GAHANNA, Ohio, July 21, 2015 (GLOBE NEWSWIRE) -- Heartland BancCorp ("the company," and "the bank") (OTCQB:HLAN), today reported earnings increased 15.7% to $1.8 million, or $1.15 per diluted share in the second quarter of 2015 compared to $1.6 million, or $1.01 per diluted share, in the second quarter a year ago. For the first six months of the year, Heartland's earnings increased 20.1% to $3.4 million, or $2.13 per diluted share, compared to $2.8 million, or $1.79 per diluted share, in the first six 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 October 10, 2015, to shareholders of record as of September 25, 2015.
"Central Ohio's economy is growing nicely and our bank and brand are uniquely positioned to capitalize on that synergy, as demonstrated by our strong financial performance in the first half of 2015," said G. Scott McComb, Chairman, President and CEO. "We launched the Agribusiness Lending Group earlier this year, with a highly experienced team of Ag relationship managers, and we are confident this field will be very productive for us."
Second Quarter Financial Highlights (at or for the period ended June 30, 2015)
- Net income was $1.8 million, up from $1.6 million in both the preceding quarter and second quarter a year ago.
- Net interest margin improved 15 basis points to 4.08% compared to 3.93% in the second quarter a year ago.
- Annualized return on average assets was 1.10%.
- Annualized return on average equity was 11.93%.
- Total deposits increased 12.1% to $591.3 million from a year ago.
- Net loans increased 15.6% to $526.4 million from a year ago.
- Non-performing assets decreased 43.9% to $3.6 million, or 0.52% of total assets, at June 30, 2015, compared to a year ago.
- Tangible book value per share increased 7.2% to $39.60 per share compared to $36.94 per share one year earlier.
- Declared a quarterly cash dividend of $0.3724 per share, which represents a 3.1% yield based on the June 30, 2015 stock price.
Balance Sheet Review
"Loan production was robust during the quarter, particularly in the Commercial Real Estate, C & I, and HELOC portfolios," said McComb. "As a result, net loans increased 15.6% to $526.4 million at quarter end, compared to $455.2 million a year earlier. Additionally, we continue to be blessed with opportunities to meet new business clients and have significant potential for current and future growth in relationships in our marketplace."
Total deposits increased 12.1% to $591.3 million at June 30, 2015, compared to $527.6 million a year earlier. Demand accounts represented 18.7%, while savings, NOW and money market accounts represented 36.3%, and CDs comprised 44.9% of the total deposit portfolio, at June 30, 2015.
Total assets increased 11.1% to $683.8 million at June 30, 2015, compared to $615.3 million a year earlier. Shareholders' equity increased 7.8% to $62.2 million at June 30, 2015, compared to $57.7 million one year ago. At quarter end, Heartland's tangible book value increased 7.2% to $39.60 per share compared to $36.94 per share one year earlier.
Operating Results
"Heartland's solid second quarter net interest margin was a result of our improved earning asset mix, modestly higher yields on securities and stable cost of deposits," said McComb. Heartland's net interest margin improved three basis points to 4.08% in the second quarter of 2015, compared to 4.05% in the preceding quarter and increased 15 basis points compared to 3.93% in the second quarter a year ago. In the first six months of the year, Heartland's net interest margin was 4.06%, an eight 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 11.4% to $7.1 million in the second quarter, compared to $6.4 million in the second quarter a year ago. Year-to-date, total revenues increased 11.8% to $13.9 million, compared to $12.4 million in the first six months of 2014. Net interest income before the provision for loan loss increased 16.8% to $6.4 million in the second quarter of 2015, compared to $5.5 million in the second quarter a year ago. In the first six months of 2015, net interest income before the provision for loan losses increased 15.2% to $12.5 million, compared to $10.8 million in the first six months of 2014.
Heartland's noninterest income was $732,000 in the second quarter of 2015, compared to $923,000 in the second quarter a year ago. The quarter-over-quarter decline was primarily due to a net gain on available-for-sale securities of $137,000 in the second quarter a year ago. Year-to-date, noninterest income was $1.4 million compared to $1.6 million in the same period a year ago.
In the second quarter of 2015, noninterest expenses were $4.3 million, which were unchanged compared to the preceding quarter, and up from $3.9 million a year ago. In the first six months of the year, noninterest expenses were $8.7 million compared to $7.8 million in the first six 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
"Credit quality has improved dramatically compared to a year ago. Nonaccrual loans, however, were up slightly in the current quarter primarily due to one commercial real estate lending relationship," said McComb. Heartland's nonaccrual loans were $2.6 million at June 30, 2015, which was a slight increase compared to $2.4 million three months earlier, and a decrease of 53.2% compared to $5.5 million a year earlier. Other real estate owned (OREO) and other non-performing assets were almost unchanged at $127,000 at June 30, 2015, compared to $117,000 three months earlier and decreased 83.6% compared to $772,000 a year earlier.
Nonperforming assets (NPAs), consisting of nonperforming loans, OREO, and loans delinquent 90 days or more, were $3.6 million at June 30, 2015, compared to $3.0 million three months earlier, and decreased 43.9% when compared to $6.4 million a year ago.
Heartland's second quarter provision for loan losses was $240,000, the same as in the preceding quarter. This compares to $350,000 in the second quarter a year ago. Year-to-date, the provision for loan losses totaled $480,000 compared to $755,000 in the first six months of 2014. As of June 30, 2015, the allowance for loan losses represented 214.1% of nonaccrual loans compared to 221.2% three months earlier, and 94.3% one year earlier.
Net charge-offs were $13,000 in the second quarter compared to $319,000 in the preceding quarter, and $280,000 in the second quarter a year ago. The allowance for loan losses was $5.5 million, or 1.02% of total loans at June 30, 2015, compared to $5.3 million, or 1.01% of total loans at March 31, 2015, and $5.2 million, or 1.12% 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.
| Heartland BancCorp | |||
| Consolidated Balance Sheets | |||
| Assets | June 30, 2015 | March 31, 2015 | June 30, 2014 |
| Cash and due from banks | $ 18,276,394 | $ 31,078,674 | $ 25,046,465 |
| Federal funds sold | -- | -- | 99,000 |
| Cash and cash equivalents | 18,276,394 | 31,078,674 | 25,145,465 |
| Available-for-sale securities | 102,750,431 | 100,811,843 | 107,813,882 |
| Held-to-maturity securities, fair value $6,912,734 and $7,222,168 at June 30, 2015 and 2014, respectively and $6,922,387 at March 31, 2015 | 6,512,404 | 6,453,351 | 6,598,997 |
| Loans, net of allowance for loan losses of $5,498,142 and $5,169,910 at June 30, 2015 and 2014, respectively and $5,271,174 at March 31, 2015 | 526,378,261 | 515,645,398 | 455,166,994 |
| Premises and equipment | 13,052,320 | 12,880,648 | 12,234,256 |
| Nonmarketable equity securities | 2,658,239 | 2,655,439 | 1,941,839 |
| Foreclosed assets held for sale | 127,457 | 117,457 | 772,398 |
| Interest receivable | 1,835,510 | 2,359,955 | 1,656,804 |
| Goodwill | 417,353 | 417,353 | 417,353 |
| Deferred income taxes | 1,881,258 | 1,881,258 | 1,731,311 |
| Life insurance assets | 9,270,862 | 1,215,898 | 1,140,898 |
| Other | 686,528 | 92,304 | 725,442 |
| Total assets | $ 683,847,017 | $ 675,609,578 | $ 615,345,639 |
| Liabilities and Shareholders' Equity | |||
| Liabilities | |||
| Deposits | |||
| Demand | $ 110,780,365 | $ 109,641,986 | $ 93,737,565 |
| Saving, NOW and money market | 214,830,174 | 220,201,722 | 200,406,842 |
| Time | 265,725,425 | 256,227,173 | 233,445,342 |
| Total deposits | 591,335,964 | 586,070,881 | 527,589,749 |
| Short-term borrowings | 26,121,461 | 22,882,863 | 25,285,661 |
| Interest payable and other liabilities | 4,184,678 | 4,769,023 | 4,783,030 |
| Total liabilities | 621,642,103 | 613,722,767 | 557,658,440 |
| Shareholders' Equity | |||
| Common stock, without par value; authorized 5,000,000 shares; issued 2015 -- 1,560,121, 2014 -- 1,551,922 shares and March 2015 - 1,554,921 shares | 23,646,662 | 23,577,337 | 23,460,714 |
| Retained earnings | 38,403,912 | 37,159,060 | 33,998,681 |
| Accumulated other comprehensive income (expense) | 154,340 | 1,150,414 | 291,074 |
| Treasury stock at Cost, Common; 2014- 1,665 shares | -- | -- | (63,270) |
| Total shareholders' equity | 62,204,914 | 61,886,811 | 57,687,199 |
| Total liabilities and shareholders' equity | $ 683,847,017 | $ 675,609,578 | $ 615,345,639 |
| Book value per share | $ 39.87 | $ 39.80 | $ 37.21 |
| Heartland BancCorp | |||||
| Consolidated Statements of Income | |||||
| Three Months Ended | Six Months Ended | ||||
| Interest Income | June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 |
| Loans | $ 6,492,460 | $ 6,140,166 | $ 5,432,679 | $ 12,632,626 | $ 10,685,588 |
| Securities | |||||
| Taxable | 313,128 | 303,519 | 309,243 | 616,647 | 648,974 |
| Tax-exempt | 386,843 | 385,458 | 405,647 | 772,301 | 836,194 |
| Other | 11,301 | 8,293 | 13,105 | 19,594 | 22,228 |
| Total interest income | 7,203,732 | 6,837,436 | 6,160,674 | 14,041,168 | 12,192,984 |
| Interest Expense | |||||
| Deposits | 805,249 | 753,517 | 683,201 | 1,558,766 | 1,357,718 |
| Borrowings | 3,050 | 3,677 | 3,340 | 6,727 | 8,118 |
| Total interest expense | 808,299 | 757,194 | 686,541 | 1,565,493 | 1,365,836 |
| Net Interest Income | 6,395,433 | 6,080,242 | 5,474,133 | 12,475,675 | 10,827,148 |
| Provision for Loan Losses | 240,000 | 240,000 | 350,000 | 480,000 | 755,000 |
| Net Interest Income After Provision for Loan Losses | 6,155,433 | 5,840,242 | 5,124,133 | 11,995,675 | 10,072,148 |
| Noninterest income | |||||
| Service charges | 479,553 | 467,519 | 517,989 | 947,072 | 999,212 |
| Net Gains and commissions on loan sales | 43,802 | 39,526 | 36,562 | 83,328 | 52,906 |
| Net realized gains on available-for-sale securities | 8,500 | 8,434 | 136,701 | 16,934 | 136,701 |
| Net realized gain/(loss) on sales of foreclosed assets | -- | 58 | 77,031 | 58 | 102,800 |
| Other | 199,914 | 163,196 | 155,034 | 363,110 | 300,768 |
| Total noninterest income | 731,769 | 678,733 | 923,317 | 1,410,502 | 1,592,387 |
| Noninterest Expense | |||||
| Salaries and employee benefits | 2,542,268 | 2,487,769 | 2,139,971 | 5,030,037 | 4,371,295 |
| Net occupancy and equipment expense | 466,576 | 441,724 | 422,785 | 908,300 | 869,244 |
| Data processing fees | 274,407 | 272,083 | 272,884 | 546,490 | 514,740 |
| Professional fees | 122,229 | 170,499 | 228,123 | 292,728 | 382,519 |
| Marketing expense | 135,000 | 141,000 | 131,250 | 276,000 | 267,500 |
| Printing and office supplies | 44,183 | 49,103 | 34,679 | 93,286 | 84,658 |
| State franchise taxes | 105,981 | 105,982 | 90,097 | 211,963 | 193,030 |
| FDIC Insurance premiums | 96,000 | 111,000 | 79,836 | 207,000 | 158,417 |
| Other | 534,157 | 568,371 | 458,158 | 1,102,528 | 977,745 |
| Total noninterest expense | 4,320,801 | 4,347,531 | 3,857,783 | 8,668,332 | 7,819,148 |
| Income before Income Tax | 2,566,401 | 2,171,444 | 2,189,667 | 4,737,845 | 3,845,387 |
| Provision for Income Taxes | 740,559 | 621,419 | 611,867 | 1,361,978 | 1,033,610 |
| Net Income | $ 1,825,842 | $ 1,550,025 | $ 1,577,800 | $ 3,375,867 | $ 2,811,777 |
| Basic Earnings Per Share | $ 1.17 | $ 1.00 | $ 1.02 | $ 2.17 | $ 1.81 |
| Diluted Earnings Per Share | $ 1.15 | $ 0.98 | $ 1.01 | $ 2.13 | $ 1.79 |
| ADDITIONAL FINANCIAL INFORMATION | |||||
| (Dollars in thousands except per share amounts)(Unaudited) | Three Months Ended | Six Months Ended | |||
| June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | |
| Performance Ratios: | |||||
| Return on average assets | 1.10% | 0.95% | 1.05% | 1.01% | 0.94% |
| Return on average equity | 11.93% | 10.26% | 11.25% | 10.96% | 10.04% |
| Net interest margin | 4.13% | 4.05% | 3.99% | 4.06% | 3.98% |
| Efficiency ratio | 60.70% | 64.40% | 61.62% | 62.50% | 63.66% |
| Asset Quality Ratios and Data: | As of or for the Three Months Ended | ||||
| June 30, 2015 | March 31, 2015 | June 30, 2014 | |||
| Non accrual loans | $ 2,567 | $ 2,383 | $ 5,485 | ||
| Loans past due 90 days and still accruing | 872 | 454 | 100 | ||
| Non-performing investment securities | -- | -- | -- | ||
| OREO and other non-performing assets | 127 | 117 | 772 | ||
| Total non-performing assets | $ 3,566 | $ 2,954 | $ 6,357 | ||
| Non-performing assets to total assets | 0.52% | 0.44% | 1.03% | ||
| Net charge-offs quarter ending | $ 13 | $ 319 | $ 280 | ||
| Allowance for loan loss | $ 5,498 | $ 5,271 | $ 5,170 | ||
| Non accrual loans | $ 2,568 | $ 2,383 | $ 5,485 | ||
| Allowance for loan loss to non accrual loans | 214.10% | 221.19% | 94.26% | ||
| Allowance for loan losses to loans outstanding | 1.02% | 1.01% | 1.12% | ||
| Book Values: | |||||
| Total shareholders' equity | $ 62,205 | $ 61,887 | $ 57,687 | ||
| Less, goodwill | 417 | 417 | 417 | ||
| Shareholders' equity less goodwill | $ 61,788 | $ 61,469 | $ 57,270 | ||
| Common shares outstanding | 1,560,121 | 1,554,921 | 1,551,922 | ||
| Less treasury shares | -- | -- | 1,665 | ||
| Common shares as adjusted | 1,560,121 | 1,554,921 | 1,550,257 | ||
| Book value per common share | $ 39.87 | $ 39.80 | $ 37.21 | ||
| Tangible book value per common share | $ 39.60 | $ 39.53 | $ 36.94 | ||