Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Investor Presentation (May 2011)
40 slides from Horizon Bancorp's investor presentation, May 18, 2011
Slide 1: Horizon - Serving the Community Since 1873
HORIZON _..... Serving the Community Since 1873
Slide 2: Forward-Looking Statements
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
Slide 3: Horizon's Corporate Profile
Horizon’s Corporate Profile • Shares Outstanding 3.3 Million • Market Cap* $89.9 Million • Total Assets** $ 1.4 Billion • Total Deposits** $ 1.0 Billion • Branches 22 • Ownership – Insiders 10% – Employee Benefit Plans 15% – Institutional & Mutual Funds 22% *Based on price at the close of business o
Slide 4: Horizon Locations
Horizon Locations Michigan City
Slide 5: Diversified Employment Base
Diversified Employment Base
Slide 6: Ranked #1 Retirement Community for Chicago Area
Ranked #1 Retirement Community for Chicago Area
Slide 7: Why Recommend HBNC to Your Clients?
Why Recommend HBNC to Your Clients? • Attractive Current Valuation • Dividends and Reinvesting for Growth • Consolidator in Banking Industry • Strong Capital Position • Positioned to Meet Regulatory Requirements • Successful Acquisition and Organic Growth Track Record • Robust Capabilities for Manag
Slide 8: Horizon is an Attractive Value
Horizon Bancorp* Median Indiana Banks** Dividend Yield 2.5% 1.9% Price to Book 91.7% 82.0% Price to Tangible Book 100.5% 90.1% Price to Earnings (LTM) 9.0x 14.0x Horizon is an Attractive Value *Horizon Bancorp data as of March 31, 2011 **Peer Data Source: KBW Report as of March 2011 Covering Indiana
Slide 9: The Current Banking Environment and Horizon's Response
The Current Banking Environment and Horizon’s Response
Slide 10: New Regulations Will Have Adverse Affect on the Industry
New Regulations Will Have Adverse Affect on the Industry • Lower Revenues – Consumer Finance Protection Bureau – Durbin amendment – Mortgage pricing • Higher Costs – Implementation & systems up-grades – Compliance & training – Lost opportunity • Higher Capital – Lower returns on equity – Importance
Slide 11: Companies That Effectively Deal with Change Execute Well
Companies That Effectively Deal with Change & Execute Well Lead the Industry!
Slide 12: Horizon is an Industry Leader
Horizon is an Industry Leader • Great Team of Employees – We execute well – We look for solutions – We look for opportunities • Good Historical Performance - Indicator of Future Ability • Positive Feedback from Shareholders & Investors • Well-Defined Growth Strategy
Slide 13: Horizon Strives to Increase Revenue
Horizon Strives to Increase Revenue Organic Growth • Commercial Lending Team Expanded • Treasury Management Team Expanded • New Retail Mortgage Sales Manager • Increase in Trust Administrators • Opening New Banking Markets
Slide 14: Experts Agree Significant Banking Industry Consolidation is Inevitable
Experts Agree Significant Banking Industry Consolidation is Inevitable
Slide 15: Challenges Confronting Community Banks
Challenges Confronting Community Banks • Poor Earnings Run Rate • Capital Constraints • Asset Quality Challenges • Limited Growth Opportunities • Increase in Regulatory Burden • Increase in Director Liability • Limited Capacity to Manage the Magnitude of Change • No Succession Plan
Slide 16: Once in a Lifetime Opportunity
Once in a Lifetime Opportunity Horizon Offers • Cooperative, Non-Hostile Approach to Business Combinations • Open, Clear Communication with Acquired Companies’ Employees • Excellent Corporate Culture: People are Proud to Work for Horizon • Ability to Leverage Strengths of Acquired Branches and Compa
Slide 17: Central Location Supports Growth Opportunities
Central Location Supports Growth Opportunities • Lake Michigan Corridor Primed for Growth • Super Regional Banks Cutting Back - Market Share Opportunities • Consolidation Opportunities Increasing for Good Performing Banks • Location, location, location: Horizon can expand north, south, east and west
Slide 18: Target Region for Expansion
Target Region for Expansion Michigan City
Slide 19: Horizon's Story
H orizon’s Story Financial Strength Consistent Performance Superior Returns
Slide 20: Balanced & Complementary Business Model
Balanced & Complementary Business Model #1 - Business Banking #2 - Retail Banking #3 - Retail Mortgage Banking #4 - Wealth Management #5 - Mortgage Warehousing Complementary Revenue Streams that are Counter-Cyclical to Varying Economic Cycles
Slide 21: Peer Data Source: KBW Report dated January 2011 covering Indiana Publicly Traded Banks; peer
Peer Data Source: KBW Report dated January 2011 covering Indiana Publicly Traded Banks; peer data represents a peer average and is as of December 2010 for all periods reviewed.
Slide 22: Record Earnings Eleven Consecutive Years
Record Earnings “Eleven” Consecutive Years CAGR 10.70 % Dollars in Millions
Slide 23: Horizon Has Record First Quarter Earnings
Horizon Has Record First Quarter Earnings Dollars in Thousands First quarter only
Slide 24: Horizon More Profitable Than State & National Peers
Horizon More Profitable Than State & National Peers As Measured By Return On Average Assets Source: Uniform Bank Performance Reports. Indiana and Michigan are state averages for all insured commercial banks. National is all insured commercial banks with assets between $1 billion and $3 billion.
Slide 25: Total Deposits at December 31, 2010
n% Total Deposits at December 31, 2010 M% WM% 8% 10% 34% B Non interest-bearing BNOW O Money market D Savings @ Consumer CD's B Negotiated CD's @ Business Investment Checking HORIZON. ——_—_-_
Slide 26: Total Loans December 31, 2010
Total Loans December 31, 2010 18% @ Commercial @ Real estate O Mortgage warehouse O Consumer HORIZON. ——_—_-_
Slide 27: Steady Asset Growth
Steady Asset Growth CAGR 10.17% 2000 to 2010
Slide 28: Increasing Core Deposits
Increasing Core Deposits CAGR 8.54% 2000 to 2010
Slide 29: Horizon's Sound Credit Culture and Asset Quality
Horizon’s Sound Credit Culture and Asset Quality
Slide 30: Sound Credit Culture
Sound Credit Culture • Team of Seasoned Underwriters – Average Tenure > 20 years • Primarily an In-Market and Full Recourse Lender • Predominately a Secured Lender • Retail & Business Focus – Average Commercial Loan Size Approximately $250,000 – Sweet Spot - Retail and Business Focus • We Manage Len
Slide 31: Horizon Outperforms Peer Groups
Horizon Outperforms Peer Groups Non-Performing Loans Plus OREO to Gross Loans Plus OREO Source: FDIC Uniform Bank Performance Reports as of 12/31/10. Peer is a custom group of 17 publicly traded banks headquartered in the state of Indiana. National peer group consists of insured commercial banks hav
Slide 32: Horizon Builds Loan Loss Reserve
Horizon Builds Loan Loss Reserve
Slide 33: Low Percentage of Development Loans
“Low Percentage” of Development Loans Commercial Loans As a Percent of Total Loans at March 31, 2011 Construction - Development and Spec Homes Spec Land Loans $2,249 Commercial and $8,272 0.3% Industrial Gite $43,724 Automotive /RV $9,067 5% $7,326 o % Owner Occupied RE $124,559 9 bY Non Owner Occup
Slide 34: Diversity in Non-Performing & Real Estate Owned
Diversity in Non-Performing & Real Estate Owned Non-Performing and REO By Classification at March 31, 2011 Dollars in Millions Non-Performing Loans - $22.1 Other Real Estate Owned - $2.3
Slide 35: HORIZON
HORIZON. __HORIZON
Slide 36: Excellent Financial Metrics
Excellent Financial Metrics • Consistent & Stable Quarterly Dividend Payments – Over twenty-five years of uninterrupted dividends – Cash reserves at the holding company • Solid Earnings Performance • Efficient Operations • Good Historical Growth – Assets – Deposits – Earnings
Slide 37: Horizon is Highly Regarded In Our Communities
Horizon is Highly Regarded In Our Communities • Nine out of Ten Customers - Would Refer a Friend • Best Bank - The News Dispatch Readers Poll - Ten out of Last Eleven Years • Best Trust Company - NW Indiana Business Quarterly • Best Place to Work - NW Indiana Business Quarterly • Family Friendly Wor
Slide 38: Horizon Outperforms NASDAQ's Bank & Composite Indices
Horizon Outperforms NASDAQ’s Bank & Composite Indices
Slide 39: Bauer Financial - Recommends
Bauer Financial - “Recommends” All Five-Star and Four-Star Institutions Source: www.bauerfinancial.com - Telephone 800.388.6686 "Because peace of mind matters"
Slide 40: A NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC