Highlands Bancorp, Inc. Reports Net Income up over 84%

VERNON, N.J.--()--Highlands Bancorp, Inc. (OTCQB:HSBK) parent company of Highlands State Bank, reported that net income for the second quarter of 2015 was up over 118% as compared to the second quarter 2014, and net income the first six months showed an increase of over 84% as compared to the first six months of 2014. The company reported second quarter 2015 net income of $428,000 compared to net income of $196,000 for the same period in 2014. For the six months ended June 30, 2015 net income was $669,000 compared to net income of $363,000 for the same period in 2014. Second quarter 2015 net income available to common stockholders was $411,000 or $.23 per basic common share and $.22 per diluted common share compared to net income of $179,000 or $.10 per basic and diluted common share for the same period in 2014. Six month results reflect net income available to common stockholders for 2015 of $635,000 or $.35 per basic common share and $.34 per diluted common share compared to net income of $329,000 or $.18 per basic and diluted common share for 2014.

Net interest income increased by $401,000 to $2,643,000 for the second quarter of 2015 when compared to net interest income of $2,242,000 for the second quarter of 2014 as a result of loan portfolio growth during the period. For the first six months of 2015, net interest income was $5,163,000 compared to $4,402,000 for the same period of 2014. The provision for loan losses for the second quarter of 2015 of $215,000 decreased by $20,000 when compared to $235,000 for the second quarter of 2014, but increased $16,000 to $378,000 for the first six months of 2015 when compared to $362,000 for the same period in 2014. The higher year-to-date provision for loan losses in 2015 is due to increased loan portfolio balances and management’s continued assessment of the reserves maintained on non-performing loans. There were no loan charge-offs for the second quarter and year-to-date of 2015, compared to $89,000 and $278,000 of loan charge-offs for the second quarter and year-to-date of 2014. There were no recoveries of previously charged off loans during the second quarter of 2015 or the second quarter of 2014. Recoveries for both the first six months of 2015 and 2014 totaled $1,000. Non-interest income for the second quarter and first six months of 2015 increased $274,000 and $622,000, respectively, when compared to the same periods in 2014 primarily due to gains on sales of loans and from higher loan fee income from the Bank’s mortgage subsidiary Secure Lending Solutions, Inc. (“SLS”). The second quarter and the first six months of 2015 reflected a lower gain on the sale of investments, but increased overdraft, debit card interchange, loan late fees, and lower writedowns on foreclosed properties (“OREO”) when compared to the same periods in 2014. Non-interest expenses increased by $365,000 to $2,721,000 for the second quarter of 2015, and by $913,000 to $5,195,000 for the six months ended June 30, 2015 when compared to similar periods of 2014 due to the additional costs associated with the Company’s continued growth and increased earnings, including higher salary and benefit costs as a result of the acquisition of SLS in February 2014, additions made to staff, higher occupancy and equipment costs relating to SLS and the openings of two new branch locations in 2014, and increased data processing, professional, loan, and OREO charges.

The Company’s total assets were $298.8 million on June 30, 2015, increasing $26.2 million or 9.6% when compared to total assets of $272.6 million at December 31, 2014. Deposits increased $18.7 million or 8.0% from $234.4 million on December 31, 2014 to $253.1 million on June 30, 2015. Net loans outstanding on June 30, 2015 were $259.6 million compared to $235.1 million on December 31, 2014, an increase of $24.5 million or 10.4%. Non-accrual loans declined to $2.3 million at June 30, 2015 compared to $2.6 million at December 31, 2014, and non-performing loans and performing troubled debt restructurings as a percentage of total loans declined to 1.07% at June 30, 2015 from 1.43% at December 31, 2014.

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,
  2015     2014     2015     2014  
INCOME STATEMENT
Net interest income $ 2,643 $ 2,242 $ 5,163 $ 4,402
Provision for loan losses 215 235 378 362
Non-interest income 950 676 1,469 847
Non-interest expense   2,721     2,356     5,195     4,282  
Net income before income tax 657 327 1,059 605
Income tax (expense) benefit   (229 )   (131 )   (390 )   (242 )
Net income 428 196 669 363
Preferred stock dividends and accretion   (17 )   (17 )   (34 )   (34 )
Net income available to
common stockholders $ 411   $ 179   $ 635   $ 329  
 
EARNINGS PER COMMON SHARE:
Net income available to
common stockholders:
Basic $ 0.23   $ 0.10   $ 0.35   $ 0.18  
Diluted $ 0.22   $ 0.10   $ 0.34   $ 0.18  
 
Weighted average common shares
Basic   1,794,522     1,796,679     1,795,340     1,793,982  
Diluted   1,840,928     1,839,846     1,841,239     1,840,949  
 
SELECTED BALANCE SHEET DATA
AT END OF PERIOD   6/30/2015     12/31/2014  
Total loans $ 262,727 $ 237,916
Allowance for loan losses 3,149 2,770
Loans held for sale 4,130 4,456
Investment securities 12,306 10,877
Total Assets 298,823 272,622
Total Deposits 253,105 234,372
Stockholders' Equity 23,415 22,811
 
Book value per common share $ 9.23 $ 8.88
Tangible book value per common share $ 8.58 $ 8.23
 
ASSET QUALITY
Non-accrual loans $ 2,308 $ 2,559
Loans past due 90 days and
still accruing - -
Troubled debt restructurings (TDRs)
currently in compliance with new terms 503 843
OREO property 596 610
Allowance for loan losses to total loans 1.20 % 1.16 %
Non-performing loans and performing TDRs
to total loans 1.07 % 1.43 %
 

Contacts

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

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