Heartland BancCorp Earns $4.9 Million, or $2.43 Per Diluted Share, in the Third Quarter of 2023; Declares Quarterly Cash Dividend of $0.759 per Share

WHITEHALL, Ohio, Oct. 24, 2023 (GLOBE NEWSWIRE) -- Heartland BancCorp (“Heartland” and “the Company”) (OTCQX: HLAN), parent company of Heartland Bank (“Bank”), today reported net income of $4.9 million, or $2.43 per diluted share, in the third quarter of 2023, compared to $5.1 million, or $2.50 per diluted share, in the third quarter of 2022, and $4.8 million, or $2.39 per diluted share, in the preceding quarter. In the first nine months of 2023, net income increased 9.1% to $14.2 million, or $7.01 per diluted share, compared to $13.0 million, or $6.43 per diluted share, in the first nine 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 January 10, 2024, to shareholders of record as of December 25, 2023. Heartland has paid regular quarterly cash dividends since 1993.

“We generated solid third quarter earnings reflecting strong revenue generation, steady balance sheet growth and stable credit quality metrics,” stated G. Scott McComb, Chairman, President and Chief Executive Officer. “In an effort to mitigate the impact of the current rate environment, we remain disciplined and intentional with the loans we are putting on the balance sheet, as we are still in an uncertain rate environment as Fed actions have slowed inflation but not as effectively as desired. We made changes earlier in the year to moderate the growth rate of loans to an annualized target range in the high single digits, and 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 third quarter of 1%, and new loans had an average rate of 7.85%, up approximately 26 basis points from the prior quarter. On the deposit side, we have been successful at growing new deposit accounts, while also maintaining core deposit balances.”

“We continue to see good growth in our Columbus and Cincinnati markets and look for ways to capitalize in these markets and surrounding areas,” McComb continued. “During the third quarter, we opened our 20th Heartland Bank branch in Delaware, Ohio, located in the Delaware Community Plaza. Delaware County has been on our radar for quite a while, and we are very excited to bring our brand of community banking to this thriving county just north of Columbus.”

Third Quarter 2023 Financial Highlights (at or for the three months ended September 30, 2023)

• Net income was $4.9 million, or $2.43 per diluted share, compared to $5.1 million, or $2.50 per diluted share, in the third quarter of 2022.
• Provision for credit losses was $500,000, compared to $480,000 for the third quarter a year ago.
• Net interest margin was 3.52%, compared to 3.61% in the preceding quarter and 4.20% in the third quarter a year ago.
• Third quarter revenues (net interest income plus noninterest income) increased 3.8% to $18.5 million, compared to $17.8 million in the third quarter a year ago.
• Annualized return on average assets was 1.07%, compared to 1.31% in the third quarter of 2022.
• Annualized return on average tangible common equity was 14.01%, compared to 15.27% in the third quarter a year ago.
• Net loans increased $15.3 million during the quarter, or 1.0%, to $1.50 billion at September 30, 2023, compared to $1.49 billion three months earlier.
• Total deposits increased $21.2 million during the quarter, or 1.4%, to $1.58 billion at September 30, 2023, compared to $1.56 billion three months earlier.
• Credit quality remains pristine, with nonperforming loans to gross loans of 0.14% and nonperforming assets to total assets of 0.11%, at September 30, 2023.
• Tangible book value was $67.78 per share, compared to $62.90 per share a year ago.
• Declared a quarterly cash dividend of $0.759 per share.
  

Balance Sheet Review

Assets

Total assets increased 16.5% to $1.83 billion at September 30, 2023, compared to $1.58 billion a year earlier, and increased 1.6% compared to $1.81 billion three months earlier. Heartland’s loan-to-deposit ratio was 95.2% at September 30, 2023, compared to 95.5% at June 30, 2023, and 96.4% at September 30, 2022.

Interest bearing deposits in other banks were $24.2 million at September 30, 2023, compared to $5.3 million a year earlier and $20.0 million three months earlier.

Average earning assets increased to $1.72 billion in the third quarter of 2023, compared to $1.67 billion in the second quarter of 2023, and $1.44 billion in the third quarter a year ago. The average yield on interest-earning assets was 5.59% in the third quarter of 2023, up 20 basis points from 5.39% in the preceding quarter, and up 99 basis points from 4.60% in the third quarter a year ago.

Loan Portfolio

“As planned, we pulled back on loan growth during the quarter, with net loans increasing 1.0% over the prior quarter end, and average loans increasing 2.2% compared to the prior quarter,” said Ben Babcanec, EVP and Chief Operating Officer. “We continue to moderate the growth rate of loans while remaining disciplined with loan pricing.”

Net loans were $1.50 billion at September 30, 2023, which was a 1.0% increase compared to $1.49 billion at June 30, 2023, and a 15.6% increase compared to $1.30 billion at September 30, 2022. Commercial loans increased 12.1% from year ago levels to $169.4 million, and comprise 11.1% of the total loan portfolio at September 30, 2023. Owner occupied commercial real estate loans (CRE) decreased 14.3% to $277.1 million at September 30, 2023, compared to a year ago, and comprise 18.2% of the total loan portfolio. Non-owner occupied CRE loans increased 34.4% to $502.0 million, compared to a year ago, and comprise 33.0% of the total loan portfolio at September 30, 2023. 1-4 family residential real estate loans increased 21.1% from year-ago levels to $500.0 million and represent 32.9% of total loans. Home equity loans increased 30.3% from year-ago levels to $52.5 million and represent 3.4% of total loans, while consumer loans increased 21.5% from year-ago levels to $19.9 million and represent 1.3% of the total loan portfolio at September 30, 2023.

Deposits

Total deposits were $1.58 billion at September 30, 2023, a 1.4% increase, compared to $1.56 billion at June 30, 2023, and a $229.8 million, or 17.0% increase, compared to $1.35 billion at September 30, 2022. “While total deposit balances increased modestly during the third quarter, average deposits increased $44.6, or 2.9% million, to $1.82 billion in the third quarter of 2023 compared to the preceding quarter, with the growth primarily in money market and CD accounts,” said Babcanec. “While we are able to maintain strong deposit balances, some of the DDA runoff during the quarter was due to rate sensitive clients reallocating to interest bearing accounts.”

At September 30, 2023, noninterest bearing demand deposit accounts decreased 4.5% compared to a year ago and represented 28.8% of total deposits; savings, NOW and money market accounts increased 8.8% compared to a year ago and represented 44.0% of total deposits; and CDs increased 83.5% compared to a year ago and comprised 27.2% of total deposits. The average cost of deposits was 2.05% in the third quarter of 2023, compared to 1.76% in the second quarter of 2023 and 0.30% in the third quarter of 2022.

Shareholders’ Equity

Shareholders’ equity was $149.6 million at September 30, 2023, compared to $151.1 million three months earlier and $139.5 million a year earlier. At September 30, 2023, Heartland’s tangible book value was $67.78 per share compared to $68.54 at June 30, 2023, and $62.90 at September 30, 2022.

Heartland continues to maintain capital levels in excess of the requirements to be categorized as “well-capitalized” with tangible equity to tangible assets of 7.50% at September 30, 2023, compared to 7.70% at June 30, 2023, and 8.09% at September 30, 2022.

Liquidity

Heartland had ample sources of available liquidity as of September 30, 2023, including a $220 million line of credit at the Federal Home Loan Bank, as well as additional credit lines of $85 million. Nearly 69% of Heartland’s client deposit balances were FDIC insured or collateralized as of September 30, 2023.

Operating Results

In the third quarter of 2023, Heartland generated a ROAA of 1.07% and a ROATCE of 14.01%, compared to 1.10% and 14.19%, respectively, in the second quarter of 2023 and 1.31% and 15.27%, respectively, in the third quarter a year ago.

Net Interest Income/Net Interest Margin

Net interest income, before the provision for credit losses, increased modestly to $15.3 million in the third quarter of 2023, compared to $15.2 million in the third quarter a year ago, and increased 1.5% compared to $15.0 million in the preceding quarter. In the first nine months of 2023, net interest income increased 10.9% to $45.6 million, compared to $41.2 million in the first nine months of 2022.

Total revenues (net interest income, before the provision for credit losses, plus noninterest income) were $18.5 million in the third quarter of 2023, a 3.8% increase compared to $17.8 million in the third quarter a year ago, and a modest increase compared to $18.4 million in the preceding quarter. Year to date, total revenues increased 9.6% to $54.9 million, compared to $50.1 million in the same period a year earlier.

Heartland’s net interest margin was 3.52% in the third quarter of 2023, compared to 3.61% in the preceding quarter and 4.20% in the third quarter of 2022. “The unprecedented rise in funding costs that is affecting the entire banking industry continued to impact our net interest margin during the third quarter. While deposit pricing pressure continues, we are benefitting from repricing loans at higher rates,” said Carrie Almendinger, EVP and Chief Financial Officer.

Heartland’s net interest margin continues to remain above the peer average posted by the Dow Jones U.S. MicroCap Bank Index with total market capitalization under $250 million as of June 30, 2023.^*

*As of June 30, 2023, the Dow Jones U.S. MicroCap Bank Index tracked 153 banks with total common market capitalization under $250 million for the following ratios: NIM* of 3.34%.

Provision for Credit Losses

Heartland recorded a $500,000 provision for credit losses in the third quarter of 2023, compared to an $800,000 provision for credit losses in the second quarter of 2023, and a $480,000 provision for credit losses in the third quarter of 2022. “Our overall credit quality metrics continue to remain stable, and we are seeing minimal signs of stress in the loan portfolio,” said McComb.

Noninterest Income

Noninterest income increased 23.6% to $3.2 million in the third quarter of 2023, compared to $2.6 million in the third quarter a year ago, and decreased 4.7% compared to $3.4 million in the preceding quarter. Gains on sale of loans and originated mortgage servicing rights increased 278.6% to $708,000 in the third quarter of 2023, compared to $187,000 in the third quarter a year ago, and increased modestly compared to $704,000 in the preceding quarter. In the first nine months of 2023, noninterest income increased 3.7% to $9.2 million, compared to $8.9 million in the first nine months of 2022.

“Similar to the prior quarter, we experienced strong secondary loan activity during the third quarter, and we were successful with executing on swaps, with $189,000 in swap referral fee income,” said Almendinger.

Noninterest Expense

Noninterest expenses were $12.0 million during the third quarter of 2023, a 2.4% increase compared to $11.7 million in the preceding quarter, and an 8.4% increase compared to $11.1 million in the third quarter a year ago. Salary and employee benefit expenses, the largest component of noninterest expense, were $7.4 million in the third quarter of 2023, compared to $7.3 million in the second quarter of 2023, and $7.1 million in the third quarter of 2022. Higher FDIC insurance premiums during the quarter also contributed to the quarterly increase. Year to date, noninterest expense totaled $35.4 million, compared to $32.5 million in the first nine months of 2022.

“We are making a company-wide effort to keep operating expenses in check, and as we look to grow the team, our focus remains on adding new associates in revenue producing roles,” said Almendinger.

The efficiency ratio for the third quarter of 2023 was 64.7%, compared to 63.5% for the preceding quarter and 62.0% for the third quarter of 2022.

Income Tax Provision

In the third quarter of 2023, Heartland recorded $1.1 million in state and federal income tax expense for an effective tax rate of 18.1%, compared to $1.1 million, or 18.3%, in the second quarter of 2023 and $1.2 million, or 19.4%, in the third quarter a year ago.

Credit Quality

Beginning January 1, 2023, Heartland began accounting for credit losses under CECL which replaced the former “incurred loss” model for recognizing credit losses with an “expected loss” model.

At September 30, 2023, the allowance for credit losses plus unfunded commitment liability (ACL + UCL) was $19.2 million, or 1.26% of total loans, compared to $18.7 million, or 1.24% of total loans, at June 30, 2023, and $16.2 million, or 1.23% of total loans, a year ago. As of September 30, 2023, the ACL represented 888% of nonaccrual loans, compared to 789% three months earlier and 2,322% one year earlier.

Nonaccrual loans were $1.9 million at September 30, 2023, compared to $2.2 million at June 30, 2023, and $699,000 at September 30, 2022. At September 30, 2023, nonaccrual loans totaled 12/ loans with an average balance of approximately $162,000. There were $146,000 in loans past due 90 days and still accruing at September 2023, compared to zero at June 30, 2023, and $404,000 at September 30, 2022. Net loan charge-offs totaled $47,000 at September 30, 2023, compared to $43,000 in net loan charge-offs at June 30, 2023, and $176,000 in net loan charge-offs at September 30, 2022.

There was no other real estate owned and other non-performing assets on the books at September 30, 2023, compared to $5,000 at June 30, 2023 and $5,000 at September 30, 2022. Non-performing assets (NPAs), consisting of non-performing loans and loans past due 90 days or more, were $2.1 million, or 0.11% of total assets, at September 30, 2023, compared to $2.2 million, or 0.12% of total assets, at June 30, 2023, and $1.1 million, or 0.07% of total assets, a year ago.

About Heartland BancCorp

Heartland BancCorp is a registered Ohio bank holding company and the parent of Heartland Bank, which operates 20 full-service banking offices and TransCounty Title Agency, LLC. Heartland Bank, founded in 1911, provides full-service commercial, small business, and consumer banking services; professional financial planning services; and other financial products and services. Heartland Bank is a member of the Federal Reserve, a member of the FDIC, and an Equal Housing Lender. Heartland BancCorp is currently quoted on the OTC Markets (OTCQX) under the symbol HLAN. Learn more about Heartland Bank at Heartland.Bank.

In June of 2023, Heartland was ranked #119 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity as of December 31, 2022.

During the first quarter of 2023, Heartland was ranked 36^th on the OTCQX’s Best 50 list for 2023. The OTCQX Best 50 is an annual ranking of the top 50 U.S. and international companies traded on the OTCQX Best Market, based on an equal weighting of one-year total return and average daily dollar volume growth. Companies in the 2023 OTCQX Best 50 were ranked based on their performance during the 2022 calendar year.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about (i) the benefits of a merger between Heartland Bank and Victory Community Bank, including future financial and operating results, cost savings enhancements to revenue and accretion to reported earnings that may be realized from the merger; (ii) Heartland’s plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts; and (iii) other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,” “projects,” or words of similar meaning generally intended to identify forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of Heartland’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Heartland. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements because of the following factors, among others: (1) the assumptions and estimates used by Heartland’s management include both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments, and thus, may not be realized; (2) legislative or regulatory changes, including changes in accounting standards, may adversely affect the businesses in which Heartland is engaged; (3) changes in the interest rate environment may adversely affect net interest income; (4) results may be adversely affected by continued diversification of assets and adverse changes to credit quality; (5) competition from other financial services companies in Heartland’s markets could adversely affect operations; (6) the impact of the coronavirus (COVID-19) pandemic on the employees and clients of Heartland, as well as the resulting effect on the business, financial condition and results of operations on Heartland; and (7) the current economic slowdown could adversely affect credit quality and loan originations.

Heartland cautions that the foregoing list of factors is not exclusive. All subsequent written and oral forward-looking statements are expressly qualified in their entirety by the cautionary statements above. Heartland does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

Heartland BancCorp
Quarterly Financial Summary
		Three Months Ended
Earnings and dividends:		Sep. 30, 2023			Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022
	Interest income	$	24,194		$	22,476		$	20,521		$	18,841		$	16,652
	Interest expense		8,928			7,437			5,180			3,011			1,444
	Net interest income		15,266			15,039			15,341			15,830			15,208
	Provision for credit losses		500			800			750			480			480
	Noninterest income		3,232			3,390			2,601			2,487			2,614
	Noninterest expense		11,975			11,695			11,750			11,761			11,051
	Provision for income taxes		1,091			1,088			992			1,048			1,223
	Net income		4,932			4,846			4,450			5,028			5,068
Share data:
	Basic earnings per share	$	2.45		$	2.41		$	2.21		$	2.50		$	2.53
	Diluted earnings per share		2.43			2.39			2.19			2.48			2.50
	Dividends declared per share		0.76			0.76			0.76			0.69			0.69
	Book value per share		74.24			75.02			73.60			71.63			69.48
	Tangible book value per share		67.78			68.54			67.09			65.09			62.90
	Common shares outstanding, 20,000,000 authorized		2,105,737			2,105,237			2,103,537			2,099,587			2,098,962
	Treasury shares		(90,612	)		(90,612	)		(90,612	)		(90,612	)		(90,612	)
	Common shares, net		2,015,125			2,014,625			2,012,925			2,008,975			2,008,350
	Average common shares outstanding, net		2,014,936			2,013,607			2,009,782			2,008,839			2,008,350
Balance sheet - average balances:
	Loans receivable, net	$	1,498,257		$	1,465,920		$	1,415,215		$	1,356,369		$	1,261,695
	Earning assets		1,718,549			1,672,994			1,606,350			1,520,860			1,437,508
	Goodwill & intangible assets		13,031			13,077			13,132			13,186			13,241
	Total assets		1,822,084			1,772,998			1,705,675			1,620,580			1,530,675
	Demand deposits		473,373			467,301			495,443			500,624			491,782
	Deposits		1,598,495			1,553,882			1,488,181			1,413,150			1,323,645
	Borrowings		51,856			49,965			54,257			52,162			49,409
	Shareholders' equity		152,720			150,017			148,195			140,800			144,873
Ratios:
	Return on average assets		1.07	%		1.10	%		1.06	%		1.23	%		1.31	%
	Return on average equity		12.81	%		12.96	%		12.18	%		14.16	%		13.88	%
	Return on average tangible common equity		14.01	%		14.19	%		13.36	%		15.63	%		15.27	%
	Yield on earning assets		5.59	%		5.39	%		5.18	%		4.91	%		4.60	%
	Cost of deposits		2.05	%		1.76	%		1.24	%		0.70	%		0.30	%
	Cost of funds		2.15	%		1.86	%		1.36	%		0.82	%		0.42	%
	Net interest margin		3.52	%		3.61	%		3.87	%		4.13	%		4.20	%
	Efficiency ratio		64.74	%		63.46	%		65.48	%		64.21	%		62.02	%
Asset quality:
	Net loan charge-offs to average loans		0.01	%		0.01	%		0.01	%		0.03	%		0.06	%
	Nonperforming loans to gross loans		0.14	%		0.14	%		0.09	%		0.07	%		0.08	%
	Nonperforming assets to total assets		0.11	%		0.12	%		0.07	%		0.06	%		0.07	%
	Allowance for loan losses to gross loans		1.13	%		1.13	%		1.13	%		1.18	%		1.23	%
	ACL + UCL to gross loans		1.26	%		1.24	%		1.22	%		1.18	%		1.23	%

Heartland BancCorp
Consolidated Balance Sheets
Assets		Sep. 30, 2023				Jun. 30, 2023				Mar. 31, 2023				Dec. 31, 2022				Sep. 30, 2022
	Cash and due from	$	20,993			$	16,304			$	14,121			$	17,543			$	21,705
	Interest bearing deposits		24,222				20,017				37,297				5,340				5,263
	Interest bearing time deposits		-				-				-				-				-
	Available-for-sale securities		179,817				178,031				159,622				152,492				149,458
	Held-to-maturity securities		5				5				5				5				49
	Loans held for sale		1,706				2,748				1,200				1,345				717
	Commercial		169,405				176,972				165,736				162,720				151,154
	CRE (Owner occupied)		277,092				273,526				285,575				325,820				323,390
	CRE (Non Owner occupied)		502,012				490,900				468,163				391,461				373,491
	1-4 Family		499,953				495,578				486,077				461,661				412,690
	Home Equity		52,466				48,542				44,749				44,526				40,253
	Consumer		19,857				19,848				18,502				18,245				16,337
	Allowance for credit losses		(17,143	)			(17,063	)			(16,644	)			(16,591	)			(16,229	)
	Net Loans		1,503,642				1,488,303				1,452,158				1,387,842				1,301,086
	Premises and equipment		33,586				31,919				30,926				30,476				30,496
	Nonmarketable equity securities		6,863				6,635				6,631				6,627				6,623
	Mortgage serving rights, net		3,346				3,208				3,119				3,173				3,228
	Foreclosed assets held for sale		0				5				5				5				5
	Goodwill		12,388				12,388				12,388				12,388				12,388
	Intangible Assets		613				661				710				765				819
	Deferred income taxes		8,323				6,702				6,157				7,504				7,587
	Life insurance assets		20,140				20,020				19,903				19,790				19,680
	Accrued interest receivable and other assets		19,148				18,744				20,848				17,831				16,038
	Total assets	$	1,834,792			$	1,805,690			$	1,765,090			$	1,663,126			$	1,575,142
Liabilities and Shareholders' Equity
Liabilities
	Deposits
	Demand	$	454,764			$	462,232			$	487,238			$	523,036			$	476,379
	Saving, NOW and money market		695,106				677,833				685,233				609,676				639,161
	Time		429,480				418,046				395,525				323,858				234,046
	Total deposits		1,579,350				1,558,111				1,567,996				1,456,570				1,349,586
	Repurchase agreements		4,446				4,594				5,095				15,213				7,830
	FHLB Advances		56,000				50,000				0				6,000				39,000
	Subordinated debt		24,024				24,213				24,703				24,693				24,682
	Interest payable and other liabilities		21,377				17,635				19,153				16,741				14,506
	Total liabilities		1,685,197				1,654,553				1,616,947				1,519,217				1,435,604
Shareholders' Equity
	Common stock, without par value		62,615				62,473				62,173				61,998				61,769
	Retained earnings		116,306				112,904				108,962				107,166				103,524
	Accumulated other comprehensive income (expense)		(24,332	)			(19,246	)			(17,998	)			(20,261	)			(20,761	)
	Treasury stock at Cost, Common		(4,994	)			(4,994	)			(4,994	)			(4,994	)			(4,994	)
	Total shareholders' equity		149,595				151,137				148,143				143,909				139,538
	Total liabilities and shareholders' equity	$	1,834,792			$	1,805,690			$	1,765,090			$	1,663,126			$	1,575,142

Heartland BancCorp
Consolidated Statements of Income
		Three Months Ended
Interest Income		Sep. 30, 2023			Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022
Loans		$	22,080		$	20,609		$	18,885		$	17,312		$	15,285
Securities
Taxable			1,173			928			845			757			684
Tax-exempt			619			596			598			604			590
Other			322			343			193			168			93
Total interest income			24,194			22,476			20,521			18,841			16,652
Interest Expense
Deposits			8,272			6,837			4,564			2,497			1,012
Borrowings			656			600			616			514			432
Total interest expense			8,928			7,437			5,180			3,011			1,444
Net Interest Income			15,266			15,039			15,341			15,830			15,208
Provision for Credit Losses			500			800			750			480			480
Net Interest Income After Provision for Credit Losses			14,766			14,239			14,591			15,350			14,728
Noninterest income
	Service charges		1,020			1,015			975			930			925
	Gains on sale of loans and originated MSR		708			704			226			218			187
	Loan servicing fees, net		408			337			431			317			367
	Title insurance income		196			311			171			237			304
	Increase in cash value of life insurance		120			117			114			110			104
	Other		780			906			684			675			727
	Total noninterest income		3,232			3,390			2,601			2,487			2,614
Noninterest Expense
	Salaries and employee benefits		7,393			7,252			7,483			7,474			7,146
	Net occupancy and equipment expense		1,057			1,055			1,067			1,004			962
	Software and data processing fees		1,205			1,069			1,025			939			984
	Professional fees		225			288			266			383			181
	Marketing expense		271			309			299			250			256
	State financial institution tax		259			259			261			339			257
	FDIC insurance premiums		341			298			228			104			104
	Other		1,224			1,165			1,121			1,268			1,161
	Total noninterest expense		11,975			11,695			11,750			11,761			11,051
Income before Income Tax			6,023			5,934			5,442			6,076			6,291
Provision for Income Taxes			1,091			1,088			992			1,048			1,223
Net Income		$	4,932		$	4,846		$	4,450		$	5,028		$	5,068
Basic Earnings Per Share		$	2.45		$	2.41		$	2.21		$	2.50		$	2.53
Diluted Earnings Per Share		$	2.43		$	2.39		$	2.19		$	2.48		$	2.50

Heartland BancCorp
Consolidated Statements of Income
		Nine Months Ended
Interest Income		Sep. 30, 2023			Sep. 30, 2022
	Loans	$	61,574		$	40,608
	Securities
	Taxable		2,946			1,740
	Tax-exempt		1,813			1,742
	Other		858			166
	Total interest income		67,191			44,256
Interest Expense
	Deposits		19,673			1,950
	Borrowings		1,872			1,145
	Total interest expense		21,545			3,095
Net Interest Income			45,646			41,161
Provision for Credit Losses			2,050			1,440
Net Interest Income After Provision for Credit Losses			43,596			39,721
Noninterest income
	Service charges		3,010			2,702
	Gains on sale of loans and originated MSR		1,638			1,301
	Loan servicing fees, net		1,176			1,187
	Title insurance income		678			940
	Increase in cash value of life insurance		351			298
	Other		2,370			2,466
	Total noninterest income		9,223			8,894
Noninterest Expense
	Salaries and employee benefits		22,128			20,869
	Net occupancy and equipment expense		3,179			2,916
	Software and data processing fees		3,299			2,723
	Professional fees		779			661
	Marketing expense		879			762
	State financial institution tax		779			790
	FDIC insurance premiums		867			266
	Other		3,510			3,477
	Total noninterest expense		35,420			32,464
Income before Income Tax			17,399			16,151
Provision for Income Taxes			3,171			3,108
Net Income		$	14,228		$	13,043
Basic Earnings Per Share		$	7.07		$	6.50
Diluted Earnings Per Share		$	7.01		$	6.43

Heartland BancCorp
ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands except per share amounts)(Unaudited)
Asset Quality Ratios and Data:
		Sep. 30, 2023				Jun. 30, 2023				Mar. 31, 2023				Dec. 31, 2022				Sep. 30, 2022
Nonaccrual loans (excluding restructured loans)		$	1,942			$	2,163			$	1,140			$	700			$	699
Nonaccrual restructured loans			-				-				-				-				-
Loans past due 90 days and still accruing			146				-				111				309				404
Total non-performing loans			2,088				2,163				1,251				1,009				1,103
OREO and other non-performing assets			-				5				5				5				5
Total non-performing assets		$	2,088			$	2,168			$	1,256			$	1,014			$	1,108
Nonperforming loans to gross loans			0.14	%			0.14	%			0.09	%			0.07	%			0.08	%
Nonperforming assets to total assets			0.11	%			0.12	%			0.07	%			0.06	%			0.07	%
Allowance for credit losses to gross loans			1.13	%			1.13	%			1.13	%			1.18	%			1.23	%
Unfunded commitment liability to gross loans			0.13	%			0.11	%			0.09	%			-				-
ACL + UCL to gross loans			1.26	%			1.24	%			1.22	%			1.18	%			1.23	%
Performing restructured loans (RC-C)		$	-			$	-			$	-			$	-			$	3,148
Net charge-offs quarter ending		$	47			$	43			$	19			$	118			$	176

Contact:		G. Scott McComb, Chairman, President & CEO
		Heartland BancCorp 614-337-4600