Highlands Bancorp, Inc. Reports Results for the Quarter and Year Ended December 31, 2016

VERNON, N.J.--()--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 %

Contacts

Highlands Bancorp, Inc.
Steven C. Ackmann, 973-764-3200

Contacts

Highlands Bancorp, Inc.
Steven C. Ackmann, 973-764-3200