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Heartland BancCorp

hlan · OTC Financial Services
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Ticker hlan
Exchange OTC
Sector Financial Services
Industry Banks - Regional
Employees 51-200
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FY2010 Annual Report · Heartland BancCorp
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2010 Financial Review

Net income for the year ended December 31, 2010 was $4.6 million or $2.96 per share compared to net income of $3.6 million or $2.32 per share for the year ended December 
31, 2009. The primary source of Heartland BancCorp’s revenue is net interest income from its investment and loan portfolios less its cost of deposits and borrowings.  Net 
interest income before provision for loan loss for 2010 grew 8% to $20.4 million compared to $18.8 million for 2009.  Provision for loan loss of $1.9 million for the full year 2010 
compared to $1.6 million for all of 2009.  The added provision in 2010 was used to increase the Bank’s allowance for loan loss while 2010 loan charge-offs at .32% of average 
loans outstanding remained at 2009 levels. The improvement in net interest income resulted from the combined effect of a 27% decline in the Bank’s cost of funds less a 4% drop 
in the yield on earning assets.  Lower funding cost resulted from a positive shift in deposit mix to lower cost non-interest bearing transaction and money market accounts that 
increased from 2009 18% and 22% respectively. This increase in lower cost deposits enabled Heartland Bank to drive significant reductions in its funding cost and improvement 
in its net interest income.  These favorable contributors to net interest income were partially offset by a reduction in the yield in the loan portfolio and an increase in lower 
yielding securities both the result of continuation of the low interest rate environment during 2010.

Total non-interest income of $2.7 million in 2010 compares to $1.9 million for 2009.  The lower level of non-interest income in 2009 was due to a one time charge to earnings 
totaling $990 thousand resulting from the mark-to-market of an other than temporarily impaired investment security.   The decline in service charges during 2010 resulted from 
the implementation of changes to Regulation E during the third quarter of 2010.  Regulation E restricts banking institutions from charging overdraft fees on ATM and debit card 
transactions absent a customer’s opt-in to overdraft coverage.   

Non-interest or operating expense of $14.9 million in 2010 increased 6% over non-interest expense of $14.0 million in 2009.  Salary and employee benefits expense for 2010 
increased $313 thousand or 4% verses the year ended 2009.  The increase was partially attributable to a 2% increase in staffing added due to the increasing banking related 
regulatory requirements and higher health insurance costs in 2010.  Other operating expense increased $310 thousand year-over-year due to increased loan related collection 
expenses in 2010.

Total assets outstanding increased 2% to $537 million at year-end 2010, an increase of $13 million from assets of $524 million at the end of 2009.   Loan and deposit volumes 
have been influenced significantly during 2010 and 2009 by overall economic factors including market interest rates, consumer confidence, fluctuations in the unemployment 
rate, lower levels of business and consumer spending as well as changes in regulations affecting banking institutions.  We continued to implement initiatives to enhance our loan 
quality and grow our retail deposit relationships while improving our productivity during 2010. Net loans outstanding declined slightly to $388 million, down 1% under loans of 
$393 million at the end of 2009. The decline in loans outstanding resulted from continued weak demand in both the commercial and retail lending sectors. Deposits increased 
2% to $462 million at December 31, 2010. A key element of Heartland’s deposit strategy was focused on growing our transaction account deposit base while reducing our 
dependence on public funds and larger non-core certificate of deposit accounts in 2010.  

Total shareholders’ equity remained strong growing to $45.2 million, up 2% from $44.3 million at year-end 2009. Based upon shares outstanding the book value of shareholders’ 
equity increased from $28.83 at year-end 2009 to $29.46 per share at December 31, 2010. Among the financial strengths of Heartland BancCorp is our capital position, which 
exceeds regulatory guidelines and compares favorably to our peers and other Ohio based banks.  Tier1 leverage, Tier 1 Risk based and Total Risk Based Capital ratios were 8.6%, 
12.4%, and 13.4% respectively as of December 31, 2010.  Regulatory requirements for a well-capitalized bank are 5%, 6%, and 10% for Tier 1 Leverage; Tier 1 Risk based and 
Total Risk Based Capital Ratios respectively.   Further enhancing shareholder value dividends per share of common stock totaled $1.28 representing a dividend yield of 5.63% on 
the average market price of $22.73 per share for 2010. Dividends paid resulted in a dividend payout ratio of 43% for 2010. 

Our conservative culture, risk management practices, and quality people throughout the last 100 years have enabled Heartland BancCorp to successfully reach and celebrate our 
Centennial. We believe Heartland BancCorp continues to be strategically positioned to capitalize on opportunities enhancing our shareholders’ interest as the economy improves. 
I would like to take this opportunity to thank our shareholders, directors, ambassadors, customers and employees for their continued support and confidence in Heartland 
BancCorp. We truly value your business and look forward to serving you for another 100 years.

Best personal regards,

Tiney M. McComb
Chairman and CEO

Heartland BancCorp and Bank Directors

Heartland BancCorp Officers

I.  Robert Amerine 
Chairman, ISCO, Inc. 

Arthur G.H. Bing M.D. 
Plastic & Reconstructive Surgeon

Tiney M. McComb
Chairman & CEO

G. Scott McComb
Vice Chairman & President

Jay B. Eggspuehler, Esq.
Wiles, Boyle, Burkholder & Bringardner Co., L.P.A.

I. Robert Amerine
Secretary

Jodi L Garrison, CPA
Partner, Hirth, Norris & Garrsion, LLP

George R. Smith
Executive Vice President, Chief Financial Officer

John R. Haines
Retired, John R. Haines Insurance Agency

David C. Kotary
Principal, Brower Insurance Agency, LLC

Gerald K. McClain
President, The Jerry McClain Company, Inc.

G. Scott McComb
President & CEO, Heartland Bank

Tiney M. McComb
Chairman of the Board

Jack J. Eggspuehler
President, Aerosafe, Inc., Director Emeritus

Cheryl C. Poulton
President, Tech International, Director Emeritus

Heartland Investment Services

Mark Posey
Investment Representative

Jason Ellinger
Investment Representative

Heartland Bank Senior Management

Tiney M. McComb
Chairman

G. Scott McComb
President and CEO

George R. Smith
Executive Vice President, Chief Financial Officer

David P. Curby
Senior Vice President, Mortgage Lending

Robert F. Halley
Senior Vice President, 
Commercial Relationship Manager

Steven C. Hines
Senior Vice President, 
Commercial Relationship Manager

Mark S. Kelly
Senior Vice President, 
Business Development & Support Services

Donna J. Holycross
Vice President, Director of Marketing

Cheryl L. Krouse
Vice President, Retail Administration Manager

Mark A. Matthews
Vice President, Credit Review

Linda E. Miller
Vice President, Corporate Secretary

Edmund W. Smallwood, Jr.
Vice President, Retail Sales Administrative Officer

Stephanie W. Toalston
Vice President, Director of Human Resources

Lois E. Ellis
Assistant Vice President, Compliance Officer

Original Croton Bank 1911

heartlandbank.com

Heartland Bank
Launches iPhone 
App! Feb. 2, 2011

Member
FDIC

1996 Groundbreaking 
of Corporate Office 
in Gahanna

Groundbreaking 

of Corporate Office 

in Gahanna 1995

Heartland BancCorp is a registered Ohio Bank Holding company and the parent of Heartland Bank, which operates eleven full-service banking offices.  Alternative investment services are provided through Infinex Financial Group.  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 over-the-counter (OTC) Bulletin Board Service under the symbol HLAN.   Worldwide access at heartlandbank.com. 
To Our Shareholders, Customers, and Friends: 

Congratulations on our Centennial!! It was 100 years ago that The Croton Bank Co. was incorporated by Jason Potter, George B. Van 
Fossen, Clarence W. Wells, Otis H. Davidson, John M. Curry, and Stanton E. Hoover, the original stockholders, and George Van Fossen 
was the first President. A great deal has changed in banking since the birth of your community bank. The first deposits were made 
by traveling by horse and buggy to the one bank branch and then came the expansion of the bank’s footprint to all of central Ohio and 
now we can make our deposits from our desktops via the Internet. However, one thing has not changed and that is our commitment to 
the community in which this bank was founded, which remains as strong as ever and continues to be the guidance for our existence.

I am pleased to announce another successful year for Heartland.  This year we were honored by US Banker Magazine by improving our 
ranking from 159 to 112 in the “Top 200” community banks nationwide based on ROAE (return on average equity). This achievement 
continues to be a true indication of the prudent underwriting standards, dedication to technology and efficiency, and management 
of risk that is Heartland Bank. Strong and prudent banks continue to emerge as the survivors of this industry and these banks will 
reap the benefits of a shrinking legion of banks as the economy and financial reform continue to be a major focus. Heartland was also 
recognized by Business First of Columbus as the #3 SBA Lender in Central Ohio, placing it above many far larger institutions. This is 
another indication that further demonstrates the creativity, flexibility, and risk management of the institution. Heartland is proud to 
receive these honors and is dedicated to remaining focused on prudent banking principles to benefit our communities and maximize 
shareholder value.

Tiney M. McComb
Chairman & CEO
of Heartland BancCorp
Chairman of
Heartland Bank 

We are seeing signs that our economy is recovering. Unemployment in central Ohio is beginning to decline slightly, consumer spending seems to be picking up, and businesses 
are starting to seek growth strategies to further their business plans. While there are some good signs, we remain cautiously optimistic about the local and national economy 
and have advised our clients that we are not on the road to complete recovery just yet. Housing starts are at a 23-year low, housing values are still settling in at the floor, and the 
consumer is, for the most part, still on the sidelines as they build up their savings and/or retire debt. Our country’s national debt is at an all time high and needs to be dealt with 
very soon. Until this occurs with just prudence, the economy will remain very fragile and extremely vulnerable to world events and economies abroad. 

2010 was a banner year for Heartland BancCorp as we continued our mission to be Central Ohio’s Community Bank. The bank achieved record earnings of $4.6 million for the first 
time. We solidified our commitment to the Westside of Columbus, and the Hilltop Community, by renovating our Wilson Road Office to look and feel like all of the other Heartland 
Offices. In a year that found many consumers and businesses searching for a relationship with a bank, we focused on introducing those displaced customers to Heartland. Growing 
core banking relationships was again the focus for the entire year, and I’m proud to report we were very successful in growing our client base.

The massive Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (FinReg Bill) was passed and we are beginning to see the effects of this legislation in the market 
place. While the Act contains a multitude of new regulations, we feel that compliance with these new rules will be a competitive strength of our enterprise. Regulating non-bank 
financial companies such as mortgage lenders, new FDIC premium guidelines, and tighter controls of the securitization markets are all things that are positive to community 
banks. Our entire staff has also participated in this effort by repeatedly writing and calling their respective members of Congress to voice their opinion on these issues and how 
it will affect their personal lives and their bank.  One of the many items that were not a benefit, the Durbin Amendment on debit card interchange fees, is most likely going to be 
delayed until a proper study of the measure and its effects on community banks can be studied further. In short, the FinReg Bill was in some ways a victory for community banks 
and we feel that our adaptability to comply with this new legislation is a competitive strength as many of our competitors find it easier to be a part of the consolidation wave.

Ultimately, our success flows directly from the quality of our employees and their commitment to delivering superior service to our customers.  We continue to invest in our 
“people portfolio,” growing Heartland Community Bankers throughout our enterprise. Our internal training department has enhanced its course offerings, we have record 
enrollment in the Bank’s Principles of Banking program, several associates are attending secondary industry education, and our front line Client Service Representative (CSR) 
movement to encourage consultative interaction has been a great success.  Management has reinforced the theme of personal empowerment across all departments, recognizing 
that client satisfaction is a direct result of their experience. Investing in this strength to become a “best of breed organization” is the goal and we are well on our way to achieving 
this distinction.  Now here are the financial highlights of 2010.

Glenn S. Potter
Past President  
of Croton Bank Co.

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Heartland BancCorp
Consolidated Balance Sheets
December 31, 2010 and 2009

Heartland BancCorp
Consolidated Statements of Income
Years Ended December 31, 2010 and 2009

Assets  

2010  
__________ 

2009
__________

  Cash and cash equivalents  

$ 7,825,727  

$ 10,432,823

  Available-for-sale securities  
  Held-to-maturity securities  

115,223,173  
5,756,962  

95,408,139
5,905,720

Loans, net of allowance for loan losses of 
  $3,871,640 and $3,244,003 at 
  December 31, 2010 and 2009, respectively  

  Premises and equipment  

Federal Reserve and Federal Home Loan Bank stock 
Foreclosed assets held for sale  
Interest receivable  

  Goodwill  
  Prepaid FDIC insurance premium  
  Other  

Total assets  

387,867,015  
9,479,273  
1,230,450  
2,615,688  
1,804,636  
417,353  
1,770,653  
2,756,864 
__________ 

392,969,857
9,670,790
1,230,300
1,468,093
1,973,311
417,353
2,605,235
1,853,552
__________

$ 536,747,794  
__________ 
__________ 

$ 523,935,173
__________
__________

Liabilities and Shareholders’ Equity

Liabilities
  Deposits

  Demand  

Savings, NOW and money market  

  Time  

Total deposits  

Short-term borrowings  
Long-term debt  
Interest payable and other liabilities  

$ 50,519,453  
159,720,953  
251,484,773  
__________ 

$ 42,795,604
130,752,542
280,372,012
__________

461,725,179  
__________ 

453,920,158
__________

23,500,430  
3,093,000  
3,185,929  
__________ 

19,601,594
3,093,000
3,064,088
__________

Interest Income
Loans  
Securities
  Taxable  
  Tax-exempt  
Other  
Federal funds sold  

  Total interest income  

Interest Expense
Deposits  
Borrowings    

  Total interest expense  

Net Interest Income  

__________ 

2010  

2009
__________

$ 23,893,785 

 $ 24,490,400

2,676,959  
1,394,671  
44,540 
161  
__________ 

3,500,090
1,172,805
 40,286
123
__________

28,010,116  
__________ 

29,203,704
__________

7,244,675  
382,357  
__________ 

9,974,546
413,723
__________

7,627,032  
__________ 

10,388,269
__________

20,383,084  

18,815,435

Provision for Loan Losses  

1,921,000  
__________ 

1,625,000
__________

Net Interest Income After Provision for 

Loan Losses  

Noninterest Income
Service charges  
Net gains and commissions on loan sales  
Net realized gains on sales of 
  available-for-sale securities  
Net realized (losses) gains on sales of 

foreclosed assets  

Other-than-temporary impairment loss on 
  available-for-sale security 
Other  

  Total noninterest income  

Total liabilities  

491,504,538  
__________ 

479,678,840
__________

Noninterest Expense

Shareholders’ Equity

  Common stock, without par value; authorized 
  5,000,000 shares; issued 2010 - 1,535,832 shares, 
  2009 - 1,535,224 shares  

  Retained earnings  
  Accumulated other comprehensive income  
  Treasury stock, at cost

  Common; 2009 - 139 shares  

Total shareholders’ equity  

23,047,347  
21,282,467  
913,442  

23,038,474
18,691,579
2 ,532,118

-  
__________ 

(5,838)
__________

45,243,256  
__________ 

44,256,333
__________

Total liabilities and shareholders’ equity  

$ 536,747,794  
__________ 
__________ 

$ 523,935,173
__________
__________

Salaries and employee benefits  
Net occupancy and equipment expense  
Data processing fees  
Professional fees  
  Marketing expense  

Printing and office supplies  
State franchise taxes  
FDIC Insurance premiums  
Other  

  Total noninterest expense  

Income Before Income Tax  
Provision for Income Taxes  

Net Income    

Basic Earnings Per Share  

Diluted Earnings Per Share  

18,462,084  
__________ 

17,190,435
__________

2,287,251  
99,020  

2,316,108
54,242

274,350  

210,993

(373,261)  

49,558

 -  
445,295  
__________ 

(989,559)
247,658
__________

2,732,655  
__________ 

1,889,000
__________

8,030,257  
1,828,933  
754,310  
616,568  
407,902  
220,232  
539,393  
908,756  
1,565,490  
__________ 

7,717,296
1,736,900
798,562
520,142
379,654
196,717
522,030
913,865
1,255,476
__________

14,871,841  
__________ 

14,040,642
__________

6,322,898  
1,753,258  
__________ 

5,038,793
1,447,114
__________

$ 4,569,640  
__________ 
__________ 

$ 3,591,679
__________
__________

$ 2 .98  
__________ 
__________ 

$ 2.33
__________
__________

$ 2 .96  
__________ 
__________ 

$ 2.32
__________
__________

Since 1911

Heartland Locations

CORPORATE OFFICE
850 North Hamilton Road
Gahanna, Ohio  43230
(614) 337-4600

COLUMBUS 
CAPITOL SQUARE
65 East State Street
Columbus, Ohio  43215
(614) 416-0244

CROTON
12 North Main Street
Croton, Ohio  43013
(740) 893-2191

DUBLIN
6500 Frantz Road
Dublin, Ohio  43017
(614) 798-8818

FRIENDSHIP VILLAGE OF DUBLIN
6000 Riverside Drive
Dublin, Ohio  43017
(614) 923-0575

GAHANNA
850 North Hamilton Road
Gahanna, Ohio  43230
(614) 337-4605

GAHANNA
NORTH STYGLER ROAD
67 North Stygler Road
Gahanna, Ohio  43230
(614) 475-7024

GROVE CITY
2365 Old Stringtown Road
Grove City, Ohio  43123
(614) 875-1884

JOHNSTOWN
730 West Coshocton Street
Johnstown, Ohio  43031
(740) 967-6500

NEWARK
6 North Park Place
Newark, Ohio  43055
(740) 349-7888

REYNOLDSBURG
6887 East Main Street
Reynoldsburg, Ohio  43068
(614) 416-0400

WEST COLUMBUS
130 North Wilson Road
Columbus, Ohio  43204
(614) 351-2100

WESTERVILLE
450 South State Street
Westerville, Ohio  43081
(614) 839-2265

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
 
 
 
 
    
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
   
 
 
 
 
 
   
 
 
 
 
   
 
 
 
 
 
   
 
 
 
 
   
 
 
 
 
To Our Shareholders, Customers, and Friends: 

Congratulations on our Centennial!! It was 100 years ago that The Croton Bank Co. was incorporated by Jason Potter, George B. Van 
Fossen, Clarence W. Wells, Otis H. Davidson, John M. Curry, and Stanton E. Hoover, the original stockholders, and George Van Fossen 
was the first President. A great deal has changed in banking since the birth of your community bank. The first deposits were made 
by traveling by horse and buggy to the one bank branch and then came the expansion of the bank’s footprint to all of central Ohio and 
now we can make our deposits from our desktops via the Internet. However, one thing has not changed and that is our commitment to 
the community in which this bank was founded, which remains as strong as ever and continues to be the guidance for our existence.

I am pleased to announce another successful year for Heartland.  This year we were honored by US Banker Magazine by improving our 
ranking from 159 to 112 in the “Top 200” community banks nationwide based on ROAE (return on average equity). This achievement 
continues to be a true indication of the prudent underwriting standards, dedication to technology and efficiency, and management 
of risk that is Heartland Bank. Strong and prudent banks continue to emerge as the survivors of this industry and these banks will 
reap the benefits of a shrinking legion of banks as the economy and financial reform continue to be a major focus. Heartland was also 
recognized by Business First of Columbus as the #3 SBA Lender in Central Ohio, placing it above many far larger institutions. This is 
another indication that further demonstrates the creativity, flexibility, and risk management of the institution. Heartland is proud to 
receive these honors and is dedicated to remaining focused on prudent banking principles to benefit our communities and maximize 
shareholder value.

Tiney M. McComb
Chairman & CEO
of Heartland BancCorp
Chairman of
Heartland Bank 

We are seeing signs that our economy is recovering. Unemployment in central Ohio is beginning to decline slightly, consumer spending seems to be picking up, and businesses 
are starting to seek growth strategies to further their business plans. While there are some good signs, we remain cautiously optimistic about the local and national economy 
and have advised our clients that we are not on the road to complete recovery just yet. Housing starts are at a 23-year low, housing values are still settling in at the floor, and the 
consumer is, for the most part, still on the sidelines as they build up their savings and/or retire debt. Our country’s national debt is at an all time high and needs to be dealt with 
very soon. Until this occurs with just prudence, the economy will remain very fragile and extremely vulnerable to world events and economies abroad. 

2010 was a banner year for Heartland BancCorp as we continued our mission to be Central Ohio’s Community Bank. The bank achieved record earnings of $4.6 million for the first 
time. We solidified our commitment to the Westside of Columbus, and the Hilltop Community, by renovating our Wilson Road Office to look and feel like all of the other Heartland 
Offices. In a year that found many consumers and businesses searching for a relationship with a bank, we focused on introducing those displaced customers to Heartland. Growing 
core banking relationships was again the focus for the entire year, and I’m proud to report we were very successful in growing our client base.

The massive Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (FinReg Bill) was passed and we are beginning to see the effects of this legislation in the market 
place. While the Act contains a multitude of new regulations, we feel that compliance with these new rules will be a competitive strength of our enterprise. Regulating non-bank 
financial companies such as mortgage lenders, new FDIC premium guidelines, and tighter controls of the securitization markets are all things that are positive to community 
banks. Our entire staff has also participated in this effort by repeatedly writing and calling their respective members of Congress to voice their opinion on these issues and how 
it will affect their personal lives and their bank.  One of the many items that were not a benefit, the Durbin Amendment on debit card interchange fees, is most likely going to be 
delayed until a proper study of the measure and its effects on community banks can be studied further. In short, the FinReg Bill was in some ways a victory for community banks 
and we feel that our adaptability to comply with this new legislation is a competitive strength as many of our competitors find it easier to be a part of the consolidation wave.

Ultimately, our success flows directly from the quality of our employees and their commitment to delivering superior service to our customers.  We continue to invest in our 
“people portfolio,” growing Heartland Community Bankers throughout our enterprise. Our internal training department has enhanced its course offerings, we have record 
enrollment in the Bank’s Principles of Banking program, several associates are attending secondary industry education, and our front line Client Service Representative (CSR) 
movement to encourage consultative interaction has been a great success.  Management has reinforced the theme of personal empowerment across all departments, recognizing 
that client satisfaction is a direct result of their experience. Investing in this strength to become a “best of breed organization” is the goal and we are well on our way to achieving 
this distinction.  Now here are the financial highlights of 2010.

Glenn S. Potter
Past President  
of Croton Bank Co.

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Heartland BancCorp
Consolidated Balance Sheets
December 31, 2010 and 2009

Heartland BancCorp
Consolidated Statements of Income
Years Ended December 31, 2010 and 2009

Assets  

2010  
__________ 

2009
__________

  Cash and cash equivalents  

$ 7,825,727  

$ 10,432,823

  Available-for-sale securities  
  Held-to-maturity securities  

115,223,173  
5,756,962  

95,408,139
5,905,720

Loans, net of allowance for loan losses of 
  $3,871,640 and $3,244,003 at 
  December 31, 2010 and 2009, respectively  

  Premises and equipment  

Federal Reserve and Federal Home Loan Bank stock 
Foreclosed assets held for sale  
Interest receivable  

  Goodwill  
  Prepaid FDIC insurance premium  
  Other  

Total assets  

387,867,015  
9,479,273  
1,230,450  
2,615,688  
1,804,636  
417,353  
1,770,653  
2,756,864 
__________ 

392,969,857
9,670,790
1,230,300
1,468,093
1,973,311
417,353
2,605,235
1,853,552
__________

$ 536,747,794  
__________ 
__________ 

$ 523,935,173
__________
__________

Liabilities and Shareholders’ Equity

Liabilities
  Deposits

  Demand  

Savings, NOW and money market  

  Time  

Total deposits  

Short-term borrowings  
Long-term debt  
Interest payable and other liabilities  

$ 50,519,453  
159,720,953  
251,484,773  
__________ 

$ 42,795,604
130,752,542
280,372,012
__________

461,725,179  
__________ 

453,920,158
__________

23,500,430  
3,093,000  
3,185,929  
__________ 

19,601,594
3,093,000
3,064,088
__________

Interest Income
Loans  
Securities
  Taxable  
  Tax-exempt  
Other  
Federal funds sold  

  Total interest income  

Interest Expense
Deposits  
Borrowings    

  Total interest expense  

Net Interest Income  

__________ 

2010  

2009
__________

$ 23,893,785 

 $ 24,490,400

2,676,959  
1,394,671  
44,540 
161  
__________ 

3,500,090
1,172,805
 40,286
123
__________

28,010,116  
__________ 

29,203,704
__________

7,244,675  
382,357  
__________ 

9,974,546
413,723
__________

7,627,032  
__________ 

10,388,269
__________

20,383,084  

18,815,435

Provision for Loan Losses  

1,921,000  
__________ 

1,625,000
__________

Net Interest Income After Provision for 

Loan Losses  

Noninterest Income
Service charges  
Net gains and commissions on loan sales  
Net realized gains on sales of 
  available-for-sale securities  
Net realized (losses) gains on sales of 

foreclosed assets  

Other-than-temporary impairment loss on 
  available-for-sale security 
Other  

  Total noninterest income  

Total liabilities  

491,504,538  
__________ 

479,678,840
__________

Noninterest Expense

Shareholders’ Equity

  Common stock, without par value; authorized 
  5,000,000 shares; issued 2010 - 1,535,832 shares, 
  2009 - 1,535,224 shares  

  Retained earnings  
  Accumulated other comprehensive income  
  Treasury stock, at cost

  Common; 2009 - 139 shares  

Total shareholders’ equity  

23,047,347  
21,282,467  
913,442  

23,038,474
18,691,579
2 ,532,118

-  
__________ 

(5,838)
__________

45,243,256  
__________ 

44,256,333
__________

Total liabilities and shareholders’ equity  

$ 536,747,794  
__________ 
__________ 

$ 523,935,173
__________
__________

Salaries and employee benefits  
Net occupancy and equipment expense  
Data processing fees  
Professional fees  
  Marketing expense  

Printing and office supplies  
State franchise taxes  
FDIC Insurance premiums  
Other  

  Total noninterest expense  

Income Before Income Tax  
Provision for Income Taxes  

Net Income    

Basic Earnings Per Share  

Diluted Earnings Per Share  

18,462,084  
__________ 

17,190,435
__________

2,287,251  
99,020  

2,316,108
54,242

274,350  

210,993

(373,261)  

49,558

 -  
445,295  
__________ 

(989,559)
247,658
__________

2,732,655  
__________ 

1,889,000
__________

8,030,257  
1,828,933  
754,310  
616,568  
407,902  
220,232  
539,393  
908,756  
1,565,490  
__________ 

7,717,296
1,736,900
798,562
520,142
379,654
196,717
522,030
913,865
1,255,476
__________

14,871,841  
__________ 

14,040,642
__________

6,322,898  
1,753,258  
__________ 

5,038,793
1,447,114
__________

$ 4,569,640  
__________ 
__________ 

$ 3,591,679
__________
__________

$ 2 .98  
__________ 
__________ 

$ 2.33
__________
__________

$ 2 .96  
__________ 
__________ 

$ 2.32
__________
__________

Since 1911

Heartland Locations

CORPORATE OFFICE
850 North Hamilton Road
Gahanna, Ohio  43230
(614) 337-4600

COLUMBUS 
CAPITOL SQUARE
65 East State Street
Columbus, Ohio  43215
(614) 416-0244

CROTON
12 North Main Street
Croton, Ohio  43013
(740) 893-2191

DUBLIN
6500 Frantz Road
Dublin, Ohio  43017
(614) 798-8818

FRIENDSHIP VILLAGE OF DUBLIN
6000 Riverside Drive
Dublin, Ohio  43017
(614) 923-0575

GAHANNA
850 North Hamilton Road
Gahanna, Ohio  43230
(614) 337-4605

GAHANNA
NORTH STYGLER ROAD
67 North Stygler Road
Gahanna, Ohio  43230
(614) 475-7024

GROVE CITY
2365 Old Stringtown Road
Grove City, Ohio  43123
(614) 875-1884

JOHNSTOWN
730 West Coshocton Street
Johnstown, Ohio  43031
(740) 967-6500

NEWARK
6 North Park Place
Newark, Ohio  43055
(740) 349-7888

REYNOLDSBURG
6887 East Main Street
Reynoldsburg, Ohio  43068
(614) 416-0400

WEST COLUMBUS
130 North Wilson Road
Columbus, Ohio  43204
(614) 351-2100

WESTERVILLE
450 South State Street
Westerville, Ohio  43081
(614) 839-2265

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
 
 
 
 
    
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
   
 
 
 
 
 
   
 
 
 
 
   
 
 
 
 
 
   
 
 
 
 
   
 
 
 
 
To Our Shareholders, Customers, and Friends: 

Congratulations on our Centennial!! It was 100 years ago that The Croton Bank Co. was incorporated by Jason Potter, George B. Van 
Fossen, Clarence W. Wells, Otis H. Davidson, John M. Curry, and Stanton E. Hoover, the original stockholders, and George Van Fossen 
was the first President. A great deal has changed in banking since the birth of your community bank. The first deposits were made 
by traveling by horse and buggy to the one bank branch and then came the expansion of the bank’s footprint to all of central Ohio and 
now we can make our deposits from our desktops via the Internet. However, one thing has not changed and that is our commitment to 
the community in which this bank was founded, which remains as strong as ever and continues to be the guidance for our existence.

I am pleased to announce another successful year for Heartland.  This year we were honored by US Banker Magazine by improving our 
ranking from 159 to 112 in the “Top 200” community banks nationwide based on ROAE (return on average equity). This achievement 
continues to be a true indication of the prudent underwriting standards, dedication to technology and efficiency, and management 
of risk that is Heartland Bank. Strong and prudent banks continue to emerge as the survivors of this industry and these banks will 
reap the benefits of a shrinking legion of banks as the economy and financial reform continue to be a major focus. Heartland was also 
recognized by Business First of Columbus as the #3 SBA Lender in Central Ohio, placing it above many far larger institutions. This is 
another indication that further demonstrates the creativity, flexibility, and risk management of the institution. Heartland is proud to 
receive these honors and is dedicated to remaining focused on prudent banking principles to benefit our communities and maximize 
shareholder value.

Tiney M. McComb
Chairman & CEO
of Heartland BancCorp
Chairman of
Heartland Bank 

We are seeing signs that our economy is recovering. Unemployment in central Ohio is beginning to decline slightly, consumer spending seems to be picking up, and businesses 
are starting to seek growth strategies to further their business plans. While there are some good signs, we remain cautiously optimistic about the local and national economy 
and have advised our clients that we are not on the road to complete recovery just yet. Housing starts are at a 23-year low, housing values are still settling in at the floor, and the 
consumer is, for the most part, still on the sidelines as they build up their savings and/or retire debt. Our country’s national debt is at an all time high and needs to be dealt with 
very soon. Until this occurs with just prudence, the economy will remain very fragile and extremely vulnerable to world events and economies abroad. 

2010 was a banner year for Heartland BancCorp as we continued our mission to be Central Ohio’s Community Bank. The bank achieved record earnings of $4.6 million for the first 
time. We solidified our commitment to the Westside of Columbus, and the Hilltop Community, by renovating our Wilson Road Office to look and feel like all of the other Heartland 
Offices. In a year that found many consumers and businesses searching for a relationship with a bank, we focused on introducing those displaced customers to Heartland. Growing 
core banking relationships was again the focus for the entire year, and I’m proud to report we were very successful in growing our client base.

The massive Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (FinReg Bill) was passed and we are beginning to see the effects of this legislation in the market 
place. While the Act contains a multitude of new regulations, we feel that compliance with these new rules will be a competitive strength of our enterprise. Regulating non-bank 
financial companies such as mortgage lenders, new FDIC premium guidelines, and tighter controls of the securitization markets are all things that are positive to community 
banks. Our entire staff has also participated in this effort by repeatedly writing and calling their respective members of Congress to voice their opinion on these issues and how 
it will affect their personal lives and their bank.  One of the many items that were not a benefit, the Durbin Amendment on debit card interchange fees, is most likely going to be 
delayed until a proper study of the measure and its effects on community banks can be studied further. In short, the FinReg Bill was in some ways a victory for community banks 
and we feel that our adaptability to comply with this new legislation is a competitive strength as many of our competitors find it easier to be a part of the consolidation wave.

Ultimately, our success flows directly from the quality of our employees and their commitment to delivering superior service to our customers.  We continue to invest in our 
“people portfolio,” growing Heartland Community Bankers throughout our enterprise. Our internal training department has enhanced its course offerings, we have record 
enrollment in the Bank’s Principles of Banking program, several associates are attending secondary industry education, and our front line Client Service Representative (CSR) 
movement to encourage consultative interaction has been a great success.  Management has reinforced the theme of personal empowerment across all departments, recognizing 
that client satisfaction is a direct result of their experience. Investing in this strength to become a “best of breed organization” is the goal and we are well on our way to achieving 
this distinction.  Now here are the financial highlights of 2010.

Glenn S. Potter
Past President  
of Croton Bank Co.

s
l
a
i
c
n
a
n
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F
d
e
t
a
d

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s
n
o
C

Heartland BancCorp
Consolidated Balance Sheets
December 31, 2010 and 2009

Heartland BancCorp
Consolidated Statements of Income
Years Ended December 31, 2010 and 2009

Assets  

2010  
__________ 

2009
__________

  Cash and cash equivalents  

$ 7,825,727  

$ 10,432,823

  Available-for-sale securities  
  Held-to-maturity securities  

115,223,173  
5,756,962  

95,408,139
5,905,720

Loans, net of allowance for loan losses of 
  $3,871,640 and $3,244,003 at 
  December 31, 2010 and 2009, respectively  

  Premises and equipment  

Federal Reserve and Federal Home Loan Bank stock 
Foreclosed assets held for sale  
Interest receivable  

  Goodwill  
  Prepaid FDIC insurance premium  
  Other  

Total assets  

387,867,015  
9,479,273  
1,230,450  
2,615,688  
1,804,636  
417,353  
1,770,653  
2,756,864 
__________ 

392,969,857
9,670,790
1,230,300
1,468,093
1,973,311
417,353
2,605,235
1,853,552
__________

$ 536,747,794  
__________ 
__________ 

$ 523,935,173
__________
__________

Liabilities and Shareholders’ Equity

Liabilities
  Deposits

  Demand  

Savings, NOW and money market  

  Time  

Total deposits  

Short-term borrowings  
Long-term debt  
Interest payable and other liabilities  

$ 50,519,453  
159,720,953  
251,484,773  
__________ 

$ 42,795,604
130,752,542
280,372,012
__________

461,725,179  
__________ 

453,920,158
__________

23,500,430  
3,093,000  
3,185,929  
__________ 

19,601,594
3,093,000
3,064,088
__________

Interest Income
Loans  
Securities
  Taxable  
  Tax-exempt  
Other  
Federal funds sold  

  Total interest income  

Interest Expense
Deposits  
Borrowings    

  Total interest expense  

Net Interest Income  

__________ 

2010  

2009
__________

$ 23,893,785 

 $ 24,490,400

2,676,959  
1,394,671  
44,540 
161  
__________ 

3,500,090
1,172,805
 40,286
123
__________

28,010,116  
__________ 

29,203,704
__________

7,244,675  
382,357  
__________ 

9,974,546
413,723
__________

7,627,032  
__________ 

10,388,269
__________

20,383,084  

18,815,435

Provision for Loan Losses  

1,921,000  
__________ 

1,625,000
__________

Net Interest Income After Provision for 

Loan Losses  

Noninterest Income
Service charges  
Net gains and commissions on loan sales  
Net realized gains on sales of 
  available-for-sale securities  
Net realized (losses) gains on sales of 

foreclosed assets  

Other-than-temporary impairment loss on 
  available-for-sale security 
Other  

  Total noninterest income  

Total liabilities  

491,504,538  
__________ 

479,678,840
__________

Noninterest Expense

Shareholders’ Equity

  Common stock, without par value; authorized 
  5,000,000 shares; issued 2010 - 1,535,832 shares, 
  2009 - 1,535,224 shares  

  Retained earnings  
  Accumulated other comprehensive income  
  Treasury stock, at cost

  Common; 2009 - 139 shares  

Total shareholders’ equity  

23,047,347  
21,282,467  
913,442  

23,038,474
18,691,579
2 ,532,118

-  
__________ 

(5,838)
__________

45,243,256  
__________ 

44,256,333
__________

Total liabilities and shareholders’ equity  

$ 536,747,794  
__________ 
__________ 

$ 523,935,173
__________
__________

Salaries and employee benefits  
Net occupancy and equipment expense  
Data processing fees  
Professional fees  
  Marketing expense  

Printing and office supplies  
State franchise taxes  
FDIC Insurance premiums  
Other  

  Total noninterest expense  

Income Before Income Tax  
Provision for Income Taxes  

Net Income    

Basic Earnings Per Share  

Diluted Earnings Per Share  

18,462,084  
__________ 

17,190,435
__________

2,287,251  
99,020  

2,316,108
54,242

274,350  

210,993

(373,261)  

49,558

 -  
445,295  
__________ 

(989,559)
247,658
__________

2,732,655  
__________ 

1,889,000
__________

8,030,257  
1,828,933  
754,310  
616,568  
407,902  
220,232  
539,393  
908,756  
1,565,490  
__________ 

7,717,296
1,736,900
798,562
520,142
379,654
196,717
522,030
913,865
1,255,476
__________

14,871,841  
__________ 

14,040,642
__________

6,322,898  
1,753,258  
__________ 

5,038,793
1,447,114
__________

$ 4,569,640  
__________ 
__________ 

$ 3,591,679
__________
__________

$ 2 .98  
__________ 
__________ 

$ 2.33
__________
__________

$ 2 .96  
__________ 
__________ 

$ 2.32
__________
__________

Since 1911

Heartland Locations

CORPORATE OFFICE
850 North Hamilton Road
Gahanna, Ohio  43230
(614) 337-4600

COLUMBUS 
CAPITOL SQUARE
65 East State Street
Columbus, Ohio  43215
(614) 416-0244

CROTON
12 North Main Street
Croton, Ohio  43013
(740) 893-2191

DUBLIN
6500 Frantz Road
Dublin, Ohio  43017
(614) 798-8818

FRIENDSHIP VILLAGE OF DUBLIN
6000 Riverside Drive
Dublin, Ohio  43017
(614) 923-0575

GAHANNA
850 North Hamilton Road
Gahanna, Ohio  43230
(614) 337-4605

GAHANNA
NORTH STYGLER ROAD
67 North Stygler Road
Gahanna, Ohio  43230
(614) 475-7024

GROVE CITY
2365 Old Stringtown Road
Grove City, Ohio  43123
(614) 875-1884

JOHNSTOWN
730 West Coshocton Street
Johnstown, Ohio  43031
(740) 967-6500

NEWARK
6 North Park Place
Newark, Ohio  43055
(740) 349-7888

REYNOLDSBURG
6887 East Main Street
Reynoldsburg, Ohio  43068
(614) 416-0400

WEST COLUMBUS
130 North Wilson Road
Columbus, Ohio  43204
(614) 351-2100

WESTERVILLE
450 South State Street
Westerville, Ohio  43081
(614) 839-2265

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
 
 
 
 
    
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
   
 
 
 
 
 
   
 
 
 
 
   
 
 
 
 
 
   
 
 
 
 
   
 
 
 
 
2010 Financial Review

Net income for the year ended December 31, 2010 was $4.6 million or $2.96 per share compared to net income of $3.6 million or $2.32 per share for the year ended December 
31, 2009. The primary source of Heartland BancCorp’s revenue is net interest income from its investment and loan portfolios less its cost of deposits and borrowings.  Net 
interest income before provision for loan loss for 2010 grew 8% to $20.4 million compared to $18.8 million for 2009.  Provision for loan loss of $1.9 million for the full year 2010 
compared to $1.6 million for all of 2009.  The added provision in 2010 was used to increase the Bank’s allowance for loan loss while 2010 loan charge-offs at .32% of average 
loans outstanding remained at 2009 levels. The improvement in net interest income resulted from the combined effect of a 27% decline in the Bank’s cost of funds less a 4% drop 
in the yield on earning assets.  Lower funding cost resulted from a positive shift in deposit mix to lower cost non-interest bearing transaction and money market accounts that 
increased from 2009 18% and 22% respectively. This increase in lower cost deposits enabled Heartland Bank to drive significant reductions in its funding cost and improvement 
in its net interest income.  These favorable contributors to net interest income were partially offset by a reduction in the yield in the loan portfolio and an increase in lower 
yielding securities both the result of continuation of the low interest rate environment during 2010.

Total non-interest income of $2.7 million in 2010 compares to $1.9 million for 2009.  The lower level of non-interest income in 2009 was due to a one time charge to earnings 
totaling $990 thousand resulting from the mark-to-market of an other than temporarily impaired investment security.   The decline in service charges during 2010 resulted from 
the implementation of changes to Regulation E during the third quarter of 2010.  Regulation E restricts banking institutions from charging overdraft fees on ATM and debit card 
transactions absent a customer’s opt-in to overdraft coverage.   

Non-interest or operating expense of $14.9 million in 2010 increased 6% over non-interest expense of $14.0 million in 2009.  Salary and employee benefits expense for 2010 
increased $313 thousand or 4% verses the year ended 2009.  The increase was partially attributable to a 2% increase in staffing added due to the increasing banking related 
regulatory requirements and higher health insurance costs in 2010.  Other operating expense increased $310 thousand year-over-year due to increased loan related collection 
expenses in 2010.

Total assets outstanding increased 2% to $537 million at year-end 2010, an increase of $13 million from assets of $524 million at the end of 2009.   Loan and deposit volumes 
have been influenced significantly during 2010 and 2009 by overall economic factors including market interest rates, consumer confidence, fluctuations in the unemployment 
rate, lower levels of business and consumer spending as well as changes in regulations affecting banking institutions.  We continued to implement initiatives to enhance our loan 
quality and grow our retail deposit relationships while improving our productivity during 2010. Net loans outstanding declined slightly to $388 million, down 1% under loans of 
$393 million at the end of 2009. The decline in loans outstanding resulted from continued weak demand in both the commercial and retail lending sectors. Deposits increased 
2% to $462 million at December 31, 2010. A key element of Heartland’s deposit strategy was focused on growing our transaction account deposit base while reducing our 
dependence on public funds and larger non-core certificate of deposit accounts in 2010.  

Total shareholders’ equity remained strong growing to $45.2 million, up 2% from $44.3 million at year-end 2009. Based upon shares outstanding the book value of shareholders’ 
equity increased from $28.83 at year-end 2009 to $29.46 per share at December 31, 2010. Among the financial strengths of Heartland BancCorp is our capital position, which 
exceeds regulatory guidelines and compares favorably to our peers and other Ohio based banks.  Tier1 leverage, Tier 1 Risk based and Total Risk Based Capital ratios were 8.6%, 
12.4%, and 13.4% respectively as of December 31, 2010.  Regulatory requirements for a well-capitalized bank are 5%, 6%, and 10% for Tier 1 Leverage; Tier 1 Risk based and 
Total Risk Based Capital Ratios respectively.   Further enhancing shareholder value dividends per share of common stock totaled $1.28 representing a dividend yield of 5.63% on 
the average market price of $22.73 per share for 2010. Dividends paid resulted in a dividend payout ratio of 43% for 2010. 

Our conservative culture, risk management practices, and quality people throughout the last 100 years have enabled Heartland BancCorp to successfully reach and celebrate our 
Centennial. We believe Heartland BancCorp continues to be strategically positioned to capitalize on opportunities enhancing our shareholders’ interest as the economy improves. 
I would like to take this opportunity to thank our shareholders, directors, ambassadors, customers and employees for their continued support and confidence in Heartland 
BancCorp. We truly value your business and look forward to serving you for another 100 years.

Best personal regards,

Tiney M. McComb
Chairman and CEO

Heartland BancCorp and Bank Directors

Heartland BancCorp Officers

I.  Robert Amerine 
Chairman, ISCO, Inc. 

Arthur G.H. Bing M.D. 
Plastic & Reconstructive Surgeon

Tiney M. McComb
Chairman & CEO

G. Scott McComb
Vice Chairman & President

Jay B. Eggspuehler, Esq.
Wiles, Boyle, Burkholder & Bringardner Co., L.P.A.

I. Robert Amerine
Secretary

Jodi L Garrison, CPA
Partner, Hirth, Norris & Garrsion, LLP

George R. Smith
Executive Vice President, Chief Financial Officer

John R. Haines
Retired, John R. Haines Insurance Agency

David C. Kotary
Principal, Brower Insurance Agency, LLC

Gerald K. McClain
President, The Jerry McClain Company, Inc.

G. Scott McComb
President & CEO, Heartland Bank

Tiney M. McComb
Chairman of the Board

Jack J. Eggspuehler
President, Aerosafe, Inc., Director Emeritus

Cheryl C. Poulton
President, Tech International, Director Emeritus

Heartland Investment Services

Mark Posey
Investment Representative

Jason Ellinger
Investment Representative

Heartland Bank Senior Management

Tiney M. McComb
Chairman

G. Scott McComb
President and CEO

George R. Smith
Executive Vice President, Chief Financial Officer

David P. Curby
Senior Vice President, Mortgage Lending

Robert F. Halley
Senior Vice President, 
Commercial Relationship Manager

Steven C. Hines
Senior Vice President, 
Commercial Relationship Manager

Mark S. Kelly
Senior Vice President, 
Business Development & Support Services

Donna J. Holycross
Vice President, Director of Marketing

Cheryl L. Krouse
Vice President, Retail Administration Manager

Mark A. Matthews
Vice President, Credit Review

Linda E. Miller
Vice President, Corporate Secretary

Edmund W. Smallwood, Jr.
Vice President, Retail Sales Administrative Officer

Stephanie W. Toalston
Vice President, Director of Human Resources

Lois E. Ellis
Assistant Vice President, Compliance Officer

Original Croton Bank 1911

heartlandbank.com

Heartland Bank
Launches iPhone 
App! Feb. 2, 2011

Member
FDIC

1996 Groundbreaking 
of Corporate Office 
in Gahanna

Groundbreaking 

of Corporate Office 

in Gahanna 1995

Heartland BancCorp is a registered Ohio Bank Holding company and the parent of Heartland Bank, which operates eleven full-service banking offices.  Alternative investment services are provided through Infinex Financial Group.  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 over-the-counter (OTC) Bulletin Board Service under the symbol HLAN.   Worldwide access at heartlandbank.com. 
2010 Financial Review

Net income for the year ended December 31, 2010 was $4.6 million or $2.96 per share compared to net income of $3.6 million or $2.32 per share for the year ended December 
31, 2009. The primary source of Heartland BancCorp’s revenue is net interest income from its investment and loan portfolios less its cost of deposits and borrowings.  Net 
interest income before provision for loan loss for 2010 grew 8% to $20.4 million compared to $18.8 million for 2009.  Provision for loan loss of $1.9 million for the full year 2010 
compared to $1.6 million for all of 2009.  The added provision in 2010 was used to increase the Bank’s allowance for loan loss while 2010 loan charge-offs at .32% of average 
loans outstanding remained at 2009 levels. The improvement in net interest income resulted from the combined effect of a 27% decline in the Bank’s cost of funds less a 4% drop 
in the yield on earning assets.  Lower funding cost resulted from a positive shift in deposit mix to lower cost non-interest bearing transaction and money market accounts that 
increased from 2009 18% and 22% respectively. This increase in lower cost deposits enabled Heartland Bank to drive significant reductions in its funding cost and improvement 
in its net interest income.  These favorable contributors to net interest income were partially offset by a reduction in the yield in the loan portfolio and an increase in lower 
yielding securities both the result of continuation of the low interest rate environment during 2010.

Total non-interest income of $2.7 million in 2010 compares to $1.9 million for 2009.  The lower level of non-interest income in 2009 was due to a one time charge to earnings 
totaling $990 thousand resulting from the mark-to-market of an other than temporarily impaired investment security.   The decline in service charges during 2010 resulted from 
the implementation of changes to Regulation E during the third quarter of 2010.  Regulation E restricts banking institutions from charging overdraft fees on ATM and debit card 
transactions absent a customer’s opt-in to overdraft coverage.   

Non-interest or operating expense of $14.9 million in 2010 increased 6% over non-interest expense of $14.0 million in 2009.  Salary and employee benefits expense for 2010 
increased $313 thousand or 4% verses the year ended 2009.  The increase was partially attributable to a 2% increase in staffing added due to the increasing banking related 
regulatory requirements and higher health insurance costs in 2010.  Other operating expense increased $310 thousand year-over-year due to increased loan related collection 
expenses in 2010.

Total assets outstanding increased 2% to $537 million at year-end 2010, an increase of $13 million from assets of $524 million at the end of 2009.   Loan and deposit volumes 
have been influenced significantly during 2010 and 2009 by overall economic factors including market interest rates, consumer confidence, fluctuations in the unemployment 
rate, lower levels of business and consumer spending as well as changes in regulations affecting banking institutions.  We continued to implement initiatives to enhance our loan 
quality and grow our retail deposit relationships while improving our productivity during 2010. Net loans outstanding declined slightly to $388 million, down 1% under loans of 
$393 million at the end of 2009. The decline in loans outstanding resulted from continued weak demand in both the commercial and retail lending sectors. Deposits increased 
2% to $462 million at December 31, 2010. A key element of Heartland’s deposit strategy was focused on growing our transaction account deposit base while reducing our 
dependence on public funds and larger non-core certificate of deposit accounts in 2010.  

Total shareholders’ equity remained strong growing to $45.2 million, up 2% from $44.3 million at year-end 2009. Based upon shares outstanding the book value of shareholders’ 
equity increased from $28.83 at year-end 2009 to $29.46 per share at December 31, 2010. Among the financial strengths of Heartland BancCorp is our capital position, which 
exceeds regulatory guidelines and compares favorably to our peers and other Ohio based banks.  Tier1 leverage, Tier 1 Risk based and Total Risk Based Capital ratios were 8.6%, 
12.4%, and 13.4% respectively as of December 31, 2010.  Regulatory requirements for a well-capitalized bank are 5%, 6%, and 10% for Tier 1 Leverage; Tier 1 Risk based and 
Total Risk Based Capital Ratios respectively.   Further enhancing shareholder value dividends per share of common stock totaled $1.28 representing a dividend yield of 5.63% on 
the average market price of $22.73 per share for 2010. Dividends paid resulted in a dividend payout ratio of 43% for 2010. 

Our conservative culture, risk management practices, and quality people throughout the last 100 years have enabled Heartland BancCorp to successfully reach and celebrate our 
Centennial. We believe Heartland BancCorp continues to be strategically positioned to capitalize on opportunities enhancing our shareholders’ interest as the economy improves. 
I would like to take this opportunity to thank our shareholders, directors, ambassadors, customers and employees for their continued support and confidence in Heartland 
BancCorp. We truly value your business and look forward to serving you for another 100 years.

Best personal regards,

Tiney M. McComb
Chairman and CEO

Heartland BancCorp and Bank Directors

Heartland BancCorp Officers

I.  Robert Amerine 
Chairman, ISCO, Inc. 

Arthur G.H. Bing M.D. 
Plastic & Reconstructive Surgeon

Tiney M. McComb
Chairman & CEO

G. Scott McComb
Vice Chairman & President

Jay B. Eggspuehler, Esq.
Wiles, Boyle, Burkholder & Bringardner Co., L.P.A.

I. Robert Amerine
Secretary

Jodi L Garrison, CPA
Partner, Hirth, Norris & Garrsion, LLP

George R. Smith
Executive Vice President, Chief Financial Officer

John R. Haines
Retired, John R. Haines Insurance Agency

David C. Kotary
Principal, Brower Insurance Agency, LLC

Gerald K. McClain
President, The Jerry McClain Company, Inc.

G. Scott McComb
President & CEO, Heartland Bank

Tiney M. McComb
Chairman of the Board

Jack J. Eggspuehler
President, Aerosafe, Inc., Director Emeritus

Cheryl C. Poulton
President, Tech International, Director Emeritus

Heartland Investment Services

Mark Posey
Investment Representative

Jason Ellinger
Investment Representative

Heartland Bank Senior Management

Tiney M. McComb
Chairman

G. Scott McComb
President and CEO

George R. Smith
Executive Vice President, Chief Financial Officer

David P. Curby
Senior Vice President, Mortgage Lending

Robert F. Halley
Senior Vice President, 
Commercial Relationship Manager

Steven C. Hines
Senior Vice President, 
Commercial Relationship Manager

Mark S. Kelly
Senior Vice President, 
Business Development & Support Services

Donna J. Holycross
Vice President, Director of Marketing

Cheryl L. Krouse
Vice President, Retail Administration Manager

Mark A. Matthews
Vice President, Credit Review

Linda E. Miller
Vice President, Corporate Secretary

Edmund W. Smallwood, Jr.
Vice President, Retail Sales Administrative Officer

Stephanie W. Toalston
Vice President, Director of Human Resources

Lois E. Ellis
Assistant Vice President, Compliance Officer

Original Croton Bank 1911

heartlandbank.com

Heartland Bank
Launches iPhone 
App! Feb. 2, 2011

Member
FDIC

1996 Groundbreaking 
of Corporate Office 
in Gahanna

Groundbreaking 

of Corporate Office 

in Gahanna 1995

Heartland BancCorp is a registered Ohio Bank Holding company and the parent of Heartland Bank, which operates eleven full-service banking offices.  Alternative investment services are provided through Infinex Financial Group.  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 over-the-counter (OTC) Bulletin Board Service under the symbol HLAN.   Worldwide access at heartlandbank.com.