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Heartland BancCorp Earnings Grow 18% to $1.7 Million, or $1.05 per Diluted Share in Fourth Quarter of 2014, and 17% to $6.1 Million, or $3.87 per Diluted Share for the Year; Declares Regular Quarterly Cash Dividend of $0.3547 Per Share

GAHANNA, Ohio, Jan. 20, 2015 (GLOBE NEWSWIRE) -- Heartland BancCorp, (OTCQB:HLAN) today reported earnings increased 17.9% to $1.7 million, or $1.05 per diluted share in the fourth quarter of 2014, compared to $1.4 million, or $0.90 per diluted share, in the fourth quarter a year ago. For the full year, Heartland's earnings increased 16.6% to $6.1 million, or $3.87 per diluted share, compared to $5.2 million, or $3.34 per diluted share in 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 April 10, 2015 to shareholders of record March 25, 2015.

"We are proud to post such positive earnings and growth," stated G. Scott McComb, Chairman, President and CEO. "Standing by our existing clients through thick and thin as well as seeking out new clients that value relationships has enabled Heartland to capitalize on the thriving Central Ohio Economy."

Fourth Quarter Financial Highlights (at or for the period ended December 31, 2014)

  • Net income was $1.7 million, or $1.05 per diluted share, compared to $1.4 million, or $0.90 per diluted share in the fourth quarter of 2013.
  • Net interest margin remained healthy and above peer levels at 4.01%.
  • Annualized return on average assets was 1.04%.
  • Annualized return on average equity was 11.22%.
  • Total deposits increased 13.3% compared to a year ago.
  • Net loans increased 17.9% to $498.6 million, compared to a year ago.
  • Non-performing assets decreased 9.3% to $5.3 million, or 0.82% of total assets at December 31, 2014, compared to three months earlier.
  • Book value per share increased 11.6% to $39.05 per share, compared to $35.00 per share one year earlier.
  • Declared a quarterly cash dividend of $0.3547 per share, which represents a 3.5% yield based on the recent stock price.

Balance Sheet Review

"Heartland had another strong quarter for loan production," said McComb. "As a result, net loans increased 17.9% to $498.6 million at year end, compared to $423.0 million a year earlier, with a majority of the growth coming from an increase in both commercial real estate and new C&I loans. Further, we continue to see significant potential for growth in our loan origination pipelines."

Total deposits increased 13.3% to $556.2 million at December 31, 2014, compared to $490.8 million a year earlier. Demand accounts represented 19.5%, while savings, NOW and money market accounts represented 36.6%, and CDs comprised 43.9% of the total deposit portfolio, at December 31, 2014.

Total assets increased 11.9% to $649.7 million at December 31, 2014, compared to $580.4 million a year earlier. Shareholders' equity increased 11.9% to $60.7 million at December 31, 2014, compared to $54.2 million one year ago. At year end, Heartland's tangible book value increased 11.7% to $38.79 per share, compared to $34.73 per share one year earlier.

Credit Quality

Heartland's fourth quarter provision for loan losses was $225,000, compared to $275,000 in the preceding quarter and $405,000 in the fourth quarter a year ago. As of December 31, 2014, the allowance for loan losses represented 119.7% of nonaccrual loans compared to 103.3% three months earlier, and 85.7% one year earlier.

"Our credit quality continues to improve with both nonperforming loans, real estate owned and other repossessed assets declining dramatically during the quarter," said McComb. "We are continuing to work with our customers to resolve problem credits and focus on managing a moderate risk profile."

Net charge-offs were $238,000 in the fourth quarter compared to $82,000 in the preceding quarter, and $1.1 million in the fourth quarter a year ago. The allowance for loan losses was $5.4 million, or 1.06% of total loans at December 31, 2014, compared to $5.4 million, or 1.11% of total loans at September 30, 2014, and $4.7 million, or 1.09% of total loans a year ago.

Nonaccrual loans decreased 13.9% to $4.5 million at December 31, 2014, compared to $5.2 million three months earlier, and decreased 18.1% compared to $5.5 million a year earlier. Other real estate owned (OREO) and other non-performing assets declined 79.1% to $108,000 at December 31, 2014, compared to $517,000 three months earlier and decreased 93.6% compared to $1.7 million a year earlier.

Nonperforming assets (NPAs), consisting of nonperforming loans, OREO, and loans delinquent 90 days or more, decreased 9.3% to $5.3 million at December 31, 2014, compared to $5.9 million three months earlier, and decreased 29.6% when compared to $7.6 million a year ago.

Operating Results

"Growing earnings faster than assets keep us focused on profitable growth. Being honest with clients about what the bank needs to fulfil their needs is a common conversation in our enterprise," said McComb. Heartland's net interest margin remained steady at 4.01% in the fourth quarter of 2014, compared to 4.04% in the preceding quarter and 4.10% in the fourth quarter a year ago. The average net interest margin was 2.82% for the 330 banks that make up the SNL U.S. Bank Index as of September30, 2014. For all of 2014, Heartland's net interest margin improved four basis points to 4.00% compared to 3.96% in 2013.

Total revenues (net interest income before the provision for loan losses, plus non-interest income) increased 10.0% to $6.9 million in the fourth quarter, compared to $6.3 million in the fourth quarter a year ago. For the full year, Heartland's revenues increased 6.2% to $26.0 million compared to $24.4 million in 2013. Net interest income before the provision for loan loss increased 11.5% to $6.1 million in the fourth quarter of 2014, compared to $5.5 million in the fourth quarter a year ago. In 2014, net interest income increased 9.9% to $22.8 million compared to $20.8 million in 2013.

Heartland's noninterest income decreased to $780,000 in the fourth quarter of 2014, compared to $783,000 in the fourth quarter a year ago. For the full year, noninterest income was $3.1 million compared to $3.6 million in 2013. The decrease in noninterest income in 2014 was primarily attributed to substantially lower net realized gains on available-for-sale securities, which totaled $137,000 in 2014, compared to $687,000 in 2013.

In the fourth quarter of 2014, noninterest expenses increased 8.9% to $4.4 million, compared to $4.0 million in the fourth quarter a year ago. In 2014, noninterest expense increased 4.8% to $16.3 million compared to $15.6 million in 2013. "The increase in noninterest expense for both the quarter and the year reflect higher employee benefit costs and incentive costs due to higher commercial loan production in lending during 2014, and further team building for the future," 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 OTC Markets (OTCQB) 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.

Heartland BancCorp
Consolidated Balance Sheets
Assets Dec. 31, 2014 Sept. 30, 2014 Dec. 31, 2013
Cash and due from banks 22,561,068 25,105,558 15,943,266
Available-for-sale securities 101,479,692 104,317,349 112,421,722
Held-to-maturity securities, fair value $6,914,232 and $6,879,717 at December 31, 2014 and 2013, respectively and $7,097,987 at September 30, 2014 6,454,963 6,627,470 6,626,777
Loans, net of allowance for loan losses of $5,350,637 and $4,676,231 at December 31, 2014 and 2013, respectively and $5,363,148 at September 30, 2014 498,585,125 479,316,638 422,967,223
Premises and equipment 12,653,144 12,252,675 11,969,597
Federal Reserve and Federal Home Loan Bank stock 2,655,439 1,941,839 1,889,950
Foreclosed assets held for sale 108,082 516,911 1,616,294
Interest receivable 1,803,108 2,185,004 1,807,632
Goodwill 417,353 417,353 417,353
Deferred income taxes 1,881,258 1,597,220 2,600,821
Other 1,083,056 1,748,676 2,097,943
Total assets $ 649,682,288 $ 636,026,693 $ 580,358,578
Liabilities and Shareholders' Equity
Liabilities
Deposits
Demand $ 108,394,566 $ 103,352,665 $ 82,076,014
Saving, NOW and money market 203,367,315 204,394,936 188,825,641
Time 244,394,645 235,257,990 219,921,798
Total deposits 556,156,526 543,005,591 490,823,453
Short-term borrowings 28,395,316 28,740,469 31,136,220
Interest payable and other liabilities 4,421,322 5,229,770 4,152,059
Total liabilities 588,973,164 576,975,830 526,111,732
Shareholders' Equity
Common stock, without par value; authorized 5,000,000 shares; issued 2014 - 1,554,457, 2013 - 1,549,922 shares and September 2014 - 1,552,922 shares 23,558,806 23,500,371 23,355,806
Retained earnings 36,160,565 35,062,394 32,287,838
Accumulated other comprehensive income (expense) 989,753 551,368 (1,396,798)
Treasury stock at Cost, Common; 2014- 1,665 shares -- (63,270) --
Total shareholders' equity 60,709,124 59,050,863 54,246,846
Total liabilities and shareholders' equity $ 649,682,288 $ 636,026,693 $ 580,358,578
Book value per share $ 39.05 $ 38.07 $ 35.00
Heartland BancCorp
Consolidated Statements of Income
Three Months Ended Twelve Months Ended
Interest Income Dec. 31, 2014 Sept. 30, 2014 Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2013
Loans $ 6,162,060 $ 5,919,484 $ 5,405,336 $ 22,767,132 $ 20,600,599
Securities
Taxable 324,614 282,906 353,749 1,256,494 1,454,271
Tax-exempt 387,701 402,987 438,378 1,626,882 1,792,899
Other 17,553 8,056 6,813 47,837 42,375
Total interest income 6,891,928 6,613,433 6,204,276 25,698,345 23,890,144
Interest Expense
Deposits 761,837 715,202 706,343 2,834,757 2,868,355
Borrowings 3,970 4,513 4,283 16,601 232,171
Total interest expense 765,807 719,715 710,626 2,851,358 3,100,526
Net Interest Income 6,126,121 5,893,718 5,493,650 22,846,987 20,789,618
Provision for Loan Losses 225,000 275,000 405,000 1,255,000 1,970,000
Net Interest Income After Provision for Loan Losses 5,901,121 5,618,718 5,088,650 21,591,987 18,819,618
Non Interest income
Service charges 475,385 505,932 494,804 1,980,529 1,949,909
Net Gains and commissions on loan sales 32,691 36,098 17,703 121,695 70,045
Net realized gains on available-for-sale securities -- -- (3,547) 136,701 687,248
Net realized gain/(loss) on sales of foreclosed assets 55,828 51,273 (8,398) 209,901 (29,129)
Other 216,095 140,263 282,811 657,126 968,914
Total noninterest income 779,999 733,566 783,373 3,105,952 3,646,987
Non Interest Expense
Salaries and employee benefits 2,576,281 2,346,693 2,320,454 9,294,269 8,357,754
Net occupancy and equipment expense 415,152 422,382 422,656 1,706,778 1,780,983
Data processing fees 319,183 184,541 259,373 1,018,464 926,392
Professional fees 186,695 203,598 169,544 772,812 785,666
Marketing expense 199,286 131,250 46,263 598,036 346,260
Printing and office supplies 42,527 38,063 42,396 165,248 161,958
State franchise taxes 90,097 90,097 153,725 373,224 619,566
FDIC Insurance premiums 91,836 91,836 121,485 342,089 478,982
Other 486,753 595,943 511,648 2,060,441 2,121,609
Total noninterest expense 4,407,810 4,104,403 4,047,544 16,331,361 15,579,170
Income before Income Tax 2,273,310 2,247,881 1,824,479 8,366,578 6,887,435
Provision for Income Taxes 617,225 634,529 420,370 2,285,364 1,671,275
Net Income $ 1,656,085 $ 1,613,352 $ 1,404,109 $ 6,081,214 $ 5,216,160
Basic Earnings Per Share $ 1.07 $ 1.04 $ 0.91 $ 3.92 $ 3.38
Diluted Earnings Per Share $ 1.05 $ 1.02 $ 0.90 $ 3.87 $ 3.34
Three Months Ended Twelve Months Ended
Dec. 31, Sept. 30, Dec. 31 Dec. 31, Dec. 31,
2014 2014 2013 2014 2013
Performance Ratios:
Return on average assets 1.04% 1.05% 0.98% 0.97% 0.91%
Return on average equity 11.22% 11.21% 10.54% 10.40% 9.54%
Net Interest margin 4.01% 4.04% 4.10% 4.00% 3.96%
Efficiency Ratio 63.82% 61.93% 63.26% 63.26% 65.60%
Asset Quality Ratios and Data: As of or for the Three Months Ended
Dec. 31, Sept. 30, Dec. 31,
2014 2014 2013
Non Accrual Loans 4,470 5,192 5,460
Loans Past Due 90 days and Still accruing 745 157 413
Non Performing Investment investment securities -- -- --
OREO and other non-performing Assets 108 517 1,688
Total non-performing assets 5,323 5,866 7,561
Non performing assets to total assets 0.82% 0.92% 1.30%
Non-performing assets to total assets
Total Assets as of 649,682 636,027 580,359
Net Charge-offs Quarter ending 238 82 1,086
Allowance for loan loss 5,350,637 5,363,148 4,676,231
Loans Receivable 503,935,762 484,679,786 427,643,454
Allowance to loans outstanding 1.06% 1.11% 1.09%
Allowance for Loan Loss 5,351 5,363 4,676
Non accrual Loans 4,470 5,192 5,460
Allowance for loan loss to non accrual loans 119.70% 103.29% 85.65%
Book Values:
Book Value per common share
Total Shareholders' Equity 60,709,124 59,050,863 54,246,846
Less, Goodwill 417,353 417,353 417,353
Shareholders' equity less Goodwill 60,291,771 58,633,510 53,829,493
Common Shares outstanding 1,554,457 1,552,922 1,549,922
Less treasury Shares -- 1,665 --
Common Shares as adjusted 1,554,457 1,551,257 1,549,922
Book Value per common share 39.05 38.07 35.00
Tangible Book Value per common shares 38.79 37.80 34.73

CONTACT: G. Scott McComb, Chairman, President & CEO Heartland BancCorp 614-337-4600Source:Heartland BancCorp