(NASDAQ:HBNC) – Horizon Bancorp (“Horizon”) today announced its
unaudited financial results for the three-month and six-month
periods ended June 30, 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 second quarter of 2017 increased 43.4% to
$9.1 million or $0.41 diluted earnings per share compared to $6.3
million or $0.35 diluted earnings per share for the second quarter
of 2016.
- Net income, excluding acquisition-related expenses, gain on
sale of investment securities and purchase accounting adjustments
(“core net income”), for the second quarter of 2017 increased 24.2%
to $8.6 million or $0.39 diluted earnings per share compared to
$6.9 million or $0.38 diluted earnings per share for the same
period of 2016.
- Net income for the first six months of 2017 was $17.3 million
or $0.77 diluted earnings per share compared to $11.7 million or
$0.64 diluted earnings per share for the same period in 2016.
- Core net income for the first six months of 2017 increased
30.7% to $16.1 million or $0.71 diluted earnings per share compared
to $12.3 million or $0.68 diluted earnings per share for the same
period of 2016.
- Return on average assets was 1.12% for the second quarter of
2017 compared to 0.94% for the same period in 2016.
- Commercial loans, excluding acquired commercial loans,
increased by an annualized rate of 13.4%, or $71.1 million, during
the first six months of 2017.
- Consumer loans, excluding acquired consumer loans, increased by
an annualized rate of 25.9%, or $51.2 million, during the first six
months of 2017.
- Total loans, excluding acquired loans, increased by an
annualized rate of 11.7%, or $124.3 million, during the first six
months of 2017.
- Net interest income for the second quarter of 2017 increased
$6.3 million, or 30.3%, compared to the same period in 2016.
- Net interest margin was 3.84% for the second quarter of 2017
compared to 3.80% for the prior quarter and 3.48% for the second
quarter of 2016. The improvement in net interest margin was due to
Horizon executing a strategy to reduce expensive funding costs in
the fourth quarter of 2016, an increase in average interest-earning
assets and an increase in loan yields.
- Net interest margin, excluding the impact of purchase
accounting adjustments (“core net interest margin”), was 3.71% for
the second quarter of 2017 compared to 3.66% for the prior quarter
and 3.42% for the same period in 2016.
- Horizon’s tangible book value per share rose to $12.20 at June
30, 2017, compared to $11.48 at December 31, 2016.
- Horizon’s Grand Rapids, Michigan loan production office
converted into a full-service branch during the second quarter of
2017.
- On May 4, 2017, Horizon announced its entrance into central
Ohio by opening a loan production office located in Dublin, Ohio,
in the Columbus metropolitan area, which will provide a full-range
of commercial products and services.
- On May 23, 2017, Horizon announced the pending acquisition of
Lafayette Community Bancorp (“Lafayette”) and its wholly-owned
subsidiary, Lafayette Community Bank, headquartered in Lafayette,
Indiana.
- On June 13, 2017, Horizon’s Board of Directors announced the
approval of an 18% increase in the Company’s quarterly cash
dividend from $0.11 to $0.13 per share, payable on July 21, 2017 to
shareholders of record on July 7, 2017.
- On June 14, 2017, Horizon announced the pending acquisition of
Wolverine Bancorp, Inc. (“Wolverine”) and its wholly-owned
subsidiary, Wolverine Bank, headquartered in Midland,
Michigan.
- On June 26, 2017, Horizon announced its wholly-owned
subsidiary, Horizon Bank, N.A., converted from a national bank to
an Indiana state-chartered non-member bank. The charter conversion
became effective following the close of business on June 23, 2017
and the converted bank now operates under the name Horizon
Bank.
Craig Dwight, Chairman and CEO, commented:
“Horizon continued to expand upon its growth story during the
second quarter of 2017 with the announcement of two acquisitions,
solid organic loan growth, the opening of a full-service branch in
Grand Rapids, Michigan, and a loan production office in Dublin,
Ohio, a vibrant suburb of Columbus, Ohio. Additionally, Horizon
Bank converted from a national bank to an Indiana state-chartered
non-member bank during the quarter which should result in a pre-tax
cost savings of approximately $432,000 annually. A portion of the
cost savings from the charter conversion will be allocated to the
state bank associations and expanded internal audit.”
Dwight continued, “Horizon experienced strong
loan growth during the first six months of 2017, primarily in
commercial and consumer loans. Our growth markets of Fort Wayne,
Grand Rapids, Indianapolis and Kalamazoo, combined to produce total
loan growth of $83.1 million during this time period. The loan
growth in these markets spurred commercial loan growth, excluding
acquired commercial loans, to an annualized growth rate of 13.4%
during the first six months of 2017. Consumer loans, excluding
acquired consumer loans, increased at an annualized growth rate of
25.9% during the first six months of 2017 due to an increased focus
on the management of direct consumer loans and the addition of a
seasoned consumer loan portfolio manager during the third quarter
of 2016. Residential mortgage loans experienced an increase of
$18.1 million, or an annualized growth of 6.8%, during the first
six months of 2017. The increases in commercial, consumer and
mortgage loans were offset by a decrease in mortgage warehouse
loans of $12.0 million from December 31, 2016 to June 30, 2017.
Excluding loans acquired through acquisition, total loans increased
by 11.7% on an annualized basis. We believe Horizon is well
positioned to continue our growth story by strengthening our
existing market share and capitalizing on the recent investments in
our growth markets.”
Loan Growth by Type, Excluding Acquired
Loans |
Six Months Ended June 30, 2017 |
(Dollars in Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Acquired Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
December 31 |
|
Amount |
|
Acquired |
|
Amount |
|
Percent |
|
|
2017 |
|
2016 |
|
Change |
|
FFBT Loans |
|
Change |
|
Change |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
$ |
1,143,761 |
|
$ |
1,069,956 |
|
$ |
73,805 |
|
$ |
(2,742) |
|
$ |
71,063 |
|
6.6% |
Residential mortgage
loans |
|
|
549,997 |
|
|
531,874 |
|
|
18,123 |
|
|
(59) |
|
|
18,064 |
|
3.4% |
Consumer loans |
|
|
450,209 |
|
|
398,429 |
|
|
51,780 |
|
|
(562) |
|
|
51,218 |
|
12.9% |
Subtotal |
|
|
2,143,967 |
|
|
2,000,259 |
|
|
143,708 |
|
|
(3,363) |
|
|
140,345 |
|
7.0% |
Held for sale
loans |
|
|
3,730 |
|
|
8,087 |
|
|
(4,357) |
|
|
- |
|
|
(4,357) |
|
-53.9% |
Mortgage warehouse
loans |
|
|
123,757 |
|
|
135,727 |
|
|
(11,970) |
|
|
- |
|
|
(11,970) |
|
-8.8% |
Total loans |
|
$ |
2,271,454 |
|
$ |
2,144,073 |
|
$ |
127,381 |
|
$ |
(3,363) |
|
$ |
124,018 |
|
5.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Dwight stated, “Horizon realized core net
income of $8.6 million and $16.1 million for the three and six
months ended June 30, 2017, a strong increase of 24.2% and 30.7%,
respectively, when compared to the same periods in 2016. Core net
interest margin for the second quarter of 2017 was 3.71%, an
increase from 3.66% for the prior quarter and 3.42% for the same
period in 2016. Horizon’s core net interest margin for the six
months ended June 30, 2017 increased 27 basis points to 3.67% when
compared to the same period in 2016. Total non-interest income
decreased during the three and six months ended June 30, 2017 when
compared to the same periods in 2016 by $1.1 million and $882,000,
respectively, primarily due to a decrease in gains on sale of
mortgage loans. This decrease in income was due to a decrease in
the volume of originations and an increase in the percentage of
those originations being retained in our portfolio when comparing
2017 to 2016. Continued growth in service charges on deposit
accounts, interchange fees and fiduciary activities partially
offset the decrease in gains on sale of mortgage loans. These
non-interest income sources offer a significant growth opportunity
and will lessen the impact of mortgage revenue volatility.
Horizon’s strategy of revenue diversification through commercial
loan growth and non-mortgage related fee income is evident in our
results. At its peak for the year ended December 31, 2012, mortgage
warehouse and gain on sale of mortgage loans revenue comprised
24.5% of Horizon’s total revenue base (interest income and
non-interest income). For the year ending December 31, 2016 and the
six months ending June 30, 2017, mortgage warehouse and gain on
sale of mortgage loans revenue as a percentage of total revenue
declined to 13.5% and 8.46%, respectively.”
Non-GAAP Reconciliation of Net Income and
Diluted Earnings per Share |
(Dollars in Thousands Except per Share Data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30 |
|
June 30 |
Non-GAAP
Reconciliation of Net Income |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
(Unaudited) |
(Unaudited) |
Net income as
reported |
|
$ |
9,072 |
|
$ |
6,326 |
|
$ |
17,296 |
|
$ |
11,707 |
Merger expenses |
|
|
200 |
|
|
1,881 |
|
|
200 |
|
|
2,520 |
Tax effect |
|
|
(70) |
|
|
(531) |
|
|
(70) |
|
|
(696) |
Net income excluding
merger expenses |
|
|
9,202 |
|
|
7,676 |
|
|
17,426 |
|
|
13,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
sale of investment securities |
|
|
3 |
|
|
(767) |
|
|
(32) |
|
|
(875) |
Tax effect |
|
|
(1) |
|
|
268 |
|
|
11 |
|
|
306 |
Net
income excluding gain on sale of investment securities |
|
|
9,204 |
|
|
7,177 |
|
|
17,405 |
|
|
12,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related purchase accounting adjustments ("PAUs") |
|
|
(939) |
|
|
(397) |
|
|
(1,955) |
|
|
(944) |
Tax effect |
|
|
329 |
|
|
139 |
|
|
684 |
|
|
330 |
Net income excluding
PAUs |
|
$ |
8,594 |
|
$ |
6,919 |
|
$ |
16,134 |
|
$ |
12,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation of Diluted Earnings per Share |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share as reported |
|
$ |
0.41 |
|
$ |
0.35 |
|
$ |
0.77 |
|
$ |
0.64 |
Merger expenses |
|
|
0.01 |
|
|
0.10 |
|
|
0.01 |
|
|
0.14 |
Tax effect |
|
|
(0.00) |
|
|
(0.03) |
|
|
(0.00) |
|
|
(0.04) |
Diluted earnings per
share excluding merger expenses |
|
|
0.42 |
|
|
0.42 |
|
|
0.78 |
|
|
0.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
sale of investment securities |
|
|
0.00 |
|
|
(0.04) |
|
|
(0.00) |
|
|
(0.05) |
Tax effect |
|
|
(0.00) |
|
|
0.01 |
|
|
0.00 |
|
|
0.02 |
Net
income excluding gain on sale of investment securities |
|
|
0.42 |
|
|
0.39 |
|
|
0.78 |
|
|
0.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
PAUs |
|
|
(0.04) |
|
|
(0.02) |
|
|
(0.09) |
|
|
(0.05) |
Tax effect |
|
|
0.01 |
|
|
0.01 |
|
|
0.02 |
|
|
0.02 |
Diluted earnings per
share excluding PAUs |
|
$ |
0.39 |
|
$ |
0.38 |
|
$ |
0.71 |
|
$ |
0.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
On May 23, 2017, Horizon entered into an
agreement to acquire Lafayette and its wholly owned subsidiary,
Lafayette Community Bank, in a cash and stock merger. The
acquisition is expected to close in the third quarter of 2017,
subject to regulatory and Lafayette shareholder approval. Lafayette
Community Bank serves Tippecanoe County, Indiana through four
full-service locations. As of March 31, 2017, Lafayette had total
assets of $172.1 million.
On June 13, 2017, Horizon entered into an
agreement to acquire Wolverine and its wholly owned subsidiary,
Wolverine Bank, in a cash and stock merger. The acquisition is
expected to close early in the fourth quarter of 2017, subject to
regulatory and Wolverine shareholder approval. Wolverine Bank
serves Midland and Saginaw Counties, Michigan through three
full-service locations and one loan production office in Troy,
Michigan in Oakland County. As of March 31, 2017, Wolverine had
total assets of $379.3 million.
Mr. Dwight concluded, “We are very pleased to be
partnering with these outstanding institutions and their talented
and experienced teams. Lafayette Community Bancorp provides Horizon
entry into the attractive Lafayette market and will fill a market
gap between Indianapolis and Northwest Indiana. Wolverine Bancorp
strengthens Horizon’s presence in the state of Michigan and
provides entry into the key markets of the Great Lakes Bay Region
and Oakland County. Over the years, both leadership teams have
strived to provide customer focused advice and a commitment to
community banking which complements Horizon’s customer focused
philosophy and core values. We believe Horizon is well positioned
to efficiently integrate each institution and take advantage of
growth opportunities within the market each institution
serves.”
Income Statement Highlights
Net income for the second quarter of 2017 was
$9.1 million or $0.41 diluted earnings per share compared to $8.2
million or $0.37 diluted earnings per share for the first quarter
of 2017. The increase in net income and diluted earnings per share
from the previous quarter reflects increases in net interest income
and non-interest income of $1.6 million and $653,000, respectively,
offset by increases in non-interest expense and income tax expense
of $967,000 and $468,000, respectively.
Net income for the second quarter of 2017 was
$9.1 million or $0.41 diluted earnings per share compared to $6.3
million or $0.35 diluted earnings per share for the second quarter
of 2016. The increase in net income and diluted earnings per
share from the same period of 2016 reflects an increase in net
interest income of $6.3 million offset by a decrease in
non-interest income of $1.1 million and increases in non-interest
expense and income tax expense of $1.5 million and $895,000,
respectively.
Net income for the six months ended June 30,
2017 totaled $17.3 million or $0.77 diluted earnings per share
compared to $11.7 million or $0.64 diluted earnings per share for
the same period in 2016. The increase in net income and diluted
earnings per share reflects an increase in net interest income of
$12.2 million offset by a decrease in non-interest income of
$882,000 and increases in non-interest expense and income tax
expense of $3.8 million and $2.0 million, respectively.
The increases in diluted earnings per share when
comparing 2017 periods to 2016 periods 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. Core net income for the second quarter of
2017 was $8.6 million or $0.39 diluted earnings per share compared
to $6.9 million or $0.38 diluted earnings per share for the same
period of 2016. For the six months ended June 30, 2017, core net
income was $16.1 million or $0.71 diluted earnings per share
compared to $12.3 million or $0.68 diluted earnings per share for
the same period in 2016.
Horizon’s net interest margin was 3.84% for the
second quarter of 2017, up from 3.80% for the prior quarter and
3.48% for same period of 2016. The increase in the net
interest margin for the second quarter of 2017 was primarily due to
an increase of 15 basis points in loan yields when compared to the
prior quarter. The increase in the net interest margin compared to
the same period of 2016 was due to an increase in loan yields of 25
basis points and a decrease in the cost of borrowings of 24 basis
points. Excluding acquisition-related purchase accounting
adjustments, the margin would have been 3.71% for the second
quarter of 2017 compared to 3.66% for the first quarter of 2017 and
3.42% for the same period of 2016. Interest income from
acquisition-related purchase accounting adjustments was $939,000,
$1.0 million and $397,000, for the three months ended June 30,
2017, March 31, 2017 and June 30, 2016, respectively.
Horizon’s net interest margin for the six months
ended June 30, 2017 was 3.81% compared to 3.47% for the same period
in 2016. The increase in the net interest margin was primarily due
to an increase in loan yields of 14 basis points which was offset
by a decrease in the yield earned on non-taxable securities of 24
basis points. Also, the cost of interest-bearing liabilities
decreased 16 basis points primarily due to a decrease in the cost
of borrowings of 24 basis points. Excluding acquisition-related
purchase accounting adjustments, the margin would have been 3.67%
for the six months ended June 30, 2017 compared to 3.40% for the
same period in 2016. Interest income from acquisition-related
purchase accounting adjustments was $2.0 million and $944,000 for
the six months ended June 30, 2017 and 2016, respectively.
Non-GAAP Reconciliation of Net Interest
Margin |
(Dollars in Thousands, Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30 |
|
March 31 |
|
June 30 |
|
June 30 |
Net Interest
Margin As Reported |
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net interest
income |
|
$ |
27,198 |
|
$ |
25,568 |
|
$ |
20,869 |
|
$ |
52,766 |
|
$ |
40,643 |
Average
interest-earning assets |
|
|
2,943,627 |
|
|
2,797,429 |
|
|
2,471,354 |
|
|
2,870,884 |
|
|
2,406,468 |
Net interest income as
a percent of average interest- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
earning assets ("Net
Interest Margin") |
|
|
3.84% |
|
|
3.80% |
|
|
3.48% |
|
|
3.81% |
|
|
3.47% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of
Acquisitions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income from
acquisition-related |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
purchase accounting
adjustments |
|
$ |
(939) |
|
$ |
(1,016) |
|
$ |
(397) |
|
$ |
(1,955) |
|
$ |
(944) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding
Impact of Prepayment Penalties and Acquisitions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
$ |
26,259 |
|
$ |
24,552 |
|
$ |
20,472 |
|
$ |
50,811 |
|
$ |
39,699 |
Average
interest-earning assets |
|
|
2,943,627 |
|
|
2,797,429 |
|
|
2,471,354 |
|
|
2,870,884 |
|
|
2,406,468 |
Core Net Interest
Margin |
|
|
3.71% |
|
|
3.66% |
|
|
3.42% |
|
|
3.67% |
|
|
3.40% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lending Activity
Total loans increased $127.7 million from $2.144
billion as of December 31, 2016 to $2.271 billion as of June 30,
2017 as commercial loans increased by $73.8 million, residential
mortgage loans increased by $18.1 million and consumer loans
increased by $51.8 million. Offsetting these increases was a
decrease in mortgage warehouse loans of $12.0 million. Total
loans, excluding acquired loans, mortgage warehouse loans and loans
held for sale, increased by an annualized rate of 14.1%, or $140.3
million, during the six months ended June 30, 2017.
Loan balances in the growth markets of Fort
Wayne, Grand Rapids, Indianapolis and Kalamazoo totaled $480.2
million as of June 30, 2017. Combined, these markets contributed
$83.1 million, or 20.9%, in loan growth during the six months ended
June 30, 2017.
Residential mortgage lending activity for the
three months ended June 30, 2017 generated $2.2 million in income
from the gain on sale of mortgage loans, an increase of $236,000
from the previous quarter and a decrease of $852,000 from the same
period in 2016. Residential mortgage lending activity for the six
months ended June 30, 2017 generated $4.2 million in income from
the gain on sale of mortgage loans, a decrease of $989,000 from the
same period in 2016. Total origination volume for the second
quarter of 2017, including loans placed into portfolio, totaled
$110.4 million, representing an increase of 67.5% from the previous
quarter and a decrease of 17.0% from the same period in 2016. Total
origination volume for the six months ended June 30, 2017,
including loans placed into portfolio, totaled $176.3 million, a
decrease of 17.0% compared to the same period in 2016. The decrease
in mortgage loan origination volume was primarily due to an
increase in mortgage loan interest rates when comparing 2017 to
2016. Purchase money mortgage originations during the second
quarter of 2017 represented 78.4% of total originations compared to
69.8% of originations during the previous quarter and 78.2% during
the second quarter of 2016. Purchase money mortgage originations
for the six months ended June 30, 2017 represented 75.1% of
originations compared to 73.4% for the same period in 2016.
The provision for loan losses totaled $330,000
for the second and first quarters of 2017 compared to $232,000 for
the second quarter of 2016. The increase in the provision for loan
losses in the second quarter of 2017 was due to the increase in
gross loans when compared to the same period in 2016. The provision
for loan losses totaled $660,000 and $764,000 for the six months
ended June 30, 2017 and 2016, respectively. The decrease in the
provision for loan losses was due to a decrease in net charge-offs
when comparing the 2017 and 2016 periods.
The ratio of the allowance for loan losses to
total loans decreased to 0.66% as of June 30, 2017 from 0.69% as of
December 31, 2016 due to an increase in gross loans. The
ratio of the allowance for loan losses to total loans, excluding
loans with credit-related purchase accounting adjustments, was
0.82% as of June 30, 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 1.18% as of June
30, 2017 compared to 1.39% as of December 31, 2016.
Non- GAAP Allowance for Loan and Lease Loss
Detail |
As of June 30, 2017 |
(Dollars in Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Horizon |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legacy |
|
Heartland |
|
Summit |
|
Peoples |
|
Kosciusko |
|
LaPorte |
|
CNB |
|
Total |
Pre-discount loan
balance |
|
$ |
1,834,963 |
|
$ |
13,823 |
|
$ |
46,708 |
|
$ |
130,009 |
|
$ |
68,577 |
|
$ |
176,902 |
|
$ |
8,612 |
|
$ |
2,279,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses (ALLL) |
|
|
14,956 |
|
|
71 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
15,027 |
Loan discount |
|
|
N/A |
|
|
879 |
|
|
2,416 |
|
|
3,086 |
|
|
1,004 |
|
|
4,248 |
|
|
237 |
|
|
11,870 |
ALLL+loan discount |
|
|
14,956 |
|
|
950 |
|
|
2,416 |
|
|
3,086 |
|
|
1,004 |
|
|
4,248 |
|
|
237 |
|
|
26,897 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, net |
|
$ |
1,820,007 |
|
$ |
12,873 |
|
$ |
44,292 |
|
$ |
126,923 |
|
$ |
67,573 |
|
$ |
172,654 |
|
$ |
8,375 |
|
$ |
2,252,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLL/ pre-discount loan
balance |
|
|
0.82% |
|
|
0.51% |
|
|
0.00% |
|
|
0.00% |
|
|
0.00% |
|
|
0.00% |
|
|
0.00% |
|
|
0.66% |
Loan discount/
pre-discount loan balance |
|
|
N/A |
|
|
6.36% |
|
|
5.17% |
|
|
2.37% |
|
|
1.46% |
|
|
2.40% |
|
|
2.75% |
|
|
0.52% |
ALLL+loan discount/
pre-discount loan balance |
|
|
0.82% |
|
|
6.87% |
|
|
5.17% |
|
|
2.37% |
|
|
1.46% |
|
|
2.40% |
|
|
2.75% |
|
|
1.18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans to total loans increased 1
basis point to 0.51% at June 30, 2017 from 0.50% at December 31,
2016. Non-performing loans totaled $11.6 million as of June
30, 2017, an increase of $880,000 from $10.7 million as of December
31, 2016. Compared to December 31, 2016, non-performing
commercial loans increased by $362,000, non-performing real estate
loans increased by $263,000 and non-performing consumer loans
increased $255,000.
Expense Management
Total non-interest expense was $1.5 million
higher in the second quarter of 2017 compared to the same period of
2016. Excluding merger-related expenses of $200,000 and $1.9
million recorded during the three months ended June 30, 2017 and
2016, respectively, total non-interest expense increased $3.2
million, or 16.9%. The increase was primarily due to an increase in
salaries and employee benefits of $2.1 million, net occupancy
expenses of $295,000, data processing expenses of $368,000, and
other expenses of $252,000 reflecting overall company growth,
market expansion and recent acquisitions. Outside services and
consultant expense and professional fee expense decreased by
$933,000 and $212,000, respectively, in the second 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. FDIC insurance expense
decreased $166,000 in the second 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. Loan expense decreased $159,000 in the second quarter of
2017 when compared to the same prior year period of 2016 primarily
due to a decrease in loan collection expenses.
Total non-interest expense for the six months ended June 30,
2017 increased $3.8 million, or 9.4%, when compared to the same
period in 2016. Excluding merger-related expenses of $200,000 and
$2.5 million recorded during the six months ended June 30, 2017 and
2016, respectively, total non-interest expense increased $6.1
million, or 16.2%. The increase was primarily due to increases in
salaries and employee benefits of $3.8 million, net occupancy
expenses of $811,000, data processing expenses of $570,000 and
other expenses of $683,000 reflecting overall company growth,
market expansion and recent acquisitions. Outside services and
consultant expense and professional fee expense decreased $810,000
and $430,000, respectively, for the six months ended June 30, 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. FDIC insurance expense
decreased $308,000 during the first six months of 2017 when
compared to the same period in 2016 due to the reduced assessment
rate schedule. Other losses decreased $275,000 for the six months
ended June 30, 2017 when compared to the same 2016 period due to
lower debit card fraud-related expenses. Loan expense was $247,000
lower for the six months ended June 30, 2017 when compared to the
same period of 2016 primarily due to a decrease in loan collection
expenses.
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) |
|
|
|
June 30 |
|
March 31 |
|
June 30 |
|
|
2017 |
|
2017 |
|
2016 |
|
|
(Unaudited) |
|
|
|
|
(Unaudited) |
Total stockholders’
equity |
|
$ |
357,259 |
|
$ |
348,575 |
|
$ |
281,002 |
Less: Intangible
assets |
|
|
86,726 |
|
|
87,094 |
|
|
65,144 |
Total tangible
stockholders' equity |
|
$ |
270,533 |
|
$ |
261,481 |
|
$ |
215,858 |
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding |
|
|
22,176,465 |
|
|
22,176,465 |
|
|
18,857,301 |
|
|
|
|
|
Tangible book value per
common share |
|
$ |
12.20 |
|
$ |
11.79 |
|
$ |
11.45 |
|
|
|
|
|
About Horizon
Horizon Bancorp is an independent, commercial
bank holding company serving northern and central Indiana,
southwest and central Michigan, and central Ohio through its
commercial banking subsidiary Horizon Bank. 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.
Additional Information for
Shareholders
Communications in this document do not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval.
In connection with the proposed merger with
Lafayette Community Bancorp, Horizon has filed with the SEC a
Registration Statement on Form S-4 that includes a proxy statement
of Lafayette Community Bancorp and a prospectus of Horizon, as well
as other relevant documents concerning the proposed transaction.
Shareholders and investors are urged to read the Registration
Statement and the proxy statement/prospectus regarding the merger
and any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they contain
important information. A free copy of the proxy
statement/prospectus, as well as other filings containing
information about Horizon, may be obtained free of charge at the
SEC’s website at www.sec.gov. You may also obtain these documents,
free of charge, from Horizon at www.horizonbank.com under the
tab “About Us – Investor Relations – Documents – SEC Filings.”
The information available through Horizon’s
website is not and shall not be deemed part of this document or
incorporated by reference into other filings Horizon makes with the
SEC.
In connection with the proposed merger with
Wolverine Bancorp, Inc. (“Wolverine Bancorp”), Horizon will file
with the SEC a Registration Statement on Form S-4 that will include
a proxy statement of Wolverine Bancorp and a prospectus of Horizon,
as well as other relevant documents concerning the proposed
transaction. Shareholders and investors are urged to read the
Registration Statement and the proxy statement/prospectus regarding
the merger when it becomes available and any other relevant
documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important
information. A free copy of the proxy statement/prospectus (when it
becomes available), as well as other filing containing information
about Horizon and Wolverine Bancorp, may be obtained free of charge
at the SEC’s website at www.sec.gov. You will also be able to
obtain these documents, free of charge, from Horizon at
www.horizonbank.com under the tab “About Us – Investor
Relations – Documents – SEC Filings,” or from Wolverine Bancorp at
www.wolverinebank.com under the tab “Investor Information –
SEC Filings.” The information available through Horizon’s and
Wolverine Bancorp’s websites is not and shall not be deemed part of
this filing or incorporated by reference into other filings Horizon
or Wolverine Bancorp make with the SEC.
Horizon, Lafayette Community Bancorp and
Wolverine Bancorp and certain of their directors and executive
officers may be deemed to be participants in the solicitation of
proxies from the shareholders of Lafayette Community Bancorp and
Wolverine Bancorp in connection with the proposed merger.
Information about the directors and executive officers of Horizon
is set forth in Horizon’s Annual Report on Form 10-K filed with the
SEC on February 28, 2017, and in the proxy statement for Horizon’s
2017 annual meeting of shareholders, as filed with the SEC on March
17, 2017. Information about the directors and executive officers of
Wolverine Bancorp is set forth in Wolverine Bancorp’s Annual Report
on Form 10-K filed with the SEC on March 31, 2017, and in the proxy
statement for Wolverine Bancorp’s 2017 annual meeting of
shareholders, as filed with the SEC on April 17, 2017. Additional
information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be
obtained by reading the proxy statement/prospectus regarding the
Lafayette Community Bancorp merger and by reading the proxy
statement/prospectus regarding the Wolverine Bancorp merger when it
becomes available. Free copies of these documents may be obtained
as described in the preceding paragraph.
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 |
|
|
2017 |
|
2017 |
|
2016 |
|
2016 |
|
2016 |
Balance
sheet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
3,321,178 |
|
$ |
3,169,643 |
|
$ |
3,141,156 |
|
$ |
3,325,650 |
|
$ |
2,918,080 |
Investment
securities |
|
|
704,525 |
|
|
673,090 |
|
|
633,025 |
|
|
744,240 |
|
|
628,935 |
Commercial loans |
|
|
1,143,761 |
|
|
1,106,471 |
|
|
1,069,956 |
|
|
1,047,450 |
|
|
874,580 |
Mortgage warehouse
loans |
|
|
123,757 |
|
|
89,360 |
|
|
135,727 |
|
|
226,876 |
|
|
205,699 |
Residential mortgage
loans |
|
|
549,997 |
|
|
533,646 |
|
|
531,874 |
|
|
530,162 |
|
|
493,626 |
Consumer loans |
|
|
450,209 |
|
|
417,476 |
|
|
398,429 |
|
|
386,031 |
|
|
363,920 |
Earning assets |
|
|
2,990,924 |
|
|
2,845,922 |
|
|
2,801,030 |
|
|
2,963,005 |
|
|
2,591,208 |
Non-interest bearing
deposit accounts |
|
|
508,305 |
|
|
502,400 |
|
|
496,248 |
|
|
479,771 |
|
|
397,412 |
Interest bearing
transaction accounts |
|
|
1,401,407 |
|
|
1,432,228 |
|
|
1,499,120 |
|
|
1,367,285 |
|
|
1,213,659 |
Time deposits |
|
|
509,071 |
|
|
509,071 |
|
|
475,842 |
|
|
489,106 |
|
|
471,190 |
Borrowings |
|
|
485,304 |
|
|
319,993 |
|
|
267,489 |
|
|
569,908 |
|
|
492,883 |
Subordinated
debentures |
|
|
37,562 |
|
|
37,516 |
|
|
37,456 |
|
|
37,418 |
|
|
32,874 |
Total stockholders’
equity |
|
|
357,259 |
|
|
348,575 |
|
|
340,855 |
|
|
345,736 |
|
|
281,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
statement: |
|
Three months ended |
Net interest
income |
|
$ |
27,198 |
|
$ |
25,568 |
|
$ |
20,939 |
|
$ |
24,410 |
|
$ |
20,869 |
Provision for loan
losses |
|
|
330 |
|
|
330 |
|
|
623 |
|
|
455 |
|
|
232 |
Non-interest
income |
|
|
8,212 |
|
|
7,559 |
|
|
9,484 |
|
|
9,318 |
|
|
9,266 |
Non-interest
expenses |
|
|
22,488 |
|
|
21,521 |
|
|
22,588 |
|
|
24,082 |
|
|
20,952 |
Income tax expense |
|
|
3,520 |
|
|
3,052 |
|
|
1,609 |
|
|
2,589 |
|
|
2,625 |
Net income |
|
|
9,072 |
|
|
8,224 |
|
|
5,603 |
|
|
6,602 |
|
|
6,326 |
Preferred stock
dividend |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Net income available to
common shareholders |
|
$ |
9,072 |
|
$ |
8,224 |
|
$ |
5,603 |
|
$ |
6,602 |
|
$ |
6,326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share (1) |
|
$ |
0.41 |
|
$ |
0.37 |
|
$ |
0.25 |
|
$ |
0.31 |
|
$ |
0.35 |
Diluted earnings per
share (1) |
|
|
0.41 |
|
|
0.37 |
|
|
0.25 |
|
|
0.30 |
|
|
0.35 |
Cash dividends declared
per common share (1) |
|
|
0.13 |
|
|
0.11 |
|
|
0.11 |
|
|
0.10 |
|
|
0.10 |
Book value per common
share (1) |
|
|
16.11 |
|
|
15.72 |
|
|
15.37 |
|
|
15.61 |
|
|
14.90 |
Tangible book value per
common share |
|
|
12.20 |
|
|
11.79 |
|
|
11.48 |
|
|
11.83 |
|
|
11.45 |
Market value -
high |
|
|
27.50 |
|
|
28.09 |
|
|
28.41 |
|
|
20.01 |
|
|
16.76 |
Market value - low |
|
$ |
24.73 |
|
$ |
24.91 |
|
$ |
17.84 |
|
$ |
16.61 |
|
$ |
15.87 |
Weighted average shares
outstanding - Basic |
|
|
22,176,465 |
|
|
22,175,526 |
|
|
22,155,549 |
|
|
21,538,752 |
|
|
18,268,880 |
Weighted average shares
outstanding - Diluted |
|
|
22,322,390 |
|
|
22,326,071 |
|
|
22,283,722 |
|
|
21,651,953 |
|
|
18,364,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key
ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets |
|
|
1.12% |
|
|
1.07% |
|
|
0.69% |
|
|
0.80% |
|
|
0.94% |
Return on average
common stockholders' equity |
|
|
10.24 |
|
|
9.66 |
|
|
6.49 |
|
|
7.88 |
|
|
9.43 |
Net interest
margin |
|
|
3.84 |
|
|
3.80 |
|
|
2.92 |
|
|
3.37 |
|
|
3.48 |
Loan loss reserve to
total loans |
|
|
0.66 |
|
|
0.70 |
|
|
0.69 |
|
|
0.66 |
|
|
0.73 |
Non-performing loans to
loans |
|
|
0.51 |
|
|
0.46 |
|
|
0.50 |
|
|
0.58 |
|
|
0.68 |
Average equity to
average assets |
|
|
10.94 |
|
|
11.12 |
|
|
10.59 |
|
|
10.18 |
|
|
9.94 |
Bank only capital
ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to
average assets |
|
|
9.84 |
|
|
10.26 |
|
|
9.93 |
|
|
9.65 |
|
|
9.39 |
Tier 1 capital to risk
weighted assets |
|
|
12.83 |
|
|
13.40 |
|
|
13.33 |
|
|
12.73 |
|
|
12.51 |
Total capital to risk
weighted assets |
|
|
13.46 |
|
|
14.05 |
|
|
13.98 |
|
|
13.34 |
|
|
13.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan
data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Substandard loans |
|
$ |
34,870 |
|
$ |
30,865 |
|
$ |
30,361 |
|
$ |
33,914 |
|
$ |
28,629 |
30 to 89 days
delinquent |
|
|
4,555 |
|
|
5,476 |
|
|
6,315 |
|
|
3,821 |
|
|
2,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90 days and greater
delinquent - accruing interest |
|
$ |
160 |
|
$ |
245 |
|
$ |
241 |
|
$ |
59 |
|
$ |
24 |
Trouble debt
restructures - accruing interest |
|
|
1,924 |
|
|
1,647 |
|
|
1,492 |
|
|
1,523 |
|
|
1,256 |
Trouble debt
restructures - non-accrual |
|
|
668 |
|
|
998 |
|
|
1,014 |
|
|
1,164 |
|
|
1,466 |
Non-accrual loans |
|
|
8,811 |
|
|
6,944 |
|
|
7,936 |
|
|
10,091 |
|
|
10,426 |
Total non-performing
loans |
|
$ |
11,563 |
|
$ |
9,834 |
|
$ |
10,683 |
|
$ |
12,837 |
|
$ |
13,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Adjusted for 3:2 stock split on November 14, 2016 |
|
HORIZON BANCORP |
Financial Highlights |
(Dollars in thousands except share and per share data
and ratios, Unaudited) |
|
|
|
|
|
|
|
June 30 |
|
June 30 |
|
2017 |
|
2016 |
Balance
sheet: |
|
|
|
|
|
Total assets |
$ |
3,321,178 |
|
$ |
2,918,080 |
Investment
securities |
|
704,525 |
|
|
628,935 |
Commercial loans |
|
1,143,761 |
|
|
874,580 |
Mortgage warehouse
loans |
|
123,757 |
|
|
205,699 |
Residential mortgage
loans |
|
549,997 |
|
|
493,626 |
Consumer loans |
|
450,209 |
|
|
363,920 |
Earning assets |
|
2,990,924 |
|
|
2,591,208 |
Non-interest bearing
deposit accounts |
|
508,305 |
|
|
397,412 |
Interest bearing
transaction accounts |
|
1,401,407 |
|
|
1,213,659 |
Time deposits |
|
509,071 |
|
|
471,190 |
Borrowings |
|
485,304 |
|
|
492,883 |
Subordinated
debentures |
|
37,562 |
|
|
32,874 |
Total stockholders’
equity |
|
357,259 |
|
|
281,002 |
|
|
|
|
|
|
Income
statement: |
Six Months Ended |
Net interest
income |
$ |
52,766 |
|
$ |
40,643 |
Provision for loan
losses |
|
660 |
|
|
764 |
Non-interest
income |
|
15,771 |
|
|
17,733 |
Non-interest
expenses |
|
44,009 |
|
|
41,302 |
Income tax expense |
|
6,572 |
|
|
4,603 |
Net income |
|
17,296 |
|
|
11,707 |
Preferred stock
dividend |
|
- |
|
|
(42) |
Net income available to
common shareholders |
$ |
17,296 |
|
$ |
11,665 |
|
|
|
|
|
|
Per share
data: |
|
|
|
|
|
Basic earnings per
share (1) |
$ |
0.78 |
|
$ |
0.65 |
Diluted earnings per
share (1) |
|
0.77 |
|
|
0.64 |
Cash dividends declared
per common share (1) |
|
0.24 |
|
|
0.20 |
Book value per common
share (1) |
|
16.11 |
|
|
14.90 |
Tangible book value per
common share |
|
12.20 |
|
|
11.45 |
Market value -
high |
|
28.09 |
|
|
18.59 |
Market value - low |
$ |
24.73 |
|
$ |
15.41 |
Weighted average shares
outstanding - Basic |
|
22,175,998 |
|
|
18,096,503 |
Weighted average shares
outstanding - Diluted |
|
22,324,520 |
|
|
18,190,542 |
|
|
|
|
|
|
Key
ratios: |
|
|
|
|
|
Return on average
assets |
|
1.10% |
|
|
0.89% |
Return on average
common stockholders' equity |
|
9.99 |
|
|
9.26 |
Net interest
margin |
|
3.81 |
|
|
3.47 |
Loan loss reserve to
total loans |
|
0.66 |
|
|
0.73 |
Non-performing loans to
loans |
|
0.51 |
|
|
0.68 |
Average equity to
average assets |
|
11.03 |
|
|
10.05 |
Bank only capital
ratios: |
|
|
|
|
|
Tier 1 capital to
average assets |
|
9.84 |
|
|
9.39 |
Tier 1 capital to risk
weighted assets |
|
12.83 |
|
|
12.51 |
Total capital to risk
weighted assets |
|
13.46 |
|
|
13.23 |
|
|
|
|
|
|
Loan
data: |
|
|
|
|
|
Substandard loans |
$ |
34,870 |
|
$ |
28,629 |
30 to 89 days
delinquent |
|
4,555 |
|
|
2,887 |
|
|
|
|
|
|
90 days and greater
delinquent - accruing interest |
$ |
160 |
|
$ |
24 |
Trouble debt
restructures - accruing interest |
|
1,924 |
|
|
1,256 |
Trouble debt
restructures - non-accrual |
|
668 |
|
|
1,466 |
Non-accrual loans |
|
8,811 |
|
|
10,426 |
Total non-performing
loans |
$ |
11,563 |
|
$ |
13,172 |
|
|
|
|
|
|
(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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
|
2017 |
|
2017 |
|
2016 |
|
2016 |
Commercial |
|
$ |
7,617 |
|
$ |
7,600 |
|
$ |
6,579 |
|
$ |
6,222 |
Real estate |
|
|
1,750 |
|
|
1,697 |
|
|
2,090 |
|
|
1,947 |
Mortgage
warehousing |
|
|
1,090 |
|
|
1,042 |
|
|
1,254 |
|
|
1,337 |
Consumer |
|
|
4,570 |
|
|
4,715 |
|
|
4,914 |
|
|
5,018 |
Total |
|
$ |
15,027 |
|
$ |
15,054 |
|
$ |
14,837 |
|
$ |
14,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-offs (Recoveries) |
(Dollars in Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
|
2017 |
|
2017 |
|
2016 |
|
2016 |
|
2016 |
Commercial |
|
$ |
24 |
|
$ |
(134) |
|
$ |
49 |
|
$ |
(5) |
|
$ |
101 |
Real estate |
|
|
(8) |
|
|
38 |
|
|
64 |
|
|
- |
|
|
(31) |
Mortgage
warehousing |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Consumer |
|
|
341 |
|
|
209 |
|
|
197 |
|
|
162 |
|
|
172 |
Total |
|
$ |
357 |
|
$ |
113 |
|
$ |
310 |
|
$ |
157 |
|
$ |
242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-performing Loans |
(Dollars in Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
|
2017 |
|
2017 |
|
2016 |
|
2016 |
|
2016 |
Commercial |
|
$ |
2,794 |
|
$ |
1,530 |
|
$ |
2,432 |
|
$ |
5,419 |
|
$ |
4,330 |
Real estate |
|
|
5,285 |
|
|
5,057 |
|
|
5,022 |
|
|
4,251 |
|
|
5,659 |
Mortgage
warehousing |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Consumer |
|
|
3,484 |
|
|
3,247 |
|
|
3,229 |
|
|
3,108 |
|
|
3,183 |
Total |
|
$ |
11,563 |
|
$ |
9,834 |
|
$ |
10,683 |
|
$ |
12,778 |
|
$ |
13,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Real Estate Owned and Repossessed
Assets |
(Dollars in Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
|
2017 |
|
2017 |
|
2016 |
|
2016 |
|
2016 |
Commercial |
|
$ |
409 |
|
$ |
542 |
|
$ |
542 |
|
$ |
542 |
|
$ |
542 |
Real estate |
|
|
1,805 |
|
|
2,413 |
|
|
2,648 |
|
|
3,182 |
|
|
2,925 |
Mortgage
warehousing |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Consumer |
|
|
21 |
|
|
20 |
|
|
26 |
|
|
67 |
|
|
69 |
Total |
|
$ |
2,235 |
|
$ |
2,975 |
|
$ |
3,216 |
|
$ |
3,791 |
|
$ |
3,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HORIZON BANCORP AND SUBSIDIARIES |
Average Balance Sheets |
(Dollar Amounts in Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
|
June 30, 2017 |
|
June 30, 2016 |
|
|
|
|
Average |
|
|
|
Average |
|
Average |
|
|
Average |
|
|
|
|
Balance |
Interest |
|
Rate |
|
Balance |
|
Interest |
Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
funds sold |
$ |
1,728 |
$ |
6 |
|
1.39% |
|
$ |
3,309 |
$ |
4 |
0.49% |
|
|
Interest-earning deposits |
|
27,677 |
|
83 |
|
1.20% |
|
|
28,045 |
|
59 |
0.85% |
|
|
Investment
securities - taxable |
|
423,815 |
|
2,155 |
|
2.04% |
|
|
469,925 |
|
2,598 |
2.22% |
|
|
Investment
securities - non-taxable (1) |
|
290,494 |
|
1,766 |
|
3.40% |
|
|
182,886 |
|
1,195 |
3.70% |
|
|
Loans
receivable (2)(3) |
|
2,199,913 |
|
26,795 |
|
4.94% |
|
|
1,787,189 |
|
20,794 |
4.69% |
|
|
|
Total interest-earning
assets (1) |
|
2,943,627 |
|
30,805 |
|
4.33% |
|
|
2,471,354 |
|
24,650 |
4.10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
due from banks |
|
42,331 |
|
|
|
|
|
|
35,435 |
|
|
|
|
|
Allowance
for loan losses |
|
(15,131) |
|
|
|
|
|
|
(14,350) |
|
|
|
|
|
Other
assets |
|
279,024 |
|
|
|
|
|
|
223,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,249,851 |
|
|
|
|
|
$ |
2,715,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$ |
1,980,025 |
$ |
1,721 |
|
0.35% |
|
$ |
1,625,024 |
$ |
1,557 |
0.39% |
|
|
Borrowings |
|
359,462 |
|
1,338 |
|
1.49% |
|
|
400,585 |
|
1,721 |
1.73% |
|
|
Subordinated debentures |
|
36,340 |
|
548 |
|
6.05% |
|
|
32,854 |
|
503 |
6.16% |
|
|
|
Total interest-bearing
liabilities |
|
2,375,827 |
|
3,607 |
|
0.61% |
|
|
2,058,463 |
|
3,781 |
0.74% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits |
|
499,446 |
|
|
|
|
|
|
364,822 |
|
|
|
|
|
Accrued
interest payable and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
other liabilities |
|
19,143 |
|
|
|
|
|
|
22,574 |
|
|
|
Stockholders' equity |
|
355,435 |
|
|
|
|
|
|
269,838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,249,851 |
|
|
|
|
|
$ |
2,715,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income/spread |
|
|
$ |
27,198 |
|
3.73% |
|
|
|
$ |
20,869 |
3.36% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income as a percent |
|
|
|
|
|
|
|
|
|
|
|
|
of
average interest earning assets (1) |
|
|
|
|
|
3.84% |
|
|
|
|
|
3.48% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2017 |
|
June 30, 2016 |
|
|
|
Average |
|
Average |
|
Average |
|
Average |
|
|
|
Balance |
Interest |
Rate |
|
Balance |
Interest |
Rate |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
Federal
funds sold |
$ |
2,377 |
$ |
11 |
0.93% |
|
$ |
2,853 |
$ |
4 |
0.28% |
|
Interest-earning deposits |
|
26,220 |
|
152 |
1.17% |
|
|
24,300 |
|
109 |
0.90% |
|
Investment
securities - taxable |
|
411,417 |
|
4,487 |
2.20% |
|
|
464,209 |
|
5,092 |
2.21% |
|
Investment
securities - non-taxable (1) |
|
280,563 |
|
3,403 |
3.40% |
|
|
181,660 |
|
2,432 |
3.64% |
|
Loans
receivable (2)(3) |
|
2,150,307 |
|
51,586 |
4.85% |
|
|
1,733,446 |
|
40,541 |
4.71% |
|
|
Total interest-earning
assets (1) |
|
2,870,884 |
|
59,639 |
4.29% |
|
|
2,406,468 |
|
48,178 |
4.10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
due from banks |
|
41,788 |
|
|
|
|
|
34,246 |
|
|
|
|
Allowance
for loan losses |
|
(15,035) |
|
|
|
|
|
(14,350) |
|
|
|
|
Other
assets |
|
279,497 |
|
|
|
|
|
217,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,177,134 |
|
|
|
|
$ |
2,644,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$ |
1,970,235 |
$ |
3,474 |
0.36% |
|
$ |
1,571,579 |
$ |
3,048 |
0.39% |
|
Borrowings |
|
305,116 |
|
2,275 |
1.50% |
|
|
401,594 |
|
3,480 |
1.74% |
|
Subordinated debentures |
|
36,315 |
|
1,124 |
6.24% |
|
|
32,653 |
|
1,007 |
6.20% |
|
|
Total interest-bearing
liabilities |
|
2,311,666 |
|
6,873 |
0.60% |
|
|
2,005,826 |
|
7,535 |
0.76% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits |
|
495,262 |
|
|
|
|
|
350,157 |
|
|
|
|
Accrued
interest payable and |
|
|
|
|
|
|
|
|
|
|
|
|
other liabilities |
|
19,901 |
|
|
|
|
|
22,465 |
|
|
|
Stockholders' equity |
|
350,305 |
|
|
|
|
|
265,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,177,134 |
|
|
|
|
$ |
2,644,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income/spread |
|
|
$ |
52,766 |
3.69% |
|
|
|
$ |
40,643 |
3.34% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income as a percent |
|
|
|
|
|
|
|
|
|
|
|
of
average interest earning assets (1) |
|
|
|
|
3.81% |
|
|
|
|
|
3.47% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
2017 |
2016 |
|
(Unaudited) |
|
Assets |
|
|
Cash and
due from banks |
$ |
65,993 |
|
|
$ |
70,832 |
|
Investment securities, available for sale |
|
505,051 |
|
|
|
439,831 |
|
Investment securities, held to maturity (fair value of $203,542 and
$194,086) |
|
199,474 |
|
|
|
193,194 |
|
Loans
held for sale |
|
3,730 |
|
|
|
8,087 |
|
Loans,
net of allowance for loan losses of $15,027 and $14,837 |
|
2,252,697 |
|
|
|
2,121,149 |
|
Premises
and equipment, net |
|
65,358 |
|
|
|
66,357 |
|
Federal
Reserve and Federal Home Loan Bank stock |
|
14,945 |
|
|
|
23,932 |
|
Goodwill |
|
77,644 |
|
|
|
76,941 |
|
Other
intangible assets |
|
9,082 |
|
|
|
9,366 |
|
Interest
receivable |
|
13,316 |
|
|
|
12,713 |
|
Cash
value of life insurance |
|
75,006 |
|
|
|
74,134 |
|
Other
assets |
|
38,882 |
|
|
|
44,620 |
|
Total
assets |
$ |
3,321,178 |
|
|
$ |
3,141,156 |
|
Liabilities |
|
|
Deposits |
|
|
Non-interest bearing |
$ |
508,305 |
|
|
$ |
496,248 |
|
Interest
bearing |
|
1,910,478 |
|
|
|
1,974,962 |
|
Total
deposits |
|
2,418,783 |
|
|
|
2,471,210 |
|
Borrowings |
|
485,304 |
|
|
|
267,489 |
|
Subordinated debentures |
|
37,562 |
|
|
|
37,456 |
|
Interest
payable |
|
559 |
|
|
|
472 |
|
Other
liabilities |
|
21,711 |
|
|
|
23,674 |
|
Total
liabilities |
|
2,963,919 |
|
|
|
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 |
|
182,552 |
|
|
|
182,326 |
|
Retained earnings |
|
176,123 |
|
|
|
164,173 |
|
Accumulated other comprehensive loss |
|
(1,416 |
) |
|
|
(5,644 |
) |
Total
stockholders’ equity |
|
357,259 |
|
|
|
340,855 |
|
Total
liabilities and stockholders’ equity |
$ |
3,321,178 |
|
|
$ |
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 |
Six Months Ended |
|
|
June 30 |
June 30 |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
(Unaudited) |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Interest Income |
|
|
|
|
|
Loans
receivable |
$ |
26,795 |
|
|
$ |
20,794 |
|
|
$ |
51,586 |
|
|
$ |
40,541 |
|
|
Investment securities |
|
|
|
|
|
Taxable |
|
2,244 |
|
|
|
2,661 |
|
|
|
4,650 |
|
|
|
5,205 |
|
|
Tax exempt |
|
1,766 |
|
|
|
1,195 |
|
|
|
3,403 |
|
|
|
2,432 |
|
|
Total interest income |
|
30,805 |
|
|
|
24,650 |
|
|
|
59,639 |
|
|
|
48,178 |
|
|
Interest Expense |
|
|
|
|
|
Deposits |
|
1,721 |
|
|
|
1,557 |
|
|
|
3,474 |
|
|
|
3,048 |
|
|
Borrowed
funds |
|
1,338 |
|
|
|
1,721 |
|
|
|
2,275 |
|
|
|
3,480 |
|
|
Subordinated debentures |
|
548 |
|
|
|
503 |
|
|
|
1,124 |
|
|
|
1,007 |
|
|
Total interest expense |
|
3,607 |
|
|
|
3,781 |
|
|
|
6,873 |
|
|
|
7,535 |
|
|
Net Interest Income |
|
27,198 |
|
|
|
20,869 |
|
|
|
52,766 |
|
|
|
40,643 |
|
|
Provision
for loan losses |
|
330 |
|
|
|
232 |
|
|
|
660 |
|
|
|
764 |
|
|
Net Interest Income after Provision for Loan
Losses |
|
26,868 |
|
|
|
20,637 |
|
|
|
52,106 |
|
|
|
39,879 |
|
|
Non-interest Income |
|
|
|
|
|
Service
charges on deposit accounts |
|
1,566 |
|
|
|
1,417 |
|
|
|
2,966 |
|
|
|
2,705 |
|
|
Wire
transfer fees |
|
178 |
|
|
|
175 |
|
|
|
328 |
|
|
|
296 |
|
|
Interchange fees |
|
1,382 |
|
|
|
978 |
|
|
|
2,558 |
|
|
|
1,909 |
|
|
Fiduciary
activities |
|
1,943 |
|
|
|
1,465 |
|
|
|
3,865 |
|
|
|
3,100 |
|
|
Gain on
sale of investment securities (includes $(3) and $767 for the
three |
|
|
|
|
|
months ended June 30, 2017 and 2016, respectively and $32 and $875
for the six |
|
|
|
|
|
months ended June 30, 2017 and 2016, respectively, related to
accumulated other comprehensive earnings
reclassifications) |
|
(3 |
) |
|
|
767 |
|
|
|
32 |
|
|
|
875 |
|
|
Gain on
sale of mortgage loans |
|
2,054 |
|
|
|
3,529 |
|
|
|
3,968 |
|
|
|
5,643 |
|
|
Mortgage
servicing income net of impairment |
|
359 |
|
|
|
500 |
|
|
|
806 |
|
|
|
947 |
|
|
Increase
in cash value of bank owned life insurance |
|
408 |
|
|
|
351 |
|
|
|
872 |
|
|
|
696 |
|
|
Other
income |
|
325 |
|
|
|
84 |
|
|
|
376 |
|
|
|
482 |
|
|
Total
non-interest income |
|
8,212 |
|
|
|
9,266 |
|
|
|
15,771 |
|
|
|
16,653 |
|
|
Non-interest Expense |
|
|
|
|
|
Salaries
and employee benefits |
|
12,466 |
|
|
|
10,317 |
|
|
|
24,175 |
|
|
|
20,382 |
|
|
Net
occupancy expenses |
|
2,196 |
|
|
|
1,901 |
|
|
|
4,648 |
|
|
|
3,837 |
|
|
Data
processing |
|
1,502 |
|
|
|
1,134 |
|
|
|
2,809 |
|
|
|
2,239 |
|
|
Professional fees |
|
535 |
|
|
|
747 |
|
|
|
1,148 |
|
|
|
1,578 |
|
|
Outside
services and consultants |
|
1,265 |
|
|
|
2,198 |
|
|
|
2,487 |
|
|
|
3,297 |
|
|
Loan
expense |
|
1,250 |
|
|
|
1,409 |
|
|
|
2,357 |
|
|
|
2,604 |
|
|
FDIC
insurance expense |
|
243 |
|
|
|
409 |
|
|
|
506 |
|
|
|
814 |
|
|
Other
losses |
|
78 |
|
|
|
136 |
|
|
|
128 |
|
|
|
403 |
|
|
Other
expense |
|
2,953 |
|
|
|
2,701 |
|
|
|
5,751 |
|
|
|
5,068 |
|
|
Total
non-interest expense |
|
22,488 |
|
|
|
20,952 |
|
|
|
44,009 |
|
|
|
40,222 |
|
|
Income Before Income
Tax |
|
12,592 |
|
|
|
8,951 |
|
|
|
23,868 |
|
|
|
16,310 |
|
|
Income
tax expense (includes $(1) and $268 for the three months ended |
|
|
|
|
|
June 30,
2017 and 2016, respectively, and $11 and $306 for the six months
ended June 30, 2017 and 2016, respectively related to income tax
expense from |
|
|
|
|
|
reclassification items) |
|
3,520 |
|
|
|
2,625 |
|
|
|
6,572 |
|
|
|
4,603 |
|
|
Net Income |
|
9,072 |
|
|
|
6,326 |
|
|
|
17,296 |
|
|
|
11,707 |
|
|
Preferred
stock dividend |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(42 |
) |
|
Net Income Available to Common Shareholders |
$ |
9,072 |
|
|
$ |
6,326 |
|
|
$ |
17,296 |
|
|
$ |
11,665 |
|
|
Basic Earnings Per Share |
$ |
0.41 |
|
|
$ |
0.35 |
|
|
$ |
0.78 |
|
|
$ |
0.65 |
|
|
Diluted Earnings Per Share |
|
0.41 |
|
|
|
0.35 |
|
|
|
0.77 |
|
|
|
0.64 |
|
|
|
|
|
|
|
|
Contact:
Horizon Bancorp
Mark E. Secor
Chief Financial Officer
(219) 873-2611
Fax: (219) 874-9280
Horizon Bancorp (NASDAQ:HBNC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Horizon Bancorp (NASDAQ:HBNC)
Historical Stock Chart
From Apr 2023 to Apr 2024