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Heartland Bancshares, Inc.: Heartland Bancshares, Inc. Announces Participation in Capital Purchase Program

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^{Published in Business and Finance on Thursday, September 17th 2009 at 8:52 GMT by Market Wire}  

FRANKLIN, IN--(Marketwire - September 17, 2009) - Heartland Bancshares, Inc. IN (OTCBB: [ HRTB ]), parent company of Heartland Community Bank, announced today that it has agreed to participate in the U.S. Treasury Capital Purchase Program and has sold for $7 million preferred, non-voting shares of stock with a total liquidation value of $7.248 million to the U.S. Treasury Department under the terms of the program.

Treasury announced the Capital Purchase Program in October 2008, which encourages healthy financial institutions to build capital to help increase the flow of financing to businesses and consumers in order to support the economy.

The total $7,248,000 preferred stock issue is accruing, commencing with the September 11, 2009 original date of investment, a preferred dividend, payable to the Treasury, at a weighted average annual rate of 5.32% (increasing to a weighted average rate of 9% at the fifth anniversary of date of issue if it has not previously been redeemed).

Heartland Bancshares, Inc. previously reported total assets of $234 million and total shareholders' equity of $15 million as of June 30, 2009. Under the Treasury's definition of a stock company without publicly traded shares with total assets under $500 million, Heartland Bancshares, Inc. qualified for the Capital Purchase Program Expansion for Small Banks as a Private Institution. Specific terms of the program may be found at the Treasury's web site.

[ http://www.financialstability.gov/roadtostability/capitalpurchaseprogram.html ].

Steve Bechman, President and Chief Executive Officer, commented, "We are here to serve our community and we have seen tremendous opportunities for growth due to the turmoil in the financial industry and in particular the acquisition of the institutions that held the second and fourth largest deposit share in Johnson County as of the most recent information published by the FDIC at [ www.FDIC.gov ]. This capital will further bolster our position to serve our existing customers and to grow in our market as well as provide strength through the current economic downturn. We recognize that Heartland Community Bank has an important role in contributing to the economic strength and expansion of the communities we serve and we have continued our leadership role as one of the largest lenders in our market and the third highest depository in Johnson County according to the most recent information published by the FDIC.

"After analyzing our options for increasing capital, our board of directors felt that this program best suited our needs including consideration of cost without dilution to existing shareholders. We also gave consideration to the fact that financial institutions have been encouraged by banking regulators to participate in the Capital Purchase Program. While we have made the decision to participate in the program, it is our intention to consider appropriate funding alternatives to plan for the redemption of this preferred investment as soon as practical and allowable. One of our long-term goals is creating long-term value for common shareholders and we believe that redemption at the earliest possible time with appropriate terms may be in the best interests of these shareholders. We will work toward redemption on terms that will maintain the capital strength of our balance sheet and provide for continued success in the future for the Company and its common shareholders."

Heartland Community Bank is the wholly owned subsidiary of Heartland Bancshares, Inc. and began banking operations December 17, 1997 and currently operates 6 banking facilities in Johnson County, Indiana on the southern edge of the Indianapolis metro area.

This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company's management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.