Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Investor Presentation (May 2009)
37 slides from Horizon Bancorp's investor presentation, May 7, 2009
Slide 1: NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward- looking statements regarding financial performance, business prospects, growth and operating strategies. For these statements, Horizon claims the protection of the safe harbor for forward-looking statements contained in the Private Se
Slide 3: Horizon: Serving the Community Since 1873
HORIZON‘ —_ ©. Serving the Community Since 1873
Slide 4: Financial Highlights
Financial Highlights Mark E. Secor Chief Financial Officer
Slide 5: Corporate Profile
*Based on price at the close of business on May 1, 2009 at $15.92 per share **Total assets and ownership as of March 31, 2009 Corporate Profile • Symbol HBNC • Shares Outstanding 3.3 Million Shares • Market Cap* $ 51 Million • Total Assets** $ 1.4 Billion • Ownership** – Insiders 10.1% – ESOP 14.6%
Slide 6: Record Earnings Nine Consecutive Years
Record Earnings Nine Consecutive Years
Slide 7: Revenue Growth Outpaces Expenses & Provision
* In Millions Revenue Growth Out Paces Expenses & Provision March 31, 2009 vs. March 31, 2008 Income Statement • Net Interest Margin • Provision for Loan Losses • Non-Interest Income • Other Non-Interest Expense • Net Income Increase* % Change $2.5 27.9% $2.4 310.9% $1.3 39.9% $1.4 17.1% $0.1 4.2%
Slide 8: Peer Data
Peer Data Source: KBW Report dated January 2009 covering Indiana Publicly Traded Banks; peer data represents a peer average and is 2008 data for all periods reviewed.
Slide 9: Steady Earnings Growth Goes Unrewarded
Steady Earnings Growth Goes Unrewarded * Twelve month trailing fully diluted EPS *
Slide 10: Steady Asset Growth
Steady Asset Growth CAGR 11.0 %
Slide 11: Asset Quality
Asset Quality Thomas H. Edwards President & Chief Operating Officer
Slide 12: Growing Consumer Debt
Source: ABA Consumer Credit Delinquency Bulletin December 31, 2008 Growing Consumer Debt
Slide 13: Unemployment is on the Rise
Source: Bureau of Labor Statistics 2003 - - 2008 Reflect December Year End Percentages Unemployment is on the Rise
Slide 14: Steady Growth in Personal Bankruptcies
Source: ABA Consumer Credit Delinquency Bulletin December 31, 2008 Steady Growth in Personal Bankruptcies Number of Cases Filed
Slide 15: Non-Performing Assets Half That of Peer
Source: Custom group of 23 publicly traded banks headquartered in Indiana from FDIC Uniform Bank Performance Reports Non-performing loans plus OREO to Gross Loans Plus Oreo Non-Performing Assets Half That of Peer
Slide 16: Loan Losses Still on Par With Peer
Loan Losses Still on Par With Peer Source: Custom group of 23 publicly traded banks headquartered in the state of Indiana from FDIC Uniform Bank Performance Report Annualized Net Loan Losses to Average Total Loans
Slide 17: Consumer Loans Driving the Increase in Loan Losses
Consumer Loans Driving the Increase in Loan Losses
Slide 18: Balanced Loan Portfolio Achieved in 2008
Consumer 32% Commercial 34% Mortgage Warehouse 14% Mortgage 20% Mortgage Warehouse 49% Commercial 20% Mortgage 16% Consumer 15% December 31, 2002 December 31, 2008 Balanced Loan Portfolio Achieved in 2008
Slide 19: Consumer Portfolio Predominately Secured
Consumer Portfolio Predominately Secured
Slide 20: Diversified Commercial Portfolio and Limited Construction Lending Exposure
Diversified Commercial Portfolio and Limited Construction Lending Exposure
Slide 21: Nominal Auto Industry Exposure
Nominal Auto Industry Exposure • Direct Loans to Dealerships Total Only $2,070,000 of which $791,000 is Covered by an SBA Guaranty • Direct Loans to Automobile Suppliers Total Only $2,450,000 • Horizon’s Total Loan Exposure to the Automobile Industry is $4,520,000
Slide 22: Disciplined Credit Philosophy
Disciplined Credit Philosophy Diversified Risk • Small Business Lenders – Average Commercial Loan is Approximately $250,000 – Internal Lending Limit is $10 Million vs. Legal Lending Limit of $18 Million – Only Seven Borrowers Exceed $5 Million • Recourse Lenders • Secured Lenders
Slide 23: Craig M. Dwight, Chief Executive Officer
Craig M. Dwight Chief Executive Officer
Slide 24: Six Months of Steady Change
Six Months of Steady Change • EESA (Economic Emergency Stabilization Act) – TARP... No – CPP …Yes – CAP …No • FDIC - Increases Deposit Ins … Yes • TALF... No (Term Asset Backed Securities Loan Facilities) • FDIC - - Debt Guarantee … No • FDIC - - Non-interest Bearing Transaction Acct. Guarantee … Ye
Slide 25: Conditions Still Valid Today for TARP Enrollment
Conditions Still Valid Today for TARP Enrollment • Recession • Liquidity Crisis • Potential Increase in Regulatory Capital Requirements • 4 of the 5 Major Investment Firms Failed • Increase in Bank & Thrift Failures = Opportunity
Slide 26: Why are Banks Paying Off TARP?
Why are Banks Paying Off TARP?
Slide 27: TARP Protects Investors & Depositors
TARP Protects Investors & Depositors
Slide 28: Congress Passes EESA - TARP
Congress Passes EESA - TARP Liquidity Crisis Large Thrifts Fail FDIC Insurance Increased
Slide 29: Winston Churchill quote on opportunity
“A pessimist sees the difficulty in every opportunity; An optimist sees the opportunity in every difficulty” Sir Winston Churchill
Slide 30: Horizon Has a History of Doing the Right Thing
Horizon Has a History of Doing the Right Thing • Record Earnings for 9 Consecutive Years • Top Performing Bank 1 st Quarter 2009 • Good Expense Control • People First Location Second • We Measure Success - “Beat the Prior Year” • Exceptional Service & Sensible Advice - Customer Focused
Slide 31: Horizon Manages Executive Compensation Programs Well
Horizon Manages Executive Compensation Programs Well • Independent Compensation Committee • Third Party Consultants Engaged by the Committee • Minimum Net Income Target Before Bonuses are Paid • Bonuses Tied to Performance & Aligned with Shareholders • Base Pay is Approximately at Peer Averages
Slide 32: Considerable Opportunities
Considerable Opportunities
Slide 33: Risks: Local Unemployment, Loan Stress, FDIC Premiums
Increase in Local Unemployment Loan Portfolios Under Stress Due to Economy Deposit Gathering When Competing Against Banks Under Duress FDIC Increases Insurance Premiums — 2008 approximately $500,000 — 2009 estimate is approximately $1,750,000 Capital Alternatives are Limited Expanded Risk Factors -
Slide 34: Horizon is an Attractive Value
Horizon Bancorp Avg. - Indiana Banks Dividend Yield (as of 05/01/09) 4.3% 5.3% Price to Book (HBNC - Price as of 05/01/09 & Book Value as of Year-end 12/31/08) 62% 86.0% Price to Tangible Book (HBNC - Price as of 05/01/09 & Tangible Book Value as of Year-end 12/31/08) 68% 100.3% Price to Earnings (L
Slide 35: Horizon Out Performs Market Over Years
Horizon Out Performs Market Over 10 Years
Slide 36: Thank You for Your Investment in Horizon Bancorp
Thank You for Your Investment in Horizon Bancorp (Symbol: HBNC)
Slide 37: NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC