Attached files
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| 8-K - HORIZON BANCORP INC /IN/ | hb_8k0505.htm |
Forward-Looking Statements
This presentation may contain forward-looking statements regarding the financial
performance, business, and future operations of Horizon Bancorp 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. Forward-looking statements provide current expectations or
forecasts of future events and are not guarantees of future results or performance. As a
result, undue reliance should not be placed on these forward-looking statements, which
speak only as of the date hereof.
performance, business, and future operations of Horizon Bancorp 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. Forward-looking statements provide current expectations or
forecasts of future events and are not guarantees of future results or performance. As a
result, undue reliance should not be placed on these forward-looking statements, which
speak only as of the date hereof.
We have tried, wherever possible, to identify such statements by using words such as
“anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar
expressions, and although management believes that the expectations reflected in such
forward-looking statements are accurate and reasonable, actual results may differ
materially from those expressed or implied in such statements. Risks and uncertainties
that could cause our actual results to differ materially include those set forth in “Item 1A
Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2010. Statements in this presentation should be considered in
conjunction with such risk factors and the other information publicly available about
Horizon, including the information in the filings we make with the Securities and
Exchange Commission.
“anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar
expressions, and although management believes that the expectations reflected in such
forward-looking statements are accurate and reasonable, actual results may differ
materially from those expressed or implied in such statements. Risks and uncertainties
that could cause our actual results to differ materially include those set forth in “Item 1A
Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2010. Statements in this presentation should be considered in
conjunction with such risk factors and the other information publicly available about
Horizon, including the information in the filings we make with the Securities and
Exchange Commission.
Horizon does not undertake, and specifically disclaims any obligation, to publicly release
any updates to any forward-looking statement to reflect events or circumstances
occurring or arising after the date on which the forward-looking statement is made, or to
reflect the occurrence of unanticipated events, except to the extent required by law.
any updates to any forward-looking statement to reflect events or circumstances
occurring or arising after the date on which the forward-looking statement is made, or to
reflect the occurrence of unanticipated events, except to the extent required by law.
Thomas H. Edwards
President & Chief Operating Officer
Horizon’s Sound Credit Culture
and
Asset Quality
Sound Credit Culture
• Team of Seasoned Underwriters
– Average Tenure > 20 years
• Primarily an In-Market and Full Recourse Lender
• Predominately a Secured Lender
• Retail & Business Focus
– Average Commercial Loan Size Approximately $250,000
– Sweet Spot - Retail and Business Focus
• We Manage Lending Limits
– House Limit $10 million
– Legal Limit > $20 million
– Five Loan Relationships with Balances > $5 million
Diversity in Non-Performing & Real Estate Owned
Non-Performing and REO By Classification at March 31, 2011
Dollars in Millions
Non-Performing Loans - $22.1
Other Real Estate Owned - $2.3
Consumer Loans Lead in Dollars Charged-off
By Type Of Loan
Horizon Builds Loan Loss Reserve
Horizon Outperforms Peer Groups
Non-Performing Loans Plus OREO to Gross Loans Plus OREO
Source: FDIC Uniform Bank Performance Reports as of 12/31/10. Peer is a custom group of 17 publicly traded banks headquartered in the
state of Indiana. National peer group consists of insured commercial banks having assets between 1 billion and 3 billion.
state of Indiana. National peer group consists of insured commercial banks having assets between 1 billion and 3 billion.
2011 1st Qtr
Foreclosure Is Option Of Last Resort
Foreclosure Mitigation Policy and Procedures
• Review each delinquent case to seek alternatives to
foreclosure
foreclosure
• Offer financial alternatives to customers
• Pursue financial alternatives even after foreclosure is
initiated
initiated
• Note modifications
• Payment extensions or note modifications
• Arrange satisfactory repayment plans
Craig M. Dwight
Chief Executive Officer
The Current Banking Environment
and Horizon’s Response
“May You Live
in
Interesting Times”
Lord's Prayer: 66 words
Archimedes' Principle: 67 words
10 Commandments: 179 words
Lincoln's Gettysburg address: 286 words
U.S. Declaration of Independence: 1,300 words
Dodd-Frank Act: ≈ 200,000 words
Archimedes' Principle: 67 words
10 Commandments: 179 words
Lincoln's Gettysburg address: 286 words
U.S. Declaration of Independence: 1,300 words
Dodd-Frank Act: ≈ 200,000 words
New Regulations Will Have
Adverse Affect on the Industry
Adverse Affect on the Industry
• Lower Revenues
– Consumer Finance Protection Bureau
– Durbin amendment
– Mortgage pricing
• Higher Costs
– Implementation & systems up-grades
– Compliance & training
– Lost opportunity
– Horizon has expanded its regulatory compliance team
• Higher Capital
– Lower returns on equity
– Importance of capital allocation
Horizon is Meeting the Challenge
for a
Once in a Lifetime Opportunity
Companies That Effectively
Deal with Change
&
Execute Well
Lead the Industry!
Deal with Change
&
Execute Well
Lead the Industry!
Horizon is an Industry Leader
• Great Team of Advisors (a/k/a Employees)
– We look for solutions
– We have a history of getting things done
– We look for opportunities
• Good Historical Performance - Indicator of
Future Ability
Future Ability
• Energy and Desire to Improve
• Positive Feedback from Shareholders & Investors
• Well-Defined Growth Strategy
Horizon Will Increase Revenue
• Organic Growth
– Commercial lending team expanded
– Treasury management team expanded
– New retail mortgage sales manager
– Increase in trust administrators
– Opening new banking markets
Horizon Will Be a Consolidator
of Community Banks
of Community Banks
Challenges Confronting Community Banks
• Poor earnings run rate
• Capital constraints
• Asset quality challenges
• Limited growth opportunities
• Increase in regulatory burden
• Increase in director liability
• Limited capacity to manage the magnitude of
change
change
• No succession plan
Once in a Lifetime Opportunity
Experts Agree Significant Banking Industry
Consolidation is Inevitable
Consolidation is Inevitable
Horizon Offers:
• Cooperative, Non-Hostile Approach
• Open, Clear Communication with Acquired
Companies’ Employees
Companies’ Employees
• Excellent Corporate Culture: People are Proud
to Work for Horizon
to Work for Horizon
• Ability to Leverage Strengths of Acquired
Branches and Companies
Branches and Companies
Target Region for Expansion
Michigan City
Horizon’s Story
Financial Strength
Consistent Performance
Superior Returns
Financial Strength
Consistent Performance
Superior Returns
*Based on price at the close of business on April 30, 2011 at $27.00 per share
**Total assets and deposits as of March 31, 2011
Horizon’s Corporate Profile
• Shares Outstanding 3.3 Million
• Market Cap* $89.9 Million
• Total Assets** $ 1.4 Billion
• Total Deposits** $ 1.0 Billion
• Branches 22
• Ownership
– Insiders 10%
– Employee Benefit Plans 15%
– Institutional & Mutual Funds 22%
Horizon Locations
Michigan City
• Net Income Exceeds $10 million
• Record Earnings for Eleven Consecutive Years
• Deposits Surpassed $1 Billion in Fourth Quarter
• Horizon’s Business Model is Working as
Planned
Planned
Horizon Achieves
Three New Milestones in 2010
Three New Milestones in 2010
Balanced & Complementary
Business Model
Business Model
#1 - Business Banking
#2 - Retail Banking
#3 - Retail Mortgage Banking
#4 - Wealth Management
#5 - Mortgage Warehousing
Complementary Revenue Streams that are
Counter-Cyclical to Varying Economic Cycles
Counter-Cyclical to Varying Economic Cycles
Record Earnings “Eleven” Consecutive Years
CAGR 10.70%
Dollars in Millions
Horizon Has Record First Quarter Earnings
Dollars in Thousands
Source: Uniform Bank Performance Reports. Indiana and Michigan are state averages for all insured
commercial banks. National is all insured commercial banks with assets between $1 billion and $3 billion.
commercial banks. National is all insured commercial banks with assets between $1 billion and $3 billion.
2008
2009
2010
Horizon More Profitable Than State & National Peers
As Measured By Return On Average Assets
As Measured By Return On Average Assets
Peer Data Source: KBW Report dated January 2011 covering Indiana Publicly Traded Banks; peer data represents a peer average and is as of
December 2010 for all periods reviewed.
December 2010 for all periods reviewed.
Steady Asset Growth
CAGR 10.17%
2000 to 2010
CAGR 8.54%
2000 to 2010
Increasing Core Deposits
Invest in Horizon
Excellent Financial Metrics
• Consistent & Stable Quarterly Dividend Payments
– Over twenty-five years of uninterrupted dividends
– Cash reserves at the holding company
• Solid Earnings Performance
• Efficient Operations
• Good Historical Growth
– Assets
– Deposits
– Earnings
Horizon is Highly Regarded
In Our Communities
In Our Communities
• Nine out of Ten Customers - Would Refer a Friend
• Best Bank - The News Dispatch Readers Poll - Ten out
of Last Eleven Years
of Last Eleven Years
• Best Trust Company - NW Indiana Business Quarterly
• Best Place to Work - NW Indiana Business Quarterly
• Family Friendly Work Policies - Clarian Award
• Ranked in the Top 200 Community Banks for
Financial Performance - US Banker Magazine - June
2008, 2009 & 2010
Financial Performance - US Banker Magazine - June
2008, 2009 & 2010
Growth Opportunities
• Lake Michigan Corridor Primed for Growth
• Super Regional Banks Cutting Back - Market
Share Opportunities
Share Opportunities
• Consolidation Opportunities Increasing for
Good Performing Banks
Good Performing Banks
|
|
Horizon
Bancorp*
|
Median Indiana
Banks**
|
|
Dividend Yield
|
2.5%
|
1.9%
|
|
Price to Book
|
91.7%
|
82.0%
|
|
Price to Tangible Book
|
100.5%
|
90.1%
|
|
Price to Earnings
(LTM) |
9.0x
|
14.0x
|
*Horizon Bancorp data as of March 31, 2011
**Peer Data Source: KBW Report as of March 2011 Covering Indiana Publicly Traded
Horizon is an Attractive Value
Horizon Outperforms Bank Index - One Year
Horizon Outperforms Bank Index - Ten Years
Bauer Financial - “Recommends”
All Five-Star and Four-Star Institutions
Source: www.bauerfinancial.com - Telephone 800.388.6686
"Because peace of mind matters"
Source: www.bauerfinancial.com - Telephone: 800.388.6686
A NASDAQ Traded Company - Symbol HBNC