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PROXY STATEMENT OF ROCKY MOUNTAIN BANCORPORATION, INC.

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PROSPECTUS OF HEARTLAND FINANCIAL USA, INC.

Merger Proposed – Your Vote is Very Important

     The boards of directors of Heartland Financial USA, Inc. and Rocky Mountain Bancorporation, Inc. have approved a merger agreement that would result in Heartland Financial’s acquisition of Rocky Mountain Bancorporation. The total consideration to be paid to Rocky Mountain Bancorporation shareholders in the merger is expected to be $34,500,000, although this amount may be adjusted up or down based on the closing equity of Rocky Mountain Bancorporation at the time of the merger. The consideration will be paid to Rocky Mountain Bancorporation shareholders 50% in shares of common stock of Heartland Financial and 50% in cash, unless shareholders elect to receive a greater proportion of their consideration in the form of common stock.

     If there is no adjustment to the $34,500,000 total purchase price, Rocky Mountain Bancorporation shareholders will be entitled to receive, per share of Rocky Mountain Bancorporation common stock, either $318.42 in cash, or shares of Heartland Financial common stock based on an exchange ratio that varies with Heartland Financial’s average trading price shortly before the merger. Based on the $19.65 closing price of Heartland Financial on the last trading day before the merger was announced, that exchange ratio would be 16.205 shares of Heartland Financial common stock per share. Based on the $18.468 average trading price of Heartland Financial during the twenty trading days ended April 14, 2004, that exchange ratio would be 17.242 shares of Heartland Financial common stock per share.

     Heartland Financial common stock is traded on the Nasdaq National Market System under the symbol “HTLF.” The closing price of Heartland Financial common stock on April 14, 2004, was $17.75.

     To complete this merger, Heartland Financial must obtain the necessary regulatory approvals and Rocky Mountain Bancorporation must obtain the approval of its shareholders. Rocky Mountain Bancorporation will hold a special meeting to vote on the merger agreement and the transactions it contemplates. Your vote is very important. Whether or not you plan to attend the special meeting, please take the time to vote by completing and mailing the enclosed proxy card.

     For a description of the significant considerations in connection with the merger and related matters described in this document, see “Risk Factors” beginning on page 19.

     We encourage you to read this entire document carefully. This proxy statement-prospectus gives you detailed information about the merger, and it includes a copy of the merger agreement as Appendix A.

	Sincerely,
	Danny Skarda
	Executive Vice President of Rocky Mountain Bancorporation, Inc.

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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this proxy statement-prospectus or determined if this proxy statement-prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

The securities we are offering through this document are not savings or deposit accounts or other obligations of any bank or non-bank subsidiary of either of our companies, and they are not insured by the Federal Deposit Insurance Corporation, the Bank Insurance Fund or any other governmental agency.

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This proxy statement-prospectus is dated April 19, 2004, and is first being mailed on or about April 21, 2004.

 

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Rocky Mountain Bancorporation, Inc.
2615 King Avenue West
Billings, Montana 59108-0450

Notice of Special Meeting of Shareholders
To Be Held On May 24, 2004

     A special meeting of the shareholders of Rocky Mountain Bancorporation, Inc., a Montana corporation, will be held at the Billings Hotel and Convention Center, 1223 Mullowney Lane, Billings, Montana 59101, on May 24, 2004, 3:00 p.m., local time, for the following purposes:

1.

To consider and vote upon a proposal to approve the Agreement and Plan of Merger dated as of February 6, 2004, among Rocky Mountain Bancorporation, Inc., Heartland Financial USA, Inc., a Delaware corporation, and RMB Acquisition Corporation, a Montana corporation and a wholly-owned subsidiary of Heartland Financial, and the transactions it contemplates, including the acquisition of Rocky Mountain Bancorporation by Heartland Financial.

2.

To transact such other business as may properly be brought before the special meeting, or any adjournments or postponements of the special meeting.

     The close of business on April 16, 2004, has been fixed as the record date for determining those shareholders entitled to vote at the special meeting and any adjournments or postponements of the special meeting. Accordingly, only shareholders of record on that date are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting.

By Order of the Board of Directors,
	Danny Skarda
	Executive Vice President

YOUR VOTE IS VERY IMPORTANT

     Whether or not you plan to attend the special meeting in person, please take the time to vote by completing and mailing the enclosed proxy card in the enclosed postage-paid envelope. If you attend the special meeting, you may still vote in person if you wish, even if you have previously returned your proxy card.

     Your board of directors unanimously recommends that you vote FOR approval of the merger agreement and the transactions it contemplates.

 

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We cannot assure you that we can obtain the necessary approvals or that the other conditions to completion of the merger can or will be satisfied.

Conditions to Completion of the Merger
(page 43)

The completion of the merger depends on a number of conditions being met. Subject to exceptions described in the merger agreement, these include:

A party to the merger agreement could choose to complete the merger even though a condition to its obligation has not been satisfied, as long as the law allows it to do so. We cannot be certain when or if the conditions to the merger will be satisfied or waived, or that the merger will be completed.

Regulatory Approvals
(page 45)

The merger is required to be approved by the Federal Reserve Board and the Division of Banking and Financial Institutions of the State of Montana. The Federal Reserve Board approved the merger on April 8, 2004.

Waiver, Amendment and Termination
(page 45)

Heartland Financial and Rocky Mountain Bancorporation may jointly amend the merger agreement and either party may waive its right to require the other party to adhere to any term or condition of the merger agreement. However, neither may do so after Rocky Mountain Bancorporation’s shareholders approve the merger, if the amendment or waiver would materially and adversely affect the rights of Rocky Mountain Bancorporation’s shareholders.

The parties can mutually agree at any time to terminate the merger agreement without completing the merger. Also, either party can decide, without the consent of the other, to terminate the merger agreement if the merger has not been completed by December 6, 2004, unless the failure to complete the merger by that time is due to a violation of the merger agreement by the party that wants to terminate the merger agreement.

The merger agreement will automatically terminate if the average closing price of Heartland Financial common stock, as reported on the Nasdaq National Market System, during the 20 business days immediately preceding the fifth business day prior to the effective time of the merger, is $13.17 or below.

In addition, either Heartland Financial or Rocky Mountain Bancorporation can terminate the merger agreement if the conditions to its respective obligation to consummate the merger have not been satisfied or if environmental investigations indicate the presence of material adverse environmental conditions that cannot be removed or remediated at a cost of $250,000 or less.

Management and Operations After the Merger
(page 46)

Following the merger, the board of directors and officers of RMB Acquisition Corporation will be the board of directors of the surviving corporation. The

corporation resulting from the merger of RMB Acquisition Corporation with and into Rocky Mountain Bancorporation will then immediately be merged into Heartland Financial. The board of directors and officers of Heartland Financial will continue to hold their positions following these mergers.

Interests of Rocky Mountain Bancorporation’s Directors and Officers in the Merger May Differ From Your Interests
(page 46)

Some of Rocky Mountain Bancorporation’s directors and officers have interests in the merger that differ from, or are in addition to, their interests as shareholders in Rocky Mountain Bancorporation, as described beginning on page 46.

The members of Rocky Mountain Bancorporation’s board of directors knew about these additional interests and considered them when they approved the merger agreement and the transactions it contemplates.

Accounting Treatment
(page 48)

The merger will be accounted for as a “purchase transaction” in accordance with accounting principles generally accepted in the United States.

Expenses and Termination Fees
(page 48)

Except as described below, whether or not the merger is completed, each of Heartland Financial and Rocky Mountain Bancorporation will pay its own fees and expenses.

If Heartland Financial terminates the merger agreement because Rocky Mountain Bancorporation breached its obligations under the merger agreement then Rocky Mountain Bancorporation must pay to Heartland Financial an amount equal to the sum of Heartland Financial’s fees and expenses, up to $500,000, plus an additional termination fee of $750,000.

If Heartland Financial or Rocky Mountain Bancorporation terminates the merger agreement because Rocky Mountain Bancorporation’s shareholders fail to approve the merger agreement, then Rocky Mountain Bancorporation must pay to Heartland Financial an amount equal to the sum of

Heartland Financial’s fees and expenses, up to $500,000.

In addition, if a termination described above occurs and, within 18 months after the termination Rocky Mountain Bancorporation enters into an agreement relating to a competing takeover proposal, Rocky Mountain Bancorporation must pay Heartland Financial:

If Rocky Mountain Bancorporation terminates the merger agreement because Heartland Financial breached its obligations under the merger agreement, then Heartland Financial must pay to Rocky Mountain Bancorporation an amount equal to the sum of Rocky Mountain Bancorporation’s fees and expenses, up to $500,000, plus an additional termination fee of $750,000.

The parties have agreed to pay these special termination fees to each other to increase the likelihood that they will complete the merger. These fees could discourage other companies from attempting to combine with either of us before we complete the merger.

Material Differences in the Rights of Shareholders
(page 50)

Upon completion of the merger, Rocky Mountain Bancorporation shareholders will become shareholders of Heartland Financial and their rights will be governed by Delaware law and by Heartland Financial’s certificate of incorporation and bylaws. There are differences between the rights of the shareholders of Heartland Financial and Rocky Mountain Bancorporation.

Authority to Adjourn Special Meeting to Solicit Additional Proxies
(page 23)

Rocky Mountain Bancorporation is asking its shareholders to grant full authority for the special

meeting to be adjourned, if necessary, to permit solicitation of additional proxies to approve the transactions proposed by this proxy statement-prospectus.

Comparative Market Prices of Common Stock
(pages 12 through 14)

Shares of Heartland Financial common stock are traded on the Nasdaq National Market System under

the symbol “HTLF.” On February 6, 2004, the last trading day before we announced the merger, the last reported trading price of Heartland Financial common stock was $19.65 per share. On April 14, 2004, the last reported trading price of Heartland Financial common stock was $17.75 per share. We can make no prediction or guarantee at what price Heartland Financial common stock will trade after the completion of the merger. Shares of Rocky Mountain Bancorporation common stock are not publicly traded.

Comparative Per Share Data

     The following table presents comparative historical per share data of Heartland Financial and Rocky Mountain Bancorporation and unaudited pro forma per share data that reflect the combination of Heartland Financial using the purchase method of accounting.

     The information listed as “equivalent pro forma” was obtained by multiplying the pro forma amounts by the exchange ratio of 17.242, which is the exchange ratio on the date of this proxy statement-prospectus, based on a $34,500,000 purchase price, 108,347.70 shares of Rocky Mountain Bancorporation common stock outstanding and an average market price of Heartland Financial common stock during the 20 trading days prior to April 14, 2004 of $18.468. However, as explained in this proxy statement-prospectus, the exchange ratio may go up or down as the purchase price changes and the market price of the common stock of Heartland Financial fluctuates.

     We expect that we will incur merger and integration charges as a result of combining our companies. We also anticipate that the merger will provide the combined company with financial benefits that include reduced operating expenses and the opportunity to earn more revenue. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect these expenses or benefits and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have actually been had our companies been combined as of the dates or for the periods presented.

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Market Price Information

     Heartland Financial common stock is traded on the Nasdaq National Market System under the symbol “HTLF.” Rocky Mountain Bancorporation common stock is not publicly traded. On February 6, 2004, the business day immediately preceding the public announcement of the execution of the merger agreement, and April 14, 2004, the most recent practicable date prior to the mailing of this document, the market prices of Heartland Financial common stock and the equivalent price per share of Heartland Financial common stock giving effect to the merger were as follows:

     The “Equivalent Price Per Share of Heartland Financial Common Stock” at each specified date in the above table represents the product achieved when the closing sales price of a share of Heartland Financial common stock on that date is multiplied by the exchange ratio of 17.242, which is the number of shares of Heartland Financial common stock that a Rocky Mountain Bancorporation shareholder would receive for each share of Rocky Mountain Bancorporation common stock owned based on a $34,500,000 purchase price, 108,347.70 shares of Rocky Mountain Bancorporation common stock outstanding, and an average market price of Heartland Financial common stock on the 20 trading days prior to April 14, 2004 of $18.468. Shareholders should obtain current market price quotations for shares of Heartland Financial common stock prior to making any decisions with respect to the merger.

     The market price of Heartland Financial common stock will likely fluctuate between the date of this document and the date on which the merger is completed and after the merger. Because the market price of Heartland Financial common stock is subject to fluctuations, the exchange ratio will change and the value of the shares of Heartland Financial common stock that Rocky Mountain Bancorporation shareholders will receive in the merger may increase or decrease prior to and after the merger.

     By voting to approve the merger agreement and the transactions it contemplates, Rocky Mountain Bancorporation shareholders will be choosing to invest in Heartland Financial because they will receive Heartland Financial common stock in exchange for a portion of their shares of Rocky Mountain Bancorporation common stock. An investment in Heartland Financial’s common stock involves significant risk. In addition to the other information included in this proxy statement-prospectus, including the matters addressed in “A Warning About Forwarding-Looking Statements” beginning on page 21, Rocky Mountain Bancorporation shareholders should carefully consider the matters described below in “Risk Factors” beginning on page 19 when determining whether to approve the merger agreement and the transactions it contemplates.

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Historical Market Prices and Dividend Information

     Heartland Financial

     Prior to May 2003, Heartland Financial’s common stock was traded in the over-the-counter market. Heartland Financial’s common stock is now traded on the Nasdaq National Market System under the symbol “HTLF.”

     The following table sets forth, for the calendar quarter indicated, the high and low closing market prices per share of Heartland Financial common stock as reported on the Nasdaq National Market System or the over-the-counter market, as applicable, and the dividends per share of Heartland Financial common stock, adjusted to reflect previous stock splits:

     On December 29, 2003, Heartland Financial paid a 3-for-2 stock split, effected in the form of a 50% stock dividend. All per share information has been restated to reflect the split.

     The timing and amount of future dividends on shares of Heartland Financial common stock will depend upon earnings, cash requirements, the financial condition of Heartland Financial and its subsidiaries, applicable government regulations and other factors deemed relevant by Heartland Financial’s board of directors.

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     Rocky Mountain Bancorporation

     There is no trading market for shares of Rocky Mountain Bancorporation common stock and Rocky Mountain Bancorporation does not make a market in its stock. From time to time Rocky Mountain Bancorporation becomes aware of transactions in its common stock. Rocky Mountain Bancorporation is not aware of any transactions in its common stock among shareholders during 2003, except for gratuitous transfers between shareholders made, to the best knowledge of Rocky Mountain Bancorporation, without consideration.

     During 2003, Rocky Mountain Bancorporation redeemed 1,474 shares of its common stock. Of the 1,474 shares, 975 shares were redeemed at a redemption price of $325.00 per share and 499 shares were redeemed at a redemption price of $300.00 per share. Also during 2003, Rocky Mountain Bancorporation issued 3,010 shares of its common stock. Of the 3,010 shares, 1,184 shares were issued at a price of $300.00 per share and the remaining 1,826 shares were issued at a price of $325.00 per share.

     Rocky Mountain Bancorporation has, historically, from time to time declared dividends in respect of its common stock. The following table presents the aggregate dividends declared and paid by Rocky Mountain Bancorporation for the calendar years indicated:

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Selected Historical Financial Data

     The following tables present selected consolidated financial data as of December 31, 1999, 2000, 2001, 2002 and 2003, for each of the five years then ended, for Heartland Financial and selected consolidated financial data as of December 31, 1999, 2000, 2001, 2002 and 2003, for each of the five years then ended, for Rocky Mountain Bancorporation. The information for Heartland Financial is based on the historical financial information that is contained in reports Heartland Financial has previously filed with the Securities and Exchange Commission, which can be found in its Annual Report on Form 10-K for the year ended December 31, 2003. This document is incorporated by reference in this proxy statement-prospectus. See “Where You Can Find More Information” on page 60. The information for Rocky Mountain Bancorporation is based on the historical financial statements as of the dates and for the periods indicated. Audited consolidated financial statements of Rocky Mountain Bancorporation for the year ended December 31, 2002, and unaudited consolidated financial statements of Rocky Mountain Bancorporation for the year ended December 31, 2003, are included with this proxy statement-prospectus as Appendix D.

     You should read the following tables in conjunction with the consolidated financial statements described above.

     Historical results do not necessarily indicate the results that you can expect for any future period.

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HEARTLAND FINANCIAL SELECTED FINANCIAL DATA

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HEARTLAND FINANCIAL SELECTED FINANCIAL DATA

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ROCKY MOUNTAIN BANCORPORATION SELECTED FINANCIAL DATA

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RISK FACTORS

     By voting in favor of the merger, Rocky Mountain Bancorporation shareholders will be choosing to invest in Heartland Financial’s common stock to the extent they receive Heartland Financial common stock in exchange for their shares of Rocky Mountain Bancorporation common stock. In addition to the information contained elsewhere in this proxy statement-prospectus or incorporated in this proxy statement-prospectus by reference, as a shareholder of Rocky Mountain Bancorporation, you should carefully consider the following factors in making your decision as to how to vote on the merger.

Risks Relating to the Merger

     The purchase price is subject to adjustment for changes in Rocky Mountain Bancorporation’s shareholders’ equity.

     If Rocky Mountain Bancorporation’s adjusted shareholders’ equity as of the business day preceding the closing date of the merger is less than $17,450,000, the $34,500,000 purchase price will be decreased by the amount of the deficiency. If Rocky Mountain Bancorporation’s adjusted shareholders’ equity on that same date is greater than $18,150,000, the $34,500,000 purchase price will be increased by the amount of the excess. In addition, if Rocky Mountain Bancorporation’s adjusted shareholders’ equity falls below $17,050,000, Heartland Financial is not obligated to complete the merger. In calculating the adjusted shareholders’ equity, Rocky Mountain Bancorporation must take into account expenses incurred in connection with the transaction, including expenses associated with obtaining shareholder approval. To the extent that Rocky Mountain Bancorporation incurs unanticipated or excessive expenses prior to the closing of the merger, shareholders may receive a lower value for their shares or the merger may never be completed.

     Because of the possible price adjustment referred to above, and because the market price of Heartland Financial common stock may fluctuate, a Rocky Mountain Bancorporation shareholder cannot be sure of the value of the merger consideration that he or she will receive.

     Upon completion of the merger, each share of Rocky Mountain Bancorporation common stock will be converted into shares of Heartland Financial common stock, cash or a combination of Heartland Financial common stock and cash under the terms of the merger agreement. The total value of the consideration will depend on Rocky Mountain Bancorporation’s final adjusted shareholders’ equity, and will further depend upon the average closing price of Heartland Financial common stock during the 20 trading day measurement period ending on the fifth day prior to completion of the merger. The likelihood that Rocky Mountain Bancorporation’s final adjusted shareholders’ equity will fall within the range stated in the merger agreement so that no adjustment will be made in the total purchase price, and the price of Heartland Financial common stock, will vary between the date the merger was announced, the date this document is mailed to Rocky Mountain Bancorporation shareholders and the date of the special meeting. Any change in Rocky Mountain Bancorporation’s revenues and/or in the price of Heartland Financial common stock prior to completion of the merger will affect the value of the total consideration that a Rocky Mountain Bancorporation shareholder will receive upon completion of the merger. Revenue and stock price changes may result from a variety of factors, including general market and economic conditions, changes in a company’s business, operations and prospects, and regulatory considerations. Many of these factors are beyond the control of Rocky Mountain Bancorporation and Heartland Financial.

     Accordingly, you will not know when you vote or make your election, either the number or the exact value of the shares of Heartland Financial common stock, or the amount of cash, that you will receive in the merger. Moreover, the market value of Heartland Financial shares at the time of the merger and afterwards could be substantially higher or lower than the current market value. You are urged to obtain current market quotations for Heartland Financial stock, and to consult with your financial advisors before you vote.

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     The interests of certain management officials of Rocky Mountain Bancorporation may be different from those of other shareholders.

     Rocky Mountain Bancorporation’s directors and executive officers have interests in the merger other than their interests as Rocky Mountain Bancorporation shareholders. These interests may cause Rocky Mountain Bancorporation’s directors and executive officers to view the merger proposal differently than you may view it. The board of directors of Rocky Mountain Bancorporation was aware of these interests at the time it approved the merger. See “Description of Transaction—Interests of Certain Persons in the Merger.”

Post-Merger Risks

     Difficulties in combining the operations of Rocky Mountain Bancorporation and Heartland Financial may prevent the combined company from achieving the expected benefits from its acquisition.

     The combined company may not be able to achieve fully the strategic objectives and operating efficiencies it hopes to achieve in the merger. The success of the merger will depend on a number of factors, including the combined company’s ability to:

These factors could contribute to the combined company not achieving the expected benefits from the merger within the desired time frames, if at all.

     In addition, Heartland Financial’s markets are currently located in Iowa, Illinois, Wisconsin, New Mexico and Arizona, and Heartland Financial has no experience in the Montana market area, and Rocky Mountain Bancorporation’s service area is spread over a fairly large geographic region. Although Heartland Financial anticipates that the continued presence of Donald Fraley, as chairman of Rocky Mountain Bank, and Danny Skarda, as president and chief executive officer of Rocky Mountain Bank, will help Heartland Financial manage its expansion into a new market area, and that the continuation of Rocky Mountain Bank under its existing name and charter will help to maintain existing relationships, Heartland Financial’s entry into the Montana markets may not be successful.

     The combined company may experience difficulties in managing its growth.

     As part of its overall growth strategy following the merger, the combined company expects to acquire banks and related businesses that its board of directors believes provide a strategic fit with its business or to establish de novo branches. To the extent that the combined company does grow, it may not be able to adequately and profitably manage its growth. In addition, the combined company may not obtain regulatory approvals for acquisitions or the establishment of de novo branches that it may undertake in the future. The combined company will account for the proposed merger and possible future acquisitions under the purchase method of accounting, which could adversely affect future results of operations.

     The combined company and its shareholders will be subjected to special risks if it effects future acquisitions.

     Acquiring other banks and businesses will involve risks commonly associated with acquisitions, including:

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A WARNING ABOUT FORWARD-LOOKING STATEMENTS

     We have each made forward-looking statements in this document (and in documents to which we refer you in this document) that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our operations or the performance of the combined company after the merger is completed. When we use any of the words “believes,” “expects,” “anticipates,” “estimates” or similar expressions, we are making forward-looking statements. These statements are based on Heartland Financial’s and Rocky Mountain Bancorporation’s respective management’s existing expectations, which in turn are based on information that is currently available to them and on the current economic, regulatory and competitive environment, including factors such as the strength of the U.S. and local economies; federal, state and local laws, regulations and policies; interest rates and regulatory policies; and expectations as to competitors and customers. Many possible events or factors, including changes from current conditions in the factors mentioned above, could affect the future financial results and performance of each of our companies and the combined company after the merger and could cause those results or performance to differ materially from those expressed in our forward-looking statements.

     In addition to the factors listed above and the risks discussed in the “Risk Factors” section of this proxy statement-prospectus, factors that could have a material adverse effect on our operations and future prospects include, but are not limited to, the following:

     These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

     Any forward-looking earnings estimates included in the proxy statement-prospectus have not been examined or compiled by our independent public accountants, nor have our independent accountants applied any procedures to our estimates. Accordingly, our accountants do not express an opinion or any other form of assurance on them. The forward-looking statements included in this proxy statement-prospectus are made only as of the date of this proxy statement-prospectus. Further information concerning Heartland Financial and its business, including additional factors that could materially affect Heartland Financial’s financial results, is included in Heartland Financial’s filings with the Securities and Exchange Commission.

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INTRODUCTION

     Rocky Mountain Bancorporation is furnishing this proxy statement-prospectus to holders of Rocky Mountain Bancorporation common stock, no par value per share, in connection with the proxy solicitation by Rocky Mountain Bancorporation’s board of directors. Rocky Mountain Bancorporation’s board of directors will use the proxies at the special meeting of shareholders of Rocky Mountain Bancorporation to be held on May 24, 2004, and at any adjournments or postponements of the meeting.

     Shareholders will be asked at this special meeting to vote to approve the Agreement and Plan of Merger, dated as of February 6, 2004, among Rocky Mountain Bancorporation, Heartland Financial and RMB Acquisition Corporation, and the transactions it contemplates. Under the merger agreement, RMB Acquisition Corporation will merge into Rocky Mountain Bancorporation. This merger will be followed immediately by the merger of Rocky Mountain Bancorporation into Heartland Financial, with Heartland Financial continuing as the surviving corporation. As a result, Rocky Mountain Bank, which is currently a wholly-owned subsidiary of Rocky Mountain Bancorporation, will become a wholly-owned subsidiary of Heartland Financial, and will continue operations under its existing name and charter. In the merger, each of the outstanding shares of Rocky Mountain Bancorporation common stock will be converted into the right to receive shares of Heartland Financial common stock or a combination of shares and cash, as described in this proxy statement-prospectus.

ROCKY MOUNTAIN BANCORPORATION SPECIAL MEETING

Date, Place, Time and Purpose

     The special meeting of Rocky Mountain Bancorporation’s shareholders will be held at the Billings Hotel and Convention Center, 1223 Mullowney Lane, Billings, Montana 59101, at 3:00 p.m., local time, on May 24, 2004. At the special meeting, holders of Rocky Mountain Bancorporation common stock will be asked to vote upon a proposal to approve the merger agreement and the transactions it contemplates.

Record Date, Voting Rights, Required Vote and Revocability of Proxies

     The Rocky Mountain Bancorporation board fixed the close of business on April 16, 2004, as the record date for determining those Rocky Mountain Bancorporation shareholders who are entitled to notice of and to vote at the special meeting. Only holders of Rocky Mountain Bancorporation common stock of record on the books of Rocky Mountain Bancorporation at the close of business on the record date have the right to receive notice of and to vote at the special meeting. On the record date, there were 108,347.70 shares of Rocky Mountain Bancorporation common stock issued and outstanding held by 119 holders of record.

     At the special meeting, Rocky Mountain Bancorporation shareholders will have one vote for each share of Rocky Mountain Bancorporation common stock owned on the record date. The holders of a majority of the outstanding shares of Rocky Mountain Bancorporation common stock entitled to vote at the special meeting must be present in order for a quorum to exist at the special meeting.

     To determine if a quorum is present, Rocky Mountain Bancorporation intends to count the following:

     Approval of the merger agreement requires the affirmative vote of holders of at least two-thirds of the outstanding shares of Rocky Mountain Bancorporation common stock.

     Brokers who hold shares in street name for customers who are the beneficial owners of such shares may not give a proxy to vote those shares without specific instructions from their customers. Any abstention, non-voting share or “broker non-vote” will have the same effect as a vote against the approval of the merger agreement.

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     Properly executed proxies that Rocky Mountain Bancorporation receives before the vote at the special meeting that are not revoked will be voted in accordance with the instructions indicated on the proxies. If no instructions are indicated, these proxies will be voted FOR the proposal to approve the merger agreement and the transactions it contemplates, and FOR any resolution to adjourn the special meeting, if necessary, to solicit additional proxies, and the proxy holder may vote the proxy in its discretion as to any other matter that may properly come before the special meeting.

     A Rocky Mountain Bancorporation shareholder who has given a proxy solicited by the Rocky Mountain Bancorporation board may revoke it at any time prior to its exercise at the special meeting by:

     All written notices of revocation and other communications with respect to revocation of proxies should be sent to: Rocky Mountain Bancorporation, Inc., 2615 King Avenue West, Billings, Montana 59108-0450, Attention: Brenda Nearpass, Secretary.

     On the record date, Rocky Mountain Bancorporation’s directors owned 27,851 shares, or approximately 25.69% of the outstanding shares, of Rocky Mountain Bancorporation common stock. These individuals have agreed to vote their shares in favor of approving the merger agreement and the transactions it contemplates.

Solicitation of Proxies

     Directors, officers and employees of Rocky Mountain Bancorporation may solicit proxies by mail, in person or by telephone or facsimile. They will receive no additional compensation for these services. Rocky Mountain Bancorporation may make arrangements with brokerage firms and other custodians, nominees and fiduciaries, if any, for the forwarding of solicitation materials to the beneficial owners of Rocky Mountain Bancorporation common stock held of record by such persons. Rocky Mountain Bancorporation will reimburse any brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses incurred by them for their services. Heartland Financial and Rocky Mountain Bancorporation will share all expenses associated with the printing and mailing of this proxy statement-prospectus, as provided in the merger agreement. See “Description of Transaction—Expenses and Termination Fees.”

Authority to Adjourn Special Meeting to Solicit Additional Proxies

     Rocky Mountain Bancorporation is asking its shareholders to grant full authority for the special meeting to be adjourned, if necessary, to permit solicitation of additional proxies to approve the transactions proposed by this proxy statement-prospectus.

Recommendation of Rocky Mountain Bancorporation Board

     The Rocky Mountain Bancorporation board has unanimously approved the merger agreement and the transactions it contemplates and believes that the proposal to approve the merger agreement and the transactions it contemplates are in the best interests of Rocky Mountain Bancorporation and its shareholders. The Rocky Mountain Bancorporation board unanimously recommends that the Rocky Mountain Bancorporation shareholders vote FOR approval of the merger agreement and the transactions it contemplates and FOR any resolution to adjourn the special meeting, if necessary, to solicit additional proxies. See “Description of Transaction—Rocky Mountain Bancorporation’s Reasons for the Merger and Board Recommendation.”

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DESCRIPTION OF TRANSACTION

     The following information describes material aspects of the merger and related transactions. This description does not provide a complete description of all the terms and conditions of the merger agreement. It is qualified in its entirety by the Appendices to this document, including the merger agreement, which is attached as Appendix A to this proxy statement-prospectus. The merger agreement is incorporated into this proxy statement-prospectus by reference. We urge you to read the Appendices in their entirety.

General

     The merger agreement provides for the acquisition by merger of Rocky Mountain Bancorporation by Heartland Financial. At the time the merger becomes effective, each share of Rocky Mountain Bancorporation common stock then issued and outstanding will be converted into and exchanged for the right to receive shares of Heartland Financial common stock, cash, or a combination of shares of Heartland Financial common stock and cash, as described below.

Purchase Price and Election of Merger Consideration

     Under the merger agreement, Rocky Mountain Bancorporation shareholders will be entitled to receive total consideration in the amount of $34,500,000, increased by the amount by which Rocky Mountain Bancorporation’s adjusted shareholders’ equity exceeds $18,150,000, or decreased by the amount by which Rocky Mountain Bancorporation’s adjusted shareholders equity is below $17,450,000, as applicable. This price, as it may be adjusted, is referred to as the purchase price.

     At March 31, 2004, Rocky Mountain Bancorporation’s adjusted shareholder equity was approximately $17,650,000.00.

     Shareholders may elect to receive their share of the merger consideration in up to 100% of Heartland Financial common stock. If no election is made, however, 50% of a holder’s shares of Rocky Mountain Bancorporation common stock will be converted into cash and the remaining shares will be converted into shares of Heartland Financial common stock. To preserve the tax treatment of the merger, the merger agreement provides that in no event will more than 50% of the outstanding shares of Rocky Mountain Bancorporation stock be converted into cash, including shares with respect to which shareholders have asserted their dissenters’ rights under the Montana Business Corporation Act.

     Stock Consideration. Shares of Rocky Mountain Bancorporation common stock will be converted into shares of Heartland Financial based on an exchange ratio calculation included in the merger agreement. The exchange ratio will be equal to the quotient of:

     with this result divided by an average closing price of Heartland Financial common stock.

     The average closing price of Heartland Financial common stock to be used in this calculation will be determined by using the closing stock prices for the last 20 trading days before the cutoff date for the determination. That cutoff date is five trading days before the effective date of the merger. However, if the average closing price is greater than $21.33, then the average closing price used in the calculation of the exchange ratio will be $21.33. In addition, if the average closing price is less than $17.33, then the average closing price used in this calculation will be $17.33.

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     Examples:

$34,500,000 ÷ 108,347.70 = $318.42

$318.42 ÷ $19.65 = 16.205 shares of Heartland Financial common stock

$34,500,000 ÷ 108,347.70 = $318.42

$318.42 ÷ $18.468 = 17.242 shares of Heartland Financial common stock

$34,500,000 ÷ 108,347.70 = $318.42

$318.42 ÷ $21.33 = 14.928 shares of Heartland Financial common stock

$34,500,000 ÷ 108,347.70 = $318.42

$318.42 ÷ $17.33 = 18.374 shares of Heartland Financial common stock

     Based on the 108,347.70 of shares of Rocky Mountain Bancorporation common stock outstanding on April 14, 2004, and based on the $18.468 average closing price of Heartland Financial common stock during the 20 trading days prior to April 14, 2004, and assuming that 50% of the Rocky Mountain Bancorporation shares are converted to cash, the exchange ratio would be 17.242 shares of Heartland Financial common stock for each share of Rocky Mountain Bancorporation stock. Heartland Financial would issue approximately 934,066 shares to former Rocky Mountain Bancorporation shareholders in the merger, representing approximately 5.77% of the total number of Heartland Financial common shares that will be outstanding after the merger. The number of shares actually issued will vary depending on the actual purchase price, as adjusted, the average closing price for Heartland Financial stock during the actual determination period, and the number of Rocky Mountain Bancorporation shares whose holders exercise dissenters’ rights or elect to exchange their shares for greater than 50% Heartland Financial common stock, subject to the requirement that a maximum of 50% of the outstanding shares of Rocky Mountain Bancorporation common stock, including dissenters’ shares, be converted into cash.

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     Share prices cannot be predicted, of course. If the average closing price of Heartland Financial stock moves between $17.33 and $21.33, the exchange ratio will change. The following table illustrates the effective exchange ratio as a function of several possible average closing prices, in each case calculated based on a total purchase price of $34,500,000 and 108,347.70 outstanding shares of Rocky Mountain Bancorporation common stock:

     Cash Consideration. You will receive cash for a maximum of 50% of the Rocky Mountain Bancorporation shares you own. The cash price per share you receive will be determined by dividing the total purchase price to be paid by Heartland Financial by the total number of outstanding shares of Rocky Mountain Bancorporation common stock.

$34,500,000 ÷ 108,347.70 = $318.42

     We are not making any recommendation as to whether Rocky Mountain Bancorporation shareholders should elect to receive a different ratio than 50% cash and 50% Heartland Financial common stock. Each Rocky Mountain Bancorporation shareholder must make his or her own decision with respect to the election to receive Heartland Financial common stock for more than 50% of their shares of Rocky Mountain Bancorporation stock.

     Variable Amount of Cash and Stock. By the terms of the merger agreement, a maximum of 50% of the total outstanding shares of Rocky Mountain Bancorporation common stock, including dissenters’ shares, may be converted into cash, and the remainder must be converted into shares of Heartland Financial common stock.

     If, after taking into account all valid stock elections, more than 50% of the total outstanding shares of Rocky Mountain Bancorporation common stock would be converted into cash, including dissenters shares, then any Rocky Mountain Bancorporation shareholders who will receive any portion of the merger consideration in cash will be subject to a proration process that will result in the holder receiving additional shares of Heartland Financial common stock in lieu of some cash. This proration will result in a final prorated number of shares of Heartland Financial common stock being issued with a value equal to at least 50% of the total merger consideration.

Election Procedures; Surrender of Stock Certificates

     An election form is included with this proxy statement-prospectus. Rocky Mountain Bancorporation shareholders can use this form to elect to receive shares of Heartland Financial common stock for up to 100% of their

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shares of Rocky Mountain Bancorporation common stock. Rocky Mountain Bancorporation shareholders do not need to make an election. If no election is made, a Rocky Mountain Bancorporation shareholder will receive cash for 50% of his or her shares of Rocky Mountain Bancorporation common stock and shares of Heartland Financial common stock for the remaining 50% of his or her shares of Rocky Mountain Bancorporation common stock.

     To make an effective election, you must submit a properly completed election form to Dubuque Bank and Trust Company, which will be acting as the exchange agent, on or before the election deadline of 5:00 p.m., Dubuque, Iowa time, on June 7, 2004. You may change your election at any time prior to the election deadline by written notice accompanied by a properly completed and signed, revised election form received by the exchange agent prior to the election deadline. All elections will be revoked automatically if the merger is not approved or the merger agreement is otherwise terminated.

     After the completion of the merger, a letter of transmittal, together with a return envelope will be mailed to Rocky Mountain Bancorporation shareholders. The letter of transmittal will include instructions for the surrender and exchange of certificates representing Rocky Mountain Bancorporation common stock for the merger consideration. A letter of transmittal will be deemed properly completed only if signed and accompanied by stock certificates representing all shares of Rocky Mountain Bancorporation common stock or an appropriate guarantee of delivery of the certificates.

     Until you surrender your Rocky Mountain Bancorporation stock certificates for exchange after completion of the merger, you will not be paid dividends or other distributions declared after the merger with respect to any Heartland Financial common stock into which your Rocky Mountain Bancorporation shares have been converted. When you surrender your Rocky Mountain Bancorporation stock certificates, Heartland Financial will pay any unpaid dividends or other distributions, without interest. After the completion of the merger, there will be no further transfers of Rocky Mountain Bancorporation common stock. Rocky Mountain Bancorporation stock certificates presented for transfer after the completion of the merger will be canceled and exchanged for the merger consideration.

     No fractional shares of Heartland Financial common stock will be issued to any holder of Rocky Mountain Bancorporation common stock upon consummation of the merger. For each fractional share that would otherwise be issued, Heartland Financial will pay cash in an amount equal to the holder’s fractional interest multiplied by the closing price of Heartland Financial common stock as reported on the Nasdaq National Market System on the effective date of the merger. No interest will be paid or accrued on cash payable to holders of Rocky Mountain Bancorporation common stock in lieu of fractional shares. No shareholder of Rocky Mountain Bancorporation will be entitled to dividends, voting rights or any other rights as a shareholder of Heartland Financial in respect of any fractional shares.

     None of Heartland Financial, Rocky Mountain Bancorporation or any other person will be liable to any former holder of Rocky Mountain Bancorporation common stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.

     If a certificate for Rocky Mountain Bancorporation common stock has been lost, stolen or destroyed, the exchange agent will issue the consideration properly payable under the merger agreement upon compliance by the holder of Rocky Mountain Bancorporation common stock with the conditions reasonably imposed by the exchange agent. These conditions will include a requirement that the shareholder provide a lost instruments indemnity bond in form, substance and amount reasonably satisfactory to the exchange agent and Heartland Financial.

Effective Time of the Merger

     Subject to the conditions to each party’s obligations to complete the merger, the merger will become effective when articles of merger reflecting the merger are filed with the Secretary of State of the State of Montana. Unless we agree otherwise, each party will use reasonable efforts to cause the merger to become effective 10 business days after the latest to occur of:

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     We anticipate that the merger will become effective in the second quarter of 2004, however, delays could occur.

     We cannot assure you that the necessary shareholder and regulatory approvals of the merger will be obtained or that other conditions precedent to the merger can or will be satisfied. Either party’s boards of directors may terminate the merger agreement if the merger is not completed by December 6, 2004, unless it is not completed because of the failure by the party seeking termination to comply fully with its obligations under the merger agreement. See “—Conditions to Completion of the Merger” and “—Waiver, Amendment and Termination.”

United States Federal Income Tax Consequences of the Merger

     The following is a summary of the material United States federal income tax consequences of the merger generally applicable to Rocky Mountain Bancorporation shareholders. This discussion assumes you hold your shares of Rocky Mountain Bancorporation common stock as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended, or the Code, and does not address all aspects of United States federal income taxation that may be relevant to you in light of your particular circumstances or if you are subject to special rules, such as rules relating to:

     In addition, this summary does not address any state, local or foreign tax consequences of the merger that may apply. The following discussion is based on the Code, existing and proposed regulations promulgated under the Code, published Internal Revenue Service rulings and court decisions, all as in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Any such change could affect the continuing validity of the discussion.

     Tax Consequences of the Merger Generally. It is intended that the merger of RMB Acquisition Corporation with and into Rocky Mountain Bancorporation, taken together with the subsequent merger of Rocky Mountain Bancorporation with and into Heartland Financial, will be treated as a reorganization within the meaning of Section 368(a) of the Code. Heartland Financial’s and Rocky Mountain Bancorporation’s obligations to complete the merger are conditioned on, among other things, their receipt of an opinion from Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP dated as of the date of the registration statement filed with the Securities and Exchange Commission in connection with the merger and updated through the effective date, to the effect that:

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     The opinion of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP is based upon existing law, assumes the absence of changes in existing facts, relies upon customary assumptions and relies upon representations contained in certificates executed by officers of Heartland Financial and Rocky Mountain Bancorporation. The opinion neither binds the Internal Revenue Service nor precludes it from adopting a contrary position, and it is possible that the Internal Revenue Service may successfully assert a contrary position in litigation or other proceedings. Neither Heartland Financial nor Rocky Mountain Bancorporation intends to obtain a ruling from the Internal Revenue Service with respect to the tax consequences of the merger.

     The following discussion assumes that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code.

     Rocky Mountain Bancorporation Shareholders Who Receive Only Heartland Financial Common Stock. If you are a holder of Rocky Mountain Bancorporation common stock and you receive only Heartland Financial common stock (plus any cash in lieu of a fractional share of Heartland Financial common stock) in exchange for your Rocky Mountain Bancorporation common stock in the merger, you will not recognize any gain or loss for federal income tax purposes with respect to such exchange, except with respect to any cash received in lieu of a fractional share, as discussed below.

     Rocky Mountain Bancorporation Shareholders Who Receive Both Heartland Financial Common Stock and Cash. If you are a holder of Rocky Mountain Bancorporation common stock and you receive both Heartland Financial common stock and cash (other than cash received in lieu of a fractional share of Heartland Financial common stock) in exchange for your Rocky Mountain Bancorporation common stock in the merger, you will recognize gain, but not loss, in an amount equal to the lesser of:

     Any such gain will be treated as capital gain unless the receipt of the cash has the effect of the distribution of a dividend for federal income tax purposes, in which case the gain will be treated as ordinary dividend income to the extent of your ratable share of Rocky Mountain Bancorporation’s accumulated earnings and profits. Any capital gain will be long-term capital gain if, as of the date of the merger, your holding period in your Rocky Mountain Bancorporation common stock is greater than one year.

     The stock redemption provisions of Section 302 of the Code apply in determining whether cash received by you in exchange for your Rocky Mountain Bancorporation common stock has the effect of a distribution of a dividend under Section 356(a)(2) of the Code, which we refer to as a hypothetical redemption analysis. Under the hypothetical redemption analysis, you will be treated as if that portion of your Rocky Mountain Bancorporation common stock that you exchange for cash in the merger will instead be exchanged for Heartland Financial common stock (which we call the hypothetical shares) followed immediately by a redemption of the hypothetical shares by Heartland Financial for cash. Under the principles of Section 302 of the Code, you will recognize capital gain rather than dividend income with respect to the cash received if the hypothetical redemption is “not essentially equivalent to a dividend” or is “substantially disproportionate” with respect to you. In applying the principles of Section 302 of the Code, the constructive ownership rules of Section 318 of the Code will apply in comparing your ownership interest in Heartland Financial both immediately after the merger (but before the hypothetical redemption) and after the hypothetical redemption.

     If you are a holder of Rocky Mountain Bancorporation common stock, whether the hypothetical redemption by Heartland Financial of the hypothetical shares for cash is “not essentially equivalent to a dividend” will depend on your particular circumstances. However, the hypothetical redemption must, in any event, result in a “meaningful reduction” in your percentage ownership of Heartland Financial common stock. In determining whether the

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hypothetical redemption by Heartland Financial results in a meaningful reduction in your percentage ownership of Heartland Financial common stock and, therefore, does not have the effect of a distribution of a dividend, you should compare your interest in Heartland Financial (including interests owned actually, hypothetically, and constructively) immediately after the merger (but before the hypothetical redemption) to your interest after the hypothetical redemption. The Internal Revenue Service has indicated, in Revenue Ruling 76-385, that a shareholder in a publicly-held corporation whose relative stock interest in the corporation is minimal and who exercises no “control” over corporate affairs is generally treated as having had a meaningful reduction in his or her stock after a redemption transaction if his or her percentage stock ownership in the corporation has been reduced to any extent, taking into account the shareholder’s actual and constructive ownership before and after the hypothetical redemption.

     If you are a holder of Rocky Mountain Bancorporation common stock, the hypothetical redemption transaction would be “substantially disproportionate,” and, therefore, would not have the effect of a distribution of a dividend if you own less than 50 percent of the voting power of the outstanding Heartland Financial common stock and the percentage of Heartland Financial common stock actually and constructively owned by you immediately after the hypothetical redemption is less than 80 percent of the percentage of Heartland Financial common stock actually, hypothetically, and constructively owned by you immediately before the hypothetical redemption. Nevertheless, you should consult your own tax advisor about the possibility that all or a portion of any cash received in exchange for Rocky Mountain Bancorporation common stock will be treated as a dividend.

     Tax Basis and Holding Period. The aggregate tax basis of any Heartland Financial common stock you receive as a result of the merger will be the same as your aggregate tax basis in the Rocky Mountain Bancorporation common stock you surrender in exchange for the Heartland Financial common stock, decreased by the amount of cash received in the merger, and increased by the amount of income or gain recognized in the merger. Your holding period in the Heartland Financial common stock you receive as a result of the exchange will include the period during which you held the Rocky Mountain Bancorporation common stock you surrender in the merger.

     Cash Received in Lieu of Fractional Shares. If you receive cash in the merger instead of a fractional share of Heartland Financial common stock, you will be treated as having received the fractional share pursuant to the merger and then as having exchanged the fractional share for cash in a redemption of the fractional share by Heartland Financial. Assuming that, immediately after the merger, you hold a minimal interest in Heartland Financial, you exercise no control over Heartland Financial and, as a result of the deemed redemption and after giving effect to certain constructive ownership rules, you experience an actual reduction in your interest in Heartland Financial, you will generally recognize capital gain or loss on the deemed redemption in an amount equal to the difference between the amount of cash received and your adjusted tax basis allocable to such fractional share. This capital gain or loss will be long-term capital gain or loss if, as of the effective date of the merger, you held your shares of Rocky Mountain Bancorporation common stock for more than one year. Long-term capital gain of a non-corporate United States shareholder is generally subject to a maximum federal tax rate of 15 percent. The deductibility of capital losses is subject to limitations.

     Backup withholding and Information Reporting. Unless you provide a taxpayer identification number (social security number or employer identification number) and certify, among other things, that such number is correct, or you provide proof of an applicable exemption from backup withholding, the exchange agent will be required to withhold 28% of any cash payable to you in connection with the merger. Any amount so withheld under the backup withholding rules is not an additional tax and will be allowed as a refund or credit against your United States federal income tax liability, provided that you furnish the required information to the Internal Revenue Service. You should complete and sign the substitute Form W-9 included as part of the transmittal letter to provide the information and certification necessary to avoid backup withholding, unless an applicable exception exists and is established in a manner that is satisfactory to the exchange agent.

     The foregoing discussion is not intended to be a complete analysis or description of all potential federal income tax consequences of the merger. In addition, the discussion does not address tax consequences which may vary with, or are contingent on, your individual circumstances. Moreover, the discussion does not address any non-income tax or any foreign, state, or local tax consequences of the merger. Accordingly, you are strongly urged to consult with your own tax advisor to determine the particular federal, state, local, or foreign income or other tax consequences to you of the merger.

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Background of the Merger

     Rocky Mountain Bancorporation is a Montana corporation organized in 1979 as Raldon, Inc. The company changed its name to Rocky Mountain Bancorporation, Inc. in 1988.

     Rocky Mountain Bancorporation is the successor to the Harlem Corporation, Stevensville Bancshares, Inc. and Whitehall Bancorporation following reorganization of the predecessor companies in the early 1990s. The predecessor companies held, respectively, substantially all of the issued and outstanding common stock of banks in Harlem, Stevensville, and Whitehall, Montana. The predecessor banks were merged into the Rocky Mountain Bank, a subsidiary of Rocky Mountain Bancorporation, in 1994, with branch offices retained at each of the merging banks locations.

     Rocky Mountain Bancorporation also acquired the Security State Bank of Plentywood, Montana, in 1995. The Plentywood bank was merged into the Rocky Mountain Bank in 1996, with a branch office retained at the Plentywood bank’s main office location in Plentywood.

     In the summer of 2003, Heartland Financial representatives contacted Rocky Mountain Bancorporation’s senior executive officers, expressing an interest in discussing a potential combination of the companies. Rocky Mountain Bancorporation had not been soliciting acquisition proposals at the time of the initial contact.

     During the late summer and fall of 2003, Heartland Financial and Rocky Mountain Bancorporation representatives exchanged information with respect to the companies and discussed a potential combination of Rocky Mountain Bancorporation with Heartland Financial. Rocky Mountain Bancorporation’s senior executive officers, Mr. Danny Skarda and Mr. Donald Fraley, as well as the board of directors of Rocky Mountain Bancorporation, were encouraged by the discussions in the fall of 2003 and the parties continued discussions with respect to a proposed transaction, including pricing and structure of the transaction and other significant terms. Rocky Mountain Bancorporation did not actively solicit competing proposals and no competing proposals to acquire Rocky Mountain Bancorporation were received during the negotiations and discussions with Heartland Financial.

     Under a Confidentiality Agreement entered into between the companies, Heartland Financial conducted its due diligence review of Rocky Mountain Bancorporation’s business activities. In addition, Heartland Financial prepared and presented a draft of a definitive agreement for the proposed transaction. Following extensive discussions and negotiations with Heartland Financial, the Rocky Mountain Bancorporation board of directors held a meeting on January 30, 2004, for the purpose of considering the definitive agreement and the proposed

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transaction. The board meeting was also attended by Rocky Mountain Bancorporation’s financial advisor and legal counsel. At the January 30, 2004, special meeting, the board of directors approved the definitive agreement, subject to the completion of certain schedules and resolution of certain remaining issues relating to the transaction and the definitive agreement. Mr. Skarda and Mr. Fraley were directed to execute and deliver the definitive agreement following satisfactory completion of the remaining issues consistent with the resolution of the board of directors. Heartland Financial and Rocky Mountain Bancorporation executed the definitive agreement and announced the merger transaction effective February 6, 2004.

Heartland Financial’s Reasons for the Merger

     The Heartland Financial board believes that the merger is fair to, and in the best interests of, Heartland Financial and its shareholders.

     Heartland Financial’s strategy is to diversify both its market area and asset base while increasing profitability through acquisitions. Consistent with this strategy, the Heartland Financial board believes that the merger presents a unique opportunity to expand into the Rocky Mountain region and extend its presence into the western portion of the United States, an area that the board considers to have good growth potential. The board also believes that Rocky Mountain Bank’s dedication to customer relationship building at the community level will provide a desirable strategic fit with Heartland Financial’s culture.

     In reaching its decision to approve the merger agreement, the Heartland Financial board consulted with Heartland Financial’s management, as well as with its legal counsel, and considered a variety of factors, including the following:

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     The foregoing discussion of the information and factors considered by the Heartland Financial board is not intended to be exhaustive, but includes all material factors considered by the Heartland Financial board. In reaching its determination to approve the merger, the Heartland Financial board did not assign any relative or specific weights to the foregoing factors, and individual directors may have given differing weights to different factors.

Rocky Mountain Bancorporation’s Reasons for the Merger and Board Recommendation

     The Rocky Mountain Bancorporation board believes that the merger is fair to, and in the best interests of, Rocky Mountain Bancorporation and its shareholders. Accordingly, the Rocky Mountain Bancorporation board has unanimously approved the merger agreement and unanimously recommends that its shareholders vote FOR the approval of the merger agreement and the transactions it contemplates.

     In deciding to approve the merger agreement and the transactions it contemplates, Rocky Mountain Bancorporation’s board consulted with Rocky Mountain Bancorporation’s management, as well as its legal and financial advisors, and considered numerous factors, including the following:

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     The above discussion of the information and factors considered by the Rocky Mountain Bancorporation board is not intended to be exhaustive, but includes all material factors considered by the Rocky Mountain Bancorporation board. In arriving at its determination to approve the merger agreement and the transactions it contemplates, and recommend that the Rocky Mountain Bancorporation shareholders vote to approve them, the Rocky Mountain Bancorporation board did not assign any relative or specific weights to the above factors, and individual directors may have given differing weights to different factors. The Rocky Mountain Bancorporation board unanimously recommends that its shareholders vote to approve the merger agreement and the related transactions.

Fairness Opinion of Rocky Mountain Bancorporation’s Financial Advisor

     Rocky Mountain Bancorporation retained D.A. Davidson on an exclusive basis on January 14, 2004, to provide investment banking advice and a fairness opinion in connection with the merger. D.A. Davidson, as part of its investment banking business, is engaged in the valuation of banking and other businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. Rocky Mountain Bancorporation retained D.A. Davidson based on its experience, expertise and familiarity with Rocky Mountain Bancorporation and other financial institutions in the northwest and Rocky Mountain regions of the United States, as well as its experience as a financial advisor in mergers and acquisitions.

     On January 30, D.A. Davidson presented its fairness opinion to Rocky Mountain Bancorporation’s board of directors at the meeting during which the directors considered and authorized approval of the merger agreement. The D.A. Davidson fairness opinion stated that the consideration to be paid by Heartland Financial under the merger agreement is fair, from a financial point of view, to the holders of Rocky Mountain Bancorporation common stock. The full text of the D.A. Davidson opinion, which sets forth the assumptions made, matters considered and limits on its review, is attached as Appendix B. The summary of the D.A. Davidson opinion included in this proxy statement-prospectus is qualified in its entirety by reference to the full text of the opinion.

     D.A. Davidson’s opinion is directed to Rocky Mountain Bancorporation’s board of directors and addresses only the merger consideration specified in the merger agreement. It does not address the underlying business decision to proceed with the Merger and does not constitute a recommendation to any shareholder as to how the stockholder should vote at the special meeting of stockholders with respect to the Merger.

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     Summary of Financial Terms of Proposed Merger. Under the terms of the agreement, upon completion of the merger, the stockholders of Rocky Mountain Bancorporation will be entitled to receive $34.5 million, subject to the adjustments described below, in the form of: (a) Heartland common stock equal to 50% of the total consideration, and (b) cash equal to 50% of the total consideration. In addition, each Rocky Mountain Bancorporation stockholder may elect to receive a greater percentage of Heartland stock, up to 100% of his or her consideration. To the extent that individual Rocky Mountain Bancorporation shareholders elect to receive more stock, the portion of stock as a percent of the total consideration may increase above 50%.

     As a condition to Heartland Financial’s paying a $34.5 million purchase price, Rocky Mountain Bancorporation is required to deliver $17.3 million in tangible stockholders’ equity before closing. Heartland Financial and Rocky Mountain Bancorporation have agreed on a number of pre-closing adjustments to Rocky Mountain Bancorporation’s balance sheet, which adjustments are to be taken into account in determining Rocky Mountain Bancorporation’s tangible stockholders’ equity for this purpose. To deliver its opinion, D.A. Davidson made the adjustments that were known as of January 28, 2004 to Rocky Mountain Bancorporation’s September 30, 2003 balance sheet. D.A. Davidson also noted that, subsequent to their meeting with Rocky Mountain Bancorporation’s board of directors on January 30, 2004, an adjustment of roughly $0.5 million (pre-tax) for a mark-to-market on Rocky Mountain Bancorporation’s security portfolio was reversed. Because of the reversal, D.A. Davidson modified its analysis and has used the final adjusted September 30, 2003 numbers throughout this discussion. D.A. Davidson noted that the change does not affect the consideration to be received by Rocky Mountain Bancorporation stockholders and is not material to other factors. D.A. Davidson also noted that Rocky Mountain Bancorporation made several adjustments to reported 2003 numbers after delivery of their opinion and noted that the changes do not affect the consideration received by Rocky Mountain Bancorporation stockholders and are not material to other factors. The remaining adjustment is largely comprised of an addition to Rocky Mountain Bancorporation’s loan loss reserve. At December 31, 2003, Rocky Mountain Bancorporation had tangible stockholders’ equity, after adjustments, of $16.9 million. Therefore, as of the date of this opinion, stockholders of Rocky Mountain Bancorporation would be entitled to receive $34.1 million in total consideration, and D.A. Davidson used that purchase price for purposes of its analysis. However, D.A. Davidson noted that management of Rocky Mountain Bancorporation expects to retain earnings between the date of their opinion and closing, such that the retained earnings less anticipated transaction and other costs, will add $0.4 million to the purchase price, resulting in a final purchase price of $34.5 million. The estimates provided through discussions with management are included below:

     Based on the $34.1 million in transaction value to common stockholders and Rocky Mountain Bancorporation’s September 30, 2003 balance sheet and preliminary earnings for the year ended December 31, 2003, D.A. Davidson calculated the following ratios:

     Review Procedures.

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     In connection with providing its opinion, D.A. Davidson reviewed and analyzed:

     In connection with its review, D.A. Davidson relied upon and assumed the accuracy and completeness of all of the information provided to D.A. Davidson or made publicly available. D.A. Davidson does not assume any responsibility for independent verification of the information. D.A. Davidson assumed that the assumptions of management used to build their estimates were reasonable, reflecting the best currently available estimates and judgments of the future financial performance of Rocky Mountain Bancorporation, and did not independently verify the validity of the assumptions.

     D.A. Davidson did not make any independent evaluation or appraisal of the assets and liabilities of Rocky Mountain Bancorporation, nor was it furnished with any appraisals. D.A. Davidson did not examine any individual loan files of Rocky Mountain Bancorporation. D.A. Davidson is not an expert in the evaluation of loan portfolios for the purpose of assessing the adequacy of the allowance for loan losses and assumed that these allowances are, in the aggregate, adequate to cover the losses.

     D.A. Davidson provided its opinion without regard to the necessity for, or level of, any restrictions, obligations, undertaking or other actions that may be imposed or required in the course of obtaining regulatory approval for the merger. D.A. Davidson’s opinion was necessarily based upon economic, market and other conditions in effect on, and the information made available to D.A. Davidson as of, January 28, 2004. No limitations were imposed on D.A. Davidson regarding the scope of its investigation or otherwise by Rocky Mountain Bancorporation or Heartland Financial.

     Valuation Methods. In connection with providing its opinion, D.A. Davidson performed a variety of financial analyses, including those summarized below. The information provided below is not a complete description of the analyses that D.A. Davidson used in reaching its opinion. Preparation of a fairness opinion involves various determinations and judgments as to the most appropriate and relevant methods of financial analysis and the application of these methods to the particular circumstances. In performing its analyses, D.A. Davidson made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Rocky Mountain Bancorporation and D.A. Davidson.

     The summary analyses presented by D.A. Davidson to Rocky Mountain Bancorporation’s board of directors on January 30, 2004, included the following:

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     Pro Forma Merger Analysis. D.A. Davidson analyzed certain pro forma effects resulting from the merger. For purposes of the analysis, D.A. Davidson assumed no revenue enhancements or expense savings. D.A. Davidson noted, however, that preliminary discussions have contemplated reducing several executive positions at Rocky Mountain Bancorporation that, net of severance and contractual arrangements, would result in a net expense savings. The analysis indicated that Heartland Financial’s assets and deposits would increase to $2.3 billion and $1.7 billion respectively, and its tangible book value would decrease from $117 million to $116 million. The analysis also indicated that Heartland Financial’s estimated net earnings per share would increase by 5.2% and 4.7% for the periods of 2003 and 2004, respectively. Heartland Financial’s book value and tangible book value per share would increase by 6.5% and decrease by 5.7%, respectively. Heartland Financial’s return on ending assets would decrease from 0.93% to 0.87% and its return on ending equity would decrease from 13.3% to 13.0%.

     Relative Contribution Analysis. D.A. Davidson also reviewed the relative financial contributions of Rocky Mountain Bancorporation and Heartland Financial to certain pro forma balance sheet and income statement items of the combined entity. The table below shows the percentage contributions. The data is at and for the twelve months ended September 30, 2003.

     D.A. Davidson noted that, in the income statement measures, Rocky Mountain Bancorporation contributes between 11.0% and 11.4% of pro forma earnings, depending on which period is compared. Rocky Mountain Bancorporation contributes between 12.1% and 12.6% of book value and tangible book value, respectively. In other balance sheet measures, Rocky Mountain Bancorporation contributes between 15.8% and 18.2% of the results. Based on the purchase price expected to be received by Rocky Mountain Bancorporation stockholders as a percent of the pro forma market capitalization of Heartland, Rocky Mountain Bancorporation would receive approximately 11.0% of the pro forma value. D.A. Davidson further noted that, given Rocky Mountain Bancorporation’s flat to declining earnings over the past five years, and Heartland’s nearly 15% compound annual growth, that Rocky Mountain Bancorporation’s contribution of earnings in future years would be significantly less if past trends continue. D.A. Davidson also noted that improvement of Rocky Mountain Bancorporation’s capital ratios would likely require a slowing of the growth in its balance sheet, which would reduce the relative contribution of Rocky Mountain Bancorporation’s balance sheet measures on a going-forward basis.

     Discounted Dividend Analysis. To further assess the value of the proposed consideration to be received by Rocky Mountain Bancorporation stockholders in the merger, D.A. Davidson compared the merger consideration to the present value of the future streams of after-tax cash flows that Rocky Mountain Bancorporation could produce through 2008 and distribute to its stockholders (which amounts are referred to here as “dividendable net income”). In this analysis, D.A. Davidson assumed that Rocky Mountain Bancorporation would perform in accordance with estimates, and that Rocky Mountain Bancorporation would be able to pay out up to 100% of its net income, with the constraint that its equity to assets ratio be maintained at a minimum of 7%. D.A. Davidson examined the value of

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Rocky Mountain Bancorporation by adding the present value of estimated net income available for dividends for 2003 through 2008. D.A. Davidson also computed the estimated terminal value of Rocky Mountain Bancorporation at the end of the year 2008 by applying a multiple 15 times estimated 2008 earnings. D.A. Davidson used a range of discount rates for the dividendable net income and terminal value of between 12% and 16%. The discounted dividend analysis indicated a reference range of $27.1 million to $32.3 million. These values compare to the merger consideration of $34.1 million.

     Comparable Public Company Analysis. Using publicly available information, D.A. Davidson compared financial information and market trading information of Rocky Mountain Bancorporation and Heartland Financial based on various financial measures of earnings performance, operating efficiency, capital adequacy and asset quality to certain banks.

     For the purpose of such analysis, the financial information used by D.A. Davidson is at and for the twelve months ended September 30, 2003. Market price information is as of January 28, 2004. For comparison to Rocky Mountain Bancorporation, D.A. Davidson used public banks with total assets under $10 billion that are located in the states of Montana, Wyoming, Utah, North Dakota, South Dakota, Nebraska, Colorado, Kansas and Idaho.

     D.A. Davidson’s analysis showed the following concerning Rocky Mountain Bancorporation and Heartland’s financial performance.

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     D.A. Davidson applied the median multiples of book value and earnings for the bank universe to Rocky Mountain Bancorporation’s results. D.A. Davidson did not apply a control premium. D.A. Davidson compared this against the consideration to be received by Rocky Mountain Bancorporation stockholders in the merger. D.A. Davidson noted that the imputed value derived from this analysis ranged from $36.8 million to $36.9 million, versus the merger consideration of $34.1 million. A summary is shown below:

     Analysis of Bank Acquisition Transactions. D.A. Davidson also evaluated the merger consideration in view of the prices and multiples paid in other bank merger and acquisition transactions, D.A. Davidson examined both broad transaction databases and transactions in the region to derive median pricing multiples using the following categories of transactions:

     D.A. Davidson reviewed the multiples of transaction value for common stockholders at announcement to latest twelve month’s earnings and book value. D.A. Davidson applied those multiples to Rocky Mountain Bancorporation’s comparable financial information at and for the latest twelve months ending September 30, 2003.

     As illustrated in the table below, D.A. Davidson derived an imputed range of values of Rocky Mountain Bancorporation of $23.2 million to $37.1 million and an average of all values of $31.4 million.

     Relationship of D.A. Davidson to Rocky Mountain Bancorporation. D.A. Davidson received a fee of $55,000 for its services in providing a fairness opinion. Rocky Mountain Bancorporation has also agreed to reimburse D.A. Davidson for its reasonable out-of-pocket expenses incurred in connection with its engagement. Rocky Mountain Bancorporation also agreed to indemnify D.A. Davidson against certain expenses and liabilities, including liabilities under securities laws, incurred in connection with its engagement.

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Dissenters’ Rights

     All of Rocky Mountain Bancorporation’s shareholders have the right under Montana law to dissent from the merger and to demand and obtain cash in an amount equal to the fair value of their shares of Rocky Mountain Bancorporation common stock under the circumstances described below. If Rocky Mountain Bancorporation’s shareholders fail to comply with the procedural requirements of Sections 35-1-826 through 35-1-839 of the Montana Business Corporation Act, they will lose their right to dissent and seek payment of the fair value of their shares.

     The fair value that Rocky Mountain Bancorporation’s shareholders obtain for their shares by dissenting may be less than, equal to or greater than the value of the cash and Heartland Financial common stock they would be entitled to receive under the merger agreement.

     The following is a summary of Sections 35-1-826 through 35-1-839 of the Montana Business Corporation Act, which specify the procedures applicable to dissenting shareholders. This summary is not a complete statement of the law regarding the right to dissent under Montana law, and if you are considering dissenting, we urge you to review the provisions of Sections 35-1-826 through 35-1-839 carefully. The text of Sections 35-1-826 through 35-1-839 is attached to this proxy statement-prospectus as Appendix C, and we incorporate that text into this proxy statement-prospectus by reference.

     Among other matters, Rocky Mountain Bancorporation’s shareholders should be aware of the following:

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Representations and Warranties

     In the merger agreement, Rocky Mountain Bancorporation made numerous representations and warranties to Heartland Financial relating to, among other things, the following:

     Heartland Financial also made representations and warranties to Rocky Mountain Bancorporation relating to, among other things, the following:

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     The foregoing is an outline of the types of representations and warranties made by Heartland Financial and Rocky Mountain Bancorporation contained in the merger agreement a copy of which is included at Appendix A. You should carefully review the entire agreement and in particular Articles 4 and 5, containing the detailed representations and warranties of the parties.

Conduct of Business Pending the Merger and Certain Covenants

     Under the merger agreement, Rocky Mountain Bancorporation has agreed to certain restrictions on its activities until the merger is completed or terminated. In general, Rocky Mountain Bancorporation and Rocky Mountain Bank are required to conduct their operations in the ordinary course of business. The following is a summary of the more significant restrictions and obligations imposed upon Rocky Mountain Bancorporation and Rocky Mountain Bank, subject to the exceptions set forth in the merger agreement. Rocky Mountain Bancorporation must:

     Rocky Mountain Bancorporation has also agreed that it will not encourage any third-party proposals to acquire Rocky Mountain Bancorporation and will not participate in negotiations regarding a proposal to acquire Rocky Mountain Bancorporation. However, Rocky Mountain Bancorporation may provide information and negotiate with a third party if Rocky Mountain Bancorporation’s board of directors determines that failure to do so would be inconsistent with its fiduciary duties. Rocky Mountain Bancorporation is required under the agreement to provide Heartland Financial notice of any proposal to acquire Rocky Mountain Bancorporation.

     Rocky Mountain Bancorporation has also agreed to provide Heartland Financial with certain documents before the closing date, including:

     Heartland Financial has agreed to file all applications and notices to obtain the necessary regulatory approvals for the transactions contemplated by the merger agreement. Rocky Mountain Bancorporation has agreed to cooperate with Heartland Financial in connection with obtaining the regulatory approvals. Both parties agree:

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     The merger agreement also contains covenants relating to employee benefits. Rocky Mountain Bancorporation is required to terminate its employee benefit plans and arrangements on or before closing if requested to do so by Heartland Financial. Heartland Financial agrees that all former employees of Rocky Mountain Bancorporation or Rocky Mountain Bank who become employees of Heartland Financial or any subsidiary will receive credit for past service for purposes of eligibility and vesting under Heartland Financial’s profit sharing plan.

Conditions to Completion of the Merger

     Each of Heartland Financial and Rocky Mountain Bancorporation is required to complete the merger only after the satisfaction of various conditions. Heartland Financial is only required to complete the merger if the following conditions are satisfied:

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     Rocky Mountain Bancorporation is only required to complete the merger if the following conditions are satisfied:

     Neither party can be certain as to when or if all of the conditions to the merger can or will be satisfied or waived by the party permitted to do so. If the merger is not completed by December 6, 2004, either of our boards of

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directors may terminate the merger agreement and abandon the merger; provided, however, that the party responsible for a condition to be met prior to December 6, 2004, may not terminate the merger agreement if the merger is not completed by December 6, 2004. See “—Waiver, Amendment and Termination.”

Regulatory Approvals

     It is a condition to the completion of the merger that we receive all necessary regulatory approvals to the merger.

     Neither Heartland Financial nor Rocky Mountain Bancorporation is aware of any material governmental approvals or actions that are required to complete the merger, except as described below. If any other approval or action is required, we will also seek this approval or action.

     The merger is subject to the prior approval of the Federal Reserve Board, under Section 3 of the Bank Holding Company Act and Sections 225.11 and 225.15 of Regulation Y of the Federal Reserve Board. In evaluating the merger, the Federal Reserve Board is required to consider, among other factors, the financial and managerial resources and future prospects of the institutions and the convenience and needs of the communities to be served. The relevant statutes prohibit the Federal Reserve Board from approving the merger if:

     The Federal Reserve Board approved the merger on April 8, 2004. The merger may not be completed until 15 days following the date of the Federal Reserve Board approval, or until after April 23, 2004. During this period, the U.S. Department of Justice is given the opportunity to challenge the transaction on antitrust grounds. The commencement of any antitrust action would stay the effectiveness of the approval of the agencies, unless a court of competent jurisdiction specifically ordered otherwise.

     Heartland Financial must also file an application with the Division of Banking and Financial Institutions of the State of Montana for approval to acquire control of Rocky Mountain Bank in the merger.

Waiver, Amendment and Termination

     To the extent permitted by law, our boards of directors may agree in writing to amend the merger agreement, whether before or after Rocky Mountain Bancorporation’s shareholders have approved the merger agreement. However, no amendment agreed to after the merger agreement has been approved by Rocky Mountain Bancorporation’s shareholders may materially and adversely affect the rights of Rocky Mountain Bancorporation’s shareholders. In addition, before or at the time the merger becomes effective, either Heartland Financial or Rocky Mountain Bancorporation, or both, may waive any default in the performance of any term of the merger agreement by the other or may waive or extend the time for the compliance or fulfillment by the other of any of its obligations under the merger agreement. Either of Heartland Financial or Rocky Mountain Bancorporation may also waive any of the conditions precedent to their respective obligations under the merger agreement, unless a violation of any law or governmental regulation would result. To be effective, a waiver must be in writing and signed by one of Heartland Financial’s or Rocky Mountain Bancorporation’s duly authorized officers.

     At any time before the merger becomes effective, our boards of directors may mutually agree to terminate the merger agreement. In addition, the merger agreement may be terminated as follows:

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     The merger agreement will automatically terminate if the average closing price of Heartland Financial common stock, as reported on the Nasdaq National Market System, during the 20 business days immediately preceding the fifth business day prior to the effective time of the merger, is $13.17 or below.

     If the merger is terminated, the merger agreement will become void and have no effect, except that certain provisions of the merger agreement, including those relating to the obligation to share some expenses and maintain the confidentiality of certain information obtained, will survive. A termination may also trigger the obligation of a party to pay certain expenses and termination fees to the other party. See “—Expenses and Termination Fees.”

Management and Operations After the Merger

     The merger agreement provides that the board of directors of the surviving corporation will consist of the directors of RMB Acquisition Corporation immediately prior to the effective time, and the officers of the surviving corporation will be the officers of RMB Acquisition Corporation immediately prior to the effective time.

     Immediately following the merger of RMB Acquisition Corporation with and into Rocky Mountain Bancorporation, Rocky Mountain Bancorporation will merge with and into Heartland Financial. Heartland Financial will be the surviving corporation in this merger, and its directors and officers will remain the same. Information concerning the management of Heartland Financial is included in the documents incorporated by reference in this proxy statement-prospectus. See “Where You Can Find More Information.” For additional information regarding the interests of certain persons in the merger, see “—Interests of Certain Persons in the Merger.”

Interests of Certain Persons in the Merger

     General. Some members of Rocky Mountain Bancorporation’s management and boards of directors may be deemed to have certain interests in the merger that are in addition to their interests as shareholders of Rocky Mountain Bancorporation generally. Each of Heartland Financial’s and Rocky Mountain Bancorporation’s boards of directors was aware of these interests and considered them, among other matters, in approving the merger agreement.

     Employment Agreement with Danny Skarda. Heartland Financial has entered into an employment agreement with Danny Skarda, which will become effective upon completion of the merger. This employment agreement provides for Mr. Skarda’s continued employment as the President of Rocky Mountain Bank following the merger. The agreement is for a five-year term, and initially provides for a base salary of $150,000, which may be maintained or increased during the term of the agreement in accordance with Heartland Financial’s established management compensation plans and policies. The agreement also provides for an annual performance bonus of up to 30% of Mr. Skarda’s base salary and other benefits.

     If Heartland Financial terminates Mr. Skarda’s employment without cause, as defined in the employment agreement, he will be entitled to receive a payment equal to the total amount of compensation that he would have received if he had remained employed for the full term of the agreement, calculated as the sum of (a) his then-current base compensation, (b) the average of the three (or less, if necessary) most recent performance bonuses paid to him and (c) the average of the three (or less, if necessary) most recent contributions made by Heartland Financial on his behalf to any tax-qualified retirement plans. Mr. Skarda will also be entitled to receive this severance benefit if he is constructively discharged as described in the agreement.

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     Heartland Financial will have no continuing obligation to Mr. Skarda if he voluntarily terminates his employment or if Heartland Financial terminates him for cause, except in either case for accrued salary and benefits earned through the date of termination.

     In the event of a change of control, as defined in the employment agreement, if Mr. Skarda’s employment is terminated within six months prior or 12 months following the change of control, he will be entitled to receive a lump sum payment equal to the amount he would receive if Heartland Financial had terminated him without cause, as described above, plus an amount equal to the sum of (a) the greater of his then-current annual base compensation or his base compensation as of the day prior to the date of the change of control, (b) the average of the three (or less, if necessary) most recent performance bonuses paid to him and (c) the average of the three (or less, if necessary) most recent contributions made by Heartland Financial on his behalf to any tax-qualified retirement plans.

     If any payments made to Mr. Skarda constitute an “excess parachute payment” under the Code, then the total amount of these payments will be reduced to one dollar less than the amount that would cause the payments to constitute an excess parachute payment.

     Mr. Skarda’s employment agreement includes a covenant limiting his ability for a period of one year following a termination of his employment to compete with Heartland Financial in an area encompassing a 35-mile radius from each banking or other office location of Rocky Mountain Bank.

     Consulting and Non-Competition Agreement with Donald Fraley. Heartland Financial has entered into a consulting and non-competition agreement with Donald Fraley, who currently serves as the Chairman of the Board of Rocky Mountain Bancorporation and of Rocky Mountain Bank. The agreement provides for consulting services for one year beginning on the effective date of the merger. The agreement provides for consulting fees of $100,000, payable monthly through the term of engagement, together with benefits including automobile lease payments, country club dues and health insurance coverage.

     In addition, Mr. Fraley’s agreement includes a covenant limiting his ability for a period of three years following the effective date of the merger to compete with Heartland Financial in an area encompassing a 35-mile radius from each banking or other office location of Rocky Mountain Bank. Heartland Financial has agreed to pay Mr. Fraley $150,000 per year, beginning with the effective date of the merger and ending on the third anniversary of this date, in consideration for his compliance with this restrictive covenant.

     Indemnification for Directors and Officers. Heartland Financial has agreed to honor for at least three years from the effective date of the merger all of Rocky Mountain Bancorporation’s obligations in respect of indemnification currently provided by Rocky Mountain Bancorporation in its articles of incorporation in favor of the current and former officers and directors of Rocky Mountain Bank with respect to matters occurring prior to the merger.

Additional Agreements

     Voting Agreement. Each of the directors of Rocky Mountain Bancorporation have entered into a voting agreement with Heartland Financial. Under this agreement, these shareholders have agreed to vote their respective shares of Rocky Mountain Bancorporation common stock:

     Furthermore, and without Heartland Financial’s prior approval, each of these shareholders has also agreed not to solicit, initiate or encourage any inquiries or proposals for a merger or other business combination involving

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Rocky Mountain Bancorporation. The shares subject to the voting agreement represent approximately 25.69% of the outstanding shares of Rocky Mountain Bancorporation common stock on the record date. The voting agreement will terminate upon the earlier of the consummation of the merger or termination of the merger agreement in accordance with its terms.

     Indemnification Agreement. Heartland Financial has entered into an indemnification agreement with Mr. Fraley, under which Mr. Fraley has agreed to indemnify Heartland Financial, Rocky Mountain Bancorporation, their affiliates and related parties from certain costs arising out of the operation of various agreements that Rocky Mountain Bancorporation and its predecessors had with certain shareholders. This agreement will survive the completion of the merger.

Accounting Treatment

     The merger will be accounted for using the purchase method of accounting under generally accepted accounting principles as applied in the United States. Under this method of accounting, Heartland Financial will record the assets acquired and liabilities assumed of Rocky Mountain Bancorporation at their fair market values. Any difference between the purchase price and the fair market value of the net tangible and identifiable intangible assets and liabilities is recorded as goodwill, which, in accordance with Statement of Financial Accounting Standard No. 142, will not be amortized for financial accounting purposes, but will be evaluated annually for impairment.

Expenses and Termination Fees

     Subject to the special circumstances described below, each of Heartland Financial and Rocky Mountain Bancorporation will pay its own expenses in connection with the merger, including filing, registration and application fees, printing fees and fees and expenses of its own financial or other consultants, accountants and counsel. The same agreement with respect to the payment of expenses will be in effect if the parties mutually agree to terminate the merger agreement or if either party terminates the merger agreement through no fault of the other because the merger has not been completed by December 6, 2004.

     If, however, the merger agreement is terminated under the special circumstances described below, either party will be obligated to pay all or part of the other’s fees and expenses in connection with the merger and also perhaps a special termination fee depending upon the reason for the termination of the merger agreement and subsequent occurrences.

     Rocky Mountain Bancorporation is obligated to pay Heartland Financial’s fees and expenses in connection with the merger, up to a maximum of $500,000, plus an additional termination fee of $750,000, if Heartland Financial terminates the merger agreement because of Rocky Mountain Bancorporation’s breach of the merger agreement, unless the breach is the result of a failure by Heartland Financial to perform and comply in all material respects with its material obligations under the merger agreement or unless the breach would not reasonably be expected to have a material adverse effect on Heartland Financial on a consolidated basis or Rocky Mountain Bancorporation’s rights under the merger agreement.

     Rocky Mountain Bancorporation is obligated to pay Heartland Financial’s fees and expenses in connection with the merger, up to a maximum of $500,000, if Heartland Financial or Rocky Mountain Bancorporation terminates the merger agreement because Rocky Mountain Bancorporation’s shareholders fail to approve the merger agreement prior to December 6, 2004.

     In addition to those payments, if a termination occurs under either of these circumstances, and within 18 months after the termination Rocky Mountain Bancorporation enters into a contract providing for a competing acquisition transaction, then Rocky Mountain Bancorporation will also be obligated to pay to Heartland Financial an additional $1,000,000 if Heartland Financial had terminated because of Rocky Mountain Bancorporation’s breach of the agreement, or an additional $1,750,000 if either party had terminated because Rocky Mountain Bancorporation’s shareholders failed to approve the merger on or before December 6, 2004.

     Heartland Financial is obligated to pay Rocky Mountain Bancorporation’s fees and expenses in connection with the merger, up to a maximum of $500,000, plus an additional termination fee of $750,000, if Rocky Mountain

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Bancorporation terminates the merger agreement because of Heartland Financial’s breach of its covenants or representations and warranties under the agreement, unless the breach is the result of a failure by Rocky Mountain Bancorporation to perform and comply in all material respects with its material obligations under the agreement, or unless such breach would not reasonably be expected to have a material adverse effect on Rocky Mountain Bancorporation on a consolidated basis or Heartland Financial’s rights under the merger agreement.

Resales of Heartland Financial Common Stock

     Heartland Financial common stock to be issued to Rocky Mountain Bancorporation shareholders in the merger will be registered under the Securities Act. All shares of Heartland Financial common stock received by Rocky Mountain Bancorporation shareholders in the merger will be freely transferable after the merger by persons who are not considered to be “affiliates” of either of Heartland Financial or Rocky Mountain Bancorporation. “Affiliates” generally are defined as persons or entities who control, are controlled by or are under common control with either Rocky Mountain Bancorporation or Heartland Financial at the time of the special meeting (generally, executive officers, directors and 10%-or-greater shareholders).

     Rule 145 promulgated under the Securities Act restricts the sale of Heartland Financial common stock received in the merger by affiliates of Rocky Mountain Bancorporation and certain of their family members and related entities. Under the rule, during the first calendar year after the merger becomes effective, affiliates of Rocky Mountain Bancorporation may publicly resell the Heartland Financial common stock they receive in the merger, but only within certain limitations as to the amount of Heartland Financial common stock they can sell in any three-month period and as to the manner of sale. After the one-year period, affiliates of Rocky Mountain Bancorporation who are not affiliates of Heartland Financial may resell their shares without restriction. Heartland Financial must continue to satisfy its reporting requirements under the Securities Exchange Act of 1934, as amended, in order for affiliates to resell, under Rule 145, shares of Heartland Financial common stock received in the merger. Affiliates would also be permitted to resell Heartland Financial common stock received in the merger pursuant to an effective registration statement under the Securities Act of 1933, or an available exemption from the registration requirements. This proxy statement-prospectus does not cover any resales of Heartland Financial common stock received by persons who may be deemed to be affiliates of Rocky Mountain Bancorporation.

EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS

General

     In the merger, shareholders of Rocky Mountain Bancorporation will receive shares of Heartland Financial common stock. The Heartland Financial shares will include all rights attaching to then existing shares of Heartland Financial common stock, which are generally described below under “Description of Heartland Financial Capital Stock.”

     Rocky Mountain Bancorporation is a Montana corporation governed by Montana law and Rocky Mountain Bancorporation’s articles of incorporation and bylaws. Heartland Financial is a Delaware corporation governed by Delaware law and Heartland Financial’s certificate of incorporation and bylaws. There are significant differences between the rights of Rocky Mountain Bancorporation’s shareholders and the rights of Heartland Financial’s shareholders. The following is a summary of the principal differences between the current rights of Rocky Mountain Bancorporation’s shareholders and those of Heartland Financial’s shareholders.

     The following summary is not intended to be complete and is qualified in its entirety by reference to the Delaware General Corporation Law and the Montana Business Corporation Act, as well as Heartland Financial’s certificate of incorporation and bylaws and Rocky Mountain Bancorporation’s articles of incorporation and bylaws.

Anti-Takeover Provisions Generally

     Heartland Financial’s certificate of incorporation, bylaws and rights agreement contain provisions designed to assist the Heartland Financial board of directors in playing a meaningful role to protect the rights of Heartland Financial’s shareholders if any group or person attempts to acquire control of Heartland Financial. These provisions may help the Heartland Financial board of directors determine that a sale of control is in the best interests of Heartland Financial’s shareholders or enhance the Heartland Financial board of directors’ ability to maximize the value to be

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received by the shareholders upon a sale of control of Heartland Financial. The rights agreement is described below under “—Rights Agreement.”

     Although Heartland Financial’s management believes that these provisions are beneficial to Heartland Financial’s shareholders, they may also tend to discourage some takeover bids. As a result, Heartland Financial’s shareholders may be deprived of opportunities to sell some or all of their shares at prices that represent a premium over prevailing market prices. On the other hand, defeating undesirable acquisition offers can be a very expensive and time-consuming process. To the extent that these provisions discourage undesirable proposals, Heartland Financial may be able to avoid these expenditures of time and money.

     These provisions may also discourage open market purchases by a company that desires to acquire Heartland Financial. Those purchases may increase the market price of Heartland Financial’s common stock temporarily, and may enable shareholders to sell their shares at a price higher than they might otherwise obtain. In addition, these provisions may decrease the market price of Heartland Financial common stock by making the stock less attractive to persons who invest in securities in anticipation of price increases from potential acquisition attempts. The provisions may also make it more difficult and time-consuming for a potential acquiror to obtain control of Heartland Financial by replacing its board of directors and management. Furthermore, the provisions may make it more difficult for Heartland Financial to replace its own board of directors or management, even if a majority of the shareholders believe that replacing the board of directors or management is in the best interests of Heartland Financial. Because of these factors, these provisions may tend to perpetuate the incumbent board of directors and management.

Authorized Capital Stock

     Heartland Financial. Heartland Financial is authorized to issue 16,000,000 shares of common stock, $1.00 par value, and 200,000 shares of preferred stock, $1.00 par value. As of December 31, 2003, 15,261,714 shares of Heartland Financial common stock and no shares of Heartland Financial preferred stock were outstanding.

     Under Heartland Financial’s certificate of incorporation, Heartland Financial’s board of directors is authorized to issue preferred stock from time to time in one or more series, subject to applicable provisions of law. The board of directors is authorized to fix the designations, powers, preferences and relative participating, optional and other special rights of such shares, including voting rights and conversion rights. In the event of a proposed merger, tender offer or other attempt to gain control of Heartland Financial that the board of directors does not approve, it may be possible for the board of directors to authorize the issuance of a series of preferred stock with rights and preferences that would impede the completion of such a transaction. If Heartland Financial issued any preferred stock that disparately reduced the voting rights of the common stock, the common stock could be required to be delisted from the Nasdaq National Market System. An effect of the issuance of preferred stock, therefore, may be to deter a future takeover attempt. Under a certificate of designation, 16,000 shares of Heartland Financial preferred stock have been designated as Series A Junior Participating preferred stock. These shares are reserved for issuance under the Heartland Financial rights agreement. See “—Rights Agreement,” below.

     Rocky Mountain Bancorporation. Rocky Mountain Bancorporation is authorized to issue 150,000 shares of common stock, no par value. As of April 14, 2004, 108,347.70 shares of Rocky Mountain Bancorporation common stock were outstanding.

Voting Rights

     Heartland Financial. Generally, holders of Heartland Financial common stock are entitled to one vote per share on all matters submitted to a vote of shareholders.

     As stated above, Heartland Financial’s board of directors is authorized to issue up to 200,000 shares of preferred stock, and may designate various characteristics and rights of Heartland Financial preferred stock, including voting and conversion rights. Heartland Financial’s board of directors may also authorize the conversion of shares of other classes of Heartland Financial preferred stock into any number of shares of Heartland Financial common stock, and thus dilute the outstanding shares of Heartland Financial common stock. Subject to the board’s fiduciary duties, Heartland Financial could issue convertible preferred stock with the purpose or effect of deterring or preventing a takeover of Heartland Financial.

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     Heartland Financial’s certificate of incorporation does not provide for cumulative voting rights in the election of directors.

     Rocky Mountain Bancorporation. Generally, holders of Rocky Mountain Bancorporation common stock are entitled to one vote per share on all matters submitted to a vote of shareholders. However, under Montana law, shareholders have cumulative voting rights for the election of directors, unless the corporation’s articles of incorporation provide otherwise. The articles of incorporation of Rocky Mountain Bancorporation do not have any contrary provisions.

Rights Agreement

     Heartland Financial. The board of directors of Heartland Financial adopted a Rights Agreement in 2002 under which each share of Heartland Financial common stock is accompanied by one preferred share purchase right. Each right entitles the holder, under certain limited circumstances, to purchase from Heartland Financial one one-thousandth of a share of Series A Junior Participating preferred stock of Heartland Financial at a price of $85.00.

     Until the earlier to occur of (a) 10 days following a public announcement that a person or group of affiliated persons (with certain exceptions, an “acquiring person”) has acquired beneficial ownership of 15% or more of Heartland Financial’s outstanding shares of common stock, or (b) 10 business days (or such later date as may be determined by action of Heartland Financial’s board of directors prior to such time as any person or group of affiliated persons becomes an acquiring person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the completion of which would result in the beneficial ownership by a person or group of 15% or more of the outstanding shares of Heartland Financial’s common stock (the earlier of such dates being called the “distribution date”), the rights will be evidenced, with respect to any common stock certificate outstanding as of the record date, by that common stock certificate together with a summary of rights.

     The rights are not exercisable until the distribution date. The rights will expire on June 7, 2012, unless the expiration date is advanced or extended or unless the rights are earlier redeemed or exchanged by Heartland Financial.

     Because of the nature of the preferred stock’s dividend, liquidation and voting rights, the value of the one one-thousandth interest in a share of preferred stock purchasable upon exercise of each right should approximate the value of one share of Heartland Financial’s common stock.

     In the event that any person or group of affiliated or associated persons becomes an acquiring person, each holder of a right, other than rights beneficially owned by the acquiring person (which will then automatically become void), will thereafter have the right to receive upon exercise of a right and the payment of $85.00 per right, that number of shares of Heartland Financial’s common stock having a market value of $170.00.

     In the event that, after a person or group has become an acquiring person, Heartland Financial is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold, proper provisions will be made so that each holder of a right (other than rights beneficially owned by an acquiring person which will become void) will thereafter have the right to receive upon the exercise of a right, that number of shares of common stock of the person with whom Heartland Financial has engaged in the foregoing transaction (or its parent) that at the time of such transaction have a market value of $170.00.

     At any time after any person or group becomes an acquiring person and prior to the earlier of one of the events described in the previous paragraph or the acquisition by such acquiring person of 50% or more of the outstanding shares of Heartland Financial’s common stock, the board of directors of Heartland Financial may exchange the rights (other than rights owned by an acquiring person which will have become void), in whole or in part, for shares of Heartland Financial’s common stock or preferred stock (or a series of Heartland Financial’s preferred stock having equivalent rights, preferences and privileges), at an exchange ratio of one share of common stock, or a fractional share of preferred stock (or other preferred stock) equivalent in value thereto, per right.

     With certain exceptions, no adjustment in the purchase price for the Series A Junior Participating preferred stock will be required until cumulative adjustments require an adjustment of at least 1% in such purchase price. No fractional shares of preferred stock or common stock will be issued (other than fractions of preferred stock which are integral multiples of one one-thousandth of a share of preferred stock, which may, at the election of Heartland

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Financial, be evidenced by depositary receipts), and in lieu thereof an adjustment in cash will be made based on the current market price of the preferred stock or the common stock.

     At any time prior to the time an acquiring person becomes such, the board of directors of Heartland Financial may redeem the rights in whole, but not in part, at a price of $0.01 per right (the “redemption price”), payable, at the option of Heartland Financial, in cash, common stock or other consideration determined by the board of directors. Immediately upon any redemption of the rights, the right to exercise the rights will terminate and the only right of the holders of rights will be to receive the redemption price.

     For so long as the rights are then redeemable, Heartland Financial may, except with respect to the redemption price, amend the rights agreement in any manner. After the rights are no longer redeemable, Heartland Financial may, except with respect to the redemption price, amend the rights agreement in any manner that does not adversely affect the interests of holders of the rights.

     Until a right is exercised or exchanged, the holder thereof, as such, will have no rights as a shareholder of Heartland Financial, including, without limitation, the right to vote or to receive dividends.

     Rocky Mountain Bancorporation. Rocky Mountain Bancorporation does not have a similar rights plan.

Classification of Board of Directors

     Heartland Financial. Heartland Financial’s certificate of incorporation provides for the division of its board of directors into three classes of approximately equal size. Heartland Financial directors are elected for three-year terms, and the terms of office of approximately one-third of the members of the classified board of directors expire each year. This board classification may make it more difficult for a shareholder to acquire immediate control of Heartland Financial and remove management by means of a proxy contest. Because the terms of approximately one-third of the incumbent directors expire each year, at least two annual elections would be necessary for the shareholders to replace a majority of the directors, while a majority of directors of a non-classified board could be replaced in one annual meeting.

     Rocky Mountain Bancorporation. The Rocky Mountain Bancorporation board of directors is not classified.

Size of the Board of Directors; Vacancies; Removal

     Heartland Financial. Heartland Financial’s bylaws provide that the size of the board of directors may be increased or decreased only by a vote of at least 66-2/3% of the board. The certificate of incorporation and bylaws also provide that any vacancy occurring on the board of directors may be filled for the remainder of the unexpired term by a majority vote of the directors then in office.

     Under the Delaware General Corporation Law, members of a classified board of directors may only be removed for cause, unless the certificate of incorporation provides otherwise. Heartland Financial’s certificate of incorporation provides that a director may be removed only for cause and only by the affirmative vote of holders of at least 70% of the shares eligible to vote in an election of directors.

     Rocky Mountain Bancorporation. Rocky Mountain Bancorporation’s articles and bylaws provide that the size of the board of directors may be changed from time to time and at any time by amendment of the bylaws, provided that there may not be fewer than three directors. The bylaws also provide that any vacancy occurring on the board of directors may be filled for the remainder of the unexpired term by a majority of the directors then in office.

     The articles of incorporation and bylaws of Rocky Mountain Bancorporation do not specify any procedure for the removal of directors. Under Montana law, shareholders may remove directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove the director. Any director or the entire board of directors may be removed only by a vote of the holders of two-thirds of the shares entitled to vote in an election of directors, unless otherwise provided by the articles of incorporation or bylaws. If shareholders have the right to cumulative voting for the election of directors and if less than the entire board of directors is to be removed, a director may not be removed if the votes cast against the director’s removal would be

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sufficient to elect him if cumulatively voted at an election of the entire board of directors. A director may be removed by shareholders only at a meeting called for the purpose of removing the director.

Shareholder Nominations and Proposals

     Heartland Financial. Under Heartland Financial’s bylaws, the only business that may be conducted at an annual meeting of shareholders is the business brought before the meeting by the board of directors or by any shareholder who is entitled to vote and who complies with the notice procedures set forth in Heartland Financial’s bylaws. For business to be brought before an annual meeting by a shareholder, the shareholder must have given timely notice in writing to the secretary of Heartland Financial. To be timely, a shareholder’s notice must be delivered or mailed and received at the principal executive offices of Heartland Financial not less than 30 or more than 75 days prior to the date of the meeting; provided, however, that in the event that less than 40 days’ notice of the meeting date is given or made to shareholders, such notice by the shareholder to be timely must be delivered no later than 10 days after the earlier of the date of the notice of the meeting or public disclosure of the date of the meeting.

     A shareholder’s notice to the secretary must set forth as to each matter the shareholder proposes to bring before the annual meeting:

     Heartland Financial’s bylaws provide that nominations for election to Heartland Financial’s board of directors may be made only by the board of directors or by any shareholder entitled to vote for the election of directors who complies with the notice procedures set forth in the bylaws and described above. The shareholder’s notice must set forth, as to each person the shareholder proposes to nominate for election or re-election as a director, such person’s name and qualifications and, as to the shareholder giving the notice, his or her name and address, and the class and number of shares of Heartland Financial’s capital stock owned by that shareholder.

     Rocky Mountain Bancorporation. Rocky Mountain Bancorporation’s bylaws provide that at the annual meeting of shareholders the shareholders will elect directors and transact such other business as may properly come before the meeting.

Special Meetings

     Heartland Financial. Heartland Financial’s certificate of incorporation provides that a special meeting of shareholders may be called by the chairman of the board, the president, the board of directors or at the written request of a majority of shareholders.

     Rocky Mountain Bancorporation. Rocky Mountain Bancorporation’s bylaws provide that special meetings may be called by the president, the vice president or any two directors. These people must call a special meeting if requested by holders of at least 25% of the capital stock of Rocky Mountain Bancorporation entitled to vote in an election of directors.

Action by Written Consent

     Heartland Financial. Heartland Financial’s certificate of incorporation prohibits its shareholders from taking action by written consent.

     Rocky Mountain Bancorporation. Rocky Mountain Bancorporation’s bylaws provide that any action required to be taken, or any action that may be taken at a meeting of shareholders, may be taken without a meeting if consents in writing setting forth the action so taken are signed by all shareholders entitled to vote with respect to such matter.

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Dividends

     Heartland Financial. Heartland Financial’s ability to pay dividends is governed by Delaware corporate law. Under Delaware corporate law, unless there are restrictions in the corporation’s certificate of incorporation, dividends may be declared from the corporation’s surplus, or, if there is no surplus, from its net profits for the fiscal year in which the dividend is declared and the preceding years. Dividends may not be declared, however, if the corporation’s capital is less than the amount of all capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets.

     Heartland Financial’s shareholders are entitled to dividends as and when declared by its board of directors. The declaration of dividends by Heartland Financial board of directors is discretionary, and depends on Heartland Financial’s earnings and financial condition, regulatory limitations, tax considerations and other factors, including limitations imposed by the terms of Heartland Financial’s outstanding junior subordinated debentures.

     Heartland Financial has issued junior subordination debentures in several private placements and one public offering. Under the terms of the debentures, Heartland Financial may be prohibited, under certain circumstances, from paying dividends on shares of its common stock. None of these circumstances currently exist.

     Most of the revenues of Heartland Financial available for the payment of dividends derive from amounts paid to it by its subsidiaries.

     Rocky Mountain Bancorporation. Rocky Mountain Bancorporation’s ability to pay dividends on its common stock is governed by Montana corporate law. Under Montana corporate law, dividends may not be paid if, after giving effect to their payment, (a) the corporation would not be able to pay its debts as they come due or (b) the corporation’s total assets would be less than the sum of its total liabilities plus the amount necessary to satisfy the preferential rights upon dissolution to shareholders whose preferential rights are superior to those receiving the dividends. Subject to Montana law, Rocky Mountain Bancorporation’s board of directors may declare and pay dividends at any meeting.

     Most of the revenues of Rocky Mountain Bancorporation available for the payment of dividends derive from amounts paid to it by its banking subsidiary. There are various statutory limitations that limit the ability of this subsidiary to pay dividends to Rocky Mountain Bancorporation.

Special Voting Requirements

     Heartland Financial. Under Heartland Financial’s certificate of incorporation, specified transactions must be approved by holders of at least 70% of the voting stock, unless the transaction (a) was approved at any time prior to its completion by at least 66-2/3% of the board of directors, (b) is with a corporation that is majority owned by Heartland Financial or (c) is a merger not requiring shareholder action under Delaware law. The transactions that are subject to these special approval requirements are:

     Rocky Mountain Bancorporation. Except as otherwise set forth under Montana law such as in the case of the merger, all matters brought before a shareholder meeting require the authorization of a majority of the votes cast in favor or against those matters by the holders of shares entitled to vote at that meeting. The articles of incorporation of Rocky Mountain Bancorporation provide that the holder of each share of stock is entitled to one vote for each share, except that shareholders may vote cumulatively in an election of directors.

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Amendment of Charter Documents

     Heartland Financial. The Delaware General Corporation Law provides that amendments to a corporation’s certificate must be approved by holders of a majority of the issued and outstanding shares of a corporation’s voting stock. However, Heartland Financial’s certificate of incorporation provides that specified amendments to the certificate of incorporation must be approved by at least two-thirds of the members of the board of directors, or by holders of at least 70% of the voting stock. These specified provisions relate to the following: