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Highlands Bancorp, Inc. Announces Net Income and Earnings Per Share for the First Quarter Ended March 31, 2016

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VERNON, N.J.--(BUSINESS WIRE)--

Highlands Bancorp, Inc. (OTCPink:HSBK), parent company of Highlands State Bank, announced first quarter net income of $386,000, an increase of 60.2% when compared to net income of $241,000 for the same period in 2015. Net income before taxes for the first quarter of 2016 increased $210,000 to $612,000 compared to $402,000 for the first quarter of 2015. First quarter net income available to common stockholders was $369,000 or $.21 per basic and $.20 per diluted share, compared to $224,000 or $.12 per basic and diluted share for the same period in 2015.

Net interest income increased by $271,000 to $2,791,000 for the first quarter of 2016, as compared to net interest income of $2,520,000 for the first quarter of 2015, as a result of growth in the loan portfolio. The net interest rate spread declined to 3.39% for the first quarter of 2016, as compared to 3.64% for the first quarter of 2015. Net interest margin also decreased to 3.67% for the first three months 2016 as compared to 3.86% for the same period of 2015. These decreases are the result of increased borrowing costs and higher rates paid on deposit promotions. The provision for loan losses increased by $17,000 to $180,000 for the first quarter of 2016 when compared to $163,000 for the same period of 2015 due loan portfolio growth and management's continued monitoring of non-performing loans. Charge-offs for the first quarter of 2016 were $282,000 compared to no charge-offs in the first quarter of 2015. There were no recoveries of previously charged off loans for the first quarter of 2016 or 2015. Non-interest income increased $449,000 to $968,000 for the first three months of 2016 from $519,000 for the comparable 2015 period due increased gains on sales of loans, debit card interchange, and loan fees. Non-interest expenses increased by $493,000 to $2,967,000 for the first quarter of 2016 compared to $2,474,000 for the same period of 2015 due to higher salaries and commissions, audit fees, and equipment costs, which were partially offset by lower data processing charges.

The Company's total assets were $320.6 million on March 31, 2016, an increase of $5.6 million or 1.8% when compared to total assets of $315.0 million at December 31, 2015. Deposits increased $1.0 million or .4% from $260.7 million on December 31, 2015 to $261.7 million on March 31, 2016. Net loans outstanding on March 31, 2016 were $292.1 million compared to $284.3 million on December 31, 2015, an increase of 2.7%. Non-accrual loans decreased $540 thousand to $1.5 million at March 31, 2016 when compared to December 31, 2015, and declined to .50% of total loans for March 31, 2016 from .70% of total loans 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
March 31,
2016 2015
INCOME STATEMENT
Net interest income $ 2,791 $ 2,520
Provision for loan losses 180 163
Non-interest income 968 519
Non-interest expense   2,967     2,474  
Net income before income tax 612 402
Income tax expense   (226 )   (161 )
Net income 386 241
Preferred stock dividends and accretion   (17 )   (17 )
Net income available to
common stockholders $ 369   $ 224  
 
EARNINGS PER COMMON SHARE:
Net income available to
common stockholders:
Basic $ 0.21   $ 0.12  
Diluted $ 0.20   $ 0.12  
 
Weighted average common shares
Basic   1,787,023     1,796,168  
Diluted   1,843,127    

1,841,548

 
 
SELECTED BALANCE SHEET DATA
AT END OF PERIOD   3/31/2016     12/31/2015  
Total loans $ 295,383 $ 287,622
Allowance for loan losses 3,254 3,356
Loans held for sale 5,337 2,622
Investment securities 3,809 3,799
Total Assets 320,642 314,954
Total Deposits 261,669 260,713
Stockholders' Equity 24,475 24,107
Goodwill 1,151 1,151
Intangible Assets Other Than Goodwill 175 175
 
Book value per common share $ 9.85 $ 9.61
Tangible book value per common share $ 9.10 $

8.87

 
ASSET QUALITY
Non-accrual loans $ 1,471 $

2,011

Loans past due 90 days and
still accruing 374 -
Troubled debt restructurings (TDRs)
currently in compliance with new terms 716 490
OREO property 488 488
Allowance for loan losses to total loans 1.10 % 1.17 %
Non-performing loans and performing TDRs
to total loans 0.87 % 0.87 %
 

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

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