture and equipment	2,692				3,126				3,470				3,184				2,749
Professional fees	11,379				10,630				12,800				10,632				9,448
Advertising	2,325				2,726				2,754				2,145				1,940
Core deposit and customer relationship intangibles amortization	2,842				2,592				2,626				2,274				1,863
Other real estate and loan collection expenses	701				574				784				948				732
(Gain)/loss on sales/valuations of assets, net	(3,004		)		(35		)		912				1,528				(197		)
Restructuring expenses	3,227				—				—				—				2,564
Other noninterest expenses	11,176				15,857				12,924				11,098				9,794
Total Noninterest Expense	88,230				88,821				92,539				88,882				83,646
Income Before Income Taxes	39,807				38,826				42,666				35,330				28,391
Income taxes	8,310				6,685				8,956				7,451				5,123
Net Income	31,497				32,141				33,710				27,879				23,268
Preferred dividends	—				—				(13		)		(13		)		(13		)
Net Income Available to Common Stockholders	$	31,497			$	32,141			$	33,697			$	27,866			$	23,255
Earnings per common share-diluted	$	0.91			$	0.93			$	0.97			$	0.85			$	0.76
Weighted average shares outstanding-diluted	34,699,839				34,670,180				34,644,187				32,830,751				30,645,212

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of
	3/31/2019				12/31/2018				9/30/2018				6/30/2018				3/31/2018
Assets
Cash and due from banks	$	174,198			$	223,135			$	196,847			$	193,069			$	143,071
Interest bearing deposits with other banks and other short-term investments	318,303				50,495				240,528				194,937				123,275
Cash and cash equivalents	492,501				273,630				437,375				388,006				266,346
Time deposits in other financial institutions	4,675				4,672				5,836				6,803				6,297
Securities:
Carried at fair value	2,400,460				2,450,709				2,274,215				2,197,117				2,027,665
Held to maturity, at cost	88,089				236,283				239,908				244,271				249,766
Other investments, at cost	27,506				28,396				26,656				26,725				22,982
Loans held for sale	69,716				119,801				77,727				55,684				24,376
Loans:
Held to maturity	7,331,544				7,407,697				7,365,493				7,477,697				6,746,015
Allowance for loan losses	(62,639		)		(61,963		)		(61,221		)		(61,324		)		(58,656		)
Loans, net	7,268,905				7,345,734				7,304,272				7,416,373				6,687,359
Premises, furniture and equipment, net	190,215				194,676				198,224				199,959				172,862
Goodwill	391,668				391,668				391,668				391,668				270,305
Core deposit and customer relationship intangibles, net	44,637				47,479				50,071				52,698				41,063
Servicing rights, net	28,968				31,072				32,039				31,996				25,471
Cash surrender value on life insurance	163,764				162,892				162,216				159,302				143,444
Other real estate, net	5,391				6,153				11,908				11,074				11,801
Other assets	136,000				114,841				123,017				120,244				106,126
Total Assets	$	11,312,495			$	11,408,006			$	11,335,132			$	11,301,920			$	10,055,863
Liabilities and Equity
Liabilities
Deposits:
Demand	$	3,118,909			$	3,264,737			$	3,427,819			$	3,399,598			$	3,094,457
Savings	5,145,929				5,107,962				4,958,430				4,864,773				4,536,106
Time	1,088,104				1,023,730				1,125,914				1,224,773				910,977
Total deposits	9,352,942				9,396,429				9,512,163				9,489,144				8,541,540
Deposits held for sale	118,564				106,409				50,312				—				—
Short-term borrowings	104,314				227,010				131,139				229,890				131,240
Other borrowings	268,312				274,905				277,563				258,708				276,118
Accrued expenses and other liabilities	96,261				78,078				83,562				68,431				55,460
Total Liabilities	9,940,393				10,082,831				10,054,739				10,046,173				9,004,358
Stockholders' Equity
Preferred equity	—				—				—				938				938
Common stock	34,604				34,477				34,473				34,438				31,068
Capital surplus	745,596				743,095				742,080				740,128				557,990
Retained earnings	603,506				579,252				553,662				524,786				500,959
Accumulated other comprehensive loss	(11,604		)		(31,649		)		(49,822		)		(44,543		)		(39,450		)
Total Equity	1,372,102				1,325,175				1,280,393				1,255,747				1,051,505
Total Liabilities and Equity	$	11,312,495			$	11,408,006			$	11,335,132			$	11,301,920			$	10,055,863

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	3/31/2019				12/31/2018				9/30/2018				6/30/2018				3/31/2018
Average Balances
Assets	$	11,267,214			$	11,371,247			$	11,291,289			$	10,643,306			$	9,759,936
Loans, net of unearned	7,412,855				7,436,497				7,462,176				7,123,182				6,525,553
Deposits	9,356,204				9,596,807				9,530,743				9,018,945				8,251,140
Earning assets	10,129,957				10,225,409				10,154,591				9,614,800				8,857,801
Interest bearing liabilities	6,622,149				6,557,185				6,544,949				6,205,187				5,694,337
Common stockholders' equity	1,336,250				1,290,691				1,263,226				1,139,876				1,011,580
Total stockholders' equity	1,336,250				1,290,691				1,263,795				1,140,814				1,012,518
Tangible common stockholders' equity (non-GAAP)	898,092				849,851				819,966				767,732				723,898
Key Performance Ratios
Annualized return on average assets	1.13		%		1.12		%		1.18		%		1.05		%		0.97		%
Annualized return on average common equity (GAAP)	9.56		%		9.88		%		10.58		%		9.81		%		9.32		%
Annualized return on average tangible common equity (non-GAAP)(1)	15.24		%		15.96		%		17.31		%		15.50		%		13.85		%
Annualized ratio of net charge-offs to average loans	0.05		%		0.48		%		0.28		%		0.12		%		0.08		%
Annualized net interest margin (GAAP)	4.12		%		4.28		%		4.32		%		4.23		%		4.19		%
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)	4.18		%		4.34		%		4.38		%		4.30		%		4.26		%
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)	65.23		%		59.35		%		62.51		%		64.94		%		68.21		%
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common shareholders (GAAP)	$	31,497			$	32,141			$	33,697			$	27,866			$	23,255
Plus core deposit and customer relationship intangibles amortization, net of tax(2)	2,245				2,048				2,075				1,796				1,472
Adjusted net income available to common shareholders (non-GAAP)	$	33,742			$	34,189			$	35,772			$	29,662			$	24,727
Average common stockholders' equity (GAAP)	$	1,336,250			$	1,290,691			$	1,263,226			$	1,139,876			$	1,011,580
Less average goodwill	391,668				391,668				391,668				325,781				250,172
Less average core deposit and customer relationship intangibles, net	46,490				49,172				51,592				46,363				37,510
Average tangible common stockholders' equity (non-GAAP)	$	898,092			$	849,851			$	819,966			$	767,732			$	723,898
Annualized return on average common equity (GAAP)	9.56		%		9.88		%		10.58		%		9.81		%		9.32		%
Annualized return on average tangible common equity (non-GAAP)	15.24		%		15.96		%		17.31		%		15.50		%		13.85		%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)	$	102,955			$	110,283			$	110,678			$	101,409			$	91,584
Plus tax-equivalent adjustment(2)	1,412				1,565				1,544				1,575				1,544
Net interest income, fully tax-equivalent (non-GAAP)	$	104,367			$	111,848			$	112,222			$	102,984			$	93,128
Average earning assets	$	10,129,957			$	10,225,409			$	10,154,591			$	9,614,800			$	8,857,801
Annualized net interest margin (GAAP)	4.12		%		4.28		%		4.32		%		4.23		%		4.19		%
Annualized net interest margin, fully tax-equivalent (non-GAAP)	4.18		%		4.34		%		4.38		%		4.30		%		4.26		%
(1) Refer to the "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) 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
Reconciliation of Efficiency Ratio (non-GAAP)		3/31/2019							12/31/2018							9/30/2018							6/30/2018								3/31/2018
Net interest income		$	102,955						$	110,283						$	110,678						$	101,409							$		91,584
Tax-equivalent adjustment(1)		1,412							1,565							1,544							1,575								1,544
Fully tax-equivalent net interest income		104,367							111,848							112,222							102,984								93,128
Noninterest income		26,717							27,045							29,765							27,634								24,716
Securities (gains)/losses, net		(1,575				)			(48				)			145							259								(1,441					)
Unrealized (gain)/loss on equity securities, net		(258				)			(115				)			(54				)			(71					)			28
Valuation adjustment on servicing rights		589							58							(230				)			216								2
Adjusted income		$	129,840						$	138,788						$	141,848						$	131,022							$		116,433
Total noninterest expenses		$	88,230						$	88,821						$	92,539						$	88,882							$		83,646
Less:
Core deposit and customer relationship intangibles amortization		2,842							2,592							2,626							2,274								1,863
Partnership investment in tax credit projects		475							3,895							338							—								—
(Gain)/loss on sales/valuation of assets, net		(3,004				)			(35				)			912							1,528								(197					)
Restructuring expenses		3,227							—							—							—								2,564
Adjusted noninterest expenses		$	84,690						$	82,369						$	88,663						$	85,080							$		79,416
Efficiency ratio, fully tax-equivalent (non-GAAP)		65.23				%			59.35				%			62.51				%			64.94					%			68.21					%
(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 AND FULL TIME EQUIVALENT EMPLOYEE DATA
	As of and for the Quarter Ended
	3/31/2019				12/31/2018				9/30/2018				6/30/2018				3/31/2018
Common Share Data
Book value per common share	$	39.65			$	38.44			$	37.14			$	36.44			$	33.81
Tangible book value per common share (non-GAAP)(1)	$	27.04			$	25.70			$	24.33			$	23.53			$	23.79
Common shares outstanding, net of treasury stock	34,603,611				34,477,499				34,473,029				34,438,445				31,068,239
Tangible common equity ratio (non-GAAP)(1)	8.60		%		8.08		%		7.70		%		7.46		%		7.59		%
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
Common stockholders' equity (GAAP)	$	1,372,102			$	1,325,175			$	1,280,393			$	1,254,809			$	1,050,567
Less goodwill	391,668				391,668				391,668				391,668				270,305
Less core deposit and customer relationship intangibles, net	44,637				47,479				50,071				52,698				41,063
Tangible common stockholders' equity (non-GAAP)	$	935,797			$	886,028			$	838,654			$	810,443			$	739,199
Common shares outstanding, net of treasury stock	34,603,611				34,477,499				34,473,029				34,438,445				31,068,239
Common stockholders' equity (book value) per share (GAAP)	$	39.65			$	38.44			$	37.14			$	36.44			$	33.81
Tangible book value per common share (non-GAAP)	$	27.04			$	25.70			$	24.33			$	23.53			$	23.79
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
Tangible common stockholders' equity (non-GAAP)	$	935,797			$	886,028			$	838,654			$	810,443			$	739,199
Total assets (GAAP)	$	11,312,495			$	11,408,006			$	11,335,132			$	11,301,920			$	10,055,863
Less goodwill	391,668				391,668				391,668				391,668				270,305
Less core deposit and customer relationship intangibles, net	44,637				47,479				50,071				52,698				41,063
Total tangible assets (non-GAAP)	$	10,876,190			$	10,968,859			$	10,893,393			$	10,857,554			$	9,744,495
Tangible common equity ratio (non-GAAP)	8.60		%		8.08		%		7.70		%		7.46		%		7.59		%
Loan Data
Loans held to maturity:
Commercial and commercial real estate	$	5,745,051			$	5,731,712			$	5,610,953			$	5,721,138			$	5,129,777
Residential mortgage	630,433				673,603				676,941				683,051				624,725
Agricultural and agricultural real estate	544,805				565,408				574,048				562,353				518,386
Consumer	412,573				440,158				506,181				512,899				474,929
Unearned discount and deferred loan fees	(1,318		)		(3,184		)		(2,630		)		(1,744		)		(1,802		)
Total loans held to maturity	$	7,331,544			$	7,407,697			$	7,365,493			$	7,477,697			$	6,746,015
Other Selected Trend Information
Effective tax rate	20.88		%		17.22		%		20.99		%		21.09		%		18.04		%
Full time equivalent employees	1,976				2,045				2,124				2,216				2,022
(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 DATA
	As of and for the Quarter Ended
	3/31/2019				12/31/2018				9/30/2018				6/30/2018				3/31/2018
Allowance for Loan Losses
Balance, beginning of period	$	61,963			$	61,221			$	61,324			$	58,656			$	55,686
Provision for loan losses	1,635				9,681				5,238				4,831				4,263
Charge-offs	(1,950		)		(9,777		)		(6,120		)		(3,164		)		(2,224		)
Recoveries	991				838				779				1,001				931
Balance, end of period	$	62,639			$	61,963			$	61,221			$	61,324			$	58,656
Asset Quality
Nonaccrual loans	$	77,294			$	71,943			$	73,060			$	69,376			$	64,806
Loans past due ninety days or more	1,706				726				154				54				22
Other real estate owned	5,391				6,153				11,908				11,074				11,801
Other repossessed assets	8				459				495				499				423
Total nonperforming assets	$	84,399			$	79,281			$	85,617			$	81,003			$	77,052
Performing troubled debt restructured loans	$	3,460			$	4,026			$	4,180			$	4,012			$	3,206
Nonperforming Assets Activity
Balance, beginning of period	$	79,281			$	85,617			$	81,003			$	77,052			$	74,599
Net loan charge offs	(959		)		(8,939		)		(5,341		)		(2,163		)		(1,293		)
New nonperforming loans	15,314				17,332				16,965				16,254				8,546
Acquired nonperforming assets	—				—				—				7,973				2,459
Reduction of nonperforming loans(1)	(6,238		)		(6,065		)		(5,085		)		(15,696		)		(6,549		)
OREO/Repossessed assets sales proceeds	(2,092		)		(8,390		)		(1,064		)		(1,541		)		(657		)
OREO/Repossessed assets writedowns, net	(462		)		(230		)		(886		)		(993		)		(16		)
Net activity at Citizens Finance Co.	(445		)		(44		)		25				117				(37		)
Balance, end of period	$	84,399			$	79,281			$	85,617			$	81,003			$	77,052
Asset Quality Ratios
Ratio of nonperforming loans to total loans	1.08		%		0.98		%		0.99		%		0.93		%		0.96		%
Ratio of nonperforming assets to total assets	0.75		%		0.69		%		0.76		%		0.72		%		0.77		%
Annualized ratio of net loan charge-offs to average loans	0.05		%		0.48		%		0.28		%		0.12		%		0.08		%
Allowance for loan losses as a percent of loans	0.85		%		0.84		%		0.83		%		0.82		%		0.87		%
Allowance for loan losses as a percent of nonperforming loans	79.29		%		85.27		%		83.62		%		88.32		%		90.48		%
Loans delinquent 30-89 days as a percent of total loans	0.47		%		0.21		%		0.62		%		0.30		%		0.21		%
(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
	March 31, 2019											December 31, 2018											March 31, 2018
	Average Balance				Interest				Rate			Average Balance				Interest				Rate			Average Balance				Interest				Rate
Earning Assets
Securities:
Taxable	$	2,169,016			$	15,876			2.97	%		$	2,184,096			$	15,851			2.88	%		$	1,827,611			$	11,577			2.57	%
Nontaxable(1)	391,724				3,915				4.05			427,332				4,388				4.07			448,641				4,530				4.09
Total securities	2,560,740				19,791				3.13			2,611,428				20,239				3.07			2,276,252				16,107				2.87
Interest on deposits with other banks and other short-term investments	218,445				1,292				2.40			238,087				1,285				2.14			112,024				407				1.47
Federal funds sold	560				4				2.90			309				—				—			—				—				—
Loans:(2)
Commercial and commercial real estate(1)	5,745,180				78,083				5.51			5,644,475				77,822				5.47			4,910,797				62,813				5.19
Residential mortgage	673,682				7,179				4.32			704,012				8,682				4.89			642,181				6,851				4.33
Agricultural and agricultural real estate(1)	554,506				7,301				5.34			568,904				7,752				5.41			513,780				6,004				4.74
Consumer	439,487				6,479				5.98			519,106				9,355				7.15			458,795				8,660				7.66
Fees on loans					2,004				—			—				2,733				—							1,916				—
Less: allowance for loan losses	(62,643		)		—				—			(60,912		)		—				—			(56,028		)		—				—
Net loans	7,350,212				101,046				5.58			7,375,585				106,344				5.72			6,469,525				86,244				5.41
Total earning assets	10,129,957				122,133				4.89	%		10,225,409				127,868				4.96	%		8,857,801				102,758				4.70	%
Nonearning Assets	1,137,257											1,145,838											902,135
Total Assets	$	11,267,214										$	11,371,247										$	9,759,936
Interest Bearing Liabilities(3)
Savings	$	5,121,179			$	10,083			0.80	%		$	5,071,573			$	8,817			0.69	%		$	4,358,508			$	3,791			0.35	%
Time deposits	1,034,744				3,130				1.23			1,088,122				3,009				1.10			907,928				1,975				0.88
Short-term borrowings	195,390				889				1.85			121,053				417				1.37			147,738				268				0.74
Other borrowings	270,836				3,664				5.49			276,437				3,777				5.42			280,163				3,596				5.21
Total interest bearing liabilities	6,622,149				17,766				1.09	%		6,557,185				16,020				0.97	%		5,694,337				9,630				0.69	%
Noninterest Bearing Liabilities(3)
Noninterest bearing deposits	3,200,281											3,437,112											2,984,704
Accrued interest and other liabilities	108,534											86,259											68,377
Total noninterest bearing liabilities	3,308,815											3,523,371											3,053,081
Stockholders' Equity	1,336,250											1,290,691											1,012,518
Total Liabilities and Stockholders' Equity	$	11,267,214										$	11,371,247										$	9,759,936
Net interest income, fully tax-equivalent (non-GAAP)(1)					$	104,367										$	111,848										$	93,128
Net interest spread(1)									3.80	%										3.99	%										4.01	%
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets									4.18	%										4.34	%										4.26	%
(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) Includes deposits held for sale

HEARTLAND FINANCIAL USA, INC.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
	As of and For the Quarter Ended
	3/31/2019			12/31/2018			9/30/2018			6/30/2018			3/31/2018
Total Assets
Citywide Banks	$	2,214,105		$	2,307,284		$	2,300,018		$	2,295,261		$	2,299,818
Dubuque Bank and Trust Company	1,550,487			1,480,914			1,523,447			1,500,108			1,490,100
New Mexico Bank & Trust	1,500,024			1,492,555			1,465,020			1,466,311			1,416,788
First Bank & Trust	1,099,759			1,109,929			1,112,464			1,123,559			—
Wisconsin Bank & Trust	1,031,305			1,114,352			1,051,160			1,034,075			1,017,053
Premier Valley Bank	855,473			849,696			851,358			846,215			805,014
Illinois Bank & Trust	810,357			804,907			795,132			815,905			751,371
Arizona Bank & Trust	669,806			658,714			650,032			653,596			633,474
Minnesota Bank & Trust	657,187			666,564			649,179			660,469			631,852
Morrill & Janes Bank and Trust Company	564,833			571,012			592,786			602,630			648,568
Rocky Mountain Bank	489,135			490,453			492,063			504,243			490,917
Total Deposits(1)
Citywide Banks	$	1,802,701		$	1,848,373		$	1,905,830		$	1,867,626		$	1,914,726
Dubuque Bank and Trust Company	1,245,553			1,214,541			1,217,976			1,136,431			1,193,271
New Mexico Bank & Trust	1,313,708			1,307,464			1,267,844			1,242,673			1,202,051
First Bank & Trust	857,313			861,629			875,170			887,181			—
Wisconsin Bank & Trust	872,090			927,821			891,167			874,035			835,919
Premier Valley Bank	676,849			639,194			706,125			696,460			660,070
Illinois Bank & Trust	735,101			715,482			726,790			753,022			674,391
Arizona Bank & Trust	593,089			574,762			550,530			558,895			567,515
Minnesota Bank & Trust	546,706			560,399			544,513			561,257			533,893
Morrill & Janes Bank and Trust Company	473,712			489,471			511,154			498,798			558,174
Rocky Mountain Bank	426,503			424,700			429,167			443,359			429,000
Net Income
Citywide Banks	$	7,283		$	7,005		$	7,762		$	7,018		$	5,463
Dubuque Bank and Trust Company	5,011			6,002			4,458			4,426			3,214
New Mexico Bank & Trust	7,847			6,007			7,104			7,043			6,444
First Bank & Trust	2,792			3,334			3,932			1,925			—
Wisconsin Bank & Trust	4,707			3,229			3,735			2,470			2,617
Premier Valley Bank	2,411			2,930			3,006			2,664			2,373
Illinois Bank & Trust	2,632			2,180			2,419			2,421			2,712
Arizona Bank & Trust	2,780			1,951			2,660			3,623			2,104
Minnesota Bank & Trust	1,454			1,038			2,167			581			762
Morrill & Janes Bank and Trust Company	1,172			324			165			961			1,186
Rocky Mountain Bank	1,358			1,230			1,210			1,185			1,172
(1) Includes deposits held for sale.

CONTACT:

Bryan R. McKeag

Executive Vice President

Chief Financial Officer

(563) 589-1994

bmckeag@htlf.com