Highlands Bankshares : Q2 2022 Financial Report

Highlands Bankshares, Inc.

Financial Results

As of June 30, 2022

Unaudited

HIGHLANDS BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (In Thousands of Dollars, Except Per Share Data)

		Quarter Ending June 30,
		2022			2021
Interest Income		Unaudited			Unaudited
Interest and fees on loans	$	8,881	$	9,441
Interest on federal funds sold		59			16
Interest on deposits in other banks		98			107
Interest and dividends on securities		943			498
Total Interest Income		9,981			10,062
Interest Expense
Interest on deposits		683			993
Interest on borrowed money		66			95
Total Interest Expense		749			1,088
Net Interest Income		9,232			8,974
Provision for Loan Losses		26			7
Net Interest Income After Provision for Loan Losses		9,206			8,967
Non-interest Income
Service charges		570			425
Life insurance investment income		127			130
(Losses) on securities transactions		0			(7)
Other non-interest income		803			833
Total Non-interest Income		1,500			1,381
Non-interest Expense
Salaries and employee benefits		4,493			4,299
Occupancy and equipment expense		916			939
Data processing expense		955			895
Directors fees		223			227
Legal and professional fees		291			239
Office supplies, postage and freight expense		109			109
FDIC premiums		75			65
Loan and foreclosed asset expense		132			138
(Gains) on sale of foreclosed property		0			(219)
Losses on appraisal adjustments of other real estate		0			47
Other non-interest expense		812			629
Total Non-interest Expense		8,006			7,368
Income Before Provision For Income Taxes		2,700			2,980
Provision for Income Taxes		594			645
Net Income	$	2,106	$	2,335
Per Share Data
Net Income		$1.58			$1.74
Cash Dividends		$0.90			$0.80
Weighted Average Common Shares Outstanding		1,336,873			1,336,873

The accompanying notes are an integral part of these financial statements.

HIGHLANDS BANKSHARES, INC. CONSOLIDATED BALANCE SHEETS (In thousands of dollars)

		June 30, 2022		December 31, 2021
ASSETS
Cash and due from banks	$	5,957	$	5,341
Interest bearing deposits in banks	$	24,872	$	26,932
Federal funds sold	$	5,505	$	16,928
Investment securities available for sale	$	114,761	$	108,698
Restricted investments, at cost	$	3,161	$	3,292
Loans	$	347,645	$	333,800
Allowance for loan losses	$	(4,194)	$	(4,132)
Bank premises and equipment, net of depreciation	$	11,396	$	11,690
Interest receivable	$	1,628	$	1,453
Investment in life insurance contracts	$	9,793	$	9,666
Foreclosed assets, net of valuation allowance	$	202	$	144
Goodwill	$	1,534	$	1,534
Other intangible assets, net of amortization	$	39	$	48
Other assets	$	3,014	$	3,029
Total Assets	$	525,313		$	518,423
LIABILITIES
Deposits
Non-interest bearing deposits	$	142,741	$	135,416
Interest bearing transaction and savings accounts	$	197,404	$	180,970
Time deposits over $250,000	$	14,954	$	16,775
All other time deposits	$	108,662		$	113,226
Total Deposits	$	463,761	$	446,387
Long term debt instruments	$	1,584	$	5,178
Other short term borrowing	$	-	$	-
Accrued expenses and other liabilities	$	6,234		$	7,433
Total Liabilities	$	471,579	$	458,998
STOCKHOLDERS' EQUITY
Common Stock, $5 par value, 3,000,000 shares
authorized, 1,436,874 shares issued, 1,336,873 shares outstanding	$	7,184	$	7,184
Surplus	$	1,662	$	1,662
Treasury stock (100,001 shares, at cost)	$	(3,372)	$	(3,372)
Retained earnings	$	57,725	$	56,822
Other accumulated comprehensive loss	$	(9,465)		$	(2,871)
Total Stockholders' Equity	$	53,734		$	59,425
Total Liabilities and Stockholders' Equity	$	525,313	$	518,423

The accompanying notes are an integral part of these financial statements

HIGHLANDS BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Three Months Ended June 30, 2022 and 2021

(In Thousands of Dollars)

	Common Stock		Surplus	Treasury	Retained	Accumulated		Total
						Stock	Earnings		Other
									Comprehensive
									Income (Loss)
Balances at December 31, 2020	$	7,184	$	1,662	$	(3,372)	$	54,118	$	(3,248)	$	56,344
Comprehensive Income
Net Income								2,335				2,335
Total Other Comprehensive Income										(308)		(308)
Dividends Paid								(1,069)				(1,069)
Balances at June 30, 2021
$	7,184	$	1,662	$	(3,372)	$	55,384	$	(3,556)	$	57,302
Balances at December 31, 2021	$	7,184	$	1,662	$	(3,372)	$	56,822	$	(2,871)	$	59,425
Comprehensive Income
Net Income								2,106				2,106
Total Other Comprehensive Income										(6,594)		(6,594)
Dividends Paid								(1,203)				(1,203)
Balances at June 30, 2022
$	7,184	$	1,662	$	(3,372)	$	57,725	$	(9,465)	$	53,734

The accompanying notes are an integral part of these financial statements

Highlands Bankshares, Inc

(Unaudited)

June 30, 2022

Highlands Bankshares, Inc. (HBSI) is a registered bank holding company incorporated under the laws of West Virginia. It is the parent company of The Grant County Bank, Capon Valley Bank, and HBI Life Insurance Company. Highlands Bankshares, Inc. operates community banking in West Virginia and Virginia from 12 locations.

The accounting and reporting policies of Highlands Bankshares, Inc. and its subsidiaries (collectively, the Company) conform to accounting principles generally accepted in the United States of America. The consolidated financial statements included herein are for Highlands Bankshares, Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying interim consolidated financial statements have been prepared under the presumption that users of the interim consolidated financial information have either read or have access to the audited consolidated financial statements of Highlands Bankshares, Inc. and subsidiaries for the year ended December 31, 2021.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. These estimates are based on information available to management at the time the estimates are made.

The unaudited consolidated financial statements as of June 30, 2022 include, in the opinion of management, all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the financial results for the respective interim periods and are not necessarily indicative of results of operations to be expected for the entire fiscal year.

The Company's critical accounting policies are unchanged since December 31, 2021.