SOURCE: Heartland Bancshares, Inc.

Heartland Bancshares, Inc.

February 20, 2009 15:00 ET

Heartland Bancshares, Inc. Announces 2008 Operating Results

FRANKLIN, IN--(Marketwire - February 20, 2009) - Heartland Bancshares, Inc. IN (OTCBB: HRTB) announced that it posted a net loss of $350,000 or $.25 per diluted share for the year ended December 31, 2008. Heartland also announced a net loss of $362,000 or $.26 per diluted share for the fourth quarter 2008. Comparatively, Heartland recorded net income of $747,000 or $.52 per diluted share for the year ended December 31, 2007 and net income of $12,000 or $.01 per diluted share for the fourth quarter 2007.

The loss for the year and the quarter were due to higher provision for loan losses, which increased by $2,200,000 in 2008 compared to 2007 due to higher charge-offs and estimated effects of weaknesses in the national and local economies and housing markets. Heartland's allowance for loan losses at December 31, 2008 was $2,880,000 or 1.82% of total loans compared to $2,042,000 or 1.36% of total loans at December 31, 2007. Net loan charge-offs recorded during 2008 were $1,707,000 or 1.07% of average loans compared to $204,000, or .14% of average loans outstanding in 2007. Non-performing assets total $6,122,000 or 2.66% of total assets at December 31, 2008 compared to $4,758,000 or 2.27% of total assets at December 31, 2007. Non-performing assets include $3,172,000 of non-accrual loans, $1,768,000 of loans past due 90 days and still accruing and $1,182,000 of other real estate at December 31, 2008.

Net interest income increased by $654,000 in 2008 compared to 2007 due to lower rates paid on deposits and other borrowings along with growth in interest earning assets. Heartland's net interest margin increased to 3.74% in 2008 from 3.66% in 2007 primarily due to the decrease in average rates paid on deposits and other borrowings. Non-interest income for 2008 grew by $326,000 or 15.24% from 2007 due to $188,000 more fee and deposit service charge income and $67,000 higher certificate of deposit brokerage commissions. Non-interest expenses increased by $743,000 or 9.40% for the year ended December 31, 2008 compared to 2007, primarily due to higher wages and benefits and occupancy expenses related to new branch facilities opened in 2008.

Total assets grew $21 million or 9.92% to $230 million at December 31, 2008 from $209 million at December 31, 2007. Total loans grew $8 million or 5.39% to $158 million at December 31, 2008. Total deposits increased by $4,890,000 or 2.86%, including $9,294,000 increase in interest bearing checking and savings accounts, partially offset by a $4,459,000 decrease in time deposits. Total equity declined by $2,135,000 from December 31, 2007 to December 31, 2008. Book value per share decreased to $9.97 at December 31, 2008 from $11.22 per share at December 31, 2007. The change in equity was primarily due to $1,088,000 of reduction in the equity portion of unrealized loss on investment securities available for sale, $536,000 of reduction through the stock repurchase program and the $350,000 net loss.

President Steve Bechman commented on the financial results for 2008. "Asset quality and sufficient loan loss reserves have become focal points for most banks in the current economy including Heartland. Within that context, we took some additional provision for loan losses in the fourth quarter of 2008. Our board also decided not to pay a cash dividend in the first quarter 2009 based on the lack of earnings in the fourth quarter 2008. The board will continue to evaluate earnings and capital in connection with any potential future cash dividends. We continue to be well capitalized according to banking regulatory guidance and the strides that we made in improving net interest income and non-interest income helped minimize the loss recorded in 2008. We are very pleased with our growth in net interest margin, loans and checking and savings deposits. We opened our fifth branch in a newly constructed facility in March 2008 and in December 2008 we opened our sixth branch in a building that was previously used as a Fifth Third Bank branch until August 2008 when it was closed. Each of those branches positions us in a new market area. Our six locations in Johnson County combined with our experienced staff make us the premier community bank in Johnson County, Indiana."

                      HEARTLAND BANCSHARES, INC.
                     SELECTED BALANCE SHEET DATA
                      December 31, 2008 and 2007
                    (Dollar amounts in thousands)
                             (Unaudited)

                                         2008         2007
                                      ---------    ---------

Total cash and cash equivalents       $  17,043    $  10,615
Securities available-for-sale            43,108       39,646
Loans held for sale                         759          288
Gross loans                             158,395      150,289
Allowance for loan losses                 2,880        2,042
Total assets                            230,176      209,397
Total deposits                          175,936      171,046
Total liabilities                       216,244      193,330
Shareholders' equity                     13,932       16,067



                      HEARTLAND BANCSHARES, INC.
                    SELECTED INCOME STATEMENT DATA
       Three and Twelve Months ended December 31, 2008 and 2007
          (Dollar amounts in thousands, except per share data)
                             (Unaudited)

                                  Three Months           Twelve Months
                                Ended December 31,     Ended December 31,
                                  2008       2007       2008       2007
                                -------    -------    --------   --------

Interest income                 $ 3,024    $ 3,457    $ 12,401   $ 13,338
Interest expense                    937      1,617       4,692      6,283
Provision for loan losses         1,280        265       2,545        345
Noninterest income                  619        602       2,468      2,142
Noninterest expense               2,223      2,182       8,657      7,914
Income tax expense/(benefit)       (435)       (17)       (675)       191
Net income/(loss)                  (362)        12        (350)       747
Basic earnings/(loss) per share    (.26)       .01        (.25)       .53
Diluted earnings/(loss) per share  (.26)       .01        (.25)       .52

Contact Information

  • Contact:
    Steve Bechman
    President
    or
    Jeff Joyce
    CFO
    (317) 738-3915