Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Investor Presentation (November 2017)
34 slides from Horizon Bancorp's investor presentation, Nov 6, 2017
Slide 1: A NASDAQ Global Select Traded Company - Symbol HBNC
A NASDAQ Global Select Traded Company - Symbol HBNC
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 and its affiliates (collectively, “Horizon”). For these statements, Horizon claims the protection of the safe harbor for forward-lookin
Slide 3: Mark E. Secor, EVP & Chief Financial Officer
* Mark E. SecorEVP & Chief Financial Officer
Slide 4: Horizon is a Growth Story
_HORIZON BANK Horizon isa Growth Story
Slide 5: Indiana, Michigan and Ohio… The Right Side of Chicago
Indiana, Michigan and Ohio… The Right Side of Chicago Illinois and Chicago-High Taxes & Living Costs-Low Credit Rating-Unfriendly Business Environment * Branch Footprint December 2006 Locations – 15Counties – 6 Branches Michigan Illinois Indiana Ohio
Slide 6: Branch Footprint December 2006
6 Branch Footprint December 2006 Locations – 15Counties – 6 Branches Michigan Illinois Indiana Ohio
Slide 7: Considerable Expansion through October 2017
7 Considerable Expansion through October 2017 BranchesLoan Production Offices New Branch in 2018 Illinois Locations – 68Counties – 25 Michigan Indiana Ohio * Considerable Expansion through October 2017 BranchesLoan Production Offices New Branch in 2018 Illinois Locations – 68Counties – 25 Michigan I
Slide 8: Growth Transformation
($’s in millions, except per share data)Category 2006 2017 Assets $1,222 $3,520 Loans $848 $2,414 Deposits $914 $2,608 Trust Assets Under Management $391 $2,429 Market Capitalization $88 $681 Stock Price $8.13 $29.17 Average Daily Trading Volume (1) 5,811 58,739 * Growth Transformation Footnote Inde
Slide 9: Balance Sheet Positioned Well for the Future
Balance Sheet Positioned Well for the Future * Asset SensitiveGrowth in Higher Yielding AssetsGood Core Deposits Growth
Slide 10: Shift to Commercial Lending
September 30, 2017 December 31, 2011 ($ in Millions) 12/31/11 9/30/17 CAGR YTD Δ Commercial $352 $1,274 25% 19% Real Estate 365 670 11% (1%) Consumer 265 485 11% 22% Total $983 $2,429 17% 13% * Shift to Commercial Lending(as a percent of total loans)
Slide 11: Well Diversified Loan Portfolio
September 30, 2017 * Well Diversified Loan Portfolio(Loans as a Percent of Total Loans)
Slide 12: Strong Low Cost Deposit Growth
September 30, 2017 December 31, 2011 * Strong Low Cost Deposit Growth YTD Cost of Deposits – 0.94% YTD Cost of Deposits – 0.36% ($ in Millions) 12/31/11 9/30/17 CAGR Non-interest $131 $563 29% Interest 538 1,536 20% CDs 341 509 7% Total $1,101 $2,608 18%
Slide 13: Good Historical Earnings Exhibits Ability to Execute
Good Historical EarningsExhibits Ability to Execute *
Slide 14: Solid Earnings Growth
* Solid Earnings Growth (2) Footnote Index included in Appendix
Slide 15: Less Dependence on Mortgage Revenue
* Less Dependence on Mortgage Revenue (1) Mortgage Revenue defined as interest and fee income from mortgage warehouse loans plus gain on sale of mortgage loans.
Slide 16: GAAP Net Interest Margin and Core Net Interest Margin
* GAAP Net Interest Margin and Core Net Interest Margin (1) Net Interest Margin Increasing Δbps GAAP 34 bps Core 29 bps Footnote Index included in Appendix
Slide 17: Wealth Management Growth Drives Fee Income
* Wealth Management Growth Drives Fee Income
Slide 18: A Company on the Move
HORIZON‘ _HORIZO! BANK A Company on the Move
Slide 19: Always Looking for Opportunities to Create Shareholder Value
Always Looking for Opportunities to Create Shareholder Value * Assets ($ Mil.) $721 $3,905(1) Loans($ Mil.) $548 $2,725(1) Deposits($ Mil.) $489 $2,879(1) OrganicExpans.(11) St. JosephSo. BendElkhart Lake County Kalamazoo Indianapolis Carmel Ft. WayneGrand Rapids Noblesville IN(2)Columbus OH(3) M&A(
Slide 20: Growth Opportunities Abound
Growth MarketsEmerging Markets 20 GrandRapids AnnArbor Columbus NW Ohio FortWayne Lafayette Kalamazoo SouthBend Warsaw Indianapolis NWIndiana Growth Opportunities Abound Midland Troy Illinois Indiana Ohio Michigan Dayton Growth MarketsEmerging Markets * GrandRapids AnnArbor Columbus NW Ohio FortWayn
Slide 21: Considerable Market Share Opportunities
Considerable Market Share Opportunities * (1) (2) (3) Market Share Market Share Key Market (1) Deposit Market (2)($’s in billions) Large Institutions (3) Horizon Columbus, OH $66 79% 0% Indianapolis, IN $48 75% 1% Grand Rapids, MI $21 74% 0% Northwest Indiana $12 51% 4% Fort Wayne, IN $8 60% 1% Kala
Slide 22: M&A Opportunities Continue
* Number of Banks Headquartered in Indiana and Michigan M&A Opportunities ContinueAs of December 31, 2016 139 Banks within Targeted Markets194 Banks Headquartered in Ohio213 Banks Headquartered in Indiana & Michigan
Slide 23: 2017 Whole Bank Acquisitions
($ in millions)Category Horizon Bancorp Lafayette Community Bancorp Wolverine Bancorp, Inc. Pro Forma Total Assets $3,321 $172 $379 $3,872 Total Loans $2,256 $135 $316 $2,707 Total Deposits $2,419 $149 $271 $2,839 Locations (1) 60 4 4 68 * 2017 Whole Bank Acquisitions Footnote Index included in Appe
Slide 24: Strategic Reasons for Lafayette and Wolverine Acquisitions
* Fills market gap between Indianapolis and Northern IndianaExperienced leadership team retained, with big bank experienceScalable platform in the high growth market of Lafayette, Indiana (home of Purdue University)Potential to capture market share from larger institutions Strategic Reasons Highly p
Slide 25: Financial Reasons for Acquisitions
2018 EPSAccretion TBVEarn-backPeriod Cost Savings(fully phased in) Internal Rateof Return Lafayette Community Bancorp 0.5% 3.0 years 35% 15% Wolverine Bancorp, Inc. 5.4% Less than 1.0 year 38%(1) 17% * Financial Reasons 28% of total cost savings are attributable to thrift benefit plans
Slide 26: Investment Thesis
Historical Financial Performance Illustrates Ability to ExecuteConsistent, Well Executed and Disciplined Business StrategyA Growth Story10-year asset and net income CAGR of 11% and 15%, respectivelyThirteen acquisitions and eleven market expansions since 2002Capacity to take additional market shareE
Slide 27: Scale Drives Shareholder Value
* Scale Drives Shareholder Value Financial data as of June 30, 2017; market data as of August 31, 2017. Nationwide publicly traded banks, excluding merger targets. Source: SNL Financial
Slide 28: Horizon Outperforms the Market for Total Shareholder Return
Horizon Outperforms the MarketFor Total Shareholder Return As of September 30, 2017SNL U.S. Bank: Includes all Major Exchange Banks in SNL's coverage universe. * Horizon Bancorp: 5-Year Total Return Comparison
Slide 29: A NASDAQ Global Select Traded Company - Symbol HBNC
A NASDAQ Global Select Traded Company - Symbol HBNC
Slide 30: Appendix
HORIZON — BAN BANK Appendix EX GEP TO NAL SvECR Val Coe
Slide 31: Footnote Index
Slide 8(1) Based on the daily trading volume during the fourth quarter of 2006 and third quarter of 2017.Slide 14(1) Core net income and core diluted EPS excludes one-time merger expenses, gain on sale of securities and death benefit on bank owned life insurance. (See further in the Appendix for a r
Slide 32: Loan Portfolio Composition
* Loan Portfolio Composition Loan Category BalanceSeptember 30, 2017($’s in millions) % of Total Loans % of Tier 1 Capital + ALLR Commercial Owner Occupied Real Estate $404,064 17% 119% Non-Owner Occupied Real Estate $533,762 22% 157% Residential Development $4,031 0% 1% Development and Spec Land $4
Slide 33: Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share
HORIZON Non-GAAP Reconciliations Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share (Dollars in Thousands Except per Share Data) ‘Twelve Months Ended, Nine Months Ended December 31 September 30 2016 2015 2014 2013, 2012 2011 2017 2016 Unaudited Unaudited GAAP Riseea Nah Net ineome
Slide 34: Non-GAAP Reconciliation of Net Interest Margin
— BANK Non-GAAP Reconciliations Non-GAAP Reconciliation of Net Interest Margin (Dollars in Thousands) Nine Months Ended Years Ended September 30 September 30. December 31 December 31 ‘Net Interest Margin As Reported 2017 2016 2016 2015, (Unaudited) (Unaudited) Net interest income $ 80,645 $ 65,053 $
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