HORIZON BANCORP, INC. A NASDAQ Traded Company - Symbol HBNC
I N V E S T O R P R E S E N TAT I O N | J A N U A R Y 2 6 , 2 0 2 2
E X C E P T I O N A L S E R V I C E | • | S E N S I B L E A D V I C E ® |
Important Information
Forward-Looking Statements
This presentation may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon Bancorp, Inc. and its affiliates (collectively, "Horizon"). For these statements, Horizon claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in the presentation materials 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 (the "SEC"), including those described in Horizon's Annual Report on Form 10-K for the year ended December 31, 2020 and other subsequent filings with the SEC. Further, statements about the effects of the COVID-19 pandemic on our business, operations, financial performance, and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable, and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties, and us. 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.
Non-GAAP Measures
Certain non-GAAP financial measures are presented herein. Horizon believes they are useful to investors and provide a greater understanding of Horizon's business without giving effect to non-recurring costs and non-core items. For each non-GAAP financial measure, we have presented comparable GAAP measures and reconciliations of the non-GAAP measures to those GAAP measures in the Appendix to this presentation. Please see slides 41-56.
E X C E P T I O N A L S E R V I C E | • | S E N S I B L E A D V I C E ® | 2 |
Corporate Overview
E X C E P T I O N A L S E R V I C E | • | S E N S I B L E A D V I C E ® | 3 |
4Q21 Highlights
Record EPS for the year and strong Q4
- YTD Diluted EPS $1.98, or $2.00 adjusted*
- QTD Diluted EPS $0.49, or $0.54 adjusted*
- YTD ROACE of 12.23%, or 12.45% adjusted*
- QTD ROACE of 11.81%, or 13.08% adjusted*
Top-line growth
- Consumer loans (ex acquired) up 1.9% in Q4 and 2.7% YTD to record $727.3M
- Commercial loans (ex PPP & acquired) up 2.4% in Q4 and YTD to record $2.13B
Disciplined expense management
- Maintained non-interest expense/average assets to 2.09%, or 1.95% excluding acquisition and ESOP settlement expenses
- Efficiency ratio 62.69%, or 58.25% adjusted*
NIM compression tempered by funding costs
- Expected NIM compression from anticipated asset pricing headwinds, partially offset by further reduction in cost of interest bearing liabilities to 0.31% and previously disclosed initiatives to optimize earning asset returns including increasing investment securities to 36.9% of total assets
- Excluding acquisition expenses, credit loss expense on acquired loans, gain on sale of ESOP trustee accounts and ESOP settlement expense, net of tax and death benefits on bank owned life insurance; see non-GAAP reconciliations in Appendix.
E X C E P T I O N A L S E R V I C E
Change % vs. | |||
($000s except per share data) | 4Q21 | 3Q21 | 4Q20 |
Income Statement | |||
Net interest income | $49,976 | 7.4% | 14.6% |
Non-interest income | $12,828 | (20.0)% | (35.0)% |
Reported net income | $21,425 | (7.1)% | (2.1)% |
Diluted EPS | $0.49 | (5.8)% | (2.0)% |
Adjusted EPS* | $0.54 | 3.9% | 3.9% |
Efficiency ratio | 62.69% | 7.81% | 5.15% |
Adjusted efficiency ratio* | 58.25% | 3.27% | 3.13% |
Return on Average Assets | 1.14% | (0.27)% | (0.35)% |
Return on Average Equity | 11.81% | (0.83)% | (0.98)% |
Balance Sheet | |||
Average earning assets | $6,938,258 | 15.0% | 29.3% |
Average total loans | $3,630,896 | 3.0% | (8.1)% |
Average total deposits | $5,910,610 | 17.9% | 31.7% |
Credit Quality | |||
Allowance for credit losses to total loans | 1.51% | (4) bps | 4 bps |
NPA ratio | 0.31% | (12) bps | (18) Bps |
Net charge-offs to avg. loans for the period | 0.04% | 4 bps | 3 Bps |
• | S E N S I B L E A D V I C E ® | 4 |
Why Horizon?
A High-Performing Operator in Growth Markets
Disciplined operating culture
1.34% ROAA, 12.23% ROAE & 2.14% operating expenses/avg. assets YTD
Superior return metrics include GAAP ROAA, ROAE and operating expenses/avg. assets, as well as adjusted(1) 1.36%,12.45% and 2.08%, respectively
35 branch consolidations over last six years and 10 in 2021
Contributing to sustained tech/digital investments and consistently low expense/assets, efficiency and compensation/ FTE ratios
Compelling value supported by commitment to dividend
166% P/TBV and 10.5x P/E (TTM) with 2.9% dividend yield
Recent HBNC share price presents compelling value, while unbroken 30-year record of quarterly cash dividends to shareholders continued in 2021 with two separate increases bringing the annual dividend amount to 60¢/share, representing a 30.6% payout ratio
Well-establishedlong-term growth goals
17% average asset growth 2017-2021
In line with long-term goals of meaningfully outpacing GDP and industry, ~50/50 growth organic/acquired, and organic growth ≥3x GDP
Very attractive Midwest markets
30 minutes from downtown Chicago and Attractive Midwest Markets
Illinois exodus, Indiana's infrastructure and business-friendly climate, and Indiana and Michigan's major global employers, entrepreneurs and research universities all contribute to favorable economic trends in Horizon markets
Deliberate mix of businesses delivers very strong operational performance
>50% of total loans comprise commercial lending
Commercial loan portfolio, excluding PPP loans, increased approximately $51 million, or 10% annualized, during Q4 2021
- Footnote Index included in Appendix (see slides 41-56 for non-GAAP reconciliation)
E X C E P T I O N A L S E R V I C E | • | S E N S I B L E A D V I C E ® | 5 |
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Horizon Bancorp published this content on 26 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2022 21:48:18 UTC.
