A Dubuque-based financial institution on Monday reported a 33% decline in net income in its second quarter.

However, officials at Heartland Financial USA framed the three-month stretch as a success given the unique challenges presented by COVID-19 and the company’s efforts to aid business clients navigating the pandemic.

President and CEO Bruce Lee said Heartland funded 4,800 Paycheck Protection Program loans totaling $1.2 billion in the quarter, preserving more than 112,000 jobs.


“The pandemic situation continues to evolve, and our team has been dynamic — anticipating challenges and pivoting when necessary,” said Lee.

Midway through the fiscal year, Heartland is behind the pace of its 2019 performance.

Heartland generated $30.1 million in net income during the quarter ending June 30, down from $45.2 million during the same period last year. Through the first six months of the year, net income was $50.2 million, compared to the $76.7 million in the first half of 2019.

Executive Operating Chairman Lynn Fuller still framed the recent quarter as a success, noting the unprecedented circumstances facing the financial institution.

“During these very challenging times, our priority has been the safety of our employees and the ongoing support of our customers, our shareholders and our communities,” he said.

Officials also said the income disparity between this year and the previous one is not as dramatic as it would appear. In the second quarter of 2019, Heartland’s earnings were propped up by the sale of its mortgage servicing rights and multiple branches, with those deals collectively adding $18 million in net income.

Meanwhile, COVID-19 has created a dynamic situation in which employees and customers are both contending with evolving circumstances.

Employees who can carry out their duties from home are continuing to do so. Those coming into the bank locations have been placed on rotating teams to limit potential exposure.

Heartland boasts a diverse geographic footprint consisting of 114 banking centers in the Midwest and western U.S. The evolving nature of the novel coronavirus means that the company must apply different strategies in different markets.

After closing most bank lobbies in March and April, Heartland began to reopen gradually on a state-by-state basis. But that plan was interrupted by the virus, Lee explained.

“Recent outbreaks in some states have led us to pull back and close bank lobbies again in certain locations to protect the health and safety of our employees and customers,” he said. “We recognize this will likely continue to occur across our footprint and our country.”

Despite these challenges, Heartland has continued to grow.

Total assets were $15 billion at the end of the second quarter, compared to $12.2 billion one year earlier.