SOURCE: Heartland Bancshares, Inc.

Heartland Bancshares, Inc.

November 10, 2011 15:00 ET

Heartland Bancshares, Inc. Announces Financial Results for Third Quarter 2011

FRANKLIN, IN--(Marketwire - Nov 10, 2011) - Heartland Bancshares, Inc. (OTCBB: HRTB) announced that it recorded net income of $139,000 for the third quarter of 2011 compared to net income of $30,000 for the third quarter of 2010. The improvement for the quarter was achieved through higher net interest income, lower provision for loan losses and higher noninterest income. Heartland's net income for the nine months ended September 30, 2011 was $218,000 compared to net income of $250,000 for the nine months ended September 30, 2010.

Heartland recorded amortization of premium and dividends on preferred shares of $110,000 and $327,000 for the three and nine month periods ended September 30, 2011. Heartland recorded amortization of premium and mandatory dividends on preferred shares of $111,000 and $325,000 for the three and nine month periods ended September 30, 2010. The amortization and dividends on preferred shares are recorded as a reduction of net income available to common shareholders resulting in net income available to common shareholders of $29,000 or $.02 per diluted share for the third quarter of 2011 compared to net loss available to common shareholders of $81,000 or $.06 per diluted share for the third quarter of 2010. Heartland's net loss available to common shareholders was $109,000 or $.08 per diluted share for the nine months ended September 30, 2011 compared to net loss available to common shareholders of $75,000 or $.05 per diluted share for the nine months ended September 30, 2010.

Net interest income increased to $2,243,000 for the third quarter 2011 compared to $2,230,000 for the third quarter 2010, an increase of $13,000 or 0.58 percent. Net interest margin was 4.06 percent for the third quarter 2011. Net interest income for the nine month period decreased to $6,712,000 for 2011 from $6,723,000 for 2010, a decrease of $11,000 or 0.16 percent. Net interest margin during the nine month period in 2011 was 4.02 percent.

Provision for loan losses declined to $350,000 for the third quarter in 2011 compared to $700,000 for the third quarter in 2010. Heartland recorded net loan chargeoffs of $61,000 during the third quarter 2011 compared to $58,000 during the third quarter of 2010. Provision for loan losses was $1,875,000 for the nine months ended September 30, 2011 compared to $2,100,000 for the nine months ended September 30, 2010. Net chargeoffs for the nine months ended September 30, 2011 were $563,000 compared to $984,000 for the same period in 2010. The allowance for loan losses was $4,344,000 or 3.07 percent of loans at September 30, 2011 compared to $3,032,000 or 2.09 percent of loans at December 31, 2010. Non-performing assets totaled $8,541,000 or 3.62 percent of total assets at September 30, 2011, including $4,850,000 non-accrual loans, $1,149,000 loans past due 90 days or more and still accruing, $375,000 of debt securities on nonaccrual, and $2,167,000 other real estate owned. Non-performing assets totaled $8,089,000 or 3.47 percent of total assets at December 31, 2010. Heartland also had $2,939,000 of loans considered troubled debt restructures which were not past due and not on nonaccrual at September 30, 2011.

Noninterest income increased $97,000 or 11.73 percent to $924,000 for the third quarter 2011 compared to $827,000 for the third quarter 2010. The increase was caused by a $167,000 increase in gains on the sales of investment securities in the third quarter 2011 compared to 2010. Noninterest income decreased $26,000 or 1.08 percent to $2,384,000 for the nine month period ended September 30, 2011 from $2,410,000 for the nine month period ended September 30, 2010. The decline was due to a $102,000 decline in gains on sales of loans for the nine month period in 2011 compared to 2010.

Noninterest expense for the third quarter 2011 was $2,666,000 compared to $2,386,000 for the same period in 2010, an increase of $280,000 or 11.74 percent. The increase was due to $284,000 higher net losses on sales and write-downs of other real estate owned in the third quarter 2011 compared to 2010. Heartland also recorded $219,000 of prepayment penalties for early repayment of advances from the Federal Home Loan Bank in the third quarter 2011. Heartland incurred no prepayment penalties in the third quarter or nine month period in 2010. Noninterest expense was $7,093,000 for the nine months ended September 30, 2011 compared to $6,934,000 for the same period in 2010 an increase of $159,000 or 2.29 percent. The increase was due to higher net losses on sales and write-downs of other real estate owned and the prepayment penalties described above. In both the three and nine month periods, Heartland recorded lower wages and benefits, lower FDIC insurance premiums and lower other noninterest expenses.

Heartland's total assets were $235,647,000 and total shareholder equity was $21,470,000 at September 30, 2011 compared to $233,048,000 and $21,148,000 at December 31, 2010. Total shareholder equity includes $7,090,000 related to preferred shares at September 30, 2011 and $7,055,000 related to preferred shares at December 31, 2010. Total common equity per share was $10.13 at September 30, 2011 compared to $10.08 at December 31, 2010. Total deposits also increased by $13,214,000 to $208,054,000 at September 30, 2011 from $194,839,000 at December 31, 2010.

According to statistics recently released by the Federal Deposit Insurance Corporation, Heartland's wholly owned subsidiary, Heartland Community Bank, achieved the top deposit market share position for Johnson County, Indiana as of June 30, 2011 for all FDIC insured depository institutions. Heartland Community Bank's deposit market share for the county was reported as 12.46% as of June 30, 2011. More information can be found on the FDIC's summary of deposit market share web site http://www3.fdic.gov/sod/sodMarketBank.asp?barItem=2.

President Steve Bechman commented on the results for the quarter and the top deposit market share achievement: "Reaching the number one deposit market share in our county has been one of our goals since inception. I'm very proud of our staff and thankful to our customers for making this goal a reality. It is clear evidence that the people in our county still want to do business with community banks. We are also very pleased with the improvement in provision for loan losses and noninterest income. Although net chargeoffs for the quarter were relatively low, the local economy continues to languish and real estate values continue to be significantly lower than their highs from 4 to 5 years ago. As a result, we bolstered our reserves during the quarter bringing loan loss reserve to over 3% of loan balances outstanding."

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.
SELECTED BALANCE SHEET DATA
September 30, 2011 and December 31, 2010
(Dollar amounts in thousands)
(Unaudited)
September 30, December 31,
2011 2010
Total cash and cash equivalents $ 27,271 $ 14,479
Securities available-for-sale 53,906 57,375
Loans held for sale 1,581 1,608
Gross loans 141,390 145,304
Allowance for loan losses 4,344 3,032
Total assets 235,647 233,048
Total deposits 208,054 194,839
Total liabilities 214,177 211,900
Shareholders' equity 21,470 21,148
Book value per common share $ 10.13 $ 10.08
HEARTLAND BANCSHARES, INC.
SELECTED INCOME STATEMENT DATA
Three and Nine Months ended September 30, 2011 and 2010
(Dollar amounts in thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
2011 2010 2011 2010
Interest income $ 2,613 $ 2,732 $ 7,846 $ 8,330
Interest expense 370 502 1,134 1,607
Provision for loan losses 350 700 1,875 2,100
Noninterest income 924 827 2,384 2,410
Noninterest expense 2,666 2,386 7,093 6,934
Income tax (benefit) 12 (59 ) (90 ) (151 )
Net income 139 30 218 250
Preferred stock dividend and accretion 110 111 327 325
Net income/(loss) available to common shareholders 29 (81 ) (109 ) (75 )
Basic and diluted earnings/(loss) per common share .02 (.06 ) (.08 ) (.05 )

Contact Information

  • Contact:
    Steve Bechman
    President

    Jeff Joyce
    CFO
    (317) 738-3915