VERNON, N.J.--(BUSINESS WIRE)--Highlands Bancorp, Inc. (OTCQB:HSBK.OB), parent company of Highlands State Bank, reported first quarter net income of $241,000, an increase of 44.3% when compared to net income of $167,000 for the same period in 2014. Net income before taxes for the first quarter of 2015 increased $124,000 to $402,000 compared to $278,000 for the first quarter of 2014. First quarter net income available to common stockholders was $224,000 or $.12 per basic and diluted share, compared to $150,000 or $.08 per basic and diluted share for the same period in 2014.
Net interest income increased by $360,000 to $2,520,000 for the first quarter of 2015, when compared to net interest income of $2,160,000 for the first quarter of 2014, as a result of loan portfolio growth. The net interest rate spread declined to 3.64% for the first quarter of 2015, as compared to 3.78% for the first quarter of 2014. Net interest margin also decreased to 3.86% for the first three months 2015 as compared to 3.93% for the same period of 2014. These decreases are the result of increased borrowing costs, specifically the subordinated debt placement completed in May 2014, as well as higher rates paid on ongoing time deposit product promotions. The provision for loan losses increased by $36,000 to $163,000 for the first quarter of 2015 when compared to $127,000 for the same period of 2014 due to management’s continued monitoring of non-performing loans. There were no charge-offs for the first quarter of 2015 compared to $189,000 in charge-offs in the first quarter of 2014. There were no recoveries of previously charged off loans for the first quarter of 2015 or 2014. Non-interest income increased $348,000 to $519,000 for the first three months of 2015 from $171,000 in the comparable 2014 period due to the benefit of a full quarter of the operations of Secure Lending Solutions, Inc. (SLS), our mortgage banking subsidiary, and from increased NSF fund, wire, and other loan fees. Highlands State Bank completed its purchase of SLS, a New Jersey licensed mortgage banking company during the first quarter of 2014. SLS originates residential mortgages for resale into the secondary market, generating gain on sale income. Non-interest expenses increased by $548,000 to $2,474,000 for the first quarter of 2015 compared to the same period of 2014 as a result of higher salaries and benefits and costs associated with SLS, as well as higher data processing, occupancy, depreciation, and professional fees.
The Company’s total assets were $281.8 million on March 31, 2015, an increase of $9.2 million or 3.4% when compared to total assets of $272.6 million at December 31, 2014. Deposits increased $8.8 million or 3.8% from $234.4 million on December 31, 2014 to $243.2 million on March 31, 2015. Net loans outstanding on March 31, 2015 were $251.1 million compared to $235.1 million on December 31, 2014, an increase of 6.8%. Non-accrual loans increased $26 thousand to $2.6 million at March 31, 2015 when compared to December 31, 2014, but declined to 1.02% of total loans for March 31, 2015 from 1.08% of total loans at December 31, 2014.
The Company serves as the holding company for Highlands State Bank. Highlands State Bank is a full service community bank headquartered in Vernon, New Jersey with branch offices in Sparta, Totowa, and Denville, New Jersey. Highlands State Bank provides deposit and loan banking services to consumers and businesses in northern New Jersey. Secure Lending Solutions, Inc., a wholly owned subsidiary of Highlands State Bank, specializes in conventional 1-4 family mortgage loans.
Forward-Looking Statements
This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company’s control and could impede its ability to achieve these goals. These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors.
Highlands Bancorp, Inc. | ||||||||||||||
Financial Highlights | ||||||||||||||
(Unaudited) | ||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
INCOME STATEMENT | ||||||||||||||
Net interest income | $ | 2,520 | $ | 2,160 | ||||||||||
Provision for loan losses | 163 | 127 | ||||||||||||
Non-interest income | 519 | 171 | ||||||||||||
Non-interest expense | 2,474 | 1,926 | ||||||||||||
Net income before income tax | 402 | 278 | ||||||||||||
Income tax (expense) benefit | (161 | ) | (111 | ) | ||||||||||
Net income | 241 | 167 | ||||||||||||
Preferred stock dividends and accretion | (17 | ) | (17 | ) | ||||||||||
Net income available to | ||||||||||||||
common stockholders | $ | 224 | $ | 150 | ||||||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||
Net income available to | ||||||||||||||
common stockholders: | ||||||||||||||
Basic | $ | 0.12 | $ | 0.08 | ||||||||||
Diluted | $ | 0.12 | $ | 0.08 | ||||||||||
Weighted average common shares | ||||||||||||||
Basic | 1,796,168 | 1,796,679 | ||||||||||||
Diluted | 1,841,548 | 1,822,717 | ||||||||||||
SELECTED BALANCE SHEET DATA | ||||||||||||||
AT END OF PERIOD | 3/31/2015 | 12/31/2014 | ||||||||||||
Total loans | $ | 254,034 | $ | 237,916 | ||||||||||
Allowance for loan losses | 2,933 | 2,770 | ||||||||||||
Loans held for sale | 2,684 | 4,456 | ||||||||||||
Investment securities | 10,936 | 10,877 | ||||||||||||
Total Assets | 281,779 | 272,622 | ||||||||||||
Total Deposits | 243,163 | 234,372 | ||||||||||||
Stockholders' Equity | 23,067 | 22,811 | ||||||||||||
Book value per common share | $ | 9.03 | $ | 8.88 | ||||||||||
Tangible book value per common share | $ | 8.38 | $ | 8.23 | ||||||||||
ASSET QUALITY | ||||||||||||||
Non-accrual loans | $ | 2,585 | $ | 2,559 | ||||||||||
Loans past due 90 days and | ||||||||||||||
still accruing | 105 | - | ||||||||||||
Troubled debt restructurings (TDRs) | ||||||||||||||
currently in compliance with new terms | 510 | 843 | ||||||||||||
OREO property | 601 | 610 | ||||||||||||
Allowance for loan losses to total loans | 1.15 | % | 1.16 | % | ||||||||||
Non-performing loans and performing TDRs | ||||||||||||||
to total loans | 1.26 | % | 1.43 | % | ||||||||||
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