Highlands Bancorp, Inc. Reports Net Income and Earnings for the Second Quarter

VERNON, N.J.--()--Highlands Bancorp, Inc. (OTCPink:HSBK) parent company of Highlands State Bank, reported second quarter 2016 net income of $421,000 compared to net income of $428,000 for the same period in 2015. For the six months ended June 30, 2016 net income was $807,000 compared to net income of $669,000 for the same period in 2015. Second quarter 2016 net income available to common stockholders was $294,000 or $.16 per basic and diluted common share compared to $411,000 or $.23 per basic common shares and $.22 per diluted common share for the same period in 2015. Six month results reflect net income available to common stockholders for 2016 of $663,000 or $.37 per basic common share and $.36 per diluted common share compared to $635,000 or $.35 per basic common shares and $.34 per diluted common share for 2015.

Net interest income increased by $214,000 to $2,857,000 for the second quarter of 2016 when compared to net interest income of $2,643,000 for the second quarter of 2015 as a result of loan portfolio growth during the period. For the first six months of 2016, net interest income was $5,648,000 compared to $5,163,000 for the same period of 2015. The provision for loan losses for the second quarter of 2016 of $225,000 increased by $10,000 when compared to $215,000 for the second quarter of 2015, and increased $27,000 to $405,000 for the first six months of 2016 when compared to $378,000 for the same period in 2015. The higher provision for loan losses in 2016 is due to loan portfolio growth and management’s continued assessment of the reserves maintained on non-performing loans. Loan charge-offs were $73,000 for the second quarter and $355,000 for year-to-date of 2016, compared to no loan charge-offs for the same periods of 2015. There were no recoveries of previously charged off loans during the second quarter of 2016 or the second quarter of 2015. Recoveries for both the first six months of 2016 and 2015 totaled $1,000. Non-interest income for the second quarter declined $60,000 when compared to the same period in 2015 due to lower gains on sales of mortgage loans and investments, and reduced overdraft fee income, partially offset by higher loan fees and merchant service income. Non-interest income for the first six months of 2016 increased $389,000 when compared to the same period in 2015 due to higher gains on sales of mortgage loans, and increased income from debit card fees and merchant services income, partially offset by lower OREO rental income and write-downs, and overdraft fee income. Non-interest expenses increased by $136,000 to $2,857,000 for the second quarter of 2016, and by $629,000 to $5,824,000 for the six months ended June 30, 2016 when compared to similar periods of 2015 due to the additional costs associated with the Company’s continued growth and increased earnings, including higher salary and benefit costs from additions made to staff, and increased advertising, professional, and training costs, partially offset by lower data processing charges.

The Company’s total assets were $342.8 million on June 30, 2016, increasing $27.8 million or 8.8% when compared to total assets of $315.0 million at December 31, 2015. Deposits increased $40.0 million or 15.3% from $260.7 million on December 31, 2015 to $300.7 million on June 30, 2016. Net loans outstanding on June 30, 2016 were $309.1 million compared to $284.3 million on December 31, 2015, an increase of $24.8 million or 8.7%. Non-accrual loans declined to $1.4 million at June 30, 2016 compared to $2.0 million at December 31, 2015, and non-performing loans and performing troubled debt restructurings as a percentage of total loans declined to .68% at June 30, 2016 from .87% at December 31, 2015.

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,
2016 2015 2016 2015
INCOME STATEMENT
Net interest income $ 2,857 $ 2,643 $ 5,648 $ 5,163
Provision for loan losses 225 215 405 378
Non-interest income 890 950 1,858 1,469
Non-interest expense   2,857     2,721     5,824     5,195  
Net income before income tax 665 657 1,277 1,059
Income tax expense   (244 )   (229 )   (470 )   (390 )
Net income 421 428 807 669
Preferred stock dividends and accretion   (127 )   (17 )   (144 )   (34 )

Net income available to common stockholders

$ 294   $ 411   $ 663   $ 635  
 
EARNINGS PER COMMON SHARE:

Net income available to common stockholders:

Basic $ 0.16   $ 0.23   $ 0.37   $ 0.35  
Diluted $ 0.16   $ 0.22   $ 0.36   $ 0.34  
 
Weighted average common shares
Basic   1,785,089     1,794,522     1,786,056     1,795,340  
Diluted   1,841,193     1,840,928     1,842,212     1,841,239  
 

SELECTED BALANCE SHEET DATA AT END OF PERIOD

  6/30/2016     12/31/2015  
Total loans $ 312,536 $ 287,622
Allowance for loan losses 3,407 3,356
Loans held for sale 3,394 2,622
Investment securities 3,779 3,799
Total Assets 342,831 314,954
Total Deposits 300,715 260,713
Stockholders' Equity 17,889 24,107
Goodwill 1,151 1,151
Intangible Assets Other Than Goodwill 175 175
 
Book value per common share $ 10.01 $ 9.61
Tangible book value per common share $ 9.26 $ 8.87
 
ASSET QUALITY
Non-accrual loans $ 1,423 $ 2,011

Loans past due 90 days and still accruing

- -

Troubled debt restructurings (TDRs) currently in compliance with new terms

707 490
OREO property 835 488
Allowance for loan losses to total loans 1.09 % 1.17 %

Non-performing loans and performing TDRs to total loans

0.68 % 0.87 %
 

Contacts

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

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