(NASDAQ: HBNC) – Horizon Bancorp today announced its unaudited
financial results for the three and nine-month periods ended
September 30, 2016. All share data has been adjusted to reflect
Horizon’s three-for-two stock split announced on October 19,
2016 to be issued on November 14, 2016.
SUMMARY:
- Net income for the third quarter of
2016 was $6.6 million or $.30 diluted earnings per share compared
to $4.3 million or $.24 diluted earnings per share for the third
quarter of 2015.
- Excluding acquisition-related expenses
and purchase accounting adjustments, net income for the third
quarter of 2016 increased 29.6% compared to the same period of 2015
to $8.4 million or $.39 diluted earnings per share.
- Net income for the first nine months of
2016 was $18.3 million or $.94 diluted earnings per share compared
to $14.4 million or $.92 diluted earnings per share for the first
nine months of 2015.
- 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 nine months of 2016 increased 32.1% compared
to the same period of 2015 to $20.7 million or $1.07 diluted
earnings per share.
- Excluding the LaPorte Bancorp, Inc.
(“LaPorte Bancorp”) acquisition, mortgage warehouse loans and loans
held for sale, loans increased 4.1% on an annualized basis during
the third quarter of 2016.
- Net interest income for the first nine
months of 2016 increased 19.3% or $10.5 million compared to the
same period in 2015.
- Net interest margin, excluding the
impact of acquisitions (“core net interest margin”), was 3.31% for
the third quarter of 2016 compared to 3.42% for the prior quarter
and 3.44% for the same period in 2015.
- Non-interest income for the first nine
months of 2016 increased 22.7% or $5.1 million compared to the same
period in 2015.
- Horizon’s tangible book value per share
rose to $11.76 at September 30, 2016, compared to $11.02 at
December 31, 2015 and $10.89 at September 30, 2015.
- Horizon opened its first commercial
office in Fort Wayne, Indiana on September 14, 2016. The new
location will offer commercial loans and cash management services
and will be led by Greg Haney, Horizon’s Fort Wayne Market
President.
Craig Dwight, Chairman and CEO, commented: “The Horizon team was
very busy in the third quarter of 2016 and we are proud of what
they have accomplished. Our balanced strategy of organic growth,
expansion into new markets and well-executed acquisitions
contributed to Horizon’s increase in net income and earnings per
share during the quarter. Core net income, excluding
acquisition-related expenses and purchase accounting adjustments,
gain on sale of investment securities and the death benefit on bank
owned life insurance, was $8.4 million for the third quarter and
$20.7 million for the first nine months of 2016. Core diluted
earnings per share was $.39 for the third quarter and $1.07 for the
first nine months of 2016, an increase over the same periods of
2015 of 7.3% and 7.1%, respectively.”
Non-GAAP Reconciliation of Net Income and Diluted
Earnings per Share (Dollars in Thousands Except per Share Data,
Unaudited)
Three
Months Ended Nine Months Ended September 30
September 30
Non-GAAP
Reconciliation of Net Income
2016 2015 2016
2015 Net income as reported
$ 6,602 $ 4,288
$ 18,309 $ 14,374 Merger expenses
2,953 3,648
5,472 4,364 Tax effect
(886 )
(1,219 )
(1,582 )
(1,402 ) Net income excluding merger expenses
8,668
6,717
22,199 17,336 Gain on sale of investment
securities
- -
(875 ) (124 ) Tax effect
- -
306 43 Net income excluding gain
on sale of investment securities
8,668 6,717
21,630
17,255 Death benefit on bank owned life insurance ("BOLI")
- -
- (145 ) Tax effect
-
-
-
51 Net income excluding death benefit on BOLI
8,668 6,717
21,630 17,161
Acquisition-related purchase accounting adjustments ("PAUs")
(459 ) (402 )
(1,404 ) (2,282 ) Tax
effect
161 141
491 799 Net income
excluding PAUs
$ 8,370 $ 6,456
$ 20,717 $ 15,678
Non-GAAP
Reconciliation of Diluted Earnings per Share
Diluted earnings per share as reported
$ 0.30 $ 0.24
$ 0.94 $ 0.92 Merger expenses
0.14 0.20
0.28 0.28 Tax effect
(0.04 )
(0.07 )
(0.08 )
(0.09 ) Diluted earnings per share excluding merger expenses
0.40 0.37
1.14 1.11 Gain on sale of investment
securities
- -
(0.05 ) (0.01 ) Tax effect
- -
0.02 0.00 Net income excluding
gain on sale of investment securities
0.40 0.37
1.11
1.10 Death benefit on BOLI
- -
- (0.01 ) Tax
effect
- -
- 0.00 Net income
excluding death benefit on BOLI
0.40
0.37
1.11
1.09 Acquisition-related PAUs
(0.02
) (0.02 )
(0.07 ) (0.15 ) Tax effect
0.01 0.01
0.03 0.05 Diluted earnings per
share excluding PAUs
$ 0.39 $ 0.36
$ 1.07 $ 0.99
Mr. Dwight continued, “The third quarter of 2016 was highlighted
by commercial loan growth in our Kalamazoo and Indianapolis
markets, continued asset quality improvement, the build-out of our
new Fort Wayne, Indiana commercial team and the integrations of our
recently closed Kosciusko Financial, Inc. (“Kosciusko”) and LaPorte
Bancorp acquisitions.”
Horizon completed the systems conversion of LaPorte Bancorp on
October 22, 2016 and announced on October 14, 2016 the receipt of
all regulatory approvals required for it’s previously announced CNB
Bancorp acquisition. Horizon also opened its Fort Wayne, Indiana
commercial office on September 14, 2016, led by Greg Haney,
Horizon’s Fort Wayne Market President. Dwight concluded, “We are
thrilled to welcome these exceptional bankers to our team and look
forward to continuing Horizon’s successful growth story.”
Income Statement Highlights
Net income for the third quarter of 2016 was $6.6 million or
$.30 diluted earnings per share compared to $4.3 million or $.24
diluted earnings per share in the third 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 $4.6 million and $1.7 million, respectively, partially
offset by increases in non-interest expense of $2.6 million, income
tax expense of $1.2 million and the diluted shares outstanding
primarily due to the stock issued in the Kosciusko and LaPorte
Bancorp acquisitions. Excluding acquisition-related expenses and
purchase accounting adjustments, net income for the third quarter
of 2016 was $8.4 million or $.39 diluted earnings per share
compared to $6.5 million or $.36 diluted earnings per share in the
third quarter of 2015.
Net income for the nine months ended September 30, 2016 was
$18.3 million or $.94 diluted earnings per share compared to $14.4
million or $.92 diluted earnings per share for the nine months
ended September 30, 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 $10.5 million and $5.1
million, respectively, and a decrease in the provision for loan
losses of $1.6 million, partially offset by increases in
non-interest expense of $11.2 million and income tax expense of
$2.2 million and the diluted shares outstanding primarily due to
the stock issued in the Kosciusko and LaPorte Bancorp 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 nine
months of 2016 was $20.7 million or $1.07 diluted earnings per
share compared to $15.7 million or $.99 diluted earnings per share
in the same period of 2015.
Horizon’s net interest margin was 3.37% during the third quarter
of 2016, down from 3.48% for the prior quarter and 3.51% for same
period of 2015. The decrease in the net interest margin compared to
the prior quarter and the same period of 2015 was due to lower
yields on new loans and re-pricing earning assets, the impact of
acquisitions and higher levels of cash during the quarter due to
acquisitions, partially offset by lower rates on interest-bearing
liabilities. Excluding acquisition-related purchase accounting
adjustments, the margin would have been 3.31% for the third quarter
of 2016 compared to 3.42% for the prior quarter and 3.44% for the
same period of 2015. Interest income from acquisition-related
purchase accounting adjustments was $459,000, $397,000 and $402,000
for the three months ended September 30, 2016, June 30, 2016, and
September 30, 2015, respectively.
Horizon’s net interest margin was 3.43% for the nine months
ending September 30, 2016, down from 3.59% for same period of 2015.
Excluding interest income from acquisition-related purchase
accounting adjustments, the margin would have been 3.36% for the
nine months ending September 30, 2016 compared to 3.44% for same
period of 2015. Interest income from acquisition-related purchase
accounting adjustments was $1.4 million and $2.3 million for the
nine months ended September 30, 2016 and September 30, 2015,
respectively.
Non-GAAP Reconciliation of Net Interest Margin
(Dollars in Thousands, Unaudited)
Three Months
Ended Nine Months Ended September
30 June 30 September 30
September 30
Net Interest
Margin As Reported
2016 2016 2015
2016 2015 Net interest income
$
24,410 $ 20,869 $ 19,776
$ 65,053 $
54,512 Average interest-earning assets
2,957,944 2,471,354
2,304,515
2,591,566 2,072,276 Net interest income as a
percent of average interest- earning assets ("Net Interest Margin")
3.37 % 3.48 % 3.51 %
3.43 % 3.59 %
Impact of
Acquisitions
Interest income from acquisition-related purchase accounting
adjustments
$ (459 ) $ (397 ) $ (402 )
$ (1,404 ) $ (2,282 )
Excluding Impact
of Acquisitions
Net interest income
$ 23,951 $ 20,472 $ 19,374
$ 63,649 $ 52,230 Average interest-earning assets
2,957,944 2,471,354 2,304,515
2,591,566 2,072,276
Core Net Interest Margin
3.31 % 3.42 % 3.44 %
3.36 % 3.44 %
Lending Activity
Total loans increased $440.8 million from $1.8 billion as of
December 31, 2015 to $2.2 billion as of September 30, 2016 as
commercial loans increased by $242.5 million, mortgage warehouse
loans increased by $82.2 million, residential mortgage loans
increased by $93.0 million and consumer loans increased by $23.7
million. Total loans, excluding acquired loans, mortgage warehouse
loans and loans held for sale, increased 1.0% during the third
quarter of 2016 or 4.1% on an annualized and 2.7% during the first
nine months of 2016 or 3.6% on an annualized basis.
Residential mortgage lending activity during the third quarter
of 2016 generated $3.5 million in income from the gain on sale of
mortgage loans, an increase of $734,000 from the same period of
2015. Total origination volume in the third quarter of 2016,
including loans placed into portfolio, totaled $129.0 million,
representing an increase of 1.2% from the same period of 2015.
Purchase money mortgage originations during the third quarter of
2016 represented 66.5% of total originations compared to 78.2% of
originations during the previous quarter and 81.0% during the third
quarter of 2015.
Loan balances in the Kalamazoo and Indianapolis markets totaled
$182.6 million and $197.7 million, respectively, as of September
30, 2016. Combined, these markets contributed $29.7 million in loan
growth during the third quarter of 2016 or 33.8% on an annualized
basis.
Loan Growth by Type, Excluding Acquired Loans
Three Months Ended September 30, 2016 (Dollars in Thousands,
Unaudited)
Excluding Acquired Loans Acquired
Annualized September 30 June 30 Amount
LaPorte Amount Percent Percent
2016 2016 Change
Loans Change
Change Change Commercial loans
$
1,047,450 $ 874,580 $ 172,870 $ (154,223 ) $ 18,647 2.1 %
8.5 % Residential mortgage loans
530,162 493,626 36,536
(42,603 ) (6,067 ) -1.2 % -4.9 % Consumer loans
386,031 363,920 22,111
(16,801 ) 5,310 1.5 % 5.8
% Subtotal
1,963,643 1,732,126 231,517 (213,627 ) 17,890 1.0
% 4.1 % Held for sale loans
7,369 7,812 (443 ) - (443 ) -5.7
% -22.6 % Mortgage warehouse loans
226,876
205,699 21,177 (99,752 )
(78,575 ) -38.2 % -152.0 % Total loans
$ 2,197,888 $ 1,945,637 $ 252,251
$ (313,379 ) $ (61,128 ) -3.1 % -12.5 %
Loan Growth by Type, Excluding Acquired Loans Nine
Months Ended September 30, 2016 (Dollars in Thousands)
Acquired Excluding Acquired Loans Kosciusko
Annualized September 30 December 31
Amount and LaPorte Amount Percent
Percent 2016 2015
Change Loans
Change Change Change
(Unaudited)
Commercial
loans
$ 1,047,450 $ 804,995 $ 242,455 $ (224,229 ) $
18,226 2.3 % 3.0 % Residential mortgage loans
530,162
437,144 93,018 (68,847 ) 24,171 5.5 % 7.4 % Consumer loans
386,031 362,300 23,731
(23,120 ) 611 0.2 % 0.2 %
Subtotal
1,963,643 1,604,439 359,204 (316,196 ) 43,008 2.7 %
3.6 % Held for sale loans
7,369 7,917 (548 ) - (548 ) -6.9 %
-9.2 % Mortgage warehouse loans
226,876
144,692 82,184 (99,752 )
(17,568 ) -12.1 % -16.2 % Total loans
$
2,197,888 $ 1,757,048 $ 440,840
$ (415,948 ) $ 24,892 1.4 % 1.9 %
The provision for loan losses was $455,000 for the third quarter
of 2016 compared to $300,000 for the same period of 2015. The
increase in the provision for loan losses during the third quarter
of 2016 was due to continued loan growth. The provision for loan
losses for the first nine months of 2016 was $1.2 million compared
to $2.8 million for the same period of 2015. The decrease in the
provision for loan losses during the first nine months of 2016 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
decreased to 0.66% as of September 30, 2016 from 0.83% as of
December 31, 2015 due to an increase in total loans. The ratio of
the allowance for loan losses to total loans, excluding loans with
credit-related purchase accounting adjustments, was 0.87% as of
September 30, 2016. Loan loss reserves and credit-related loan
discounts on acquired loans as a percentage of total loans was
1.40% as of September 30, 2016.
Non-performing loans to total loans declined 37 basis points to
0.58% at September 30, 2016 from 0.95% at December 31, 2015.
Non-performing loans totaled $12.8 million as of September 30, 2016
a decrease of $3.9 million from $16.7 million as of December 31,
2015. Compared to December 31, 2015, non-performing commercial
loans decreased by $1.6 million, non-performing real estate loans
decreased by $2.0 million and non-performing consumer loans
decreased $330,000.
Non- GAAP Allowance for Loan and Lease Loss Detail
As of September 30, 2016 (Dollars in Thousands, Unaudited)
Horizon Legacy
Heartland Summit
Peoples Kosciusko
LaPorte Total Pre-discount loan balance
$ 1,673,722 $ 15,719 $ 57,214 $ 155,318 $ 89,490 $
215,531
$ 2,206,994 Allowance for loan losses
(ALLL)
14,524 - - - - -
14,524 Loan discount
N/A 1,067
2,645 3,545
1,132 8,086
16,475 ALLL+loan discount
14,524 1,067
2,645 3,545 1,132 8,086
30,999 Loans, net
$
1,659,198 $ 14,652
$ 54,569 $ 151,773 $
88,358 $ 207,445
$
2,175,995 ALLL/ pre-discount loan balance
0.87 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
0.66
% Loan discount/ pre-discount loan balance
N/A 6.79 %
4.62 % 2.28 % 1.26 % 3.75 %
0.75 % ALLL+loan
discount/ pre-discount loan balance
0.87 % 6.79 %
4.62 % 2.28 % 1.26 % 3.75 %
1.40 %
Expense Management
Total non-interest expense was $2.6 million higher in the third
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, data processing, professional fees, loan
expense, and other expense reflecting overall company growth.
Outside services and consultants expense decreased primarily due to
the expense associated with the Peoples Bancorp acquisition that
occurred in the third quarter of 2015. Non-interest expense for the
third quarter of 2016 included $2.9 million of one- time
merger-related expenses due to the Kosciusko, LaPorte Bancorp and
CNB Bancorp acquisitions compared to $3.6 million in one-time
merger-related expenses during the same period of 2015 due to the
Peoples Bancorp acquisition.
Total non-interest expense was $11.2 million higher in the first
nine 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 $4.0 million, employee benefits of $1.3 million, net
occupancy expenses of $1.4 million, data processing expense of
$685,000, professional fees of $594,000, loan expense of $111,000,
FDIC deposit insurance expense of $180,000, other losses of
$159,000 and other expense of $1.8 million due to overall company
growth. Commission and bonus expense decreased by $261,000 due to
decrease in incentive pay. Outside services and consultants expense
increased $1.2 million primarily due to the expense associated with
the Kosciusko, LaPorte Bancorp and CNB Bancorp acquisitions.
Non-interest expense for the first nine months of 2016 included
$5.5 million of one-time merger-related expenses due to the
Kosciusko, LaPorte Bancorp and CNB Bancorp acquisitions compared to
$4.4 million in one-time merger-related expenses in the same period
of 2015 due to the Peoples Bancorp 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.
Non-GAAP Reconciliation of Tangible Stockholders' Equity
and Tangible Book Value per Share (Dollars in Thousands Except
per Share Data)
September 30 June 30 March
31 December 31 September 30 2016
2016 2016
2015 2015 (Unaudited)
(Unaudited) (Unaudited)
(Unaudited) Total stockholders’ equity
$
345,525 $ 281,002 $ 261,417 $ 266,832 $ 264,738 Less:
Preferred stock
- - - 12,500 12,500 Less: Intangible assets
85,179 65,144
56,695 56,971
57,248 Total tangible stockholder's equity
$ 260,346
$ 215,858 $ 204,722 $
197,361 $ 194,990 Common shares outstanding
22,143,228 18,857,301 17,974,970 17,909,831 17,897,981
Tangible book value per common share
$ 11.76 $
11.45 $ 11.39 $ 11.02 $ 10.89
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) September 30
June 30 March 31
December 31 September 30
2016 2016 2016
2015 2015 Balance
sheet: Total assets $ 3,325,658 $ 2,918,080 $ 2,627,918 $
2,652,401 $ 2,607,914 Investment securities 744,240 628,935 642,767
632,611 617,860 Commercial loans 1,047,450 874,580 797,754 804,995
795,271 Mortgage warehouse loans 226,876 205,699 119,876 144,692
138,974 Residential mortgage loans 530,162 493,626 442,806 437,144
430,946 Consumer loans 386,031 363,920 359,636 362,300 361,298
Earning assets 2,963,005 2,591,208 2,379,830 2,403,482 2,363,755
Non-interest bearing deposit accounts 479,771 397,412 343,025
335,955 338,436 Interest bearing transaction accounts 1,367,285
1,213,659 1,118,617 1,177,651 1,164,787 Time deposits 489,106
471,190 416,837 366,547 409,852 Borrowings 571,889 492,883 430,507
449,347 373,901 Subordinated debentures 37,418 32,874 32,836 32,797
32,758 Common stockholders' equity 345,525 281,002 261,417 254,332
252,238 Total stockholders’ equity 345,525 281,002 261,417 266,832
264,738
Income statement: Three months ended
Net interest income $ 24,410 $ 20,869 $ 19,774 $ 20,222 $ 19,776
Provision for loan losses 455 232 532 342 300 Non-interest income
10,056 9,869 7,864 7,750 8,400 Non-interest expenses 24,820 21,555
19,747 19,240 22,235 Income tax expense 2,589
2,625 1,978
2,215 1,353 Net
income 6,602 6,326 5,381 6,175 4,288 Preferred stock dividend
- -
(42 ) (31 ) (31 ) Net
income available to common shareholders $ 6,602
$ 6,326 $ 5,339 $
6,144 $ 4,257
Per share
data: Basic earnings per share $ 0.31 $ 0.35 $ 0.30 $ 0.34 $
0.24 Diluted earnings per share 0.30 0.34 0.30 0.34 0.24 Cash
dividends declared per common share 0.10 0.10 0.10 0.10 0.10 Book
value per common share 15.60 14.90 14.54 14.20 14.09 Tangible book
value per common share 11.76 11.45 11.39 11.02 10.89 Market value -
high 20.01 16.76 18.59 18.77 17.43 Market value - low $ 16.61 $
15.87 $ 15.41 $ 15.72 $ 15.07 Weighted average shares outstanding -
Basic 21,538,752 18,268,880 17,924,124 17,905,871 17,408,964
Weighted average shares outstanding - Diluted 21,651,953 18,364,167
18,012,726 18,020,615 17,839,882
Key ratios: Return
on average assets 0.80 % 0.94 % 0.83 % 0.94 % 0.67 % Return on
average common stockholders' equity 7.88 9.43 8.26 9.53 6.76 Net
interest margin 3.37 3.48 3.45 3.50 3.51 Loan loss reserve to total
loans 0.66 0.73 0.83 0.83 0.93 Non-performing loans to loans 0.58
0.68 0.87 0.95 1.21 Average equity to average assets 10.18 9.94
10.16 10.32 10.38 Bank only capital ratios: Tier 1 capital to
average assets 9.88 9.39 8.98 8.77 9.31 Tier 1 capital to risk
weighted assets 12.35 12.51 12.33 11.80 12.30 Total capital to risk
weighted assets 12.95 13.23 13.10 12.57 13.17
Loan
data: Substandard loans $ 33,914 $ 28,629 $ 23,600 $ 25,127 $
26,073 30 to 89 days delinquent 3,821 2,887 2,149 5,011 4,868
90 days and greater delinquent - accruing interest $ 59 $ 24
$ 1 $ 28 $ 100 Trouble debt restructures - accruing interest 1,523
1,256 1,231 1,218 2,948 Trouble debt restructures - non-accrual
1,164 1,466 2,857 3,172 3,994 Non-accrual loans 10,032
10,426
10,895 12,262
13,956 Total non-performing loans $ 12,778
$ 13,172 $ 14,984
$ 16,680 $ 20,998
HORIZON BANCORP Financial Highlights (Dollars in
thousands except share and per share data and ratios,
Unaudited) September 30
September 30 2016 2015
Balance sheet: Total assets $ 3,325,658 $ 2,607,914
Investment securities 744,240 617,860 Commercial loans 1,047,450
795,271 Mortgage warehouse loans 226,876 138,974 Residential
mortgage loans 530,162 430,946 Consumer loans 386,031 361,298
Earning assets 2,963,005 2,363,755 Non-interest bearing deposit
accounts 479,771 338,436 Interest bearing transaction accounts
1,367,285 1,164,787 Time deposits 489,106 409,852 Borrowings
571,889 373,901 Subordinated debentures 37,418 32,758 Common
stockholders' equity 345,525 252,238 Total stockholders’ equity
345,525 264,738
Income statement: Nine Months
Ended Net interest income $ 65,053 $ 54,512 Provision for loan
losses 1,219 2,820 Non-interest income 27,789 22,652 Non-interest
expenses 66,122 54,953 Income tax expense 7,192
5,017 Net income 18,309 14,374
Preferred stock dividend (42 ) (94 )
Net income available to common shareholders $ 18,267
$ 14,280
Per share data: Basic earnings
per share $ 0.95 $ 0.95 Diluted earnings per share 0.94 0.92 Cash
dividends declared per common share 0.30 0.29 Book value per common
share 15.60 14.09 Tangible book value per common share 11.76 10.89
Market value - high 20.01 17.43 Market value - low $ 15.41 $ 14.92
Weighted average shares outstanding - Basic 19,252,295 15,044,129
Weighted average shares outstanding - Diluted 19,346,376 15,580,711
Key ratios: Return on average assets 0.86 % 0.85 %
Return on average common stockholders' equity 8.82 9.12 Net
interest margin 3.43 3.59 Loan loss reserve to total loans 0.66
0.93 Non-performing loans to loans 0.58 1.21 Average equity to
average assets 10.13 9.81 Bank only capital ratios: Tier 1 capital
to average assets 9.88 9.31 Tier 1 capital to risk weighted assets
12.35 12.30 Total capital to risk weighted assets 12.95 13.17
Loan data: Substandard loans $ 33,914 $ 25,898 30 to
89 days delinquent 3,821 4,868 90 days and greater
delinquent - accruing interest $ 59 $ 100 Trouble debt restructures
- accruing interest 1,523 2,948 Trouble debt restructures -
non-accrual 1,164 3,994 Non-accrual loans 10,032
13,956 Total non-performing loans $
12,778 $ 20,998
HORIZON
BANCORP Allocation of the Allowance for Loan and
Lease Losses
(Dollars in Thousands, Unaudited)
September 30 June
30 March 31 December
31 September 30 2016
2016 2016 2015
2015 Commercial
$ 6,222 $ 6,051
$ 6,460 $ 7,195 $ 8,842 Real estate
1,947 2,102 1,794 2,476
2,297 Mortgage warehousing
1,337 1,080 1,014 1,007 1,015
Consumer
5,018 4,993
4,968 3,856
4,014 Total
$ 14,524 $ 14,226
$ 14,236 $ 14,534 $ 16,168
Net Charge-offs (Recoveries)
(Dollars in Thousands, Unaudited)
Three months ended September 30
June 30 March 31
December 31 September 30 2016
2016 2016
2015 2015 Commercial
$ (5
) $ 101 $ 403 $ 1,595 $ 77 Real estate
- (31 ) 83 (59
) 96 Mortgage warehousing
- - - - - Consumer
162 172
344 440 380
Total
$ 157 $ 242
$ 830 $ 1,976 $ 553
Total Non-performing Loans
(Dollars in Thousands, Unaudited)
September 30 June
30 March 31 December
31 September 30 2016
2016 2016 2015
2015 Commercial
$ 5,419 $ 4,330
$ 5,774 $ 7,005 $ 10,832 Real estate
4,251 5,659 5,974 6,237
6,315 Mortgage warehousing
- - - - - Consumer
3,108 3,183 3,236
3,438 3,851 Total
$ 12,778 $ 13,172 $
14,984 $ 16,680 $ 20,998
Other Real Estate Owned and Repossessed Assets
(Dollars in Thousands, Unaudited)
September 30 June
30 March 31 December
31 September 30 2016
2016 2016 2015
2015 Commercial
$ 542 $ 542 $
424 $ 161 $ 324 Real estate
3,182 2,925 3,393 3,046 958
Mortgage warehousing
- - - - - Consumer
67
69 -
- - Total
$ 3,791
$ 3,536 $ 3,817 $ 3,207 $
1,282
HORIZON BANCORP AND SUBSIDIARIES Average
Balance Sheets
(Dollar Amounts in Thousands,
Unaudited)
Three Months Ended
Three Months Ended September 30, 2016 September
30, 2015 Average Average
Average Average Balance
Interest Rate Balance
Interest Rate ASSETS
Interest-earning assets Federal funds sold $ 35,492 $ 20 0.22 % $
23,086 $ 2 0.03 % Interest-earning deposits 55,047 32 0.23 % 16,340
5 0.12 % Investment securities - taxable 530,228 2,446 1.84 %
401,702 2,149 2.12 % Investment securities - non-taxable (1)
186,074 1,151 3.73 % 154,050 1,125 4.39 % Loans receivable (2)(3)
2,151,103 25,313 4.69 %
1,709,337 20,297 4.72 % Total interest-earning
assets (1) 2,957,944 28,962 3.98 % 2,304,515 23,578 4.17 %
Non-interest-earning assets Cash and due from banks 39,875 31,384
Allowance for loan losses (14,301 ) (16,427 ) Other assets
290,100 206,545 $ 3,273,618 $
2,526,017
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities Interest-bearing deposits $ 1,896,156
$ 1,875 0.39 % $ 1,568,777 $ 1,566 0.40 % Borrowings 510,738 2,128
1.66 % 303,521 1,729 2.26 % Subordinated debentures 37,092
549 5.89 % 32,737
507 6.14 % Total interest-bearing liabilities 2,443,986 4,552 0.74
% 1,905,035 3,802 0.79 % Non-interest-bearing liabilities
Demand deposits 462,253 343,780 Accrued interest payable and other
liabilities 34,144 14,891 Stockholders' equity 333,235
262,311 $ 3,273,618 $ 2,526,017
Net interest income/spread $ 24,410 3.24 % $ 19,776
3.38 % Net interest income as a percent of average interest
earning assets (1) 3.37 % 3.51 % (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)
Nine Months Ended
Nine Months Ended September 30, 2016 September 30,
2015 Average Average Average
Average Balance Interest
Rate Balance Interest
Rate ASSETS Interest-earning assets Federal funds
sold $ 13,812 $ 23 0.22 % $ 10,563 $ 11 0.14 % Interest-earning
deposits 34,624 59 0.23 % 11,927 10 0.11 % Investment securities -
taxable 486,374 7,621 2.09 % 375,548 6,356 2.26 % Investment
securities - non-taxable (1) 183,142 3,583 3.63 % 145,576 3,281
3.96 % Loans receivable (2)(3) 1,873,614
65,854 4.70 % 1,528,662 55,140
4.83 % Total interest-earning assets (1) 2,591,566 77,140 4.05 %
2,072,276 64,798 4.25 % Non-interest-earning assets Cash and
due from banks 36,220 30,729 Allowance for loan losses (14,334 )
(16,557 ) Other assets 243,021 174,363
$ 2,856,473 $ 2,260,811
LIABILITIES
AND SHAREHOLDERS' EQUITY Interest-bearing liabilities
Interest-bearing deposits $ 1,680,560 $ 4,923 0.39 % $ 1,347,882 $
4,035 0.40 % Borrowings 438,324 5,608 1.71 % 340,593 4,747 1.86 %
Subordinated debentures 34,144 1,556
6.09 % 32,698 1,504 6.15 % Total
interest-bearing liabilities 2,153,028 12,087 0.75 % 1,721,173
10,286 0.80 % Non-interest-bearing liabilities Demand
deposits 387,768 303,309 Accrued interest payable and other
liabilities 26,397 14,582 Stockholders' equity 289,280
221,747 $ 2,856,473 $ 2,260,811
Net interest income/spread $ 65,053 3.30 % $ 54,512
3.45 % Net interest income as a percent of average interest
earning assets (1) 3.43 % 3.59 % (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)
September 30 December
31 2016 2015 (Unaudited)
Assets Cash and due from banks
$
83,721 $ 48,650 Investment securities, available for sale
557,213 444,982 Investment securities, held to maturity
(fair value of $194,293 and $193,703)
187,027 187,629 Loans
held for sale
7,369 7,917 Loans, net of allowance for loan
losses of $14,524 and $14,534
2,175,995 1,734,597 Premises
and equipment, net
67,265 60,798 Federal Reserve and Federal
Home Loan Bank stock
20,877 13,823 Goodwill
75,596
49,600 Other intangible assets
9,583 7,371 Interest
receivable
12,702 10,535 Cash value of life insurance
73,661 54,504 Other assets
54,649
31,995 Total assets
$ 3,325,658
$ 2,652,401
Liabilities Deposits
Non-interest bearing
$ 479,771 $ 335,955 Interest
bearing
1,856,391 1,544,198
Total deposits
2,336,162 1,880,153 Borrowings
571,889 449,347 Subordinated debentures
37,418 32,797
Interest payable
1,015 507 Other liabilities
33,649 22,765 Total liabilities
2,980,133 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,
66,000,000 shares Issued, 22,172,103 and 17,909,831 shares
Outstanding, 22,143,228 and 17,909,831 shares
- - Additional
paid-in capital
181,901 106,370 Retained earnings
161,026 148,685 Accumulated other comprehensive income
(loss)
2,598 (723 ) Total
stockholders’ equity
345,525
266,832 Total liabilities and stockholders’ equity
$
3,325,658 $ 2,652,401
HORIZON
BANCORP AND SUBSIDIARIES Condensed Consolidated Statements
of Income
(Dollar Amounts in Thousands, Except Per
Share Data, Unaudited)
Three Months Ended
Nine Months Ended September 30
September 30 2016 2015
2016 2015 (Unaudited)
(Unaudited) (Unaudited)
(Unaudited) Interest Income Loans
receivable
$ 25,313 $ 20,297
$ 65,854 $
55,140 Investment securities Taxable
2,498 2,156
7,703 6,377 Tax exempt
1,151
1,125
3,583
3,281 Total interest income
28,962
23,578
77,140
64,798
Interest Expense Deposits
1,875 1,566
4,923 4,035 Borrowed funds
2,128
1,729
5,608 4,747 Subordinated debentures
549
507
1,556
1,504 Total interest expense
4,552 3,802
12,087 10,286
Net Interest
Income 24,410 19,776
65,053 54,512 Provision for
loan losses
455 300
1,219 2,820
Net
Interest Income after Provision for Loan Losses
23,955 19,476
63,834 51,692
Non-interest
Income Service charges on deposit accounts
1,483 1,359
4,056 3,443 Wire transfer fees
292 160
588 493
Interchange fees
2,016 1,625
5,137 4,093 Fiduciary
activities
1,653 1,520
4,753 4,033 Gain on sale of
investment securities (includes $0 for the three months ended and
$875 for the nine months ended September 30, 2016 and $0 for the
three months ended and $124 for the nine
months ended September 30, 2015,
related to accumulated other comprehensive earnings
reclassifications)
- -
875 124 Gain on sale of
mortgage loans
3,528 2,794
9,171 7,815 Mortgage
servicing income net of impairment
409 246
1,356 725
Increase in cash value of bank owned life insurance
449 374
1,145 889 Death benefit on bank owned life insurance
- -
- 145 Other income
226
322
708
892 Total non-interest income
10,056
8,400
27,789
22,652
Non-interest Expense
Salaries and employee benefits
12,210 10,652
32,592
27,541 Net occupancy expenses
2,174 1,723
6,011 4,649
Data processing
1,616 1,281
3,855 3,170 Professional
fees
612 409
2,190 1,596 Outside services and
consultants
2,686 3,209
5,983 4,753 Loan expense
1,482 1,351
4,086 3,975 FDIC insurance expense
465 423
1,279 1,099 Other losses
107 246
510 351 Other expense
3,468
2,941
9,616
7,819 Total non-interest expense
24,820
22,235
66,122
54,953
Income Before Income Tax
9,191 5,641
25,501 19,391 Income tax expense
(includes $0 for the three months ended and $306 for the nine
months ended September 30, 2016 and $0 for the three months ended
and $43 for the nine months ended September 30, 2015, related to
income tax expense from reclassification items)
2,589
1,353
7,192
5,017
Net Income 6,602 4,288
18,309 14,374 Preferred stock dividend
-
(31 )
(42 )
(94 )
Net Income Available to Common Shareholders
$ 6,602 $ 4,257
$
18,267 $ 14,280
Basic Earnings Per
Share $ 0.31 $ 0.24
$ 0.95 $ 0.95
Diluted Earnings Per Share 0.30 0.24
0.94 0.92
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161026005393/en/
Horizon BancorpMark E. SecorChief Financial Officer(219)
873-2611Fax: (219) 874-9280
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