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Horizon Bancorp Announces Record Earnings For 2012

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern and Central Indiana and Southwest Michigan through its commercial banking subsidiary, Horizon Bank, which also operates under the “Heartland Community Bank a Horizon Bank Company” name in certain markets. Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.accesshorizon.com. Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

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 “Item 1A Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. 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)

         
December 31 September 30 June 30 March 31 December 31
2012   2012   2012   2012   2011
Balance sheet:
Total assets $ 1,847,677 $ 1,846,776 $ 1,563,265 $ 1,546,831 $ 1,547,162
Investment securities 482,801 503,804 441,715 440,601 438,145
Commercial loans 460,471 447,414 356,549 350,463 352,376
Mortgage warehouse loans 251,448 244,233 215,478 213,152 208,299
Residential mortgage loans 189,714 176,553 156,675 155,550 157,141
Consumer loans 289,084 286,848 268,437 269,388 265,377
Earning assets 1,700,595 1,690,348 1,460,544 1,451,746 1,447,818
Non-interest bearing deposit accounts 208,650 211,935 136,979 138,618 130,673
Interest bearing transaction accounts 769,822 767,202 634,907 641,128 538,083
Time deposits 315,131 327,834 273,903 284,875 341,109
Borrowings 345,764 333,150 339,880 310,889 370,111
Subordinated debentures 32,331 32,282 30,722 30,699 30,676
Common stockholders' equity 146,468 143,362 118,112 113,738 108,965
Total stockholders’ equity 158,968 155,862 130,612 126,238 121,465
 
Income statement: Three months ended
Net interest income $ 17,003 $ 14,999 $ 13,006 $ 13,198 $ 13,592
Provision for loan losses 1,715 1,041 209 559 838
Other income 7,924 7,710 6,555 5,142 4,999
Other expenses 15,844 14,840 12,180 11,160 13,089
Income tax expense   2,198       1,978       2,262       2,008       1,142  
Net income 5,170 4,850 4,910 4,613 3,522
Preferred stock dividend   (156 )     (63 )     (106 )     (156 )     (63 )
Net income available to common shareholders $ 5,014     $ 4,787     $ 4,804     $ 4,457     $ 3,459  
 
Per share data:
Basic earnings per share $ 0.58 $ 0.56 $ 0.65 $ 0.60 $ 0.47
Diluted earnings per share 0.56 0.54 0.62 0.59 0.46
Cash dividends declared per common share 0.10 0.10 0.09 0.09 0.08
Book value per common share 17.00 16.64 15.88 15.33 14.68
Tangible book value per common share 14.23 13.85 14.81 14.24 13.58
Market value - high 19.68 19.08 17.73 12.33 11.97
Market value - low $ 16.54 $ 17.67 $ 11.76 $ 11.53 $ 10.82
Weighted average shares outstanding - Basic 8,617,466 8,503,475 7,434,537 7,422,860 7,421,544
Weighted average shares outstanding - Diluted 8,964,315 8,838,659 7,728,519 7,598,490 7,576,052
 
Key ratios:
Return on average assets 1.13 % 1.09 % 1.31 % 1.23 % 0.93 %
Return on average common stockholders' equity 13.70 13.96 16.43 15.90 12.74
Net interest margin 4.16 3.79 3.79 3.87 3.95
Loan loss reserve to total loans 1.52 1.58 1.83 1.94 1.89
Non-performing loans to loans 1.97 2.08 2.07 2.11 2.02
Average equity to average assets 8.71 8.45 8.61 8.33 7.96
Bank only capital ratios:
Tier 1 capital to average assets 7.87 8.58 8.74 8.53 8.50
Tier 1 capital to risk weighted assets 10.91 11.25 12.01 11.82 11.86
Total capital to risk weighted assets 12.16 12.50 13.27 13.08 13.12
 
Loan data:
Substandard loans $ 52,114 $ 57,079 $ 35,634 $ 46,643 $ 57,489
30 to 89 days delinquent 6,759 8,351 3,773 2,932 3,282
 
90 days and greater delinquent - accruing interest $ 51 $ 109 $ 13 $ 28 $ 37
Trouble debt restructures - accruing interest 3,702 3,356 3,092 3,188 3,540
Trouble debt restructures - non-accrual 6,649 5,062 2,786 2,439 2,198
Non-accrual loans   13,374       15,887       14,925       15,451       14,368  
Total non-performing loans $ 23,776     $ 24,414     $ 20,816     $ 21,106     $ 20,143  
 

HORIZON BANCORP

Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)

   
December 31 December 31
2012   2011
Balance sheet:
Total assets $ 1,847,677 $ 1,547,162
Investment securities 482,801 438,145
Commercial loans 460,471 352,376
Mortgage warehouse loans 251,448 208,299
Residential mortgage loans 189,714 157,141
Consumer loans 289,084 265,377
Earning assets 1,700,595 1,447,818
Non-interest bearing deposit accounts 208,650 130,673
Interest bearing transaction accounts 769,822 538,083
Time deposits 315,131 341,109
Borrowings 345,764 370,111
Subordinated debentures 32,331 30,676
Common stockholders' equity 146,468 108,965
Total stockholders’ equity 158,968 121,465
 
Income statement: Twelve months ended
Net interest income $ 58,206 $ 48,113
Provision for loan losses 3,524 5,282
Other income 27,331 20,299
Other expenses 54,024 46,147
Income tax expense   8,446       4,186  
Net income 19,543 12,797
Preferred stock dividend   (481 )     (1,325 )
Net income available to common shareholders $ 19,062     $ 11,472  
 
Per share data:
Basic earnings per share $ 2.39 $ 1.55
Diluted earnings per share 2.30 1.51
Cash dividends declared per common share 0.38 0.31
Book value per common share 17.00 14.68
Tangible book value per common share 14.23 13.58
Market value - high 19.68 12.97
Market value - low $ 11.53 $ 10.82
Weighted average shares outstanding - Basic 7,974,241 7,407,258
Weighted average shares outstanding - Diluted 8,271,177 7,588,394
 
Key ratios:
Return on average assets 1.19 % 0.90 %
Return on average common stockholders' equity 14.72 11.20
Net interest margin 3.89 3.74
Loan loss reserve to total loans 1.52 1.89
Non-performing loans to loans 1.97 2.02
Average equity to average assets 8.63 8.30
Bank only capital ratios:
Tier 1 capital to average assets 7.87 8.52
Tier 1 capital to risk weighted assets 10.91 11.89
Total capital to risk weighted assets 12.16 13.14
 
Loan data:
Substandard loans $ 52,114 $ 57,489
30 to 89 days delinquent 6,759 3,282
 
90 days and greater delinquent - accruing interest $ 51 $ 37
Trouble debt restructures - accruing interest 3,702 3,540
Trouble debt restructures - non-accrual 6,649 2,198
Non-accrual loans   13,374       14,368  
Total non-performing loans $ 23,776     $ 20,143  
 

HORIZON BANCORP

 
Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands, Unaudited)

         
December 31 September 30 June 30 March 31 December 31
2012   2012   2012   2012   2011
Commercial $ 7,771 $ 8,058 $ 7,766 $ 8,435 $ 8,017
Real estate 3,204 2,974 2,946 3,025 2,472
Mortgage warehousing 1,705 1,716 1,695 1,694 1,695
Consumer 5,590 5,820 5,967 6,258 6,698
Unallocated   -     -     -     -       -
Total $ 18,270   $ 18,568   $ 18,374   $ 19,412     $ 18,882
 
Net Charge-offs

(Dollars in Thousands, Unaudited)

 
Three months ended
December 31 September 30 June 30 March 31 December 31
2012   2012   2012   2012   2011
Commercial $ 1,326 $ 334 $ 278 $ (332 ) $ 111
Real estate 143 205 113 59 118
Mortgage warehousing - - - - -
Consumer   544     308     856     302       837
Total $ 2,013   $ 847   $ 1,247   $ 29     $ 1,066
 
Total Non-performing Loans

(Dollars in Thousands, Unaudited)

 
December 31 September 30 June 30 March 31 December 31
2012   2012   2012   2012   2011
Commercial $ 10,693 $ 11,957 $ 8,796 $ 9,035 $ 7,958
Real estate 9,153 8,833 8,595 8,669 8,496
Mortgage warehousing - - - - -
Consumer   3,930     3,624     3,425     3,402       3,689
Total $ 23,776   $ 24,414   $ 20,816   $ 21,106     $ 20,143
 
Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands, Unaudited)

 
December 31 September 30 June 30 March 31 December 31
2012   2012   2012   2012   2011
Commercial $ 1,337 $ 1,867 $ 688 $ 94 $ 1,092
Real estate 1,228 716 338 709 1,708
Mortgage warehousing - - - - -
Consumer   11     72     43     86       49
Total $ 2,576   $ 2,655   $ 1,069   $ 889     $ 2,849
 

HORIZON BANCORP AND SUBSIDIARIES

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

     

Three Months Ended

Three Months Ended

December 31, 2012

December 31, 2011

Average     Average Average     Average
Balance   Interest   Rate Balance   Interest   Rate
 
ASSETS
Interest-earning assets
Federal funds sold $ 3,094 $ 2 0.26 % $ 2,084 $ 1 0.19 %
Interest-earning deposits 498 - 0.00 % 2,591 1 0.15 %
Investment securities - taxable 385,821 2,093 2.16 % 340,407 2,371 2.76 %
Investment securities - non-taxable (1) 126,265 1,024 4.68 % 111,344 1,007 5.28 %
Loans receivable (2)(3)(4)   1,157,474       17,341 5.97 %   957,651       14,080 5.84 %
Total interest-earning assets (1) 1,673,152 20,460 4.98 % 1,414,077 17,460 5.04 %
 
Noninterest-earning assets
Cash and due from banks 24,726 16,065
Allowance for loan losses (18,049 ) (19,208 )
Other assets   135,803     99,631  
 
$ 1,815,632   $ 1,510,565  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 1,107,786 $ 1,403 0.50 % $ 882,213 $ 1,836 0.83 %
Borrowings 293,200 1,531 2.08 % 331,769 1,574 1.88 %
Subordinated debentures   33,799       523 6.16 %   31,446       458 5.78 %
Total interest-bearing liabilities 1,434,785 3,457 0.96 % 1,245,428 3,868 1.23 %
 
Noninterest-bearing liabilities
Demand deposits 203,393 131,523
Accrued interest payable and
other liabilities 19,317 13,372
Shareholders' equity   158,137     120,242  
 
$ 1,815,632   $ 1,510,565  
 
Net interest income/spread $ 17,003 4.02 % $ 13,592 3.80 %
 
Net interest income as a percent
of average interest earning assets (1) 4.16 % 3.95 %
 
(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 loans fees.
(4) Loan fees and late fees included in interest on loans.
 

HORIZON BANCORP AND SUBSIDIARIES

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

     

Twelve Months Ended

Twelve Months Ended

December 31, 2012

December 31, 2011

Average     Average Average     Average
Balance   Interest   Rate Balance   Interest   Rate
ASSETS
Interest-earning assets
Federal funds sold $ 5,609 $ 13 0.23 % $ 20,307 $ 49 0.24 %
Interest-earning deposits 2,770 6 0.22 % 7,262 2 0.03 %
Investment securities - taxable 365,693 8,814 2.41 % 332,551 10,150 3.05 %
Investment securities - non-taxable (1) 115,398 3,968 4.65 % 111,934 4,073 5.20 %
Loans receivable (2)(3)(4)   1,043,620       59,727 5.73 %   862,498       50,340 5.84 %
Total interest-earning assets (1) 1,533,090 72,528 4.83 % 1,334,552 64,614 4.98 %
 
Noninterest-earning assets
Cash and due from banks 19,365 15,834
Allowance for loan losses (18,738 ) (19,047 )
Other assets   112,739     98,069  
 
$ 1,646,456   $ 1,429,408  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 992,880 $ 6,206 0.63 % $ 887,687 $ 8,346 0.94 %
Borrowings 297,597 6,166 2.07 % 261,255 6,334 2.42 %
Subordinated debentures   32,408       1,950 6.02 %   31,446       1,821 5.79 %
Total interest-bearing liabilities 1,322,885 14,322 1.08 % 1,180,388 16,501 1.40 %
 
Noninterest-bearing liabilities
Demand deposits 165,340 119,504
Accrued interest payable and
other liabilities 16,190 10,841
Shareholders' equity   142,041     118,675  
 
$ 1,646,456   $ 1,429,408  
 
Net interest income/spread $ 58,206 3.75 % $ 48,113 3.58 %
 
Net interest income as a percent
of average interest earning assets (1) 3.89 % 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 loans fees.
(4) Loan fees and late fees included in interest on loans.
 

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

   
December 31 December 31
2012 2011
(Unaudited)    
Assets
Cash and due from banks $ 30,735 $ 20,447
Investment securities, available for sale 482,801 431,045
Investment securities, held to maturity - 7,100
Loans held for sale 13,744 14,090
Loans, net of allowance for loan losses of $18,270 and $18,882 1,172,447 964,311
Premises and equipment 42,184 34,665
Federal Reserve and Federal Home Loan Bank stock 13,333 12,390
Goodwill 19,748 5,910
Other intangible assets 4,048 2,292
Interest receivable 7,716 6,671
Cash value life insurance 35,192 30,190
Other assets   25,729     18,051
Total assets $ 1,847,677   $ 1,547,162
Liabilities
Deposits
Non-interest bearing $ 208,650 $ 130,673
Interest bearing   1,084,953     879,192
Total deposits 1,293,603 1,009,865
Borrowings 345,764 370,111
Subordinated debentures 32,331 30,676
Interest payable 560 596
Other liabilities   16,451     14,449
Total liabilities   1,688,709     1,425,697
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, $.01 par value, $1,000 liquidation value
Authorized, 1,000,000 Series B shares
Issued 12,500 and 12,500 shares 12,500 12,500
Common stock, no par value
Authorized, 22,500,000 shares
Issued, 8,693,471 and 7,450,794 shares
Outstanding, 8,617,466 and 7,421,544 shares - -
Additional paid-in capital 31,965 11,736
Retained earnings 105,402 89,387
Accumulated other comprehensive income   9,101     7,842
Total stockholders’ equity   158,968     121,465
Total liabilities and stockholders’ equity $ 1,847,677   $ 1,547,162
 

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Per Share Data)

   
Three Months Ended December 31   Twelve Months Ended December 31
2012   2011 2012   2011
(Unaudited)   (Unaudited)   (Unaudited)    
Interest Income
Loans receivable $ 17,341 $ 14,080 $ 59,727 $ 50,340
Investment securities
Taxable 2,095 2,373 8,833 10,201
Tax exempt   1,024       1,007       3,968       4,073  
Total interest income   20,460       17,460       72,528       64,614  
Interest Expense
Deposits 1,403 1,836 6,206 8,346
Borrowed funds 1,531 1,574 6,166 6,334
Subordinated debentures   523       458       1,950       1,821  
Total interest expense   3,457       3,868       14,322       16,501  
Net Interest Income 17,003 13,592 58,206 48,113
Provision for loan losses   1,715       838       3,524       5,282  
Net Interest Income after Provision for Loan Losses   15,288       12,754       54,682       42,831  
Other Income
Service charges on deposit accounts 993 742 3,470 3,164
Wire transfer fees 249 207 892 619
Interchange fees 895 689 3,122 2,594
Fiduciary activities 1,069 1,072 3,997 3,983
Gain on sale of securities - 23 2 1,777
Gain on sale of mortgage loans 4,002 2,463 14,123 6,449
Mortgage servicing income net of impairment 329 (424 ) 234 267
Increase in cash value of bank owned life insurance 265 230 1,025 891
Death benefit on officer life insurance - - - 453
Other income   122       (3 )     466       102  
Total other income   7,924       4,999       27,331       20,299  
Other Expenses
Salaries and employee benefits 7,976 5,963 28,383 22,875
Net occupancy expenses 1,313 1,091 4,529 4,267
Data processing 834 556 2,717 2,006
Professional fees 507 458 1,990 1,497
Outside services and consultants 692 520 2,313 1,741
Loan expense 1,397 1,310 4,276 3,586
FDIC insurance expense 310 276 1,108 1,220
Other losses 118 1,018 619 2,383
Other expenses   2,697       1,897       8,089       6,572  
Total other expenses   15,844       13,089       54,024       46,147  
Income Before Income Tax 7,368 4,664 27,989 16,983
Income tax expense   2,198       1,142       8,446       4,186  
Net Income 5,170 3,522 19,543 12,797
Preferred stock dividend and discount accretion   (156 )     (63 )     (481 )     (1,325 )
Net Income Available to Common Shareholders $ 5,014     $ 3,459     $ 19,062     $ 11,472  
Basic Earnings Per Share $ 0.58 $ 0.47 $ 2.39 $ 1.55
Diluted Earnings Per Share 0.56 0.46 2.30 1.51
 




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