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 | ||