A Dubuque-headquartered financial institution on Monday reported a positive outlook for the year ahead following a “solid” first quarter.
HTLF, formerly known as Heartland Financial USA, offers financial services and has locations in 12 states, including Iowa, Illinois and Wisconsin.
“We feel that it was a really solid quarter,” said HTLF President and CEO Bruce Lee to the Telegraph Herald on Monday following a conference call with investors. “We’ve had excellent loan growth. Our credit quality continues to improve. We’re off to a really good start.”
HTLF reported net income of $47.9 million for the first quarter of 2022, which concluded on March 31. That represents a 5.7% decrease from the record-setting first quarter of 2021, which had a net income of $50.8 million.
However, Lee said the biggest reason for decrease is that COVID-19-related Paycheck Protection Program funds are depleted.
“We have $6 million less in income from last year to this year,” added Chief Financial Officer Bryan McKeag.
Total assets in the first quarter were $19.24 billion, down less than 1% from the end of 2021.
However, total deposits were up to a record $16.7 billion as of March 31, an increase from $16.4 billion at the end of December. The quarter marks the 12th consecutive quarter of total deposit growth.
However, McKeag said HTLF officials expect deposit growth to hover around 1% each quarter going forward, especially after COVID-19 stimulus money is spent.
“We think that’s going to slow down in growth,” he said. “We expect to have some growth going forward, but it’s not going to be what we’ve done.”
Looking ahead, Lee said that the company plans to continue to build upon its growth by recruiting and retaining talent.
In addition, he said the company’s charter consolidation plan will begin to reap benefits within the next year.
HTLF’s board previously approved the decision to consolidate the company’s 11 bank charters into one charter based in Colorado, a move that is expected to be complete by the end of 2023.
The remaining estimated cost to restructure the charters is $17 million, though Lee said the move is expected to save $20 million annually upon completion due to the elimination of redundancies in the charter process. He also said the move would allow people to access HTLF bank branches in other states.
“Ever since we announced the charter consolidation, all of the analysts have been very supportive of that,” Lee said. “… We’re really going to start to see that (benefit) in the back half of this year and next year.”