SOURCE: Heartland Bancshares, Inc.

Heartland Bancshares, Inc.

February 02, 2011 17:34 ET

Heartland Bancshares, Inc. Announces 2010 Operating Results

FRANKLIN, IN--(Marketwire - February 2, 2011) - Heartland Bancshares, Inc. IN (OTCBB: HRTB) announced that it posted net loss of $26,000 for the fourth quarter 2010 and net income of $224,000 for the year ended December 31, 2010 compared to net loss of $474,000 for the fourth quarter 2009 and net loss of $964,000 for the year ended December 31, 2009. The improvement in results for both periods was primarily related to lower provision for loan losses and higher gains on sales of securities and loans.

Heartland recorded accretion of discount and mandatory dividends on preferred shares of $107,000 for the quarter and $432,000 for the year ended December 31, 2010. Heartland recorded accretion of discount and dividends on preferred shares of $96,000 for the quarter and $118,000 for the year ended December 31, 2009. The accretion and dividends on preferred shares are recorded as a reduction of net income available to common shareholders resulting in net loss available to common shareholders of $133,000 or $.10 per diluted share for the fourth quarter of 2010 compared to net loss available to common shareholders of $570,000 or $0.41 per diluted share for the fourth quarter of 2009. Heartland's net loss available to common shareholders was $208,000 or $.15 per diluted share for the year ended December 31, 2010 compared to net loss available to common shareholders of $1,082,000 or $.77 per diluted share for the year ended December 31, 2009.

Net interest income decreased by $33,000 or 1.43% for the fourth quarter 2010 compared to 2009 and increased by $453,000 or 5.30% for the year in 2010 compared to 2009. The decline in net interest income in the fourth quarter 2010 compared to 2009 was caused by lower balances of loans. The increase in net interest income for the year 2010 compared to 2009 was driven by lower rates paid on deposits and increases in average balances of transaction deposit accounts coupled with reductions in average balances of time deposits and FHLB advances. Net interest margin increased to 4.37% for the fourth quarter 2010 compared to 4.34% for the fourth quarter 2009. Net interest margin increased to 4.30% in 2010 from 4.10% in 2009.

Provision for loan losses was $650,000 for the fourth quarter 2010 compared to $1,190,000 for the fourth quarter 2009 and was $2,750,000 for the year 2010 compared to $3,540,000 for the year 2009. Provision for loan losses is primarily impacted by net loan chargeoffs, changes in loan balances, changes within the loan portfolio and estimated impacts from the national and local economies and real estate markets. Heartland's allowance for loan losses at December 31, 2010 was $3,032,000 or 2.09% of total loans compared to $3,421,000 or 2.20% of total loans at December 31, 2009. Net loan charge-offs recorded during 2010 were $3,139,000 or 2.05% of average loans compared to $2,999,000 or 1.87% of average loans outstanding in 2009. Non-performing assets and loans 90 days or more past due and still accruing totaled $8,089,000 or 3.46% of total assets at December 31, 2010, which is a $2,929,000 decline from the linked quarter end September 30, 2010 when non-performing assets and loans 90 days or more past due and still accruing totaled $11,018,000 or 4.63% of total assets. Non-performing assets and loans 90 days or more past due and still accruing include $4,294,000 of non-accrual loans, $403,000 of loans past due 90 days or more and still accruing, $3,391,000 of other real estate and $1,000 of repossessions at December 31, 2010. Non-performing assets and loans 90 days or more past due and still accruing totaled $7,661,000 or 3.15% of total assets at December 31, 2009.

Noninterest income grew by $328,000 or 53.25% from the fourth quarter 2009 to 2010 due to higher gains on sales of mortgage loans and higher gains on sales of securities. Noninterest income grew by $671,000 or 25.01% for 2010 compared to 2009. Noninterest expenses increased by $173,000 or 6.82% for the fourth quarter 2010 compared to 2009, primarily due to higher losses on other real estate owned. Noninterest expenses decreased by $17,000 or 0.18% in 2010 compared to 2009 due to lower wages and lower data processing expenses.

Total assets declined $9,429,000 or 3.88% to $233,511,000 at December 31, 2010 from $242,940,000 at December 31, 2009 partially due to $7,211,000 reduction in other borrowings funded by $7,156,000 reduction in cash and cash equivalents. Heartland prepaid $5,000,000 of Federal Home Loan Bank advances in the fourth quarter of 2010 and recorded $87,000 of debt extinguishment expense related to the prepayments. Total investment securities grew $7,555,000 or 15.12% during 2010, while total loans declined by $10,229,000 or 6.58%. Total deposits decreased by $3,506,000 or 1.77%, including $4,400,000 or 7.02% decrease in time deposit accounts. Total equity increased by $271,000 from December 31, 2009 to December 31, 2010. Book value (shareholders' common equity) per common share at December 31, 2010 was $10.30 compared to $10.08 at December 31, 2009.

President Steve Bechman commented on the financial results for 2010. "Asset quality and sufficient loan loss reserves continued to be focal points for most banks in 2010 including Heartland. We are very pleased to report net income in these difficult times. Our board has decided to pay, in February 2011, the current and past due quarterly dividends on preferred stock issued under the US Treasury's Capital Purchase Program. Dividends are cumulative at a weighted average annual rate of 5.32%. Our board has also decided to pay, in March 2011, the current and past due quarterly interest payments on the outstanding trust preferred securities. Heartland's wholly owned subsidiary, Heartland Community Bank continues to be well capitalized according to banking regulatory guidance."

                       HEARTLAND BANCSHARES, INC.
                      SELECTED BALANCE SHEET DATA
                       December 31, 2010 and 2009
                      (Dollar amounts in thousands)
                              (Unaudited)

                                                       2010        2009
                                                    ----------  ----------

Total cash and cash equivalents                     $   14,479  $   21,635
Securities available-for-sale                           57,522      50,036
Loans held for sale                                      1,608       1,576
Gross loans                                            145,304     155,532
Allowance for loan losses                                3,032       3,421
Total assets                                           233,511     242,952
Total deposits                                         194,840     198,346
Total liabilities                                      212,113     221,865
Shareholders' equity                                    21,398      21,087
Book value per common share                         $    10.30  $    10.08



                      HEARTLAND BANCSHARES, INC.
                    SELECTED INCOME STATEMENT DATA
       Three and Twelve Months ended December 31, 2010 and 2009
         (Dollar amounts in thousands, except per share data)
                              (Unaudited)

                                       Three Months       Twelve Months
                                    Ended December 31,  Ended December 31,
                                      2010      2009      2010      2009
                                    --------  --------  --------  --------

Interest income                     $  2,696  $  2,920  $ 11,025  $ 11,466
Interest expense                         422       613     2,029     2,923
Provision for loan losses                650     1,190     2,750     3,540
Noninterest income                       944       616     3,354     2,463
Noninterest expense                    2,711     2,538     9,645     9,441
Income tax (benefit)                    (117)     (331)     (269)   (1,012)
Net Income (loss)                        (26)     (474)      224      (964)
Preferred stock dividend and
 accretion                               107        96       432       118
Net loss available to common
 shareholders                           (133)     (570)     (208)   (1,082)
Basic and diluted (loss) per
 common Share                           (.10)     (.41)     (.15)     (.77)

Contact Information

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