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Heartland BancCorp Earnings Increase 26% to $1.6 Million, or $0.98 per Diluted Share, in First Quarter 2015, Increases Quarterly Cash Dividend 5% to $0.3724 Per Share

GAHANNA, Ohio, April 21, 2015 (GLOBE NEWSWIRE) -- Heartland BancCorp ("the company," and "the bank") (OTCQB:HLAN), today reported earnings increased 25.6% to $1.6 million, or $0.98 per diluted share in the first quarter of 2015 compared to $1.2 million, or $0.79 per diluted share, in the first quarter a year ago.

The Company also announced its board of directors increased its regular quarterly cash dividend by 5% to $0.3724 per share. The dividend will be payable July 10, 2015, to common shareholders of record as of June 25, 2015. Previously Heartland paid a regular quarterly cash dividend of $0.3547 per share.

"We started off 2015 with the same robust pace as we finished 2014, with double digit loan and deposit growth year-over-year as well as continued meaningful progress in reducing nonperforming assets," stated G. Scott McComb, Chairman, President and CEO. "Management, at the board's direction, is positioning the bank for future growth by strengthening our balance sheet, liquidity, and capital base. At this time we are exploring all growth opportunities, both organic and through acquisition, in our current markets and surrounding areas."

First Quarter Financial Highlights (at or for the period ended March 31, 2015)

  • Net income was $1.6 million, or $0.98 per diluted share, compared to $1.2 million, or $0.79 per diluted share in the first quarter of 2014.
  • Net interest margin remained healthy and above peer levels at 4.05%.
  • Annualized return on average assets was 0.95%.
  • Annualized return on average equity was 10.26%.
  • Total deposits increased to $586.1 million, a 14.5% increase compared to a year ago.
  • Net loans increased to $515.6 million, a 20.1% increase compared to a year ago.
  • Non-performing assets decreased 44.5% to $3.0 million, or 0.44% of total assets, at March 31, 2015, compared to December 31, 2014.
  • Book value per share increased 10.2% to $39.80 per share compared to $36.11 per share one year earlier.
  • Increased its quarterly cash dividend 5% to $0.3724 per share, which represents a 3.5% yield based on the March 31, 2015 stock price.

Balance Sheet Review

"Our community bankers generated another strong quarter of loan production," said McComb. "As a result, net loans increased 20.1% to $515.6 million at quarter end, compared to $429.3 million a year earlier. Additionally, we continue to see significant potential for current and future growth in relationships in our marketplace."

Total deposits increased 14.5% to $586.1 million at March 31, 2015, compared to $511.9 million a year earlier. Demand accounts represented 18.7%, while savings, NOW and money market accounts represented 37.6%, and CDs comprised 43.7% of the total deposit portfolio, at March 31, 2015.

Total assets increased 12.5% to $675.6 million at March 31, 2015, compared to $600.8 million a year earlier. Shareholders' equity increased 10.4% to $61.9 million at March 31, 2015, compared to $56.0 million one year ago. At quarter end, Heartland's tangible book value increased 10.3% to $39.53 per share compared to $35.84 per share one year earlier.

Credit Quality

"Credit quality continues to improve, with nonperforming loans declining dramatically during the quarter and year-over year," said McComb. Heartland's nonaccrual loans decreased 46.7% to $2.4 million at March 31, 2015, compared to $4.5 million three months earlier, and decreased 54.5% compared to $5.2 million a year earlier. Other real estate owned (OREO) and other non-performing assets increased modestly to $117,000 at March 31, 2015, compared to $108,000 three months earlier and decreased 88.8% compared to $1.0 million a year earlier.

Nonperforming assets (NPAs), consisting of nonperforming loans, OREO, and loans delinquent 90 days or more, decreased 44.5% to $3.0 million at March 31, 2015, compared to $5.3 million three months earlier, and decreased 53.5% when compared to $6.4 million a year ago.

Heartland's first quarter provision for loan losses was $240,000, compared to $225,000 in the preceding quarter and $405,000 in the first quarter a year ago. As of March 31, 2015, the allowance for loan losses represented 221.2% of nonaccrual loans compared to 119.7% three months earlier, and 97.4% one year earlier.

Net charge-offs were $319,000 in the first quarter compared to $238,000 in the preceding quarter, and net recoveries of $19,000 in the first quarter a year ago. The allowance for loan losses was $5.3 million, or 1.01% of total loans at March 31, 2015, compared to $5.4 million, or 1.06% of total loans at December 31, 2014, and $5.1 million, or 1.07% of total loans a year ago.

Operating Results

"Growing earnings in pace with assets keep us focused on generating sustainable profitability," said McComb. Heartland's net interest margin improved four basis points to 4.05% in the first quarter of 2015, compared to 4.01% in the preceding quarter and declined eight basis points compared to 4.13% in the first quarter a year ago.

Total revenues (net interest income before the provision for loan losses, plus non-interest income) increased 12.5% to $6.8 million in the first quarter, compared to $6.0 million in the first quarter a year ago. Net interest income before the provision for loan loss increased 13.9% to $6.1 million in the first quarter of 2015, compared to $5.3 million in the first quarter a year ago.

Heartland's noninterest income increased slightly to $679,000 in the first quarter of 2015, compared to $669,000 in the first quarter a year ago.

"The increase in noninterest expense for the current quarter reflects higher employee and incentive costs due to higher loan production and expansion into new markets such as Pickerington, Ohio. The bank is at the point where we need more corporate and operations staff to continue to mitigate risk and support a robust growing balance sheet," said McComb. In the first quarter of 2015, noninterest expenses increased 10.2% to $4.3 million, compared to $3.9 million in the first quarter 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.

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 March 31, 2015 Dec. 31, 2014 March 31, 2014
Cash and cash equivalents 31,078,674 22,561,068 32,050,021
Available-for-sale securities 100,811,843 101,479,692 111,301,455
Held-to-maturity securities, fair value $6,922,387 and $6,918,508 at March 31, 2015 and 2014, respectively and $6,914,217 at December 31, 2014 6,453,351 6,454,963 6,625,150
Loans, net of allowance for loan losses of $5,271,174 and $5,100,283 at March 31, 2015 and 2014, respectively and $5,350,637 at December 31, 2014 515,645,398 498,585,125 429,302,310
Premises and equipment 12,880,648 12,653,144 12,043,040
Nonmarketable equity securities 2,655,439 2,655,439 1,891,550
Foreclosed assets held for sale 117,457 108,082 1,045,972
Interest receivable 2,359,955 1,803,108 2,090,793
Goodwill 417,353 417,353 417,353
Deferred income taxes 1,881,258 1,881,258 2,600,821
Other 1,308,202 1,083,056 1,403,012
Total assets $ 675,609,578 $ 649,682,288 $ 600,771,477
Liabilities and Shareholders' Equity
Liabilities
Deposits
Demand $ 109,641,986 $ 108,394,566 $ 85,849,357
Saving, NOW and money market 220,201,722 203,367,315 209,050,095
Time 256,227,173 244,394,645 217,019,221
Total deposits 586,070,881 556,156,526 511,918,673
Short-term borrowings 22,882,863 28,395,316 28,798,256
Interest payable and other liabilities 4,769,023 4,421,322 4,016,523
Total liabilities 613,722,767 588,973,164 544,733,452
Shareholders' Equity
Common stock, without par value; authorized 5,000,000 shares; issued 2015 -- 1,554,921, 2014 -- 1,551,922 shares and December 2014 - 1,554,457 shares 23,577,337 23,558,806 23,437,557
Retained earnings 37,159,060 36,160,565 32,971,348
Accumulated other comprehensive income (expense) 1,150,414 989,753 (370,880)
Total shareholders' equity 61,886,811 60,709,124 56,038,025
Total liabilities and shareholders' equity $ 675,609,578 $ 649,682,288 $ 600,771,477
Book value per share $ 39.80 $ 39.05 $ 36.11
Heartland BancCorp
Consolidated Statements of Income
Three Months Ended
Interest Income March 31, 2015 Dec. 31, 2014 March 31, 2014
Loans $ 6,140,166 $ 6,162,060 $ 5,238,041
Securities
Taxable 303,519 324,614 339,731
Tax-exempt 385,458 387,701 430,547
Other 8,293 17,553 9,123
Total interest income 6,837,436 6,891,928 6,017,442
Interest Expense
Deposits 753,517 761,837 674,517
Borrowings 3,677 3,970 4,778
Total interest expense 757,194 765,807 679,295
Net Interest Income 6,080,242 6,126,121 5,338,147
Provision for Loan Losses 240,000 225,000 405,000
Net Interest Income After Provision for Loan Losses 5,840,242 5,901,121 4,933,147
Noninterest Income
Service charges 467,519 475,385 481,223
Net gains and commissions on loan sales 39,526 32,691 16,344
Net realized gains on available-for-sale securities 8,434 -- --
Net realized gains on sales of foreclosed assets 58 55,828 25,769
Other 163,196 216,095 145,734
Total noninterest income 678,733 779,999 669,070
Noninterest Expense
Salaries and employee benefits 2,487,769 2,576,281 2,216,456
Net occupancy and equipment expense 441,724 415,152 446,459
Data processing fees 272,083 319,183 241,856
Professional fees 170,499 186,695 154,396
Marketing expense 141,000 199,286 136,250
Printing and office supplies 49,103 42,527 49,979
State financial institutions tax 105,982 90,097 102,933
FDIC Insurance premiums 111,000 91,836 78,581
Other 568,371 486,753 519,587
Total noninterest expense 4,347,531 4,407,810 3,946,497
Income before Income Tax 2,171,444 2,273,310 1,655,720
Provision for Income Taxes 621,419 617,225 421,743
Net Income $ 1,550,025 $ 1,656,085 $ 1,233,977
Basic Earnings Per Share $ 1.00 $ 1.07 $ 0.80
Diluted Earnings Per Share $ 0.98 $ 1.05 $ 0.79
ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands except per share amounts)(Unaudited) Three Months Ended
March 31, 2015 Dec. 31, 2014 March 31, 2014
Performance Ratios:
Return on average assets 0.95% 1.04% 0.85%
Return on average equity 10.26% 11.22% 9.08%
Net interest margin 4.05% 4.01% 4.13%
Efficiency ratio 64.40% 63.82% 65.70%
Asset Quality Ratios and Data: As of or for the Three Months Ended
March 31, 2015 Dec. 31, 2014 March 31, 2014
Non accrual loans $ 2,383 $ 4,470 $ 5,237
Loans past due 90 days and still accruing 454 725 76
OREO and other non-performing assets 117 108 1,046
Total non-performing assets $ 2,954 $ 5,303 $ 6,359
Non-performing assets to total assets 0.44% 0.82% 1.06%
Net charge-offs (recoveries) quarter ending $ 319 $ 238 $ (19)
Allowance for loan loss $ 5,271 $ 5,351 $ 5,100
Non accrual loans $ 2,383 $ 4,470 $ 5,237
Allowance for loan loss to non accrual loans 221.19% 119.70% 97.38%
Allowance for loan losses to loans outstanding 1.01% 1.06% 1.17%
Book Values:
Total shareholders' equity $ 61,887 $ 60,709 $ 56,038
Less, goodwill 417 417 417
Shareholders' equity less goodwill $ 61,469 $ 60,292 $ 55,621
Common shares outstanding 1,554,921 1,554,457 1,551,922
Common shares as adjusted 1,554,921 1,554,457 1,551,922
Book value per common share $ 39.80 $ 39.05 $ 36.11
Tangible book value per common share $ 39.53 $ 38.79 $ 35.84

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