VERNON, N.J.--(BUSINESS WIRE)--Highlands Bancorp, Inc. (OTCPink:HSBK) parent company of Highlands State Bank, reported fourth quarter net income of $501,000 in 2016 compared to net income of $324,000 for the same period of 2015. Fourth quarter net income available to common stockholders was $499,000 or $.26 per diluted share in 2016 compared to $306,000 or $.17 per diluted share for the same period in 2015. Net income available to common stockholders for the full year 2016 was $1,644,000 or $.88 per diluted share compared to $1,440,000 or $.78 per diluted share for the year of 2015.
Net interest income increased by $237,000 to $2,970,000 for the fourth quarter of 2016 compared to net interest income of $2,733,000 for the fourth quarter of 2015. For the year ended December 31, 2016, net interest income increased to $11,537,000 from $10,637,000 for 2015 primarily as a result of loan portfolio growth. The provision for loan losses was $129,000 for the quarter and $663,000 for the year ended December 31, 2016. In 2015, the Company’s provision totaled $191,000 and $711,000 for the fourth quarter and year respectively. The provision for loan losses reflects management’s continued assessment of the reserves maintained on non-performing loans. Charge-offs for the year ended December 31, 2016 were $537,000 compared to charge-offs of $127,000 in 2015. Recoveries of previously charged off loans totaled $85,000 in 2016, and $2,000 in 2015. The ratio of non-performing loans and performing TDRs to total loans was .86% at year end 2016, compared to .87% at year end 2015.
Non-interest income was $1,177,000 for the fourth quarter of 2016, compared to $715,000 for the fourth quarter of 2015, and reflected higher gains from sales of mortgage loans attributable to the Bank’s subsidiary, Secure Lending Solutions, Inc. (“SLS”) and increased loan fee income. For the year ended December 31, 2016, non-interest income was $4,090,000 increasing $833,000 from $3,257,000 for the year ended December 31, 2015. This increase for 2016 was primarily the result of higher gains on sales of mortgage loans, loan fees, merchant settlements services and debit card transactions, which were partially offset by lower gains on the sale of investment securities. In addition, 2015 reflected a $67,000 charge relating to the consolidation and closure of one of the Bank’s Sparta branch offices. Non-interest expenses for the twelve months of 2016 increased $1,302,000 when compared to the same period in 2015. Additions made to staff, employee benefits and taxes, and increased professional fees, advertising, deposit insurance, legal, and loan expenses resulted in higher costs for 2016, which were partially offset by lower data processing, leasehold depreciation, insurance, and OREO costs. In addition, a full year’s effect of SLS’s addition of LCD Mortgage Company (“LCD Mortgage”) lending group in June 2015 impacted employee salary, benefit and equipment expenses for 2016.
Steven C. Ackmann, President and CEO of Highlands Bancorp, Inc., stated, “2016 was a year of continued progress for Highlands Bancorp, Inc. Core earnings grew to our highest level ever, even as we continued to invest in the resources critical to support that growth. Our talented lenders and branch staff successfully sustained our outstanding deposit and loan growth. In December we successfully completed a private placement that brought us $8.5 million in new common equity that will be important to maintain our company’s growth as we move forward. We thank both our continuing and our new shareholders for their faith in our company.”
Total assets were $395.0 million on December 31, 2016, an increase of $80.0 million or 25.4% from $315.0 million on December 31, 2015. Deposits increased $82.1 million or 31.5% from $260.7 million on December 31, 2015 to $342.8 million on December 31, 2016. Net loans outstanding, including loans held for sale, increased $49.7 million or 17.3% to $336.6 million as of December 31, 2016 from $286.9 million the previous year end. Total equity was $26.7 million on December 31, 2016, increasing $2.6 million or 10.8% from $24.1 million on December 31, 2015. During 2016, the Company redeemed its Non-Cumulative Perpetual Preferred Stock, Series C totaling $6,853,000 issued under the U.S. Treasury’s Small Business Lending Fund (SBLF), and in the current quarter completed a private placement of $8,500,000 of common stock which was used to supplement the Bank’s regulatory capital levels to support future growth.
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 | Twelve Months Ended | ||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||
INCOME STATEMENT | |||||||||||||||||||||||
Net interest income | $ | 2,970 | $ | 2,733 | $ | 11,537 | $ | 10,637 | |||||||||||||||
Provision for loan losses | 129 | 191 | 663 | 711 | |||||||||||||||||||
Non-interest income | 1,177 | 715 | 4,090 | 3,257 | |||||||||||||||||||
Non-interest expense | 3,236 | 2,763 | 12,142 | 10,840 | |||||||||||||||||||
Net income before income tax | 782 | 494 | 2,822 | 2,343 | |||||||||||||||||||
Income tax expense | (281 | ) | (170 | ) | (1,032 | ) | (834 | ) | |||||||||||||||
Net income | 501 | 324 | 1,790 | 1,509 | |||||||||||||||||||
Noncontrolling interest | (2 | ) | - | (2 | ) | - | |||||||||||||||||
Preferred stock dividends and accretion | - | (18 | ) | (144 | ) | (69 | ) | ||||||||||||||||
Net income available to | |||||||||||||||||||||||
common stockholders | $ | 499 | $ | 306 | $ | 1,644 | $ | 1,440 | |||||||||||||||
EARNINGS PER COMMON SHARE: | |||||||||||||||||||||||
Net income available to | |||||||||||||||||||||||
common stockholders: | |||||||||||||||||||||||
Basic | $ | 0.26 | $ | 0.17 | $ | 0.91 | $ | 0.80 | |||||||||||||||
Diluted | $ | 0.26 | $ | 0.17 | $ | 0.88 | $ | 0.78 | |||||||||||||||
Weighted average common shares | |||||||||||||||||||||||
Basic | 1,887,434 | 1,788,872 | 1,811,911 | 1,792,978 | |||||||||||||||||||
Diluted | 1,947,454 | 1,844,126 | 1,868,886 | 1,845,697 | |||||||||||||||||||
SELECTED BALANCE SHEET DATA | |||||||||||||||||||||||
AT END OF PERIOD | 12/31/2016 | 12/31/2015 | |||||||||||||||||||||
Total loans | $ | 335,147 | $ | 287,622 | |||||||||||||||||||
Allowance for loan losses | 3,567 | 3,356 | |||||||||||||||||||||
Loans held for sale | 5,009 | 2,622 | |||||||||||||||||||||
Investment securities | 9,052 | 3,799 | |||||||||||||||||||||
Total Assets | 395,029 | 314,954 | |||||||||||||||||||||
Total Deposits | 342,794 | 260,713 | |||||||||||||||||||||
Stockholders' Equity | 26,721 | 24,107 | |||||||||||||||||||||
Goodwill | 1,151 | 1,151 | |||||||||||||||||||||
Intangible Assets Other Than Goodwill | 175 | 175 | |||||||||||||||||||||
Book value per common share | $ | 9.89 | $ | 9.65 | |||||||||||||||||||
Tangible book value per common share | $ | 9.40 | $ | 8.91 | |||||||||||||||||||
ASSET QUALITY | |||||||||||||||||||||||
Non-accrual loans | $ | 2,186 | $ | 2,011 | |||||||||||||||||||
Loans past due 90 days and | |||||||||||||||||||||||
still accruing | - | - | |||||||||||||||||||||
Troubled debt restructurings (TDRs) | |||||||||||||||||||||||
currently in compliance with new terms | 688 | 490 | |||||||||||||||||||||
OREO property | 518 | 488 | |||||||||||||||||||||
Allowance for loan losses to total loans | 1.06 | % | 1.17 | % | |||||||||||||||||||
Non-performing loans and performing TDRs | |||||||||||||||||||||||
to total loans | 0.86 | % | 0.87 | % |