Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Investor Presentation (May 2005)
37 slides from Horizon Bancorp's investor presentation, May 27, 2005
Slide 1: A 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: History
History • Founded in 1873 • Located in Northwest Indiana and Southwest Michigan • Total Assets: $900 million • Publicly Held Company Since Early 1960’s - Traded Over the Counter • NASDAQ Small Cap in 2001 • Employees Own Approximately 18% • Insiders Own Approximately 30%
Slide 4: Total Assets
Total Assets 1,0 0 0 ,0 0 0 ,0 0 0 CAGR 1873 to 2004: 7.25% 1933 to 2004: 7.9% 10 0 ,0 0 0 ,0 0 0 10 ,0 0 0 ,0 0 0 1,0 0 0 ,0 0 0 FDIC CAGR 1934 to 2004: 5.3% 10 0 ,0 0 0 18 7 3 18 8 3 18 9 3 19 0 3 19 13 19 2 3 19 3 3 19 4 3 19 5 3 19 6 3 19 7 3 19 8 3 19 9 3 2003 2004 2005
Slide 5: Total Assets
Total Assets $1,100,000 $1,000,000 CAGR 14.25% $900,000 1997 to 2004 $800,000 $700,000 $600,000 CAGR 3.02% 1994 to 1998 $500,000 $400,000 $300,000 $200,000 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Slide 6: Business Lines
Business Lines • Retail Banking • Commercial Banking • Mortgage Lending • Mortgage Warehousing • Trust & Investment Management • Goal is to Balance Revenue Streams
Slide 7: Delivery Systems
Delivery Systems 1999 2004 Post Merger Full Service 8 9 12 Branches ATM’s 34 17 24 Loan & Deposit Production 0 2 3 Offices Internet No Yes Yes Banking
Slide 8: Current Locations
Current Locations - 1 1 Wisconsin) = Allegan | Barry | 1) fo ieeeeesweere wes pal merenty) ne --Man Buren __‘Kalamazoo a, 1 y a ee i Beatie ies © *higan | | Vey reat cet A AK 5. X a We i je SP = : Kane j; ee icago PA ai ve CassSaiht Joseph 9 S1 oss oth Sar = \ 00 ; = iz —T Kendalli ~ Sr 0 Gaye < Por
Slide 9: Deposit Opportunities
Deposit Opportunities Total Total Deposits Deposits Horizon’s MSA Horizon Market (millions) (millions) Share South Bend - $3,214 0 0 Mishawaka, IN Lake & Porter $8,228 $118 1.4% Counties, IN Michigan City – La Porte, IN $1,260 $440 34.9% Niles – Benton $1,918 $35 1.8% Harbor, MI Source: FDIC June 30
Slide 10: Deposit Market Share - Percent
Deposit Market Share - Percent 45% 40% 35% 30% 1999 25% 2000 2001 2002 20% 2003 2004 15% 10% 5% 0% La Porte County, IN Porter County, IN Berrien County, MI Source FDIC June 30, 2004
Slide 11: Closely Held Beliefs
Closely Held Beliefs • We Affirm the Customer as Our Highest Focus • We Accomplish Our Goals • We Understand the Value of Profit • We Value Measurement • We Only Deploy Proven Technology • People First, Location Second
Slide 12: Exceptional Service & Sensible Advice
Exceptional Service & Sensible Advice • Retention • Cross Sell • Net Growth in Households
Slide 13: Exceptional Service & Sensible Advice
Exceptional Service & Sensible Advice Percent 2000 2004 Change Total Households 19,617 24,425 24.51% Retention 96.1% 97.2% Rates Products & Services Per 3.31 3.25 House Hold
Slide 14: Assets Per Employee
Assets Per Employee $3,800,000 $3,300,000 $2,800,000 $2,300,000 $1,800,000 1998 1999 2000 2001 2002 2003 2004
Slide 15: Growth Plans
Growth Plans • Southern Lake Michigan and Highway’s 80 & 94 Corridor • Two New Offices Per Year • Breakeven Point Per Office in 12 to 18 months • Lead with People First • Location Second • Focus on Commercial and Mortgage Lending
Slide 16: Target Growth Area
Target Growth Area _Platteville Janesville | predate eS T LO 3 a ; ainta 2 P jt 1 _ o : Coame UPUM Taylorville. _ Charlegfc G9) nm Olt © 2005 MapQuest.com, Ine.
Slide 17: Organizational Design by Market
Organizational Design by Market • Market Presidents – Seasoned Bankers – Live in the Area they Work – Accountability & Responsibility – Voice and Ears of the Community • Presence – To be Visible – To be Active • Recruitment and Retention – 24/7 Recruitment – Incentive Compensation Programs • Central
Slide 18: Alliance Acquisition
Alliance Acquisition HORIZON. _HORIZON
Slide 19: Acquisition Metrics
Acquisition Metrics Alliance 2004 Acquisition Averages Price to LTM 4,250x 23.9x Earnings Price to Book 1.68x 2.34x Price to Core 6.19% 12.9% Deposit Price to Assets 9.90% 19.5% Source for Alliance Acquisition: McConnell, Budd & Romano, Inc. Investment Banker & Alliance’s Year-end 2004 Audited Finan
Slide 20: Reasons to Acquire
Reasons to Acquire • Fills Market Gap • Cost Savings Greater Than 30% – Staffing – Occupancy – Operational • Minimizes Risk of New Entrant into Market • IRR > 15%
Slide 21: Locations Post Closing
Locations Post Closing —< 1 = Wisconsin‘, qf Allegan | Barry Eran Buren ‘Kalamazoo Ba oe [Berrien | 4 ; \ i Casssaiht Joseph , SS aoe so Garg « iG Porte } | Elkpartt#Grange PoMer| eee Sema aa \Will | tate at a4 =, | Noble i ae) a, | Marshall! = Grundyy Oh ie ‘Starke | Kosciuskd == = foo Kanke kee |
Slide 22: Renegotiated Price
Renegotiated Price • Fiduciary Out/Duty Clause • Chicago Area Bank • Lock-Up Agreement • Increase Break Up Fee • Verizon Vs. Qwest Communications Battle to Acquire MCI
Slide 23: Shareholder Value Plan
Shareholder Value Plan • Started in 2001 • Dividend Policy • DRIP • EPS • ROAE
Slide 24: Dividends
Dividends • 8.33% Increase in 2004 - 52 Cents • 12.49% Increase in 2003 - 48 Cents • 6.67% Increase in 2002 - 42.67 Cents • We Review our Dividend Policy Annually • Dividend Reinvestment Plan
Slide 25: Volume
Volume • 3:1 Stock Split in 2001 – 661,900 to 1,985,700 • 3:2 Stock Split in 2003 – 1,987,500 to 2,981,164 • Trading Volume – NASDAQ Small Cap December 2001 – 2002 annual volume 716,159 shares – 2003 annual volume 795,824 shares – 2004 annual volume 547,266 shares
Slide 26: Why Attractive Investment
Why Attractive Investment • Strategic Growth Plans • Organic Growth & Market Share Opportunities • Excellent Asset Quality • Closely Held Beliefs • Management Team has History of Getting Things Done
Slide 27: Stock Price History - Five Years
Stock Price History - Five Years Source: NASDAQ Bank: Nasdaq Bank Index Bix: S&P Bank Index COMP: Nasdaq Composite
Slide 28: Financial Presentation
Financial Presentation Thomas H. Edwards, President & Chief Operating Officer
Slide 29: Total Loans Year-End
Total Loans Year-End $600 CAGR 11.92% 1997 to 2004 $500 $400 CAGR 6.75% Millions 1994 to 1998 $300 $200 $100 $0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Slide 30: Total Loans
Total Loans 2002 2004 Mortgage Mortgage 16% Warehousing 16% 23% Installment Warehousing 15% 40% Installment 25% Commercial Commercial 36% 20%
Slide 31: Non-Performing Loans
Non-Performing Loans 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% 2000 2001 2002 2003 2004 Peer Horizon Source: Uniform Bank Performance Report prepared by the FDIC
Slide 32: Deposits Year-End
Deposits Year-End $900 $800 CAGR 17.02% 2000 to 2004 $700 $600 Millions $500 $400 $300 $200 $100 $0 2000 2001 2002 2003 2004 Non-Interest Bearing Deposits Interest Bearing Transaction Accounts Time Deposits Other Borrowings
Slide 33: Non-Interest Income
Non-Interest Income 2.00% 12 1.80% 10 1.60% 1.40% 8 1.20% Millions 1.00% 6 0.80% 4 0.60% 0.40% 2 0.20% 0.00% 0 2000 2001 2002 2003 2004 Peer Horizon Actual Source: Uniform Bank Performance Report prepared by the FDIC
Slide 34: Gain on Sale of Loans
Gain on Sale of Loans $4,500 $4,000 $3,500 $3,000 Thousands $2,500 $2,000 $1,500 $1,000 $500 $0 2000 2001 2002 2003 2004
Slide 35: Non-Interest Expense
Non-Interest Expense 4.00% $26 3.80% $24 3.60% $22 3.40% $20 3.20% Millions 3.00% $18 2.80% $16 2.60% $14 2.40% $12 2.20% 2.00% $10 2000 2001 2002 2003 2004 Peer Horizon Actual Source: Uniform Bank Performance Report prepared by the FDIC
Slide 36: Net Income
Net Income $7.5 $7.0 CAGR 16.35% $6.5 2000 to 2004 $6.0 $5.5 $5.0 $4.5 Millions $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 -$0.5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Slide 37: First Quarter Net Income
First Quarter Net Income $2,000 $1,800 $1,600 $1,400 Thousands $1,200 $1,000 $800 $600 $400 $200 $- 2001 2002 2003 2004 2005