(NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the
“Company”) today announced its unaudited financial results for the
three-month and nine-month periods ended September 30, 2019. All
share data has been adjusted to reflect Horizon’s three-for-two
stock split effective June 15, 2018.
SUMMARY:
- Net income for the quarter ended
September 30, 2019 was $20.5 million, or $0.46 diluted earnings per
share, compared to $13.1 million, or $0.34 diluted earnings per
share, for the quarter ended September 30, 2018. This represents
the highest quarterly net income and diluted earnings per share in
the Company’s history.
- Core net income for the quarter
ended September 30, 2019 increased 54.4% to $20.3 million, or $0.45
diluted earnings per share, compared to $13.2 million, or $0.34
diluted earnings per share, for the same period in 2018. This
represents the highest quarterly core net income and core diluted
earnings per share in the Company’s history. (See the “Non-GAAP
Reconciliation of Net Income and Diluted Earnings per Share” table
on page 4 for a description of the elements of core net
income.)
- Net income for the first nine
months of 2019 was $48.0 million, or $1.11 diluted earnings per
share, compared to $40.0 million, or $1.04 diluted earnings per
share, for the first nine months of 2018. This represents the
highest year-to-date net income and diluted earnings per share as
of September 30th in the Company’s history.
- Core net income for the first nine
months of 2019 was $52.1 million, or $1.21 diluted earnings per
share, compared to $39.9 million, or $1.04 diluted earnings per
share, for the first nine months of 2018. This represents the
highest year-to-date core net income and core diluted earnings per
share as of September 30th in the Company’s history. (See the
“Non-GAAP Reconciliation of Net Income and Diluted Earnings per
Share” table on page 4 for a description of the elements of core
net income.)
- Net interest margin for the quarter
ended September 30, 2019 was 3.82% compared to 3.73% and 3.67% for
the quarters ended June 30, 2019 and September 30, 2018,
respectively. The increase in net interest margin from the second
quarter of 2019 and third quarter of 2018 reflects an increase in
the yield of interest-earning assets as loans continue to reprice
upwards and a decrease in cost of borrowings, along with a
stabilization in deposit pricing.
- Core net interest margin for the
quarter ended September 30, 2019 was 3.67% compared to 3.61% and
3.59% for the quarters ended June 30, 2019 and September 30, 2018,
respectively. (See the “Non-GAAP Reconciliation of Net Interest
Margin” table on page 5 for a description of the elements of core
net interest margin.)
- Return on average assets was 1.60%
for the third quarter of 2019 compared to 1.26% for the third
quarter of 2018. Return on average assets was 1.33% for both the
first nine months of 2019 and 2018.
- Core return on average assets for
the third quarter of 2019 was 1.58% compared to 1.27% for the third
quarter of 2018. Core return on average assets was 1.44% for the
first nine months of 2019 compared to 1.32% for the first nine
months of 2018. (See the “Non-GAAP Reconciliation of Return on
Average Assets and Return on Average Common Equity” table on page
11 for the description of core return on average assets.)
- Return on average equity was 12.72%
for the third quarter of 2019 compared to 10.87% for the third
quarter of 2018. Return on average equity was 10.88% for the first
nine months of 2019 compared to 11.43% for the first nine months of
2018.
- Core return on average equity for
the third quarter of 2019 was 12.59% compared to 10.95% for the
third quarter of 2018. Core return on average equity was 11.83% for
the first nine months of 2019 compared to 11.41% for the first nine
months of 2018. (See the “Non-GAAP Reconciliation of Return on
Average Assets and Return on Average Common Equity” table on page
11 for the description of core return on average assets.)
- Horizon’s tangible book value per
share increased to $10.31 at September 30, 2019 compared to $9.91
and $9.04 at June 30, 2019 and September 30, 2018, respectively.
This represents the highest tangible book value per share in the
Company’s history.
- On July 16, 2019, Horizon’s Board
of Directors authorized a stock repurchase program for up to
2,250,000 shares of Horizon’s issued and outstanding common stock,
no par value. As of September 30, 2019, Horizon had repurchased a
total of 99,407 shares at an average price per share of
$16.04.
- Horizon consolidated its two Midland, Michigan full-service
branches into one location on September 6, 2019.
Craig Dwight, Chairman and CEO of Horizon,
commented: “Horizon’s 2019 third quarter and year-to-date
performance resulted in record earnings and demonstrate that our
long range strategic plan to improve efficiency through an increase
in mass and scale is working. Third quarter 2019 earnings increased
to $20.5 million, or $0.46 diluted earnings per share, when
compared to prior year period earnings of $13.1 million, or $0.34
diluted earnings per share. Year-to-date earnings increased to
$48.0 million, or $1.11 diluted earnings per share, compared to
$40.0 million, or $1.04 diluted earnings per share, for the prior
year period.”
Dwight added, “Horizon’s growth story continues
with total assets now reaching approximately $5.2 billion at
September 30, 2019. In addition to the loans acquired from our
acquisition of Salin Bank and Trust Company during the first
quarter of 2019, which totaled approximately $568.9 million, we
continue to experience year-to-date loan growth of $118.3 million
from the markets of Fort Wayne, Grand Rapids, Indianapolis and
Kalamazoo.”
Dwight concluded, “Horizon continues to maximize
operational leverage through an increase in mass and scale as
evident by the decrease in our adjusted efficiency ratio. Horizon’s
adjusted efficiency ratio, excluding merger expenses, loss on sale
of investment securities and death benefit on bank owned life
insurance decreased to 54.89% for the third quarter of 2019
compared to 57.62% for the second quarter of 2019 and 60.17% for
the third quarter of 2018. In addition, annualized non-interest
expense to average assets, excluding merger expenses, fell to 2.34%
for the third quarter of 2019 compared to 2.39% for the second
quarter of 2019 and 2.48% for the third quarter of 2018. Our team
continues to leverage new technologies and develop operational
efficiencies. In addition, Horizon consolidated its two Midland,
Michigan full-service branches into one location on September 6,
2019 in our continued efforts to improve branch efficiencies.”
Income Statement Highlights
Net income for the third quarter of 2019 was
$20.5 million, or $0.46 diluted earnings per share, compared to
$16.6 million, or $0.37 diluted earnings per share, for the second
quarter of 2019 and $13.1 million, or $0.34 diluted earnings per
share, for the third quarter of 2018. Excluding acquisition-related
expenses, loss on sale of investment securities and death benefit
on bank owned life insurance (“core net income”), core net income
for the third quarter of 2019 was $20.3 million, or $0.46 diluted
earnings per share, compared to $17.6 million, or $0.39 diluted
earnings per share, for the second quarter of 2019 and $13.2
million, or $0.34 diluted earnings per share, for the third quarter
of 2018.
The increase in net income and diluted earnings
per share from the second quarter of 2019 to the third quarter of
2019 reflects increases in net interest income of $1.9 million and
non-interest income of $616,000, in addition to decreases in
non-interest expense of $1.5 million and provision for loan losses
of $520,000, offset by an increase in income tax expense of
$699,000.
The increase in net income from the third
quarter of 2018 when compared to the same period of 2019 reflects
increases in net interest income of $9.7 million and non-interest
income of $2.8 million, in addition to a decrease in provision for
loan losses of $800,000, offset by increases in non-interest
expense of $4.4 million and income tax expense of $1.4 million.
Net income for the nine months ended September
30, 2019 was $48.0 million, or $1.11 diluted earnings per share,
compared to $40.0 million, or $1.04 diluted earnings per share, for
the nine months ended September 30, 2018. Core net income for the
nine months ended September 30, 2019 was $52.1 million, or $1.21
diluted earnings per share, compared to $39.9 million, or $1.04
diluted earnings per share, for the nine months ended September 30,
2018. This represents a 16.3% increase in core diluted earnings per
share for the first nine months of 2019 compared to the same period
in 2018.
The increase in net income when comparing the
first nine months of 2019 to the prior year period reflects
increases in net interest income of $18.5 million and non-interest
income of $5.2 million, in addition to a decrease in provision for
loan losses of $742,000, offset by increases in non-interest
expense of $15.0 million and income tax expense of $1.5
million.
|
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 |
|
June
30 |
|
September
30 |
|
September
30 |
|
September
30 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Non-GAAP Reconciliation of Net Income |
|
|
|
|
|
|
|
|
|
Net income
as reported |
$ |
20,537 |
|
|
$ |
16,642 |
|
|
$ |
13,065 |
|
|
$ |
47,995 |
|
|
$ |
39,984 |
|
Merger
expenses |
|
- |
|
|
|
1,532 |
|
|
|
- |
|
|
|
5,650 |
|
|
|
- |
|
Tax
effect |
|
- |
|
|
|
(295 |
) |
|
|
- |
|
|
|
(987 |
) |
|
|
- |
|
Net income excluding merger expenses |
|
20,537 |
|
|
|
17,879 |
|
|
|
13,065 |
|
|
|
52,658 |
|
|
|
39,984 |
|
|
|
|
|
|
|
|
|
|
|
Loss on sale
of investment securities |
|
- |
|
|
|
100 |
|
|
|
122 |
|
|
|
85 |
|
|
|
111 |
|
Tax
effect |
|
- |
|
|
|
(21 |
) |
|
|
(25 |
) |
|
|
(18 |
) |
|
|
(23 |
) |
Net income excluding loss on sale of investment securities |
|
20,537 |
|
|
|
17,958 |
|
|
|
13,162 |
|
|
|
52,725 |
|
|
|
40,072 |
|
|
|
|
|
|
|
|
|
|
|
Death
benefit on bank owned life insurance ("BOLI") |
|
(213 |
) |
|
|
(367 |
) |
|
|
- |
|
|
|
(580 |
) |
|
|
(154 |
) |
Net income excluding death benefit on BOLI |
|
20,324 |
|
|
|
17,591 |
|
|
|
13,162 |
|
|
|
52,145 |
|
|
|
39,918 |
|
|
|
|
|
|
|
|
|
|
|
Core Net Income |
$ |
20,324 |
|
|
$ |
17,591 |
|
|
$ |
13,162 |
|
|
$ |
52,145 |
|
|
$ |
39,918 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation of Diluted Earnings per
Share |
|
|
|
|
|
|
|
|
|
Diluted
earnings per share ("EPS") as reported |
$ |
0.46 |
|
|
$ |
0.37 |
|
|
$ |
0.34 |
|
|
$ |
1.11 |
|
|
$ |
1.04 |
|
Merger
expenses |
|
- |
|
|
|
0.03 |
|
|
|
- |
|
|
|
0.13 |
|
|
|
- |
|
Tax
effect |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(0.02 |
) |
|
|
- |
|
Diluted EPS excluding merger expenses |
|
0.46 |
|
|
|
0.40 |
|
|
|
0.34 |
|
|
|
1.22 |
|
|
|
1.04 |
|
|
|
|
|
|
|
|
|
|
|
Loss on sale
of investment securities |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Tax
effect |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Diluted EPS excluding loss on sale of investment securities |
|
0.46 |
|
|
|
0.40 |
|
|
|
0.34 |
|
|
|
1.22 |
|
|
|
1.04 |
|
|
|
|
|
|
|
|
|
|
|
Death
benefit on BOLI |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
Diluted EPS excluding death benefit on BOLI |
|
0.45 |
|
|
|
0.39 |
|
|
|
0.34 |
|
|
|
1.21 |
|
|
|
1.04 |
|
|
|
|
|
|
|
|
|
|
|
Core Diluted EPS |
$ |
0.45 |
|
|
$ |
0.39 |
|
|
$ |
0.34 |
|
|
$ |
1.21 |
|
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
|
|
Horizon’s net interest margin increased to 3.82%
for the third quarter of 2019 when compared to 3.73% for the second
quarter of 2019. The increase in net interest margin reflects an
increase in the yield on interest-earning assets of six basis
points as loans continued to reprice upwards along with an increase
in commercial loan fees of $811,000 when compared to the second
quarter of 2019. The cost of interest-bearing liabilities decreased
by three basis points primarily from a decrease in the cost of
borrowings. In addition, deposit pricing is reducing within the
markets we serve in alignment with the recent decline in general
market short-term interest rates.
Net interest margin increased to 3.82% for the
third quarter of 2019 when compared to 3.67% for the third quarter
of 2018. The increase in net interest margin was due to an increase
in yield on interest-earning assets of 29 basis points, offset by
an increase in the cost on interest-bearing liabilities of 22 basis
points. The increase in the yield of interest-earning assets was
primarily due to the increase in the yields on loans receivable of
34 basis points and non-taxable investment securities of 25 basis
points. The increase in the yields on loans receivable was the
result of loans repricing upwards along with an increase in
commercial loan fees of $1.2 million when comparing the third
quarter of 2019 to the third quarter of 2018. The cost of
interest-bearing deposits increased by 33 basis points and was
partially offset by a decrease in the cost on borrowings of 12
basis points.
Net interest margin decreased to 3.72% during
the first nine months of 2019 when compared to 3.74% for the first
nine months of 2018. This decrease reflects an increase in the cost
of interest-bearing liabilities of 40 basis points, offset by an
increase in the yield of interest-earning assets of 26 basis
points. The increase in the cost of interest-bearing liabilities
was due to an increase in the cost of interest-bearing deposits of
48 basis points and borrowings of 28 basis points. The increase in
the yield of interest-earning assets was due to increases in the
yields on loans receivable of 26 basis points, non-taxable
investment securities of 37 basis points and taxable investment
securities of 15 basis points.
Net interest margin, excluding
acquisition-related purchase accounting adjustments (“core net
interest margin”), was 3.67% for the third quarter of 2019 compared
to 3.61% for the prior quarter and 3.59% for the third quarter of
2018. Interest income from acquisition-related purchase accounting
adjustments was $1.7 million, $1.3 million and $789,000 for the
three months ended September 30, 2019, June 30, 2019 and September
30, 2018, respectively. The increase in the core net interest
margin during the third quarter of 2019 was due to a decrease of
the cost on borrowings and an increase in the yield on earning
assets from higher mortgage warehouse lending balances, loans
continuing to reprice higher and the addition of acquired Salin
loans.
|
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 |
|
September
30 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Non-GAAP Reconciliation of Net Interest
Margin |
|
|
|
|
|
|
|
|
|
Net interest
income as reported |
$ |
43,463 |
|
|
$ |
41,529 |
|
|
$ |
33,772 |
|
|
$ |
119,272 |
|
|
$ |
100,733 |
|
|
|
|
|
|
|
|
|
|
|
Average
interest-earning assets |
|
4,623,985 |
|
|
|
4,566,674 |
|
|
|
3,717,139 |
|
|
|
4,376,841 |
|
|
|
3,610,277 |
|
|
|
|
|
|
|
|
|
|
|
Net interest
income as a percentage of average interest-earning assets ("Net
Interest Margin") |
|
3.82 |
% |
|
|
3.73 |
% |
|
|
3.67 |
% |
|
|
3.72 |
% |
|
|
3.74 |
% |
|
|
|
|
|
|
|
|
|
|
Acquisition-related purchase accounting adjustments ("PAUs") |
$ |
(1,739 |
) |
|
$ |
(1,299 |
) |
|
$ |
(789 |
) |
|
$ |
(4,548 |
) |
|
$ |
(4,460 |
) |
|
|
|
|
|
|
|
|
|
|
Core net interest income |
$ |
41,724 |
|
|
$ |
40,230 |
|
|
$ |
32,983 |
|
|
$ |
114,724 |
|
|
$ |
96,273 |
|
|
|
|
|
|
|
|
|
|
|
Core net interest margin |
|
3.67 |
% |
|
|
3.61 |
% |
|
|
3.59 |
% |
|
|
3.58 |
% |
|
|
3.58 |
% |
|
|
|
|
|
|
|
|
|
|
Lending Activity
Total loans increased $653.3 million from $3.014
billion as of December 31, 2018 to $3.668 billion as of September
30, 2019. Excluding acquired loans, total loans increased $84.4
million during the first nine months of 2019 as consumer loans
increased by $33.7 million and mortgage warehouse loans increased
by $81.5 million, offset by a decrease in commercial loans of $28.2
million and residential mortgage loans of $2.7 million.
|
Loan Growth
by Type, Excluding Acquired Loans |
(Dollars in
Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30 |
|
December
31 |
|
Amount |
|
Acquired |
|
Amount |
|
Percent |
|
|
2019 |
|
|
2018 |
|
Change |
|
Loans |
|
Change |
|
Change |
Commercial |
$ |
2,046,165 |
|
$ |
1,721,590 |
|
$ |
324,575 |
|
$ |
(352,798 |
) |
|
$ |
(28,223 |
) |
|
-1.6 |
% |
Residential
mortgage |
|
796,497 |
|
|
668,141 |
|
|
128,356 |
|
|
(131,008 |
) |
|
|
(2,652 |
) |
|
-0.4 |
% |
Consumer |
|
668,332 |
|
|
549,481 |
|
|
118,851 |
|
|
(85,112 |
) |
|
|
33,739 |
|
|
6.1 |
% |
Subtotal |
|
3,510,994 |
|
|
2,939,212 |
|
|
571,782 |
|
|
(568,918 |
) |
|
|
2,864 |
|
|
0.1 |
% |
Held for
sale loans |
|
1,060 |
|
|
1,038 |
|
|
22 |
|
|
- |
|
|
|
22 |
|
|
2.1 |
% |
Mortgage
warehouse loans |
|
155,631 |
|
|
74,120 |
|
|
81,511 |
|
|
- |
|
|
|
81,511 |
|
|
110.0 |
% |
Total loans |
$ |
3,667,685 |
|
$ |
3,014,370 |
|
$ |
653,315 |
|
$ |
(568,918 |
) |
|
$ |
84,397 |
|
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
During the first nine months of 2019, Horizon Bank (the “Bank”)
originated approximately $299.5 million of commercial loans, which
is a 17% increase compared to the same period in 2018; however,
only 56.5%, or $169.1 million, of these loan originations had been
funded as of September 30, 2019. These originations were offset by
commercial loan payoffs totaling approximately $226.0 million
during the first nine months of 2019, which is a 69% increase in
payoffs compared to the same period in 2018, as there was an
increase in clients moving projects that had reached stabilization
into the long-term, fixed rate conduit financing market and
properties being sold. During the first nine months of 2018, the
Bank originated approximately $256.5 million of commercial loans;
however, only 56.2%, or $144.1 million, of these loan originations
had been funded as of September 30, 2018. These originations were
offset by commercial loan payoffs totaling approximately $134.1
million during the first nine months of 2018.
Residential mortgage lending activity for the
three months ended September 30, 2019 generated $2.7 million in
income from the gain on sale of mortgage loans, an increase of
$624,000 from the second quarter of 2019 and $863,000 from the
third quarter of 2018. Total origination volume for the third
quarter of 2019, including loans placed into portfolio, totaled
$121.1 million, representing an increase of 8.7% from the second
quarter of 2019 and an increase of 20.4% from the third quarter of
2018. Total origination volume for the third quarter of 2019 of
loans sold to the secondary market totaled $95.0 million,
representing an increase of 56.7% from the second quarter of 2019
and an increase of 60.3% from the third quarter of 2018.
Revenue derived from Horizon’s residential
mortgage and warehouse lending activities was 5.8% of Horizon’s
total revenue for the nine months ended September 30, 2019, which
is comparable to the same prior year period.
The provision for loan losses totaled $376,000
for the third quarter of 2019 compared to $896,000 for the second
quarter of 2019 and $1.2 million for the third quarter of 2018.
The provision for loan losses totaled $1.6
million for the first nine months of 2019 compared to $2.4 million
for the first nine months of 2018.
The ratio of the allowance for loan losses to
total loans decreased to 0.49% as of September 30, 2019 from 0.59%
at December 31, 2018. The decrease in the ratio of the allowance
for loan losses to total loans is primarily due to increased loan
balances from the Salin acquisition. The ratio of the allowance for
loan losses to total loans, excluding loans with credit-related
purchase accounting adjustments, was 0.65% as of September 30, 2019
compared to 0.72% as of December 31, 2018. Loan loss reserves plus
credit-related loan discounts on acquired loans as a percentage of
total loans was 1.07% as of September 30, 2019 compared to 0.98% as
of December 31, 2018.
|
Non-GAAP
Allowance for Loan and Lease Loss Detail |
As of
September 30, 2019 |
(Dollars in
Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-discountLoanBalance |
|
Allowancefor LoanLosses(ALLL) |
|
LoanDiscount |
|
ALLL+LoanDiscount |
|
Loans,net |
|
ALLL/ Pre-discountLoanBalance |
|
LoanDiscount/ Pre-discountLoanBalance |
|
ALLL + LoanDiscount/ Pre-discountLoanBalance |
Horizon
Legacy |
$ |
2,779,961 |
|
$ |
17,946 |
|
N/A |
|
$ |
17,946 |
|
$ |
2,762,015 |
|
0.65 |
% |
|
0.00 |
% |
|
0.65 |
% |
Heartland |
|
5,244 |
|
|
- |
|
|
589 |
|
|
589 |
|
|
4,655 |
|
0.00 |
% |
|
11.23 |
% |
|
11.23 |
% |
Summit |
|
16,191 |
|
|
- |
|
|
987 |
|
|
987 |
|
|
15,204 |
|
0.00 |
% |
|
6.10 |
% |
|
6.10 |
% |
Peoples |
|
71,941 |
|
|
- |
|
|
1,669 |
|
|
1,669 |
|
|
70,272 |
|
0.00 |
% |
|
2.32 |
% |
|
2.32 |
% |
Kosciusko |
|
30,580 |
|
|
- |
|
|
528 |
|
|
528 |
|
|
30,052 |
|
0.00 |
% |
|
1.73 |
% |
|
1.73 |
% |
LaPorte |
|
70,442 |
|
|
10 |
|
|
2,461 |
|
|
2,471 |
|
|
67,971 |
|
0.01 |
% |
|
3.49 |
% |
|
3.50 |
% |
CNB |
|
3,498 |
|
|
- |
|
|
88 |
|
|
88 |
|
|
3,410 |
|
0.00 |
% |
|
2.52 |
% |
|
2.52 |
% |
Lafayette |
|
63,805 |
|
|
- |
|
|
519 |
|
|
519 |
|
|
63,286 |
|
0.00 |
% |
|
0.81 |
% |
|
0.81 |
% |
Wolverine |
|
136,829 |
|
|
- |
|
|
729 |
|
|
729 |
|
|
136,100 |
|
0.00 |
% |
|
0.53 |
% |
|
0.53 |
% |
Salin |
|
489,194 |
|
|
- |
|
|
13,797 |
|
|
13,797 |
|
|
475,397 |
|
0.00 |
% |
|
2.82 |
% |
|
2.82 |
% |
Total |
$ |
3,667,685 |
|
$ |
17,956 |
|
$ |
21,367 |
|
$ |
39,323 |
|
$ |
3,628,362 |
|
0.49 |
% |
|
0.58 |
% |
|
1.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2019, non-performing loans
totaled $19.2 million, which reflects a two basis point increase in
non-performing loans to total loans, or a $4.0 million increase
from $15.2 million in non-performing loans as of December 31, 2018.
Compared to December 31, 2018, non-performing commercial loans
increased by $1.3 million, non-performing real estate loans
increased by $2.2 million and non-performing consumer loans
increased by $485,000. Other real estate owned and repossessed
assets totaled $4.0 million as of September 30, 2019 which is an
increase of $2.0 million from December 31, 2018. The majority of
this increase was due to other real estate owned properties
acquired in the Salin transaction, including the closed branches,
totaling $1.7 million.
As of September 30, 2019, substandard loans
totaled $62.1 million, which is an increase of $14.4 million from
June 30, 2019. This increase in substandard loans was primarily due
to four unrelated relationships, each from a different industry,
being downgraded during the quarter. We do not believe this
increase to be an indication of the overall quality of our loan
portfolio as evident by our steady non-performing loans to total
loans ratio of 0.52% as of September 30, 2019 and other
non-performing and substandard relationships showing
improvement.
Expense Management
Total non-interest expense was $1.5 million
lower in the third quarter of 2019 when compared to the second
quarter of 2019. FDIC insurance, other expense, professional fees,
and outside services and consultants decreased by $638,000,
$572,000, $263,000 and $103,000, respectively. Offsetting these
decreases was an increase in loan expense of $150,000. FDIC
insurance decreased due to assessment credits the Bank received
during the third quarter of 2019 as the FDIC reserve is currently
overfunded. Excluding merger expenses, total non-interest expense
held steady at $30.1 million when comparing the third quarter of
2019 to the second quarter of 2019.
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
September 30 |
|
June 30 |
|
|
|
|
|
|
2019 |
|
|
|
2019 |
|
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest Expense |
Actual |
|
MergerExpenses |
|
Adjusted |
|
Actual |
|
MergerExpenses |
|
Adjusted |
|
|
AmountChange |
|
PercentChange |
Salaries and employee benefits |
$ |
16,948 |
|
|
$ |
- |
|
$ |
16,948 |
|
|
$ |
16,951 |
|
|
$ |
(482 |
) |
|
$ |
16,469 |
|
|
$ |
479 |
|
|
2.9 |
% |
Net occupancy expenses |
|
3,131 |
|
|
|
- |
|
|
3,131 |
|
|
|
3,148 |
|
|
|
(75 |
) |
|
|
3,073 |
|
|
|
58 |
|
|
1.9 |
% |
Data
processing |
|
2,140 |
|
|
|
- |
|
|
2,140 |
|
|
|
2,139 |
|
|
|
(68 |
) |
|
|
2,071 |
|
|
|
69 |
|
|
3.3 |
% |
Professional
fees |
|
335 |
|
|
|
- |
|
|
335 |
|
|
|
598 |
|
|
|
(153 |
) |
|
|
445 |
|
|
|
(110 |
) |
|
-24.7 |
% |
Outside
services and consultants |
|
1,552 |
|
|
|
- |
|
|
1,552 |
|
|
|
1,655 |
|
|
|
(176 |
) |
|
|
1,479 |
|
|
|
73 |
|
|
4.9 |
% |
Loan
expense |
|
2,198 |
|
|
|
- |
|
|
2,198 |
|
|
|
2,048 |
|
|
|
(2 |
) |
|
|
2,046 |
|
|
|
152 |
|
|
7.4 |
% |
FDIC deposit
insurance |
|
(273 |
) |
|
|
- |
|
|
(273 |
) |
|
|
365 |
|
|
|
- |
|
|
|
365 |
|
|
|
(638 |
) |
|
-174.8 |
% |
Other
losses |
|
90 |
|
|
|
- |
|
|
90 |
|
|
|
169 |
|
|
|
(69 |
) |
|
|
100 |
|
|
|
(10 |
) |
|
-10.0 |
% |
Other
expenses |
|
3,939 |
|
|
|
- |
|
|
3,939 |
|
|
|
4,511 |
|
|
|
(507 |
) |
|
|
4,004 |
|
|
|
(65 |
) |
|
-1.6 |
% |
Total non-interest expense |
$ |
30,060 |
|
|
$ |
- |
|
$ |
30,060 |
|
|
$ |
31,584 |
|
|
$ |
(1,532 |
) |
|
$ |
30,052 |
|
|
$ |
8 |
|
|
0.0 |
% |
Annualized Non-interest Exp. to Avg. Assets |
|
2.34 |
% |
|
|
|
|
2.34 |
% |
|
|
2.51 |
% |
|
|
|
|
2.39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest expense was $4.4 million
higher during the third quarter of 2019 compared to the same period
of 2018. Salaries and employee benefits, other expense, net
occupancy expense, loan expense, data processing and outside
services and consultants increased $2.6 million, $836,000,
$636,000, $476,000, $381,000 and $348,000, respectively. These
increases were offset by a decrease of $669,000 in FDIC insurance
and $102,000 in professional fees. FDIC insurance decreased due to
assessment credits the Bank received during the third quarter of
2019 as the FDIC reserve is currently overfunded.
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
September 30 |
|
September 30 |
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
Adjusted |
Non-interest Expense |
Actual |
|
MergerExpenses |
|
Adjusted |
|
Actual |
|
MergerExpenses |
|
Adjusted |
AmountChange |
|
PercentChange |
Salaries and employee benefits |
$ |
16,948 |
|
|
$ |
- |
|
$ |
16,948 |
|
|
$ |
14,343 |
|
|
$ |
- |
|
$ |
14,343 |
|
|
$ |
2,605 |
|
|
18.2 |
% |
Net occupancy expenses |
|
3,131 |
|
|
|
- |
|
|
3,131 |
|
|
|
2,495 |
|
|
|
- |
|
|
2,495 |
|
|
|
636 |
|
|
25.5 |
% |
Data
processing |
|
2,140 |
|
|
|
- |
|
|
2,140 |
|
|
|
1,759 |
|
|
|
- |
|
|
1,759 |
|
|
|
381 |
|
|
21.7 |
% |
Professional
fees |
|
335 |
|
|
|
- |
|
|
335 |
|
|
|
437 |
|
|
|
- |
|
|
437 |
|
|
|
(102 |
) |
|
-23.3 |
% |
Outside
services and consultants |
|
1,552 |
|
|
|
- |
|
|
1,552 |
|
|
|
1,204 |
|
|
|
- |
|
|
1,204 |
|
|
|
348 |
|
|
28.9 |
% |
Loan
expense |
|
2,198 |
|
|
|
- |
|
|
2,198 |
|
|
|
1,722 |
|
|
|
- |
|
|
1,722 |
|
|
|
476 |
|
|
27.6 |
% |
FDIC deposit
insurance |
|
(273 |
) |
|
|
- |
|
|
(273 |
) |
|
|
396 |
|
|
|
- |
|
|
396 |
|
|
|
(669 |
) |
|
-168.9 |
% |
Other
losses |
|
90 |
|
|
|
- |
|
|
90 |
|
|
|
161 |
|
|
|
- |
|
|
161 |
|
|
|
(71 |
) |
|
-44.1 |
% |
Other
expenses |
|
3,939 |
|
|
|
- |
|
|
3,939 |
|
|
|
3,103 |
|
|
|
- |
|
|
3,103 |
|
|
|
836 |
|
|
26.9 |
% |
Total non-interest expense |
$ |
30,060 |
|
|
$ |
- |
|
$ |
30,060 |
|
|
$ |
25,620 |
|
|
$ |
- |
|
$ |
25,620 |
|
|
$ |
4,440 |
|
|
17.3 |
% |
Annualized Non-interest Exp. to Avg. Assets |
|
2.34 |
% |
|
|
|
|
2.34 |
% |
|
|
2.48 |
% |
|
|
|
|
2.48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest expense was $15.0 million higher during the
first nine months of 2019 when compared to the first nine months of
2018. Salaries and employee benefits, other expenses, outside
services and consultants, loan expense, data processing and net
occupancy increased $5.8 million, $3.1 million, $3.0 million, $1.7
million, $1.2 million and $1.1 million, respectively. Offsetting
these increases was a decrease in FDIC insurance of $799,000 and
other losses of $213,000. FDIC insurance decreased due to the
assessment credits the Bank received during the third quarter of
2019 as the FDIC reserve is currently overfunded. Excluding merger
expenses, total non-interest expense increased $9.3 million during
the first nine months of 2019 when compared to the same period of
2018.
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
September 30 |
|
September 30 |
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
Adjusted |
Non-interest Expense |
Actual |
|
MergerExpenses |
|
Adjusted |
|
Actual |
|
MergerExpenses |
|
Adjusted |
AmountChange |
|
PercentChange |
Salaries and
employee benefits |
$ |
48,365 |
|
|
$ |
(484 |
) |
|
$ |
47,881 |
|
|
$ |
42,525 |
|
|
$ |
- |
|
$ |
42,525 |
|
|
$ |
5,356 |
|
|
12.6 |
% |
Net occupancy expenses |
|
9,051 |
|
|
|
(75 |
) |
|
|
8,976 |
|
|
|
7,981 |
|
|
|
- |
|
|
7,981 |
|
|
|
995 |
|
|
12.5 |
% |
Data
processing |
|
6,245 |
|
|
|
(360 |
) |
|
|
5,885 |
|
|
|
5,062 |
|
|
|
- |
|
|
5,062 |
|
|
|
823 |
|
|
16.3 |
% |
Professional
fees |
|
1,426 |
|
|
|
(392 |
) |
|
|
1,034 |
|
|
|
1,314 |
|
|
|
- |
|
|
1,314 |
|
|
|
(280 |
) |
|
-21.3 |
% |
Outside
services and consultants |
|
6,737 |
|
|
|
(2,466 |
) |
|
|
4,271 |
|
|
|
3,735 |
|
|
|
- |
|
|
3,735 |
|
|
|
536 |
|
|
14.4 |
% |
Loan
expense |
|
6,195 |
|
|
|
(2 |
) |
|
|
6,193 |
|
|
|
4,504 |
|
|
|
- |
|
|
4,504 |
|
|
|
1,689 |
|
|
37.5 |
% |
FDIC deposit
insurance |
|
252 |
|
|
|
- |
|
|
|
252 |
|
|
|
1,051 |
|
|
|
- |
|
|
1,051 |
|
|
|
(799 |
) |
|
-76.0 |
% |
Other
losses |
|
363 |
|
|
|
(71 |
) |
|
|
292 |
|
|
|
576 |
|
|
|
- |
|
|
576 |
|
|
|
(284 |
) |
|
-49.3 |
% |
Other
expenses |
|
12,748 |
|
|
|
(1,800 |
) |
|
|
10,948 |
|
|
|
9,651 |
|
|
|
- |
|
|
9,651 |
|
|
|
1,297 |
|
|
13.4 |
% |
Total non-interest expense |
$ |
91,382 |
|
|
$ |
(5,650 |
) |
|
$ |
85,732 |
|
|
$ |
76,399 |
|
|
$ |
- |
|
$ |
76,399 |
|
|
$ |
9,333 |
|
|
12.2 |
% |
Annualized Non-interest Exp. to Avg. Assets |
|
2.53 |
% |
|
|
|
|
2.38 |
% |
|
|
2.54 |
% |
|
|
|
|
2.54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized non-interest expense as a percent of
average assets were 2.34%, 2.51% and 2.48% for the three months
ended September 30, 2019, June 30, 2019 and September 30, 2018,
respectively. Annualized non-interest expense, excluding merger
expenses, as a percent of average assets continue to decline and
were 2.34%, 2.39% and 2.48% for the three months ended September
30, 2019, June 30, 2019 and September 30, 2018, respectively.
Annualized non-interest expense as a percent of
average assets were 2.53% and 2.54% for the first nine months of
2019 and 2018, respectively. Annualized non-interest expense,
excluding merger expenses, as a percent of average assets were
2.38% and 2.54% for the first nine months of 2019 and 2018,
respectively. Horizon’s strategy to build mass and scale continues
to prove effective.
Income tax expense totaled $4.0 million for the
third quarter of 2019, an increase of $699,000 when compared to the
second quarter of 2019 and an increase of $1.4 million when
compared to the third quarter of 2018. The increase in income tax
expense from the second quarter of 2019 and the third quarter of
2018 was primarily due to increases in income before income taxes
of $4.6 million and $8.9 million, respectively, when compared to
the third quarter of 2019.
Income tax expense totaled $9.4 million for the
first nine months of 2019, an increase of $1.5 million when
compared to the first nine months of 2018. The increase in income
tax expense from the first nine months of 2018 was primarily due to
an increase in income before income taxes of $9.5 million when
compared to the same period of 2019.
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 relating to net income, diluted
earnings per share, net interest margin, total loans and loan
growth, the allowance for loan and lease losses, tangible
stockholders’ equity, tangible book value per share, the return on
average assets and the return on average equity. In each case, we
have identified special circumstances that we consider to be
non-recurring and have excluded them, to show the impact of such
events as acquisition-related purchase accounting adjustments,
among others we have identified in our reconciliations. 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. 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 below and 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, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
September
30 |
|
June
30 |
|
March
31 |
|
December
31 |
|
September
30 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
Total
stockholders' equity |
$ |
642,711 |
|
$ |
626,461 |
|
$ |
609,468 |
|
$ |
491,992 |
|
$ |
477,594 |
Less:
Intangible assets |
|
178,896 |
|
|
179,776 |
|
|
176,864 |
|
|
130,270 |
|
|
130,755 |
Total
tangible stockholders' equity |
$ |
463,815 |
|
$ |
446,685 |
|
$ |
432,604 |
|
$ |
361,722 |
|
$ |
346,839 |
|
|
|
|
|
|
|
|
|
|
Common
shares outstanding |
|
44,969,021 |
|
|
45,061,372 |
|
|
45,052,747 |
|
|
38,375,407 |
|
|
38,367,890 |
|
|
|
|
|
|
|
|
|
|
Tangible
book value per common share |
$ |
10.31 |
|
$ |
9.91 |
|
$ |
9.60 |
|
$ |
9.43 |
|
$ |
9.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Calculation and Reconciliation of Efficiency Ratio and Adjusted
Efficiency Ratio |
(Dollars in
Thousands, Unaudited) |
|
Three Months Ended |
|
Nine Months Ended |
|
September 30 |
|
June 30 |
|
September 30 |
|
September 30 |
|
September 30 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Non-GAAP Calculation of Efficiency Ratio |
|
|
|
|
|
|
|
|
|
Non-interest
expense as reported |
$ |
30,060 |
|
|
$ |
31,584 |
|
|
$ |
25,620 |
|
|
$ |
91,382 |
|
|
$ |
76,399 |
|
|
|
|
|
|
|
|
|
|
|
Net interest
income as reported |
|
43,463 |
|
|
|
41,529 |
|
|
|
33,772 |
|
|
|
119,272 |
|
|
|
100,733 |
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income as reported |
|
11,514 |
|
|
|
10,898 |
|
|
|
8,686 |
|
|
|
31,124 |
|
|
|
25,936 |
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense/(Net interest income + Non-interest income)
("Efficiency Ratio") |
|
54.68 |
% |
|
|
60.24 |
% |
|
|
60.34 |
% |
|
|
60.76 |
% |
|
|
60.31 |
% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation of Adjusted Efficiency
Ratio |
|
|
|
|
|
|
|
|
|
Non-interest
expense as reported |
$ |
30,060 |
|
|
$ |
31,584 |
|
|
$ |
25,620 |
|
|
$ |
91,382 |
|
|
$ |
76,399 |
|
Merger
expenses |
|
- |
|
|
|
(1,532 |
) |
|
|
- |
|
|
|
(5,650 |
) |
|
|
- |
|
Non-interest expense excluding merger expenses |
|
30,060 |
|
|
|
30,052 |
|
|
|
25,620 |
|
|
|
85,732 |
|
|
|
76,399 |
|
|
|
|
|
|
|
|
|
|
|
Net interest
income as reported |
|
43,463 |
|
|
|
41,529 |
|
|
|
33,772 |
|
|
|
119,272 |
|
|
|
100,733 |
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income as reported |
|
11,514 |
|
|
|
10,898 |
|
|
|
8,686 |
|
|
|
31,124 |
|
|
|
25,936 |
|
Loss on sale
of investment securities |
|
- |
|
|
|
100 |
|
|
|
122 |
|
|
|
85 |
|
|
|
111 |
|
Death
benefit on bank owned life insurance ("BOLI") |
|
(213 |
) |
|
|
(367 |
) |
|
|
- |
|
|
|
(580 |
) |
|
|
(154 |
) |
Non-interest income excluding loss on sale of investment securities
and death benefit on BOLI |
|
11,301 |
|
|
|
10,631 |
|
|
|
8,808 |
|
|
|
30,629 |
|
|
|
25,893 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted
efficiency ratio |
|
54.89 |
% |
|
|
57.62 |
% |
|
|
60.17 |
% |
|
|
57.19 |
% |
|
|
60.33 |
% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation of Return on Average Assets and Return on Average
Common Equity |
(Dollars in
Thousands, Unaudited) |
|
Three Months Ended |
|
Six Months Ended |
|
September 30 |
|
June 30 |
|
September 30 |
|
September 30 |
|
September 30 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Non-GAAP Reconciliation of Return on Average
Assets |
|
|
|
|
|
|
|
|
|
Average
Assets |
$ |
5,107,259 |
|
|
$ |
5,047,365 |
|
|
$ |
4,105,096 |
|
|
$ |
4,823,601 |
|
|
$ |
4,021,811 |
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets ("ROAA") as reported |
|
1.60 |
% |
|
|
1.32 |
% |
|
|
1.26 |
% |
|
|
1.33 |
% |
|
|
1.33 |
% |
Merger
expenses |
|
0.00 |
% |
|
|
0.12 |
% |
|
|
0.00 |
% |
|
|
0.16 |
% |
|
|
0.00 |
% |
Tax
effect |
|
0.00 |
% |
|
|
-0.02 |
% |
|
|
0.00 |
% |
|
|
-0.03 |
% |
|
|
0.00 |
% |
ROAA excluding merger expenses |
|
1.60 |
% |
|
|
1.42 |
% |
|
|
1.26 |
% |
|
|
1.46 |
% |
|
|
1.33 |
% |
|
|
|
|
|
|
|
|
|
|
Loss on sale
of investment securities |
|
0.00 |
% |
|
|
0.01 |
% |
|
|
0.01 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
Tax
effect |
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
ROAA excluding gain on sale of investment securities |
|
1.60 |
% |
|
|
1.43 |
% |
|
|
1.27 |
% |
|
|
1.46 |
% |
|
|
1.33 |
% |
|
|
|
|
|
|
|
|
|
|
Death
benefit on bank owned life insurance ("BOLI") |
|
-0.02 |
% |
|
|
-0.03 |
% |
|
|
0.00 |
% |
|
|
-0.02 |
% |
|
|
-0.01 |
% |
ROAA excluding death benefit on BOLI |
|
1.58 |
% |
|
|
1.40 |
% |
|
|
1.27 |
% |
|
|
1.44 |
% |
|
|
1.32 |
% |
|
|
|
|
|
|
|
|
|
|
Core ROAA |
|
1.58 |
% |
|
|
1.40 |
% |
|
|
1.27 |
% |
|
|
1.44 |
% |
|
|
1.32 |
% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation of Return on Average Common
Equity |
|
|
|
|
|
|
|
|
|
Average
Common Equity |
$ |
640,770 |
|
|
$ |
622,028 |
|
|
$ |
476,959 |
|
|
$ |
589,766 |
|
|
$ |
467,867 |
|
|
|
|
|
|
|
|
|
|
|
Return on
average common equity ("ROACE") as reported |
|
12.72 |
% |
|
|
10.73 |
% |
|
|
10.87 |
% |
|
|
10.88 |
% |
|
|
11.43 |
% |
Merger
expenses |
|
0.00 |
% |
|
|
0.99 |
% |
|
|
0.00 |
% |
|
|
1.28 |
% |
|
|
0.00 |
% |
Tax
effect |
|
0.00 |
% |
|
|
-0.19 |
% |
|
|
0.00 |
% |
|
|
-0.22 |
% |
|
|
0.00 |
% |
ROACE excluding merger expenses |
|
12.72 |
% |
|
|
11.53 |
% |
|
|
10.87 |
% |
|
|
11.94 |
% |
|
|
11.43 |
% |
|
|
|
|
|
|
|
|
|
|
Loss on sale
of investment securities |
|
0.00 |
% |
|
|
0.06 |
% |
|
|
0.10 |
% |
|
|
0.02 |
% |
|
|
0.03 |
% |
Tax
effect |
|
0.00 |
% |
|
|
-0.01 |
% |
|
|
-0.02 |
% |
|
|
0.00 |
% |
|
|
-0.01 |
% |
ROACE excluding gain on sale of investment securities |
|
12.72 |
% |
|
|
11.58 |
% |
|
|
10.95 |
% |
|
|
11.96 |
% |
|
|
11.45 |
% |
|
|
|
|
|
|
|
|
|
|
Death
benefit on bank owned life insurance ("BOLI") |
|
-0.13 |
% |
|
|
-0.24 |
% |
|
|
0.00 |
% |
|
|
-0.13 |
% |
|
|
-0.04 |
% |
ROAA excluding death benefit on BOLI |
|
12.59 |
% |
|
|
11.34 |
% |
|
|
10.95 |
% |
|
|
11.83 |
% |
|
|
11.41 |
% |
|
|
|
|
|
|
|
|
|
|
Core ROACE |
|
12.59 |
% |
|
|
11.34 |
% |
|
|
10.95 |
% |
|
|
11.83 |
% |
|
|
11.41 |
% |
|
|
|
|
|
|
|
|
|
|
About Horizon Bancorp, Inc.
Horizon Bancorp, Inc. is an independent,
commercial bank holding company serving northern and central
Indiana, and southern and central Michigan through its commercial
banking subsidiary, Horizon Bank. Horizon 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.
Contact:
Horizon Bancorp, Inc.Mark E. SecorChief Financial Officer(219)
873-2611
Fax: (219) 874-9280
HORIZON BANCORP,
INC.Financial
Highlights(Dollars in thousands except
share and per share data and ratios,
Unaudited)
|
September
30 |
|
June
30 |
|
March
31 |
|
December
31 |
|
September
30 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
Balance sheet: |
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
5,186,714 |
|
|
$ |
5,098,682 |
|
|
$ |
5,051,639 |
|
|
$ |
4,246,688 |
|
|
$ |
4,150,561 |
|
Investment
securities |
|
977,536 |
|
|
|
887,187 |
|
|
|
893,469 |
|
|
|
810,460 |
|
|
|
766,153 |
|
Commercial
loans |
|
2,046,165 |
|
|
|
2,062,623 |
|
|
|
2,089,579 |
|
|
|
1,721,590 |
|
|
|
1,698,582 |
|
Mortgage
warehouse loans |
|
155,631 |
|
|
|
133,428 |
|
|
|
71,944 |
|
|
|
74,120 |
|
|
|
71,422 |
|
Residential
mortgage loans |
|
796,497 |
|
|
|
814,065 |
|
|
|
819,824 |
|
|
|
668,141 |
|
|
|
651,250 |
|
Consumer
loans |
|
668,332 |
|
|
|
654,552 |
|
|
|
639,710 |
|
|
|
549,481 |
|
|
|
536,132 |
|
Earnings
assets |
|
4,667,668 |
|
|
|
4,577,487 |
|
|
|
4,538,952 |
|
|
|
3,842,903 |
|
|
|
3,743,592 |
|
Non-interest
bearing deposit accounts |
|
756,707 |
|
|
|
810,350 |
|
|
|
811,768 |
|
|
|
642,129 |
|
|
|
621,475 |
|
Interest
bearing transaction accounts |
|
2,173,100 |
|
|
|
2,153,189 |
|
|
|
2,115,847 |
|
|
|
1,684,336 |
|
|
|
1,605,825 |
|
Time
deposits |
|
986,150 |
|
|
|
967,236 |
|
|
|
960,408 |
|
|
|
812,911 |
|
|
|
901,254 |
|
Borrowings |
|
516,591 |
|
|
|
436,233 |
|
|
|
457,788 |
|
|
|
550,384 |
|
|
|
477,719 |
|
Subordinated
debentures |
|
56,250 |
|
|
|
56,194 |
|
|
|
55,310 |
|
|
|
37,837 |
|
|
|
37,791 |
|
Total
stockholders' equity |
|
642,711 |
|
|
|
626,461 |
|
|
|
609,468 |
|
|
|
491,992 |
|
|
|
477,594 |
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
Income statement: |
|
|
|
|
|
|
|
|
|
Net interest
income |
$ |
43,463 |
|
|
$ |
41,529 |
|
|
$ |
34,280 |
|
|
$ |
33,836 |
|
|
$ |
33,772 |
|
Provision
for loan losses |
|
376 |
|
|
|
896 |
|
|
|
364 |
|
|
|
528 |
|
|
|
1,176 |
|
Non-interest
income |
|
11,514 |
|
|
|
10,898 |
|
|
|
8,712 |
|
|
|
8,477 |
|
|
|
8,686 |
|
Non-interest
expenses |
|
30,060 |
|
|
|
31,584 |
|
|
|
29,738 |
|
|
|
26,117 |
|
|
|
25,620 |
|
Income tax
expense |
|
4,004 |
|
|
|
3,305 |
|
|
|
2,074 |
|
|
|
2,535 |
|
|
|
2,597 |
|
Net
income |
$ |
20,537 |
|
|
$ |
16,642 |
|
|
$ |
10,816 |
|
|
$ |
13,133 |
|
|
$ |
13,065 |
|
|
|
|
|
|
|
|
|
|
|
Per
share data:(1) |
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
0.46 |
|
|
$ |
0.37 |
|
|
$ |
0.28 |
|
|
$ |
0.34 |
|
|
$ |
0.34 |
|
Diluted
earnings per share |
|
0.46 |
|
|
|
0.37 |
|
|
|
0.28 |
|
|
|
0.34 |
|
|
|
0.34 |
|
Cash
dividends declared per common share |
|
0.12 |
|
|
|
0.12 |
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.10 |
|
Book value
per common share |
|
14.29 |
|
|
|
13.90 |
|
|
|
13.53 |
|
|
|
12.82 |
|
|
|
12.45 |
|
Tangible
book value per common share |
|
10.31 |
|
|
|
9.91 |
|
|
|
9.60 |
|
|
|
9.43 |
|
|
|
9.04 |
|
Market value
- high |
|
17.77 |
|
|
|
17.13 |
|
|
|
17.82 |
|
|
|
19.40 |
|
|
|
21.39 |
|
Market value
- low |
$ |
15.93 |
|
|
$ |
15.51 |
|
|
$ |
15.50 |
|
|
$ |
14.94 |
|
|
$ |
19.44 |
|
Weighted
average shares outstanding - Basic |
|
45,038,021 |
|
|
|
45,055,117 |
|
|
|
38,822,543 |
|
|
|
38,367,972 |
|
|
|
38,365,379 |
|
Weighted
average shares outstanding - Diluted |
|
45,113,730 |
|
|
|
45,130,408 |
|
|
|
38,906,172 |
|
|
|
38,488,002 |
|
|
|
38,534,970 |
|
|
|
|
|
|
|
|
|
|
|
Key
ratios: |
|
|
|
|
|
|
|
|
|
Return on
average assets |
|
1.60 |
% |
|
|
1.32 |
% |
|
|
1.02 |
% |
|
|
1.25 |
% |
|
|
1.26 |
% |
Return on
average common stockholders' equity |
|
12.72 |
|
|
|
10.73 |
|
|
|
8.66 |
|
|
|
10.73 |
|
|
|
10.87 |
|
Net interest
margin |
|
3.82 |
|
|
|
3.73 |
|
|
|
3.62 |
|
|
|
3.60 |
|
|
|
3.67 |
|
Loan loss
reserve to total loans |
|
0.49 |
|
|
|
0.50 |
|
|
|
0.49 |
|
|
|
0.59 |
|
|
|
0.60 |
|
Average
equity to average assets |
|
12.55 |
|
|
|
12.32 |
|
|
|
11.76 |
|
|
|
11.62 |
|
|
|
11.62 |
|
Bank only
capital ratios: |
|
|
|
|
|
|
|
|
|
Tier 1 capital to average assets |
|
9.39 |
|
|
|
9.52 |
|
|
|
10.99 |
|
|
|
9.38 |
|
|
|
9.53 |
|
Tier 1 capital to risk weighted assets |
|
11.69 |
|
|
|
11.76 |
|
|
|
11.84 |
|
|
|
11.91 |
|
|
|
12.09 |
|
Total capital to risk weighted assets |
|
12.14 |
|
|
|
12.23 |
|
|
|
12.30 |
|
|
|
12.47 |
|
|
|
12.66 |
|
|
|
|
|
|
|
|
|
|
|
Loan
data: |
|
|
|
|
|
|
|
|
|
Substandard
loans |
$ |
62,130 |
|
|
$ |
47,764 |
|
|
$ |
41,728 |
|
|
$ |
38,775 |
|
|
$ |
34,655 |
|
30 to 89
days delinquent |
|
10,204 |
|
|
|
9,633 |
|
|
|
9,980 |
|
|
|
7,161 |
|
|
|
6,878 |
|
|
|
|
|
|
|
|
|
|
|
90 days and
greater delinquent - accruing interest |
$ |
34 |
|
|
$ |
391 |
|
|
$ |
192 |
|
|
$ |
568 |
|
|
$ |
202 |
|
Trouble debt
restructures - accruing interest |
|
3,491 |
|
|
|
2,198 |
|
|
|
2,532 |
|
|
|
2,002 |
|
|
|
1,830 |
|
Trouble debt
restructures - non-accrual |
|
1,807 |
|
|
|
1,576 |
|
|
|
1,349 |
|
|
|
1,057 |
|
|
|
1,077 |
|
Non-accural
loans |
|
13,823 |
|
|
|
14,764 |
|
|
|
15,313 |
|
|
|
11,548 |
|
|
|
11,417 |
|
Total
non-performing loans |
$ |
19,155 |
|
|
$ |
18,929 |
|
|
$ |
19,386 |
|
|
$ |
15,175 |
|
|
$ |
14,526 |
|
Non-performing loans to total loans |
|
0.52 |
% |
|
|
0.52 |
% |
|
|
0.54 |
% |
|
|
0.50 |
% |
|
|
0.49 |
% |
|
|
|
|
|
|
|
|
|
|
(1) Adjusted for 3:2 stock split on June 15, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HORIZON BANCORP,
INC.Financial
Highlights(Dollars in thousands except
share and per share data and ratios,
Unaudited)
|
September
30 |
|
September
30 |
|
|
|
2019 |
|
|
|
2018 |
|
|
Balance sheet: |
|
|
|
|
Total
assets |
$ |
5,186,714 |
|
|
$ |
4,150,561 |
|
|
Investment
securities |
|
977,536 |
|
|
|
766,153 |
|
|
Commercial
loans |
|
2,046,165 |
|
|
|
1,698,582 |
|
|
Mortgage
warehouse loans |
|
155,631 |
|
|
|
71,422 |
|
|
Residential
mortgage loans |
|
796,497 |
|
|
|
651,250 |
|
|
Consumer
loans |
|
668,332 |
|
|
|
536,132 |
|
|
Earnings
assets |
|
4,667,668 |
|
|
|
3,743,592 |
|
|
Non-interest
bearing deposit accounts |
|
756,707 |
|
|
|
621,475 |
|
|
Interest
bearing transaction accounts |
|
2,173,100 |
|
|
|
1,605,825 |
|
|
Time
deposits |
|
986,150 |
|
|
|
901,254 |
|
|
Borrowings |
|
516,591 |
|
|
|
477,719 |
|
|
Subordinated
debentures |
|
56,250 |
|
|
|
37,791 |
|
|
Total
stockholders' equity |
|
642,711 |
|
|
|
477,594 |
|
|
|
|
|
|
|
|
Nine months
ended |
Income statement: |
|
|
|
|
Net interest
income |
$ |
119,272 |
|
|
$ |
100,733 |
|
|
Provision
for loan losses |
|
1,636 |
|
|
|
2,378 |
|
|
Non-interest
income |
|
31,124 |
|
|
|
25,936 |
|
|
Non-interest
expenses |
|
91,382 |
|
|
|
76,399 |
|
|
Income tax
expense |
|
9,383 |
|
|
|
7,908 |
|
|
Net
income |
$ |
47,995 |
|
|
$ |
39,984 |
|
|
|
|
|
|
|
Per
share data:(1) |
|
|
|
|
Basic
earnings per share |
$ |
1.12 |
|
|
$ |
1.04 |
|
|
Diluted
earnings per share |
|
1.11 |
|
|
|
1.04 |
|
|
Cash
dividends declared per common share |
|
0.34 |
|
|
|
0.30 |
|
|
Book value
per common share |
|
14.29 |
|
|
|
12.45 |
|
|
Tangible
book value per common share |
|
10.31 |
|
|
|
9.04 |
|
|
Market value
- high |
|
17.82 |
|
|
|
21.94 |
|
|
Market value
- low |
$ |
15.50 |
|
|
$ |
17.87 |
|
|
Weighted
average shares outstanding - Basic |
|
42,995,082 |
|
|
|
38,340,012 |
|
|
Weighted
average shares outstanding - Diluted |
|
43,070,095 |
|
|
|
38,503,403 |
|
|
|
|
|
|
|
Key
ratios: |
|
|
|
|
Return on
average assets |
|
1.33 |
% |
|
|
1.33 |
% |
|
Return on
average common stockholders' equity |
|
10.88 |
|
|
|
11.43 |
|
|
Net interest
margin |
|
3.72 |
|
|
|
3.74 |
|
|
Loan loss
reserve to total loans |
|
0.49 |
|
|
|
0.60 |
|
|
Average
equity to average assets |
|
12.23 |
|
|
|
11.63 |
|
|
Bank only
capital ratios: |
|
|
|
|
Tier 1 capital to average assets |
|
9.39 |
|
|
|
9.53 |
|
|
Tier 1 capital to risk weighted assets |
|
11.69 |
|
|
|
12.09 |
|
|
Total capital to risk weighted assets |
|
12.14 |
|
|
|
12.66 |
|
|
|
|
|
|
|
Loan
data: |
|
|
|
|
Substandard
loans |
$ |
62,130 |
|
|
$ |
34,655 |
|
|
30 to 89
days delinquent |
|
10,204 |
|
|
|
6,878 |
|
|
|
|
|
|
|
90 days and
greater delinquent - accruing interest |
$ |
34 |
|
|
$ |
202 |
|
|
Trouble debt
restructures - accruing interest |
|
3,491 |
|
|
|
1,830 |
|
|
Trouble debt
restructures - non-accrual |
|
1,807 |
|
|
|
1,077 |
|
|
Non-accural
loans |
|
13,823 |
|
|
|
11,417 |
|
|
Total
non-performing loans |
$ |
19,155 |
|
|
$ |
14,526 |
|
|
Non-performing loans to total loans |
|
0.52 |
% |
|
|
0.49 |
% |
|
|
|
|
|
|
(1) Adjusted for 3:2 stock split on June 15, 2018 |
|
|
|
|
|
|
|
HORIZON BANCORP,
INC.
Allocation
of the Allowance for Loan and Lease Losses |
(Dollars in
Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
September
30 |
|
June
30 |
|
March
31 |
|
December
31 |
|
September
30 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
Commercial |
$ |
12,082 |
|
|
$ |
11,881 |
|
|
$ |
11,556 |
|
|
$ |
10,495 |
|
|
$ |
10,581 |
|
Real
estate |
|
1,449 |
|
|
|
1,732 |
|
|
|
1,588 |
|
|
|
1,676 |
|
|
|
1,574 |
|
Mortgage
warehousing |
|
1,041 |
|
|
|
1,040 |
|
|
|
1,014 |
|
|
|
1,006 |
|
|
|
1,030 |
|
Consumer |
|
3,384 |
|
|
|
3,652 |
|
|
|
3,663 |
|
|
|
4,643 |
|
|
|
4,613 |
|
Total |
$ |
17,956 |
|
|
$ |
18,305 |
|
|
$ |
17,821 |
|
|
$ |
17,820 |
|
|
$ |
17,798 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Charge-Offs (Recoveries) |
(Dollars in
Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
September
30 |
|
June
30 |
|
March
31 |
|
December
31 |
|
September
30 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
Commercial |
$ |
192 |
|
|
$ |
265 |
|
|
$ |
61 |
|
|
$ |
196 |
|
|
$ |
179 |
|
Real
estate |
|
(7 |
) |
|
|
41 |
|
|
|
(27 |
) |
|
|
47 |
|
|
|
(2 |
) |
Mortgage
warehousing |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Consumer |
|
540 |
|
|
|
106 |
|
|
|
329 |
|
|
|
263 |
|
|
|
272 |
|
Total |
$ |
725 |
|
|
$ |
412 |
|
|
$ |
363 |
|
|
$ |
506 |
|
|
$ |
449 |
|
Percent of
net charge-offs to average loans outstanding for the period |
|
0.02 |
% |
|
|
0.01 |
% |
|
|
0.01 |
% |
|
|
0.02 |
% |
|
|
0.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total
Non-performing Loans |
(Dollars in
Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
September
30 |
|
June
30 |
|
March
31 |
|
December
31 |
|
September
30 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
Commercial |
$ |
8,193 |
|
|
$ |
8,697 |
|
|
$ |
9,750 |
|
|
$ |
6,903 |
|
|
$ |
8,355 |
|
Real
estate |
|
7,212 |
|
|
|
6,444 |
|
|
|
5,995 |
|
|
|
5,007 |
|
|
|
3,754 |
|
Mortgage
warehousing |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Consumer |
|
3,750 |
|
|
|
3,788 |
|
|
|
3,641 |
|
|
|
3,265 |
|
|
|
2,417 |
|
Total |
$ |
19,155 |
|
|
$ |
18,929 |
|
|
$ |
19,386 |
|
|
$ |
15,175 |
|
|
$ |
14,526 |
|
Non-performing loans to total loans |
|
0.52 |
% |
|
|
0.52 |
% |
|
|
0.54 |
% |
|
|
0.55 |
% |
|
|
0.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
Other Real
Estate Owned and Repossessed Assets |
(Dollars in
Thousands, Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
September
30 |
|
June
30 |
|
March
31 |
|
December
31 |
|
September
30 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
Commercial |
$ |
3,972 |
|
|
$ |
3,694 |
|
|
$ |
3,496 |
|
|
$ |
1,967 |
|
|
$ |
2,181 |
|
Real
estate |
|
48 |
|
|
|
113 |
|
|
|
126 |
|
|
|
60 |
|
|
|
58 |
|
Mortgage
warehousing |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Consumer |
|
24 |
|
|
|
48 |
|
|
|
30 |
|
|
|
48 |
|
|
|
26 |
|
Total |
$ |
4,044 |
|
|
$ |
3,855 |
|
|
$ |
3,652 |
|
|
$ |
2,075 |
|
|
$ |
2,265 |
|
|
|
|
|
|
|
|
|
|
|
HORIZON BANCORP,
INC.Average Balance Sheets(Dollar Amounts
in Thousands, Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
|
September 30, 2019 |
|
September 30, 2018 |
|
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds sold |
$ |
18,133 |
|
|
$ |
115 |
|
2.52 |
% |
|
$ |
3,840 |
|
|
$ |
24 |
|
2.48 |
% |
|
Interest-earning deposits |
|
17,823 |
|
|
|
93 |
|
2.07 |
% |
|
|
24,494 |
|
|
|
104 |
|
1.68 |
% |
|
Investment securities - taxable |
|
478,764 |
|
|
|
2,949 |
|
2.44 |
% |
|
|
421,681 |
|
|
|
2,611 |
|
2.46 |
% |
|
Investment securities - non-taxable(1) |
|
462,997 |
|
|
|
3,099 |
|
3.36 |
% |
|
|
324,289 |
|
|
|
2,010 |
|
3.11 |
% |
|
Loans receivable(2)(3) |
|
3,646,268 |
|
|
|
49,455 |
|
5.41 |
% |
|
|
2,942,835 |
|
|
|
37,522 |
|
5.07 |
% |
|
Total interest-earning assets(1) |
|
4,623,985 |
|
|
|
55,711 |
|
4.87 |
% |
|
|
3,717,139 |
|
|
|
42,271 |
|
4.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
66,970 |
|
|
|
|
|
|
|
45,864 |
|
|
|
|
|
|
Allowance for loan losses |
|
(18,277 |
) |
|
|
|
|
|
|
(17,090 |
) |
|
|
|
|
|
Other assets |
|
434,581 |
|
|
|
|
|
|
|
359,183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
average assets |
$ |
5,107,259 |
|
|
|
|
|
|
$ |
4,105,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$ |
3,132,852 |
|
|
$ |
9,109 |
|
1.15 |
% |
|
$ |
2,438,450 |
|
|
$ |
5,023 |
|
0.82 |
% |
|
Borrowings |
|
413,859 |
|
|
|
2,275 |
|
2.18 |
% |
|
|
496,054 |
|
|
|
2,876 |
|
2.30 |
% |
|
Subordinated debentures |
|
54,433 |
|
|
|
864 |
|
6.30 |
% |
|
|
36,570 |
|
|
|
600 |
|
6.51 |
% |
|
Total interest-bearing liabilities |
|
3,601,144 |
|
|
|
12,248 |
|
1.35 |
% |
|
|
2,971,074 |
|
|
|
8,499 |
|
1.13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
818,164 |
|
|
|
|
|
|
|
640,983 |
|
|
|
|
|
|
Accrued interest payable and other liabilities |
|
47,181 |
|
|
|
|
|
|
|
16,080 |
|
|
|
|
|
|
Stockholders' equity |
|
640,770 |
|
|
|
|
|
|
|
476,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
average liabilities and stockholders' equity |
$ |
5,107,259 |
|
|
|
|
|
|
$ |
4,105,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread |
|
|
$ |
43,463 |
|
3.52 |
% |
|
|
|
$ |
33,772 |
|
3.44 |
% |
|
Net interest
income as a percentage of average interest-earning assets(1) |
|
|
|
|
3.82 |
% |
|
|
|
|
|
3.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
Securities balances represent daily average balances for the fair
value of securities. The average rate is calculated based on the
daily average balance for the amortized cost of securities. The
average rate is presented on a tax equivalent basis. |
(2 |
) |
Includes fees on loans. The inclusion of loan fees does not have a
material effect on the average interest rate. |
|
|
|
|
(3 |
) |
Non-accruing loans for the purpose of the computations above are
included in the daily average loan amounts outstanding. Loan totals
are shown net of unearned income and deferred loan fees. The
average rate is presented on a tax equivalent basis. |
|
|
|
HORIZON BANCORP,
INC.Average Balance Sheets(Dollar Amounts
in Thousands, Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended |
|
Nine Months
Ended |
|
|
September 30, 2019 |
|
September 30, 2018 |
|
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds sold |
$ |
14,778 |
|
|
$ |
339 |
|
3.07 |
% |
|
$ |
2,845 |
|
|
$ |
53 |
|
2.49 |
% |
|
Interest-earning deposits |
|
21,938 |
|
|
|
284 |
|
1.73 |
% |
|
|
25,411 |
|
|
|
300 |
|
1.58 |
% |
|
Investment securities - taxable |
|
469,330 |
|
|
|
8,929 |
|
2.54 |
% |
|
|
413,617 |
|
|
|
7,379 |
|
2.39 |
% |
|
Investment securities - non-taxable(1) |
|
423,141 |
|
|
|
8,520 |
|
3.37 |
% |
|
|
313,168 |
|
|
|
5,745 |
|
3.00 |
% |
|
Loans receivable(2)(3) |
|
3,447,654 |
|
|
|
136,862 |
|
5.32 |
% |
|
|
2,855,236 |
|
|
|
108,961 |
|
5.06 |
% |
|
Total interest-earning assets(1) |
|
4,376,841 |
|
|
|
154,934 |
|
4.81 |
% |
|
|
3,610,277 |
|
|
|
122,438 |
|
4.55 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
58,890 |
|
|
|
|
|
|
|
44,605 |
|
|
|
|
|
|
Allowance for loan losses |
|
(18,053 |
) |
|
|
|
|
|
|
(16,686 |
) |
|
|
|
|
|
Other assets |
|
405,923 |
|
|
|
|
|
|
|
383,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
average assets |
$ |
4,823,601 |
|
|
|
|
|
|
$ |
4,021,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$ |
2,924,433 |
|
|
$ |
24,923 |
|
1.14 |
% |
|
$ |
2,382,864 |
|
|
$ |
11,814 |
|
0.66 |
% |
|
Borrowings |
|
462,575 |
|
|
|
8,391 |
|
2.43 |
% |
|
|
504,349 |
|
|
|
8,127 |
|
2.15 |
% |
|
Subordinated debentures |
|
48,666 |
|
|
|
2,348 |
|
6.45 |
% |
|
|
36,524 |
|
|
|
1,764 |
|
6.46 |
% |
|
Total interest-bearing liabilities |
|
3,435,674 |
|
|
|
35,662 |
|
1.39 |
% |
|
|
2,923,737 |
|
|
|
21,705 |
|
0.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
760,717 |
|
|
|
|
|
|
|
613,866 |
|
|
|
|
|
|
Accrued interest payable and other liabilities |
|
37,444 |
|
|
|
|
|
|
|
16,341 |
|
|
|
|
|
|
Stockholders' equity |
|
589,766 |
|
|
|
|
|
|
|
467,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
average liabilities and stockholders' equity |
$ |
4,823,601 |
|
|
|
|
|
|
$ |
4,021,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread |
|
|
$ |
119,272 |
|
3.42 |
% |
|
|
|
$ |
100,733 |
|
3.55 |
% |
|
Net interest
income as a percentage of average interest-earning assets(1) |
|
|
|
|
3.72 |
% |
|
|
|
|
|
3.74 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. The
average rate is presented on a tax equivalent basis. |
|
|
|
HORIZON BANCORP,
INC.Condensed Consolidated Balance
Sheets(Dollar Amounts in Thousands)
|
|
|
|
|
September
30 |
|
December
31 |
|
|
2019 |
|
|
2018 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
Cash and due from banks |
$ |
91,279 |
|
$ |
58,492 |
|
Interest-earning time deposits |
|
8,455 |
|
|
15,744 |
|
Investment securities, available for sale |
|
767,230 |
|
|
600,348 |
|
Investment securities, held to maturity (fair value of $217,718 and
$208,273) |
|
210,306 |
|
|
210,112 |
|
Loans held for sale |
|
1,060 |
|
|
1,038 |
|
Loans, net of allowance for loan losses of $17,956 and $17,820 |
|
3,648,669 |
|
|
2,995,512 |
|
Premises and equipment, net |
|
92,800 |
|
|
74,331 |
|
Federal Home Loan Bank stock |
|
22,447 |
|
|
18,073 |
|
Goodwill |
|
151,238 |
|
|
119,880 |
|
Other intangible assets |
|
27,658 |
|
|
10,390 |
|
Interest receivable |
|
18,282 |
|
|
14,239 |
|
Cash value of life insurance |
|
95,011 |
|
|
88,062 |
|
Other assets |
|
52,279 |
|
|
40,467 |
|
Total assets |
$ |
5,186,714 |
|
$ |
4,246,688 |
|
Liabilities |
|
|
|
Deposits |
|
|
|
Non-interest bearing |
$ |
756,707 |
|
$ |
642,129 |
|
Interest bearing |
|
3,159,250 |
|
|
2,497,247 |
|
Total deposits |
|
3,915,957 |
|
|
3,139,376 |
|
Borrowings |
|
516,591 |
|
|
550,384 |
|
Subordinated debentures |
|
56,250 |
|
|
37,837 |
|
Interest payable |
|
2,725 |
|
|
2,031 |
|
Other liabilities |
|
52,480 |
|
|
25,068 |
|
Total liabilities |
|
4,544,003 |
|
|
3,754,696 |
|
Commitments and contingent liabilities |
|
|
|
Stockholders' Equity |
|
|
|
Preferred stock, Authorized, 1,000,000 shares, Issued 0 shares |
|
- |
|
|
- |
|
Common stock, no par value, Authorized 99,000,000 shares (1) |
|
|
|
Issued 44,994,090 and 38,400,476 shares (1), Outstanding 44,969,021
and 38,375,407 shares (1) |
|
- |
|
|
- |
|
Additional paid-in capital |
|
379,448 |
|
|
276,101 |
|
Retained earnings |
|
256,617 |
|
|
224,035 |
|
Accumulated other comprehensive income (loss) |
|
6,646 |
|
|
(8,144 |
) |
Total stockholders' equity |
|
642,711 |
|
|
491,992 |
|
Total liabilities and stockholders' equity |
$ |
5,186,714 |
|
$ |
4,246,688 |
|
|
|
|
|
(1) Adjusted
for 3:2 stock split on June 15, 2018 |
|
|
|
|
|
|
|
HORIZON BANCORP,
INC.Condensed Consolidated Statements of
Income (Dollar Amounts in Thousands, Except Per Share
Data, Unaudited)
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September 30 |
|
September 30 |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Interest Income |
|
|
|
|
|
|
|
Loans receivable |
$ |
49,455 |
|
|
$ |
37,522 |
|
|
$ |
136,862 |
|
|
$ |
108,961 |
|
Investment securities |
|
|
|
|
|
|
|
Taxable |
|
3,157 |
|
|
|
2,739 |
|
|
|
9,552 |
|
|
|
7,732 |
|
Tax exempt |
|
3,099 |
|
|
|
2,010 |
|
|
|
8,520 |
|
|
|
5,745 |
|
Total interest income |
|
55,711 |
|
|
|
42,271 |
|
|
|
154,934 |
|
|
|
122,438 |
|
Interest Expense |
|
|
|
|
|
|
|
Deposits |
|
9,109 |
|
|
|
5,023 |
|
|
|
24,923 |
|
|
|
11,814 |
|
Borrowed funds |
|
2,275 |
|
|
|
2,876 |
|
|
|
8,391 |
|
|
|
8,127 |
|
Subordinated debentures |
|
864 |
|
|
|
600 |
|
|
|
2,348 |
|
|
|
1,764 |
|
Total interest expense |
|
12,248 |
|
|
|
8,499 |
|
|
|
35,662 |
|
|
|
21,705 |
|
Net
Interest Income |
|
43,463 |
|
|
|
33,772 |
|
|
|
119,272 |
|
|
|
100,733 |
|
Provision for loan losses |
|
376 |
|
|
|
1,176 |
|
|
|
1,636 |
|
|
|
2,378 |
|
Net
Interest Income after Provision for Loan Losses |
|
43,087 |
|
|
|
32,596 |
|
|
|
117,636 |
|
|
|
98,355 |
|
Non-interest Income |
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
2,836 |
|
|
|
2,009 |
|
|
|
7,193 |
|
|
|
5,804 |
|
Wire transfer fees |
|
189 |
|
|
|
160 |
|
|
|
474 |
|
|
|
490 |
|
Interchange fees |
|
2,138 |
|
|
|
1,410 |
|
|
|
5,659 |
|
|
|
4,293 |
|
Fiduciary activities |
|
1,834 |
|
|
|
1,855 |
|
|
|
5,986 |
|
|
|
5,598 |
|
Gains (losses) on sale of investment securities (includes $0 and
$(122) |
|
|
|
|
|
|
|
for the three months ended September 30, 2019 and 2018,
respectively, and $(85) and $(111) for the nine months ended
September 30, 2019 and nine months ended September 30, 2018 related
to accumulated other comprehensive earnings reclassifications) |
|
- |
|
|
|
(122 |
) |
|
|
(85 |
) |
|
|
(111 |
) |
Gain on sale of mortgage loans |
|
2,702 |
|
|
|
1,839 |
|
|
|
6,089 |
|
|
|
5,158 |
|
Mortgage servicing income net of impairment |
|
444 |
|
|
|
563 |
|
|
|
1,620 |
|
|
|
1,423 |
|
Increase in cash value of bank owned life insurance |
|
556 |
|
|
|
503 |
|
|
|
1,624 |
|
|
|
1,380 |
|
Death benefit on bank owned life insurance |
|
213 |
|
|
|
- |
|
|
|
580 |
|
|
|
154 |
|
Other income |
|
602 |
|
|
|
469 |
|
|
|
1,984 |
|
|
|
1,747 |
|
Total non-interest income |
|
11,514 |
|
|
|
8,686 |
|
|
|
31,124 |
|
|
|
25,936 |
|
Non-interest Expense |
|
|
|
|
|
|
|
Salaries and employee benefits |
|
16,948 |
|
|
|
14,343 |
|
|
|
48,365 |
|
|
|
42,525 |
|
Net occupancy expenses |
|
3,131 |
|
|
|
2,495 |
|
|
|
9,051 |
|
|
|
7,981 |
|
Data processing |
|
2,140 |
|
|
|
1,759 |
|
|
|
6,245 |
|
|
|
5,062 |
|
Professional fees |
|
335 |
|
|
|
437 |
|
|
|
1,426 |
|
|
|
1,314 |
|
Outside services and consultants |
|
1,552 |
|
|
|
1,204 |
|
|
|
6,737 |
|
|
|
3,735 |
|
Loan expense |
|
2,198 |
|
|
|
1,722 |
|
|
|
6,195 |
|
|
|
4,504 |
|
FDIC insurance expense |
|
(273 |
) |
|
|
396 |
|
|
|
252 |
|
|
|
1,051 |
|
Other losses |
|
90 |
|
|
|
161 |
|
|
|
363 |
|
|
|
576 |
|
Other expense |
|
3,939 |
|
|
|
3,103 |
|
|
|
12,748 |
|
|
|
9,651 |
|
Total non-interest expense |
|
30,060 |
|
|
|
25,620 |
|
|
|
91,382 |
|
|
|
76,399 |
|
Income Before Income Taxes |
|
24,541 |
|
|
|
15,662 |
|
|
|
57,378 |
|
|
|
47,892 |
|
Income tax expense (includes $0 and $(25) for the three months
ended |
|
|
|
|
|
|
|
September 30, 2019 and 2018, respectively, and $(18) and $(23) for
the nine months ended September 30, 2019 and nine months ended
September 30, 2018 related to income tax expense (benefit) from
reclassification items) |
|
4,004 |
|
|
|
2,597 |
|
|
|
9,383 |
|
|
|
7,908 |
|
Net
Income |
$ |
20,537 |
|
|
$ |
13,065 |
|
|
$ |
47,995 |
|
|
$ |
39,984 |
|
Basic Earnings Per Share (1) |
$ |
0.46 |
|
|
$ |
0.34 |
|
|
$ |
1.12 |
|
|
$ |
1.04 |
|
Diluted Earnings Per Share (1) |
|
0.46 |
|
|
|
0.34 |
|
|
|
1.11 |
|
|
|
1.04 |
|
|
|
|
|
|
|
|
|
(1) Adjusted
for 3:2 stock split on June 15, 2018 |
|
|
|
|
|
|
|
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