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Sep 30, 2020
Heartland Financial Q3 2020 Earnings Report
Reported record quarterly net income available to common stockholders and increased diluted earnings per common share.
Key Takeaways
Heartland Financial USA, Inc. reported a record quarterly net income available to common stockholders of $45.5 million for the third quarter of 2020, an increase of 32% compared to the same quarter of 2019. Diluted earnings per common share increased by 31% to $1.23.
Record quarterly net income available to common stockholders of $45.5 million, up 32% year-over-year.
Diluted earnings per common share increased 31% to $1.23 compared to Q3 2019.
Net interest margin was 3.51% during the third quarter of 2020.
Efficiency ratio (non-GAAP) was 54.67% compared to 60.85% for the third quarter of 2019.
Heartland Financial
Heartland Financial
Forward Guidance
Heartland expects to complete the acquisitions of AimBank and four Johnson Bank branches in the fourth quarter of 2020.
Positive Outlook
- Acquisition of AIM Bancshares, Inc. expected to close in Q4 2020
- Acquisition of Johnson Bank's Arizona operations expected to close in Q4 2020
- Branch consolidations expected to be completed in early 2021
- Net interest income increased for the third quarter of 2020 compared to the third quarter of 2019
- Total assets were $15.61 billion at September 30, 2020, an increase of $2.40 billion or 18% from $13.21 billion at year-end 2019
Challenges Ahead
- 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
- Branch Optimization In the third quarter of 2020, Heartland's subsidiary banks approved plans to consolidate six branch locations, which included one branch in the Midwest region, four branches in the Western region and one in the Southwestern region and resulted in $1.2 million of fixed asset write-downs.
- Net Interest Margin Decreases from Third Quarter of 2019
- Heartland expects that net charge offs could remain elevated in future periods as customers’ ability to repay loans is adversely impacted by economic disruptions caused by the COVID-19 pandemic.
- Total interest income was $131.0 million, which was a decrease of $2.4 million or 2% from $133.4 million