GAHANNA, Ohio, Oct. 20, 2015 (GLOBE NEWSWIRE) — Heartland BancCorp (“the company,” and “the bank”) (OTCQB:HLAN), today reported earnings increased 20.4% to $1.9 million, or $1.22 per diluted share in the third quarter of 2015 compared to $1.6 million, or $1.02 per diluted share, in the third quarter a year ago. In the preceding quarter, earnings were $1.8 million, or $1.15 per diluted share. For the first nine months of the year, Heartland’s earnings increased 20.2% to $5.3 million, or $3.36 per diluted share, compared to $4.4 million, or $2.82 per diluted share, in the first nine months of 2014.
The Company also announced its board of directors declared a regular quarterly cash dividend of $0.3724 per share. The dividend will be payable January 10, 2016, to shareholders of record as of December 25, 2015.
“With above average wage growth and below average unemployment, the greater Columbus market continues to be one of the healthiest economies, not only in the region, but in the country.* We have been strategically positioned to leverage that growth,” said G. Scott McComb, Chairman, President and CEO.
Third Quarter Financial Highlights (at or for the period ended September 30, 2015)
- Net income was $1.9 million, up from $1.8 million in the preceding quarter and $1.6 million in the third quarter a year ago.
- Net interest margin remained strong at 3.96% compared to 4.08% in the preceding quarter and 4.04% in the third quarter a year ago.
- Annualized return on average assets was 1.14%.
- Annualized return on average equity was 12.47%.
- Total deposits increased 12.0% to $608.0 million from a year ago.
- Net loans increased 10.5% to $529.7 million from a year ago.
- Non-performing assets decreased 29.8% to $4.1 million, or 0.59% of total assets, at September 30, 2015, compared to a year ago, and increased from $3.6 million in the preceding quarter.
- Tangible book value per share increased 8.0% to $40.84 per share compared to $37.80 per share one year earlier.
- Declared a quarterly cash dividend of $0.3724 per share, which represents a 3.0% yield based on the September 30, 2015 stock price. ($48.97)
Balance Sheet Review
“Our strong loan growth during the quarter, particularly in the agricultural and commercial and industrial (C&I) portfolios, contributed to double digit year-over-year loan growth again this quarter,” said McComb. “We have taken advantage of the thirst for local community banking, and continue to develop relationships with new clients as they seek what we deliver.” Net loans increased 0.6% to $529.7 million at quarter end, compared to $526.4 million three months earlier and increased 10.5% compared to $479.3 million a year earlier.
Total deposits increased 2.8% to $608.0 million at September 30, 2015, compared to $591.3 million at June 30, 2015 and increased 12.0% compared to $543.0 million at September 30, 2014. Demand accounts represented 19.6%, savings, NOW and money market accounts represented 35.7%, and CDs comprised 44.6% of the total deposit portfolio, at September 30, 2015.
Total assets increased 2.4 % to $700.5 million at September 30, 2015, compared to $683.8 million three months earlier and increased 10.1 % compared to $636.0 million a year earlier. Shareholders’ equity increased 3.2% to $64.2 million at September 30, 2015, compared to $62.2 million at June 30, 2015 and increased 8.7% compared to $59.1 million one year ago. At quarter end, Heartland’s tangible book value increased 3.1% to $40.84 per share compared to $39.60 per share three months earlier and increased 8.0% from $37.80 per share one year earlier.
“Our net interest margin contracted during the quarter, reflecting the continued margin compression that the industry is experiencing,” said McComb. Heartland’s net interest margin was 3.96% in the third quarter of 2015, compared to 4.08% in the preceding quarter and 4.04% in the third quarter a year ago. In the first nine months of the year, Heartland’s net interest margin was 4.03%, a three basis point improvement compared to the same period a year ago.
Total revenues (net interest income before the provision for loan losses, plus non-interest income) increased 9.5% to $7.3 million in the third quarter, compared to $6.6 million in the third quarter a year ago. Year-to-date, total revenues increased 11.0% to $21.1 million, compared to $19.04 million in the first nine months of 2014. Net interest income before the provision for loan loss increased 8.3% to $6.4 million in the third quarter of 2015, compared to $5.9 million in the third quarter a year ago. In the first nine months of 2015, net interest income before the provision for loan losses increased 12.8% to $18.9 million, compared to $16.7 million in the first nine months of 2014.
Heartland’s noninterest income was $874,000 in the third quarter of 2015, compared to $732,000 in the second quarter and $734,000 a year ago. The increase in noninterest income reflects a $124,000 net gain on sale of loans, which is more than triple the gains booked the prior periods. Year-to-date, noninterest income was $2.28 million compared to $2.33 million in the same period a year ago. In 2014, Heartland had substantial gains from sales of securities and foreclosed assets.
In the third quarter of 2015, noninterest expenses were $4.3 million, which were unchanged compared to the preceding quarter, and up from $4.1 million a year ago. In the first nine months of the year, noninterest expenses were $13.0 million compared to $11.9 million in the first nine months of 2014. The year-over-year increase is primarily attributable to costs associated with the new branch in Pickerington, Ohio, as well as higher employee and incentive costs due to higher loan production.
“Credit quality continues to improve compared to a year ago, and all of our foreclosed assets have been cleared as of the end of the quarter. Nonaccrual loans and past due loans still accruing, however, were up in the current quarter for a few relationships that have been slow in making their payments,” said McComb.
Heartland’s nonaccrual loans were $3.0 million at September 30, 2015, which was a slight increase compared to $2.6 million three months earlier, and a decrease of 42.4% from $5.2 million a year earlier. Loans past due 90 days and still accruing also increased to $1.1 million from $872,000 at the end of the second quarter and $157,000 a year ago. Other real estate owned (OREO) and other non-performing assets were zero compared to $127,000 at June 30, 2015, and $517,000 a year earlier.
Nonperforming assets (NPAs), consisting of nonperforming loans, OREO, and loans delinquent 90 days or more, were $4.1 million at September 30, 2015, compared to $3.6 million three months earlier, and decreased 29.8% when compared to $5.9 million a year ago.
Heartland’s third quarter provision for loan losses was $160,000, down from $240,000 in the preceding quarter. This compares to $275,000 in the third quarter a year ago. Year-to-date, the provision for loan losses totaled $640,000 compared to $1.03 million in the first nine months of 2014. As of September 30, 2015, the allowance for loan losses represented 190.8% of nonaccrual loans compared to 214.2% three months earlier, and 103.3% one year earlier.
Net charge-offs were $8,000 in the third quarter compared to $13,000 in the preceding quarter, and $81,000 in the third quarter a year ago. The allowance for loan losses was $5.6 million, or 1.06% of total loans at September 30, 2015, compared to $5.5 million, or 1.03% of total loans at Jun 30, 2015, and $5.4 million, or 1.11% of total loans a year ago.
About Heartland BancCorp
Heartland BancCorp is a registered Ohio bank holding company and the parent of Heartland Bank, which operates twelve full-service banking offices. Heartland Bank, founded in 1911, provides full service commercial, small business, and consumer banking services; alternative investment services; insurance services; and other financial products and services. Heartland Bank is a member of the Federal Reserve, a member of the FDIC and an Equal Housing Lender. Heartland BancCorp is currently quoted on the OTC Markets (OTCQB) under the symbol HLAN. Learn more about Heartland Bank at HeartlandBank.com.
In May 2015, Heartland was ranked #77 on the American Banker magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity (“ROE”) as of 12/31/14.
Safe Harbor Statement
This release contains forward-looking statements that reflect management’s current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including, but not limited to, the ability of the Company to implement its strategy and expand its lending operations.
|Consolidated Balance Sheets|
|Assets||Sept. 30, 2015||June 30, 2015||Sept. 30, 2014|
|Cash and due from banks||$ 29,736,396||$ 18,276,394||$ 25,105,558|
|Federal funds sold||—||—||—|
|Cash and cash equivalents||29,736,396||18,276,394||25,105,558|
|Held-to-maturity securities, fair value $6,845,100 and $7,097,981 at September 30, 2015 and 2014, respectively and $6,912,734 at June 30, 2015||6,498,787||6,512,404||6,627,470|
|Loans, net of allowance for loan losses of $5,649,773 and $5,363,148 at September 30, 2015 and 2014, respectively and $5,498,142 at June 30, 2015||529,733,539||526,378,261||479,316,638|
|Premises and equipment||13,458,703||13,052,320||12,252,675|
|Nonmarketable equity securities||2,658,239||2,658,239||1,941,839|
|Foreclosed assets held for sale||—||127,457||516,911|
|Deferred income taxes||1,881,258||1,881,258||1,597,220|
|Life insurance assets||9,337,159||9,270,862||1,140,898|
|Total assets||$ 700,479,658||$ 683,847,017||$ 636,026,693|
|Liabilities and Shareholders’ Equity|
|Demand||$ 119,445,210||$ 110,780,365||$ 103,352,665|
|Saving, NOW and money market||217,336,061||214,830,174||204,394,936|
|Interest payable and other liabilities||4,617,893||4,184,678||5,229,770|
|Common stock, without par value; authorized 5,000,000 shares; issued 2015 — 1,561,781 shares 2014 — 1,552,922 shares and June 2015 – 1,560,121 shares||23,725,023||23,646,662||23,500,371|
|Accumulated other comprehensive income (expense)||714,658||154,340||551,368|
|Treasury stock at Cost, Common; 2014- 1,665 shares||—||—||(63,270)|
|Total shareholders’ equity||64,205,001||62,204,914||59,050,863|
|Total liabilities and shareholders’ equity||$ 700,479,658||$ 683,847,017||$ 636,026,693|
|Book value per share||$ 41.11||$ 39.87||$ 38.07|
|Consolidated Statements of Income|
|Three Months Ended||Nine Months Ended|
|Interest Income||Sept. 30, 2015||June 30, 2015||Sept. 30, 2014||Sept. 30, 2015||Sept. 30, 2014|
|Loans||$ 6,497,915||$ 6,492,460||$ 5,919,484||$ 19,130,541||$ 16,605,072|
|Total interest income||7,232,787||7,203,732||6,613,433||21,273,955||18,806,417|
|Total interest expense||849,353||808,299||719,715||2,414,846||2,085,551|
|Net Interest Income||6,383,434||6,395,433||5,893,718||18,859,109||16,720,866|
|Provision for Loan Losses||160,000||240,000||275,000||640,000||1,030,000|
|Net Interest Income After Provision for Loan Losses||6,223,434||6,155,433||5,618,718||18,219,109||15,690,866|
|Net Gains and commissions on loan sales||123,793||43,802||36,098||207,121||89,004|
|Net realized gains on available-for-sale securities||—||8,500||—||16,934||136,701|
|Net realized gain/(loss) on sales of foreclosed assets||5,250||—||51,273||5,308||154,073|
|Total noninterest income||874,412||731,769||733,566||2,284,914||2,325,953|
|Salaries and employee benefits||2,501,325||2,542,268||2,346,693||7,531,362||6,717,988|
|Net occupancy and equipment expense||478,053||466,576||422,382||1,386,353||1,291,626|
|Data processing fees||270,360||274,407||184,541||816,850||699,281|
|Printing and office supplies||33,805||44,183||38,063||127,091||122,721|
|State franchise taxes||105,982||105,981||90,097||317,945||283,127|
|FDIC Insurance premiums||111,000||96,000||91,836||318,000||250,253|
|Total noninterest expense||4,341,489||4,320,801||4,104,403||13,009,821||11,923,551|
|Income before Income Tax||2,756,357||2,566,401||2,247,881||7,494,202||6,093,268|
|Provision for Income Taxes||813,343||740,559||634,529||2,175,321||1,668,139|
|Net Income||$ 1,943,014||$ 1,825,842||$ 1,613,352||$ 5,318,881||$ 4,425,129|
|Basic Earnings Per Share||$ 1.25||$ 1.17||$ 1.04||$ 3.42||$ 2.85|
|Diluted Earnings Per Share||$ 1.22||$ 1.15||$ 1.02||$ 3.36||$ 2.82|
|ADDITIONAL FINANCIAL INFORMATION|
|(Dollars in thousands except per share amounts)(Unaudited)||Three Months Ended||Nine Months Ended|
|Sept. 30, 2015||June 30, 2015||Sept. 30, 2014||Sept. 30, 2015||Sept. 30, 2014|
|Return on average assets||1.14%||1.10%||1.05%||1.01%||0.97%|
|Return on average equity||12.47%||11.93%||11.21%||10.96%||10.40%|
|Net interest margin||3.96%||4.13%||4.04%||4.03%||4.00%|
|Asset Quality Ratios and Data:||As of or for the Three Months Ended|
|Sept. 30, 2015||June 30, 2015||Sept. 30, 2014|
|Non accrual loans||$ 2,991||$ 2,567||$ 5,192|
|Loans past due 90 days and still accruing||1,126||872||157|
|Non-performing investment securities||—||—||—|
|OREO and other non-performing assets||—||127||517|
|Total non-performing assets||$ 4,117||$ 3,566||$ 5,866|
|Non-performing assets to total assets||0.59%||0.52%||0.92%|
|Net charge-offs quarter ending||$ 8||$ 13||$ 81|
|Allowance for loan loss||$ 5,650||$ 5,498||$ 5,363|
|Non accrual loans||$ 2,962||$ 2,567||$ 5,192|
|Allowance for loan loss to non accrual loans||190.75%||214.18%||103.29%|
|Allowance for loan losses to loans outstanding||1.06%||1.03%||1.11%|
|Total shareholders’ equity||$ 64,205||$ 62,205||$ 59,051|
|Shareholders’ equity less goodwill||$ 63,788||$ 61,788||$ 58,634|
|Common shares outstanding||1,561,781||1,560,121||1,552,922|
|Less treasury shares||—||—||1,665|
|Common shares as adjusted||1,561,781||1,560,121||1,551,257|
|Book value per common share||$ 41.11||$ 39.87||$ 38.07|
|Tangible book value per common share||$ 40.84||$ 39.60||$ 37.80|
CONTACT: G. Scott McComb, Chairman, President & CEO Heartland BancCorp 614-337-4600