VERNON, N.J.--(BUSINESS WIRE)--Highlands Bancorp, Inc. (OTCPink:HSBK) parent company of Highlands State Bank, reported second quarter 2017 net income of $717,000 compared to net income of $421,000 for the second quarter of 2016, increasing $296,000 or 70.3%. For the six months ended June 30, 2017 net income increased $410,000 or 50.8% to $1,217,000 compared to net income of $807,000 for the same period in 2016. Second quarter 2017 net income available to common stockholders increased 143.5% and totaled $716,000 or $.26 per basic and diluted common share, compared to $294,000 or $.16 per basic and diluted common share for the same period in 2016. The second quarter 2016 and six months ended June 30, 2016 reflected preferred stock dividends of $127,000 and $144,000, respectively, which were paid to the U.S. Treasury for the Company’s participation in the Small Business Lending Fund (“SBLF”) program. The Company exited the SBLF program in June of 2016, at which time the preferred shares were redeemed. Net income available to common stockholders for the six months of 2017 totaled $1,216,000 or $.45 per basic common share and $.44 per diluted common share compared to $663,000 or $.37 per basic and $.36 per diluted common share for 2016.
Net interest income increased by $403,000 to $3,260,000 for the second quarter of 2017 when compared to net interest income of $2,857,000 for the second quarter of 2016 due to growth in the loan and investment portfolios during the period. For the first six months of 2017, net interest income was $6,356,000 compared to $5,648,000 for the same period of 2016, reflecting an increase of $708,000 or 12.5%. The provision for loan losses for the second quarter of 2017 of $211,000 decreased by $14,000 when compared to $225,000 for the second quarter of 2016, and increased $85,000 to $490,000 for the first six months of 2017 when compared to $405,000 for the same period in 2016. The higher provision for loan losses in 2017 is a result of loan portfolio growth and management’s continued assessment of the reserves maintained on non-performing loans. There were no loan charge-offs for the second quarter of 2017, compared to $73,000 for the second quarter of 2016. For the six months ended June 30, 2017, loan charge-offs were $10,000 compared to $355,000 for the same period in 2016. There were no recoveries of previously charged off loans during the second quarter of 2017 or the second quarter of 2016. Recoveries for both the first six months of 2017 and 2016 totaled $1,000 respectively.
Non-interest income declined $79,000 and $255,000 for the second quarter of 2017, and the first six months of 2017, respectively, when compared to the same periods of 2016 due to lower gains on sales of mortgage loans, and reduced loan and overdraft fee income. Non-interest expenses decreased by $129,000 to $2,728,000 for the second quarter of 2017, and by $276,000 to $5,548,000 for the six months ended June 30, 2017 when compared to similar periods of 2016 due to lower occupancy, professional, advertising, insurance, loan, and foreclosed asset expenses.
The Company’s total assets were $415.6 million on June 30, 2017, increasing $20.6 million or 5.2% when compared to total assets of $395.0 million at December 31, 2016. Deposits increased $19.2 million or 5.6% from $342.8 million on December 31, 2016 to $362.0 million on June 30, 2017. Net loans outstanding on June 30, 2017 were $371.9 million compared to $331.6 million on December 31, 2016, reflecting an increase of $40.3 million or 12.2%. Non-accrual loans increased $426 thousand to $2.6 million at June 30, 2017 compared to $2.2 million at December 31, 2016, while non-performing loans and performing troubled debt restructurings as a percentage of total loans declined to .85% at June 30, 2017 from .86% at December 31, 2016.
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 | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
| INCOME STATEMENT | |||||||||||||||||||||||
| Net interest income | $ | 3,260 | $ | 2,857 | $ | 6,356 | $ | 5,648 | |||||||||||||||
| Provision for loan losses | 211 | 225 | 490 | 405 | |||||||||||||||||||
| Non-interest income | 811 | 890 | 1,603 | 1,858 | |||||||||||||||||||
| Non-interest expense | 2,728 | 2,857 | 5,548 | 5,824 | |||||||||||||||||||
| Net income before income tax | 1,132 | 665 | 1,921 | 1,277 | |||||||||||||||||||
| Income tax expense | (415 | ) | (244 | ) | (704 | ) | (470 | ) | |||||||||||||||
| Net income | 717 | 421 | 1,217 | 807 | |||||||||||||||||||
| Net income attributable to | |||||||||||||||||||||||
| non-controlling interest | 1 | - | 1 | - | |||||||||||||||||||
| Net income attributable to | |||||||||||||||||||||||
| Highlands Bancorp, Inc. | 716 | 421 | 1,216 | 807 | |||||||||||||||||||
| Preferred stock dividends and accretion | - | (127 | ) | - | (144 | ) | |||||||||||||||||
| Net income available to | |||||||||||||||||||||||
| common stockholders | $ | 716 | $ | 294 | $ | 1,216 | $ | 663 | |||||||||||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||||||||||
| Net income available to | |||||||||||||||||||||||
| common stockholders: | |||||||||||||||||||||||
| Basic | $ | 0.26 | $ | 0.16 | $ | 0.45 | $ | 0.37 | |||||||||||||||
| Diluted | $ | 0.26 | $ | 0.16 | $ | 0.44 | $ | 0.36 | |||||||||||||||
| Weighted average common shares | |||||||||||||||||||||||
| Basic | 2,702,067 | 1,785,089 | 2,702,067 | 1,786,056 | |||||||||||||||||||
| Diluted | 2,768,435 | 1,841,193 | 2,767,921 | 1,842,212 | |||||||||||||||||||
| SELECTED BALANCE SHEET DATA | |||||||||||||||||||||||
| AT END OF PERIOD | 6/30/2017 | 12/31/2016 | |||||||||||||||||||||
| Total loans | $ | 375,901 | $ | 335,147 | |||||||||||||||||||
| Allowance for loan losses | 4,048 | 3,567 | |||||||||||||||||||||
| Loans held for sale | 1,895 | 5,009 | |||||||||||||||||||||
| Investment securities | 11,024 | 9,052 | |||||||||||||||||||||
| Total Assets | 415,557 | 395,029 | |||||||||||||||||||||
| Total Deposits | 361,973 | 342,794 | |||||||||||||||||||||
| Stockholders' Equity | 27,880 | 26,721 | |||||||||||||||||||||
| Goodwill | 1,151 | 1,151 | |||||||||||||||||||||
| Intangible Assets Other Than Goodwill | 175 | 175 | |||||||||||||||||||||
| Book value per common share | $ | 10.32 | $ | 9.89 | |||||||||||||||||||
| Tangible book value per common share | $ | 9.83 | $ | 9.40 | |||||||||||||||||||
| ASSET QUALITY | |||||||||||||||||||||||
| Non-accrual loans | $ | 2,612 | $ | 2,186 | |||||||||||||||||||
| Loans past due 90 days and | |||||||||||||||||||||||
| still accruing | - | - | |||||||||||||||||||||
| Troubled debt restructurings (TDRs) | |||||||||||||||||||||||
| currently in compliance with new terms | 567 | 688 | |||||||||||||||||||||
| OREO property | 282 | 518 | |||||||||||||||||||||
| Allowance for loan losses to total loans | 1.08 | % | 1.06 | % | |||||||||||||||||||
| Non-performing loans and performing TDRs | |||||||||||||||||||||||
| to total loans | 0.85 | % | 0.86 | % | |||||||||||||||||||