Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Investor Presentation (February 2020)
40 slides from Horizon Bancorp's investor presentation, Feb 25, 2020
Slide 1: A NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC February 25, 2020
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: Craig M. Dwight, Chairman & Chief Executive Officer
Craig M. DwightChairman &Chief Executive Officer 3
Slide 4: Dynamic Midwest Market
Dynamic MidwestMarket * Dynamic MidwestMarket
Slide 5: Indiana and Michigan… The Right Side of Chicago
Indiana and Michigan… The Right Side of Chicago Chicago-High Taxes-High Cost of Living-Low Credit Rating 5
Slide 6: Locations
LOCATIONS – 75COUNTIES – 31 BRANCHES LOAN PRODUCTIONOFFICE TOTAL LOANS – DECEMBER 31, 2019INDIANA – $2.1 BILLIONMICHIGAN – $1.5 BILLION Locations 6
Slide 7: Indiana and Michigan: Great States to Conduct Business
IndianaRanked 5th Best State for Business by Chief Executive Magazine in 2019 and 2018Ranked 1st in Infrastructure, 4th in Business Friendliness, 4th in Cost of Doing Business, 9th in Cost of Living and 11th overall by CNBC’s Ranking of America’s Top States for Business in 2019Budget Surplus and Res
Slide 8: Stable Growth Creates Shareholder Value
Stable GrowthCreatesShareholder Value * Stable GrowthCreatesShareholder Value
Slide 9: Complementary Revenue Streams
Retail BankingBusiness BankingMortgage BankingWealth Management Complementary Revenue Streams that are Counter-Cyclical to Varying Economic Cycles 9 Complementary Revenue Streams
Slide 10: Growth Story
($’s in millions, except per share data)Category December2009 December2019 Assets $1,387 $5,244 Loans $892 $3,641 Deposits $952 $3,931 Trust Assets Under Management $385 $3,296 Market Capitalization $53 $855 Stock Price $3.20 $19.00 Average Daily Trading Volume (1) #4,135 #84,800 10 Growth Story Foo
Slide 11: High Quality, Well Diversified Loan Portfolio
($’s in Millions) December 31, 2015 December 31, 2019 CAGR OrganicCAGR Commercial (“C&I”) $185 $506 22% 6% Commercial Real Estate (“CRE ”) 620 1,541 20% 6% Res. Real Estate (“Res. RE”) 590 925 9% 0% Consumer (“I/L”) 362 669 13% 9% Total $1,757 $3,641 16% 5% * High Quality, Well Diversified Loan Port
Slide 12: Commercial Real Estate Concentration Risk
Commercial Real Estate Concentration Risk December 31, 2017 * Footnote Index included in Appendix Commercial Real Estate Concentration Risk December 31, 2017 12 Footnote Index included in Appendix
Slide 13: Strong Core Deposit Base
Average Total Deposits CAGR 16% 13 Strong Core Deposit Base Footnote Index included in Appendix (3) ($’s in millions)
Slide 14: Stable Net Interest Margin
* Stable Net Interest Margin Footnote Index included in Appendix 14 Stable Net Interest Margin Footnote Index included in Appendix
Slide 15: Robust Earnings Growth
Core Diluted EPS CAGR 11% 15 Robust Earnings Growth Footnote Index included in Appendix (4) (4) ($’s in millions)
Slide 16: Low Dependence on Mortgage Revenue
16 Low Dependence on Mortgage Revenue (5) Footnote Index included in Appendix ($’s in millions)
Slide 17: Mass & Scale Results in Efficiency Gains
* Mass & Scale Resultsin Efficiency Gains Footnote Index included in Appendix (6) 17 Mass & Scale Resultsin Efficiency Gains Footnote Index included in Appendix (6) Closed 11 Locations in 2019 (4 – Horizon, 1 – LPO, 5 – Salin)Closed 21 Locations Over the Last 10 YearsAnnual Review of Branch Footprin
Slide 18: Branch Rationalization
Closed 11 Locations in 2019 (4 – Horizon, 1 – LPO, 5 – Salin)Closed 21 Locations Over the Last 10 YearsAnnual Review of Branch FootprintExpansion of Interactive Teller Machines (“ITM’s”) * Branch Rationalization
Slide 19: Building Future Shareholder Value
Building Future Shareholder Value * Organic and M&A Building Future Shareholder Value Organic and M&A
Slide 20: An Emerging Regional Bank
LOCATIONS – 75COUNTIES – 31 BRANCHES LOAN PRODUCTIONOFFICE TOTAL LOANS – DECEMBER 31, 2019INDIANA – $2.1 BILLIONMICHIGAN – $1.5 BILLION An Emerging Regional Bank 20
Slide 21: Market Place Dynamics
21 Market Place Dynamics Midland, MichiganDow Chemical’s commitment to the market.Chemical Bank relocates headquarters.Comerica is pulling back from the region.Oakland County, Michigan5th richest county in the country.Northwest IndianaDouble commuter track addition to the South Shore train lines.Hig
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,C
Slide 24: Building Shareholder Value after Acquisitions
24 Building Shareholder Value after Acquisitions Footnote Index included in Appendix Tangible Book Value per Share CAGR 6%
Slide 25: Market Opportunities Abound
Growth MarketsFuture Markets 25 GrandRapids AnnArbor Toledo FortWayne Lafayette Kalamazoo SouthBend Warsaw Indianapolis NWIndiana Market Opportunities Abound Midland Troy CentralIllinois PeopleMarket ShareMergers & Acquisitions Detroit Sandusky Columbus Growth MarketsFuture Markets 25 GrandRapids An
Slide 26: 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 5 + IL 8 + OH 5 ~ 18 Footnote Index included in Appendix 24 13 9 10 9 14 13 17 8 9 5 Number of Banks Headquartered in Indiana and Mic
Slide 27: Investing for the Future
HORIZON‘ BANK Investing for the Future Soe Nos wp Lik A
Slide 28: Leverage Investments in Technology
To Enhance the Customer’s ExperienceOnline Account OpeningLive Person Chat and MessagingNew Consumer Loan PlatformTo Improve Internal Processes and Link SystemsUpgrade Teller PlatformNew Retail Mortgage SystemProcess and Workflow EnhancementsData MiningNew Customer Relationship Management and Referr
Slide 29: Value & Growth Investment
* Value & GrowthInvestment As of December 31, 2019 HBNC SNL Peer$1.0B - $5.0B Variance Price/Tangible Book Value 179% 157% 22% Price/EPS (Last 12 Months)HBNC EPS LTM $1.33 12.4x 13.9x (1.5)x Price/EPS (Consensus Estimate 2020)HBNC 2020 EPS Consensus Est. $1.71 10.7x 11.1x (0.4)x Dividend Yield (as o
Slide 30: Horizon Outperforms the Market For Total Shareholder Return
Horizon Outperforms the Market For Total Shareholder Return(as of December 31, 2019) 30 Horizon Bancorp, Inc.: 5-Year Total Return Comparison Footnote Index included in Appendix
Slide 31: A NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC
Slide 32: Appendix
HORIZON‘ —_— BAN BANK Appendix Ex GE Pot tb © NAL Sek Voice = ob Noose be ADV AC cE Se
Slide 33: Footnote Index
33 Footnote Index Slide 10(1) Based on the daily trading volume for the years ended December 31, 2009 and 2019, respectively.Financial data in millions, except for stock price, as of December 31, 2009 and 2019, respectively. Slide 11(2) Organic CAGR of 6% represents the organic CAGR for the entire c
Slide 34: Footnote Index
34 Footnote Index Slide 16(5) Mortgage Revenue is defined as interest and fee income from mortgage warehouse loans plus gain on sale of mortgage loans.Slide 17(6) Adjusted efficiency ratio excludes prepayment penalties on borrowings, (gain)/loss on sale of securities, death benefit on bank owned lif
Slide 35: Footnote Index
35 Footnote Index Slide 30As of December 31, 2019. SNL U.S. Bank includes all Major Exchange Banks in SNL’s coverage universe.Slides 36-40Use of Non-GAAP Financial MeasuresCertain information set forth in the presentation materials refers to financial measures determined by methods other than in acc
Slide 36: Non-GAAP Reconciliation of Cost of Deposits
_HORIZON' Footnote Index Non-GAAP Reconciliation of Cost of Deposits (Dollars in Thousands) ‘Twelve Months Ended December 31 2019 2018 2017 2016 2015, ‘Total deposit interest expense as reported $ 33,690 $ 18,225 § 7,901 $ 6,616 $ 5,559 Average interest-bearing deposits 3,007,937 2,418,987 2,045,896
Slide 37: Non-GAAP Reconciliation of Net Interest Margin and Cost of Liabilities
Net interest income as reported Average interest-caring assets Net interest income as a percentage of avenige interest-earning assets (°Net Interest Margin”) Prepayment penalties on borrowings Acquistion-related purchase accounting adjustments Core net interest income Core net interest margin Non-GA
Slide 38: Non-GAAP Reconciliation of Net Income and Diluted EPS
[Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share (Doltarsin Thousands Except per Share Data) Footnote Index ‘Twelve Months Ended ‘December 31 20 2018 2007 2016 2015 [Non-GAAP Reconciliation of Net Income Netincomeas sported $665 $ GIT $337 $92 $ 205K9 Merges expenses 5.650 487 3
Slide 39: Non-GAAP Reconciliation of Efficiency Ratio
_HORIZON' Footnote Index ‘Non-GAAP Reconciliation of Efficiency Ratio (Dollars in thousands, Unaudited) ‘Twelve Months Ended December 31 2019 2018 2017 2016 2015 ‘Non-GAAP Reconciliation of Efficiency Ratio Netinterest income 3 160,791 $ 134,569 $ 112,100 $ 85,992 $74,734 Non interest inaome 43,058
Slide 40: Non-GAAP Reconciliation of Tangible Equity and Book Value per Share
_HORIZON' Footnote Index Non-GAAP Reconciliation of Tangible Stockholders' Equity and Tangible Book Value per Share (Dollars in Thousands Except per Share Data, Unaudited) ‘December 31 2019 2018 2017 2016 2015 ‘Total stockholders’ equity $ 656,023 $ 491,992 $ 457,078 $ 340,855 $ 266,832 Less: Intang
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