GAHANNA, Ohio, Oct. 22, 2014 (GLOBE NEWSWIRE) -- Heartland BancCorp, (OTCQB:HLAN) today reported earnings increased 12.1% to $1.6 million, or $1.02 per diluted share, in the third quarter of 2014 compared to $1.4 million, or $0.92 per diluted share, in the third quarter a year ago. In the first nine months of the year, Heartland's earnings increased 16.1% to $4.4 million, or $2.82 per diluted share, compared to $3.8 million, or $2.44 per diluted share, in the first nine months of 2013.
The Company also announced its board of directors declared a regular quarterly cash dividend of $0.3547 per share. The dividend will be payable January 10, 2015 to shareholders of record December 25, 2014.
"Heartland's third quarter success was fueled by solid loan and deposit growth and ongoing improvements in credit quality," stated G. Scott McComb, Chairman, President and CEO. "We have seen improvements across all areas of our operations this year and continue to generate a healthy net interest margin. The steady economic recovery in Ohio, particularly in the Columbus MSA, has contributed to strong core deposit growth and robust lending activity. We look forward to the future with confidence as we continue to create value for our shareholders by developing strong relationships with our customers, communities and employees."
Third Quarter Highlights (at or for the period ended September 30, 2014)
- Net income was $1.6 million, or $1.02 per diluted share, compared to $1.4 million, or $0.92 per diluted share in the third quarter of 2013.
- Annualized return on average assets was 1.05%.
- Annualized return on average equity was 11.21%.
- Net interest margin improved 11 basis points to 4.04%, compared to 3.93% in the third quarter a year ago.
- Core deposits increased 9.4% and represent 56.7% of total deposits.
- Total net loans increased 14% to $490.3 million compared to a year ago.
- Non-performing assets decreased 8.2% compared to three months earlier to $5.8 million, or 0.92% of total assets, at September 30, 2014.
- Book value per share increased 9.6% to $38.07 per share, compared to $34.73 per share one year earlier.
- Declared a quarterly cash dividend of $0.3547 per share, which represents a 3.4% yield based on the recent stock price.
Balance Sheet Review
"We are continuing to build our loan pipeline and new applications were particularly robust during the current quarter," said McComb. "As a result, total net loans increased 13.9% to $479.3 million at quarter end compared to $420.9 million a year earlier, with a majority of the growth coming from an increase in both commercial real estate loans and new C&I loans."
Heartland's total deposits increased 8.7% to $543.0 million at September 30, 2014, compared to $499.6 million a year earlier. "A majority of the deposit increase came from a combination of new demand deposits, as well as higher balances in checking accounts," said McComb. Demand accounts represent 19%, savings, NOW and money market accounts represent 38%, and CDs comprise 43% of the total deposit portfolio at September 30, 2014.
Total assets increased 9.0% to $636.0 million at September 30, 2014, compared to $583.7 million a year earlier and shareholders' equity increased 9.8% to $59.1 million at September 30, 2014, compared to $53.8 million one year ago. At quarter-end, Heartland's tangible book value increased 9.6% to $38.07 per share, compared to $34.73 per share one year earlier.
"Heartland's credit quality metrics remained strong in the current quarter and reflect our focus on maintaining a moderate risk profile. Non-performing loan balances, real estate owned and other repossessed assets all declined compared to the prior quarter and are below year ago levels," said McComb.
The third quarter provision for loan losses was $275,000, compared to $350,000 in the preceding quarter and $455,000 in the third quarter a year ago. As of September 30, 2014, the allowance for loan losses represented 103.3% of nonperforming loans compared to 94.3% three months earlier and 69.1% a year earlier.
Net charge-offs were $82,000 in the third quarter compared to $280,000 in the preceding quarter and $838,000 in the third quarter a year ago. The allowance for loan losses was $5.4 million, or 1.11% of total loans at September 30, 2014, compared to $5.2 million, or 1.12% of total loans at June 30, 2014, and $5.4 million, or 1.26% of total loans a year ago.
Nonaccrual loans decreased 5.3% to $5.2 million at September 30, 2014, compared to $5.5 million three months earlier, and decreased 33.1% compared to $7.8 million a year earlier. Other real estate owned (OREO) and other non-performing assets declined 33.0% to $517,000 at September 30, 2014 compared to $772,000 three months earlier and decreased 83.3% compared to $3.1 million a year earlier.
Nonperforming assets (NPAs), consisting of nonperforming loans, OREO, and loans delinquent 90 days or more, decreased 8.2% to $5.8 million at September 30, 2014, compared to $6.4 million three months earlier, and decreased 46% when compared to $10.9 million a year ago.
Heartland's revenues (net interest income before the provision for loan losses, plus non-interest income) increased 10.2% to $6.6 million in the third quarter, compared to $6.0 million in the third quarter a year ago. In the first nine months of the year, Heartland's revenues increased 5.6% to $19.0 million compared to $18.0 million in the first nine months of 2013. Net interest income before the provision for loan loss increased 14.1% to $5.9 million in the third quarter of 2014, compared to $5.2 million in the third quarter a year ago. In the first nine months of the year, net interest income increased 10.2% to $16.7 million compared to $15.2 million the first nine months a year ago.
"Despite continued pressure on loan yields, our net interest margin remains healthy and well above peer levels due to higher than industry average yields on our loan mix," said McComb. Heartland's net interest margin remained steady at 4.04% in the third quarter of 2014, compared to 3.99% in the preceding quarter and 3.93% in the third quarter a year ago. The average net interest margin was 2.81% for the 324 banks that make up the SNL U.S. Bank Index as of June 30, 2014. In the first nine months of 2014, Heartland's net interest margin improved 11 basis points to 4.00% compared to 3.89% in the first nine months of 2013.
Noninterest income decreased to $734,000 in the third quarter of 2014, compared to $851,000 in the third quarter a year ago. Year-to-date, noninterest income was $2.3 million compared to $2.9 million in the first nine months of 2013. The year-to-date decrease in noninterest income was primarily attributed to substantially lower net realized gains on available-for-sale securities, which totaled $137,000 in the first nine months of 2014, compared to $691,000 in the first nine months of 2013.
In the third quarter of 2014, noninterest expenses increased 13.7% to $4.1 million, compared to $3.6 million in the third quarter a year ago. Year-to-date, noninterest expense increased 4.6% to $11.9 million compared to $11.4 million in the same period a year earlier. "The increase in noninterest expense for both the quarter and the year-to-date periods is primarily related to the increase in commercial lenders we have brought on during the year, who are helping to produce our double-digit year-over-year loan growth," said McComb.
About Heartland BancCorp
Heartland BancCorp is a registered Ohio bank holding company and the parent of Heartland Bank, which operates eleven full-service banking offices. Heartland Bank, founded in 1911, provides full service commercial, small business, and consumer banking services; alternative investment services; insurance services; and other financial products and services. Heartland Bank is a member of the Federal Reserve, a member of the FDIC and an Equal Housing Lender. Heartland BancCorp is currently quoted on the over-the-counter (OTC) Bulletin Board Service under the symbol HLAN. Learn more about Heartland Bank at HeartlandBank.com.
Safe Harbor Statement
This release contains forward-looking statements that reflect management's current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including, but not limited to, the ability of the Company to implement its strategy and expand its lending operations.
|Consolidated Balance Sheets|
|Assets||Sept. 30, 2014||June 30, 2014||Sept. 30, 2013|
|Cash and due from banks||$ 25,105,558||$ 25,046,465||$ 20,679,384|
|Federal funds sold||--||99,000||--|
|Cash and due from banks||25,105,558||25,145,465||20,679,384|
|Held-to-maturity securities, fair value $7,097,981 and $7,198,014 at September 30, 2014 and 2013, respectively and $7,801,919 at June 30, 2014||6,627,470||6,598,997||6,959,072|
|Loans, net of allowance for loan losses of $5,363,148 and $5,357,008 at September 30, 2014 and 2013, respectively and $5,169,910 at June 30, 2014||479,316,638||455,166,994||420,919,004|
|Premises and equipment||12,252,675||12,234,256||11,943,694|
|Federal Reserve and Federal Home Loan Bank stock||1,941,839||1,941,839||1,889,950|
|Foreclosed assets held for sale||516,911||772,398||3,089,100|
|Receivables due from loan sales|
|Deferred income taxes||1,597,220||1,731,311||3,036,817|
|Total assets||$ 636,026,693||$ 615,345,639||$ 583,709,157|
|Liabilities and Shareholders' Equity|
|Demand||$ 103,352,665||$ 93,737,565||$ 89,651,217|
|Saving, NOW and money market||204,394,936||200,406,842||191,625,207|
|Interest payable and other liabilities||5,229,770||4,783,030||3,929,336|
|Common stock, without par value; authorized 5,000,000 shares; issued 2014 - 1,552,922, 2013 - 1,547,922 shares and June 2014 - 1,551,922 shares||23,500,371||23,460,714||23,275,659|
|Accumulated other comprehensive income (expense)||551,368||291,074||(919,797)|
|Treasury stock at Cost, Common; 2014- 1,665 shares||(63,270)||(63,270)||--|
|Total shareholders' equity||59,050,863||57,687,199||53,763,154|
|Total liabilities and shareholders' equity||$ 636,026,693||$ 615,345,639||$ 583,709,157|
|Book value per share||$ 38.07||$ 37.21||$ 34.73|
|Consolidated Statements of Income|
|Three Months Ended||Nine Months Ended|
|Interest Income||Sept. 30, 2014||June 30, 2014||Sept. 30, 2013||Sept. 30, 2014||Sept. 30, 2013|
|Loans||$ 5,919,484||$ 5,432,679||$ 5,138,858||$ 16,605,072||$ 15,195,263|
|Total interest income||6,613,433||6,160,674||5,906,177||18,806,417||17,685,868|
|Total interest expense||719,715||686,541||741,528||2,085,551||2,517,100|
|Net Interest Income||5,893,718||5,474,133||5,164,649||16,720,866||15,168,768|
|Provision for Loan Losses||275,000||350,000||455,000||1,030,000||1,565,000|
|Net Interest Income After Provision for Loan Losses||5,618,718||5,124,133||4,709,649||15,690,866||13,603,768|
|Net Gains and commissions on loan sales||36,098||36,562||18,388||89,004||52,342|
|Net realized gains on available-for-sale securities||--||136,701||6,692||136,701||690,795|
|Net realized gain/(loss) on sales of foreclosed assets||51,273||77,031||20,188||154,073||(20,731)|
|Total noninterest income||733,566||923,317||851,350||2,325,953||2,863,614|
|Salaries and employee benefits||2,346,693||2,139,971||1,926,343||6,717,988||6,037,299|
|Net occupancy and equipment expense||422,382||422,785||432,284||1,291,626||1,358,327|
|Data processing fees||184,541||272,884||221,496||699,281||667,019|
|Printing and office supplies||38,063||34,679||38,194||122,721||119,562|
|State franchise taxes||90,097||90,097||153,726||283,127||465,841|
|FDIC Insurance premiums||91,836||79,836||120,491||250,253||357,497|
|Total noninterest expense||4,104,403||3,857,783||3,609,904||11,923,551||11,404,426|
|Income before Income Tax||2,247,881||2,189,667||1,951,095||6,093,268||5,062,956|
|Provision for Income Taxes||634,529||611,867||511,252||1,668,139||1,250,905|
|Net Income||$ 1,613,352||$ 1,577,800||$ 1,439,843||$ 4,425,129||$ 3,812,051|
|Basic Earnings Per Share||$ 1.04||$ 1.02||$ 0.93||$ 2.85||$ 2.47|
|Diluted Earnings Per Share||$ 1.02||$ 1.01||$ 0.92||$ 2.82||$ 2.44|
|Three Months Ended||Nine Months Ended|
| Sept. 30, |
| June 30, |
| Sept. 30, |
| Sept. 30, |
| Sept. 30, |
|Return on average assets||1.05%||1.05%||1.02%||0.97%||0.88%|
|Return on average equity||11.21%||11.25%||10.86%||10.40%||9.28%|
|Net Interest margin||4.04%||3.99%||3.93%||4.00%||3.89%|
|Asset Quality Ratios and Data:||As of or for the Three Months Ended|
| Sept. 30, |
| June 30, |
| Sept. 30, |
|Non Accrual Loans||5,193||5,485||7,763|
|Loans Past Due 90 days and Still accruing||126||100||50|
|Non Performing Investment investment securities||--||--||--|
|OREO and other non-performing Assets||517||772||3,090|
|Total non-performing assets||5,836||6,357||10,903|
|Non performing assets to total assets||0.92%||1.03%||1.87%|
|Non-performing assets to total assets|
|Total Assets as of||636,027||615,346||583,709|
|Net Charge-offs Quarter ending||82||280||838|
|Allowance for loan loss||5,363,148||5,169,910||5,357,008|
|Allowance to loans outstanding||1.11%||1.12%||1.26%|
|Allowance for Loan Loss||5,363||5,170||5,357|
|Non accrual Loans||5,193||5,485||7,763|
|Allowance for loan loss to non accrual loans||103.27%||94.26%||69.01%|
|Total Shareholders' Equity||59,050,863||57,687,199||53,753,748|
|Shareholders' equity less Goodwill||58,633,510||57,269,846||53,336,395|
|Common Shares outstanding||1,552,922||1,551,922||1,544,922|
|Less treasury Shares||1,665||1,665||--|
|Common Shares as adjusted||1,551,257||1,550,257||1,544,922|
|Book Value per common share||$ 38.07||$ 37.21||$ 34.79|
|Tangible Book Value per common shares||$ 37.80||$ 36.94||$ 34.52|
CONTACT: G. Scott McComb, President, Chairman & CEO Heartland BancCorp 614-337-4600Source:Heartland BancCorp