Heartland BancCorp Earns $4.2 Million, or $2.06 Per Diluted Share, in the Second Quarter of 2021; Grows Loans (ex. PPP) by $18.5 Million, or 1.8% in the Second Quarter of 2021; Declares Quarterly Cash Dividend of $0.627 per Share
Rhea-AI Summary
Heartland BancCorp (OTCQX: HLAN) reported a 37.8% increase in net income for Q2 2021, totaling $4.2 million or $2.06 per diluted share, compared to $3.0 million in the same quarter last year. The company declared a quarterly cash dividend of $0.627 per share, payable on October 10, 2021. In the first half of 2021, net income rose 47.9% to $8.8 million. Total revenues increased 4.3% year-over-year to $15.4 million. Noninterest income grew 7.9% to $3.2 million. Despite challenges in net interest margin, asset quality remains strong with decreased non-performing assets.
Positive
- Net income increased 37.8% to $4.2 million in Q2 2021.
- Declared a quarterly cash dividend of $0.627 per share.
- Noninterest income grew 7.9% to $3.2 million.
- Total revenues increased 4.3% to $15.4 million.
Negative
- Net interest margin decreased from 3.81% in Q2 2020 to 3.38% in Q2 2021.
- Commercial loans decreased 12.1% from last year.
AI-generated analysis. How Rhea-AI works. Not financial advice.
WHITEHALL, Ohio, July 26, 2021 (GLOBE NEWSWIRE) -- Heartland BancCorp (“Heartland” and “the company”) (OTCQX: HLAN) today reported net income increased
The company announced its board of directors declared a quarterly cash dividend of
“We delivered solid earnings for the second quarter and first half of 2021, fueled by net interest income generation and controllable operating expenses,” stated G. Scott McComb, Chairman, President and Chief Executive Officer. “Our franchise is growing as we continue to welcome new clients to the Bank both from organic growth and from the integration of our acquisition of Victory Community Bank last year. With the strength of the economy in our greater Columbus and Northern Kentucky markets, and the team we have in place, I remain hopeful about our growth prospects for the remainder of the year.”
Second Quarter Financial Highlights (at or for the period ended June 30, 2021)
- Net income increased
37.8% to$4.2 million , compared to$3.0 million in the second quarter a year ago. - Earnings per diluted share were
$2.06 , compared to$1.52 in the second quarter a year ago. - Provision for loan losses was
$480,000 , compared to$2.6 million in the second quarter a year ago. - Net interest margin was
3.38% , compared to3.36% in the preceding quarter, and3.81% in the second quarter a year ago. - Total revenues (net interest income plus noninterest income) increased
4.3% to$15.4 million , compared to$14.8 million in the second quarter a year ago. - Noninterest income increased
7.9% to$3.2 million , compared to$2.9 million in the second quarter a year ago. - Annualized return on average assets was
1.09% , compared to0.91% in the second quarter a year ago. - Annualized return on average equity was
11.63% , compared to9.38% in the second quarter a year ago. - Excluding PPP loans, net loans increased
$18.5 million or1.8% on a linked quarter basis to$1.03 billion and declined$5.4 million or0.5% compared to a year earlier. - COVID-19 related loan deferrals declined significantly to
1.7% of total loans (excluding PPP) at the end of the second quarter of 2021 from3.7% of total loans three months earlier and14.3% a year ago. - Noninterest bearing demand deposits increased
12.0% to$441.8 million , compared to$394.5 million a year ago. - Total deposits increased modestly to
$1.30 billion , compared to$1.28 billion a year ago. - Tangible book value per share increased to
$66.65 per share, compared to$60.19 per share a year ago. - Declared a quarterly cash dividend of
$0.627 per share.
Paycheck Protection Program
During the second and third quarters of 2020, Heartland originated 1,075 Paycheck Protection Program (“PPP”) loans, for a total of
At the end of December 2020, additional COVID-19 stimulus relief was signed into law that allowed for an additional round of PPP lending. During the first half of 2021, Heartland originated 770 PPP loans, or
Balance Sheet Review
“We are pleased that the team achieved a modest gain in loan portfolio growth this quarter ex-PPP. We remain cautiously optimistic that this trend continues for the second half of 2021,” said Ben Babcanec, SVP and Chief Operating Officer. Excluding PPP loans, net loans increased
Deposit growth for the year was reflective of federal programs such as the PPP and stimulus checks, which boosted demand deposit balances. Total deposits increased modestly to
Total assets were relatively flat at
Operating Results
Heartland’s net interest margin was
Total revenues (net interest income before the provision for loan losses, plus noninterest income) increased
Heartland’s net interest income, before the provision for loan losses, increased
“Noninterest income had solid growth year-over-year, with higher interchange fees from increased debit and credit card transaction volumes, along with increases in title insurance income, income from financial planning services through Heartland Planning Associates, and higher gains on sales of loans, that was partly offset by lower loan servicing income due to amortization of MSRs resulting from elevated payoffs,” said Almendinger. Noninterest income increased
Second quarter noninterest expenses totaled
Heartland continues to focus on investments in new products, talent and technology. The efficiency ratio for the second quarter of 2021 was
Credit Quality
“Asset quality remained strong, with non-performing assets down
At June 30, 2021, the allowance for loan losses (ALLL) was
Nonaccrual loans decreased
Heartland’s performing restructured loans, that were not included in nonaccrual loans, decreased to
There was
Northwest Florida Expansion
On July 12, 2021, Heartland announced plans for a Northwest Florida Region Loan and Deposit Production Office led by Ashley Vannoy, Senior Vice President. This new market in Destin, Florida, will allow for a focus on strategic growth for the Bank. Vannoy has a solid background as a financial services professional with 30 years of success in strategic planning, program development, marketing management and direct client engagement. With the majority of her experience in northern Florida, Vannoy’s network and professional reach contributes to her anticipated success for Heartland in this new market area.
About Heartland BancCorp
Heartland BancCorp is a registered Ohio bank holding company and the parent of Heartland Bank, which operates 18 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 (OTCQX) under the symbol HLAN. Learn more about Heartland Bank at Heartland.Bank.
In May of 2021, Heartland was ranked #82 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity as of December 31, 2020.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about (i) the benefits of a merger between Heartland Bank and Victory Community Bank, including future financial and operating results, cost savings enhancements to revenue and accretion to reported earnings that may be realized from the merger; (ii) Heartland’s plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts; and (iii) other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,” “projects,” or words of similar meaning generally intended to identify forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of Heartland’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Heartland. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements because of the following factors, among others: (1) the assumptions and estimates used by Heartland’s management include both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments, and thus, may not be realized; (2) legislative or regulatory changes, including changes in accounting standards, may adversely affect the businesses in which Heartland is engaged; (3) changes in the interest rate environment may adversely affect net interest income; (4) results may be adversely affected by continued diversification of assets and adverse changes to credit quality; (5) competition from other financial services companies in Heartland’s markets could adversely affect operations; (6) the impact of the coronavirus (COVID-19) pandemic on the employees and customers of Heartland, as well as the resulting effect on the business, financial condition and results of operations on Heartland; and (7) the current economic slowdown could adversely affect credit quality and loan originations.
Heartland cautions that the foregoing list of factors is not exclusive. All subsequent written and oral forward-looking statements are expressly qualified in their entirety by the cautionary statements above. Heartland does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.
| Contact: | G. Scott McComb, Chairman, President & CEO |
| Heartland BancCorp 614-337-4600 |
| Heartland BancCorp | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||
| Assets | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | |||||||||
| Cash and cash equivalents | $ | 126,967 | $ | 197,115 | $ | 89,617 | ||||||
| Interest bearing time deposits | 281 | 279 | 274 | |||||||||
| Available-for-sale securities | 159,683 | 151,971 | 151,323 | |||||||||
| Held-to-maturity securities, fair values of, | 202 | 202 | 741 | |||||||||
| Loans held for sale | 1,221 | 1,025 | 19,766 | |||||||||
| Commercial | 219,421 | 237,418 | 249,503 | |||||||||
| CRE (Owner occupied) | 275,727 | 245,092 | 250,083 | |||||||||
| CRE (Non Owner occupied) | 292,955 | 300,923 | 276,496 | |||||||||
| 1-4 Family | 314,630 | 318,068 | 349,974 | |||||||||
| Home Equity | 35,527 | 36,550 | 38,853 | |||||||||
| Consumer | 9,995 | 10,142 | 10,630 | |||||||||
| Allowance for loan losses | (13,867 | ) | (14,649 | ) | (11,125 | ) | ||||||
| Net Loans | 1,134,390 | 1,133,545 | 1,164,415 | |||||||||
| Premises and equipment | 29,937 | 30,264 | 30,583 | |||||||||
| Nonmarketable equity securities | 6,024 | 6,024 | 5,601 | |||||||||
| Mortgage serving rights, net | 2,665 | 2,702 | 2,303 | |||||||||
| Foreclosed assets held for sale | 5 | 5 | 316 | |||||||||
| Goodwill | 12,388 | 12,388 | 12,012 | |||||||||
| Intangible Assets | 1,113 | 1,185 | 1,406 | |||||||||
| Deferred income taxes | 929 | 955 | 600 | |||||||||
| Life insurance assets | 17,919 | 17,567 | 17,264 | |||||||||
| Accrued interest recievable and other assets | 15,456 | 15,688 | 13,892 | |||||||||
| Total assets | $ | 1,509,179 | $ | 1,570,915 | $ | 1,510,114 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Liabilities | ||||||||||||
| Deposits | ||||||||||||
| Demand | $ | 441,836 | $ | 447,646 | $ | 394,488 | ||||||
| Saving, NOW and money market | 582,782 | 602,181 | 464,807 | |||||||||
| Time | 274,336 | 307,525 | 419,498 | |||||||||
| Total deposits | 1,298,954 | 1,357,352 | 1,278,793 | |||||||||
| Repurchase agreements | 9,754 | 9,866 | 10,010 | |||||||||
| FHLB Advances | 17,000 | 24,290 | 49,018 | |||||||||
| Subordinated debt | 24,630 | 24,620 | 24,750 | |||||||||
| Interest payable and other liabilities | 12,312 | 12,554 | 14,216 | |||||||||
| Total liabilities | 1,362,650 | 1,428,682 | 1,376,787 | |||||||||
| Shareholders' Equity | ||||||||||||
| Common stock, without par value; authorized 5,000,000 shares; 2,086,512, 2,083,487 and 2,082,657 shares issued, respectively | 60,917 | 60,529 | 59,879 | |||||||||
| Retained earnings | 87,370 | 84,435 | 74,524 | |||||||||
| Accumulated other comprehensive income (expense) | 3,237 | 2,262 | 3,917 | |||||||||
| Treasury stock at Cost, Common; 90,612, 90,612 and 90,612 shares held, respectively | (4,994 | ) | (4,994 | ) | (4,994 | ) | ||||||
| Total shareholders' equity | 146,529 | 142,233 | 133,326 | |||||||||
| Total liabilities and shareholders' equity | $ | 1,509,179 | $ | 1,570,915 | $ | 1,510,114 | ||||||
| Book value per share | $ | 73.42 | $ | 71.37 | $ | 66.93 | ||||||
| Heartland BancCorp | |||||||||||||||
| Consolidated Statements of Income | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| Interest Income | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||||||||||
| Loans | $ | 12,484 | $ | 12,746 | $ | 13,467 | $ | 25,230 | $ | 25,278 | |||||
| Securities | |||||||||||||||
| Taxable | 437 | 324 | 429 | 761 | 929 | ||||||||||
| Tax-exempt | 580 | 601 | 629 | 1,181 | 1,121 | ||||||||||
| Other | 40 | 48 | 28 | 88 | 75 | ||||||||||
| Total interest income | 13,541 | 13,719 | 14,553 | 27,260 | 27,403 | ||||||||||
| Interest Expense | |||||||||||||||
| Deposits | 886 | 1,130 | 2,225 | 2,016 | 4,680 | ||||||||||
| Borrowings | 423 | 512 | 495 | 935 | 704 | ||||||||||
| Total interest expense | 1,309 | 1,642 | 2,720 | 2,951 | 5,384 | ||||||||||
| Net Interest Income | 12,232 | 12,077 | 11,833 | 24,309 | 22,019 | ||||||||||
| Provision for Loan Losses | 480 | 480 | 2,550 | 960 | 3,050 | ||||||||||
| Net Interest Income After Provision for Loan Losses | 11,752 | 11,597 | 9,283 | 23,349 | 18,969 | ||||||||||
| Noninterest income | |||||||||||||||
| Service charges | 692 | 573 | 491 | 1,265 | 1,010 | ||||||||||
| Gains on sale of loans and originated MSR | 805 | 1,550 | 1,099 | 2,355 | 1,981 | ||||||||||
| Loan servicing fees, net | 223 | 205 | 211 | 428 | 517 | ||||||||||
| Title insurance income | 382 | 318 | 307 | 700 | 568 | ||||||||||
| Net realized gains on sales of available-for-sale securities | - | 223 | - | 223 | - | ||||||||||
| Increase in cash value of life insurance | 99 | 99 | 102 | 198 | 207 | ||||||||||
| Other | 967 | 732 | 726 | 1,699 | 1,260 | ||||||||||
| Total noninterest income | 3,168 | 3,700 | 2,936 | 6,868 | 5,543 | ||||||||||
| Noninterest Expense | |||||||||||||||
| Salaries and employee benefits | 5,550 | 5,204 | 3,647 | 10,754 | 9,095 | ||||||||||
| Net occupancy and equipment expense | 1,496 | 1,330 | 1,226 | 2,826 | 2,309 | ||||||||||
| Data processing fees | 497 | 448 | 538 | 945 | 968 | ||||||||||
| Professional fees | 263 | 378 | 1,103 | 641 | 1,345 | ||||||||||
| Marketing expense | 279 | 276 | 461 | 555 | 693 | ||||||||||
| Printing and office supplies | 75 | 92 | 91 | 167 | 183 | ||||||||||
| State financial institution tax | 309 | 315 | 256 | 624 | 512 | ||||||||||
| FDIC insurance premiums | 85 | 128 | 92 | 213 | 95 | ||||||||||
| Other | 1,235 | 1,443 | 1,138 | 2,678 | 2,082 | ||||||||||
| Total noninterest expense | 9,789 | 9,614 | 8,552 | 19,403 | 17,282 | ||||||||||
| Income before Income Tax | 5,131 | 5,683 | 3,667 | 10,814 | 7,230 | ||||||||||
| Provision for Income Taxes | 942 | 1,059 | 626 | 2,001 | 1,270 | ||||||||||
| Net Income | $ | 4,189 | $ | 4,624 | $ | 3,041 | $ | 8,813 | $ | 5,960 | |||||
| Basic Earnings Per Share | $ | 2.10 | $ | 2.32 | $ | 1.52 | $ | 4.42 | $ | 2.97 | |||||
| Diluted Earnings Per Share | $ | 2.06 | $ | 2.29 | $ | 1.52 | $ | 4.35 | $ | 2.95 | |||||
| ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||||||
| (Dollars in thousands except per share amounts)(Unaudited) | Three Months Ended | Six Months Ended | ||||||||||||||||
| Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||||||||||||||
| Performance Ratios: | ||||||||||||||||||
| Return on average assets | 1.09 | % | 1.20 | % | 0.91 | % | 1.14 | % | 0.94 | % | ||||||||
| Return on average equity | 11.63 | % | 13.25 | % | 9.38 | % | 12.30 | % | 9.20 | % | ||||||||
| Return on average tangible common equity | 12.84 | % | 14.66 | % | 9.97 | % | 13.59 | % | 9.64 | % | ||||||||
| Net interest margin | 3.38 | % | 3.36 | % | 3.81 | % | 3.36 | % | 3.74 | % | ||||||||
| Efficiency ratio | 63.57 | % | 61.81 | % | 57.91 | % | 62.69 | % | 62.70 | % | ||||||||
| Asset Quality Ratios and Data: | As of or for the Three Months Ended | |||||||||||||||||
| Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | ||||||||||||||||
| Nonaccrual loans | $ | 2,841 | $ | 4,514 | $ | 3,686 | ||||||||||||
| Loans past due 90 days and still accruing | 359 | 18 | - | |||||||||||||||
| Non-performing investment securities | - | - | - | |||||||||||||||
| OREO and other non-performing assets | 5 | 5 | 316 | |||||||||||||||
| Total non-performing assets | $ | 3,205 | $ | 4,537 | $ | 4,002 | ||||||||||||
| Non-performing assets to total assets | 0.21 | % | 0.29 | % | 0.27 | % | ||||||||||||
| Net charge-offs quarter ending | $ | 1,263 | $ | (22 | ) | $ | 682 | |||||||||||
| Allowance for loan loss | $ | 13,867 | $ | 14,649 | $ | 11,125 | ||||||||||||
| Nonaccrual loans | $ | 2,841 | $ | 4,514 | $ | 3,686 | ||||||||||||
| Allowance for loan loss to non accrual loans | 488.10 | % | 324.52 | % | 301.82 | % | ||||||||||||
| Allowance for loan losses to loans outstanding | 1.21 | % | 1.28 | % | 0.95 | % | ||||||||||||
| Restructured loans included in non-accrual | $ | 1,093 | $ | 2,405 | $ | 285 | ||||||||||||
| Performing restructured loans (RC-C) | $ | 621 | $ | 632 | $ | 338 | ||||||||||||
| Book Values: | ||||||||||||||||||
| Total shareholders' equity | $ | 146,529 | $ | 142,233 | $ | 133,326 | ||||||||||||
| Less: goodwill and intangible assets | 13,501 | 13,573 | 13,418 | |||||||||||||||
| Shareholders' equity less goodwill and intangible assets | $ | 133,028 | $ | 128,660 | $ | 119,908 | ||||||||||||
| Common shares outstanding | 2,086,512 | 2,083,487 | 2,082,657 | |||||||||||||||
| Less: treasury shares | (90,612 | ) | (90,612 | ) | (90,612 | ) | ||||||||||||
| Common shares as adjusted | 1,995,900 | 1,992,875 | 1,992,045 | |||||||||||||||
| Book value per common share | $ | 73.42 | $ | 71.37 | $ | 66.93 | ||||||||||||
| Tangible book value per common share | $ | 66.65 | $ | 64.56 | $ | 60.19 | ||||||||||||