Heartland BancCorp Earns $4.8 Million, or $2.39 Per Diluted Share, in the Second Quarter of 2023; Declares Quarterly Cash Dividend of $0.759 per Share.

WHITEHALL, Ohio: Heartland BancCorp ("Heartland" and "the Company") (OTCQX: HLAN), parent company of Heartland Bank ("Bank"), today reported net income increased 23.1% to $4.8 million, or $2.39 per diluted share, in the second quarter of 2023, compared to $3.9 million, or $1.94 per diluted share, in the second quarter of 2022, and increased 8.9% compared to $4.5 million, or $2.19 per diluted share, in the preceding quarter. In the first six months of 2023, net income increased 16.6% to $9.3 million, or $4.58 per diluted share, compared to $8.0 million, or $3.93 per diluted share, in the first six months of 2022.

The company also announced that its board of directors declared a quarterly cash dividend of $0.759 per share. The dividend will be payable October 10, 2023, to shareholders of record as of September 25, 2023. Heartland has paid regular quarterly cash dividends since 1993.

"Our second quarter and year to date operating results were solid, highlighted by higher operating income, stable balance sheet growth and pristine credit quality," stated G. Scott McComb, Chairman, President and Chief Executive Officer. "Due to the current rate environment, we made changes at the beginning of the second quarter to pull back the growth rate of loans to an annualized target range between 8-12%. While implementing this strategy, we remained selective on the loans we added during the quarter, as well as adhering to disciplined loan pricing. The result was more muted loan growth during the quarter of 2.5%, or 10% annualized, and new loans had an average rate of 7.59%, up approximately 70 basis points from the prior quarter. Additionally, we continue to focus on building out the Cincinnati market that we entered just a year ago. Our brand of community banking is gaining momentum in Cincinnati, just as it's been in all the markets that we serve. We will continue to look for ways to come out ahead as we navigate through this challenging operating environment."

Second Quarter 2023 Financial Highlights (at or for the three months ended June 30, 2023)

Net income was $4.8 million, or $2.39 per diluted share, compared to $3.9 million, or $1.94 per diluted share, in the second quarter of 2022.

Provision for credit losses was $800,000, compared to $480,000 for the second quarter a year ago.

Net interest margin was 3.61%, compared to 3.87% in the preceding quarter and 3.92% in the second quarter a year ago.

Second quarter revenues (net interest income plus noninterest income) increased 13.9% to $18.4 million, compared to $16.2 million in the second quarter a year ago.

Annualized return on average assets was 1.10%, unchanged compared to the second quarter of 2022.

Annualized return on average tangible common equity was 14.19%, compared to 11.97% in the second quarter a year ago.

Net loans increased $36.1 million during the quarter, or 2.5%, to $1.49 billion at June 30, 2023, compared to $1.45 billion three months earlier.

Total deposits decreased $9.9 million during the quarter, or less than 1%, to $1.56 billion at June 30, 2023, compared to $1.57 billion three months earlier.

Credit quality remains pristine, with nonperforming loans to gross loans of 0.14% and nonperforming...