(NASDAQ: HBNC) – Horizon Bancorp today announced its unaudited
financial results for the three month period ended March 31, 2017.
All share data has been adjusted to reflect Horizon’s three-for-two
stock split effective November 14, 2016.
SUMMARY:
- Net income for the first quarter of
2017 was $8.2 million or $0.37 diluted earnings per share compared
to $5.4 million or $0.30 diluted earnings per share for the same
period in 2016. The first quarter of 2017 represents an excellent
start to the year given that the first quarter is typically a
seasonal low revenue point for Horizon.
- Net income, excluding
acquisition-related expenses, gain on sale of investment securities
and purchase accounting adjustments (“core net income”), for the
first quarter of 2017 increased 38.9% to $7.5 million or $0.34
diluted earnings per share compared to $5.4 million or $0.30
diluted earnings per share for the same period of 2016.
- Return on average assets was 1.07% for
the first quarter of 2017 compared to 0.83% for the same period in
2016.
- Net interest income for the first
quarter of 2017 increased $5.8 million, or 29.3%, compared to the
same period in 2016.
- Net interest margin was 3.80% for the
first quarter of 2017 compared to 2.92% for the prior quarter and
3.45% for the same period in 2016. The improvement in net interest
margin reflects Horizon’s execution on its plan to reduce expensive
funding costs, which was accomplished in the fourth quarter of
2016.
- Net interest margin, excluding the
impact of prepayment penalties on borrowings and purchase
accounting adjustments (“core net interest margin”), was 3.66% for
the first quarter of 2017 compared to 3.45% for the prior quarter
and 3.36% for the same period in 2016.
- Horizon’s tangible book value per share
rose to $11.79 at March 31, 2017, compared to $11.48 at December
31, 2016.
- Commercial loans, excluding acquired
commercial loans, increased by an annualized rate of 12.8%, or
$33.8 million, during the first quarter of 2017.
- Consumer loans, excluding acquired
consumer loans, increased by an annualized rate of 18.8%, or $18.5
million, during the first quarter of 2017.
- On February 3, 2017, Horizon completed
the purchase and assumption of certain assets and liabilities of a
single branch of First Farmers Bank & Trust Company located in
Bargersville, Indiana. The acquired office was closed and
consolidated into Horizon’s existing Bargersville location.
- Our Grand Rapids team moved to their
new downtown loan production office during February 2017. This
office was approved to continue as a full service branch which will
take place in the second quarter of 2017.
- Early in the second quarter, Horizon
hired two additional seasoned commercial lenders for our Fort
Wayne, Indiana loan production office.
- At the beginning of the second quarter
of 2017, Michael Lamping, joined Horizon as Central Ohio Market
President. A loan production office will be opened in the greater
Columbus, Ohio area during the second quarter of 2017 and will
focus on commercial business.
- Horizon received regulatory approval to
open a new office in Noblesville, Indiana, which will be open later
this year.
- Horizon, for the first time, hired a
corporate general legal counsel in the first quarter. The objective
for this position is, in part, to better manage legal costs and to
more closely monitor changes in the regulatory and legal
landscape.
Craig Dwight, Chairman and CEO, commented: “During the first
quarter of 2017, Horizon’s business model of diversified and
balanced revenue streams was proven to be effective as an increase
in commercial and consumer lending helped to offset the seasonal
low in residential mortgage revenues. Excluding non-core items,
Horizon realized an increase in net income of $2.1 million, or
38.9%, in the first quarter of 2017 when compared to the same
period of 2016 resulting in an increase in core diluted earnings
per share of 13.3%. Core net interest margin increased in the first
quarter of 2017 to 3.66% from 3.36% for the same period in 2016.
Horizon also realized solid growth in service charges on deposit
accounts of 8.7%, interchange fees of 26.3% and fiduciary
activities of 17.6% in the first quarter of 2017 when compared to
the same period in 2016.”
Mr. Dwight continued, “Although commercial and consumer loan
growth was strong in the first quarter of 2017, total loan growth
was tempered by a decrease in our mortgage warehouse portfolio.
Excluding acquired loans, commercial loan growth increased by an
annual rate of 12.8% and was fueled by our growth markets of Fort
Wayne, Grand Rapids, Indianapolis and Kalamazoo, which combined
produced total loan growth of $39.7 million for the quarter.
Additionally, consumer loans, excluding acquired consumer loans,
increased by 18.8% on an annualized basis during the quarter as a
result of a new seasoned consumer loan portfolio manager in the
third quarter of 2016 and increasing our focus on the management of
direct consumer loans. The increases in commercial and consumer
loans were offset by a decrease in mortgage warehouse loans of
$46.4 million from December 31, 2016 to March 31, 2017. The
decrease in mortgage warehouse loans was primarily due to quicker
turn-around times by the end investors to fund loans which resulted
in a lower average balance in the portfolio during the first
quarter of 2017. With our established presence in the growth
markets of Kalamazoo and Indianapolis, coupled with our recent
investments in Fort Wayne, Grand Rapids and Columbus, Horizon is
well positioned to continue our growth momentum. In addition,
Horizon’s solid growth in trust and service fee income has
contributed to our plan to decrease dependence on margin income.
”
Dwight concluded, “We are pleased to have completed the purchase
of certain assets totaling $3.5 million and the assumption of
certain deposits totaling $14.8 million from First Farmers Bank
& Trust Company’s Bargersville, Indiana branch which closed on
February 3, 2017, enhancing our presence in this attractive and
growing central Indiana market.”
Income Statement Highlights
Net income for the first quarter of 2017 was $8.2 million or
$0.37 diluted earnings per share compared to $5.6 million or $0.25
diluted earnings per share for the fourth quarter of 2016. The
increase in net income and diluted earnings per share from the
previous quarter reflects increases in net interest income of $4.6
million and a decrease in non-interest expense and provision for
loan losses of $1.1 million and $293,000, respectively, which was
partially offset by a decrease in non-interest income of $1.9
million and an increase in income tax expense of $1.4 million.
Interest expense decreased $5.2 million primarily due to prepayment
penalties on borrowings of $4.8 million during the fourth quarter
of 2016. Interest income decreased $555,000 due to a decrease in
loan interest income of $924,000, offset by an increase in interest
on investment securities of $369,000 during the first quarter of
2017. The decrease in loan interest income was primarily due to the
decrease in mortgage warehouse loan balances in the first quarter.
The decrease in non-interest income was primarily due to a decrease
in the gain on sale of investments of $926,000 and a decrease in
gain on mortgage loan sales of $590,000.
Net income for the first quarter of 2017 was $8.2 million or
$0.37 diluted earnings per share compared to $5.4 million or $0.30
diluted earnings per share for the first quarter of 2016. The
increase in net income and diluted earnings per share from the same
period of 2016 reflects increases in net interest income and
non-interest income of $5.8 million and $172,000, respectively, and
a decrease in provision for loan losses of $202,000, partially
offset by an increase in non-interest expense and income tax
expense of $2.3 million and $1.1 million, respectively.
The increase in diluted earnings per share was partially offset
by an increase in dilutive shares outstanding as a result of the
stock issued in the Kosciusko Financial, Inc. and LaPorte Bancorp,
Inc. acquisitions in 2016. Excluding acquisition-related expenses,
gain on sale of investment securities and acquisition-related
purchase accounting adjustments, net income for the first quarter
of 2017 was $7.5 million or $0.34 diluted earnings per share
compared to $5.4 million or $0.30 diluted earnings per share in the
first quarter of 2016.
Non-GAAP Reconciliation of Net Income and Diluted
Earnings per Share (Dollars in Thousands Except per Share Data)
Three Months Ended March
31
Non-GAAP
Reconciliation of Net Income
2017 2016 (Unaudited) Net
income as reported
$ 8,224 $ 5,381 Merger expenses
- 639 Tax effect
-
(165 ) Net income excluding merger expenses
8,224 5,855
Gain on sale of investment securities
(35 )
(108 ) Tax effect
12 38
Net income excluding gain on sale of investment securities
8,201 5,785 Acquisition-related purchase accounting
adjustments ("PAUs")
(1,016 ) (547 ) Tax effect
356 191 Net income
excluding PAUs
$ 7,541 $ 5,429
Non-GAAP
Reconciliation of Diluted Earnings per Share
Diluted earnings per share as reported
$ 0.37 $ 0.30
Merger expenses
- 0.04 Tax effect
-
(0.01 ) Diluted earnings per share excluding
merger expenses
0.37 0.33 Gain on sale of investment
securities
(0.00 ) (0.01 ) Tax effect
0.00 0.00 Net income
excluding gain on sale of investment securities
0.37 0.32
Acquisition-related PAUs
(0.05 ) (0.03 ) Tax
effect
0.02 0.01
Diluted earnings per share excluding PAUs
$ 0.34
$ 0.30
Horizon’s net interest margin was 3.80% during the first quarter
of 2017, up from 2.92% for the prior quarter and 3.45% for same
period of 2016. The increase in the net interest margin compared to
the prior quarter was primarily due to prepayment penalties
incurred on high fixed-rate borrowings as part of Horizon’s balance
sheet restructuring transaction in the fourth quarter of 2016 in
addition to a decrease in average outstanding borrowings. Average
outstanding borrowings during the first quarter of 2017 were $132.3
million and $156.8 million lower when compared to the prior quarter
and the same prior-year period.
The increase in the net interest margin compared to the same
period of 2016 was primarily due to an increase in the yield earned
on loans and a decrease in the cost of borrowings. Excluding
prepayment penalties on borrowings and acquisition-related purchase
accounting adjustments, the margin would have been 3.66% for the
first quarter of 2017 compared to 3.45% for the prior quarter and
3.36% for the same period of 2016. Interest expense from the
prepayment penalties on borrowings was $4.8 million for the fourth
quarter of 2016. Interest income from acquisition-related purchase
accounting adjustments was $1.0 million, $900,000 and $547,000 for
the three months ended March 31, 2017, December 31, 2016, and March
31, 2016, respectively.
Non-GAAP
Reconciliation of Net Interest Margin (Dollars in Thousands,
Unaudited)
Three Months Ended March 31 December
31 March 31
Net Interest
Margin As Reported
2017 2016 2016 Net
interest income
$ 25,568 $ 20,939 $ 19,774 Average
interest-earning assets
2,797,429 2,932,145 2,367,250 Net
interest income as a percent of average interest- earning assets
("Net Interest Margin")
3.80 % 2.92 % 3.45 %
Impact of
Prepayment Penalties on Borrowings
Interest expense from prepayment penalties on borrowings
$
- $ 4,839 $ -
Impact of
Acquisitions
Interest income from acquisition-related purchase accounting
adjustments
$ (1,016 ) $ (900 ) $ (547 )
Excluding Impact
of Prepayment Penalties and Acquisitions
Net interest income
$ 24,552 $ 24,878 $ 19,227
Average interest-earning assets
2,797,429 2,932,145
2,367,250 Core Net Interest Margin
3.66 % 3.45 % 3.36
%
Lending Activity
Total loans increased $4.7 million from $2.144 billion as of
December 31, 2016 to $2.149 billion as of March 31, 2017 as
commercial loans increased by $36.5 million, residential mortgage
loans increased by $1.8 million and consumer loans increased by
$19.0 million. Offsetting these increases was a decrease in
mortgage warehouse loans of $46.4 million as of March 31, 2017.
Total loans, excluding acquired loans, mortgage warehouse loans and
loans held for sale, increased 2.7% for the three months ended
March 31, 2017. Commercial and consumer loans, excluding acquired
loans, increased $33.8 million, or an annualized growth rate of
12.8%, and $18.5 million, or an annualized growth rate of 18.8%,
respectively.
Loan balances in the Fort Wayne, Grand Rapids, Indianapolis and
Kalamazoo totaled $436.8 million as of March 31, 2017. Combined,
these markets contributed $39.7 million, or 10.0%, in loan growth
during the three months ended March 31, 2017.
Loan Growth by Type, Excluding Acquired Loans
Three Months Ended March 31, 2017 (Dollars in Thousands)
Excluding Acquired Loans
Acquired March 31 December 31
Amount FFBT Amount Percent
2017 2016 Change
Loans Change Change
(Unaudited) (Unaudited)
Commercial loans
$
1,106,471 $ 1,069,956 $ 36,515 $ (2,742 ) $ 33,773 3.2 %
Residential mortgage loans
533,646 531,874 1,772 (59 ) 1,713
0.3 % Consumer loans
417,476 398,429
19,047 (562 )
18,485 4.6 % Subtotal
2,057,593 2,000,259 57,334
(3,363 ) 53,971 2.7 % Held for sale loans
1,789 8,087 (6,298
) - (6,298 ) -77.9 % Mortgage warehouse loans
89,360
135,727 (46,367 ) -
(46,367 ) -34.2 % Total loans
$
2,148,742 $ 2,144,073 $ 4,669 $
(3,363 ) $ 1,306 0.1 %
Residential mortgage lending activity during the three months
ended March 31, 2017 generated $1.9 million in income from the gain
on sale of mortgage loans, a decrease of $137,000 from the same
period of 2016. Total origination volume for the three months ended
March 31, 2017, including loans placed into portfolio, totaled
$65.9 million, representing a decrease of 17.0% from the same
period of 2016. The decrease in mortgage loan origination volume is
primarily due to an increase in mortgage loan interest rates when
comparing the first quarter of 2017 to the same period of 2016.
Purchase money mortgage originations during the first quarter of
2017 represented 69.8% of total originations compared to 68.0% of
originations during the previous quarter and 65.3% during the first
quarter of 2016.
The provision for loan losses was $330,000 for the first quarter
of 2017 compared to $532,000 for the same period of 2016. The
decrease in the provision for loan losses during the first quarter
of 2017 was due to lower charge-offs, stable delinquency trends and
a decrease in non-performing loans.
The ratio of the allowance for loan losses to total loans
increased to 0.70% as of March 31, 2017 from 0.69% as of December
31, 2016 due to an increase in allowance for loan losses. The ratio
of the allowance for loan losses to total loans, excluding loans
with credit-related purchase accounting adjustments, was 0.89% as
of March 31, 2017 compared to 0.91% as of December 31, 2016. Loan
loss reserves and credit-related loan discounts on acquired loans
as a percentage of total loans was 1.31% as of March 31, 2017
compared to 1.39% as of December 31, 2016.
Non- GAAP Allowance for Loan and Lease Loss Detail
As of March 31, 2017 (Dollars in Thousands, Unaudited)
Horizon Legacy Heartland
Summit Peoples Kosciusko
LaPorte CNB Total Pre-discount
loan balance
$ 1,681,167 $ 14,698 $ 51,026 $ 139,602
$ 75,151 $ 189,149 $ 9,485
$ 2,160,278
Allowance for loan losses (ALLL)
14,983 71 - - - - -
15,054 Loan discount
N/A
867 2,431 3,260
994 5,466
307
13,325 ALLL+loan discount
14,983 938 2,431 3,260 994 5,466 307
28,379
Loans, net
$ 1,666,184 $ 13,760
$ 48,595 $ 136,342 $ 74,157
$ 183,683 $ 9,178
$ 2,131,899 ALLL/ pre-discount loan
balance
0.89 % 0.48 % 0.00 % 0.00 % 0.00 % 0.00 %
0.00 %
0.70 % Loan discount/ pre-discount loan
balance
N/A 5.90 % 4.76 % 2.34 % 1.32 % 2.89 % 3.24 %
0.62 % ALLL+loan discount/ pre-discount loan balance
0.89 % 6.38 % 4.76 % 2.34 % 1.32 % 2.89 % 3.24 %
1.31 %
Non-performing loans to total loans decreased 4 basis points to
0.46% at March 31, 2017 from 0.50% at December 31, 2016.
Non-performing loans totaled $9.8 million as of March 31, 2017, a
decrease of $849,000 from $10.7 million as of December 31, 2016.
Compared to December 31, 2016, non-performing commercial loans
decreased by $902,000, non-performing real estate loans increased
by $35,000 and non-performing consumer loans increased $18,000.
Expense Management
Total non-interest expense was $2.3 million higher in the first
quarter of 2017 compared to the same period of 2016. The increase
was primarily due to an increase in salaries and employee benefits
of $1.6 million, net occupancy expenses of $516,000, data
processing expenses of $202,000, and other expenses of $431,000
reflecting overall company growth, market expansion and recent
acquisitions. Professional fee expense decreased $218,000 in the
first quarter of 2017 when compared to the same period of 2016
primarily due to one-time expenses related to the Kosciusko
Financial, Inc. and LaPorte Bancorp, Inc. acquisitions in 2016.
Other losses decreased $217,000 in the first quarter of 2017 when
compared to the same period of 2016 due to a decrease in debit card
fraud-related expense. FDIC insurance expense decreased $142,000 in
the first quarter of 2017 when compared to the same period of 2016
as the assessment rate schedule was reduced effective for
assessment payments due in the fourth quarter of 2016 and 2017.
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, total loans and loan growth, 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. See the tables and other information
contained elsewhere in this press release for reconciliations of
the non-GAAP figures identified herein and their most comparable
GAAP measures.
Non-GAAP Reconciliation of Tangible Stockholders' Equity
and Tangible Book Value per Share (Dollars in Thousands Except
per Share Data)
March
31 December 31 March 31 2017
2016 2016 (Unaudited)
(Unaudited) Total stockholders’ equity
$ 348,575 $ 340,855 $ 261,417 Less: Preferred stock
- - - Less: Intangible assets
87,094
86,307 56,695 Total tangible
stockholder's equity
$ 261,481 $
254,548 $ 204,722 Common shares outstanding
22,176,465 22,171,596 17,974,970 Tangible book value
per common share
$ 11.79 $ 11.48 $ 11.39
About Horizon
Horizon Bancorp is an 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) March 31
December 31 September 30 June 30
March 31 2017 2016
2016 2016 2016 Balance
sheet: Total assets $ 3,169,643 $ 3,141,156 $ 3,325,650 $
2,918,080 $ 2,627,918 Investment securities 673,090 633,025 744,240
628,935 642,767 Commercial loans 1,106,471 1,069,956 1,047,450
874,580 797,754 Mortgage warehouse loans 89,360 135,727 226,876
205,699 119,876 Residential mortgage loans 533,646 531,874 530,162
493,626 442,806 Consumer loans 417,476 398,429 386,031 363,920
359,636 Earning assets 2,845,922 2,801,030 2,963,005 2,591,208
2,379,830 Non-interest bearing deposit accounts 502,400 496,248
479,771 397,412 343,025 Interest bearing transaction accounts
1,432,228 1,499,120 1,367,285 1,213,659 1,118,617 Time deposits
509,071 475,842 489,106 471,190 416,837 Borrowings 319,993 267,489
569,908 492,883 430,507 Subordinated debentures 37,516 37,456
37,418 32,874 32,836 Total stockholders’ equity 348,575 340,855
345,736 281,002 261,417
Income statement: Three
months ended Net interest income $ 25,568 $ 20,939 $ 24,410 $
20,869 $ 19,774 Provision for loan losses 330 623 455 232 532
Non-interest income 7,559 9,484 9,318 9,266 7,387 Non-interest
expenses 21,521 22,588 24,082 20,952 19,270 Income tax expense
3,052 1,609 2,589
2,625 1,978 Net
income 8,224 5,603 6,602 6,326 5,381 Preferred stock dividend
- - -
- (42 ) Net income available to
common shareholders $ 8,224 $ 5,603 $
6,602 $ 6,326 $ 5,339
Per share data: Basic earnings per share (1) $ 0.37 $ 0.25 $
0.31 $ 0.35 $ 0.30 Diluted earnings per share (1) 0.37 0.25 0.30
0.34 0.30 Cash dividends declared per common share (1) 0.11 0.11
0.10 0.10 0.10 Book value per common share (1) 15.72 15.37 15.61
14.90 14.54 Tangible book value per common share 11.79 11.48 11.83
11.45 11.39 Market value - high 28.09 28.41 20.01 16.76 18.59
Market value - low $ 24.91 $ 17.84 $ 16.61 $ 15.87 $ 15.41 Weighted
average shares outstanding - Basic 22,175,526 22,155,549 21,538,752
18,268,880 17,924,124 Weighted average shares outstanding - Diluted
22,326,071 22,283,722 21,651,953 18,364,167 18,012,726
Key ratios: Return on average assets 1.07 % 0.69 % 0.80 %
0.94 % 0.83 % Return on average common stockholders' equity 9.66
6.49 7.88 9.43 8.26 Net interest margin 3.80 2.92 3.37 3.48 3.45
Loan loss reserve to total loans 0.70 0.69 0.66 0.73 0.83
Non-performing loans to loans 0.46 0.50 0.58 0.68 0.87 Average
equity to average assets 11.12 10.59 10.18 9.94 10.16 Bank only
capital ratios: Tier 1 capital to average assets 10.26 9.93 9.65
9.39 8.98 Tier 1 capital to risk weighted assets 13.40 13.33 12.73
12.51 12.33 Total capital to risk weighted assets 14.05 13.98 13.34
13.23 13.10
Loan data: Substandard loans $ 30,865 $
30,361 $ 33,914 $ 28,629 $ 23,600 30 to 89 days delinquent 5,476
6,315 3,821 2,887 2,149 90 days and greater delinquent -
accruing interest $ 245 $ 241 $ 59 $ 24 $ 1 Trouble debt
restructures - accruing interest 1,647 1,492 1,523 1,256 1,231
Trouble debt restructures - non-accrual 998 1,014 1,164 1,466 2,857
Non-accrual loans 6,944 7,936
10,091 10,426
10,895 Total non-performing loans $ 9,834
$ 10,683 $ 12,837 $ 13,172
$ 14,984 (1) Adjusted for 3:2 stock
split on November 14, 2016
HORIZON BANCORP
Allocation of the Allowance for Loan and Lease Losses
(Dollars in Thousands, Unaudited)
March 31 December
31 September 30 June
30 March 31 2017
2016 2016 2016
2016 Commercial
$ 7,600 $ 6,579
$ 6,222 $ 6,051 $ 6,460 Real estate
1,697 2,090 1,947 2,102
1,794 Mortgage warehousing
1,042 1,254 1,337 1,080 1,014
Consumer
4,715 4,914
5,018 4,993
4,968 Total
$ 15,054 $ 14,837
$ 14,524 $ 14,226 $ 14,236
Net Charge-offs (Recoveries)
(Dollars in Thousands, Unaudited)
Three months ended March 31
December 31 September 30
June 30 March 31
2017 2016 2016
2016 2016 Commercial
$ (134 ) $ 49 $ (5 ) $ 101 $ 403 Real estate
38 64 - (31 ) 83 Mortgage warehousing
- - - - -
Consumer
209 197
162 172
344 Total
$ 113 $
310 $ 157 $ 242
$ 830
Total Non-performing Loans
(Dollars in Thousands, Unaudited)
March 31 December
31 September 30 June
30 March 31 2017
2016 2016 2016
2016 Commercial
$ 1,530 $ 2,432
$ 5,419 $ 4,330 $ 5,774 Real estate
5,057 5,022 4,251 5,659
5,974 Mortgage warehousing
- - - - - Consumer
3,247 3,229 3,108
3,183 3,236 Total
$ 9,834 $ 10,683 $ 12,778
$ 13,172 $ 14,984
Other Real
Estate Owned and Repossessed Assets
(Dollars in Thousands, Unaudited)
March 31 December
31 September 30 June
30 March 31 2017
2016 2016 2016
2016 Commercial
$ 542 $ 542 $
542 $ 542 $ 424 Real estate
2,413 2,648 3,182 2,925 3,393
Mortgage warehousing
- - - - - Consumer
20
26 67
69 - Total
$ 2,975
$ 3,216 $ 3,791 $ 3,536
$ 3,817
HORIZON BANCORP AND SUBSIDIARIES
Average Balance Sheets
(Dollar Amounts in Thousands,
Unaudited)
Three Months Ended
Three Months Ended March 31, 2017 March 31,
2016 Average Average Average
Average Balance Interest
Rate Balance Interest
Rate ASSETS Interest-earning assets Federal
funds sold $ 3,034 $ 5 0.67 % $ 2,424 $ 1 0.17 % Interest-earning
deposits 24,748 69 1.13 % 20,810 49 0.95 % Investment securities -
taxable 398,871 2,332 2.37 % 463,544 2,494 2.16 % Investment
securities - non-taxable (1) 270,522 1,637 3.41 % 182,275 1,237
3.79 % Loans receivable (2)(3) 2,100,254
24,791 4.79 % 1,698,197 19,747
4.69 % Total interest-earning assets (1) 2,797,429 28,834 4.28 %
2,367,250 23,528 4.09 % Non-interest-earning assets Cash and
due from banks 40,994 32,925 Allowance for loan losses (14,937 )
(14,508 ) Other assets 279,982 214,604
$ 3,103,468 $ 2,600,271
LIABILITIES
AND SHAREHOLDERS' EQUITY Interest-bearing liabilities
Interest-bearing deposits $ 1,960,337 $ 1,753 0.36 % $ 1,534,833 $
1,491 0.39 % Borrowings 249,923 937 1.52 % 406,679 1,759 1.74 %
Subordinated debentures 36,290 576 6.44
% 32,813 504 6.18 % Total
interest-bearing liabilities 2,246,550 3,266 0.59 % 1,974,325 3,754
0.76 % Non-interest-bearing liabilities Demand deposits
491,154 339,141 Accrued interest payable and other liabilities
20,672 22,521 Stockholders' equity 345,092
264,284 $ 3,103,468 $ 2,600,271
Net interest income/spread $ 25,568 3.69 % $ 19,774 3.32 %
Net interest income as a percent of average interest earning assets
(1) 3.80 % 3.45 % (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)
March 31 December
31 2017 2016 (Unaudited)
Assets Cash and due from banks
$
60,280 $ 70,832 Investment securities, available for sale
474,222 439,831 Investment securities, held to maturity
(fair value of $200,482 and $194,086)
198,868 193,194 Loans
held for sale
1,789 8,087 Loans, net of allowance for loan
losses of $15,054 and $14,837
2,131,899 2,121,149 Premises
and equipment, net
66,314 66,357 Federal Reserve and Federal
Home Loan Bank stock
24,090 23,932 Goodwill
77,644
76,941 Other intangible assets
9,450 9,366 Interest
receivable
12,581 12,713 Cash value of life insurance
74,598 74,134 Other assets
37,908
44,620 Total assets
$
3,169,643 $ 3,141,156
Liabilities Deposits Non-interest bearing
$
502,400 $ 496,248 Interest bearing
1,941,299
1,974,962 Total deposits
2,443,699 2,471,210 Borrowings
319,993 267,489
Subordinated debentures
37,516 37,456 Interest payable
523 472 Other liabilities
19,337
23,674 Total liabilities
2,821,068 2,800,301
Commitments and contingent liabilities Stockholders’
Equity Preferred stock, Authorized, 1,000,000 shares Issued 0
and 0 shares
- - Common stock, no par value Authorized
66,000,000 shares(1) Issued, 22,195,715 and 22,192,530 shares(1)
Outstanding, 22,176,465 and 22,171,596 shares(1)
- -
Additional paid-in capital
182,402 182,326 Retained earnings
169,950 164,173 Accumulated other comprehensive loss
(3,777 ) (5,644 ) Total
stockholders’ equity
348,575
340,855 Total liabilities and stockholders’ equity
$ 3,169,643 $ 3,141,156
(1) Adjusted for 3:2 stock split on November 14, 2016
HORIZON BANCORP AND SUBSIDIARIES Condensed Consolidated
Statements of Income
(Dollar Amounts in Thousands, Except Per
Share Data, Unaudited)
Three Months Ended March 31
2017 2016 (Unaudited)
(Unaudited) Interest Income
Loans receivable
$ 24,791 $ 19,747 Investment
securities Taxable
2,406 2,544 Tax exempt
1,637 1,237 Total interest
income
28,834 23,528
Interest Expense Deposits
1,753 1,491 Borrowed funds
937 1,759 Subordinated debentures
576
504 Total interest expense
3,266
3,754
Net Interest Income
25,568 19,774 Provision for loan losses
330
532
Net Interest Income after
Provision for Loan Losses 25,238
19,242
Non-interest Income Service charges on
deposit accounts
1,400 1,288 Wire transfer fees
150
121 Interchange fees
1,176 931 Fiduciary activities
1,922 1,635 Gain on sale of investment securities
(includes $35 and $108 for the three months ended March 31, 2017
and 2016 related to accumulated other comprehensive earnings
reclassifications)
35 108 Gain on sale of mortgage loans
1,914 2,114 Mortgage servicing income net of impairment
447 447 Increase in cash value of bank owned life insurance
471 345 Other income
44
398 Total non-interest income
7,559
7,387
Non-interest Expense Salaries and
employee benefits
11,709 10,065 Net occupancy expenses
2,452 1,936 Data processing
1,307 1,105 Professional
fees
613 831 Outside services and consultants
1,222
1,099 Loan expense
1,107 1,195 FDIC insurance expense
263 405 Other losses
50 267 Other expense
2,798 2,367 Total non-interest
expense
21,521 19,270
Income Before Income Tax 11,276 7,359 Income tax
expense (includes $12 and $38 for the three months ended March 31,
2017 and 2016, respectively, related to income tax expense from
reclassification items)
3,052
1,978
Net Income 8,224 5,381 Preferred stock
dividend
- (42 )
Net Income
Available to Common Shareholders $ 8,224
$ 5,339
Basic Earnings Per Share $
0.37 $ 0.30
Diluted Earnings Per Share 0.37
0.30
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version on businesswire.com: http://www.businesswire.com/news/home/20170425006961/en/
Horizon BancorpMark E. SecorChief Financial Officer(219)
873-2611Fax: (219) 874-9280
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