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Heartland BancCorp 1Q19 Earnings Increase 18% to $3.0 million, Year Over Year, Declares Quarterly Cash Dividend of $0.52 per Share

By GlobeNewswire,  April 16, 2019, 04:33:00 PM EDT


WHITEHALL, Ohio, April 16, 2019 (GLOBE NEWSWIRE) -- Heartland BancCorp ("the company," and "the bank") (OTCQB:HLAN), today reported that growing revenues and a stable net interest margin contributed to first quarter 2019 net income of $3.0 million, or $1.45 per diluted share.  This compares with net income of $3.1 million or $1.68 per diluted share, in the fourth quarter of 2018, and $2.5 million, or $1.52 per diluted share, in the first quarter of 2018. 

The company also announced its board of directors declared a regular quarterly cash dividend of $0.52 per share. The dividend will be payable July 10, 2019, to shareholders of record as of June 25, 2019. Heartland has paid regular cash dividends since 1993.

"Our first quarter 2019 operating results reflect the strategies we have put in place to grow our organization and expand market share in Central Ohio," stated G. Scott McComb, Chairman, President and CEO.  "Profitability in our first quarter was consistent with our record results posted in the preceding quarter.  We, again, had double digit loan and deposit growth combined with higher noninterest income."

First Quarter Financial Highlights (at or for the period ended March 31, 2019)

  • Net income was $3.0 million, or $1.45 per diluted share.
  • Net interest margin remained stable at 4.04%, compared to 4.04% in the preceding quarter.
  • Annualized return on average assets was 1.14%.
  • Annualized return on average equity was 10.31%.
  • Total assets increased 13.5% to $1.06 billion, compared to $937.6 million a year earlier.
  • Net loans increased 12.1% to $822.3 million from a year ago.
  • Total deposits increased 9.9% to $894.9 million from a year ago.
  • Tangible book value per share increased 2.9% to $57.99 per share compared to $56.33 three months earlier and grew 20.9% from $47.97 per share one year earlier.
  • Declared quarterly cash dividend of $0.52 per share, which represents a 2.56% yield based on the March 31, 2019, stock price ($81.25).

Balance Sheet Review

"We had double digit loan growth year-over-year, with the increases primarily concentrated in residential real estate, commercial real estate, and agriculture loan segments," said McComb. 

Net loans increased 12.1% to $822.3 million at March 31, 2019, compared to $733.3 million at March 31, 2018, and increased modestly compared to $816.8 million at December 31, 2018.  Owner occupied commercial real estate loans (CRE) increased 7.0% to $227.2 million at March 31, 2019, compared to a year ago and comprise 27.4% of the total loan portfolio.  Non-owner occupied CRE loans increased 15.6% to $251.5 million compared to a year ago and comprise 30.3% of the total loan portfolio.  1-4 family residential real estate loans were up 15.1% from year ago levels to $208.6 million and represent 25.1% of total loans.  Commercial loans were up 11.9% from year ago levels to $101.0 million at March 31, 2019 and comprise 12.2% of the total loan portfolio.  Home equity loans increased 6.0% from year ago levels to $30.3 million and represent 3.7% of total loans and consumer loans increased 17.1% from year ago levels to $11.4 million and represent 1.4% of the total loan portfolio.

Total deposits increased 9.9% to $894.9 million at March 31, 2019, compared to $814.2 million a year earlier and increased modestly compared to $880.4 million three months earlier.  Noninterest bearing demand deposit accounts increased 18.5% at March 31, 2019, compared to a year ago, and represented 27.6% of total deposits.  Savings, NOW and money market accounts increased 1.3% compared to a year ago and represented 35.3% of total deposits and CDs increased 13.0% when compared to a year ago and comprised 37.1% of the total deposit portfolio at March 31, 2019.

Heartland's total assets increased 13.5% to $1.06 billion at March 31, 2019, compared to $937.6 million a year earlier. Shareholders' equity increased 51.2% to $118.5 million at the end of the first quarter, compared to $78.4 million a year earlier, reflecting the capital raise during the fourth quarter of 2018.  At March 31, 2019, Heartland's tangible book value increased 20.9% to $57.99 per share compared to $47.97 per share one year earlier.

Operating Results

"Our net interest margin increased from a year ago and remained stable compared to the prior quarter reflecting increased levels of earning assets to total assets along with higher balances in noninterest demand deposits during the first quarter, in addition to higher asset yields resulting from four 25-basis point rate hikes during 2018," said McComb.  Heartland's net interest margin was 4.04% in the first quarter of 2019, compared to 4.04% in the preceding quarter and 3.85% in first quarter a year ago. 

Net interest income before the provision for loan loss increased 19.9% to $9.9 million in the first quarter of 2019, compared to $8.2 million in the first quarter a year ago, and increased nominally compared to $9.8 million in the preceding quarter. 

Total revenues (net interest income before the provision for loan losses, plus noninterest income) increased 20.4% to $11.5 million in the first quarter, compared to $9.5 million in the first quarter a year ago, and increased 1.7% from $11.3 million in the preceding quarter. 

Heartland's noninterest income increased 23.5% to $1.6 million in the first quarter, compared to $1.3 million in the first quarter a year ago, and increased 8.7% compared to $1.5 million in the preceding quarter.  The TransCounty Title Agency acquisition contributed $395,860 to noninterest income during the first quarter of 2019. 

First quarter noninterest expenses were $7.5 million, compared to $7.1 million in the preceding quarter and $6.0 million in the first quarter a year ago.  The increase was due to costs associated with the company's branch expansion, including its new corporate headquarters, as well as costs associated with the subsidiary TransCounty Title Agency.  The efficiency ratio for the first quarter of 2019 was 65.17%, compared to 62.75% for the preceding quarter and 63.36% in the first quarter of 2018.  

Credit Quality

Nonaccrual loans were $2.0 million at March 31, 2019, compared to $1.8 million three months earlier and $6.8 million at March 31, 2018.  There were $29,000 in loans past due 90 days and still accruing at March 31, 2019, compared to $97,000 at December 31, 2018, and $62,000 a year ago.

Performing restructured loans that were not included in nonaccrual loans at March 31, 2019, were $292,000, compared to $293,000 in the preceding quarter.  Borrowers who are in financial difficulty and who have been granted concessions that may include interest rate reductions, term extensions, or payment alterations are categorized as restructured loans. 

There was no other real estate owned (OREO) and other non-performing assets on the books at March 31, 2019.  Non-performing assets (NPAs), consisting of non-performing loans, OREO, and loans delinquent 90 days or more, were $2.1 million, or 0.19% of assets, at March 31, 2019, compared to $1.9 million, or 0.18% of assets, three months earlier, and $6.9 million, or 0.74% of assets, a year ago.

Heartland's first quarter provision for loan losses was $375,000, the same as in both the preceding quarter and the first quarter a year ago.  The allowance for loan losses was $7.7 million, or 0.93% of total loans at March 31, 2019, compared to $7.5 million, or 0.92% of total loans at December 31, 2018, and $6.6 million, or 0.90% of total loans a year ago.  As of March 31, 2019, the allowance for loan losses represented 377.4% of nonaccrual loans compared to 420.0% three months earlier, and 97.2% one year earlier.  Net charge-offs were $223,000 in the first quarter of 2019.  This compares to net charge-offs of $99,000 in the preceding quarter and net recoveries of $49,000 in the first quarter a year ago. 

Recent Events

On November 20, 2018, Heartland successfully completed a private placement of its common stock and generated net proceeds of approximately $28.9 million. The Company expects to use the proceeds from the capital raise for general corporate purposes, including but not limited to supporting organic growth, facilitating potential expansion opportunities, expanding products and services and debt repayment. 

About Heartland BancCorp

Heartland BancCorp is a registered Ohio bank holding company and the parent of Heartland Bank, which operates 16 full-service banking offices and TransCounty Title Agency, LLC. Heartland Bank, founded in 1911, provides full-service commercial, small business, and consumer banking services; professional financial planning 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 Heartland.Bank.

In May 2018, Heartland was ranked #37 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 12/31/17.

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.

Contacts:     G. Scott McComb, Chairman, President & CEO                                                                            

                  Heartland BancCorp  614-337-4600       

   

Heartland BancCorp  
Consolidated Balance Sheets  
   
Assets March 31, 2019   Dec. 31, 2018   March 31, 2018  
  Cash and cash equivalents $ 26,195     $ 29,922     $ 30,839    
  Interest bearing time deposits     -          -        250    
  Available-for-sale securities   148,900       140,556       118,440    
  Held-to-maturity securities, fair values of $1,551,368, $1,568,346 and $4,701,998 respectively     1,548         1,565         4,655    
                     
  Commercial    101,000       100,028       90,290    
  CRE (Owner occupied)   227,157       228,461       212,385    
  CRE (Non Owner occupied)   251,474       247,780       217,597    
  1-4 Family   208,590       208,335       181,209    
  Home Equity   30,300       27,869       28,592    
  Consumer   11,371       11,660       9,709    
  Net deferred loan costs, premiums and discounts   90       197       188    
  Allowance for loan losses   (7,700 )     (7,547 )     (6,649 )  
    Net Loans $ 822,282     $ 816,783     $ 733,320    
                     
  Premises and equipment   31,875       28,504       26,229    
  Nonmarketable equity securities   4,174       3,526       2,830    
  Interest receivable   5,028       4,169       3,695    
  Goodwill   1,206       1,069       417    
  Intangible Assets   420         446         -     
  Deferred income taxes   1,433       1,433       805    
  Life insurance assets   16,664       16,555       13,054    
  Lease - Right of Use Asset   2,690         -          -     
  Other    1,809       2,550       3,048    
    Total assets $ 1,064,224     $ 1,047,079     $ 937,582    
                     
Liabilities and Shareholders' Equity                  
  Liabilities                  
  Deposits                  
  Demand $ 247,302     $ 232,682     $ 208,713    
  Saving, NOW and money market   315,867       321,497       311,966    
  Time   331,691       326,261       293,498    
    Total deposits   894,861       880,441       814,177    
  Short-term borrowings   20,436       34,768       24,471    
  Long-term debt   20,460       10,460       15,460    
  Lease Liability   2,690         -          -     
  Interest payable and other liabilities   7,250       6,382       5,090    
    Total liabilities   945,697       932,051       859,199    
                     
Shareholders' Equity                  
  Common stock, without par value; authorized 5,000,000 shares; 2,015,976, 2,015,276 and 1,625,349 shares issued, respectively   55,297       55,080       25,298    
  Retained earnings   63,774       61,855       55,421    
  Accumulated other comprehensive income (expense)   (543 )     (1,907 )     (2,335 )  
    Total shareholders' equity   118,528       115,028       78,384    
    Total liabilities and shareholders' equity $ 1,064,224     $ 1,047,079     $ 937,582    
    Book value per share $ 58.79     $ 57.08     $ 48.23    
                     

 

Heartland BancCorp  
Consolidated Statements of Income  
                       
      Three Months Ended,    
Interest Income March 31, 2019   Dec. 31, 2018   March 31, 2018    
  Loans $   10,850    $    10,838   $   8,738      
  Securities     -       -       -      
  Taxable      741       666       434      
  Tax-exempt     432       404       418      
  Other     121       148       84      
    Total interest income     12,144       12,056       9,674      
Interest Expense                    
  Deposits     2,113       2,009       1,303      
  Borrowings     177       252       153      
    Total interest expense     2,290       2,261       1,456      
Net Interest Income     9,854       9,795       8,218      
Provision for Loan Losses     375       375       375      
Net Interest Income After Provision for Loan Losses     9,479       9,420       7,843      
Noninterest income                    
  Service charges     503       544       513      
  Net Gains and commissions on loan sales and servicing   398       204       547      
  Title Insurance Income     179       195       -      
  Net realized gains on sales of available-for-sale securities   -       -       (66 )    
  Net realized gain/(loss) on sales of foreclosed assets     -       -       10      
  Increase in cash value of life insurance     109       116       84      
  Other     418       420       213      
    Total noninterest income     1,607       1,479       1,301      
Noninterest Expense                    
  Salaries and employee benefits     4,623       4,256       3,452      
  Net occupancy and equipment expense     962       870       824      
  Data processing fees     366       340       339      
  Professional fees     224       177       165      
  Marketing expense     240       228       212      
  Printing and office supplies     75       83       73      
  State financial institution tax     205       152       156      
  FDIC Insurance premiums     27       102       122      
  Other     748       866       729      
    Total noninterest expense     7,469       7,074       6,073      
Income before Income Tax     3,617       3,825       3,071      
Provision for Income Taxes     650       711       548      
Net Income $   2,968   $   3,114   $   2,523      
Basic Earnings Per Share $   1.47   $   1.71   $   1.56      
Diluted Earnings Per Share $   1.45   $   1.68   $   1.52      
                       

 

               
ADDITIONAL FINANCIAL INFORMATION              
(Dollars in thousands except per share amounts)(Unaudited)   Three Months Ended  
    March 31, 2019   Dec. 31, 2018   March 31, 2018  
Performance Ratios:              
Return on average assets     1.14 %     1.20 %     1.11 %  
Return on average equity      10.31 %     12.66 %     13.04 %  
Return on average tangible common equity      10.45 %     12.86 %     13.11 %  
Net interest margin     4.04 %     4.04 %     3.85 %  
Efficiency ratio     65.17 %     62.75 %     63.36 %  
               
Asset Quality Ratios and Data:   As of or for the Three Months Ended  
    March 31, 2019   Dec. 31, 2018   March 31, 2018  
Nonaccrual loans   $   2,040     $   1,797     $   6,840    
Loans past due 90 days and still accruing       29         97         62    
Non-performing investment securities       -          -          -     
OREO and other non-performing assets       -          -          -     
Total non-performing assets   $   2,069     $   1,894     $   6,902    
               
Non-performing assets to total assets     0.19 %     0.18 %     0.74 %  
Net charge-offs quarter ending    $   223     $   99     $   (49 )  
               
Allowance for loan loss   $   7,700     $   7,547     $   6,649    
Nonaccrual loans   $   2,040     $   1,797     $   6,840    
Allowance for loan loss to non accrual loans     377.43 %     419.99 %     97.21 %  
Allowance for loan losses to loans outstanding     0.93 %     0.92 %     0.90 %  
               
Restructured loans included in non-accrual   $   289     $   324     $   428    
Performing restructured loans (RC-C)   $   292     $   293     $   1,663    
               
Book Values:              
Total shareholders' equity   $   118,528     $   115,028     $   78,384    
Less, goodwill and intangible assets       1,626         1,515         417    
Shareholders' equity less goodwill and intangible assets   $   116,902     $   113,513     $   77,966    
Common shares outstanding       2,015,976         2,015,276         1,625,349    
Less treasury shares       -          -          -     
Common shares as adjusted       2,015,976         2,015,276         1,625,349    
Book value per common share   $    58.79     $    57.08     $    48.23    
               
Tangible book value per common share   $    57.99     $    56.33     $    47.97    
               

 

Source: Heartland BancCorp

This article appears in: News Headlines

Referenced Stocks: HLAN










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