Heartland BancCorp Earns $5.0 Million, or $2.48 Per Diluted Share, in the Fourth Quarter of 2022 and $18.1 Million, or $8.90 Per Diluted Share, for the Year 2022; Increases Quarterly Cash Dividend by 10% to $0.759 per Share

WHITEHALL, Ohio, Jan. 23, 2023 (GLOBE NEWSWIRE) — Heartland BancCorp (�Heartland” and “the Company”) (OTCQX: HLAN), parent company of Heartland Bank (“Bank”), today reported net income of $5.0 million, or $2.48 per diluted share in the fourth quarter of 2022, which was unchanged compared to the fourth quarter of 2021, and a modest decrease compared to $5.1 million, or $2.50 per diluted share, in the preceding quarter. For the year 2022, net income was $18.1 million, or $8.90 per diluted share, compared to $18.6 million, or $9.17 per diluted share, in 2021.

The company also announced that its board of directors increased its quarterly cash dividend by 10% to $0.759 per share. The dividend will be payable April 10, 2023, to shareholders of record as of March 25, 2023. Heartland has paid regular quarterly cash dividends since 1993.

“2023 was a substantial year of growth for Heartland, and our operating results reflect the continued success of our relationship banking model,” stated G. Scott McComb, Chairman, President and Chief Executive Officer. “We accomplished record loan growth for the year, and more importantly, loan growth has really started to materialize across all lending segments. We have been able to capitalize on displacement within our markets by bringing on talented bankers and lending officers from other institutions, which is contributing to our success. Near the end of the fourth quarter, we opened our permanent office in Cincinnati, and we’ve been adding to our top-quality team as we continue to execute our Greater Cincinnati expansion strategy. Our brand of community banking is being well received in all of the markets that we serve, and we will continue in the year ahead to work to create value for our shareholders, our clients and our communities.”

Earlier this month, Heartland BancCorp 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.

Fourth Quarter 2022 Financial Highlights (at or for the three months ended December 31, 2022)

• Net income was $5.0 million, or $2.48 per diluted share, which was unchanged compared to the fourth quarter of 2021.
• Provision for loan losses was $480,000, which was unchanged compared to the fourth quarter a year ago.
• Net interest margin of 4.13%, compared to 4.20% in the preceding quarter and improved 27 basis points compared to 3.86% in the fourth quarter a year ago.
• Fourth quarter revenues (net interest income plus noninterest income) increased 6.4% to $18.3 million, compared to $17.2 million in the fourth quarter a year ago.
• Annualized return on average assets was 1.23%, compared to 1.36% in the fourth quarter of 2021.
• Annualized return on average tangible common equity was 15.63%, compared to 14.42% in the fourth quarter a year ago.
• Net loans increased $86.8 million during the quarter to $1.39 billion at December 31, 2022, compared to $1.30 billion three months earlier.
• Credit quality remains pristine, with nonperforming loans to gross loans of 0.07% and nonperforming assets to total assets of 0.06%, at December 31, 2022.
• Tangible book value was $65.09 per share, compared to $69.74 per share a year ago.
• Declared a quarterly cash dividend of $0.759 per share.

2022 Full Year Financial Highlights (at or for the twelve months ended December 31, 2022)

• Net income for 2022 was $18.1 million, compared to $18.6 million in 2021.
• Net interest margin was 4.03% for the year, compared to 3.56% for 2021.
• Total revenues increased 5.5% to $68.4 million in 2022, compared to $64.8 million in 2021.
• Annualized return on average assets was 1.20% for 2022, compared to 1.23% for 2021.
• Annualized return on average tangible equity was 13.60% for 2022, compared to 13.97% for 2021.
• Net loans increased a record $230.2 million, or 19.9% year-over-year to $1.39 billion.
• Noninterest bearing demand deposits increased 9.2% to $523.0 million, compared to $478.9 million a year ago.

Balance Sheet Review

Assets

Total assets increased 13.2% to $1.66 billion at December 31, 2022, compared to $1.47 billion a year earlier, and increased 5.6% compared to $1.58 billion three months earlier. Heartland’s loan-to-deposit ratio was 95.3% at December 31, 2022, compared to 96.4% at September 30, 2022, and 92.2% at December 31, 2021.

Excess liquidity levels continued to decline, with interest bearing deposits in other banks at $5.3 million, compared to $54.4 million a year earlier and was unchanged compared to three months earlier.

Average earning assets increased to $1.52 billion in the fourth quarter of 2022, compared to $1.44 billion in the third quarter of 2022, and $1.38 billion in the fourth quarter a year ago. The average yield on interest-earning assets was 4.91% in the fourth quarter of 2022, up 31 basis points from 4.60% in the preceding quarter and up 78 basis points from 4.13% in the fourth quarter a year ago.

Loan Portfolio

“Loan production was a highlight of the fourth quarter, increasing $86.8 million, or 6.7% over the prior quarter end, with great activity across nearly every loan segment, including commercial, 1-4 family loans, owner occupied CRE, non-owner occupied CRE, home equity and consumer loans,” said Ben Babcanec, EVP and Chief Operating Officer.

Net loans were $1.39 billion at December 31, 2022, which was an 6.7% increase compared to $1.30 billion at September 30, 2022, and a 19.9% increase compared to $1.16 billion at December 31, 2021.   Commercial loans increased 5.5% from year ago levels to $162.7 million, and comprise 11.6% of the total loan portfolio at December 31, 2022. Owner occupied commercial real estate loans (CRE) increased 13.0% to $325.8 million at December 31, 2022, compared to a year ago, and comprise 23.2% of the total loan portfolio. Non-owner occupied CRE loans increased 9.1% to $391.5 million, compared to a year ago, and comprise 27.9% of the total loan portfolio at December 31, 2022. 1-4 family residential real estate loans increased 43.1% from year ago levels to $461.7 million and represent 32.9% of total loans. Home equity loans increased 22.8% from year ago levels to $44.5 million and represent 3.2% of total loans, and consumer loans increased 44.6% from year ago levels to $18.2 million and represent 1.3% of the total loan portfolio at December 31, 2022.

Deposits

Total deposits were $1.46 billion at December 31, 2022, a 7.9% increase compared to $1.35 billion at September 30, 2022, and a 16.0% increase compared to $1.26 billion at December 31, 2021.   “We have been successful at growing deposit balances and, while we experienced some movement from savings accounts into time deposits during the fourth quarter, we remain focused on our deposit pricing,” said Babcanec. At December 31, 2022, noninterest bearing demand deposit accounts increased 9.2% compared to a year ago and represented 35.9% of total deposits; savings, NOW and money market accounts increased 3.5% compared to a year ago and represented 41.9% of total deposits, and CDs increased 72.1% compared to a year ago and comprised 22.2% of total deposits.   The average cost of deposits was 0.70% in the fourth quarter of 2022, compared to 0.30% in the third quarter of 2022, and 0.17% in the fourth quarter of 2021.

Shareholders’ Equity

Shareholders’ equity was $143.9 million at December 31, 2022, compared to $139.5 million three months earlier and $153.2 million a year earlier. The decrease in shareholders’ equity compared to a year ago was primarily due to a $22.5 million decrease in accumulated other comprehensive income related to an increase in the unrealized loss on available for sale securities reflecting the increase in market interest rates during the year. At December 31, 2022, Heartland’s tangible book value was $65.09 per share, compared to $62.90 at September 30, 2022, and $69.74 at December 31, 2021.

Heartland continues to maintain capital levels in excess of the requirements to be categorized as “well-capitalized” with tangible equity to tangible assets of 7.92% at December 31, 2022, compared to 8.09% at September 30, 2022, and 9.60% at December 31, 2021.

Operating Results

In the fourth quarter of 2022, Heartland generated a ROAA of 1.23% and a ROATCE of 15.63%, compared to 1.31% and 15.27%, respectively, in the third quarter of 2022 and 1.36% and 14.42%, respectively, in the fourth quarter a year ago.

Net Interest Income/Net Interest Margin

Net interest income, before the provision for loan losses, increased 18.0% to $15.8 million in the fourth quarter of 2022, compared to $13.4 million in the fourth quarter a year ago, and increased 4.1% compared to $15.2 million in the preceding quarter, which included a $490,000 recovery of nonaccrual interest on problem credits. Net interest income continued to benefit from higher yielding assets and the current rate environment.   In addition, approximately $16,000 of the income recognized during the fourth quarter of 2022 was related to recognizing origination fees for PPP loan payoffs or forgiveness, compared to $30,000 recognized during the third quarter of 2022, and $846,000 recognized during the fourth quarter of 2021. For the year 2022, net interest income increased 12.8% to $57.0 million, compared to $50.5 million in 2021.

Total revenues (net interest income, before the provision for loan losses, plus noninterest income) was $18.3 million in the fourth quarter, a 6.4% increase compared to $17.2 million in the fourth quarter a year ago, and a 2.8% increase compared to $17.8 million in the preceding quarter. For the year 2022, total revenues increased 5.5% to $68.4 million, compared to $64.8 million in 2021.

Heartland’s net interest margin was 4.13% in the fourth quarter of 2022, compared to 4.20% in the preceding quarter and improved by 27 basis points compared to 3.86% in the fourth quarter of 2021. The preceding quarter net interest margin included the above-mentioned recovery. Excluding the recovery, net interest margin would have been 4.06% for the third quarter of 2022. “Our net interest margin for the fourth quarter benefitted from strong net interest income generation, robust loan growth and rising interest rates. New loans that carry a higher interest rate, and variable rate loans are repricing, which is helping our net interest margin expand compared to a year ago, although funding costs have begun to catch up” 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 September 30, 2022.^*

*As of September 30, 2022, the Dow Jones U.S. MicroCap Bank Index tracked 154 banks with total common market capitalization under $250 million for the following ratios: NIM* of 3.70%.

Provision for Loan Losses

“We continue to make additions to the allowance for loan losses to reflect the steady level of new loan growth,” said McComb.   “Overall credit quality remains strong, and we are well positioned for our conversion to the CECL loan loss methodology.”

Heartland recorded a $480,000 provision for loan losses in the fourth quarter of 2022, which was the same amount recorded in both the preceding quarter and the year ago quarter.

Noninterest Income

Noninterest income decreased 34.5% to $2.5 million in the fourth quarter of 2022, compared to $3.8 million in the fourth quarter a year ago, and decreased 4.9% compared to $2.6 million in the preceding quarter. Gains on sale of loans, and originated mortgage servicing rights, decreased 83.7% to $218,000 in the fourth quarter of 2022, compared to $1.3 million in the fourth quarter a year ago, and increased 16.6% compared to $187,000 in the preceding quarter. For the year 2022, noninterest income decreased 20.4% to $11.4 million, compared to $14.3 million in 2021.

“Mortgage origination continues to be strong through the fourth quarter of 2022, although we’ve seen a shift to increased volumes of on-balance sheet, adjustable rate mortgages, leading to lower gains on sale,” said Almendinger.

Noninterest Expense

Heartland’s fourth quarter noninterest expenses totaled $11.8 million, compared to $11.1 million in the preceding quarter and $10.4 million in the fourth quarter a year ago. Salary and employee benefit expenses, the largest component of noninterest expense, were $7.5 million in the fourth quarter of 2022, compared to $7.1 million in the preceding quarter and $6.5 million in the fourth quarter of 2021. “The increase in salary and employee benefit expense is largely due to variable compensation related to increased loan production. Occupancy expense increased modestly due to the build out of the permanent office space in Cincinnati,” said Almendinger. “By expanding into the Cincinnati market organically, with a seasoned leader who has been established in that market for years, we have begun to broaden our client base and look forward to continuing to leverage this investment for future growth.” For the year, noninterest expense totaled $44.2 million, compared to $39.7 million in 2021.

The efficiency ratio for the fourth quarter of 2022 was 64.2%, compared to 62.0% for the preceding quarter and 60.5% for the fourth quarter of 2021.

Income Tax Provision

In the fourth quarter of 2022, Heartland recorded $1.0 million in state and federal income tax expense for an effective tax rate of 17.2%, compared to $1.2 million, or 19.4% in the third quarter of 2022 and $1.3 million or 20.5% in the fourth quarter a year ago. For the year, Heartland recorded $4.2 million in state and federal income tax expense for an effective tax rate of 18.7%, compared to $4.6 million, or 19.7% in 2021.

Credit Quality

At December 31, 2022, the allowance for loan losses (ALLL) was $16.6 million, or 1.18% of total loans, compared to $16.2 million, or 1.23% of total loans at September 30, 2022, and $15.0 million, or 1.28% of total loans a year ago. As of December 31, 2022, the ALLL represented 2,370% of nonaccrual loans, compared to 2,322% three months earlier and 925% one year earlier.

Nonaccrual loans were $700,000 at December 31, 2022, compared to $699,000 at September 30, 2022, and decreased 56.7% when compared to $1.6 million at December 31, 2021. Heartland had net loan charge-offs of $118,000 at December 31, 2022. This compared to $176,000 in net loan charge-offs at September 30, 2022, and $133,000 in net loan recoveries at December 31, 2021.   There was $309,000 in loans past due 90 days and still accruing at December 31, 2022, compared to $404,000 at September 30, 2022, and $16,000 at December 31, 2021.

Heartland had zero performing restructured loans that were not included in nonaccrual loans, at December 31, 2022. This compared to $3.1 million in performing restructured loans at September 30, 2022. Borrowers who are in financial difficulty, and who have been granted concessions, including interest rate reductions, term extensions, or payment alterations, are categorized as restructured loans.

There was $5,000 in other real estate owned and other non-performing assets on the books at December 31, 2022, unchanged from three months earlier and one year earlier. Non-performing assets (NPAs), consisting of non-performing loans and loans past due 90 days or more, decreased 8.5% to $1.0 million, or 0.06% of total assets, at December 31, 2022, compared to $1.1 million, or 0.07% of total assets, at September 30, 2022, and decreased 38.1% when compared to $1.6 million, or 0.11% 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 May of 2022, Heartland was ranked #112 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, 2021.

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 customers 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:		Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022			Mar. 31, 2022			Dec. 31, 2021
	Interest income	$	18,841		$	16,652		$	13,993		$	13,611		$	14,337
	Interest expense		3,011			1,444			832			819			925
	Net interest income		15,830			15,208			13,161			12,792			13,412
	Provision for loan losses		480			480			480			480			480
	Noninterest income		2,487			2,614			3,012			3,268			3,797
	Noninterest expense		11,761			11,053			10,824			10,589			10,407
	Provision for income taxes		1,048			1,223			933			952			1,299
	Net income		5,028			5,068			3,936			4,039			5,023
Share data:
	Basic earnings per share	$	2.50		$	2.53		$	1.96		$	2.02		$	2.51
	Diluted earnings per share		2.48			2.50			1.94			1.99			2.48
	Dividends declared per share		0.69			0.69			0.69			0.69			0.63
	Book value per share		71.63			69.48			70.66			73.56			76.42
	Tangible book value per share		65.09			62.90			64.06			66.92			69.74
	Common shares outstanding, 20,000,000 authorized		2,099,587			2,098,962			2,098,962			2,098,562			2,094,787
	Treasury shares		(90,612	)		(90,612	)		(90,612	)		(90,612	)		(90,612	)
	Common shares, net		2,008,975			2,008,350			2,008,350			2,007,950			2,004,175
	Average common shares outstanding, net		2,008,839			2,008,350			2,008,154			2,004,901			2,003,784
Balance sheet – average balances:
	Loans receivable, net	$	1,356,369		$	1,261,695		$	1,164,191		$	1,153,203		$	1,160,267
	PPP loans		1,153			2,234			6,094			17,889			44,321
	Earning assets		1,520,860			1,437,508			1,345,041			1,354,627			1,378,244
	Goodwill & intangible assets		13,186			13,241			13,295			13,355			13,409
	Total assets		1,620,580			1,530,675			1,437,003			1,442,050			1,461,752
	Deposits		1,413,150			1,323,645			1,237,620			1,238,275			1,248,971
	Borrowings		52,162			49,409			42,459			39,000			47,192
	Shareholders’ equity		140,800			144,873			145,218			153,591			151,620
Ratios:
	Return on average assets		1.23	%		1.31	%		1.10	%		1.14	%		1.36	%
	Return on average equity		14.16	%		13.88	%		10.87	%		10.66	%		13.14	%
	Return on average tangible common equity		15.63	%		15.27	%		11.97	%		11.68	%		14.42	%
	Yield on earning assets		4.91	%		4.60	%		4.17	%		4.07	%		4.13	%
	Cost of deposits		0.70	%		0.30	%		0.16	%		0.15	%		0.17	%
	Cost of funds		0.82	%		0.42	%		0.26	%		0.26	%		0.28	%
	Net interest margin		4.13	%		4.20	%		3.92	%		3.83	%		3.86	%
	Efficiency ratio		64.21	%		62.02	%		66.94	%		65.94	%		60.48	%
Asset quality:
	Net loan charge-offs to average loans		0.03	%		0.06	%		0.00	%		-0.00	%		-0.05	%
	Nonperforming loans to gross loans		0.07	%		0.08	%		0.12	%		0.11	%		0.14	%
	Nonperforming assets to total assets		0.06	%		0.07	%		0.10	%		0.09	%		0.11	%
	Allowance for loan losses to gross loans		1.18	%		1.23	%		1.32	%		1.34	%		1.28	%

Heartland BancCorp
Consolidated Balance Sheets
Assets	Dec. 31, 2022				Sep. 30, 2022				Jun. 30, 2022				Mar. 31, 2022				Dec. 31, 2021
Cash and due from	$	17,543			$	21,705			$	18,139			$	16,698			$	10,469
Interest bearing deposits		5,340				5,263				35,583				56,284				54,415
Interest bearing time deposits		–				–				–				–				–
Available-for-sale securities		152,492				149,458				154,505				150,674				156,505
Held-to-maturity securities		5				49				49				49				49
Loans held for sale		1,345				717				655				2,573				4,648
Commercial		162,720				151,154				134,033				142,925				154,182
CRE (Owner occupied)		325,820				323,390				306,507				285,287				288,261
CRE (Non Owner occupied)		391,461				373,491				346,905				346,326				358,713
1-4 Family		461,661				412,690				370,444				331,255				322,558
Home Equity		44,526				40,253				37,740				35,948				36,250
Consumer		18,245				16,337				15,343				13,218				12,620
Allowance for loan losses		(16,591	)			(16,229	)			(15,925	)			(15,450	)			(14,965	)
Net Loans		1,387,842				1,301,086				1,195,047				1,139,508				1,157,619
Premises and equipment		30,476				30,496				30,516				29,583				29,410
Nonmarketable equity securities		6,627				6,623				6,032				6,028				6,024
Mortgage serving rights, net		3,173				3,228				3,268				3,261				3,096
Foreclosed assets held for sale		5				5				5				5				5
Goodwill		12,388				12,388				12,388				12,388				12,388
Intangible Assets		765				819				874				929				990
Deferred income taxes		7,504				7,587				6,134				2,877				1,404
Life insurance assets		19,790				19,680				18,314				18,218				18,120
Accrued interest receivable and other assets		17,831				16,038				14,353				15,550				13,967
Total assets	$	1,663,126			$	1,575,142			$	1,495,862			$	1,454,626			$	1,469,109
Liabilities and Shareholders’ Equity
Liabilities
Deposits
Demand	$	523,036			$	476,379			$	489,172			$	500,733			$	478,893
Saving, NOW and money market		609,676				639,161				606,534				578,633				588,959
Time		323,858				234,046				206,632				178,000				188,193
Total deposits		1,456,570				1,349,586				1,302,338				1,257,366				1,256,045
Repurchase agreements		15,213				7,830				7,525				8,275				9,032
FHLB Advances		6,000				39,000				7,000				0				12,000
Subordinated debt		24,693				24,682				24,672				24,661				24,651
Interest payable and other liabilities		16,741				14,506				12,413				16,628				14,223
Total liabilities		1,519,217				1,435,604				1,353,948				1,306,930				1,315,951
Shareholders’ Equity
Common stock, without par value		61,998				61,769				61,641				61,488				61,231
Retained earnings		107,166				103,524				99,841				97,294				94,638
Accumulated other comprehensive income (expense)		(20,261	)			(20,761	)			(14,574	)			(6,091	)			2,283
Treasury stock at Cost, Common		(4,994	)			(4,994	)			(4,994	)			(4,994	)			(4,994	)
Total shareholders’ equity		143,909				139,538				141,914				147,696				153,158
Total liabilities and shareholders’ equity	$	1,663,126			$	1,575,142			$	1,495,862			$	1,454,626			$	1,469,109

Heartland BancCorp
Consolidated Statements of Income
	Three Months Ended
Interest Income	Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022			Mar. 31, 2022			Dec. 31, 2021
Loans	$	17,312		$	15,285		$	12,778		$	12,544		$	13,251
Securities
Taxable		757			684			586			471			467
Tax-exempt		604			590			578			574			586
Other		168			93			51			22			33
Total interest income		18,841			16,652			13,993			13,611			14,337
Interest Expense
Deposits		2,497			1,012			484			454			523
Borrowings		514			432			348			365			402
Total interest expense		3,011			1,444			832			819			925
Net Interest Income		15,830			15,208			13,161			12,792			13,412
Provision for Loan Losses		480			480			480			480			480
Net Interest Income After Provision for Loan Losses		15,350			14,728			12,681			12,312			12,932
Noninterest income
Service charges		930			925			916			861			834
Gains on sale of loans and originated MSR		218			187			431			683			1,339
Loan servicing fees, net		317			367			311			509			462
Title insurance income		237			304			346			290			313
Net realized gains on sales of available-for-sale securities		–			–			–			–			–
Increase in cash value of life insurance		110			104			96			98			101
Other		675			727			912			827			748
Total noninterest income		2,487			2,614			3,012			3,268			3,797
Noninterest Expense
Salaries and employee benefits		7,474			7,146			6,819			6,905			6,520
Net occupancy and equipment expense		1,004			962			960			994			948
Software and data processing fees		939			984			907			833			801
Professional fees		383			181			247			233			262
Marketing expense		250			256			247			259			218
State financial institution tax		339			257			257			277			313
FDIC insurance premiums		104			104			94			69			128
Other		1,268			1,161			1,293			1,019			1,217
Total noninterest expense		11,761			11,051			10,824			10,589			10,407
Income before Income Tax		6,076			6,291			4,869			4,991			6,322
Provision for Income Taxes		1,048			1,223			933			952			1,299
Net Income	$	5,028		$	5,068		$	3,936		$	4,039		$	5,023
Basic Earnings Per Share	$	2.50		$	2.53		$	1.96		$	2.02		$	2.51
Diluted Earnings Per Share	$	2.48		$	2.50		$	1.94		$	1.99		$	2.48

Heartland BancCorp
Consolidated Statements of Income
	Twelve Months Ended
Interest Income	Dec. 31, 2022			Dec. 31, 2021
Loans	$	57,919		$	51,307
Securities
Taxable		2,498			1,676
Tax-exempt		2,346			2,356
Other		334			169
Total interest income		63,097			55,508
Interest Expense
Deposits		4,447			3,254
Borrowings		1,659			1,748
Total interest expense		6,106			5,002
Net Interest Income		56,991			50,506
Provision for Loan Losses		1,920			1,920
Net Interest Income After Provision for Loan Losses		55,071			48,586
Noninterest income
Service charges		3,632			2,911
Gains on sale of loans and originated MSR		1,519			4,743
Loan servicing fees, net		1,504			1,353
Title insurance income		1,177			1,434
Net realized gains on sales of available-for-sale securities		–			223
Increase in cash value of life insurance		408			399
Other		3,141			3,235
Total noninterest income		11,381			14,298
Noninterest Expense
Salaries and employee benefits		28,344			23,592
Net occupancy and equipment expense		3,920			5,318
Software and data processing fees		3,663			1,961
Professional fees		1,044			1,132
Marketing expense		1,012			1,049
State financial institution tax		1,130			1,104
FDIC insurance premiums		371			400
Other		4,741			5,170
Total noninterest expense		44,225			39,726
Income before Income Tax		22,227			23,158
Provision for Income Taxes		4,156			4,565
Net Income	$	18,071		$	18,593
Basic Earnings Per Share	$	9.00		$	9.30
Diluted Earnings Per Share	$	8.90		$	9.17

Heartland BancCorp
ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands except per share amounts)(Unaudited)
Asset Quality Ratios and Data:
	Dec. 31, 2022				Sep. 30, 2022				Jun. 30, 2022				Mar. 31, 2022				Dec. 31, 2021
Nonaccrual loans (excluding restructured loans)	$	700			$	699			$	949			$	659			$	1,333
Nonaccrual restructured loans		–				–				261				285				285
Loans past due 90 days and still accruing		309				404				245				383				16
Total non-performing loans		1,009				1,103				1,455				1,327				1,634
OREO and other non-performing assets		5				5				5				5				5
Total non-performing assets	$	1,014			$	1,108			$	1,460			$	1,332			$	1,639
Nonperforming loans to gross loans		0.07	%			0.08	%			0.12	%			0.11	%			0.14	%
Nonperforming assets to total assets		0.06	%			0.07	%			0.10	%			0.09	%			0.11	%
Allowance for loan losses to gross loans		1.18	%			1.23	%			1.32	%			1.34	%			1.28	%
Performing restructured loans (RC-C)	$	–			$	3,148			$	4,519			$	5,106			$	5,119
Net charge-offs quarter ending	$	118			$	176			$	5			$	(5	)		$	(133	)

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