“Horizon closed 2022 with record annual earnings reflecting continued strong growth in commercial and consumer loans through the fourth quarter, solid asset quality metrics and continued disciplined expense management,” Chairman and CEO
Fourth Quarter and Full Year 2022 Highlights
- Return on average assets (“ROAA”) was 1.24% for the year ended 2022.
- Return on average tangible equity was 18.33% for the year ended 2022.
- Total loans grew 13.4% year–to–date and 12.8% annualized during the fourth quarter.
- Commercial loans grew to a record
$2.42 billion , up 13.4% year–to–date and 10.8% annualized during the fourth quarter. - Consumer loans grew to a record
$967.8 million , up 30.6% year–to–date and 21.0% annualized during the fourth quarter. - Asset quality remained solid with total loan delinquency at 0.26% of total loans, net charge–offs to average loans of 0.01% and non–performing loans to total loans at 0.52%.
- Total deposits remained strong increasing
$26.9 million during the quarter at an average cost of 71 basis points and$54.8 million year–to–date at an average cost of 30 basis points. - Fourth quarter net interest income was
$48.8 million compared to$51.9 million in the previous quarter. Lower loan fees, less purchase accounting accretion and higher dealer reserve amortization represented$2.2 million of this decrease. - An accounting revision was made to amounts reported in previously issued financial statements covering the third quarter of 2022 related to immaterial errors discovered in the fourth quarter of 2022. The errors relate to the inclusion of the dealer reserve amortization expense in loan expense in non–interest expenses for the third quarter of 2022 rather than loan interest income. The previously issued financial statements for the three and nine months dated
September 30, 2022 have been revised to correct this error, which resulted in lowering both interest income and non–interest expense by$1.5 million for the quarter and lowering net interest margin by ten basis points from the historical presentation of these amounts (See Exhibit 1 – Revision of Previously Issued Financial Statements for details). All periods presented reflect this adjustment, and there was no impact to net income. - Non–interest income increased by 4.8% from
$10.2 million to$10.7 million from the third quarter to the fourth quarter of 2022. - Non-interest expense was
$35.7 million in the quarter, or 1.84% of average assets on an annualized basis, compared to$36.8 million , or 1.91%, in the third quarter of 2022. Year–to–date non–interest expense continued to be well managed at$143.2 million , or 1.90% of average assets. - Net income totaled
$21.2 million , compared to$23.8 million in the third quarter and$21.4 million in the prior year period. Diluted earnings per share (“EPS”) was$0.48 compared to$0.55 for the third quarter of 2022 and$0.49 for the fourth quarter of 2021. - The Bank’s capital position continues to be robust with leverage and risk based capital ratios of 9.55% and 13.59%, respectively. The annualized dividend yield was 4.24% as of
December 31, 2022 .
Summary
For the Three Months Ended | ||||||||||||
Net Interest Income and Net Interest Margin | 2022 | 2022 | 2021 | |||||||||
Net interest income | $ | 48,782 | $ | 51,861 | $ | 48,477 | ||||||
Net interest margin | 2.85 | % | 3.04 | % | 2.87 | % | ||||||
Adjusted net interest margin | 2.83 | % | 2.99 | % | 2.77 | % |
“Horizon's net interest income of approximately
For the Three Months Ended | |||||||||
Asset Yields and Funding Costs | 2022 | 2022 | 2021 | ||||||
Interest earning assets | 3.88 | % | 3.58 | % | 3.11 | % | |||
Interest bearing liabilities | 1.29 | % | 0.69 | % | 0.31 | % |
For the Three Months Ended | |||||||||
Non–interest Income and | |||||||||
Mortgage Banking Income | 2022 | 2022 | 2021 | ||||||
Total non–interest income | $ | 10,674 | $ | 10,188 | $ | 12,828 | |||
Gain on sale of mortgage loans | 1,196 | 1,441 | 4,167 | ||||||
Mortgage servicing income net of impairment | 637 | 355 | 300 |
For the Three Months Ended | ||||||||||||
Non–interest Expense | 2022 | 2022 | 2021 | |||||||||
Total non–interest expense | $ | 35,711 | $ | 36,816 | $ | 37,871 | ||||||
Annualized non–interest expense to average assets | 1.84 | % | 1.91 | % | 2.01 | % |
For the Three Months Ended | |||||||||
Credit Quality | 2022 | 2022 | 2021 | ||||||
Allowance for credit losses to total loans | 1.21 | % | 1.27 | % | 1.48 | % | |||
Non–performing loans to total loans | 0.52 | % | 0.47 | % | 0.52 | % | |||
Percent of net charge–offs to average loans outstanding for the period | 0.01 | % | 0.00 | % | 0.04 | % |
Allowance for | Net Reserve | |||||||||||||||||||||||
Credit Losses | 2022 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 2021 | ||||||||||||||||||
Commercial | $ | 32,445 | $ | (1,361 | ) | $ | (996 | ) | $ | (2,987 | ) | $ | (2,986 | ) | $ | 40,775 | ||||||||
Retail Mortgage | 5,577 | 440 | 715 | 71 | 495 | 3,856 | ||||||||||||||||||
Warehouse | 1,020 | (4 | ) | (43 | ) | 12 | (4 | ) | 1,059 | |||||||||||||||
Consumer | 11,422 | 20 | (657 | ) | 2,746 | 717 | 8,596 | |||||||||||||||||
Allowance for Credit Losses (“ACL”) | $ | 50,464 | $ | (905 | ) | $ | (981 | ) | $ | (158 | ) | $ | (1,778 | ) | $ | 54,286 | ||||||||
ACL / Total Loans | 1.21 | % | 1.48 | % | ||||||||||||||||||||
Acquired Loan Discount (“ALD”) | $ | 6,279 | $ | (308 | ) | $ | (619 | ) | $ | (1,122 | ) | $ | (769 | ) | $ | 9,097 |
“We continued to report solid asset quality metrics, including low net charge–offs and modest levels of non–performing loans to total loans. Asset quality continued to remain a hallmark of our franchise and a credit to our seasoned loan underwriters”, said
Exhibit 1 – Revision of Previously Issued Financial Statements
We have revised amounts reported in previously issued financial statements for our third quarter 2022 results reflected in this press release related to immaterial errors. Subsequent to the third quarter of 2022, the Company’s management determined that the dealer reserve amortization expense was incorrectly included in loan expense in non–interest expenses rather than loan interest income. In addition, the dealer reserve asset was incorrectly included with other assets on the balance sheet rather than included with loans. As a result, loan interest income for the three and nine months ended
We evaluated the aggregate effects of the errors to our previously issued financial statements in accordance with
Three Months Ended | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Without Dealer Reserve Change | Dealer Reserve Change | Actual | Pre Revision | Revision | Post Revision | |||||||||||||||||||
Balance Sheet | ||||||||||||||||||||||||
Loans, net of allowance for credit losses | $ | 4,089,370 | $ | 18,164 | $ | 4,107,534 | $ | 3,590,331 | $ | 13,917 | $ | 3,604,248 | ||||||||||||
Other assets | 157,445 | (18,164 | ) | 139,281 | 80,753 | (13,917 | ) | 66,836 | ||||||||||||||||
Total assets | 7,872,518 | — | 7,872,518 | 7,411,889 | — | 7,411,889 | ||||||||||||||||||
Income Statement | ||||||||||||||||||||||||
Interest income | 69,211 | (2,024 | ) | 67,187 | 54,118 | (1,499 | ) | 52,619 | ||||||||||||||||
Net interest income | 50,806 | (2,024 | ) | 48,782 | 49,976 | (1,499 | ) | 48,477 | ||||||||||||||||
Non–interest expense | 37,735 | (2,024 | ) | 35,711 | 39,370 | (1,499 | ) | 37,871 | ||||||||||||||||
Net income | 21,165 | — | 21,165 | 21,425 | — | 21,425 | ||||||||||||||||||
Average Balance Sheet | ||||||||||||||||||||||||
Loans | 4,019,744 | 18,912 | 4,038,656 | 3,630,896 | 13,792 | 3,644,688 | ||||||||||||||||||
Interest earning assets | 7,073,068 | 18,912 | 7,091,980 | 6,938,258 | 13,792 | 6,952,050 | ||||||||||||||||||
Other assets | 599,786 | (18,912 | ) | 580,874 | 477,352 | (13,792 | ) | 463,560 | ||||||||||||||||
Total assets | $ | 7,718,366 | $ | — | $ | 7,718,366 | $ | 7,461,343 | $ | — | $ | 7,461,343 | ||||||||||||
Other Financial Information | ||||||||||||||||||||||||
Average rate on loans | 5.22 | % | (0.20 | )% | 5.02 | % | 4.52 | % | (0.18 | )% | 4.34 | % | ||||||||||||
Average rate on interest earning assets | 4.01 | (0.13 | ) | 3.88 | 3.20 | (0.09 | ) | 3.11 | ||||||||||||||||
Net interest spread | 2.72 | (0.13 | ) | 2.59 | 2.89 | (0.09 | ) | 2.80 | ||||||||||||||||
Net interest margin | 2.97 | (0.12 | ) | 2.85 | 2.97 | (0.10 | ) | 2.87 | ||||||||||||||||
Efficiency ratio | 61.38 | (1.32 | ) | 60.06 | 62.69 | (0.92 | ) | 61.77 | ||||||||||||||||
Non–interest expense to average assets | 1.94 | % | (0.10 | )% | 1.84 | % | 2.09 | % | (0.08 | )% | 2.01 | % |
Twelve Months Ended | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Without Dealer Reserve Change | Dealer Reserve Change | Actual | Pre Revision | Revision | Post Revision | |||||||||||||||||||
Balance Sheet | ||||||||||||||||||||||||
Loans, net of allowance for credit losses | $ | 4,089,370 | $ | 18,164 | $ | 4,107,534 | $ | 3,590,331 | $ | 13,917 | $ | 3,604,248 | ||||||||||||
Other assets | 157,445 | (18,164 | ) | 139,281 | 80,753 | (13,917 | ) | 66,836 | ||||||||||||||||
Total assets | 7,872,518 | — | 7,872,518 | 7,411,889 | — | 7,411,889 | ||||||||||||||||||
Income Statement | ||||||||||||||||||||||||
Interest income | 241,895 | (5,862 | ) | 236,033 | 199,995 | (5,885 | ) | 194,110 | ||||||||||||||||
Net interest income | 205,380 | (5,862 | ) | 199,518 | 181,690 | (5,885 | ) | 175,805 | ||||||||||||||||
Non–interest expense | 149,063 | (5,862 | ) | 143,201 | 139,279 | (5,885 | ) | 133,394 | ||||||||||||||||
Net income | 93,408 | — | 93,408 | 87,091 | — | 87,091 | ||||||||||||||||||
Average Balance Sheet | ||||||||||||||||||||||||
Loans | 3,828,090 | 17,047 | 3,845,137 | 3,626,033 | 13,421 | 3,639,454 | ||||||||||||||||||
Interest earning assets | 6,960,360 | 17,047 | 6,977,407 | 6,021,740 | 13,421 | 6,035,161 | ||||||||||||||||||
Other assets | 526,276 | (17,047 | ) | 509,229 | 459,316 | (13,421 | ) | 445,895 | ||||||||||||||||
Total assets | $ | 7,533,915 | $ | — | $ | 7,533,915 | $ | 6,514,251 | $ | 6,514,251 | ||||||||||||||
Other Financial Information | ||||||||||||||||||||||||
Average rate on loans | 4.70 | % | (0.17 | )% | 4.53 | % | 4.47 | % | (0.17 | )% | 4.30 | % | ||||||||||||
Average rate on interest earning assets | 3.60 | (0.10 | ) | 3.50 | 3.43 | (0.10 | ) | 3.33 | ||||||||||||||||
Net interest spread | 2.93 | (0.10 | ) | 2.83 | 3.03 | (0.10 | ) | 2.93 | ||||||||||||||||
Net interest margin | 3.07 | (0.09 | ) | 2.98 | 3.13 | (0.10 | ) | 3.03 | ||||||||||||||||
Efficiency ratio | 58.96 | (0.98 | ) | 57.98 | 58.12 | (1.05 | ) | 57.07 | ||||||||||||||||
Non–interest expense to average assets | 1.98 | % | (0.08 | )% | 1.90 | % | 2.14 | % | (0.09 | )% | 2.05 | % |
Income Statement
Net income for the fourth quarter of 2022 was
The change in net income for the fourth quarter of 2022 when compared to the third quarter of 2022 reflects an increase in non–interest income of
Non–interest expense of
Net income for the fourth quarter of 2022 when compared to the same prior year period reflects a decrease in non–interest income of
Net income for the year ended
Net Interest Margin
Horizon’s net interest margin was 2.85% for the fourth quarter of 2022 compared to 3.04% for the third quarter. The decrease in net interest margin reflects an increase in the cost of interest bearing liabilities of 60 basis points, offset by an increase in the yield on interest earning assets of 42 basis points. Additionally, interest income from acquisition–related purchase accounting adjustments was
Horizon’s net interest margin decreased to 2.98% for the year ended
Net interest margin, excluding acquisition–related purchase accounting adjustments (“adjusted net interest margin”), was 2.83% for the fourth quarter of 2022, compared to 2.99% for the linked quarter and 2.77% for the fourth quarter of 2021. Interest income from acquisition–related purchase accounting adjustments was
The adjusted net interest margin was 2.93% for the year ended
Lending Activity
Total loan balances were
Loan Growth by Type | |||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||
QTD | QTD | Annualized | |||||||||||
2022 | 2022 | $ Change | % Change | % Change | |||||||||
Commercial, excluding PPP loans and sold commercial participation loans | $ | 2,416,249 | $ | 2,352,446 | $ | 63,803 | 2.7% | 10.8% | |||||
PPP loans | 217 | 315 | (98 | ) | (31.1)% | (123.4)% | |||||||
Sold commercial participation loans | 50,956 | 50,982 | (26 | ) | (0.1)% | (0.2)% | |||||||
Residential mortgage | 653,292 | 634,901 | 18,391 | 2.9% | 11.5% | ||||||||
Consumer | 967,755 | 919,198 | 48,557 | 5.3% | 21.0% | ||||||||
Subtotal | 4,088,469 | 3,957,842 | 130,627 | 3.3% | 13.1% | ||||||||
Loans held for sale | 5,807 | 1,852 | 3,955 | 213.6% | 847.2% | ||||||||
Mortgage warehouse | 69,529 | 73,690 | (4,161 | ) | (5.6)% | (22.4)% | |||||||
Total loans | $ | 4,163,805 | $ | 4,033,384 | $ | 130,421 | 3.2% | 12.8% | |||||
Total loans, excluding PPP loans and sold commercial participation loans | $ | 4,112,632 | $ | 3,982,087 | $ | 130,545 | 3.3% | 13.0% |
Loan Growth by Type | |||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||
YTD | YTD | ||||||||||
2022 | 2021 | $ Change | % Change | ||||||||
Commercial, excluding PPP loans and sold commercial participation loans | $ | 2,416,249 | $ | 2,131,644 | $ | 284,605 | 13.4% | ||||
PPP loans | 217 | 25,844 | (25,627 | ) | (99.2)% | ||||||
Sold commercial participation loans | 50,956 | 56,457 | (5,501 | ) | (9.7)% | ||||||
Residential mortgage | 653,292 | 594,382 | 58,910 | 9.9% | |||||||
Consumer | 967,755 | 741,176 | 226,579 | 30.6% | |||||||
Subtotal | 4,088,469 | 3,549,503 | 538,966 | 15.2% | |||||||
Loans held for sale | 5,807 | 12,579 | (6,772 | ) | (53.8)% | ||||||
Mortgage warehouse | 69,529 | 109,031 | (39,502 | ) | (36.2)% | ||||||
Total loans | $ | 4,163,805 | $ | 3,671,113 | $ | 492,692 | 13.4% | ||||
Total loans, excluding PPP loans and sold commercial participation loans | $ | 4,112,632 | $ | 3,588,812 | $ | 523,820 | 14.6% |
Residential mortgage lending activity for the three months ended
Gain on sale of mortgage loans and mortgage warehousing income was 3.2% of total revenue for the three months ended
Deposit Activity
Total deposit balances of
Deposit Growth by Type | |||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||
QTD | QTD | Annualized | |||||||||||
2022 | 2022 | $ Change | % Change | % Change | |||||||||
Non–interest bearing | $ | 1,277,768 | $ | 1,315,155 | $ | (37,387 | ) | (2.8)% | (11.3)% | ||||
Interest bearing | 3,582,891 | 3,736,798 | (153,907 | ) | (4.1)% | (16.3)% | |||||||
Time deposits | 997,115 | 778,885 | 218,230 | 28.0% | 111.2% | ||||||||
Total deposits | $ | 5,857,774 | $ | 5,830,838 | $ | 26,936 | 0.5% | 1.8% |
Total deposit balances of
Deposit Growth by Type | |||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||
YTD | YTD | ||||||||||
2022 | 2021 | $ Change | % Change | ||||||||
Non–interest bearing | $ | 1,277,768 | $ | 1,360,338 | $ | (82,570 | ) | (6.1)% | |||
Interest bearing | 3,582,891 | 3,711,767 | (128,876 | ) | (3.5)% | ||||||
Time deposits | 997,115 | 730,886 | 266,229 | 36.4% | |||||||
Total deposits | $ | 5,857,774 | $ | 5,802,991 | $ | 54,783 | 0.9% |
Expense Management
Non–Interest Expense | |||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
QTD | QTD | ||||||||||||
Non–interest Expense | 2022 | 2022 | $ Change | % Change | |||||||||
Salaries and employee benefits | $ | 19,978 | $ | 20,613 | $ | (635 | ) | (3.1)% | |||||
Net occupancy expenses | 3,279 | 3,293 | (14 | ) | (0.4)% | ||||||||
Data processing | 2,884 | 2,539 | 345 | 13.6% | |||||||||
Professional fees | 694 | 552 | 142 | 25.7% | |||||||||
Outside services and consultants | 2,985 | 2,855 | 130 | 4.6% | |||||||||
Loan expense | 1,281 | 1,392 | (111 | ) | (8.0)% | ||||||||
388 | 670 | (282 | ) | (42.1)% | |||||||||
Other losses | 118 | 398 | (280 | ) | (70.4)% | ||||||||
Other expense | 4,104 | 4,504 | (400 | ) | (8.9)% | ||||||||
Total non–interest expense | $ | 35,711 | $ | 36,816 | $ | (1,105 | ) | (3.0)% | |||||
Annualized non–interest expense to average assets | 1.84 | % | 1.91 | % |
Total non–interest expense was
Non–GAAP Reconciliation of Non–Interest Expense | ||||||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||
2022 | 2021 | Adjusted | ||||||||||||||||||||||||||
Non–interest Expense | Actual | Acquisition & Non– Recurring Expenses | Adjusted | Actual | Acquisition & Non– Recurring Expenses | Adjusted | Amount Change | Percent Change | ||||||||||||||||||||
Salaries and employee benefits | $ | 19,978 | $ | — | $ | 19,978 | $ | 20,549 | $ | (202 | ) | $ | 20,347 | $ | (369 | ) | (1.8)% | |||||||||||
Net occupancy expenses | 3,279 | — | 3,279 | 3,204 | — | 3,204 | 75 | 2.3% | ||||||||||||||||||||
Data processing | 2,884 | — | 2,884 | 2,672 | (1 | ) | 2,671 | 213 | 8.0% | |||||||||||||||||||
Professional fees | 694 | — | 694 | 562 | (45 | ) | 517 | 177 | 34.2% | |||||||||||||||||||
Outside services and consultants | 2,985 | — | 2,985 | 2,197 | (162 | ) | 2,035 | 950 | 46.7% | |||||||||||||||||||
Loan expense | 1,281 | — | 1,281 | 1,304 | (83 | ) | 1,221 | 60 | 4.9% | |||||||||||||||||||
388 | — | 388 | 798 | (6 | ) | 792 | (404 | ) | (51.0)% | |||||||||||||||||||
Other losses | 118 | — | 118 | 1,925 | (1,904 | ) | 21 | 97 | 461.9% | |||||||||||||||||||
Other expense | 4,104 | — | 4,104 | 4,660 | (381 | ) | 4,279 | (175 | ) | (4.1)% | ||||||||||||||||||
Total non–interest expense | $ | 35,711 | $ | — | $ | 35,711 | $ | 37,871 | $ | (2,784 | ) | $ | 35,087 | $ | 624 | 1.8% | ||||||||||||
Annualized non–interest expense to average assets | 1.84 | % | 1.84 | % | 2.01 | % | 1.87 | % |
Total adjusted non–interest expense was
Non–GAAP Reconciliation of Non–Interest Expense | ||||||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||
Twelve Months Ended | ||||||||||||||||||||||||||||
2022 | 2021 | Adjusted | ||||||||||||||||||||||||||
Non–interest Expense | Actual | Acquisition & Non–Recurring Expenses | Adjusted | Actual | Acquisition & Non–Recurring Expenses | Adjusted | Amount Change | Percent Change | ||||||||||||||||||||
Salaries and employee benefits | $ | 80,283 | $ | — | $ | 80,283 | $ | 74,051 | $ | (227 | ) | $ | 73,824 | $ | 6,459 | 8.7% | ||||||||||||
Net occupancy expenses | 13,323 | — | 13,323 | 12,541 | (13 | ) | 12,528 | 795 | 6.3% | |||||||||||||||||||
Data processing | 10,567 | — | 10,567 | 9,962 | (18 | ) | 9,944 | 623 | 6.3% | |||||||||||||||||||
Professional fees | 1,843 | — | 1,843 | 2,216 | (149 | ) | 2,067 | (224 | ) | (10.8)% | ||||||||||||||||||
Outside services and consultants | 10,850 | — | 10,850 | 8,449 | (750 | ) | 7,699 | 3,151 | 40.9% | |||||||||||||||||||
Loan expense | 5,411 | — | 5,411 | 5,492 | (83 | ) | 5,409 | 2 | —% | |||||||||||||||||||
2,558 | — | 2,558 | 2,377 | (6 | ) | 2,371 | 187 | 7.9% | ||||||||||||||||||||
Other losses | 1,046 | — | 1,046 | 2,283 | (5 | ) | 2,278 | (1,232 | ) | (54.1)% | ||||||||||||||||||
Other expense | 17,320 | — | 17,320 | 16,023 | (2,574 | ) | 13,449 | 3,871 | 28.8% | |||||||||||||||||||
Total non–interest expense | $ | 143,201 | $ | — | $ | 143,201 | $ | 133,394 | $ | (3,825 | ) | $ | 129,569 | $ | 13,632 | 10.5% | ||||||||||||
Annualized non–interest expense to average assets | 1.90 | % | 1.90 | % | 2.05 | % | 1.99 | % |
Total adjusted non–interest expense was
Annualized non–interest expense as a percent of average assets was 1.84%, 1.91% and 2.01% for the three months ended
Annualized non–interest expense as a percent of average assets was 1.90% and 2.05% for the year ended
Income tax expense totaled
Income tax expense totaled
Capital
The capital resources of the Company and the Bank exceeded regulatory capital ratios for “well capitalized” banks at
The following table presents the actual regulatory capital dollar amounts and ratios of the Company and the Bank as of
Actual | Required for Capital Adequacy Purposes | Required for Capital Adequacy Purposes with Capital Buffer | Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||
Total capital (to risk–weighted assets) | |||||||||||||||||||||||
Consolidated | $ | 782,705 | 14.48 | % | $ | 432,525 | 8.00 | % | $ | 567,688 | 10.50 | % | N/A | N/A | |||||||||
Bank | 734,578 | 13.59 | % | 432,413 | 8.00 | % | 567,542 | 10.50 | % | $ | 540,516 | 10.00 | % | ||||||||||
Tier 1 capital (to risk–weighted assets) | |||||||||||||||||||||||
Consolidated | 736,150 | 13.62 | % | 324,393 | 6.00 | % | 459,557 | 8.50 | % | N/A | N/A | ||||||||||||
Bank | 686,069 | 12.69 | % | 324,310 | 6.00 | % | 459,439 | 8.50 | % | 432,413 | 8.00 | % | |||||||||||
Common equity tier 1 capital (to risk–weighted assets) | |||||||||||||||||||||||
Consolidated | 616,231 | 11.40 | % | 243,295 | 4.50 | % | 378,459 | 7.00 | % | N/A | N/A | ||||||||||||
Bank | 686,069 | 12.69 | % | 243,232 | 4.50 | % | 378,361 | 7.00 | % | 351,336 | 6.50 | % | |||||||||||
Tier 1 capital (to average assets) | |||||||||||||||||||||||
Consolidated | 736,150 | 10.23 | % | 287,867 | 4.00 | % | 287,867 | 4.00 | % | N/A | N/A | ||||||||||||
Bank | 686,069 | 9.55 | % | 287,262 | 4.00 | % | 287,262 | 4.00 | % | 359,077 | 5.00 | % |
Tangible book value per common share (“TBVPS”) declined
Liquidity
The Bank maintains a stable base of core deposits provided by long–standing relationships with individuals and local businesses. These deposits are the principal source of liquidity, while other sources of liquidity for Horizon include earnings, loan repayments, investment security sales and maturities, proceeds from the sale of residential mortgage loans, unpledged investment securities and borrowing relationships with correspondent banks, including the
Forward Looking Statements
This press release may contain forward–looking statements regarding the financial performance, business prospects, growth and operating strategies of
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: changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; continuing increases in inflation; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon’s assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; continuing risks and uncertainties relating to the COVID–19 pandemic and government responses thereto; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the
Financial Highlights | ||||||||||||||
(Dollars in Thousands, Unaudited) | ||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||
Balance sheet: | ||||||||||||||
Total assets | $ | 7,872,518 | $ | 7,718,695 | $ | 7,640,936 | $ | 7,420,328 | $ | 7,374,903 | ||||
Interest earning deposits & federal funds sold | 12,233 | 7,302 | 5,646 | 20,827 | 502,364 | |||||||||
Interest earning time deposits | 2,812 | 2,814 | 3,799 | 4,046 | 4,782 | |||||||||
Investment securities | 3,020,306 | 3,017,191 | 3,093,792 | 3,118,641 | 2,713,255 | |||||||||
Commercial loans | 2,467,422 | 2,403,743 | 2,363,991 | 2,259,327 | 2,213,945 | |||||||||
Mortgage warehouse loans | 69,529 | 73,690 | 116,488 | 105,118 | 109,031 | |||||||||
Residential mortgage loans | 653,292 | 634,901 | 608,582 | 593,372 | 594,382 | |||||||||
Consumer loans | 967,755 | 919,198 | 866,819 | 768,854 | 741,176 | |||||||||
Total loans | 4,157,998 | 4,031,532 | 3,955,880 | 3,726,671 | 3,658,534 | |||||||||
Earning assets | 7,225,833 | 7,087,368 | 7,088,737 | 6,898,208 | 6,878,968 | |||||||||
Non–interest bearing deposit accounts | 1,277,768 | 1,315,155 | 1,328,213 | 1,325,570 | 1,360,338 | |||||||||
Interest bearing transaction accounts | 3,582,891 | 3,736,798 | 3,760,890 | 3,782,644 | 3,711,767 | |||||||||
Time deposits | 997,115 | 778,885 | 756,482 | 743,283 | 730,886 | |||||||||
Total deposits | 5,857,774 | 5,830,838 | 5,845,585 | 5,851,497 | 5,802,991 | |||||||||
Borrowings | 1,142,949 | 1,048,091 | 959,222 | 728,664 | 712,739 | |||||||||
Subordinated notes | 58,896 | 58,860 | 58,823 | 58,786 | 58,750 | |||||||||
Junior subordinated debentures issued to capital trusts | 57,027 | 56,966 | 56,907 | 56,850 | 56,785 | |||||||||
Total stockholders’ equity | 677,375 | 644,993 | 657,865 | 677,450 | 723,209 |
Financial Highlights | |||||||||||||||||||
(Dollars in Thousands Except Share and Per Share Data and Ratios, Unaudited) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Income statement: | |||||||||||||||||||
Net interest income | $ | 48,782 | $ | 51,861 | $ | 52,044 | $ | 46,831 | $ | 48,477 | |||||||||
Credit loss expense (recovery) | (69 | ) | (601 | ) | 240 | (1,386 | ) | (2,071 | ) | ||||||||||
Non–interest income | 10,674 | 10,188 | 12,434 | 14,155 | 12,828 | ||||||||||||||
Non–interest expense | 35,711 | 36,816 | 35,404 | 35,270 | 37,871 | ||||||||||||||
Income tax expense | 2,649 | 2,013 | 3,975 | 3,539 | 4,080 | ||||||||||||||
Net income | $ | 21,165 | $ | 23,821 | $ | 24,859 | $ | 23,563 | $ | 21,425 | |||||||||
Per share data: | |||||||||||||||||||
Basic earnings per share | $ | 0.49 | $ | 0.55 | $ | 0.57 | $ | 0.54 | $ | 0.49 | |||||||||
Diluted earnings per share | 0.48 | 0.55 | 0.57 | 0.54 | 0.49 | ||||||||||||||
Cash dividends declared per common share | 0.16 | 0.16 | 0.16 | 0.15 | 0.15 | ||||||||||||||
Book value per common share | 15.55 | 14.80 | 15.10 | 15.55 | 16.61 | ||||||||||||||
Tangible book value per common share | 11.59 | 10.82 | 11.11 | 11.54 | 12.58 | ||||||||||||||
Market value – high | 20.00 | 20.59 | 19.21 | 23.45 | 21.14 | ||||||||||||||
Market value – low | $ | 14.51 | $ | 16.74 | $ | 16.72 | $ | 18.67 | $ | 18.01 | |||||||||
Weighted average shares outstanding – Basis | 43,574,151 | 43,573,370 | 43,572,796 | 43,554,713 | 43,534,298 | ||||||||||||||
Weighted average shares outstanding – Diluted | 43,667,954 | 43,703,793 | 43,684,691 | 43,734,556 | 43,733,416 | ||||||||||||||
Key ratios: | |||||||||||||||||||
Return on average assets | 1.09 | % | 1.24 | % | 1.33 | % | 1.31 | % | 1.14 | % | |||||||||
Return on average common stockholders’ equity | 12.72 | 13.89 | 14.72 | 13.34 | 11.81 | ||||||||||||||
Net interest margin | 2.85 | 3.04 | 3.13 | 2.90 | 2.87 | ||||||||||||||
Allowance for credit losses to total loans | 1.21 | 1.27 | 1.32 | 1.41 | 1.48 | ||||||||||||||
Average equity to average assets | 8.55 | 8.91 | 9.06 | 9.79 | 9.64 | ||||||||||||||
Efficiency ratio | 60.06 | 59.33 | 54.91 | 57.83 | 61.77 | ||||||||||||||
Annualized non–interest expense to average assets | 1.84 | 1.91 | 1.90 | 1.95 | 2.01 | ||||||||||||||
Bank only capital ratios: | |||||||||||||||||||
Tier 1 capital to average assets | 9.55 | 8.84 | 8.85 | 8.83 | 8.50 | ||||||||||||||
Tier 1 capital to risk weighted assets | 12.69 | 12.74 | 12.87 | 13.23 | 13.69 | ||||||||||||||
Total capital to risk weighted assets | 13.59 | 13.65 | 13.83 | 14.25 | 14.72 |
Financial Highlights | |||||||
(Dollars in Thousands Except Share and Per Share Data and Ratios, Unaudited) | |||||||
Twelve Months Ended | |||||||
2022 | 2021 | ||||||
Income statement: | |||||||
Net interest income | $ | 199,518 | $ | 175,805 | |||
Credit loss expense (recovery) | (1,816 | ) | (2,084 | ) | |||
Non–interest income | 47,451 | 57,952 | |||||
Non–interest expense | 143,201 | 133,394 | |||||
Income tax expense | 12,176 | 15,356 | |||||
Net income | $ | 93,408 | $ | 87,091 | |||
Per share data: | |||||||
Basic earnings per share | $ | 2.14 | $ | 1.99 | |||
Diluted earnings per share | 2.14 | 1.98 | |||||
Cash dividends declared per common share | 0.63 | 0.56 | |||||
Book value per common share | 15.55 | 16.61 | |||||
Tangible book value per common share | 11.59 | 12.58 | |||||
Market value – high | 23.45 | 21.14 | |||||
Market value – low | $ | 14.51 | $ | 15.43 | |||
Weighted average shares outstanding – Basis | 43,568,823 | 43,802,733 | |||||
Weighted average shares outstanding – Diluted | 43,699,734 | 43,955,280 | |||||
Key ratios: | |||||||
Return on average assets | 1.24 | % | 1.34 | % | |||
Return on average common stockholders’ equity | 13.66 | 12.23 | |||||
Net interest margin | 2.98 | 3.03 | |||||
Allowance for credit losses to total loans | 1.21 | 1.48 | |||||
Average equity to average assets | 9.07 | 10.93 | |||||
Efficiency ratio | 57.98 | 57.07 | |||||
Annualized non–interest expense to average assets | 1.90 | 2.05 | |||||
Bank only capital ratios: | |||||||
Tier 1 capital to average assets | 9.55 | 8.50 | |||||
Tier 1 capital to risk weighted assets | 12.69 | 13.69 | |||||
Total capital to risk weighted assets | 13.59 | 14.72 |
Financial Highlights | |||||||||||||||||||
(Dollars in Thousands Except Ratios, Unaudited) | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Loan data: | |||||||||||||||||||
Substandard loans | $ | 56,194 | $ | 57,932 | $ | 59,377 | $ | 57,928 | $ | 56,968 | |||||||||
30 to 89 days delinquent | 10,709 | 6,970 | 6,739 | 6,358 | 8,536 | ||||||||||||||
Non–performing loans: | |||||||||||||||||||
90 days and greater delinquent – accruing interest | 92 | 193 | 210 | 107 | 145 | ||||||||||||||
Trouble debt restructures – accruing interest | 2,570 | 2,529 | 2,535 | 2,372 | 2,391 | ||||||||||||||
Trouble debt restructures – non–accrual | 1,548 | 1,665 | 1,345 | 1,501 | 1,521 | ||||||||||||||
Non–accrual loans | 17,630 | 14,771 | 16,116 | 16,133 | 14,962 | ||||||||||||||
Total non–performing loans | $ | 21,840 | $ | 19,158 | $ | 20,206 | $ | 20,113 | $ | 19,019 | |||||||||
Non–performing loans to total loans | 0.52 | % | 0.47 | % | 0.51 | % | 0.54 | % | 0.52 | % |
Allocation of the Allowance for Credit Losses | ||||||||||||||
(Dollars in Thousands, Unaudited) | ||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||
Commercial | $ | 32,445 | $ | 33,806 | $ | 34,802 | $ | 37,789 | $ | 40,775 | ||||
Residential mortgage | 5,577 | 5,137 | 4,422 | 4,351 | 3,856 | |||||||||
Mortgage warehouse | 1,020 | 1,024 | 1,067 | 1,055 | 1,059 | |||||||||
Consumer | 11,422 | 11,402 | 12,059 | 9,313 | 8,596 | |||||||||
Total | $ | 50,464 | $ | 51,369 | $ | 52,350 | $ | 52,508 | $ | 54,286 |
Net Charge–offs (Recoveries) | |||||||||||||||||||
(Dollars in Thousands Except Ratios, Unaudited) | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Commercial | $ | (94 | ) | $ | 51 | $ | (75 | ) | $ | 38 | $ | 926 | |||||||
Residential mortgage | (8 | ) | (75 | ) | 40 | (10 | ) | 126 | |||||||||||
Mortgage warehouse | — | — | — | — | — | ||||||||||||||
Consumer | 387 | 162 | 319 | 108 | 360 | ||||||||||||||
Total | $ | 285 | $ | 138 | $ | 284 | $ | 136 | $ | 1,412 | |||||||||
Percent of net charge–offs (recoveries) to average loans outstanding for the period | 0.01 | % | 0.00 | % | 0.01 | % | 0.00 | % | 0.04 | % |
Total Non–performing Loans | |||||||||||||||||||
(Dollars in Thousands Except Ratios, Unaudited) | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Commercial | $ | 9,330 | $ | 7,199 | $ | 8,008 | $ | 7,844 | $ | 7,509 | |||||||||
Residential mortgage | 8,123 | 8,047 | 8,469 | 8,584 | 8,005 | ||||||||||||||
Mortgage warehouse | — | — | — | — | — | ||||||||||||||
Consumer | 4,387 | 3,912 | 3,729 | 3,685 | 3,505 | ||||||||||||||
Total | $ | 21,840 | $ | 19,158 | $ | 20,206 | $ | 20,113 | $ | 19,019 | |||||||||
Non–performing loans to total loans | 0.52 | % | 0.47 | % | 0.51 | % | 0.54 | % | 0.52 | % |
Other Real Estate Owned and Repossessed Assets | ||||||||||||||
(Dollars in Thousands, Unaudited) | ||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||
Commercial | $ | 1,881 | $ | 3,206 | $ | 1,414 | $ | 2,245 | $ | 2,861 | ||||
Residential mortgage | 107 | 22 | — | 170 | 695 | |||||||||
Mortgage warehouse | — | — | — | — | — | |||||||||
Consumer | 152 | 14 | 58 | 5 | 5 | |||||||||
Total | $ | 2,140 | $ | 3,242 | $ | 1,472 | $ | 2,420 | $ | 3,561 |
Average Balance Sheets | |||||||||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||
Assets | |||||||||||||||||||
Interest earning assets | |||||||||||||||||||
Federal funds sold | $ | 4,023 | $ | 34 | 3.35 | % | $ | 654,225 | $ | 251 | 0.15 | % | |||||||
Interest earning deposits | 8,233 | 48 | 2.31 | % | 22,537 | 32 | 0.56 | % | |||||||||||
Investment securities – taxable | 1,655,728 | 8,703 | 2.09 | % | 1,405,689 | 6,208 | 1.75 | % | |||||||||||
Investment securities – non–taxable (1) | 1,385,340 | 7,543 | 2.73 | % | 1,224,911 | 6,456 | 2.65 | % | |||||||||||
Loans receivable (2) (3) | 4,038,656 | 50,859 | 5.02 | % | 3,644,688 | 39,672 | 4.34 | % | |||||||||||
Total interest earning assets | 7,091,980 | 67,187 | 3.88 | % | 6,952,050 | 52,619 | 3.11 | % | |||||||||||
Non–interest earning assets | |||||||||||||||||||
Cash and due from banks | 96,835 | 102,273 | |||||||||||||||||
Allowance for credit losses | (51,323 | ) | (56,540 | ) | |||||||||||||||
Other assets | 580,874 | 463,560 | |||||||||||||||||
Total average assets | $ | 7,718,366 | $ | 7,461,343 | |||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Interest bearing liabilities | |||||||||||||||||||
Interest bearing deposits | $ | 4,555,887 | $ | 10,520 | 0.92 | % | $ | 4,543,989 | $ | 1,663 | 0.15 | % | |||||||
Borrowings | 850,236 | 5,729 | 2.67 | % | 525,638 | 1,025 | 0.77 | % | |||||||||||
Repurchase agreements | 141,676 | 311 | 0.87 | % | 137,868 | 36 | 0.10 | % | |||||||||||
Subordinated notes | 58,874 | 881 | 5.94 | % | 58,728 | 881 | 5.95 | % | |||||||||||
Junior subordinated debentures issued to capital trusts | 56,988 | 964 | 6.71 | % | 56,745 | 537 | 3.75 | % | |||||||||||
Total interest bearing liabilities | 5,663,661 | 18,405 | 1.29 | % | 5,322,968 | 4,142 | 0.31 | % | |||||||||||
Non–interest bearing liabilities | |||||||||||||||||||
Demand deposits | 1,321,139 | 1,366,621 | |||||||||||||||||
Accrued interest payable and other liabilities | 73,378 | 52,111 | |||||||||||||||||
Stockholders’ equity | 660,188 | 719,643 | |||||||||||||||||
Total average liabilities and stockholders’ equity | $ | 7,718,366 | $ | 7,461,343 | |||||||||||||||
Net interest income / spread | $ | 48,782 | 2.59 | % | $ | 48,477 | 2.80 | % | |||||||||||
Net interest income as a percent of average interest earning assets (1) | 2.85 | % | 2.87 | % | |||||||||||||||
(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 computation 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. |
Average Balance Sheets | |||||||||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||||||||
Twelve Months Ended | Twelve Months Ended | ||||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||
Assets | |||||||||||||||||||
Interest earning assets | |||||||||||||||||||
Federal funds sold | $ | 62,211 | $ | 165 | 0.27 | % | $ | 398,528 | $ | 535 | 0.13 | % | |||||||
Interest earning deposits | 13,596 | 141 | 1.04 | % | 25,993 | 160 | 0.62 | % | |||||||||||
Investment securities – taxable | 1,700,418 | 33,202 | 1.95 | % | 884,244 | 14,437 | 1.63 | % | |||||||||||
Investment securities – non–taxable (1) | 1,356,045 | 29,025 | 2.71 | % | 1,086,942 | 23,246 | 2.71 | % | |||||||||||
Loans receivable (2) (3) | 3,845,137 | 173,500 | 4.53 | % | 3,639,454 | 155,732 | 4.30 | % | |||||||||||
Total interest earning assets | 6,977,407 | 236,033 | 3.50 | % | 6,035,161 | 194,110 | 3.33 | % | |||||||||||
Non–interest earning assets | |||||||||||||||||||
Cash and due from banks | 99,885 | 89,993 | |||||||||||||||||
Allowance for credit losses | (52,606 | ) | (56,798 | ) | |||||||||||||||
Other assets | 509,229 | 445,895 | |||||||||||||||||
Total average assets | $ | 7,533,915 | $ | 6,514,251 | |||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Interest bearing liabilities | |||||||||||||||||||
Interest bearing deposits | $ | 4,513,668 | $ | 17,809 | 0.39 | % | $ | 3,897,750 | $ | 7,867 | 0.20 | % | |||||||
Borrowings | 696,584 | 11,938 | 1.71 | % | 425,214 | 4,546 | 1.07 | % | |||||||||||
Repurchase agreements | 141,048 | 527 | 0.37 | % | 123,675 | 155 | 0.13 | % | |||||||||||
Subordinated notes | 58,819 | 3,522 | 5.99 | % | 58,672 | 3,522 | 6.00 | % | |||||||||||
Junior subordinated debentures issued to capital trusts | 56,899 | 2,719 | 4.78 | % | 56,657 | 2,215 | 3.91 | % | |||||||||||
Total interest bearing liabilities | 5,467,018 | 36,515 | 0.67 | % | 4,561,968 | 18,305 | 0.40 | % | |||||||||||
Non–interest bearing liabilities | |||||||||||||||||||
Demand deposits | 1,332,937 | 1,188,275 | |||||||||||||||||
Accrued interest payable and other liabilities | 50,330 | 51,886 | |||||||||||||||||
Stockholders’ equity | 683,630 | 712,122 | |||||||||||||||||
Total average liabilities and stockholders’ equity | $ | 7,533,915 | $ | 6,514,251 | |||||||||||||||
Net interest income / spread | $ | 199,518 | 2.83 | % | $ | 175,805 | 2.93 | % | |||||||||||
Net interest income as a percent of average interest earning assets (1) | 2.98 | % | 3.03 | % | |||||||||||||||
(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 computation 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. |
Condensed Consolidated Balance Sheets | ||||||
(Dollars in Thousands) | ||||||
2022 | 2021 | |||||
(Unaudited) | ||||||
Assets | ||||||
Cash and due from banks | $ | 123,505 | $ | 593,508 | ||
Interest earning time deposits | 2,812 | 4,782 | ||||
Investment securities, available for sale | 997,558 | 1,160,812 | ||||
Investment securities, held to maturity (fair value | 2,022,748 | 1,552,443 | ||||
Loans held for sale | 5,807 | 12,579 | ||||
Loans, net of allowance for credit losses of | 4,107,534 | 3,604,248 | ||||
Premises and equipment, net | 92,677 | 93,441 | ||||
26,677 | 24,440 | |||||
155,211 | 154,572 | |||||
Other intangible assets | 17,239 | 20,941 | ||||
Interest receivable | 35,294 | 26,137 | ||||
Cash value of life insurance | 146,175 | 97,150 | ||||
Other assets | 139,281 | 66,836 | ||||
Total assets | $ | 7,872,518 | $ | 7,411,889 | ||
Liabilities | ||||||
Deposits | ||||||
Non–interest bearing | $ | 1,277,768 | $ | 1,360,338 | ||
Interest bearing | 4,580,006 | 4,442,653 | ||||
Total deposits | 5,857,774 | 5,802,991 | ||||
Borrowings | 1,142,949 | 712,739 | ||||
Subordinated notes | 58,896 | 58,750 | ||||
Junior subordinated debentures issued to capital trusts | 57,027 | 56,785 | ||||
Interest payable | 5,380 | 2,235 | ||||
Other liabilities | 73,117 | 55,180 | ||||
Total liabilities | 7,195,143 | 6,688,680 | ||||
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 Issued and Outstanding 43,937,889 and 43,811,421 shares | — | — | ||||
Additional paid–in capital | 354,188 | 352,122 | ||||
Retained earnings | 429,385 | 363,742 | ||||
Accumulated other comprehensive income | (106,198 | ) | 7,345 | |||
Total stockholders’ equity | 677,375 | 723,209 | ||||
Total liabilities and stockholders’ equity | $ | 7,872,518 | $ | 7,411,889 |
Condensed Consolidated Statements of Income | ||||||||||||||||||
(Dollars in Thousands Except Per Share Data, Unaudited) | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||||||
Interest income | ||||||||||||||||||
Loans receivable | $ | 50,859 | $ | 45,517 | $ | 40,585 | $ | 36,539 | $ | 39,672 | ||||||||
Investment securities – taxable | 8,785 | 8,501 | 8,716 | 7,506 | 6,491 | |||||||||||||
Investment securities – non–taxable | 7,543 | 7,478 | 7,307 | 6,697 | 6,456 | |||||||||||||
Total interest income | 67,187 | 61,496 | 56,608 | 50,742 | 52,619 | |||||||||||||
Interest expense | ||||||||||||||||||
Deposits | 10,520 | 4,116 | 1,677 | 1,496 | 1,663 | |||||||||||||
Borrowed funds | 6,040 | 3,895 | 1,450 | 1,080 | 1,061 | |||||||||||||
Subordinated notes | 881 | 880 | 881 | 880 | 881 | |||||||||||||
Junior subordinated debentures issued to capital trusts | 964 | 744 | 556 | 455 | 537 | |||||||||||||
Total interest expense | 18,405 | 9,635 | 4,564 | 3,911 | 4,142 | |||||||||||||
Net interest income | 48,782 | 51,861 | 52,044 | 46,831 | 48,477 | |||||||||||||
Credit loss expense (recovery) | (69 | ) | (601 | ) | 240 | (1,386 | ) | (2,071 | ) | |||||||||
Net interest income after credit loss expense (recovery) | 48,851 | 52,462 | 51,804 | 48,217 | 50,548 | |||||||||||||
Non–interest Income | ||||||||||||||||||
Service charges on deposit accounts | 2,947 | 3,023 | 2,833 | 2,795 | 2,510 | |||||||||||||
Wire transfer fees | 118 | 148 | 170 | 159 | 205 | |||||||||||||
Interchange fees | 2,951 | 3,089 | 3,582 | 2,780 | 3,082 | |||||||||||||
Fiduciary activities | 1,270 | 1,203 | 1,405 | 1,503 | 1,591 | |||||||||||||
Gain on sale of mortgage loans | 1,196 | 1,441 | 2,501 | 2,027 | 4,167 | |||||||||||||
Mortgage servicing income net of impairment | 637 | 355 | 319 | 3,489 | 300 | |||||||||||||
Increase in cash value of bank owned life insurance | 751 | 814 | 519 | 510 | 547 | |||||||||||||
Death benefit on bank owned life insurance | — | — | 644 | — | — | |||||||||||||
Other income | 804 | 115 | 461 | 892 | 426 | |||||||||||||
Total non–interest income | 10,674 | 10,188 | 12,434 | 14,155 | 12,828 | |||||||||||||
Non–interest expense | ||||||||||||||||||
Salaries and employee benefits | 19,978 | 20,613 | 19,957 | 19,735 | 20,549 | |||||||||||||
Net occupancy expenses | 3,279 | 3,293 | 3,190 | 3,561 | 3,204 | |||||||||||||
Data processing | 2,884 | 2,539 | 2,607 | 2,537 | 2,672 | |||||||||||||
Professional fees | 694 | 552 | 283 | 314 | 562 | |||||||||||||
Outside services and consultants | 2,985 | 2,855 | 2,485 | 2,525 | 2,197 | |||||||||||||
Loan expense | 1,281 | 1,392 | 1,533 | 1,205 | 1,304 | |||||||||||||
388 | 670 | 775 | 725 | 798 | ||||||||||||||
Other losses | 118 | 398 | 362 | 168 | 1,925 | |||||||||||||
Other expenses | 4,104 | 4,504 | 4,212 | 4,500 | 4,660 | |||||||||||||
Total non–interest expense | 35,711 | 36,816 | 35,404 | 35,270 | 37,871 | |||||||||||||
Income before income taxes | 23,814 | 25,834 | 28,834 | 27,102 | 25,505 | |||||||||||||
Income tax expense | 2,649 | 2,013 | 3,975 | 3,539 | 4,080 | |||||||||||||
Net income | $ | 21,165 | $ | 23,821 | $ | 24,859 | $ | 23,563 | $ | 21,425 | ||||||||
Basic earnings per share | $ | 0.49 | $ | 0.55 | $ | 0.57 | $ | 0.54 | $ | 0.49 | ||||||||
Diluted earnings per share | 0.48 | 0.55 | 0.57 | 0.54 | 0.49 |
Condensed Consolidated Statements of Income | |||||||
(Dollars in Thousands Except Per Share Data, Unaudited) | |||||||
Twelve Months Ended | |||||||
2022 | 2021 | ||||||
Interest income | |||||||
Loans receivable | $ | 173,500 | $ | 155,732 | |||
Investment securities – taxable | 33,508 | 15,132 | |||||
Investment securities – non–taxable | 29,025 | 23,246 | |||||
Total interest income | 236,033 | 194,110 | |||||
Interest expense | |||||||
Deposits | 17,809 | 7,867 | |||||
Borrowed funds | 12,465 | 4,701 | |||||
Subordinated notes | 3,522 | 3,522 | |||||
Junior subordinated debentures issued to capital trusts | 2,719 | 2,215 | |||||
Total interest expense | 36,515 | 18,305 | |||||
Net interest income | 199,518 | 175,805 | |||||
Credit loss expense (recovery) | (1,816 | ) | (2,084 | ) | |||
Net interest income after credit loss expense (recovery) | 201,334 | 177,889 | |||||
Non–interest Income | |||||||
Service charges on deposit accounts | 11,598 | 9,192 | |||||
Wire transfer fees | 595 | 892 | |||||
Interchange fees | 12,402 | 10,901 | |||||
Fiduciary activities | 5,381 | 7,419 | |||||
Gains / (losses) on sale of investment securities | — | 914 | |||||
Gain on sale of mortgage loans | 7,165 | 19,163 | |||||
Mortgage servicing income net of impairment | 4,800 | 2,352 | |||||
Increase in cash value of bank owned life insurance | 2,594 | 2,094 | |||||
Death benefit on bank owned life insurance | 644 | 783 | |||||
Other income | 2,272 | 4,242 | |||||
Total non–interest income | 47,451 | 57,952 | |||||
Non–interest expense | |||||||
Salaries and employee benefits | 80,283 | 74,051 | |||||
Net occupancy expenses | 13,323 | 12,541 | |||||
Data processing | 10,567 | 9,962 | |||||
Professional fees | 1,843 | 2,216 | |||||
Outside services and consultants | 10,850 | 8,449 | |||||
Loan expense | 5,411 | 5,492 | |||||
2,558 | 2,377 | ||||||
Other losses | 1,046 | 2,283 | |||||
Other expenses | 17,320 | 16,023 | |||||
Total non–interest expense | 143,201 | 133,394 | |||||
Income before income taxes | 105,584 | 102,447 | |||||
Income tax expense | 12,176 | 15,356 | |||||
Net income | $ | 93,408 | $ | 87,091 | |||
Basic earnings per share | $ | 2.14 | $ | 1.99 | |||
Diluted earnings per share | 2.14 | 1.98 |
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, pre–tax, pre–provision income, net interest margin, tangible stockholders’ equity, tangible book value per share, efficiency ratio, the return on average assets, the return on average common equity and the return on average tangible equity. In each case, we have identified special circumstances that we consider to be non–recurring and have excluded them. We believe that this shows the impact of such events as acquisition–related purchase accounting adjustments, among others we have identified in our reconciliations. Horizon believes these non–GAAP financial measures are helpful to investors and provide a greater understanding of our business and financial results without giving effect to the purchase accounting impacts and one–time costs of acquisitions and non–recurring 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 information identified herein and its most comparable GAAP measures.
Non–GAAP Reconciliation of Net Income | ||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
Net income as reported | $ | 21,165 | $ | 23,821 | $ | 24,859 | $ | 23,563 | $ | 21,425 | $ | 93,408 | $ | 87,091 | ||||||||||
Acquisition expenses | — | — | — | — | 884 | — | 1,925 | |||||||||||||||||
Tax effect | — | — | — | — | (184 | ) | — | (401 | ) | |||||||||||||||
Net income excluding acquisition expenses | 21,165 | 23,821 | 24,859 | 23,563 | 22,125 | 93,408 | 88,615 | |||||||||||||||||
Credit loss expense acquired loans | — | — | — | — | — | — | 2,034 | |||||||||||||||||
Tax effect | — | — | — | — | — | — | (427 | ) | ||||||||||||||||
Net income excluding credit loss expense acquired loans | 21,165 | 23,821 | 24,859 | 23,563 | 22,125 | 93,408 | 90,222 | |||||||||||||||||
Gain on sale of ESOP trustee accounts | — | — | — | — | — | — | (2,329 | ) | ||||||||||||||||
Tax effect | — | — | — | — | — | — | 489 | |||||||||||||||||
Net income excluding gain on sale of ESOP trustee accounts | 21,165 | 23,821 | 24,859 | 23,563 | 22,125 | 93,408 | 88,382 | |||||||||||||||||
ESOP settlement expenses | — | — | — | — | 1,900 | — | 1,900 | |||||||||||||||||
Tax effect | — | — | — | — | (315 | ) | — | (315 | ) | |||||||||||||||
Net income excluding ESOP settlement expenses | 21,165 | 23,821 | 24,859 | 23,563 | 23,710 | 93,408 | 89,967 | |||||||||||||||||
(Gain) / loss on sale of investment securities | — | — | — | — | — | — | (914 | ) | ||||||||||||||||
Tax effect | — | — | — | — | — | — | 192 | |||||||||||||||||
Net income excluding (gain) / loss on sale of investment securities | 21,165 | 23,821 | 24,859 | 23,563 | 23,710 | 93,408 | 89,245 | |||||||||||||||||
Death benefit on bank owned life insurance (“BOLI”) | — | — | (644 | ) | — | — | (644 | ) | (783 | ) | ||||||||||||||
Net income excluding death benefit on BOLI | 21,165 | 23,821 | 24,215 | 23,563 | 23,710 | 92,764 | 88,462 | |||||||||||||||||
Prepayment penalties on borrowings | — | — | — | — | — | — | 125 | |||||||||||||||||
Tax effect | — | — | — | — | — | — | (26 | ) | ||||||||||||||||
Net income excluding prepayment penalties on borrowings | 21,165 | 23,821 | 24,215 | 23,563 | 23,710 | 92,764 | 88,561 | |||||||||||||||||
Adjusted net income | $ | 21,165 | $ | 23,821 | $ | 24,215 | $ | 23,563 | $ | 23,710 | $ | 92,764 | $ | 88,561 |
Non–GAAP Reconciliation of Diluted Earnings per Share | ||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
Diluted earnings per share (“EPS”) as reported | $ | 0.48 | $ | 0.55 | $ | 0.57 | $ | 0.54 | $ | 0.49 | $ | 2.14 | $ | 1.98 | ||||||||||
Acquisition expenses | — | — | — | — | 0.02 | — | 0.04 | |||||||||||||||||
Tax effect | — | — | — | — | — | — | — | |||||||||||||||||
Diluted EPS excluding acquisition expenses | 0.48 | 0.55 | 0.57 | 0.54 | 0.51 | 2.14 | 2.02 | |||||||||||||||||
Credit loss expense acquired loans | — | — | — | — | — | — | 0.05 | |||||||||||||||||
Tax effect | — | — | — | — | — | — | (0.01 | ) | ||||||||||||||||
Diluted EPS excluding credit loss expense acquired loans | 0.48 | 0.55 | 0.57 | 0.54 | 0.51 | 2.14 | 2.06 | |||||||||||||||||
Gain on sale of ESOP trustee accounts | — | — | — | — | — | — | (0.05 | ) | ||||||||||||||||
Tax effect | — | — | — | — | — | — | 0.01 | |||||||||||||||||
Diluted EPS excluding gain on sale of ESOP trustee accounts | 0.48 | 0.55 | 0.57 | 0.54 | 0.51 | 2.14 | 2.02 | |||||||||||||||||
ESOP settlement expenses | — | — | — | — | 0.04 | — | 0.04 | |||||||||||||||||
Tax effect | — | — | — | — | (0.01 | ) | — | (0.01 | ) | |||||||||||||||
Diluted EPS excluding ESOP settlement expenses | 0.48 | 0.55 | 0.57 | 0.54 | 0.54 | 2.14 | 2.05 | |||||||||||||||||
(Gain) / loss on sale of investment securities | — | — | — | — | — | — | (0.02 | ) | ||||||||||||||||
Tax effect | — | — | — | — | — | — | — | |||||||||||||||||
Diluted EPS excluding (gain) / loss on sale of investment securities | 0.48 | 0.55 | 0.57 | 0.54 | 0.54 | 2.14 | 2.03 | |||||||||||||||||
Death benefit on bank owned life insurance (“BOLI”) | — | — | (0.01 | ) | — | — | (0.01 | ) | (0.03 | ) | ||||||||||||||
Diluted EPS excluding death benefit on BOLI | 0.48 | 0.55 | 0.56 | 0.54 | 0.54 | 2.13 | 2.00 | |||||||||||||||||
Prepayment penalties on borrowings | — | — | — | — | — | — | — | |||||||||||||||||
Tax effect | — | — | — | — | — | — | — | |||||||||||||||||
Diluted EPS excluding prepayment penalties on borrowings | 0.48 | 0.55 | 0.56 | 0.54 | 0.54 | 2.13 | 2.00 | |||||||||||||||||
Adjusted diluted EPS | $ | 0.48 | $ | 0.55 | $ | 0.56 | $ | 0.54 | $ | 0.54 | $ | 2.13 | $ | 2.00 |
Non–GAAP Reconciliation of Pre–Tax, Pre–Provision Income | |||||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Pre–tax income | $ | 23,814 | $ | 25,834 | $ | 28,834 | $ | 27,102 | $ | 25,505 | $ | 105,584 | $ | 102,447 | |||||||||||||
Credit loss expense | (69 | ) | (601 | ) | 240 | (1,386 | ) | (2,071 | ) | (1,816 | ) | (2,084 | ) | ||||||||||||||
Pre–tax, pre–provision income | $ | 23,745 | $ | 25,233 | $ | 29,074 | $ | 25,716 | $ | 23,434 | $ | 103,768 | $ | 100,363 | |||||||||||||
Pre–tax, pre–provision income | $ | 23,745 | $ | 25,233 | $ | 29,074 | $ | 25,716 | $ | 23,434 | $ | 103,768 | $ | 100,363 | |||||||||||||
Acquisition expenses | — | — | — | — | 884 | — | 1,925 | ||||||||||||||||||||
Gain on sale of ESOP trustee accounts | — | — | — | — | — | — | (2,329 | ) | |||||||||||||||||||
ESOP settlement expenses | — | — | — | — | 1,900 | — | 1,900 | ||||||||||||||||||||
(Gain) / loss on sale of investment securities | — | — | — | — | — | — | (914 | ) | |||||||||||||||||||
Death benefit on BOLI | — | — | (644 | ) | — | — | (644 | ) | (783 | ) | |||||||||||||||||
Prepayment penalties on borrowings | — | — | — | — | — | — | 125 | ||||||||||||||||||||
Adjusted pre–tax, pre–provision income | $ | 23,745 | $ | 25,233 | $ | 28,430 | $ | 25,716 | $ | 26,218 | $ | 103,124 | $ | 100,162 |
Non–GAAP Reconciliation of Net Interest Margin | |||||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Net interest income as reported | $ | 48,782 | $ | 51,861 | $ | 52,044 | $ | 46,831 | $ | 48,477 | $ | 199,518 | $ | 175,805 | |||||||||||||
Average interest earning assets | 7,091,980 | 7,056,208 | 6,943,633 | 6,814,756 | 6,952,050 | 6,977,407 | 6,035,161 | ||||||||||||||||||||
Net interest income as a percentage of average interest earning assets (“Net Interest Margin”) | 2.85 | % | 3.04 | % | 3.13 | % | 2.90 | % | 2.87 | % | 2.98 | % | 3.03 | % | |||||||||||||
Net interest income as reported | $ | 48,782 | $ | 51,861 | $ | 52,044 | $ | 46,831 | $ | 48,477 | $ | 199,518 | $ | 175,805 | |||||||||||||
Acquisition–related purchase accounting adjustments (“PAUs”) | (431 | ) | (906 | ) | (1,223 | ) | (916 | ) | (1,819 | ) | (3,476 | ) | (4,503 | ) | |||||||||||||
Prepayment penalties on borrowings | — | — | — | — | — | — | 125 | ||||||||||||||||||||
Adjusted net interest income | $ | 48,351 | $ | 50,955 | $ | 50,821 | $ | 45,915 | $ | 46,658 | $ | 196,042 | $ | 171,302 | |||||||||||||
Adjusted net interest margin | 2.83 | % | 2.99 | % | 3.06 | % | 2.85 | % | 2.77 | % | 2.93 | % | 2.96 | % |
Non–GAAP Reconciliation of Tangible Stockholders’ Equity and Tangible Book Value per Share | ||||||||||||||
(Dollars in Thousands, Unaudited) | ||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||
Total stockholders’ equity | $ | 677,375 | $ | 644,993 | $ | 657,865 | $ | 677,450 | $ | 723,209 | ||||
Less: Intangible assets | 172,450 | 173,375 | 173,662 | 174,588 | 175,513 | |||||||||
Total tangible stockholders’ equity | $ | 504,925 | $ | 471,618 | $ | 484,203 | $ | 502,862 | $ | 547,696 | ||||
Common shares outstanding | 43,574,151 | 43,574,151 | 43,572,796 | 43,572,796 | 43,547,942 | |||||||||
Book value per common share | $ | 15.55 | $ | 14.80 | $ | 15.10 | $ | 15.55 | $ | 16.61 | ||||
Tangible book value per common share | $ | 11.59 | $ | 10.82 | $ | 11.11 | $ | 11.54 | $ | 12.58 |
Non–GAAP Calculation and Reconciliation of Efficiency Ratio and Adjusted Efficiency Ratio | |||||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Non–interest expense as reported | $ | 35,711 | $ | 36,816 | $ | 35,404 | $ | 35,270 | $ | 37,871 | $ | 143,201 | $ | 133,394 | |||||||||||||
Net interest income as reported | 48,782 | 51,861 | 52,044 | 46,831 | 48,477 | 199,518 | 175,805 | ||||||||||||||||||||
Non–interest income as reported | $ | 10,674 | $ | 10,188 | $ | 12,434 | $ | 14,155 | $ | 12,828 | $ | 47,451 | $ | 57,952 | |||||||||||||
Non–interest expense / (Net interest income + Non–interest income) (“Efficiency Ratio”) | 60.06 | % | 59.33 | % | 54.91 | % | 57.83 | % | 61.77 | % | 57.98 | % | 57.07 | % | |||||||||||||
Non–interest expense as reported | $ | 35,711 | $ | 36,816 | $ | 35,404 | $ | 35,270 | $ | 37,871 | $ | 143,201 | $ | 133,394 | |||||||||||||
Acquisition expenses | — | — | — | — | (884 | ) | — | (1,925 | ) | ||||||||||||||||||
ESOP settlement expenses | — | — | — | — | (1,900 | ) | — | (1,900 | ) | ||||||||||||||||||
Non–interest expense excluding acquisition expenses and ESOP settlement expenses | 35,711 | 36,816 | 35,404 | 35,270 | 35,087 | 143,201 | 129,569 | ||||||||||||||||||||
Net interest income as reported | 48,782 | 51,861 | 52,044 | 46,831 | 48,477 | 199,518 | 175,805 | ||||||||||||||||||||
Prepayment penalties on borrowings | — | — | — | — | — | — | 125 | ||||||||||||||||||||
Net interest income excluding prepayment penalties on borrowings | 48,782 | 51,861 | 52,044 | 46,831 | 48,477 | 199,518 | 175,930 | ||||||||||||||||||||
Non–interest income as reported | 10,674 | 10,188 | 12,434 | 14,155 | 12,828 | 47,451 | 57,952 | ||||||||||||||||||||
Gain on sale of ESOP trustee accounts | — | — | — | — | — | — | (2,329 | ) | |||||||||||||||||||
(Gain) / loss on sale of investment securities | — | — | — | — | — | — | (914 | ) | |||||||||||||||||||
Death benefit on BOLI | — | — | (644 | ) | — | — | (644 | ) | (783 | ) | |||||||||||||||||
Non–interest income excluding (gain) / loss on sale of investment securities and death benefit on BOLI | $ | 10,674 | $ | 10,188 | $ | 11,790 | $ | 14,155 | $ | 12,828 | $ | 46,807 | $ | 53,926 | |||||||||||||
Adjusted efficiency ratio | 60.06 | % | 59.33 | % | 55.46 | % | 57.83 | % | 57.23 | % | 58.13 | % | 56.37 | % |
Non–GAAP Reconciliation of Return on Average Assets | |||||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Average assets | $ | 7,718,366 | $ | 7,635,102 | $ | 7,476,238 | $ | 7,319,675 | $ | 7,461,343 | $ | 7,533,915 | $ | 6,514,251 | |||||||||||||
Return on average assets (“ROAA”) as reported | 1.09 | % | 1.24 | % | 1.33 | % | 1.31 | % | 1.14 | % | 1.24 | % | 1.34 | % | |||||||||||||
Acquisition expenses | — | — | — | — | 0.05 | — | 0.03 | ||||||||||||||||||||
Tax effect | — | — | — | — | (0.01 | ) | — | (0.01 | ) | ||||||||||||||||||
ROAA excluding acquisition expenses | 1.09 | 1.24 | 1.33 | 1.31 | 1.18 | 1.24 | 1.36 | ||||||||||||||||||||
Credit loss expense acquired loans | — | — | — | — | — | — | 0.03 | ||||||||||||||||||||
Tax effect | — | — | — | — | — | — | (0.01 | ) | |||||||||||||||||||
ROAA excluding credit loss expense on acquired loans | 1.09 | 1.24 | 1.33 | 1.31 | 1.18 | 1.24 | 1.38 | ||||||||||||||||||||
Gain on sale of ESOP trustee accounts | — | — | — | — | — | — | (0.04 | ) | |||||||||||||||||||
Tax effect | — | — | — | — | — | — | 0.01 | ||||||||||||||||||||
ROAA excluding gain on sale of ESOP trustee accounts | 1.09 | 1.24 | 1.33 | 1.31 | 1.18 | 1.24 | 1.35 | ||||||||||||||||||||
ESOP settlement expenses | — | — | — | — | 0.10 | — | 0.03 | ||||||||||||||||||||
Tax effect | — | — | — | — | (0.02 | ) | — | — | |||||||||||||||||||
ROAA excluding ESOP settlement expenses | 1.09 | 1.24 | 1.33 | 1.31 | 1.26 | 1.24 | 1.38 | ||||||||||||||||||||
(Gain) / loss on sale of investment securities | — | — | — | — | — | — | (0.01 | ) | |||||||||||||||||||
Tax effect | — | — | — | — | — | — | — | ||||||||||||||||||||
ROAA excluding (gain) / loss on sale of investment securities | 1.09 | 1.24 | 1.33 | 1.31 | 1.26 | 1.24 | 1.37 | ||||||||||||||||||||
Death benefit on BOLI | — | — | (0.03 | ) | — | — | (0.01 | ) | (0.01 | ) | |||||||||||||||||
ROAA excluding death benefit on BOLI | 1.09 | 1.24 | 1.30 | 1.31 | 1.26 | 1.23 | 1.36 | ||||||||||||||||||||
Prepayment penalties on borrowings | — | — | — | — | — | — | — | ||||||||||||||||||||
Tax effect | — | — | — | — | — | — | — | ||||||||||||||||||||
ROAA excluding prepayment penalties on borrowings | 1.09 | 1.24 | 1.30 | 1.31 | 1.26 | 1.23 | 1.36 | ||||||||||||||||||||
Adjusted ROAA | 1.09 | % | 1.24 | % | 1.30 | % | 1.31 | % | 1.26 | % | 1.23 | % | 1.36 | % |
Non–GAAP Reconciliation of Return on Average Common Equity | |||||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Average common equity | $ | 660,188 | $ | 680,376 | $ | 677,299 | $ | 716,341 | $ | 719,643 | $ | 683,630 | $ | 712,122 | |||||||||||||
Return on average common equity (“ROACE”) as reported | 12.72 | % | 13.89 | % | 14.72 | % | 13.34 | % | 11.81 | % | 13.66 | % | 12.23 | % | |||||||||||||
Acquisition expenses | — | — | — | — | 0.49 | — | 0.27 | ||||||||||||||||||||
Tax effect | — | — | — | — | (0.10 | ) | — | (0.06 | ) | ||||||||||||||||||
ROACE excluding acquisition expenses | 12.72 | 13.89 | 14.72 | 13.34 | 12.20 | 13.66 | 12.44 | ||||||||||||||||||||
Credit loss expense acquired loans | — | — | — | — | — | — | 0.29 | ||||||||||||||||||||
Tax effect | — | — | — | — | — | — | (0.06 | ) | |||||||||||||||||||
ROACE excluding credit loss expense acquired loans | 12.72 | 13.89 | 14.72 | 13.34 | 12.20 | 13.66 | 12.67 | ||||||||||||||||||||
Gain on sale of ESOP trustee accounts | — | — | — | — | — | — | (0.33 | ) | |||||||||||||||||||
Tax effect | — | — | — | — | — | — | 0.07 | ||||||||||||||||||||
ROACE excluding gain on sale of ESOP trustee accounts | 12.72 | 13.89 | 14.72 | 13.34 | 12.20 | 13.66 | 12.41 | ||||||||||||||||||||
ESOP settlement expenses | — | — | — | — | 1.05 | — | 0.27 | ||||||||||||||||||||
Tax effect | — | — | — | — | (0.17 | ) | — | (0.04 | ) | ||||||||||||||||||
ROACE excluding ESOP settlement expenses | 12.72 | 13.89 | 14.72 | 13.34 | 13.08 | 13.66 | 12.64 | ||||||||||||||||||||
(Gain) / loss on sale of investment securities | — | — | — | — | — | — | (0.13 | ) | |||||||||||||||||||
Tax effect | — | — | — | — | — | — | 0.03 | ||||||||||||||||||||
ROACE excluding (gain) / loss on sale of investment securities | 12.72 | 13.89 | 14.72 | 13.34 | 13.08 | 13.66 | 12.54 | ||||||||||||||||||||
Death benefit on BOLI | — | — | (0.38 | ) | — | — | (0.09 | ) | (0.11 | ) | |||||||||||||||||
ROACE excluding death benefit on BOLI | 12.72 | 13.89 | 14.34 | 13.34 | 13.08 | 13.57 | 12.43 | ||||||||||||||||||||
Prepayment penalties on borrowings | — | — | — | — | — | — | 0.02 | ||||||||||||||||||||
Tax effect | — | — | — | — | — | — | — | ||||||||||||||||||||
ROACE excluding prepayment penalties on borrowings | 12.72 | % | 13.89 | % | 14.34 | % | 13.34 | % | 13.08 | % | 13.57 | % | 12.45 | % | |||||||||||||
Adjusted ROACE | 12.72 | % | 13.89 | % | 14.34 | % | 13.34 | % | 13.08 | % | 13.57 | % | 12.45 | % |
Non–GAAP Reconciliation of Return on Average Tangible Equity | |||||||||||||||||||||||||||
(Dollars in Thousands, Unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Average tangible equity | $ | 660,188 | $ | 680,376 | $ | 677,299 | $ | 716,341 | $ | 719,643 | $ | 683,630 | $ | 712,122 | |||||||||||||
Less: Average intangible assets | 173,050 | 173,546 | 175,321 | 176,356 | 179,594 | 174,003 | 175,811 | ||||||||||||||||||||
Average tangible equity | $ | 487,138 | $ | 506,830 | $ | 501,978 | $ | 539,985 | $ | 540,049 | $ | 509,627 | $ | 536,311 | |||||||||||||
Return on average tangible equity (“ROATE”) as reported | 17.24 | % | 18.65 | % | 19.86 | % | 17.70 | % | 15.74 | % | 18.33 | % | 16.24 | % | |||||||||||||
Acquisition expenses | — | — | — | — | 0.65 | — | 0.36 | ||||||||||||||||||||
Tax effect | — | — | — | — | (0.14 | ) | — | (0.08 | ) | ||||||||||||||||||
ROATE excluding acquisition expenses | 17.24 | 18.65 | 19.86 | 17.70 | 16.25 | 18.33 | 16.52 | ||||||||||||||||||||
Credit loss expense acquired loans | — | — | — | — | — | — | 0.38 | ||||||||||||||||||||
Tax effect | — | — | — | — | — | — | (0.08 | ) | |||||||||||||||||||
ROATE excluding credit loss expense acquired loans | 17.24 | 18.65 | 19.86 | 17.70 | 16.25 | 18.33 | 16.82 | ||||||||||||||||||||
Gain on sale of ESOP trustee accounts | — | — | — | — | — | — | (0.43 | ) | |||||||||||||||||||
Tax effect | — | — | — | — | — | — | 0.10 | ||||||||||||||||||||
ROATE excluding gain on sale of ESOP trustee accounts | 17.24 | 18.65 | 19.86 | 17.70 | 16.25 | 18.33 | 16.49 | ||||||||||||||||||||
ESOP settlement expenses | — | — | — | — | 1.40 | — | 0.35 | ||||||||||||||||||||
Tax effect | — | — | — | — | (0.23 | ) | — | (0.06 | ) | ||||||||||||||||||
ROATE excluding ESOP settlement expenses | 17.24 | 18.65 | 19.86 | 17.70 | 17.42 | 18.33 | 16.78 | ||||||||||||||||||||
(Gain) / loss on sale of investment securities | — | — | — | — | — | — | (0.17 | ) | |||||||||||||||||||
Tax effect | — | — | — | — | — | — | 0.04 | ||||||||||||||||||||
ROATE excluding (gain) / loss on sale of investment securities | 17.24 | 18.65 | 19.86 | 17.70 | 17.42 | 18.33 | 16.65 | ||||||||||||||||||||
Death benefit on BOLI | — | — | (0.51 | ) | — | — | (0.13 | ) | (0.15 | ) | |||||||||||||||||
ROATE excluding death benefit on BOLI | 17.24 | 18.65 | 19.35 | 17.70 | 17.42 | 18.20 | 16.50 | ||||||||||||||||||||
Prepayment penalties on borrowings | — | — | — | — | — | — | 0.02 | ||||||||||||||||||||
Tax effect | — | — | — | — | — | — | (0.01 | ) | |||||||||||||||||||
ROATE excluding prepayment penalties on borrowings | 17.24 | % | 18.65 | % | 19.35 | % | 17.70 | % | 17.42 | % | 18.20 | % | 16.51 | % | |||||||||||||
Adjusted ROATE | 17.24 | % | 18.65 | % | 19.35 | % | 17.70 | % | 17.42 | % | 18.20 | % | 16.51 | % |
Earnings Conference Call
As previously announced, Horizon will host a conference call to review its fourth quarter and full year 2022 financial results and operating performance.
Participants may access the live conference call on
A telephone replay of the call will be available approximately one hour after the end of the conference through
About
Contact: | |
Chief Financial Officer | |
Phone: | (219) 873-2611 |
Fax: | (219) 874-9280 |
Date: |
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