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Heartland BancCorp Earnings Increase 15.7% to $1.8 Million, or $1.15 per Diluted Share, in 2Q15, Declares Quarterly Cash Dividend of $0.3724 per Share

20:00 EDT 20 Jul 2015 | Globe Newswire

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

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