HTLF sets strategic plan in motion

A financial institution with a large Dubuque presence announced on Monday the details of its latest strategic plan and its year-end earnings.

HTLF, which moved its headquarters from Dubuque to Denver, Colo., about a year ago, laid out “HTLF 3.0,” the moniker for its strategic initiatives aiming to increase revenue, efficiency, return on assets and capital allocation.

Bruce Lee, president and CEO of HTLF, said one part of HTLF 3.0 is already completed — the repositioning of HTLF’s balance sheet, which resulted in the sale of investment securities totaling $865.4 million with a pre-tax loss of $140 million. Kevin Thompson, CFO of HTLF, said the securities were sold because they were low-yielding investments. He said the sale will result in a net interest income of about $6 million per quarter moving forward.

Lee said another part of the strategic plan is reducing the costs associated with operating HTLF’s branches. The organization’s costs are higher than some of its peers partially because HTLF’s branches tend to be larger and older, Lee said.

In that vein, HTLF is also planning to reduce its real estate expenses and physical footprint, Lee said. He said over the years, some institutions have utilized an operation center in addition to a headquarters, each with more square footage than necessary.

“We may not actually reduce the overall number of branches, but we’ll be reducing the square footage,” Lee said.

Lee said the company has also reduced the total number of retail leaders and has given the remaining ones more power. The company is standardizing its approach to retail by making products and training consistent across all its branches.

The company is also expanding and adding staff to various branches around the U.S., including Milwaukee and Minneapolis.

Also, the company will create a digital online bank for consumers and small businesses to utilize. Lee said the consumer portion of the digital bank should be available around July.

In terms of earnings, the company reported a net loss available to common stockholders of $72.4 million for the fourth quarter of 2023. The net income available in the prior year’s fourth quarter was $58.6 million.

Net income available to common stockholders in 2023 was $71.9 million, the company reported, compared to $204.1 million in 2022.

HTLF also reported total assets of $19.4 billion at the end of the 2023 fourth quarter, about a 4% decrease from the end of 2022, when total assets amounted to $20.2 billion.

Total deposits were $16.2 billion at the end of the recently completed quarter, a decrease from $17.1 billion at the end of the 2023 third quarter and $17.5 billion in the fourth quarter of 2022.

Thompson emphasized the loss during the last quarter of 2023 was caused by one-time expenses, such as the sale of the securities. Thompson said the company also spent $4.4 million on restructuring, $2.1 million on asset dispositions and $8.1 million on an FDIC special assessment.

“We’re actually very excited about the runway that that gives us in the future,” Thompson said.