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Kroll revises Heartland's outlook to 'positive'

Kroll Bond Rating Agency on March 2 changed its outlook on Heartland Financial USA Inc.'s long-term ratings to "positive."

The outlook was previously "stable," and the rating agency attributed the revision to the Dubuque, Iowa-based company's successful integration of acquisitions and improvements in its core earnings metrics and operating efficiency. Kroll also now expects "an enhanced capital profile ... and [the] successful maintenance of [Heartland's] strong core deposit franchise." The "positive" outlook applies to Heartland's subsidiaries' long-term ratings as well.

The agency affirmed the company's senior unsecured debt rating of BBB, subordinated debt rating of BBB- and short-term debt rating of K3.

It affirmed the BBB+ deposit and senior unsecured debt ratings and K2 short-term deposit and debt ratings of subsidiaries Dubuque Bank and Trust Co., New Mexico Bank & Trust and Wisconsin Bank & Trust.

It assigned deposit and senior unsecured debt ratings of BBB+ and short-term deposit and debt ratings of K2 to subsidiaries Citywide Banks and Premier Valley Bank.

The ratings reflect Heartland's "diversified revenue streams" and "comparatively favorable run rate of stable noninterest revenue." They are constrained primarily by the company's comparatively weak efficiency ratio — something Kroll expects Heartland to improve as it integrates acquired banks.