(NASDAQ: HBNC) – Horizon Bancorp today announced its unaudited
financial results for the three and six-month periods ended June
30, 2016.
SUMMARY:
- Net income for the second quarter of
2016 was $6.3 million or $.52 diluted earnings per share.
- Excluding acquisition-related expenses
and gain on sale of investment securities, net income for the
second quarter of 2016 increased 38.9% compared to the same period
of 2015 to $7.2 million or $.59 diluted earnings per share.
- Net income for the first six months of
2016 was $11.7 million or $.96 diluted earnings per share.
- Excluding acquisition-related expenses,
gain on sale of investment securities and the death benefit on bank
owned life insurance, net income for the first six months of 2016
increased 24.1% compared to the same period of 2015 to $13.0
million or $1.07 diluted earnings per share.
- Total loans, excluding mortgage
warehouse loans, increased 8.1% on an annualized basis during the
second quarter of 2016.
- Net interest income for the first six
months of 2016 increased 17.0% or $5.9 million compared to the same
period in 2015.
- Net interest margin, excluding the
impact of acquisitions (“core net interest margin”), was 3.42% for
the second quarter of 2016 compared to 3.36% for the prior quarter
and 3.51% for the same period in 2015.
- Non-interest income for the first six
months of 2016 increased 24.4% or $3.5 million compared to the same
period in 2015.
- Horizon’s tangible book value per share
rose to $17.17 at June 30, 2016, compared to $16.53 at December 31,
2015 and $17.06 at June 30, 2015.
- Horizon entered Fort Wayne, Indiana in
the second quarter of 2016 by establishing a loan production team
that will focus on commercial lending in Indiana’s second largest
city.
- On June 1, 2016, Horizon closed the
acquisition of Kosciusko Financial, Inc. (“Kosciusko”) and its
wholly-owned subsidiary, Farmers State Bank, headquartered in
Mentone, Indiana.
- On July 18, 2016, Horizon closed the
acquisition of LaPorte Bancorp, Inc. (“LaPorte Bancorp”) and its
wholly-owned subsidiary, The LaPorte Savings Bank, headquartered in
La Porte, Indiana. LaPorte Bancorp’s results are not included in
Horizon’s June 30, 2016 financial results.
- On July 12, 2016, Horizon announced the
pending acquisition of CNB Bancorp and its wholly-owned subsidiary,
The Central National Bank and Trust Company, headquartered in
Attica, Indiana.
Craig Dwight, Chairman and CEO, commented: “Horizon’s 2016
second quarter and year-to-date earnings illustrate, once again,
our balanced and diversified revenue streams producing strong
results. Core net income, excluding acquisition-related expenses,
gain on sale of investment securities and the death benefit on bank
owned life insurance, was $7.2 million for the second quarter and
$13.0 million for the first six months of 2016. The increase in
core net income translated to solid growth in Horizon’s core
diluted earnings per share for both the second quarter and the
first six months of 2016 compared to 2015.”
Non-GAAP Reconciliation of Net Income and Diluted
Earnings per Share (Dollars in Thousands Except per Share Data,
Unaudited)
Three
Months Ended Six Months Ended June 30 June
30
Non-GAAP
Reconciliation of Net Income
2016 2015 2016
2015 Net income as reported
$ 6,326 $ 4,728
$ 11,707 $ 10,086 Merger expenses
1,881 570
2,520 716 Tax effect
(531 )
(132 )
(696 ) (183
) Net income excluding merger expenses
7,676 5,166
13,531 10,619 Gain on sale of investment securities
(767 ) -
(875 ) (124 ) Tax effect
268 -
306 43 Net income excluding gain
on sale of investment securities
7,177 5,166
12,962
10,538 Death benefit on bank owned life insurance ("BOLI")
- -
- (145 ) Tax effect
-
-
- 51
Net income excluding death benefit on BOLI
7,177 5,166
12,962 10,444
Acquisition-related purchase accounting adjustments ("PAUs")
(397 ) (797 )
(944 ) (1,880 ) Tax
effect
139 279
330 658 Net income
excluding PAUs
$ 6,919 $ 4,648
$ 12,348 $ 9,222
Non-GAAP
Reconciliation of Diluted Earnings per Share
Diluted earnings per share as reported
$ 0.52 $ 0.49
$ 0.96 $ 1.04 Merger expenses
0.15 0.06
0.21 0.07 Tax effect
(0.04 )
(0.01 )
(0.06 )
(0.02 ) Diluted earnings per share excluding merger expenses
0.63 0.54
1.11 1.09 Gain on sale of investment
securities
(0.06 ) -
(0.07 ) (0.01 )
Tax effect
0.02 -
0.03 0.00 Net income
excluding gain on sale of investment securities
0.59 0.54
1.07 1.09 Death benefit on BOLI
- -
-
(0.02 ) Tax effect
- -
- 0.01 Net income
excluding death benefit on BOLI
0.59
0.54
1.07
1.08 Acquisition-related PAUs
(0.03 )
(0.08 )
(0.09 ) (0.20 ) Tax effect
0.01
0.03
0.03
0.07 Diluted earnings per share excluding PAUs
$ 0.57 $ 0.49
$
1.01 $ 0.95
Mr. Dwight continued, “The second quarter of 2016 was
highlighted by strong contributions from our retail and mortgage
warehouse operations, an increase in net interest margin over the
linked quarter, fee income growth and continued improvement in
asset quality. Additionally, Horizon continued to build-out our
existing growth markets and entered Fort Wayne, Indiana with a loan
production team that will focus on developing our commercial
presence in Indiana’s second largest city.”
Loan Growth by Type, Excluding Acquired Loans
Three Months Ended June 30, 2016 (Dollars in Thousands,
Unaudited)
Excluding
Acquired Loans Acquired June 30 March
31 Amount Kosciusko Amount Percent
2016 2016
Change Loans Change
Change (Unaudited)
(Unaudited)
Commercial loans
$ 874,580 $ 797,754 $ 76,826 $
(67,310 ) $ 9,516 1.2 % Residential mortgage loans
493,626
442,806 50,820 (26,244 ) 24,576 5.6 % Consumer loans
363,920 359,636 4,284
(6,319 ) (2,035 ) -0.6 % Subtotal
1,732,126 1,600,196 131,930 (99,873 ) 32,057 2.0 % Held for
sale loans
7,812 3,168 4,644 - 4,644 146.6 % Mortgage
warehouse loans
205,699 119,876
85,823 - 85,823
71.6 % Total loans
$ 1,945,637 $
1,723,240 $ 222,397 $ (99,873 ) $
122,524 7.1 %
Loan Growth by Type, Excluding
Acquired Loans Six Months Ended June 30, 2016 (Dollars
in Thousands)
Excluding Acquired Loans Acquired
June 30 December 31 Amount Kosciusko
Amount Percent 2016
2015 Change Loans
Change Change
(Unaudited) (Unaudited)
Commercial loans
$
874,580 $ 804,995 $ 69,585 $ (67,310 ) $ 2,275 0.3 %
Residential mortgage loans
493,626 437,144 56,482 (26,244 )
30,238 6.9 % Consumer loans
363,920
362,300 1,620 (6,319 )
(4,699 ) -1.3 % Subtotal
1,732,126 1,604,439 127,687
(99,873 ) 27,814 1.7 % Held for sale loans
7,812 7,917 (105
) - (105 ) -1.3 % Mortgage warehouse loans
205,699
144,692 61,007 -
61,007 42.2 % Total loans
$
1,945,637 $ 1,757,048 $ 188,589
$ (99,873 ) $ 88,716 5.0 %
“An improved mix of higher yielding interest earning assets and
low cost deposits and a $415,000 prepayment penalty received on an
investment security during the second quarter of 2016 resulted in
an increase in net interest margin from the prior quarter,” Mr.
Dwight commented. Horizon’s core net interest margin, excluding
income from acquisition-related purchase accounting adjustments,
increased 6 basis points from the linked quarter to 3.42% and was
down 9 basis points in the first six months of 2016 compared to the
same period of 2015.
Non-GAAP Reconciliation of Net Interest Margin
(Dollar in Thousands)
Three Months Ended
Six Months Ended June 30 March
31 June 30 June 30
Net Interest
Margin As Reported
2016 2016 2015
2016 2015 (Unaudited) (Unaudited)
(Unaudited) (Unaudited) (Unaudited) Net
interest income
$ 20,869 $ 19,774 $ 17,850
$
40,643 $ 34,736 Average interest-earning assets
2,471,354 2,367,250 2,008,191
2,406,468 1,954,287 Net
interest income as a percent of average interest- earning assets
("Net Interest Margin")
3.48 % 3.45 % 3.67 %
3.47 % 3.68 %
Impact of
Acquisitions
Interest income from acquisition-related purchase accounting
adjustments
$ (397 ) $ (547 ) $ (797 )
$ (944 ) $ (1,880 )
Excluding Impact
of Acquisitions
Net interest income
$ 20,472 $ 19,227 $ 17,053
$ 39,699 $ 32,856 Average interest-earning assets
2,471,354 2,367,250 2,008,191
2,406,468 1,954,287
Core Net Interest Margin
3.42 % 3.36 % 3.51 %
3.40 % 3.49 %
Dwight noted, “Asset quality continued to improve during the
second quarter of 2016 as non-performing loans to total loans
declined to 0.68% at June 30, 2016 from 0.95% at December 31, 2015.
Total non-performing loans decreased $3.5 million during the first
half of 2016, while commercial loans saw the largest improvement in
non-performing loans to $4.3 million as of June 30, 2016, a
decrease of $2.7 million from December 31, 2015.” Horizon’s loan
loss reserve ratio, excluding loans with credit-related purchase
accounting adjustments, was 0.89% as of June 30, 2016. Loan loss
reserves and credit-related loan discounts on acquired loans as a
percentage of total loans was 1.32% as of June 30, 2016.
Non- GAAP Allowance for Loan and Lease Loss Detail
As of June 30, 2016 (Dollars in Thousands, Unaudited)
Horizon
Legacy Heartland Summit
Peoples Kosciusko Total
Pre-discount loan balance
$ 1,591,788 $ 19,346 $
69,137 $ 169,224 $ 99,873
$ 1,949,368
Allowance for loan losses (ALLL)
14,226 - - - -
14,226 Loan discount
N/A
1,222 2,801 3,694
3,826
11,543
ALLL+loan discount
14,226 1,222 2,801 3,694 3,826
25,769
Loans, net
$ 1,577,562
$ 18,124 $ 66,336 $
165,530 $ 96,047
$
1,923,599 ALLL/ pre-discount loan balance
0.89 % 0.00 % 0.00 % 0.00 % 0.00 %
0.73
% Loan discount/ pre-discount loan balance
N/A 6.32 %
4.05 % 2.18 % 3.83 %
0.59 % ALLL+loan discount/
pre-discount loan balance
0.89 % 6.32 % 4.05 % 2.18 %
3.83 %
1.32 %
Horizon completed the acquisitions of Kosciusko and LaPorte
Bancorp on June 1, 2016 and July 18, 2016, respectively. On July
12, 2016, Horizon announced the signing of a definitive merger
agreement with CNB Bancorp in Attica, Indiana, which is expected to
be completed in the fourth quarter of 2016. Dwight concluded, “I
could not be more pleased with the dedication and team work of all
those involved in these mergers. Kosciusko fills the gap between
Horizon’s central and northeast Indiana locations and adds a
seasoned banking team in the growth market of Warsaw, Indiana and
Kosciusko County. The LaPorte Bancorp acquisition is an in-market
merger that adds experience and depth to Horizon’s team and cost
saves through consolidation of branch office locations. The CNB
Bancorp merger adds a seasoned banking team in Fountain County,
Indiana and is a nice lead into the contiguous growth market of
Lafayette, Indiana, home of Purdue University.”
Income Statement Highlights
Net income for the second quarter of 2016 was $6.3 million or
$.52 diluted earnings per share compared to $4.7 million or $.49
diluted earnings per share in the second quarter of 2015. The
increase in net income and earnings per share from the previous
year reflects an increase in net interest income and non-interest
income of $3.0 million and $2.7 million, respectively, and a
decrease in the provision for loan losses of $1.7 million,
partially offset by increases in non-interest expense of $4.9
million, income tax expense of $873,000 and the diluted shares
outstanding primarily due to the stock issued in the Peoples
Bancorp (“Peoples”) and Kosciusko acquisitions. Excluding
acquisition-related expenses and purchase accounting adjustments
and gain on sale of investment securities, net income for the
second quarter of 2016 was $6.9 million or $.57 diluted earnings
per share compared to $4.6 million or $.49 diluted earnings per
share in the second quarter of 2015.
Net income for the six months ended June 30, 2016 was $11.7
million or $.96 diluted earnings per share compared to $10.1
million or $1.04 diluted earnings per share for the six months
ended June 30, 2015. The increase in net income from the previous
year reflects an increase in net interest income and non-interest
income of $5.9 million and $3.5 million, respectively, and a
decrease in the provision for loan losses of $1.8 million,
partially offset by increases in non-interest expense of $8.6
million and income tax expense of $939,000. The decrease in diluted
earnings per share compared to the same period of 2015 was due to
an increase in the diluted shares outstanding primarily due to the
stock issued in the Peoples and Kosciusko acquisitions. Excluding
acquisition-related expenses and purchase accounting adjustments,
gain on sale of investment securities and the death benefit on bank
owned life insurance, net income for the first six months of 2016
was $12.3 million or $1.01 diluted earnings per share compared to
$9.2 million or $.95 diluted earnings per share in the same period
of 2015.
Horizon’s net interest margin was 3.48% during the second
quarter of 2016, up from 3.45% for the prior quarter and down from
3.67% for same period of 2015. The increase in net interest margin
compared to the prior quarter was the result of an improved mix of
higher yielding assets and low cost deposits and a $415,000
prepayment penalty received on an investment security during the
second quarter of 2016. The decrease in the net interest margin
compared to the same period of 2015 was due to lower yields on new
loans and re-pricing earning assets and a decrease in interest
income from acquisition-related purchase accounting adjustments,
partially offset by lower rates and a change in mix on
interest-bearing liabilities. Excluding acquisition-related
purchase accounting adjustments, the margin would have been 3.42%
for the second quarter of 2016 compared to 3.36% for the prior
quarter and 3.51% for the same period of 2015. Interest income from
acquisition-related purchase accounting adjustments was $397,000,
$547,000 and $797,000 for the three months ended June 30, 2016,
March 31, 2016, and June 30 2015, respectively.
Horizon’s net interest margin was 3.47% for the six months
ending June 30, 2016, down from 3.68% for same period of 2015.
Excluding interest income from acquisition-related purchase
accounting adjustments, the margin would have been 3.40% for the
six months ending June 30, 2016 compared to 3.49% for same period
of 2015. Interest income from acquisition-related purchase
accounting adjustments was $944,000 and $1.9 million for the six
months ended June 30, 2016 and June 30, 2015, respectively.
Lending Activity
Total loans increased $188.6 million from $1.8 billion as of
December 31, 2015 to $1.9 billion as of June 30, 2016 as commercial
loans increased by $69.6 million, mortgage warehouse loans
increased by $61.0 million, residential mortgage loans increased by
$56.5 million and consumer loans increased by $1.6 million.
Residential mortgage lending activity during the second quarter
of 2016 generated $3.5 million in income from the gain on sale of
mortgage loans, an increase of $887,000 from the same period of
2015. Total origination volume in the second quarter of 2016,
including loans placed into portfolio, totaled $132.9 million,
representing an increase of 16.2% from the same period of 2015.
Purchase money mortgage originations during the second quarter of
2016 represented 78.2% of total originations compared to 65.3% of
originations during the previous quarter and 71.8% during the
second quarter of 2015.
Loan balances in the Kalamazoo and Indianapolis markets totaled
$175.0 million and $175.5 million, respectively, as of June 30,
2016. Combined, these markets contributed $13.4 million in loan
growth during the second quarter of 2016 or 15.9% on an annualized
basis.
The provision for loan losses was $232,000 for the second
quarter and $764,000 for the first six months of 2016, which was
$1.7 million and $1.8 million lower than the provision for the
second quarter and first six months of 2015, respectively. The
decrease in provision for loan losses in the second quarter and for
the first six months of 2016 was due to lower charge-offs and a
decrease in non-performing loans.
The ratio of the allowance for loan losses to total loans
decreased to 0.73% as of June 30, 2016 from 0.83% as of December
31, 2015 due to an increase in total loans and a decrease in the
allowance for loan losses from $14.5 million as of December 31,
2015 to $14.2 million as of June 30, 2016. The ratio of the
allowance for loan losses to total loans, excluding loans with
credit-related purchase accounting adjustments, was 0.89% as of
June 30, 2016.
Non-performing loans totaled $13.2 million as of June 30, 2016
and $16.7 million as of December 31, 2015. Compared to December 31,
2015, non-performing commercial, real estate and consumer loans
decreased by $2.7 million, $578,000 and $255,000, respectively. As
a percentage of total loans, non-performing loans were 0.68% at
June 30, 2016, down 27 basis points from 0.95% at December 31,
2015.
Expense Management
Total non-interest expense was $4.9 million higher in the second
quarter of 2016 compared to the same period of 2015. The increase
was primarily due to an increase in salaries, employee benefits,
net occupancy expenses and other expense reflecting overall company
growth. Non-interest expense for the second quarter of 2016
included $1.9 million of one-time merger-related expenses due to
the Kosciusko and LaPorte Bancorp acquisitions compared to $570,000
in one-time merger-related expenses during the same period of 2015
due to the Peoples acquisition.
Total non-interest expense was $8.6 million higher in the first
six months of 2016 compared to the same period of 2015. The
increase in non-interest expense was due to an increase in salaries
expense of $2.5 million, employee benefits of $1.1 million, net
occupancy expenses of $911,000, data processing expense of
$350,000, professional fees of $391,000, FDIC deposit insurance
expense of $138,000, other losses of $298,000 and other expense of
$1.3 million due to overall company growth. Non-interest expense
for the first six months of 2016 included $2.5 million of one-time
merger-related expenses due to the Kosciusko and LaPorte Bancorp
acquisitions compared to $716,000 in one-time merger-related
expenses in the same period of 2015 due to the Peoples
acquisition.
Use of Non-GAAP Financial Measures
Certain information set forth in this press release refers to
financial measures determined by methods other than in accordance
with GAAP. Specifically, we have included non-GAAP financial
measures of the net interest margin and the allowance for loan and
lease losses excluding the impact of acquisition-related purchase
accounting adjustments and net income and diluted earnings per
share excluding the impact of one-time costs related to
acquisitions, acquisition-related purchase accounting adjustments
and other events that are considered to be non-recurring. Horizon
believes that these non-GAAP financial measures are helpful to
investors and provide a greater understanding of our business
without giving effect to the purchase accounting impacts and
one-time costs of acquisitions and non-core items, although these
measures are not necessarily comparable to similar measures that
may be presented by other companies and should not be considered in
isolation or as a substitute for the related GAAP measure.
About Horizon
Horizon Bancorp is a locally owned, independent, commercial bank
holding company serving northern and central Indiana and southwest
and central Michigan through its commercial banking subsidiary
Horizon Bank, NA. Horizon also offers mortgage-banking services
throughout the Midwest. Horizon Bancorp may be reached online at
www.horizonbank.com. Its common stock is traded on the NASDAQ
Global Select Market under the symbol HBNC.
Forward Looking Statements
This press release may contain forward-looking statements
regarding the financial performance, business prospects, growth and
operating strategies of Horizon. For these statements, Horizon
claims the protections of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995. Statements in this press release should be considered
in conjunction with the other information available about Horizon,
including the information in the filings we make with the
Securities and Exchange Commission. Forward-looking statements
provide current expectations or forecasts of future events and are
not guarantees of future performance. The forward-looking
statements are based on management’s expectations and are subject
to a number of risks and uncertainties. We have tried, wherever
possible, to identify such statements by using words such as
“anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,”
“will” and similar expressions in connection with any discussion of
future operating or financial performance. Although management
believes that the expectations reflected in such forward-looking
statements are reasonable, actual results may differ materially
from those expressed or implied in such statements. Risks and
uncertainties that could cause actual results to differ materially
include risk factors relating to the banking industry and the other
factors detailed from time to time in Horizon’s reports filed with
the Securities and Exchange Commission, including those described
in its Form 10-K. Undue reliance should not be placed on the
forward-looking statements, which speak only as of the date hereof.
Horizon does not undertake, and specifically disclaims any
obligation, to publicly release the result of any revisions that
may be made to update any forward-looking statement to reflect the
events or circumstances after the date on which the forward-looking
statement is made, or reflect the occurrence of unanticipated
events, except to the extent required by law.
HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and
per share data and ratios, Unaudited)
June 30 March
31 December 31 September 30 June 30
2016 2016 2015
2015 2015 Balance sheet: Total assets $
2,918,080 $ 2,627,918 $ 2,652,401 $ 2,607,914 $ 2,219,307
Investment securities 628,935 642,767 632,611 617,860 493,631
Commercial loans 874,580 797,754 804,995 795,271 709,946 Mortgage
warehouse loans 205,699 119,876 144,692 138,974 195,924 Residential
mortgage loans 493,626 442,806 437,144 430,946 277,407 Consumer
loans 363,920 359,636 362,300 361,298 336,006 Earning assets
2,591,208 2,379,830 2,403,482 2,363,755 2,031,671 Non-interest
bearing deposit accounts 397,412 343,025 335,955 338,436 307,215
Interest bearing transaction accounts 1,213,659 1,118,617 1,177,651
1,164,787 983,912 Time deposits 471,190 416,837 366,547 409,852
293,596 Borrowings 492,883 430,507 449,347 373,901 385,236
Subordinated debentures 32,874 32,836 32,797 32,758 32,719 Common
stockholders' equity 281,002 261,417 254,332 252,238 189,631 Total
stockholders’ equity 281,002 261,417 266,832 264,738 202,131
Income statement: Three months ended Net interest
income $ 20,869 $ 19,774 $ 20,222 $ 19,776 $ 17,850 Provision for
loan losses 232 532 342 300 1,906 Non-interest income 9,869 7,864
7,750 8,400 7,186 Non-interest expenses 21,555 19,747 19,240 22,235
16,650 Income tax expense 2,625 1,978
2,215 1,353
1,752 Net income 6,326 5,381 6,175 4,288 4,728
Preferred stock dividend - (42 )
(31 ) (31 ) (31 ) Net income
available to common shareholders $ 6,326 $ 5,339
$ 6,144 $ 4,257 $ 4,697
Per share data: Basic earnings per share $
0.52 $ 0.45 $ 0.51 $ 0.37 $ 0.51 Diluted earnings per share 0.52
0.44 0.51 0.36 0.49 Cash dividends declared per common share 0.15
0.15 0.15 0.15 0.14 Book value per common share 22.35 21.82 21.30
21.14 20.49 Tangible book value per common share 17.17 17.08 16.53
16.34 17.06 Market value - high 25.14 27.88 28.15 26.15 26.03
Market value - low $ 23.80 $ 23.11 $ 23.58 $ 22.60 $ 22.85 Weighted
average shares outstanding - Basic 12,179,253 11,949,416 11,937,247
11,605,976 9,240,005 Weighted average shares outstanding - Diluted
12,242,778 12,008,484 12,013,743 11,893,254 9,637,586
Key
ratios: Return on average assets 0.94 % 0.83 % 0.94 % 0.67 %
0.87 % Return on average common stockholders' equity 9.43 8.26 9.53
6.76 9.88 Net interest margin 3.48 3.45 3.50 3.51 3.67 Loan loss
reserve to total loans 0.73 0.83 0.83 0.93 1.08 Non-performing
loans to loans 0.68 0.87 0.95 1.21 1.51 Average equity to average
assets 9.94 10.16 10.32 10.38 9.32 Bank only capital ratios: Tier 1
capital to average assets 9.39 8.98 8.77 9.31 8.24 Tier 1 capital
to risk weighted assets 12.51 12.33 11.80 12.30 10.76 Total capital
to risk weighted assets 13.23 13.10 12.57 13.17 11.76
Loan data: Substandard loans $ 28,629 $ 23,600 $ 25,127 $
26,073 $ 28,220 30 to 89 days delinquent 2,887 2,149 5,011 4,868
3,326 90 days and greater delinquent - accruing interest $
24 $ 1 $ 28 $ 100 $ 207 Trouble debt restructures - accruing
interest 1,256 1,231 1,218 2,948 3,271 Trouble debt restructures -
non-accrual 1,466 2,857 3,172 3,994 4,523 Non-accrual loans
10,426 10,895 12,262
13,956 15,050
Total non-performing loans $ 13,172 $ 14,984
$ 16,680 $ 20,998 $ 23,051
HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and
per share data and ratios, Unaudited)
June 30 June 30
2016 2015 Balance sheet: Total
assets $ 2,918,080 $ 2,219,307 Investment securities 628,935
493,631 Commercial loans 874,580 709,946 Mortgage warehouse loans
205,699 195,924 Residential mortgage loans 493,626 277,407 Consumer
loans 363,920 336,006 Earning assets 2,591,208 2,031,671
Non-interest bearing deposit accounts 397,412 307,215 Interest
bearing transaction accounts 1,213,659 983,912 Time deposits
471,190 293,596 Borrowings 492,883 385,236 Subordinated debentures
32,874 32,719 Common stockholders' equity 281,002 189,631 Total
stockholders’ equity 281,002 202,131
Income
statement: Six Months Ended Net interest income $ 40,643
$ 34,736 Provision for loan losses 764 2,520 Non-interest income
17,733 14,252 Non-interest expenses 41,302 32,718 Income tax
expense 4,603 3,664 Net
income 11,707 10,086 Preferred stock dividend (42 )
(63 ) Net income available to common shareholders $
11,665 $ 10,023
Per share
data: Basic earnings per share $ 0.97 $ 1.09 Diluted earnings
per share 0.96 1.04 Cash dividends declared per common share 0.30
0.28 Book value per common share 22.35 20.49 Tangible book value
per common share 17.17 17.06 Market value - high 27.88 26.14 Market
value - low $ 23.11 $ 22.38 Weighted average shares outstanding -
Basic 12,064,335 9,228,075 Weighted average shares outstanding -
Diluted 12,127,028 9,615,551
Key ratios: Return on
average assets 0.89 % 0.96 % Return on average common stockholders'
equity 9.26 10.73 Net interest margin 3.47 3.68 Loan loss reserve
to total loans 0.73 1.08 Non-performing loans to loans 0.68 1.51
Average equity to average assets 10.05 9.45 Bank only capital
ratios: Tier 1 capital to average assets 9.39 8.18 Tier 1 capital
to risk weighted assets 12.51 11.04 Total capital to risk weighted
assets 13.23 12.08
Loan data: Substandard loans $
28,629 $ 28,220 30 to 89 days delinquent 2,887 3,326 90 days
and greater delinquent - accruing interest $ 24 $ 207 Trouble debt
restructures - accruing interest 1,256 3,271 Trouble debt
restructures - non-accrual 1,466 4,523 Non-accrual loans
10,426 15,050 Total
non-performing loans $ 13,172 $ 23,051
HORIZON BANCORP
Allocation of the Allowance for Loan
and Lease Losses
(Dollars in Thousands, Unaudited)
June 30
March 31 December 31 September 30 June
30 2016 2016 2015
2015 2015 Commercial
$ 6,051 $
6,460 $ 7,195 $ 8,842 $ 8,386 Real estate
2,102 1,794 2,476
2,297 3,044 Mortgage warehousing
1,080 1,014 1,007 1,015
1,319 Consumer
4,993 4,968
3,856 4,014 3,672 Total
$
14,226 $ 14,236 $ 14,534 $ 16,168
$ 16,421
Net Charge-offs (Recoveries)
(Dollars in Thousands, Unaudited)
Three months ended June 30
March 31 December 31
September 30 June 30 2016
2016 2015 2015
2015 Commercial
$ 101 $ 403 $ 1,595 $ 77 $
1,583 Real estate
(31 ) 83 (59 ) 96 161 Mortgage
warehousing
- - - - - Consumer
172
344 440 380
375 Total
$ 242 $ 830 $
1,976 $ 553 $ 2,119
Total Non-performing Loans
(Dollars in Thousands, Unaudited)
June 30
March 31 December 31 September 30 June
30 2016 2016 2015
2015 2015 Commercial
$ 4,330 $
5,774 $ 7,005 $ 10,832 $ 13,384 Real estate
5,659 5,974
6,237 6,315 5,819 Mortgage warehousing
- - - - - Consumer
3,183 3,236 3,438
3,851 3,848 Total
$ 13,172
$ 14,984 $ 16,680 $ 20,998 $ 23,051
Other Real Estate Owned and Repossessed
Assets
(Dollars in Thousands, Unaudited)
June 30
March 31 December 31 September 30 June
30 2016 2016 2015
2015 2015 Commercial
$ 542 $ 424
$ 161 $ 324 $ 376 Real estate
2,925 3,393 3,046 958 58
Mortgage warehousing
- - - - - Consumer
69
- - - 37
Total
$ 3,536 $ 3,817 $ 3,207 $
1,282 $ 471
HORIZON BANCORP AND
SUBSIDIARIES
Average Balance Sheets
(Dollar Amounts in Thousands,
Unaudited)
Three Months
Ended Three Months Ended June 30, 2016 June
30, 2015 Average Average
Average Average Balance
Interest Rate Balance
Interest Rate ASSETS
Interest-earning assets Federal funds sold $ 3,309 $ 4 0.49 % $
3,597 $ 2 0.22 % Interest-earning deposits 28,045 59 0.85 % 8,608 5
0.23 % Investment securities - taxable 469,925 2,598 2.22 % 363,919
2,060 2.27 % Investment securities - non-taxable (1) 182,886 1,195
3.70 % 141,784 1,079 4.24 % Loans receivable (2)(3)
1,787,189 20,794 4.69 % 1,490,283
17,981 4.87 % Total interest-earning assets
(1) 2,471,354 24,650 4.10 % 2,008,191 21,127 4.33 %
Non-interest-earning assets Cash and due from banks 35,435 31,783
Allowance for loan losses (14,350 ) (16,756 ) Other assets
223,258 157,795 $ 2,715,697 $
2,181,013
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities Interest-bearing deposits $ 1,625,024
$ 1,557 0.39 % $ 1,255,123 $ 1,237 0.40 % Borrowings 400,585 1,721
1.73 % 381,782 1,539 1.62 % Subordinated debentures 32,854
503 6.16 % 32,699
501 6.15 % Total interest-bearing liabilities 2,058,463 3,781 0.74
% 1,669,604 3,277 0.79 % Non-interest-bearing liabilities
Demand deposits 364,822 294,425 Accrued interest payable and other
liabilities 22,574 13,770 Stockholders' equity 269,838
203,214 $ 2,715,697 $ 2,181,013
Net interest income/spread $ 20,869 3.36 % $ 17,850
3.54 % Net interest income as a percent of average interest
earning assets (1) 3.48 % 3.67 % (1) Securities
balances represent daily average balances for the fair value of
securities. The average rate is calculated based on the daily
average balance for the amortized cost of securities. The average
rate is presented on a tax equivalent basis. (2) Includes fees on
loans. The inclusion of loan fees does not have a material effect
on the average interest rate. (3) Non-accruing loans for the
purpose of the computations above are included in the daily average
loan amounts outstanding. Loan totals are shown net of unearned
income and deferred loan fees.
HORIZON BANCORP AND
SUBSIDIARIES
Average Balance Sheets
(Dollar Amounts in Thousands,
Unaudited)
Six Months
Ended Six Months Ended June 30, 2016 June 30,
2015 Average Average Average
Average Balance Interest
Rate Balance Interest
Rate ASSETS Interest-earning assets Federal funds
sold $ 2,853 $ 4 0.28 % $ 4,198 $ 11 0.53 % Interest-earning
deposits 24,300 109 0.90 % 9,684 10 0.21 % Investment securities -
taxable 464,209 5,092 2.21 % 362,250 4,200 2.34 % Investment
securities - non-taxable (1) 181,660 2,432 3.64 % 141,269 2,156
4.27 % Loans receivable (2)(3) 1,733,446
40,541 4.71 % 1,436,886 34,843
4.90 % Total interest-earning assets (1) 2,406,468 48,178 4.10 %
1,954,287 41,220 4.35 % Non-interest-earning assets Cash and
due from banks 34,246 30,396 Allowance for loan losses (14,350 )
(16,623 ) Other assets 217,797 157,669
$ 2,644,161 $ 2,125,729
LIABILITIES
AND SHAREHOLDERS' EQUITY Interest-bearing liabilities
Interest-bearing deposits $ 1,571,579 $ 3,048 0.39 % $ 1,235,601 $
2,469 0.40 % Borrowings 401,594 3,480 1.74 % 359,436 3,018 1.69 %
Subordinated debentures 32,653 1,007
6.20 % 32,678 997 6.15 % Total
interest-bearing liabilities 2,005,826 7,535 0.76 % 1,627,715 6,484
0.80 % Non-interest-bearing liabilities Demand deposits
350,157 282,796 Accrued interest payable and other liabilities
22,465 14,374 Stockholders' equity 265,713
200,844 $ 2,644,161 $ 2,125,729
Net interest income/spread $ 40,643 3.34 % $ 34,736 3.55 %
Net interest income as a percent of average interest earning assets
(1) 3.47 % 3.68 % (1) Securities balances represent
daily average balances for the fair value of securities. The
average rate is calculated based on the daily average balance for
the amortized cost of securities. The average rate is presented on
a tax equivalent basis. (2) Includes fees on loans. The inclusion
of loan fees does not have a material effect on the average
interest rate. (3) Non-accruing loans for the purpose of the
computations above are included in the daily average loan amounts
outstanding. Loan totals are shown net of unearned income and
deferred loan fees.
HORIZON BANCORP AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(Dollar Amounts in Thousands)
June 30 December
31 2016 2015 (Unaudited)
Assets Cash and due from banks
$
109,224 $ 48,650 Investment securities, available for sale
455,239 444,982 Investment securities, held to maturity
(fair value of $180,059 and $193,703)
173,696 187,629 Loans
held for sale
7,812 7,917 Loans, net of allowance for loan
losses of $14,226 and $14,534
1,923,599 1,734,597 Premises
and equipment, net
61,186 60,798 Federal Reserve and Federal
Home Loan Bank stock
16,636 13,823 Goodwill
56,458
49,600 Other intangible assets
8,686 7,371 Interest
receivable
11,526 10,535 Cash value of life insurance
57,944 54,504 Other assets
36,074
31,995 Total assets
$ 2,918,080
$ 2,652,401
Liabilities Deposits
Non-interest bearing
$ 397,412 $ 335,955 Interest
bearing
1,684,849 1,544,198
Total deposits
2,082,261 1,880,153 Borrowings
492,883 449,347 Subordinated debentures
32,874 32,797
Interest payable
961 507 Other liabilities
28,099 22,765 Total liabilities
2,637,078 2,385,569
Commitments and contingent liabilities Stockholders’
Equity Preferred stock, Authorized, 1,000,000 shares Series B
shares $.01 par value, $1,000 liquidation value Issued 0 and 12,500
shares
- 12,500 Common stock, no par value Authorized,
22,500,000 shares Issued, 12,590,784 and 11,995,324 shares
Outstanding, 12,571,534 and 11,939,887 shares
- - Additional
paid-in capital
120,758 106,370 Retained earnings
156,651 148,685 Accumulated other comprehensive income
(loss)
3,593 (723 ) Total
stockholders’ equity
281,002
266,832 Total liabilities and stockholders’ equity
$
2,918,080 $ 2,652,401
HORIZON BANCORP AND
SUBSIDIARIES
Condensed Consolidated Statements of
Income
(Dollar Amounts in Thousands, Except Per
Share Data, Unaudited)
Three Months Ended Six Months
Ended June 30 June 30 2016
2015 2016 2015
(Unaudited) (Unaudited)
(Unaudited) (Unaudited) Interest Income
Loans receivable
$ 20,794 $ 17,981
$ 40,541 $ 34,843 Investment securities Taxable
2,661 2,067
5,205 4,221 Tax exempt
1,195 1,079
2,432
2,156 Total interest income
24,650 21,127
48,178 41,220
Interest
Expense Deposits
1,557 1,237
3,048 2,469 Borrowed
funds
1,721 1,539
3,480 3,018 Subordinated debentures
503 501
1,007 997 Total interest expense
3,781 3,277
7,535 6,484
Net Interest
Income 20,869 17,850
40,643 34,736 Provision for
loan losses
232 1,906
764 2,520
Net Interest
Income after Provision for Loan Losses 20,637
15,944
39,879
32,216
Non-interest Income Service
charges on deposit accounts
1,335 1,085
2,573 2,084
Wire transfer fees
175 182
296 333 Interchange fees
1,663 1,366
3,121 2,468 Fiduciary activities
1,465 1,216
3,100 2,513 Gain on sale of investment
securities (includes $767 for the three months ended and $875 for
the six months ended June 30, 2016 and $0 for the three months
ended and $124 for the six months ended June 30, 2015, related to
accumulated other comprehensive earnings reclassifications)
767 -
875 124 Gain on sale of mortgage loans
3,529 2,642
5,643 5,021 Mortgage servicing income net
of impairment
500 300
947 479 Increase in cash value
of bank owned life insurance
351 257
696 515 Death
benefit on bank owned life insurance
- -
- 145 Other
income
84 138
482 570 Total non-interest
income
9,869 7,186
17,733 14,252
Non-interest
Expense Salaries and employee benefits
10,317 8,385
20,382 16,889 Net occupancy expenses
1,901 1,375
3,837 2,926 Data processing
1,134 966
2,239
1,889 Professional fees
747 660
1,578 1,187 Outside
services and consultants
2,198 918
3,297 1,544 Loan
expense
1,409 1,367
2,604 2,624 FDIC insurance
expense
409 339
814 676 Other losses
136 150
403 105 Other expense
3,304
2,490
6,148 4,878
Total non-interest expense
21,555
16,650
41,302
32,718
Income Before Income Tax 8,951
6,480
16,310 13,750 Income tax expense (includes $268 for
the three months ended and $306 for the six months ended June 30,
2016 and $0 for the three months ended and $43 for the six months
ended June 30, 2015, related to income tax expense from
reclassification items)
2,625 1,752
4,603 3,664
Net Income 6,326 4,728
11,707 10,086 Preferred
stock dividend
- (31 )
(42 ) (63 )
Net Income Available to
Common Shareholders $ 6,326 $ 4,697
$ 11,665 $ 10,023
Basic Earnings Per Share $ 0.52 $ 0.51
$ 0.97 $ 1.09
Diluted Earnings Per Share
0.52 0.49
0.96 1.04
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160727005376/en/
Horizon BancorpMark E. SecorChief Financial Officer(219)
873-2611Fax: (219) 874-9280
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