Heartland BancCorp Earns $5.3 Million, or $2.61 Per Diluted Share, in the Fourth Quarter of 2023; and a Record $19.5 Million, or $9.62 Per Diluted Share, for the Year; Declares Quarterly Cash Dividend of $0.759 Per Share

Rhea-AI Summary

Heartland BancCorp reported a 5.2% increase in net income to $5.3 million in Q4 2023, with a 7.2% increase in the preceding quarter. The company declared a quarterly cash dividend of $0.759 per share, payable on April 10, 2024. Net loans increased by 1.8% to $1.53 billion, and total deposits increased by 4.0% to $1.64 billion at the end of Q4 2023.

Positive

• Net income increased by 5.2% in Q4 2023
• Quarterly cash dividend declared
• Net loans and total deposits increased
• Strong credit quality metrics

Negative

• Net interest margin decreased to 3.49%
• Provision for credit losses increased
• Noninterest income remained unchanged compared to the preceding quarter

WHITEHALL, Ohio, Jan. 23, 2024 (GLOBE NEWSWIRE) -- Heartland BancCorp (“Heartland” and “the Company”) (OTCQX: HLAN), parent company of Heartland Bank (“Bank”), today reported net income increased 5.2% to $5.3 million, or $2.61 per diluted share, in the fourth quarter of 2023, compared to $5.0 million, or $2.48 per diluted share, in the fourth quarter of 2022, and increased 7.2% compared to $4.9 million, or $2.43 per diluted share, in the preceding quarter. For the year 2023, net income increased 8.0% to a record $19.5 million, or $9.62 per diluted share, compared to $18.1 million, or $8.90 per diluted share, in 2022.

The company also announced that its board of directors declared a quarterly cash dividend of $0.759 per share. The dividend will be payable April 10, 2024, to shareholders of record as of March 25, 2024. Heartland has paid regular quarterly cash dividends since 1993.

“Heartland produced strong net income for the fourth quarter, and record earnings for the year, as we continue to selectively grow the loan portfolio while maintaining a strong deposit base,” stated G. Scott McComb, Chairman, President and Chief Executive Officer. “As in previous quarters, we continued to remain selective on the loans we added during the quarter, while adhering to disciplined loan pricing. The result was tempered loan growth during the fourth quarter of 1.8%, and newly funded loans had a weighted rate of 8.22%, up approximately 37 basis points from the prior quarter. Additionally, we have been successful at growing new deposit accounts, up 4.0% over the prior quarter end, while also maintaining core deposit balances. With solid revenue generation and stable credit quality metrics, we are well positioned for the year ahead.”

“We continue to see excellent growth in our Columbus and Greater Cincinnati markets and look for ways to expand our market outreach to these MSAs as well as surrounding areas,” McComb continued. “During the preceding quarter, we opened our 20th Heartland Bank branch in Delaware County, and our brand of community banking is already being well received in this thriving county just north of Columbus. Our focus for 2024 will be to capture additional market share in our established Columbus and Greater Cincinnati markets while continuing to work on improving operating efficiencies across the Company.”

Fourth Quarter 2023 Financial Highlights (at or for the three months ended December 31, 2023)

• Net income was $5.3 million, or $2.61 per diluted share, compared to $5.0 million, or $2.48 per diluted share, in the fourth quarter of 2022.
• Provision for credit losses was $550,000, compared to $480,000 for the fourth quarter a year ago.
• Net interest margin was 3.49%, compared to 3.52% in the preceding quarter and 4.13% in the fourth quarter a year ago.
• Fourth quarter revenues (net interest income plus noninterest income) increased 1.6% to $18.6 million, compared to $18.3 million in the fourth quarter a year ago.
• Annualized return on average assets was 1.13%, compared to 1.23% in the fourth quarter of 2022.
• Annualized return on average tangible common equity was 15.05%, compared to 15.63% in the fourth quarter a year ago.
• Net loans increased $27.6 million during the quarter, or 1.8%, to $1.53 billion at December 31, 2023, compared to $1.50 billion three months earlier.
• Total deposits increased $63.3 million during the quarter, or 4.0%, to $1.64 billion at December 31, 2023, compared to $1.58 billion three months earlier.
• Credit quality remains pristine, with nonperforming loans to gross loans of 0.13% and nonperforming assets to total assets of 0.11%, at December 31, 2023.
• Tangible book value increased 14.0% to $74.23 per share, compared to $65.09 per share a year ago.
• Declared a quarterly cash dividend of $0.759 per share.
  

2023 Full Year Financial Highlights (at or for the twelve months ended December 31, 2023)

• Net income for 2023 increased 8.0% to $19.5 million, compared to $18.1 million in 2022.
• Net interest margin was 3.62% for the year, compared to 4.03% for 2022.
• Total revenues increased 7.5% to $73.5 million in 2023, compared to $68.4 million in 2022.
• Annualized return on average assets was 1.09% for 2023, compared to 1.20% for 2022.
• Annualized return on average tangible equity was 14.15% for 2023, compared to 13.60% for 2022.
• Net loans increased $143.4 million, or 10.3%, year-over-year to $1.53 billion.
• Total deposits increased 12.8% to $1.64 billion, compared to $1.46 billion a year ago.
  

Balance Sheet Review

Assets

Total assets increased 13.2% to $1.88 billion at December 31, 2023, compared to $1.66 billion a year earlier, and increased 2.6% compared to $1.83 billion three months earlier. Heartland’s loan-to-deposit ratio was 93.2% at December 31, 2023, compared to 95.2% at September 30, 2023, and 95.3% at December 31, 2022.

Securities increased 38.5% to $211.1 million at December 31, 2023, compared to $152.5 million a year earlier, and increased 17.4% compared to $179.8 million three months earlier. Securities comprise 11.2% of total assets at December 31, 2023, compared to 9.8% three months prior and 9.2% a year ago.

Average earning assets increased to $1.75 billion in the fourth quarter of 2023, compared to $1.72 billion in the third quarter of 2023, and $1.52 billion in the fourth quarter a year ago. The average yield on interest-earning assets was 5.71% in the fourth quarter of 2023, up 12 basis points from 5.59% in the preceding quarter, and up 80 basis points from 4.91% in the fourth quarter a year ago.

Loan Portfolio

“We continued to moderate loan growth during the quarter, resulting in net loans increasing 1.8% over the prior quarter end, with average loans increasing 1.5% compared to the prior quarter,” said Ben Babcanec, EVP and Chief Operating Officer. “While loan demand has been strong, we remain disciplined with loan pricing which is resulting in slower growth.”

Net loans were $1.53 billion at December 31, 2023, compared to $1.50 billion at September 30, 2023, and a 10.3% increase compared to $1.39 billion at December 31, 2022. Commercial loans increased 6.1% from year ago levels to $172.7 million, and comprise 11.1% of the total loan portfolio at December 31, 2023. Owner occupied commercial real estate loans (CRE) decreased 9.2% to $296.0 million at December 31, 2023, compared to a year ago, and comprise 19.1% of the total loan portfolio. Nonowner occupied CRE loans increased 28.0% to $501.1 million, compared to a year ago, and comprise 32.3% of the total loan portfolio at December 31, 2023. 1-4 family residential real estate loans increased 10.2% from year-ago levels to $508.8 million and represent 32.8% of total loans. Home equity loans increased 16.1% from year-ago levels to $51.7 million and represent 3.3% of total loans, while consumer loans increased 4.0% from year-ago levels to $19.0 million and represent 1.2% of the total loan portfolio at December 31, 2023.

Deposits

Total deposits were $1.64 billion at December 31, 2023, a 4.0% increase, compared to $1.58 billion at September 30, 2023, and a $186.0 million, or 12.8% increase, compared to $1.46 billion at December 31, 2022. “Average deposits increased $23.8 million, or 1.5%, to $1.62 billion in the fourth quarter of 2023 compared to the preceding quarter, with the growth in DDA, money market and CD accounts,” said Babcanec. “Average demand deposits increased $3.6 million during the quarter, which is helping to improve our funding mix.”

At December 31, 2023, noninterest bearing demand deposit accounts decreased 6.8% compared to a year ago and represented 29.7% of total deposits; savings, NOW and money market accounts increased 16.7% compared to a year ago and represented 43.3% of total deposits; and CDs increased 37.0% compared to a year ago and comprised 27.0% of total deposits. The average cost of deposits was 2.21% in the fourth quarter of 2023, compared to 2.05% in the third quarter of 2023 and 0.70% in the fourth quarter of 2022.

Shareholders’ Equity

Shareholders’ equity increased 8.6% to $162.5 million at December 31, 2023, compared to $149.6 million three months earlier and increased 12.9% compared to $143.9 million a year earlier. At December 31, 2023, Heartland’s tangible book value was $74.23 per share compared to $67.78 at September 30, 2023, and $65.09 at December 31, 2022.

Heartland continues to maintain capital levels in excess of the requirements to be categorized as “well-capitalized” with tangible equity to tangible assets of 8.00% at December 31, 2023, compared to 7.50% at September 30, 2023, and 7.92% at December 31, 2022.

Liquidity

Heartland had ample sources of available liquidity as of December 31, 2023, including a $220 million line of credit at the Federal Home Loan Bank, as well as additional credit lines of $120 million. Nearly 67% of Heartland’s client deposit balances were FDIC insured or collateralized as of December 31, 2023.

Operating Results

In the fourth quarter of 2023, Heartland generated a ROAA of 1.13% and a ROATCE of 15.05%, compared to 1.07% and 14.01%, respectively, in the third quarter of 2023 and 1.23% and 15.63%, respectively, in the fourth quarter a year ago.

Net Interest Income/Net Interest Margin

Net interest income, before the provision for credit losses, decreased 2.8% to $15.4 million in the fourth quarter of 2023, compared to $15.8 million in the fourth quarter a year ago, and increased modestly compared to $15.3 million in the preceding quarter. For the year 2023, net interest income increased 7.1% to $61.0 million, compared to $57.0 million in 2022.

Total revenues (net interest income, before the provision for credit losses, plus noninterest income) were $18.6 million in the fourth quarter of 2023, a 1.6% increase compared to $18.3 million in the fourth quarter a year ago, and a modest increase compared to $18.5 million in the preceding quarter. For the year, total revenues increased 7.5% to $73.5 million, compared to $68.4 million a year earlier.

Heartland’s net interest margin was 3.49% in the fourth quarter of 2023, compared to 3.52% in the preceding quarter and 4.13% in the fourth quarter of 2022. “Our net interest margin is starting to stabilize, contracting three basis points during the fourth quarter, compared to the prior quarter. While deposit pricing pressures continue, the increase in average DDA balances helped to ease funding costs. Additionally, we continue to benefit from repricing loans at higher rates,” said Carrie Almendinger, EVP and Chief Financial Officer.

Heartland’s net interest margin continues to remain above the peer average posted by the Dow Jones U.S. MicroCap Bank Index with total market capitalization under $250 million as of September 30, 2023.^*

Provision for Credit Losses

Heartland recorded a $550,000 provision for credit losses in the fourth quarter of 2023, compared to a $500,000 provision for credit losses in the third quarter of 2023, and a $480,000 provision for credit losses in the fourth quarter of 2022.

Noninterest Income

Noninterest income increased 29.4% to $3.2 million in the fourth quarter of 2023, compared to $2.5 million in the fourth quarter a year ago, and was unchanged compared to the preceding quarter. Gains on sale of loans and originated mortgage servicing rights increased 236.7% to $734,000 in the fourth quarter of 2023, compared to $218,000 in the fourth quarter a year ago, and increased 3.7% compared to $708,000 in the preceding quarter. For the year 2023, noninterest income increased 9.3% to $12.4 million, compared to $11.4 million in 2022.

“Similar to the prior quarter, we experienced strong secondary loan activity during the fourth quarter, and we were successful with executing on swaps, with $497,000 in swap referral fee income during the fourth quarter, compared to $189,000 in swap referral fee income during the preceding quarter,” said Almendinger.

Noninterest Expense

Noninterest expenses were $11.6 million during the fourth quarter of 2023, a 2.9% decrease compared to $12.0 million in the preceding quarter, and a 1.1% decrease compared to $11.8 million in the fourth quarter a year ago. Salary and employee benefit expenses, the largest component of noninterest expense, were $7.4 million in the fourth quarter of 2023, which was unchanged compared to the preceding quarter and a modest decrease compared to $7.5 million in the fourth quarter of 2022. For the year, noninterest expense totaled $47.1 million, compared to $44.2 million in 2022.

“We have made a company-wide effort over the last few quarters to manage operating expenses, and we will continue this focus into 2024,” said Almendinger. “Salary and employee benefits were lower in part due to lower incentive compensation from muted loan growth. We also had a benefit of approximately $200,000 recognized through other expenses.”

The efficiency ratio for the fourth quarter of 2023 was 62.5%, compared to 64.7% for the preceding quarter and 64.2% for the fourth quarter of 2022.

Income Tax Provision

In the fourth quarter of 2023, Heartland recorded $1.1 million in state and federal income tax expense for an effective tax rate of 17.7%, compared to $1.1 million, or 18.1%, in the third quarter of 2023 and $1.0 million, or 17.2%, in the fourth quarter a year ago.

Credit Quality

“Our overall credit quality metrics continue to remain stable. We are seeing minimal signs of stress in the loan portfolio, and we hold strong collateral positions with all our loans,” said McComb.

Beginning January 1, 2023, Heartland began accounting for credit losses under CECL which replaced the former “incurred loss” model for recognizing credit losses with an “expected loss” model.

___________________________

*As of September 30, 2023, the Dow Jones U.S. MicroCap Bank Index tracked 177 banks with total common market capitalization under $250 million for the following ratios: NIM* of 3.26%.

At December 31, 2023, the allowance for credit losses plus unfunded commitment liability (ACL + UCL) was $19.4 million, or 1.25% of total loans, compared to $19.2 million, or 1.26% of total loans, at September 30, 2023, and $16.6 million, or 1.18% of total loans, a year ago. As of December 31, 2023, the ACL represented 1,106% of nonaccrual loans, compared to 883% three months earlier and 2,370% one year earlier.

Nonaccrual loans were $1.6 million at December 31, 2023, compared to $1.9 million at September 30, 2023, and $700,000 at December 31, 2022. At December 31, 2023, nonaccrual loans totaled 10 loans with an average balance of approximately $162,000. There were $468,000 in loans past due 90 days and still accruing at December 31, 2023, compared to $146,000 at September 30, 2023, and $309,000 at December 31, 2022. Net loan charge-offs totaled $318,000 at December 31, 2023, compared to $47,000 in net loan charge-offs at September 30, 2023, and $118,000 in net loan charge-offs at December 31, 2022. The increase in net loan charge-offs during the quarter was related to one PPP loan.

There was $10,000 in other real estate owned and other nonperforming assets on the books at December 31, 2023, compared to zero at September 30, 2023, and $5,000 at December 31, 2022. Nonperforming assets (NPAs), consisting of nonperforming loans and loans past due 90 days or more, were $2.1 million, or 0.11% of total assets, at December 31, 2023, which was unchanged compared to September 30, 2023. NPAs were $1.0 million, or 0.06% of total assets, at December 31, 2022.

About Heartland BancCorp

Heartland BancCorp is a registered Ohio bank holding company and the parent of Heartland Bank, which operates 20 full-service banking offices and TransCounty Title Agency, LLC. Heartland Bank, founded in 1911, provides full-service commercial, small business, and consumer banking services; professional financial planning services; and other financial products and services. Heartland Bank is a member of the Federal Reserve, a member of the FDIC, and an Equal Housing Lender. Heartland BancCorp is currently quoted on the OTC Markets (OTCQX) under the symbol HLAN. Learn more about Heartland Bank at Heartland.Bank.

In June of 2023, Heartland was ranked #119 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity as of December 31, 2022.

During the first quarter of 2023, Heartland was ranked 36^th on the OTCQX’s Best 50 list for 2023. The OTCQX Best 50 is an annual ranking of the top 50 U.S. and international companies traded on the OTCQX Best Market, based on an equal weighting of one-year total return and average daily dollar volume growth. Companies in the 2023 OTCQX Best 50 were ranked based on their performance during the 2022 calendar year.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about (i) Heartland’s plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts; and (ii) other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,” “projects,” or words of similar meaning generally intended to identify forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of Heartland’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Heartland. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements because of the following factors, among others: (1) the assumptions and estimates used by Heartland’s management include both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments, and thus, may not be realized; (2) legislative or regulatory changes, including changes in accounting standards, may adversely affect the businesses in which Heartland is engaged; (3) changes in the interest rate environment may adversely affect net interest income; (4) results may be adversely affected by continued diversification of assets and adverse changes to credit quality; (5) competition from other financial services companies in Heartland’s markets could adversely affect operations; and (6) the current economic slowdown could adversely affect credit quality and loan originations.

Heartland cautions that the foregoing list of factors is not exclusive. All subsequent written and oral forward-looking statements are expressly qualified in their entirety by the cautionary statements above. Heartland does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

Heartland BancCorp
Quarterly Financial Summary
		Three Months Ended
Earnings and dividends:		Dec. 31, 2023			Sep. 30, 2023			Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022
	Interest income	$	25,195		$	24,194		$	22,476		$	20,521		$	18,841
	Interest expense		9,807			8,928			7,437			5,180			3,011
	Net interest income		15,388			15,266			15,039			15,341			15,830
	Provision for credit losses		550			500			800			750			480
	Noninterest income		3,217			3,232			3,390			2,601			2,487
	Noninterest expense		11,632			11,975			11,695			11,750			11,761
	Provision for income taxes		1,135			1,091			1,088			992			1,048
	Net income		5,288			4,932			4,846			4,450			5,028
Share data:
	Basic earnings per share	$	2.62		$	2.45		$	2.41		$	2.21		$	2.50
	Diluted earnings per share		2.61			2.43			2.39			2.19			2.48
	Dividends declared per share		0.76			0.76			0.76			0.76			0.69
	Book value per share		80.66			74.24			75.02			73.60			71.63
	Tangible book value per share		74.23			67.78			68.54			67.09			65.09
	Common shares outstanding, 20,000,000 authorized		2,105,737			2,105,737			2,105,237			2,103,537			2,099,587
	Treasury shares		(90,612	)		(90,612	)		(90,612	)		(90,612	)		(90,612	)
	Common shares, net		2,015,125			2,015,125			2,014,625			2,012,925			2,008,975
	Average common shares outstanding, net		2,015,125			2,014,936			2,013,607			2,009,782			2,008,839
Balance sheet - average balances:
	Loans receivable, net	$	1,520,331		$	1,498,257		$	1,465,920		$	1,415,215		$	1,356,369
	Earning assets		1,749,160			1,718,549			1,672,994			1,606,350			1,520,860
	Goodwill & intangible assets		12,982			13,031			13,077			13,132			13,186
	Total assets		1,854,191			1,822,084			1,772,998			1,705,675			1,620,580
	Demand deposits		476,992			473,373			467,301			495,443			500,624
	Deposits		1,622,335			1,598,495			1,553,882			1,488,181			1,413,150
	Borrowings		60,857			51,856			49,965			54,257			52,162
	Shareholders' equity		152,393			152,720			150,017			148,195			140,800
Ratios:
	Return on average assets		1.13	%		1.07	%		1.10	%		1.06	%		1.23	%
	Return on average equity		13.77	%		12.81	%		12.96	%		12.18	%		14.16	%
	Return on average tangible common equity		15.05	%		14.01	%		14.19	%		13.36	%		15.63	%
	Yield on earning assets		5.71	%		5.59	%		5.39	%		5.18	%		4.91	%
	Cost of deposits		2.21	%		2.05	%		1.76	%		1.24	%		0.70	%
	Cost of funds		2.31	%		2.15	%		1.86	%		1.36	%		0.82	%
	Net interest margin		3.49	%		3.52	%		3.61	%		3.87	%		4.13	%
	Efficiency ratio		62.52	%		64.74	%		63.46	%		65.48	%		64.21	%
Asset quality:
	Net loan charge-offs to average loans		0.08	%		0.01	%		0.01	%		0.01	%		0.03	%
	Nonperforming loans to gross loans		0.13	%		0.14	%		0.14	%		0.09	%		0.07	%
	Nonperforming assets to total assets		0.11	%		0.11	%		0.12	%		0.07	%		0.06	%
	Allowance for loan losses to gross loans		1.16	%		1.13	%		1.13	%		1.13	%		1.18	%
	ACL + UCL to gross loans		1.25	%		1.26	%		1.24	%		1.22	%		1.18	%

Heartland BancCorp
Consolidated Balance Sheets
Assets		Dec. 31, 2023				Sep. 30, 2023				Jun. 30, 2023				Mar. 31, 2023				Dec. 31, 2022
	Cash and due from	$	16,750			$	20,993			$	16,304			$	14,121			$	17,543
	Interest bearing deposits		19,932				24,222				20,017				37,297				5,340
	Interest bearing time deposits		-				-				-				-				-
	Available-for-sale securities		211,130				179,817				178,031				159,622				152,492
	Held-to-maturity securities		0				5				5				5				5
	Loans held for sale		1,145				1,706				2,748				1,200				1,345
	Commercial		172,658				169,405				176,972				165,736				162,720
	CRE (Owner occupied)		295,996				277,092				273,526				285,575				325,820
	CRE (Nonowner occupied)		501,056				502,012				490,900				468,163				391,461
	1-4 Family		508,826				499,953				495,578				486,077				461,661
	Home Equity		51,697				52,466				48,542				44,749				44,526
	Consumer		18,974				19,857				19,848				18,502				18,245
	Allowance for credit losses		(17,928	)			(17,143	)			(17,063	)			(16,644	)			(16,591	)
	Net Loans		1,531,279				1,503,642				1,488,303				1,452,158				1,387,842
	Premises and equipment		33,649				33,586				31,919				30,926				30,476
	Nonmarketable equity securities		6,866				6,863				6,635				6,631				6,627
	Mortgage servicing rights, net		3,373				3,346				3,208				3,119				3,173
	Foreclosed assets held for sale		10				0				5				5				5
	Goodwill		12,388				12,388				12,388				12,388				12,388
	Intangible Assets		565				613				661				710				765
	Deferred income taxes		7,087				8,323				6,702				6,157				7,504
	Life insurance assets		20,315				20,140				20,020				19,903				19,790
	Accrued interest receivable and other assets		18,661				19,148				18,744				20,848				17,831
	Total assets	$	1,883,150			$	1,834,792			$	1,805,690			$	1,765,090			$	1,663,126
Liabilities and Shareholders' Equity
Liabilities
	Deposits
	Demand	$	487,631			$	454,764			$	462,232			$	487,238			$	523,036
	Saving, NOW and money market		711,198				695,106				677,833				685,233				609,676
	Time		443,772				429,480				418,046				395,525				323,858
	Total deposits		1,642,601				1,579,350				1,558,111				1,567,996				1,456,570
	Repurchase agreements		4,583				4,446				4,594				5,095				15,213
	FHLB Advances		31,000				56,000				50,000				0				6,000
	Subordinated debt		24,034				24,024				24,213				24,703				24,693
	Interest payable and other liabilities		18,400				21,377				17,635				19,153				16,741
	Total liabilities		1,720,618				1,685,197				1,654,553				1,616,947				1,519,217
Shareholders' Equity
	Common stock, without par value		62,725				62,615				62,473				62,173				61,998
	Retained earnings		120,064				116,306				112,904				108,962				107,166
	Accumulated other comprehensive income (expense)		(15,263	)			(24,332	)			(19,246	)			(17,998	)			(20,261	)
	Treasury stock at Cost, Common		(4,994	)			(4,994	)			(4,994	)			(4,994	)			(4,994	)
	Total shareholders' equity		162,532				149,595				151,137				148,143				143,909
	Total liabilities and shareholders' equity	$	1,883,150			$	1,834,792			$	1,805,690			$	1,765,090			$	1,663,126

Heartland BancCorp
Consolidated Statements of Income
	Three Months Ended
Interest Income	Dec. 31, 2023			Sep. 30, 2023			Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022
Loans	$	22,850		$	22,080		$	20,609		$	18,885		$	17,312
Securities
Taxable		1,374			1,173			928			845			757
Tax-exempt		629			619			596			598			604
Other		342			322			343			193			168
Total interest income		25,195			24,194			22,476			20,521			18,841
Interest Expense
Deposits		9,017			8,272			6,837			4,564			2,497
Borrowings		790			656			600			616			514
Total interest expense		9,807			8,928			7,437			5,180			3,011
Net Interest Income		15,388			15,266			15,039			15,341			15,830
Provision for Credit Losses		550			500			800			750			480
Net Interest Income After Provision for Credit Losses		14,838			14,766			14,239			14,591			15,350
Noninterest income
Service charges		1,002			1,020			1,015			975			930
Gains on sale of loans and originated MSR		734			708			704			226			218
Loan servicing fees, net		354			408			337			431			317
Title insurance income		214			196			311			171			237
Increase in cash value of life insurance		175			120			117			114			110
Other		738			780			906			684			675
Total noninterest income		3,217			3,232			3,390			2,601			2,487
Noninterest Expense
Salaries and employee benefits		7,430			7,393			7,252			7,483			7,474
Net occupancy and equipment expense		1,052			1,057			1,055			1,067			1,004
Software and data processing fees		1,163			1,205			1,069			1,025			939
Professional fees		242			225			288			266			383
Marketing expense		320			271			309			299			250
State financial institution tax		260			259			259			261			339
FDIC insurance premiums		299			341			298			228			104
Other		866			1,224			1,165			1,121			1,268
Total noninterest expense		11,632			11,975			11,695			11,750			11,761
Income before Income Tax		6,423			6,023			5,934			5,442			6,076
Provision for Income Taxes		1,135			1,091			1,088			992			1,048
Net Income	$	5,288		$	4,932		$	4,846		$	4,450		$	5,028
Basic Earnings Per Share	$	2.62		$	2.45		$	2.41		$	2.21		$	2.50
Diluted Earnings Per Share	$	2.61		$	2.43		$	2.39		$	2.19		$	2.48

Heartland BancCorp
Consolidated Statements of Income
		Twelve Months Ended
Interest Income		Dec. 31, 2023			Dec. 31, 2022
	Loans	$	84,424		$	57,919
	Securities
	Taxable		4,320			2,498
	Tax-exempt		2,442			2,346
	Other		1,200			334
	Total interest income		92,386			63,097
Interest Expense
	Deposits		28,690			4,447
	Borrowings		2,662			1,659
	Total interest expense		31,352			6,106
Net Interest Income			61,034			56,991
Provision for Credit Losses			2,600			1,920
Net Interest Income After Provision for Credit Losses			58,434			55,071
Noninterest income
	Service charges		4,012			3,632
	Gains on sale of loans and originated MSR		2,372			1,519
	Loan servicing fees, net		1,530			1,504
	Title insurance income		892			1,177
	Increase in cash value of life insurance		526			408
	Other		3,108			3,141
	Total noninterest income		12,440			11,381
Noninterest Expense
	Salaries and employee benefits		29,558			28,344
	Net occupancy and equipment expense		4,231			3,920
	Software and data processing fees		4,462			3,663
	Professional fees		1,021			1,044
	Marketing expense		1,199			1,012
	State financial institution tax		1,039			1,130
	FDIC insurance premiums		1,166			371
	Other		4,376			4,741
	Total noninterest expense		47,052			44,225
Income before Income Tax			23,822			22,227
Provision for Income Taxes			4,306			4,156
Net Income		$	19,516		$	18,071
Basic Earnings Per Share		$	9.69		$	9.00
Diluted Earnings Per Share		$	9.62		$	8.90

Heartland BancCorp
ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands except per share amounts)(Unaudited)
Asset Quality Ratios and Data:
	Dec. 31, 2023				Sep. 30, 2023				Jun. 30, 2023				Mar. 31, 2023				Dec. 31, 2022
Nonaccrual loans (excluding restructured loans)	$	1,621			$	1,942			$	2,163			$	1,140			$	700
Nonaccrual restructured loans		-				-				-				-				-
Loans past due 90 days and still accruing		468				146				-				111				309
Total nonperforming loans		2,089				2,088				2,163				1,251				1,009
OREO and other non-performing assets		10				-				5				5				5
Total non-performing assets	$	2,099			$	2,088			$	2,168			$	1,256			$	1,014
Nonperforming loans to gross loans		0.13	%			0.14	%			0.14	%			0.09	%			0.07	%
Nonperforming assets to total assets		0.11	%			0.11	%			0.12	%			0.07	%			0.06	%
Allowance for credit losses to gross loans		1.16	%			1.13	%			1.13	%			1.13	%			1.18	%
Unfunded commitment liability to gross loans		0.09	%			0.13	%			0.11	%			0.09	%			-
ACL + UCL to gross loans		1.25	%			1.26	%			1.24	%			1.22	%			1.18	%
Performing restructured loans (RC-C)	$	-			$	-			$	-			$	-			$	-
Net charge-offs quarter ending	$	318			$	47			$	43			$	19			$	118

 

Contact:	G. Scott McComb, Chairman, President & CEO
	Heartland BancCorp 614-337-4600

FAQ

What was the net income in Q4 2023?

The net income in Q4 2023 was $5.3 million.

What was the quarterly cash dividend declared?

The quarterly cash dividend declared was $0.759 per share.

How much did net loans increase by in Q4 2023?

Net loans increased by 1.8% to $1.53 billion at the end of Q4 2023.

What was the total deposit increase in Q4 2023?

Total deposits increased by 4.0% to $1.64 billion at the end of Q4 2023.

What was the net interest margin in Q4 2023?

The net interest margin was 3.49% in Q4 2023.

What was the provision for credit losses in Q4 2023?

The provision for credit losses was $550,000 in Q4 2023.

How did noninterest income change in Q4 2023?

Noninterest income increased by 29.4% to $3.2 million in Q4 2023.

What was the average cost of deposits in Q4 2023?

The average cost of deposits was 2.21% in Q4 2023.

What was the efficiency ratio in Q4 2023?

The efficiency ratio was 62.5% in Q4 2023.

What was the net loan charge-offs at the end of Q4 2023?

Net loan charge-offs totaled $318,000 at the end of Q4 2023.