Highlands Bancorp, Inc. Reports 72% Increase in Net Income for the Nine Months Ended September 30, 2017

Highlands Bancorp, Inc. Reports 72% Increase in Net Income for the Nine Months Ended September 30, 2017

Highlands Bancorp, Inc. (OTCPink: HSBK) parent company of Highlands State Bank, reported net income available to common stockholders for the three and nine months ended September 30, 2017 of $761,000 or $.28 per basic and $.27 per diluted share, and $1,977,000 or $.73 per basic and $.71 per diluted share, respectively. This compares to net income available to common stockholders of $482,000 or $.27 per basic and $.26 per diluted share for the third quarter of 2016, and $1,145,000 or $.64 per basic and $.62 per diluted share for the nine months ended September 30, 2016. Net income available to common stockholders increased $279,000 or 57.9% when comparing the three months ended September 30, 2017 and 2016, and increased $832,000 or 72.7% when comparing the nine months ended September 30, 2017 and 2016.

Net interest income increased by $431,000 to $3,350,000 for the third quarter of 2017 when compared to $2,919,000 for the third quarter of 2016, and by $1,139,000 to $9,706,000 for the first nine months of 2017 when compared to $8,567,000 for the first nine months of 2016, as a result of increases in average interest-earning assets, primarily from loan portfolio growth. These increases were partially offset by higher interest costs from ongoing deposit promotions. The provision for loan losses for the third quarter of 2017 of $57,000 reflected a decrease of $72,000 when compared to $129,000 for the third quarter of 2016, but increased for the nine-month period by $13,000 to $547,000 for 2017 when compared to $534,000 for the same period in 2016. These changes in the provision for loan losses level are the result of management’s continued assessment of the reserves maintained on non-performing loans. There were no loan charge-offs for the third quarter of 2017, as compared to $4,000 in loan charge-offs for the third quarter of 2016, and no recoveries of previously charged off loans for those periods. Charge-offs and recoveries for the first nine months of 2017 totaled $10,000 and $1,000, respectively. This compares to $359,000 in charge-offs and $1,000 in recoveries for same period in 2016. Non-interest income for the third quarter and first nine months of 2017 decreased $331,000 and $586,000, respectively, when compared to the third quarter and the comparable nine-month period of 2016, due to lower gains on the sales of loans and reduced loan fees, which were partially offset by higher late charge, insufficient fund, wire transfer and debit card interchange fee income. Non-interest expenses decreased by $261,000 to $2,821,000 for the third quarter of 2017, and decreased $537,000 to $8,369,000 for the nine months ended September 30, 2017 when compared to similar periods of 2016 due to lower salary costs resulting from reduced commissions and increased amounts of salary deferred as loan origination costs, and from lower loan expenses, rent, consulting and advertising costs, which were partially offset by higher data processing, FDIC deposit insurance premiums, and legal expenses.

Total assets were $430.4 million on September 30, 2017, increasing $35.4 million or 9.0% when compared to total assets of $395.0 million at December 31, 2016. Deposits increased $38.0 million or 11.1% from $342.8 million on December 31, 2016 to $380.8 million on September 30, 2017. Total loans outstanding on September 30, 2017 were $379.1 million compared to $335.1 million on December 31, 2016, an increase of $44.0 million or 13.1%. Non-accrual loans totaled $2.8 million at September 30, 2017 compared to $2.2 million at December 31, 2016. Non-performing loans and performing TDRs as a percentage of total loans were .88% at September 30, 2017, from .86% at December 31, 2016.

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.
Steven C. Ackmann, 973-764-3200

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