Heartland BancCorp Announces Record 1st Quarter 2011 Earnings

GAHANNA, Ohio, April 22, 2011 /PRNewswire/ -- Tiney M. McComb, Chairman and CEO of Heartland BancCorp, parent company of Heartland Bank, today reported record 1st quarter 2011 net income of $1.260 million or $0.81 per diluted share up 18% over earnings of $1.066 million or $0.69 per diluted share for the 1st quarter of 2010.

The recent quarter's earnings as compared with the first quarter of 2010 reflect higher net interest income, resulting from a widening of the net interest margin, higher non-interest income and lower or improved operating expense.

Net interest income after provision for loan loss increased $184 thousand or 4% for the 1st quarter of 2011 over the prior year.  The increase in net interest income was due to a 27% decline in the cost of funds partially offset by a 5% decline in interest income and a 4% increase in the provision for loan loss. The improved margin reflects the continued low and stable interest rates in effect during the quarter resulting in the downward repricing of funding costs as well as the lower cost of new funds acquired.  Provision expense of $545 thousand for the 1st quarter 2010 increased slightly from the prior year 1st quarter.  The allowance for loan loss increased to $3.9 million compared to $3.5 million at March 31, 2010 allowing for growth in the loan portfolio.  Loan losses at Heartland have continued to be lower than that of Ohio peer banks.

Non-interest income of $755 thousand for the 1st quarter of 2011 increased $32 thousand or 4% over the prior year quarter.  

Operating expenses for 2011 declined $27 thousand or 1% below 2010 1st quarter levels.  The decrease in operating expense was due to lower year over year building and occupancy expense coupled with lower FDIC insurance expense in 2011 totaling $89 thousand  

Other financial highlights for the 1st quarter 2011 compared to the same period in 2010 include:

• Total assets increased $17 million or 3% to $559 million.
• Net loans increased $1.2 million.
• Shareholders' equity increased $1.8 million or 4% to $46.1 million.
• Book value per share increased $1.17 or 4% to $30.02 per share

Reflecting on the recent quarterly performance McComb commented, "I am pleased to report, in this 1st quarter of our 100th anniversary year of Heartland Bank, strong year over year and record 1st quarter earnings. Overall, our asset quality remains strong, and, coupled with both loan and deposit growth, and an improved net interest margin, provides the fundamentals for future earnings growth.  Furthermore, I am encouraged by our success in increasing non-interest income considering the negative impact regulatory changes have had on fee income from deposit service charges.  As we continue to emerge into an expanding economy we are very encouraged about opportunities to advance our market share as we continue to fulfill the banking needs of the communities we serve while extending our franchise through technology based product offerings. Our consistent years of strong earnings have resulted in increases in our regulatory capital ratios.  I believe we will have many opportunities in future years to profitably deploy this accumulated capital while rewarding our shareholders. As a result of earnings growth, our Board of Directors declared a 2nd quarter 2011 cash dividend $0.3217 per share payable to shareholders of record June 25, 2011, payable July 10, 2011.  This dividend results in a dividend payout ratio of 40% and based upon the closing value of Heartland BancCorp stock on March 31, 2011 a dividend yield of 5.09%".

Heartland Bank provides a complete line of loan and deposit products accessible from any of our banking offices and ATMs, as well as from home or office using Heartland's telephone banking at 416-BANK or worldwide access at www.heartlandbank.com

Heartland BancCorp is a registered Ohio bank holding company and the parent of Heartland Bank which operates eleven full-service banking offices.  Alternative investment services are provided through Infinex Financial Group.  Heartland Bank is a member of the Federal Reserve, a member of the FDIC and an Equal Housing Lender.  Heartland BancCorp is currently quoted on the over-the-counter (OTC) Bulletin Board Service under the symbol HLAN.

SOURCE Heartland BancCorp