Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Q2 2024 Earnings Presentation
26 slides from Horizon Bancorp's earnings presentation, Jul 25, 2024
Slide 1: Investor Presentation
Investor Presentation Horizon Bancorp, Inc. (NASDAQ: HBNC) Second Quarter Ended June 30, 2024 July 24, 2024 Beyond ordinary banking
Slide 2: Important Information
Important Information 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 clai
Slide 3: Seasoned Management Team
Seasoned Management Team Kathie A. DeRuiter Todd A. Etzler Lynn M. Kerber EVP & Senior EVP & Corporate Secretary EVP & Chief Commercial Operations Officer & General Counsel Banking Officer • 35 Years of banking and operational • 33 Years of corporate legal experience and • 34 Years of banking experi
Slide 4: Second Quarter 2024
Second Quarter 2024 HIGHLIGHTS & DEVELOPMENTS ($000S EXCEPT PER SHARE DATA) 2Q24 1Q24 • NIM expansion INCOME STATEMENT o +14 bps to 2.64% (FTE)* o Continued strategic shift to more Net interest income $45,279 $43,288 profitable asset mix NIM (FTE)* 2.64% 2.50% • Loan growth Provision $2,369 $805 o G
Slide 5: Balanced Loan Growth
Balanced Loan Growth 1% 2Q24 HIGHLIGHTS & DEVELOPMENTS • Total loan growth of $205MM or 17.8% annualized 22% Consumer o Maintaining highly diverse residential, Residential consumer, C&I and CRE portfolios Total Loans* C&I 44% $4.8B CRE • New production continues shift of loan mix to MRQ end Mortgage
Slide 6: Diversified Commercial Portfolio
Diversified Commercial Portfolio 2Q24 HIGHLIGHTS & DEVELOPMENTS 5% 8% 30% Central Indiana • Commercial loan balances grew organically 8% o Up $155MM or 22.6% annualized Northern Indiana Geography Western Michigan • Well balanced geographies, product mix and $2.9B Southwest Michigan industry 17% MRQ
Slide 7: Well-Managed CRE Maturities
Well-Managed CRE Maturities 2024 Maturities Remaining 2025 Maturities Average Rate 6.37% Average Rate 5.73% Loans Outstanding % of Total Adjusted CRE* Loans Outstanding % of Total Adjusted CRE* 9% 9% $millions $millions 6% 4% $197 $191 $118 $93 All rates <7% rates All rates <7% rates Data as of MRQ
Slide 8: Prime Consumer & Residential Lending
Prime Consumer & Residential Lending 2Q24 HIGHLIGHTS & DEVELOPMENTS • Consumer portfolio 6% o Grew $22MM or 8.4% annualized 21% • Mortgage portfolio Mortgage o Grew $16MM or 8.1% annualized Mix 43% Home Equity o Consistent higher quality borrowers, significant capacity to pay and low LTV $1.8B MRQ e
Slide 9: Strong Asset Quality Metrics
Strong Asset Quality Metrics Substandard Loans (period end) Non-Performing Loans (period end) 0.52% $47.6 $49.5 $51.2 0.46% $47.5 0.45% 0.41% 0.40% $41.5 $22.1 $millions $19.4 $20.3 $19.2 $19.3 $millions 1.09% 1.12% 1.03% 1.06% 0.97% 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 Commercial Resi
Slide 10: Relationship Based Core Deposits
Relationship Based Core Deposits 2Q24 HIGHLIGHTS & DEVELOPMENTS • Consumer and Commercial Deposits Ample Deposits to Fund Additional Loan Growth o Well managed pricing disciplines providing benefit $5,709 $5,700 $5,665 Treasury management team investments $5,580 $5,630 $millions o gaining traction e
Slide 11: Granular and Tenured Deposits
Granular and Tenured Deposits Seasoned, Core Deposit Base • Consumer: $6K avg. account balance 11 year avg. tenure 56% 25% • Commercial: $54K avg. account balance 10 year avg. tenure • Public: $288K avg. account balance 11 year avg. tenure Total Deposits 81% 51% of Balances in Checking Accounts $5.6
Slide 12: Stable Investment Securities
Stable Investment Securities 2Q24 HIGHLIGHTS & DEVELOPMENTS 2Q23 3Q23 4Q23 1Q24 2Q24 • No new investments in the quarter ROLL-OFF/CASH FLOW $41 $26 $28 $27 $26 • High credit quality treasuries, agencies, municipals and mortgage-backed securities SALES $24 – $383 – – • Cash flows to support funding o
Slide 13: NIM Expansion
NIM Expansion 2Q24 HIGHLIGHTS & DEVELOPMENTS • NIM expansion driven by continued, intentional shift in earning asset mix, combined with improving loan yields • Relatively stable cost of interest-bearing liabilities * Net Fully-Taxable Equivalent Interest Margin is a Non-GAAP measure. Please see appe
Slide 14: Stable Non-Interest Income
Stable Non-Interest Income 2Q24 HIGHLIGHTS & DEVELOPMENTS Non-interest Income $11.8 • $10.5MM in non-interest income $11.0 $10.5 o Interchange fees, including merchant $2.0 $9.9 $1.4 $1.7 $0.7 services, continued to see positive $1.1 $1.3 momentum $1.6 $2.2 $1.7 $1.1 $1.4 o Seasonal origination acti
Slide 15: Diligent Expense Management
Diligent Expense Management 2Q24 HIGHLIGHTS & DEVELOPMENTS Non-interest Expense 1.98% • Diligent expense management 1.94% 1.90% o Continued annualized non-interest 1.86% expense to average assets <2% 1.81% $39.3 $37.1 $37.5 $36.3 $36.2 • $37.5MM in non-interest expense $17.5 $16.8 $16.9 o Well manag
Slide 16: Capital Position Provides Flexibility
Capital Position Provides Flexibility TCE/TA* $12.80 Leverage Ratio $12.65 $12.60 8.61% 8.91% 8.98% 7.08% 7.20% 7.22% 4Q23 1Q24 2Q24 4Q23** 1Q24** 2Q24*** CET1 Ratio Total RBC Ratio 14.04% 13.75% 13.36% 11.11% 10.89% 10.60% 4Q23 1Q24 2Q24*** 4Q23** 1Q24** 2Q24*** HBNC TBVPS* HBNC Ratio * The tangibl
Slide 17: 2024 Guidance Summary
2024 Guidance Summary • Period-end total loan balances to grow low to mid single digits for remainder of 2024 Loans • Continued positive shift in mix toward higher-yielding commercial loans Deposits • Period-end total deposit balances and mix to remain relatively stable for remainder of 2024 • Upper
Slide 18: Why Horizon?
Why Horizon? PROVEN OPERATOR Constant, High Tenured And Stable Well Managed Compelling Value Quality Loan Growth Deposit Base Operating Culture Supported By With Significant Commitment To Liquidity Dividend Positive momentum with Stable, granular deposit Consistent expense P/EPS of 11.77x annualized
Slide 19: Appendix
HORIZON _HORIZON' BANK — Appendix
Slide 20: Highly Attractive Midwestern Markets
Highly Attractive Midwestern Markets DISTRIBUTION IN EXCELLENT GROWTH MARKETS Economically Major Brands Diverse Attractive Opportunities Horizon’s markets are Horizon’s branches are home to multi-national Horizon’s Commercial and located strategically in companies, flourishing Retail Banking offerin
Slide 21: Diverse Commercial Lending Portfolio
Diverse Commercial Lending Portfolio 6/30/24 % OF % OF TOTAL COMMERCIAL LOANS BY INDUSTRY BALANCE COMMERCIAL LOAN STRONG AND ($millions) PORTFOLIO PORTFOLIO TRADITIONAL Lessors - Residential Multi $289 9.9% 6.0% COMMERCIAL LENDING Health Care, Educational Social Assist. 231 8.0% 4.8% NOO- Warehouse/
Slide 22: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Certain information set forth in this presentation refers to financial measures determined by methods other than in accordance with GAAP. In each case, we have identified special circumstances that we consider to be non-recurring and have excluded them. We believe
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Interest income (GAAP) Taxable-equivalent adjustment: Investment securities - tax exempt Loan receivable @) Interest income (non-GAAP) Interest expense (GAAP) Net interest income (GAAP) Net FTE interest income (non-GAAP) Average interest earning assets (A) (B) (C) (D) =(A) -
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation of Return on Average Tangible Common Equity (Dollars in Thousands, Unaudited) HORIZON _HORIZON BANK Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Net income (loss) (GAAP) (A) $ 14,140 $ 13,991 $ (25,
Slide 25: Non-GAAP Reconciliation
HORIZON Non-GAAP Reconciliation — BANK Non-GAAP Reconciliation of Tangible Common Equity to Tangible Assets (Dollars in Thousands, Unaudited) Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Total stockholders’ equity (GAAP) (A) $ 726,665 $ 721,250 $
Slide 26: Thank you
Thank you John R. Stewart, CFA Executive Vice President & Chief Financial Officer 515 Franklin Street, Michigan City, IN 46360 219-814-5833 Investor.HorizonBank.com