SOURCE: Heartland Bancshares, Inc.

February 07, 2007 11:08 ET

Heartland Bancshares, Inc. Announces Record High Annual Net Income

FRANKLIN, IN -- (MARKET WIRE) -- February 7, 2007 -- Heartland Bancshares, Inc. (OTCBB: HRTB) announced that it posted record high net income of $1,365,000 or $.95 per diluted share for the year ended December 31, 2006, an increase in net income of 6.88% over 2005. Heartland also announced net income of $363,000 or $.25 per diluted share for the fourth quarter 2006. Comparatively, Heartland recorded net income of $1,278,000 or $.88 per diluted share for the year ended December 31, 2005 and net income of $363,000 or $.25 per diluted share for the fourth quarter 2005. Higher net interest income, higher non-interest income, and lower income tax expense all contributed to the improvements in annual earnings. Return on assets was 0.68% and return on equity was 9.35% for the year 2006.

Net interest income increased by $56,000 in 2006 compared to 2005 due to higher volumes of interest earning assets. Heartland's net interest margin decreased to 3.76% in 2006 from 3.95% in 2005 primarily due to the increase in average rates paid on deposits and other borrowings. Non-interest income for 2006 grew by $50,000 or 2.50% from 2005 primarily due to higher other fee and deposit service charge income. Non-interest expenses increased by $64,000 or 0.90% for the year ended December 31, 2006 primarily due to higher wages and benefits and data processing costs. Lower professional fees and other non-interest expenses partially offset the increases in those two categories. Income tax expense declined by $52,000 for the year in 2006 due to higher interest income on non-taxable securities as a percentage of net income before taxes.

Total assets grew $8 million or 4.09% to $205 million at December 31, 2006 from $197 million at December 31, 2005. Total loans grew $10 million to $134 million and deposits grew $9 million to $170 million at December 31, 2006. Total equity grew by $1,181,000 from December 31, 2005 to December 31, 2006. Book value per share increased to $10.95 at December 31, 2006 from $10.00 per share at December 31, 2005. The change in equity is net of $221,000 paid to repurchase 15,350 shares of common stock under Heartland's current stock repurchase program.

President Steve Bechman commented on the improvements. "We are proud to celebrate the completion of our ninth full year of banking operations by posting the highest annual earnings in our history and our fourth consecutive year with increased earnings. Like many banks, our net interest margin declined under the flat yield curve environment that we experienced in 2006. However, we were satisfied with the level that we were able to maintain in conjunction with higher non-interest income and lower tax expense. In our opinion, holding the increase in non-interest expenses below 1% was also a great achievement in today's economy. In December 2006, we paid off our existing $5 million of trust preferred securities, which were bearing interest at a spread of 3.60% over LIBOR and issued $3 million of new trust preferred securities at a spread of 1.67% over LIBOR. The combination of those two transactions will have over $100,000 of positive impact on our net interest income in 2007. We were also happy to see our stock price trend upward during 2006 and end the year at an all time high of $14.99 per share."

Heartland's allowance for loan losses at December 31, 2006 was $1,901,000 or 1.42% of total loans. Net loan charge-offs recorded during 2006 were $370,000, or .27% of average loans outstanding. Non-performing assets total $2,923,000 or 1.43% of total assets at December 31, 2006 and include $1,213,000 of non-accrual loans, $513,000 of loans past due 90 days and still accruing and $1,197,000 of other real estate. Non-performing assets were down from $2,985,000 or 1.52% of total assets at December 31, 2005.

                      HEARTLAND BANCSHARES, INC.
                      SELECTED BALANCE SHEET DATA
                      December 31, 2006 and 2005
                     (Dollar amounts in thousands)
                             (Unaudited)

                                        2006        2005
                                     ----------  ----------

Total cash and cash equivalents      $   14,000  $   14,387
Securities available-for-sale            47,674      47,582
Loans held for sale                       1,858       2,958
Gross loans                             134,205     124,671
Allowance for loan losses                 1,901       2,069
Total assets                            204,707     196,666
Total deposits                          170,404     161,663
Total Liabilities                       189,421     182,561
Shareholders' equity                     15,286      14,105



                      HEARTLAND BANCSHARES, INC.
                    SELECTED INCOME STATEMENT DATA
      Three and Twelve Months ended December 31, 2006 and 2005
       (Dollar amounts in thousands, except per share data)
                              (Unaudited)

                               Three Months           Twelve Months
                             Ended December 31,      Ended December 31,
                             2006        2005        2006        2005
                           --------    --------    ---------   ---------

Interest income            $  3,447    $  2,866    $  12,780   $  10,792
Interest expense              1,620       1,153        5,636       3,704
Provision for loan losses        33           -          202         195
Noninterest income              476         515        2,065       2,015
Noninterest expense           1,776       1,713        7,109       7,046
Income tax expense              130         153          533         584
Net income                      363         363        1,365       1,278
Basic earnings per share        .26         .26          .97         .91
Diluted earnings per share      .25         .25          .95         .88

Contact Information

  • Contact:
    Steve Bechman
    President

    Jeff Joyce
    CFO
    (317) 738-3915