Heartland Financial USA to receive Small Business Loan funding

Heartland Financial USA says it plans to step up its small business lending with the help of a $81.7 million investment from the Treasury Department's Small Business Lending Fund.

The investment will take the form of a purchase of Heartland Preferred stock by the Treasury Department, according to a statement released Tuesday, August 30, by the Dubuque-based financial services and banking company.

The Small Business Lending Fund is a $30 billion program designed to encourage more small business lending by providing capital to community banks at favorable interest rates, according to the statement.

"We believe our participation in the Small Business Loan Fund is a great opportunity for Heartland, said Chief Financial Officer Lynn Fuller. "It will further strengthen our significant commitment to small business and promotes economic growth across our eight-state footprint."

After Heartland Financial receives the funds, it intends to redeem $81.7 million of preferred stock it issued to the Treasury Department in December 2008 under the Troubled Asset Relief Program's Capital Purchase Program. The company said it paid $13.5 million in dividends to Treasury for the preferred stock.

The  Treasury Department holds a warrant to buy 609,687 shares of Heartland common stock at $20.10 per share, and Heartland is preparing a proposal to begin the process for repurchase of the warrant.

Heartland Financial has 61 banking locations in eight states and $4 billion in assets.