Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Q3 2024 Earnings Presentation
26 slides from Horizon Bancorp's earnings presentation, Oct 24, 2024
Slide 1: Investor Presentation
Investor Presentation Horizon Bancorp, Inc. (NASDAQ: HBNC) Third Quarter Ended September 30, 2024 October 24, 2024 Beyond ordinary banking
Slide 2: Important Information
Important Information Forward-Looking Statements This press release 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 cla
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: Third Quarter 2024 Highlights & Developments
Third Quarter 2024 HIGHLIGHTS & DEVELOPMENTS ($000S EXCEPT PER SHARE DATA) 3Q24 2Q24 • Fourth consecutive quarter of FTE NIM expansion, INCOME STATEMENT to 2.66%* Net interest income $46,910 $45,279 • Quality loan growth NIM (FTE)* 2.66% 2.64% o Continued commercial loan growth coupled with planned
Slide 5: Balanced Loan Growth
Balanced Loan Growth 3Q24 HIGHLIGHTS & DEVELOPMENTS 2% • Quarter end Loans remained nearly flat at $4.8 21% Billion Consumer o Maintaining highly diverse residential, Total Loans* Residential consumer, C&I and CRE portfolios $4.8B Commercial MRQ end Mortgage • New production continues shift of loan
Slide 6: Diversified Commercial Portfolio
Diversified Commercial Portfolio 3Q24 HIGHLIGHTS & DEVELOPMENTS 4% 8% 30% • Commercial loan balances grew organically 10% Central Indiana o Quarter end up $9MM Northern Indiana Geography Western Michigan • Well balanced geographies, product mix and industry $2.9B Southwest Michigan o No segment exce
Slide 7: Prime Consumer & Residential Lending
Prime Consumer & Residential Lending 3Q24 HIGHLIGHTS & DEVELOPMENTS • Consumer portfolio 6% o Excluding Indirect Auto remained nearly flat 19% Mortgage Mix 44% Home Equity • Mortgage portfolio $1.8B o Grew $3M or 2% annualized MRQ end Indirect Auto o Consistent higher quality borrowers, significant
Slide 8: Strong Asset Quality Metrics
Strong Asset Quality Metrics Substandard Loans (period end) Non-Performing Loans (period end) 0.51% $59.8 0.45% 0.46% $51.2 0.41% $49.5 0.40% $47.6 $47.5 $24.4 $millions $19.4 $20.3 $19.2 $19.3 $millions 1.24% 1.09% 1.12% 1.03% 1.06% 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 Commercial Resi
Slide 9: Relationship Based Core Deposits
Relationship Based Core Deposits 3Q24 HIGHLIGHTS & DEVELOPMENTS Ample Deposits to • Consumer and Commercial Deposits Fund Additional Loan Growth o Positive momentum in core relationships and $5,727 balances $5,700 $5,665 $5,580 $5,630 $millions o Treasury management team investments making a positiv
Slide 10: NIM Expansion
NIM Expansion 3Q24 HIGHLIGHTS & DEVELOPMENTS • NIM expansion driven by continued, intentional shift in the earning asset mix toward commercial loans, combined with a favorable shift in the funding mix toward lower-cost deposit balances * Net Fully-Taxable Equivalent Interest Margin is a Non-GAAP mea
Slide 11: Non-Interest Income
Non-Interest Income 3Q24 HIGHLIGHTS & DEVELOPMENTS Non-interest Income $11.8 $11.5 $10.5 $2.0 $9.9 $1.1 • Continued positive momentum in non-interest income $1.7 $0.7 $1.1 $2.0 o Creating more stable and diversified revenue $2.2 $1.7 $1.3 streams $1.1 $1.4 $1.4 $millions $1.2 $1.4 $1.3 o Realizing b
Slide 12: Non-Interest Expense
Non-Interest Expense 3Q24 HIGHLIGHTS & DEVELOPMENTS • $39.3 MM in non-interest expense, impacted by: Non-interest Expense o $0.6 MM expense related to a legacy $39.3 $39.3 $37.1 $37.5 benefits program, which is expected to be $36.2 $17.5 $17.4 resolved in the fourth quarter $16.8 $16.9 $16.1 o $0.6
Slide 13: Capital Position Provides Flexibility
Capital Position Provides Flexibility $13.46 TCE/TA* Leverage Ratio $12.80 $12.60 $12.65 8.61% 8.91% 9.02% 9.01% 7.08% 7.20% 7.22% 7.58% 4Q23 1Q24 2Q24 3Q24 4Q23** 1Q24** 2Q24 3Q24*** CET1 Ratio Total RBC Ratio 14.04% 13.75% 13.52% 13.41% 11.11% 10.89% 10.63% 10.74% 4Q23 1Q24 2Q24 3Q24*** 4Q23** 1Q2
Slide 14: Accretive Q4 2024 Strategic Actions
Accretive Q4 2024 Strategic Actions Simplifying Business Model, Strengthening Balance Sheet & Improving Profitability • Repositioned ~$325MM AFS Securities (Book Expected Financial Impact: Value) o Completed over the first half of October • Less than 4.0 year earn-back on net after-tax o Realized pr
Slide 15: Q4 2024 Guidance Summary
Q4 2024 Guidance Summary • Period-end total loan balances to remain relatively unchanged in Q4, excluding mortgage warehouse balances Loans • Continued growth in higher-yielding commercial loans mostly offset by continued runoff in indirect auto loans • October loan portfolio yields of ~6.30% • Peri
Slide 16: On The Horizon
On The Horizon Positive Momentum Across the Franchise Highly Attractive Constant, High Tenured Deposit Lean In Operating Midwestern Markets Quality Loan Growth Base With Culture Significant Liquidity 70+ branches strategically Positive loan momentum Tenured, granular Proactively managing located in
Slide 17: Appendix
HORIZON‘ _HORIZON: BANK
Slide 18: Diverse Commercial Lending Portfolio
Diverse Commercial Lending Portfolio % of % of Total STRONG AND 9/30/2024 Commercial Loan TRADITIONAL COMMERCIAL LOANS BY INDUSTRY Lessors - Residential Multi $ Balance 271 Portfolio 9.3% Portfolio 5.6% COMMERCIAL LENDING Health Care, Educational Social Assist. 233 8.0% 4.8% NOO- Warehouse/Industria
Slide 19: Well-Managed CRE Maturities
Well-Managed CRE Maturities 2024 Maturities Remaining 2025 Maturities Average Rate 6.48% Average Rate 5.85% Loans Outstanding % of Total Adjusted CRE* Loans Outstanding % of Total Adjusted CRE* 10% $millions $millions 5% 5% $200 $109 $111 2% $37 All rates <7% rates All rates <7% rates Data as of MRQ
Slide 20: Investment Securities Detail
Investment Securities Detail 3Q24 HIGHLIGHTS & DEVELOPMENTS 3Q23 4Q23 1Q24 2Q24 3Q24 • No new investments in the quarter ROLL-OFF/CASH FLOW $26 $28 $27 $26 $23 • High credit quality treasuries, agencies, SALES – $383 – – – municipals and mortgage-backed securities DURATION (YEARS) 6.7 7.0 6.9 6.8 6.
Slide 21: 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 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: Net FTE Interest Margin
HORIZON Non-GAAP Reconciliation — BANK Non-GAAP Reconciliation of Net Fully-Taxable Equivalent ("FTE") Interest Margin (Dollars in Thousands, Unaudited) Three Months Ended September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Interest income (GAAP) (A) $ 90,888 $ 86,98
Slide 24: Non-GAAP Reconciliation: Tangible Common Equity to Tangible Assets
HORIZON Non-GAAP Reconciliation — BANK Non-GAAP Reconciliation of Tangible Common Equity to Tangible Assets Total stockholders’ equity (GAAP) Intangible assets (end of period) Total tangible common equity (non- GAAP) Total assets (GAAP) Intangible assets (end of period) Total tangible assets (non-GA
Slide 25: Non-GAAP Reconciliation: Tangible Book Value Per Share
HORIZON Non-GAAP Reconciliation — BANK Non-GAAP Reconciliation of Tangible Book Value Per Share (Dollars in Thousands, Unaudited) Three Months Ended September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Total stockholders’ equity (GAAP) (A) $ 754,822 $ 726,665 $ 721,25
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