I’m delighted to be able to begin this letter by sharing the great news that 2016 proved to be another record year for our Company and one in which we made significant progress on many fronts. We maintained our historic record of positive earnings with the highest net income in our 30-year history; we completed an acquisition in Colorado and announced another acquisition in California; and our Board of Directors approved cash dividends of $0.50 per share, continuing our history of increased or level dividend payments every year since Heartland’s inception in 1981.  
Assessing Heartland’s exceptional financial performance for 2016, we were gratified to see net income available to common shareholders increase to $80.1 million, a 35-percent increase over 2015. On a per share basis, Heartland earned $3.22 per diluted common share, a 14-percent increase over the previous year. Throughout the past year, Heartland has benefited from an enviable tax-equivalent net interest margin of 4.13 percent, demonstrating our success in making profitable loans and attracting competitively-priced deposits. 
I encourage you to review our 2016 Annual Report. Within it, you'll see highlighted the many opportunities Heartland has capitalized on as we continued to pursue our master strategy of balanced profit and growth. You will also note, via a question and answer format, how Heartland continues to successfully navigate through the dynamic challenges facing our industry. Not to lose sight of our valued customers, we have included several successful business clients of our subsidiary banks. These clients’ stories illustrate how our commitment to an exceptional customer experience and our consultative approach to providing unique and creative solutions lead to the successful achievement of our clients’ goals and aspirations. 
Undoubtedly, one of the most significant opportunities Heartland has embraced is growth through successful mergers and acquisitions. The growing costs of doing business, combined with increased regulation, pose significant challenges to small and mid-size banks. Therein lies our opportunity, as the Heartland community banking business model is viewed as highly attractive. Over the years, we have planted many seeds with banks in and near our existing operations. As a result of those efforts, we now have a significant number of merger and acquisition candidates under consideration, with new opportunities arising on a regular basis.  
In closing, I am delighted with Heartland’s performance in 2016. We are optimistic about Heartland’s future as we work toward another record year for 2017 and continue to pursue our successful track record of balanced profit and growth. 
I want to thank our corporate board and subsidiary bank boards for their continued support and guidance; I want to thank our corporate leadership team, bank management teams and employees for assuring that "Great Things Happen" for our clients; and finally I want to thank our loyal shareholders for both the confidence you have placed in our Company and your continued investment in Heartland. 
Lynn. B. Fuller 
Chairman and CEO 
Heartland Financial USA, Inc. 

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