Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Merger or Acquisition (May 2015)
37 slides from Horizon Bancorp's merger presentation, May 27, 2015
Slide 1: A NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC
Slide 2: Forward-Looking Statements
This presentation may contain forward-looking statements regarding the financial performance, business, and future operations of Horizon Bancorp and its affiliates (collectively, “Horizon”). For these statements, Horizon claims the protection of the safe harbor for forward-looking statements contain
Slide 3: Who We Are
HORIZON‘ _HORIZO! BANK Who We Are RCE PT ON A
Slide 4: Horizon at a Glance
* Horizon at a Glance 32 Locations Across Indiana and MichiganHeadquartered in Michigan City, IndianaRecord Earnings 14 out of Last 15 YearsMarket Capitalization of $224 Million$2.2 Billion in Total Assets$985 Million in AUMOwnership9% Insiders12% Employee Benefit Plans39% Institutional * Market dat
Slide 5: Northwest Indiana/Southwest Michigan… The Right Side of Chicago
Northwest Indiana/Southwest Michigan… The Right Side of Chicago
Slide 6: Four Key Revenue Streams
Retail BankingBusiness BankingMortgage BankingWealth Management Complementary Revenue Streams that are Counter-Cyclical to Varying Economic Cycles * Four Key Revenue Streams
Slide 7: Horizon's Story
Horizon’s Story Steady GrowthSuperior ReturnsFinancial StrengthConsistent Performance *
Slide 8: 1Q15 Highlights
_HORIZON BANK 1Q15 Highlights RCE PT ON A
Slide 9: 1Q15 Highlights
1Q15 Highlights * Total Loan Growth - LQA 29%, YOY 33% Commercial Loan Growth - LQA 13%, YOY 32%Core Net Interest Margin Held Steady at 3.47% (1)Strong Mortgage Revenue Generated Redeployable CapitalOpened Full-Service Carmel, Indiana Branch on February 23, 2015Announced Peoples Bancorp, Inc. Acquis
Slide 10: Net Income and Diluted Earnings per Share
* Net Income and Diluted Earnings per Share 2015 Off to a Strong Start Change LQ YOY Net Inc. 8.3% 56.8% Dil. EPS 7.8% 44.7%
Slide 11: Continued Loan Growth in 1Q15
Continued Loan Growth in 1Q15 * (In Millions)Loan Type 3/31/14 12/31/14 3/31/15 LQA Δ YOY Δ Commercial $528 $674 $695 13% 32% Residential Mtg. $189 $254 $260 10% 38% Consumer $280 $320 $326 8% 16% Mtg. Warehouse $102 $129 $178 154% 75% Total Loans $1,100 $1,362 $1,461 29% 33%
Slide 12: Peoples Bancorp Acquisition
Peoples Bancorp Acquisition *
Slide 13: Peoples Bancorp Franchise Overview
* Peoples Bancorp Franchise Overview Established in 1925 in Auburn, IN16 F.S. Locations (IN-12 & MI-4)$3.4 Million LTM Net Income$477 Million in Total Assets$230 Million in Total Loans $358 Million in Deposits$230 Million in AUM0.27% NPAs/Assets Data Source: Peoples company financials at or for the
Slide 14: Merger Highlights
* Merger Highlights Strategic Financial Operational Aligned with Horizon’s plan to expand in the states of Indiana and MichiganNatural expansion into contiguous Northeast Indiana Bolsters existing presence in Southwest MichiganContinued revenue diversificationStrong core deposit base EPS accretion o
Slide 15: Pro Forma Franchise
* Pro Forma Franchise 48 Full Service Locations$2.6 Billion in Assets$1.7 Billion in Loans$1.8 Billion in Deposits$1.2 Billion in AUMMarket Cap. ~ $268 Million Horizon and Peoples company financials and pro forma analysis, excluding merger adjustments. Horizon announced intention to close Peoples’ M
Slide 16: Merger Summary
* Based on Horizon’s closing price of $23.02 as of February 18, 2015 Merger Summary Horizon Bancorp Acquiring Peoples Bancorp Horizon Bancorp Acquiring Peoples Bancorp Deal Price per Share (1) $31.62 Consideration Structure 0.95 HBNC shares for each outstanding PBNI share; $9.75 in cash for each out
Slide 17: Transaction Pricing Metrics
* Source: SNL Financial; financial data as of December 31, 2014 and market data as of February 18, 2015Nationwide bank and thrift transactions announced after 12/31/2012 with target’s assets between $200 million and $1 billion, tangible common equity to tangible assets between 10.0% and 15%, LTM ret
Slide 18: Transaction Assumptions
* Transaction Assumptions Category Assumption Cost saves 37% 1x after-tax charges $4.9 million Loan mark $3.5 million or 1.5% of total loans Core deposit intangibles $2.3 million or 1.0% of core deposits Branches Up to two branch closings in the first twelve months. One branch closing has been ident
Slide 19: Horizon's Growth Story
HORIZON‘ _HORIZO! BANK Horizon’s Growth Story RCE PT ON A
Slide 20: Horizon: A Company on the Move
Horizon: A Company on the Move OrganicExpans.(7) St. JosephSouth BendElkhart Lake County Kalamazoo Indianapolis Carmel M&A(7) Anchor Mortgage Alliance Bank American Trust Heartland 1st MortgageSummitPeoples * Assets ($ Mil.) $721 $2,631 Loans($ Mil.) $548 $1,691 Deposits($ Mil.) $489 $1,823 Branches
Slide 21: Growth Opportunities in All Directions
Growth Opportunities in All Directions * Kalamazoo, Lansing & St. JosephPopulation: 883,000Deposits: $10 billion South Bend, Elkhart & Fort WaynePopulation: 835,000Deposits: $12 billion Indianapolis & Johnson CountyPopulation: 1.4 millionDeposits: $32 billion Lake & Porter CountiesPopulation: 657,00
Slide 22: Solid Historical Earnings
2000 – 1Q15 CAGR: 13% In Millions Net Income History * Solid Historical Earnings
Slide 23: Investing in Commercial Lenders Creates Growth
* Investing in Commercial LendersCreates Growth Commercial Loan Balances
Slide 24: Balanced Risk In Commercial Portfolio
* Balanced Risk In Commercial Portfolio Commercial Loan Composition as of March 31, 2015
Slide 25: Growth Markets Thriving
Kalamazoo and Indianapolis Loan Balances * Growth Markets Thriving 2014 Growth: 43%
Slide 26: Shift to Commercial
March 31, 2015 December 31, 2008 In Millions 2008 1Q15 CAGR Commercial $311 $695 13.8% Real Estate $291 $439 6.8% Consumer $280 $326 2.5% Total $882 $1,461 8.4% * Shift to Commercial
Slide 27: Strong Low Cost Deposit Growth
December 31, 2008 March 31, 2015 Strong Low Cost Deposit Growth * In Millions 2008 1Q15 CAGR NIB $84 $285 21.7% IB Trans. $429 $905 12.7% CDs $329 $274 -2.8% Total $842 $1,465 9.3%
Slide 28: Disciplined Credit Culture
* NPLs/ Loans Disciplined Credit Culture
Slide 29: Why Invest In Horizon
HORIZON‘ _HORIZO! BANK Why Invest In Horizon ACCEPT bP OcN AL SvECR Val Coe
Slide 30: Shareholder Value Plan - Since 2001
Shareholder Value Plan - Since 2001 Steady Growth in Net Book Value & EPS DividendsUninterrupted Dividends for more than 25 YearsDividend Increases Aligned with Earnings GrowthImproving LiquidityStock Splits in 2001, 2003, 2011 and 2012Common Stock Issued in Heartland and Summit AcquisitionsRussell
Slide 31: Highly Regarded For Financial Performance
Highly Regarded For Financial Performance Top 200 Community Banks for Financial Performance Six Consecutive Years, 2008 - 2013US Banker & ABA MagazinesTop 10% of Community BanksAnnual Community Bankers Cup, 2012 & 2013Raymond JamesKBW Bank Honor Roll2011 & 2012 *
Slide 32: Highly Regarded In Our Communities
Highly Regarded In Our Communities * Community Relations Award Urban League of Northwest Indiana, Inc.Nine out of Ten Customers Would Refer a FriendIndependent SurveyBest Bank - Twelve out of Last Thirteen YearsThe News Dispatch Readers PollBest Bank for Obtaining a Business LoanNorthwest Indiana Bu
Slide 33: Horizon Outperforms the Market For Total Shareholder Return
Horizon Outperforms the MarketFor Total Shareholder Return As of May 20, 2015; 2015 estimated EPS of $2.24 is the mean estimate from 3rd party research analystsSNL U.S. Bank: Includes all Major Exchange Banks in SNL's coverage universe. * Horizon Bancorp: 5-Year Total Return Comparison P/2015 Est. E
Slide 34: Thank You for Your Investment in Horizon Bancorp
Thank Youfor Your Investment inHorizon Bancorp
Slide 35: A NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC
Slide 36: Appendix
HORIZON‘ _HORIZO! BANK Appendix RCE PT ON A
Slide 37: Non-GAAP Reconciliations
HORIZON Non-GAAP Reconciliations Non-GAAP Reconciliation of Net Interest Margin @ollar Amounts in Thousands) ‘Three Months Ended March 31 December 31 March 31 2015 2014 2014 ‘Net Interest Margin As Reported (Unaudited) (Unaudited) Net interest inaame S$ 16,886 $ 16,523 $ 13,272 Average interest-carn