Highlands Bancorp, Inc. Reports Earnings for the First Quarter Ended March 31, 2018

VERNON, N.J.--()--Highlands Bancorp, Inc. (OTCPink: HSBK), parent company of Highlands State Bank, announced first quarter net income of $829,000, an increase of 65.8% when compared to net income of $500,000 for the same period in 2017. Net income before taxes for the first quarter of 2018 increased $300,000 to $1,089,000 compared to $789,000 for the first quarter of 2017. First quarter 2018 net income available to common stockholders was $829,000 or $.31 per basic and $.30 per diluted share, compared to $500,000 or $.19 per basic and $.18 per diluted share for the same period in 2017.

Net interest income increased by $424,000 to $3,520,000 for the first quarter of 2018, as compared to net interest income of $3,096,000 for the first quarter of 2017, which is attributed to higher average loan balances. The net interest rate spread increased to 2.94% for the first quarter of 2018, as compared to 2.91% for the first quarter of 2017. Net interest margin also increased to 3.25% for the first three months 2018 as compared to 3.18% for the same period of 2017. The current year net interest spread and net interest margin increases reflect increases in loan, investment, and other interest-earning asset interest rates due to the rising rate environment, partially offset by higher rates paid by the Company on deposit promotions. The provision for loan losses decreased by $181,000 to $99,000 for the first quarter of 2018 when compared to $279,000 for the same period of 2017 and reflects management’s continued assessment of the reserves maintained on non-performing loans. There were no loan charge-offs for the first quarter of 2018 compared to $10,000 in loan charge-offs for the first quarter of 2017, and no recoveries of previously charged off loans for the first quarter of 2018 or 2017. Non-interest income increased $72,000 to $864,000 for the first three months of 2018 from $792,000 for the comparable 2017 period due to higher loan fees and service charges, which were partially offset by lower gains on sales of loans and a loss on the sale of a foreclosed asset. Non-interest expenses increased by $377,000 to $3,197,000 for the first quarter of 2018 compared to $2,820,000 for the same period of 2017 as a result of higher salaries and benefits costs from additions made to staff, and increased foreclosed asset, deposit insurance, data processing, advertising and legal expenses, which were partially offset by lower rent costs and equipment charges.

The Company’s total assets were $460.3 million on March 31, 2018, increasing $11.3 million or 2.5% when compared to total assets of $449.0 million at December 31, 2017. Deposits increased $7.5 million or 1.9% from $389.1 million on December 31, 2017 to $396.6 million on March 31, 2018. Net loans outstanding on March 31, 2018 were $402.7 million compared to $396.6 million on December 31, 2017, increasing $6.1 million or 1.5%. Non-accrual loans decreased $179 thousand to $2.9 million at March 31, 2018 when compared to the December 31, 2017 level of $3.1 million.

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.

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
March 31,
2018 2017
INCOME STATEMENT
Net interest income $ 3,520 $ 3,096
Provision for loan losses 98 279
Non-interest income 864 792
Non-interest expense   3,197     2,820  
Net income before income tax 1,089 789
Income tax expense   (260 )   (289 )

Net income available to common stockholders

$ 829   $ 500  
 
EARNINGS PER COMMON SHARE:

Net income available to common stockholders:

Basic $ 0.31   $ 0.19  
Diluted $ 0.30   $ 0.18  
 
Weighted average common shares
Basic   2,702,989     2,702,067  
Diluted   2,800,120     2,764,883  
 

SELECTED BALANCE SHEET DATA AT END OF PERIOD

  3/31/2018     12/31/2017  
Total loans $ 407,039 $ 400,855
Allowance for loan losses 4,375 4,276
Loans held for sale 3,486 5,194
Investment securities 12,225 10,439
Total Assets 460,293 449,016
Total Deposits 396,641 389,120
Stockholders' Equity 29,239 28,510
Goodwill 1,151 1,151
 
Book value per common share $ 10.82 $ 10.55
Tangible book value per common share $ 10.39 $ 10.13
 
ASSET QUALITY
Non-accrual loans $ 2,906 $ 3,085

Loans past due 90 days and still accruing

- -

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

702 749
OREO property 233 282
Allowance for loan losses to total loans 1.07 % 1.07 %

Non-performing loans and performing TDRs to total loans

0.89 % 0.96 %
 

Contacts

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

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