Heartland BancCorp Earns $5.0 Million, or $2.48 Per Diluted Share, in the Fourth Quarter of 2022 and $18.1 Million, or $8.90 Per Diluted Share, for the Year 2022; Increases Quarterly Cash Dividend by 10% to $0.759 per Share

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WHITEHALL, Ohio, Jan. 23, 2023 (GLOBE NEWSWIRE) — Heartland BancCorp (“Heartland” and “the Firm”) (OTCQX: HLAN), dad or mum firm of Heartland Financial institution (“Financial institution”), at this time reported internet revenue of $5.0 million, or $2.48 per diluted share within the fourth quarter of 2022, which was unchanged in comparison with the fourth quarter of 2021, and a modest lower in comparison with $5.1 million, or $2.50 per diluted share, within the previous quarter. For the 12 months 2022, internet revenue was $18.1 million, or $8.90 per diluted share, in comparison with $18.6 million, or $9.17 per diluted share, in 2021.

The corporate additionally introduced that its board of administrators elevated its quarterly money dividend by 10% to $0.759 per share. The dividend can be payable April 10, 2023, to shareholders of report as of March 25, 2023. Heartland has paid common quarterly money dividends since 1993.

“2023 was a considerable 12 months of development for Heartland, and our working outcomes mirror the continued success of our relationship banking mannequin,” acknowledged G. Scott McComb, Chairman, President and Chief Government Officer. “We completed report mortgage development for the 12 months, and extra importantly, mortgage development has actually began to materialize throughout all lending segments. Now we have been in a position to capitalize on displacement inside our markets by bringing on proficient bankers and lending officers from different establishments, which is contributing to our success. Close to the tip of the fourth quarter, we opened our everlasting workplace in Cincinnati, and we’ve been including to our top-quality group as we proceed to execute our Larger Cincinnati enlargement technique. Our model of neighborhood banking is being nicely acquired in all the markets that we serve, and we’ll proceed within the 12 months forward to work to create worth for our shareholders, our shoppers and our communities.”

Earlier this month, Heartland BancCorp was ranked 36^th on the OTCQX’s Greatest 50 checklist for 2023. The OTCQX Greatest 50 is an annual rating of the highest 50 U.S. and worldwide firms traded on the OTCQX Greatest Market, primarily based on an equal weighting of one-year complete return and common every day greenback quantity development. Corporations within the 2023 OTCQX Greatest 50 had been ranked primarily based on their efficiency in the course of the 2022 calendar 12 months.

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Fourth Quarter 2022 Monetary Highlights (at or for the three months ended December 31, 2022)

• Web revenue was $5.0 million, or $2.48 per diluted share, which was unchanged in comparison with the fourth quarter of 2021.

• Provision for mortgage losses was $480,000, which was unchanged in comparison with the fourth quarter a 12 months in the past.

• Web curiosity margin of 4.13%, in comparison with 4.20% within the previous quarter and improved 27 foundation factors in comparison with 3.86% within the fourth quarter a 12 months in the past.

• Fourth quarter revenues (internet curiosity revenue plus noninterest revenue) elevated 6.4% to $18.3 million, in comparison with $17.2 million within the fourth quarter a 12 months in the past.

• Annualized return on common property was 1.23%, in comparison with 1.36% within the fourth quarter of 2021.

• Annualized return on common tangible widespread fairness was 15.63%, in comparison with 14.42% within the fourth quarter a 12 months in the past.

• Web loans elevated $86.8 million in the course of the quarter to $1.39 billion at December 31, 2022, in comparison with $1.30 billion three months earlier.

• Credit score high quality stays pristine, with nonperforming loans to gross loans of 0.07% and nonperforming property to complete property of 0.06%, at December 31, 2022.

• Tangible e book worth was $65.09 per share, in comparison with $69.74 per share a 12 months in the past.

• Declared a quarterly money dividend of $0.759 per share.

2022 Full Yr Monetary Highlights (at or for the twelve months ended December 31, 2022)

• Web revenue for 2022 was $18.1 million, in comparison with $18.6 million in 2021.

• Web curiosity margin was 4.03% for the 12 months, in comparison with 3.56% for 2021.

• Complete revenues elevated 5.5% to $68.4 million in 2022, in comparison with $64.8 million in 2021.

• Annualized return on common property was 1.20% for 2022, in comparison with 1.23% for 2021.

• Annualized return on common tangible fairness was 13.60% for 2022, in comparison with 13.97% for 2021.

• Web loans elevated a report $230.2 million, or 19.9% year-over-year to $1.39 billion.

• Noninterest bearing demand deposits elevated 9.2% to $523.0 million, in comparison with $478.9 million a 12 months in the past.

Stability Sheet Assessment

Property

Complete property elevated 13.2% to $1.66 billion at December 31, 2022, in comparison with $1.47 billion a 12 months earlier, and elevated 5.6% in comparison with $1.58 billion three months earlier. Heartland’s loan-to-deposit ratio was 95.3% at December 31, 2022, in comparison with 96.4% at September 30, 2022, and 92.2% at December 31, 2021.

Extra liquidity ranges continued to say no, with curiosity bearing deposits in different banks at $5.3 million, in comparison with $54.4 million a 12 months earlier and was unchanged in comparison with three months earlier.

Common incomes property elevated to $1.52 billion within the fourth quarter of 2022, in comparison with $1.44 billion within the third quarter of 2022, and $1.38 billion within the fourth quarter a 12 months in the past. The common yield on interest-earning property was 4.91% within the fourth quarter of 2022, up 31 foundation factors from 4.60% within the previous quarter and up 78 foundation factors from 4.13% within the fourth quarter a 12 months in the past.

Mortgage Portfolio

“Mortgage manufacturing was a spotlight of the fourth quarter, rising $86.8 million, or 6.7% over the prior quarter finish, with nice exercise throughout practically each mortgage section, together with industrial, 1-4 household loans, proprietor occupied CRE, non-owner occupied CRE, house fairness and client loans,” mentioned Ben Babcanec, EVP and Chief Working Officer.

Web loans had been $1.39 billion at December 31, 2022, which was an 6.7% enhance in comparison with $1.30 billion at September 30, 2022, and a 19.9% enhance in comparison with $1.16 billion at December 31, 2021.   Business loans elevated 5.5% from 12 months in the past ranges to $162.7 million, and comprise 11.6% of the entire mortgage portfolio at December 31, 2022. Proprietor occupied industrial actual property loans (CRE) elevated 13.0% to $325.8 million at December 31, 2022, in comparison with a 12 months in the past, and comprise 23.2% of the entire mortgage portfolio. Non-owner occupied CRE loans elevated 9.1% to $391.5 million, in comparison with a 12 months in the past, and comprise 27.9% of the entire mortgage portfolio at December 31, 2022. 1-4 household residential actual property loans elevated 43.1% from 12 months in the past ranges to $461.7 million and signify 32.9% of complete loans. Residence fairness loans elevated 22.8% from 12 months in the past ranges to $44.5 million and signify 3.2% of complete loans, and client loans elevated 44.6% from 12 months in the past ranges to $18.2 million and signify 1.3% of the entire mortgage portfolio at December 31, 2022.

Deposits

Complete deposits had been $1.46 billion at December 31, 2022, a 7.9% enhance in comparison with $1.35 billion at September 30, 2022, and a 16.0% enhance in comparison with $1.26 billion at December 31, 2021.   “Now we have been profitable at rising deposit balances and, whereas we skilled some motion from financial savings accounts into time deposits in the course of the fourth quarter, we stay centered on our deposit pricing,” mentioned Babcanec. At December 31, 2022, noninterest bearing demand deposit accounts elevated 9.2% in comparison with a 12 months in the past and represented 35.9% of complete deposits; financial savings, NOW and cash market accounts elevated 3.5% in comparison with a 12 months in the past and represented 41.9% of complete deposits, and CDs elevated 72.1% in comparison with a 12 months in the past and comprised 22.2% of complete deposits.   The common price of deposits was 0.70% within the fourth quarter of 2022, in comparison with 0.30% within the third quarter of 2022, and 0.17% within the fourth quarter of 2021.

Shareholders’ Fairness

Shareholders’ fairness was $143.9 million at December 31, 2022, in comparison with $139.5 million three months earlier and $153.2 million a 12 months earlier. The lower in shareholders’ fairness in comparison with a 12 months in the past was primarily as a consequence of a $22.5 million lower in gathered different complete revenue associated to a rise within the unrealized loss on out there on the market securities reflecting the rise in market rates of interest in the course of the 12 months. At December 31, 2022, Heartland’s tangible e book worth was $65.09 per share, in comparison with $62.90 at September 30, 2022, and $69.74 at December 31, 2021.

Heartland continues to keep up capital ranges in extra of the necessities to be categorized as “well-capitalized” with tangible fairness to tangible property of seven.92% at December 31, 2022, in comparison with 8.09% at September 30, 2022, and 9.60% at December 31, 2021.

Working Outcomes

Within the fourth quarter of 2022, Heartland generated a ROAA of 1.23% and a ROATCE of 15.63%, in comparison with 1.31% and 15.27%, respectively, within the third quarter of 2022 and 1.36% and 14.42%, respectively, within the fourth quarter a 12 months in the past.

Web Curiosity Revenue/Web Curiosity Margin

Web curiosity revenue, earlier than the supply for mortgage losses, elevated 18.0% to $15.8 million within the fourth quarter of 2022, in comparison with $13.4 million within the fourth quarter a 12 months in the past, and elevated 4.1% in comparison with $15.2 million within the previous quarter, which included a $490,000 restoration of nonaccrual curiosity on downside credit. Web curiosity revenue continued to profit from greater yielding property and the present charge surroundings.   As well as, roughly $16,000 of the revenue acknowledged in the course of the fourth quarter of 2022 was associated to recognizing origination charges for PPP mortgage payoffs or forgiveness, in comparison with $30,000 acknowledged in the course of the third quarter of 2022, and $846,000 acknowledged in the course of the fourth quarter of 2021. For the 12 months 2022, internet curiosity revenue elevated 12.8% to $57.0 million, in comparison with $50.5 million in 2021.

Complete revenues (internet curiosity revenue, earlier than the supply for mortgage losses, plus noninterest revenue) was $18.3 million within the fourth quarter, a 6.4% enhance in comparison with $17.2 million within the fourth quarter a 12 months in the past, and a 2.8% enhance in comparison with $17.8 million within the previous quarter. For the 12 months 2022, complete revenues elevated 5.5% to $68.4 million, in comparison with $64.8 million in 2021.

Heartland’s internet curiosity margin was 4.13% within the fourth quarter of 2022, in comparison with 4.20% within the previous quarter and improved by 27 foundation factors in comparison with 3.86% within the fourth quarter of 2021. The previous quarter internet curiosity margin included the above-mentioned restoration. Excluding the restoration, internet curiosity margin would have been 4.06% for the third quarter of 2022. “Our internet curiosity margin for the fourth quarter benefitted from sturdy internet curiosity revenue era, strong mortgage development and rising rates of interest. New loans that carry the next rate of interest, and variable charge loans are repricing, which helps our internet curiosity margin develop in comparison with a 12 months in the past, though funding prices have begun to catch up” mentioned Carrie Almendinger, EVP, and Chief Monetary Officer.

Heartland’s internet curiosity margin continues to stay above the peer common posted by the Dow Jones U.S. MicroCap Financial institution Index with complete market capitalization below $250 million as of September 30, 2022.^*

*As of September 30, 2022, the Dow Jones U.S. MicroCap Financial institution Index tracked 154 banks with complete widespread market capitalization below $250 million for the next ratios: NIM* of three.70%.

Provision for Mortgage Losses

“We proceed to make additions to the allowance for mortgage losses to mirror the regular stage of latest mortgage development,” mentioned McComb.   “General credit score high quality stays sturdy, and we’re nicely positioned for our conversion to the CECL mortgage loss methodology.”

Heartland recorded a $480,000 provision for mortgage losses within the fourth quarter of 2022, which was the identical quantity recorded in each the previous quarter and the 12 months in the past quarter.

Noninterest Revenue

Noninterest revenue decreased 34.5% to $2.5 million within the fourth quarter of 2022, in comparison with $3.8 million within the fourth quarter a 12 months in the past, and decreased 4.9% in comparison with $2.6 million within the previous quarter. Good points on sale of loans, and originated mortgage servicing rights, decreased 83.7% to $218,000 within the fourth quarter of 2022, in comparison with $1.3 million within the fourth quarter a 12 months in the past, and elevated 16.6% in comparison with $187,000 within the previous quarter. For the 12 months 2022, noninterest revenue decreased 20.4% to $11.4 million, in comparison with $14.3 million in 2021.

“Mortgage origination continues to be sturdy by the fourth quarter of 2022, though we’ve seen a shift to elevated volumes of on-balance sheet, adjustable charge mortgages, resulting in decrease positive aspects on sale,” mentioned Almendinger.

Noninterest Expense

Heartland’s fourth quarter noninterest bills totaled $11.8 million, in comparison with $11.1 million within the previous quarter and $10.4 million within the fourth quarter a 12 months in the past. Wage and worker profit bills, the most important part of noninterest expense, had been $7.5 million within the fourth quarter of 2022, in comparison with $7.1 million within the previous quarter and $6.5 million within the fourth quarter of 2021. “The rise in wage and worker profit expense is basically as a consequence of variable compensation associated to elevated mortgage manufacturing. Occupancy expense elevated modestly as a result of construct out of the everlasting workplace house in Cincinnati,” mentioned Almendinger. “By increasing into the Cincinnati market organically, with a seasoned chief who has been established in that marketplace for years, now we have begun to broaden our consumer base and sit up for persevering with to leverage this funding for future development.” For the 12 months, noninterest expense totaled $44.2 million, in comparison with $39.7 million in 2021.

The effectivity ratio for the fourth quarter of 2022 was 64.2%, in comparison with 62.0% for the previous quarter and 60.5% for the fourth quarter of 2021.

Revenue Tax Provision

Within the fourth quarter of 2022, Heartland recorded $1.0 million in state and federal revenue tax expense for an efficient tax charge of 17.2%, in comparison with $1.2 million, or 19.4% within the third quarter of 2022 and $1.3 million or 20.5% within the fourth quarter a 12 months in the past. For the 12 months, Heartland recorded $4.2 million in state and federal revenue tax expense for an efficient tax charge of 18.7%, in comparison with $4.6 million, or 19.7% in 2021.

Credit score High quality

At December 31, 2022, the allowance for mortgage losses (ALLL) was $16.6 million, or 1.18% of complete loans, in comparison with $16.2 million, or 1.23% of complete loans at September 30, 2022, and $15.0 million, or 1.28% of complete loans a 12 months in the past. As of December 31, 2022, the ALLL represented 2,370% of nonaccrual loans, in comparison with 2,322% three months earlier and 925% one 12 months earlier.

Nonaccrual loans had been $700,000 at December 31, 2022, in comparison with $699,000 at September 30, 2022, and decreased 56.7% when in comparison with $1.6 million at December 31, 2021. Heartland had internet mortgage charge-offs of $118,000 at December 31, 2022. This in comparison with $176,000 in internet mortgage charge-offs at September 30, 2022, and $133,000 in internet mortgage recoveries at December 31, 2021.   There was $309,000 in loans overdue 90 days and nonetheless accruing at December 31, 2022, in comparison with $404,000 at September 30, 2022, and $16,000 at December 31, 2021.

Heartland had zero performing restructured loans that weren’t included in nonaccrual loans, at December 31, 2022. This in comparison with $3.1 million in performing restructured loans at September 30, 2022. Debtors who’re in monetary issue, and who’ve been granted concessions, together with rate of interest reductions, time period extensions, or cost alterations, are categorized as restructured loans.

There was $5,000 in different actual property owned and different non-performing property on the books at December 31, 2022, unchanged from three months earlier and one 12 months earlier. Non-performing property (NPAs), consisting of non-performing loans and loans overdue 90 days or extra, decreased 8.5% to $1.0 million, or 0.06% of complete property, at December 31, 2022, in comparison with $1.1 million, or 0.07% of complete property, at September 30, 2022, and decreased 38.1% when in comparison with $1.6 million, or 0.11% of complete property a 12 months in the past.

About Heartland BancCorp

Heartland BancCorp is a registered Ohio financial institution holding firm and the dad or mum of Heartland Financial institution, which operates 20 full-service banking workplaces and TransCounty Title Company, LLC. Heartland Financial institution, based in 1911, supplies full-service industrial, small enterprise, and client banking providers; skilled monetary planning providers; and different monetary services. Heartland Financial institution is a member of the Federal Reserve, a member of the FDIC, and an Equal Housing Lender. Heartland BancCorp is presently quoted on the OTC Markets (OTCQX) below the image HLAN. Be taught extra about Heartland Financial institution at Heartland.Financial institution.

In Might of 2022, Heartland was ranked #112 on the American Banker Journal’s checklist of Prime 200 Publicly Traded Neighborhood Banks and Thrifts primarily based on three-year common return on fairness as of December 31, 2021.

Protected Harbor Assertion

This press launch comprises forward-looking statements throughout the which means of the Personal Securities Litigation Reform Act of 1995. These forward-looking statements embrace, however usually are not restricted to, statements about (i) the advantages of a merger between Heartland Financial institution and Victory Neighborhood Financial institution, together with future monetary and working outcomes, price financial savings enhancements to income and accretion to reported earnings that could be realized from the merger; (ii) Heartland’s plans, aims, expectations and intentions and different statements contained on this press launch that aren’t historic details; and (iii) different statements recognized by phrases equivalent to “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,” “initiatives,” or phrases of comparable which means typically supposed to determine forward-looking statements. These forward-looking statements are primarily based upon the present beliefs and expectations of Heartland’s administration and are inherently topic to vital enterprise, financial and aggressive uncertainties and contingencies, a lot of that are past the management of Heartland. As well as, these forward-looking statements are topic to assumptions with respect to future enterprise methods and selections which might be topic to vary. Precise outcomes could differ materially from the anticipated outcomes mentioned in these forward-looking statements due to the next elements, amongst others: (1) the assumptions and estimates utilized by Heartland’s administration embrace each assumptions as to sure enterprise selections which might be topic to vary and, in lots of respects, subjective judgment, and thus is prone to a number of interpretations and periodic revisions primarily based on precise expertise and enterprise developments, and thus, is probably not realized; (2) legislative or regulatory modifications, together with modifications in accounting requirements, could adversely have an effect on the companies through which Heartland is engaged; (3) modifications within the rate of interest surroundings could adversely have an effect on internet curiosity revenue; (4) outcomes could also be adversely affected by continued diversification of property and opposed modifications to credit score high quality; (5) competitors from different monetary providers firms in Heartland’s markets may adversely have an effect on operations; (6) the influence of the coronavirus (COVID-19) pandemic on the workers and clients of Heartland, in addition to the ensuing impact on the enterprise, monetary situation and outcomes of operations on Heartland; and (7) the present financial slowdown may adversely have an effect on credit score high quality and mortgage originations.

Heartland cautions that the foregoing checklist of things just isn’t unique. All subsequent written and oral forward-looking statements are expressly certified of their entirety by the cautionary statements above. Heartland doesn’t undertake any obligation to replace any forward-looking assertion to mirror circumstances or occasions that happen after the date the forward-looking statements are made, besides as required by legislation.