VERNON, N.J.--(EON: Enhanced Online News)--Highlands Bancorp, Inc. (OTCQB: HSBK) parent company of Highlands State Bank, reported third quarter 2013 net income of $326,000 compared to net income of $167,000 for the same period in 2012. For the nine months ended September 30, 2013 net income was $730,000 compared to a net income of $536,000 for the same period in 2012. Third quarter 2013 net income available to common stockholders was $603,000 or $.34 per diluted common share compared to net income of $154,000 or $.09 per diluted common share for the same period in 2012. The comparable nine month results reflect net income available to common stockholders for 2013 of $1,656,000 or $.93 per diluted common share compared to net income of $490,000 or $.27 per diluted common share. The third quarter and year-to-date 2013 results were positively impacted by partial reversals of the Company’s valuation allowance on deferred tax assets of $425,000 and $1,274,000 respectively, which were partially offset by respective period income tax expenses of $131,000, and $297,000, respectively. These resulted in net tax benefits of $294,000 or $.16 per share for the third quarter 2013, and $977,000 or $.55 per share for the nine months ended September 30, 2013.
Net interest income increased by $100,000 to $1,992,000 for the third quarter of 2013 when compared to $1,892,000 for the third quarter of 2012, and by $665,000 to $5,913,000 for the first nine months of 2013 when compared to $5,248,000 for the first nine months of 2012, as a result of loan portfolio growth and lower costs of funds. The provision for loan losses for the third quarter of 2013 of $171,000 reflected a decrease of $197,000 when compared to $368,000 for the third quarter of 2012, and also declined $316,000 to $388,000 for the first nine months of 2013 when compared to $704,000 for the same period in 2012. The provision for loan losses decreased in 2013 due improvement in non-performing loans and management’s continued assessment of the reserves maintained on non-performing loans. There were $418,000 in loan charge-offs for the third quarter of 2013, compared to $347,000 for the third quarter of 2012, and $1,000 in recoveries of previously charged off loans for both the third quarter of 2013 and the third quarter of 2012. Charge-offs and recoveries for the first nine months of 2013 totaled $438,000 and $1,000, respectively. This compares to $378,000 in charge-offs and $1,000 in recoveries for same period in 2012. Non-interest income for the third quarter of 2013 increased $4,000 when compared to the third quarter of 2012 due to higher loan fees, but declined $333,000 for the first nine months of 2013 when compared to the same period in 2012 due to writedowns and losses on sales of foreclosed properties (“OREO”), and a writedown on a bank branch sublease. Non-interest expenses increased by $142,000 to $1,608,000 for the third quarter, and increased $454,000 to $4,836,000 for the nine months ended September 30, 2013 when compared to similar periods of 2012 due to higher salary and benefit costs from additions made to staff and stock based compensation expenses, and increased data processing, professional, deposit insurance, and loan expenses, which were partially offset by lower occupancy costs.
Total assets at Highlands State Bank were $209.1 million on September 30, 2013, increasing $16.0 million or 8.3% when compared to total assets of $193.1 million at December 31, 2012. Deposits increased $16.9 million or 10.1% from $166.9 million on December 31, 2012 to $183.8 million on September 30, 2012. Net loans outstanding on September 30, 2013 were $170.2 million compared to $160.5 million on December 31, 2012, an increase of $9.7 million or 6.0%. Non-accrual loans totaled $5.1 million at September 30, 2013 compared to $4.9 million at December 31, 2012. OREO balances declined $2.5 million or 80.6% to $609 thousand at September 30, 2012 compared to $3.1 million at December 31, 2012.
Highlands State Bank is a full service community bank headquartered in Vernon, New Jersey with branch offices in Sparta and Totowa, New Jersey. Highlands State Bank provides deposit and loan banking services to consumers and businesses in northern New Jersey.
This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company’s control and could impede its ability to achieve these goals. These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors.
|Highlands State Bank|
|(Dollars in thousands, except per share data)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Net interest income||$||1,992||$||1,892||$||5,913||$||5,248|
|Provision for loan losses||171||368||388||704|
|Net income before income taxes||326||167||730||536|
|Income tax benefit||294||-||977||-|
|Preferred stock dividends and accretion||(17||)||(13||)||(51||)||(46||)|
|Net income available to|
|EARNINGS PER COMMON SHARE:|
|Net income available to|
|Basic and diluted||$||0.34||$||0.09||$||0.93||$||0.27|
|Weighted average common shares|
|Basic and diluted||1,788,262||1,788,262||1,788,262||1,788,262|
|SELECTED BALANCE SHEET DATA|
|AT END OF PERIOD||9/30/2013||12/31/2012|
|Allowance for loan losses||2,581||2,630|
|Book value per common share||$||8.19||$||7.34|
|Tangible book value per common share||$||7.74||$||6.89|
|Loans past due 90 days and|
|Troubled debt restructurings (TDRs)|
|currently in compliance with new terms||756||1,893|
|Allowance for loan losses to total loans||1.49||%||1.61||%|
|Non-performing loans and performing TDRs|
|to total loans||3.40||%||4.18||%|