Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Shareholder Meeting (May 2019)
41 slides from Horizon Bancorp's shareholder meeting presentation, May 2, 2019
Slide 1: A NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC May 2, 2019
Slide 2: 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-
Slide 3: Mark E. Secor, Executive Vice President & Chief Financial Officer
Mark E. SecorExecutive Vice President & Chief Financial Officer 3
Slide 4: Proven & Stable Performance Over Time
Proven & StablePerformanceOver Time
Slide 5: An Emerging Regional Bank
BranchesBranches – SalinLoan Production Office 5 An Emerging Regional Bank Locations – 76Counties – 31 Michigan Indiana Ohio Illinois
Slide 6: Salin Bancshares, Inc. Adds Attractive Growth Markets
* Salin Bancshares, Inc.Adds Attractive Growth Markets Strategic Well-positioned 115+ year old franchise in central and northern Indiana that complements Horizon’s existing marketsEnhances Horizon’s presence in the attractive Fort Wayne, Columbus, and Indianapolis locales along with numerous locatio
Slide 7: Salin Bancshares, Inc. Financially Accretive
7 Salin Bancshares, Inc.Financially Accretive Financial Cost savings 45% fully phase-inEPS accretion of ~ 7.2% in 2020 (first full year of fully phased-in cost saves)Minimal tangible book value dilution earned-back in ~ 3.1 years (crossover method)Internal rate of return 25%+ March 26, 2019 Financia
Slide 8: Focused & Consistent Revenue Streams
Retail BankingBusiness BankingMortgage BankingWealth Management Complementary Revenue Streams that are Counter-Cyclical to Varying Economic Cycles 8 Focused & Consistent Revenue Streams
Slide 9: History of Creating Shareholder Value
9 History of Creating Shareholder Value Footnote Index included in Appendix ($’s in millions, except per share data)Category 1998 2008 2018 2019 Q1 Assets $416 $1,307 $4,241 $5,052 Market Capitalization $27 $41 $606 $725 Stock Price $2.17 $2.47 $15.78 $16.23 Avg. Daily Trading Volume(1) #355 #1,644
Slide 10: High Quality, Well Diversified Loan Portfolio
($’s in Millions) 2013 2018 CAGR OrganicCAGR Commercial (“C&I”) $102 $394 31% 14% Commercial Real Estate (“CRE”) 402 1,328 27% 14% Res. Real Estate (“Res. RE”) 287 743 21% 4% Consumer (“I/L”) 280 549 14% 12% Total $1,071 $3,014 23% 11% * High Quality, Well Diversified Loan Portfolio 2013 2018 (2) (2
Slide 11: Managing Commercial Real Estate Concentration Risk
Managing Commercial Real Estate Concentration Risk December 31, 2017 * Footnote Index included in Appendix Managing Commercial Real Estate Concentration Risk December 31, 2017 11 Footnote Index included in Appendix
Slide 12: Strong Core Funding & Mix
($’s in Millions) 2013 2018 CAGR 2018 Cost Non-interest (“NIB”) $231 $642 23% 0.00% Interest (“IB Trans.”) 780 1,684 17% 0.37% Time Deposits (“CDs”) 280 813 24% 1.57% Borrowings (“Debt”) 289 588 15% 2.53% Total $1,579 $3,727 19% 0.88% * Strong Core Funding & Mix 2013 2018 ($’s in Millions) 2013 2018
Slide 13: Stabilization of Interest Rates and Net Interest Margin
* Stabilization of Interest Rates and Net Interest Margin 13 Stabilization of Interest Rates and Net Interest Margin
Slide 14: Wealth Management Key Contributor to Fee Income
* Wealth Management Key Contributor to Fee Income ($’s in millions) ($’s in millions) 14 Wealth Management Key Contributor to Fee Income ($’s in millions) ($’s in millions)
Slide 15: Low Dependence on Mortgage Revenue
* Low Dependence on Mortgage Revenue (3) Footnote Index included in Appendix ($’s in millions) 15 Low Dependence on Mortgage Revenue (3) Footnote Index included in Appendix ($’s in millions)
Slide 16: Robust Earnings Growth
* Robust Earnings Growth Footnote Index included in Appendix (4) (4) ($’s in millions) Core Diluted EPS CAGR 16% * Robust Earnings Growth Footnote Index included in Appendix (4) (4) ($’s in millions) Core Diluted EPS CAGR 16% Core Diluted EPS CAGR 16% * Robust Earnings Growth Footnote Index included
Slide 17: Record First Quarter Core Earnings
17 Record First QuarterCore Earnings Footnote Index included in Appendix EPS Growth 12% EPS Growth 32% ($’s in millions) (6) (6) * Record First QuarterCore Earnings Footnote Index included in Appendix EPS Growth 12% EPS Growth 32% ($’s in millions) (6) (6) 17 Record First QuarterCore Earnings Footno
Slide 18: Increased Liquidity & Dividends Aligned with Earnings Growth
18 Increased Liquidity & DividendsAligned with Earnings Growth Avg. Daily Volume Annual Dividends Footnote Index included in Appendix
Slide 19: Craig M. Dwight, Chairman & Chief Executive Officer
Craig M. DwightChairman & Chief Executive Officer 19
Slide 20: Building Future Shareholder Value
Building Future Shareholder Value GrowthOperational Leverage
Slide 21: Growth Markets, Future Markets
Growth MarketsFuture Markets 21 GrandRapids AnnArbor NWOhio FortWayne Lafayette Kalamazoo SouthBend Warsaw Indianapolis NWIndiana Market Opportunities Abound Midland Troy CentralIllinois PeopleMarket ShareMergers & Acquisitions Growth MarketsFuture Markets 21 GrandRapids AnnArbor NWOhio FortWayne La
Slide 22: Considerable Opportunities to Gain Market Share
Considerable Opportunitiesto Gain Market Share 22 Footnote Index included in Appendix
Slide 23: Proven Ability to Capitalize
Proven Ability to Capitalize Footnote Index included in Appendix 11OrganicExpans. St. Joseph,S. Bend,Elkhart,Merrillville Kalamazoo,Indianapolis Carmel Ft. Wayne,Grand Rapids Columbus, Noblesville,Holland 14M&A Anchor Mtg.,Alliance American Trust,Heartland 1st Mtg.,Summit,Peoples Farmers,LaPorte,CNB
Slide 24: Merger Opportunities Continue to Flourish
Number of Banks Headquartered in Indiana and Michigan (11) Merger OpportunitiesContinue to Flourish On average, approximately 5% of the Banks sold each year.IN & MI 9 + IL 8 + OH 5 ~ 22 Footnote Index included in Appendix 9 24 13 9 10 9 14 13 17 8 9
Slide 25: Operational Leverage - Mass & Scale Works
* Operational Leverage -Mass & Scale Works ($’s in thousands) ($’s in thousands) Avg. Assets $639 $1,118 $1,394 $1,950 $4,063 $4,307 7x 2x 25 Operational Leverage -Mass & Scale Works ($’s in thousands) ($’s in thousands) Avg. Assets $639 $1,118 $1,394 $1,950 $4,063 $4,307 7x 2x
Slide 26: Continue to Focus on Operational Leverage
Branch Rationalization as Customers Expand Use of TechnologyClosed 9 Branches in 2019 (3 – Horizon, 1 – LPO, 5 – Salin)Closed 12 Branches from 2008 to 2018Continue to Rationalize Retail LocationsLeverage Investments in TechnologyTo Enhance the Customer’s ExperienceTo Improve Internal Processes and L
Slide 27: Investments in Technology Increase Capacity
2018 InvestmentsData Mining PartnershipCall TrackingSmall Business Loan Application – “Instacap”Consumer Loan PlatformInteractive Teller Machines – “ITMs”2019 / 2020 InvestmentsData WarehouseDeposit PlatformMortgage PlatformCommercial Platform Investments in Technology Increase Capacity
Slide 28: Why Invest in Horizon Bancorp, Inc.
Why Invest inHorizon Bancorp, Inc.
Slide 29: Value Investment
Value Investment As of December 31, 2018 HBNC SNL Peer$1.0B - $5.0B Variance Price/Tangible Book Value 167% 151% 16% Price/EPS (Last 12 Months) 11.4x 13.4x (2.0)x Price/EPS (Consensus Estimate 2020) 9.3x 10.5x (1.2)x Dividend Yield (as of April 29, 2019) 2.4% 1.9% 0.5%
Slide 30: Efficiency Through Mass & Scale
HBNC 2018 YTD Eff. Ratio – 60.4% 2019 1st QTD Eff. Ratio – 59.6% Efficiency Through Mass & Scale Banks by Total Assets
Slide 31: Growth Story for 20 Years
* Growth Story for 20 Years ($’s in millions) * Growth Story for 20 Years ($’s in millions) Growth Story for 20 Years ($’s in millions)
Slide 32: Value, Growth, Operational Leverage, Multiple Revenue Streams
ValueGrowthOperational LeverageMultiple Revenue StreamsProven Ability to Execute the Plan
Slide 33: Horizon Outperforms the Market For Total Shareholder Return
Horizon Outperforms the Market For Total Shareholder Return(as of April 29, 2019) 33 Horizon Bancorp, Inc.: 5-Year Total Return Comparison Footnote Index included in Appendix
Slide 34: Thank You for Your Investment in Horizon Bancorp, Inc.
Thank Youfor Your Investment inHorizon Bancorp, Inc.
Slide 35: A NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC
Slide 36: Appendix
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Slide 37: Footnote Index
37 Footnote Index Slide 8(1) Based on the daily trading volume during the fourth quarters of 1998, 2008 and 2018, and the first quarter of 2019, respectively.Financial data in millions, except for stock price, as of December 31, 1998, 2008 and 2018, and March 31, 2019, respectively. Slide 9(2) Organ
Slide 38: Footnote Index (cont.)
38 Footnote Index (cont.) Slide 17Annual dividend amounts adjusted for the following stock splits: December 2011 3:2, November 2012 3:2, November 2016 3:2 and June 2018 3:2.Slide 21(7) All Key Markets are MSAs, except for Northwest Indiana which consists of Lake and Porter Counties.(8) Deposit Marke
Slide 39: Non-GAAP Reconciliations
39 Non-GAAP Reconciliations See Footnote Index in Appendix
Slide 40: Non-GAAP Reconciliations
40 Non-GAAP Reconciliations See Footnote Index in Appendix
Slide 41: Non-GAAP Reconciliations
41 Non-GAAP Reconciliations See Footnote Index in Appendix