WHITEHALL, Ohio - Heartland BancCorp (OTCQX: OTC:HLAN), the parent company of Heartland Bank, disclosed its financial results for the third quarter of 2024, revealing a net income of $4.4 million or $2.12 per diluted share. This performance marks a decline from the $4.9 million or $2.43 per diluted share reported in the same period last year. Despite this, the company's net income for the first nine months of 2024 showed a slight increase of 2.6%, reaching $14.6 million or $7.12 per diluted share.
The company also declared a quarterly cash dividend of $0.759 per share, payable on December 30, 2024, to shareholders recorded as of December 13, 2024. Heartland has consistently paid quarterly cash dividends since 1993.
Heartland Bank is set to merge with German American Bancorp (NASDAQ:GABC)'s subsidiary bank, which is expected to close in the first quarter of 2025, pending regulatory and shareholder approvals. Under the merger agreement, Heartland shareholders will receive 3.90 shares of German American common stock for each share of Heartland common stock in an all-stock, tax-free exchange.
The third quarter saw net loans inch up to $1.54 billion as of September 30, 2024, while total deposits rose by 3.7% to $1.71 billion. The bank's credit quality remained strong with nonperforming loans to gross loans at 0.12% and nonperforming assets to total assets at 0.10%. Additionally, the tangible book value per share increased by 18.9% year-over-year to $80.61.
The bank's net interest margin declined to 3.27% from 3.52% in the same quarter the previous year. Noninterest income also decreased by 6.4% to $3.0 million in the third quarter of 2024, while noninterest expense saw a slight increase from the previous year to $12.4 million.
This financial overview is based on a press release statement from Heartland BancCorp and reflects the company's performance as of the third quarter ending September 30, 2024.
In other recent news, Heartland BancCorp has been downgraded from Buy to Neutral by DA Davidson, despite an increased price target of $145.00, up from $103.00. The downgrade follows Heartland BancCorp's substantial $330 million all-stock sale to German American Bancorp. The deal, which marked a significant event for Heartland BancCorp, priced the company at a 72% premium and approximately 2.1 times its tangible book value.
Although Heartland BancCorp's stock declined by 9% post-announcement, DA Davidson suggests the potential for further growth is limited to around 5%. This estimation is based on the fixed exchange ratio tied to German American Bancorp's shares.
Recent developments also highlight Heartland BancCorp's strong second-quarter earnings for 2024, which exceeded consensus expectations. This success was fueled by lower than expected operating expenses, a robust loan growth of 6%, and deposit growth of 4%. Despite these positive results and maintained credit quality, DA Davidson advises a more cautious approach following the recent share gains post-deal.
InvestingPro Insights
Heartland BancCorp's financial performance, as reported in its third-quarter results, can be further contextualized with real-time data from InvestingPro. As of the latest available data, the company's market capitalization stands at $299.36 million, reflecting its current valuation in the market.
The company's P/E ratio of 14.62 suggests that investors are willing to pay $14.62 for every dollar of earnings, which is relatively modest compared to some banking sector peers. This valuation metric aligns with the company's steady performance and consistent dividend payments since 1993.
InvestingPro data shows that Heartland's revenue for the last twelve months as of Q2 2024 was $72.03 million, with a revenue growth of 2.9% over the same period. This growth, albeit modest, supports the company's ability to maintain its dividend payments, which currently yield 2.08% according to recent data.
An InvestingPro Tip highlights that Heartland BancCorp has maintained dividend payments for 30 consecutive years, underscoring the company's commitment to shareholder returns mentioned in the article. This long-standing dividend history may be particularly appealing to income-focused investors in the current economic climate.
Another relevant InvestingPro Tip notes that the company's earnings have been growing, which aligns with the reported increase in net income for the first nine months of 2024. This growth in earnings could be a positive factor for shareholders as the company approaches its merger with German American Bancorp.
For investors seeking a deeper analysis, InvestingPro offers 14 additional tips for Heartland BancCorp, providing a more comprehensive view of the company's financial health and prospects.
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