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| 8-K - HORIZON BANCORP INC /IN/ | hb_8k0801.htm |
A NASDAQ Traded Company - Symbol HBNC
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, 2011. 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, 2011. 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.
Corporate Profile
• Shares Outstanding 5.0 Million
• Market Cap (1) $ 130.4 Million
• Total Assets (2) $ 1.6 Billion
• Total Deposits (2) $ 1.0 Billion
• Locations 24
• Ownership (2)
– Insiders 10%
– Employee Benefit Plans 16%
– Institutional & Mutual Funds 23%
(1) Based on price at the close of business on June 30, 2012 at $26.30 per common share
(2) Total assets, deposits and inside ownership as of June 30, 2012
1
29 Current Locations
Northwest Indiana/Southwest Michigan…
The Right Side of Chicago
Global companies
find world class
locations
locations
Diversified Employment Base
Horizon’s Story
Financial Strength
Consistent Performance
Superior Returns
Stable Growth
Financial Strength
Consistent Performance
Superior Returns
Stable Growth
CAGR 10.65%
7
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
2011
As Measured By Return On Average Assets
8
Core Funding CAGR 7.19%
Loans CAGR 8.04%
9
Balanced & Complementary
Business Model
Business Model
#1 - Business Banking
#2 - Retail Banking
#3 - Wealth Management
#4 - Retail Mortgage Banking
#5 - Mortgage Warehousing
Complementary Revenue Streams that are
Counter-Cyclical to Varying Economic Cycles
Counter-Cyclical to Varying Economic Cycles
10
Horizon’s Sound Credit Culture
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 $225,000
– Sweet Spot - Retail and Business Focus
• We Manage Lending Limits
– House Limit $10 million
– Legal Limit > $20 million
– Seven Loan Relationships with Balances > $5 million
• Independent Loan Review
12
Loans Past Due 30 to 89 Days
13
14
Source: FDIC Uniform Bank Performance Reports as of 12/31/11. Peer is a custom group of 16 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.
2nd Qtr.
Non-Performing Loans Plus OREO to Gross Loans Plus OREO
15
A Company on the Move
1999
2004
2005
2012
Mortgage
Warehousing
Established
Warehousing
Established
Entered St.
Joseph Michigan
Market
Joseph Michigan
Market
Entered South
Bend and
Elkhart Market
Bend and
Elkhart Market
Acquired
Alliance Bank
Alliance Bank
Entered Lake
County
Market
County
Market
Acquired
American
Trust Bank
American
Trust Bank
Entered
Kalamazoo
Michigan Market
Kalamazoo
Michigan Market
Entered
Indianapolis
Market
Indianapolis
Market
Acquired
Heartland
Community
Bank
Heartland
Community
Bank
2010
2006
2002
2003
Acquired
Anchor
Mortgage
Anchor
Mortgage
2008
International
Liquidity Crisis
Liquidity Crisis
Mortgage
Loan
Originators
Loan
Originators
6
16
32
Full Service
Branches
Branches
9
14
24
Commercial
Loan
Officers
Loan
Officers
8
15
15
17
Continuous Expectation to Improve
• Minimum Expectation is for Each Department to
Beat Last Year’s Performance
Beat Last Year’s Performance
– Financial Results
– Internal Processes
– Productivity
• Utilize Third Parties
– To Test Critical Thinking and Strategies
– To Seek New Ideas
– Asset Liability/Enterprise Risk Management/Efficiency/
Acquisitions / Loan Review / Allowance Methodology
Acquisitions / Loan Review / Allowance Methodology
• Benchmark to Best Practices
18
Proven Growth Strategy
• People First
– 24/7 Recruitment Effort
– Experienced Community Bankers
– Retention
• De Novo Branching
– Breakeven Within First 18 Months
– Traditional Banking at its Best
• Acquisitions
– Branch
– Whole Bank
– FDIC
19
Grand Rapids
Franklin
20
Heartland Community Bank
Heartland’s Corporate Profile
as of March 31, 2012
as of March 31, 2012
• Total Shares Outstanding 1,442,727
• Total Assets $238 Million
• Total Loans $135 Million
• Total Deposits $211 Million
• Branches 6*
*Horizon will close one branch on August 31st
22
Heartland’s Locations
23
Transaction Summary
• Business Combination
• Form of Consideration - Stock for Stock
• Fixed Exchange Ratio at 0.54:1
• Heartland’s Shareholders Will Own Approximately
16% of Horizon Bancorp
16% of Horizon Bancorp
• Name Retained - “Heartland Community Bank, a
Horizon Bank NA Company”
Horizon Bank NA Company”
24
Transaction Summary
Continued
Continued
• CEO & EVP Retained
• Heartland Retained - One Bank Board Seat
• Community Advisory Board Established
• Transaction Closed on July 17, 2012
25
Acquisition Improves Shareholder Value
• Strategic Considerations
– Expands Horizon’s Presence into Central Indiana
a Growth Market
– Lowers Geographic Concentration Risk
– Opens the Door for Future Opportunities
– Demonstrates Horizon’s Interest as a Statewide Bank
• Financial Considerations
– Heartland is #1 in Deposit Market Share
– Low Cost of Deposits
– Accretive to Horizon’s Earnings Per Share
– Anticipate Cost Saves of Approximately 25%
– Revenue Enhancement Opportunities
26
Indiana Business Research Center
27
Invest in Horizon
Why Invest in Horizon Bancorp?
• A Company on the Move
• Attractive Current Valuation
• Dividends and Reinvesting for Growth
• Consolidator in Banking Industry
• Strong Capital Position
• Positioned to Meet Regulatory Requirements
• Successful Acquisition and Organic Growth
Track Record
Track Record
• Robust Capabilities for Managing Expansion
• Focus on Growth Accretive to Earnings
29
Shareholder Value Plan - Since 2001
• Dividends
– Over 25 Years of Uninterrupted Dividend Payments to
Horizon’s Common Shareholders
Horizon’s Common Shareholders
– Recent Dividend Increases (2011 & 2012)
• Focuses on Improving Liquidity
– 3:2 Stock Split in 2011
– Heartland Acquisition Increases Shares Outstanding
• Focuses on Growing Net Book Value
– Stable Earnings Growth Over Time
• Enrolled in Russell 3000 / 2000 Index - June 2012
30
Highly Regarded
In Our Communities
In Our Communities
• Nine out of Ten Customers - Would Refer a Friend
• Best Bank - The News Dispatch Readers Poll - Eleven
out of Last Twelve Years
out of Last Twelve Years
• Best Wealth Management Company - NW Indiana
Business Quarterly
Business Quarterly
• Best Place to Work - NW Indiana Business Quarterly
• Family Friendly Work Policies - Clarian Award
• High Visibility - Volunteerism and Contributions
31
Highly Regarded
for Financial Performance
for Financial Performance
• Ranked in the Top 200 Community Banks for
Financial Performance - US Banker & ABA Magazines
for the Years -2008, 2009, 2010 & 2011
Financial Performance - US Banker & ABA Magazines
for the Years -2008, 2009, 2010 & 2011
• Horizon Named to KBW Bank Honor Roll
– Only 45 Banks Selected Throughout the United States
– No Annual Loss in the Past Decade
– Honor Roll Banks Typically Outperformed the Market;
Growth, Earnings and Performance Ratios
Growth, Earnings and Performance Ratios
– Includes Names Such as JP Morgan and Wells Fargo
32
Horizon Outperforms Market - 3 Years
33
A NASDAQ Traded Company - Symbol HBNC