SOURCE: Heartland Bancshares, Inc.

November 09, 2007 17:25 ET

Heartland Bancshares, Inc. Announces Net Income for Third Quarter 2007

FRANKLIN, IN--(Marketwire - November 9, 2007) - Heartland Bancshares, Inc. (OTCBB: HRTB) announced that it recorded net income of $179,000 or $.13 per diluted share for the third quarter of 2007. Heartland recorded net income of $381,000 or $.26 per diluted share for the third quarter of 2006. Heartland's net income for the nine months ended September 30, 2007 was $736,000 or $.51 per diluted share compared to net income for the nine months ended September 30, 2006 of $1,002,000 or $.70 per diluted share. Return on average equity was 4.60% and 6.32% for the three and nine month periods ended September 30, 2007 compared to 9.28% and 10.48% for the three and nine month periods ended September 30, 2006. Return on average assets was .35% and .48% for the three and nine month periods ended September 30, 2007 compared to .75% and .68% for the three and nine month periods ended September 30, 2006.

Net interest income was $1,712,000 in 2007 compared to $1,830,000 in 2006 for the quarter ended September 30. Net interest margin decreased to 3.55 percent from 3.84 percent for the same time periods. Net interest income for the nine month period was $5,215,000 for 2007 and was $5,318,000 for 2006. Net interest margin during the nine month period was 3.60 percent for 2006 and was 3.76 percent for 2006. Net interest income and net interest margin declined in 2007 compared to 2006 due to higher cost of funds, including higher rates paid on deposits.

Provision for loan losses was $60,000 for the third quarter in 2007 compared to $91,000 for the third quarter in 2006. Provision for loan losses was $80,000 for the nine months ended September 30, 2007 compared to $169,000 for the nine months ended September 30, 2006. Heartland recorded net loan charge offs of $157,000 during the third quarter of 2007 causing the total allowance for loan losses to decline to $1,833,000 or 1.27 percent of loans. Non-performing assets totaled $3,123,000 or 1.51 percent of total assets at September 30, 2007, including $1,345,000 non-accrual loans, $71,000 loans past due 90 days or more and still accruing and $1,707,000 other real estate owned. Non-performing assets totaled $2,770,000 or 1.35% of total assets at December 31, 2006.

Non-interest expense for the third quarter 2007 was $1,955,000 compared to $1,702,000 for the same period in 2006. Non-interest expense was $5,731,000 for the nine months ended September 30, 2007 compared to $5,334,000 for the same period in 2006. The increases for both periods were primarily due to losses on the sale of other real estate owned and expenses related to other real estate owned. For the three and nine months ended September 30, 2007, losses on sale of other real estate owned were $95,000 and $116,000 respectively. For the three month period ended September 30, 2006, net losses on sale of other real estate were $1,000. For the nine month period ended September 30, 2006, Heartland recorded a net gain on sale of other real estate of $45,000. Expenses on other real estate were $31,000 and $68,000 for the three and nine month periods ended September 30, 2007 compared to $(71,000) and $(46,000) for the three and nine month periods ended September 30, 2006. Negative expenses were reported in 2006 due to a $112,000 recovery of real estate taxes paid on other real estate owned.

FDIC insurance also increased to $34,000 and $71,000 for the three and nine month periods ended September 30, 2007 compared to $5,000 and $15,000 for the three and nine month periods ended September 30, 2006. The increases were due to changes in the FDIC insurance premium rates, not due to any changes in Heartland's regulatory ratings or internal capital ratios.

President Steve Bechman commented on the earnings for the quarter: "We chose to liquidate some of our other real estate owned in the third quarter of 2007 and incurred significant losses on the sales as local residential real estate values continued to decline. The decrease in net income was also partially due to the large recovery of real estate taxes paid on one piece of real estate obtained through foreclosure that was recorded in the third quarter of 2006. We expensed the payment for the taxes in the third quarter of 2003 and we recorded the recovery as reduced noninterest expense in the third quarter 2006. That individual item after tax, represents $68,000 of the reported net income for the third quarter 2006."

Total consolidated assets increased 1.37 percent to $207,506,000 at September 30, 2007 from the December 31, 2006 total of $204,707,000. Total loans increased 7.43 percent to $144,180,000 at September 30, 2007 from $134,205,000 at December 31, 2006. Total deposits decreased to $169,499,000 at September 30, 2007 from $170,404,000 at December 31, 2006. Book value (shareholders' equity) per share at September 30, 2007 was $11.13 compared to $10.91 at December 31, 2006.

Heartland Community Bank is the wholly owned subsidiary of Heartland Bancshares, Inc. and began banking operations December 17, 1997 in Johnson County, Indiana on the southern edge of the Indianapolis metro area.

                            HEARTLAND BANCSHARES, INC.
                            SELECT BALANCE SHEET DATA
                    September 30, 2007 and December 31, 2006
                          (Dollar amounts in thousands)
                                   (Unaudited)

                                        September 30,   December 31,
                                            2007            2006
                                        ------------    -----------

Total cash and cash equivalents         $  11,272       $  14,000
Securities available-for-sale              42,677          47,674
Loans held for sale                           731           1,858
Loans                                     144,180         134,205
Allowance for loan losses                   1,833           1,901
Total deposits                            169,499         170,404
Total liabilities                         191,570         189,421
Shareholders' equity                       15,936          15,286
Total assets                            $ 207,506       $ 204,707
Book value per share                    $   11.13       $   10.91



                            HEARTLAND BANCSHARES, INC.
                          SELECTED INCOME STATEMENT DATA
            Three and Nine Months ended September 30, 2007 and 2006
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)

                                    Three Months            Nine Months
                                Ended September 30,     Ended September 30,
                                  2007      2006          2007       2006
                                  ----      ----          ----       ----

Interest income                 $3,355    $3,291        $9,881     $9,334
Interest expense                 1,643     1,461         4,666      4,016
Provision for loan losses           60        91            80        169
Noninterest income                 504       513         1,540      1,589
Noninterest expense              1,955     1,702         5,731      5,334
Income tax expense                  22       169           208        402
Net income                         179       381           736      1,002
Basic earnings per share           .13       .27           .53        .71
Diluted earnings per share         .13       .26           .51        .70
Cash dividends per share           .05       .05           .15        .15


Contact Information

  • Contact:
    Steve Bechman
    President
    (317) 738-3915

    Jeff Joyce
    CFO
    (317) 738-3915