HBNC 8-K
Horizon Bancorp Inc /In/ (HBNC)
8-K
2024-04-24
For: 2024-04-24
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April 11, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 24, 2024
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of principal executive offices, including zip code)
(219 ) 879-0211
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 2.02 Results of Operations and Financial Condition
On April 24, 2024, Horizon Bancorp, Inc. (the “Company”) issued a press release announcing earnings and other financial results for the three–month period ended March 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated here by reference.
Item 7.01 Regulation FD Disclosure
Investor Presentation
The Company has prepared presentation materials (the “Investor Presentation”) that management intends to use during its previously announced Earnings Conference Call on Thursday, April 25, 2024 at 7:30 a.m. Central Time, and from time to time thereafter in presentations about the Company’s operations and performance. The Company may use the Investor Presentation, possibly with modifications, in presentations to current and potential investors, analysts, lenders, business partners, acquisition candidates, customers, employees and others with an interest in the Company and its business.
A copy of the Investor Presentation is furnished as Exhibit 99.2 to this report and incorporated here by reference. The Investor Presentation is also available on the Company’s investor website at www.horizonbank.com. Materials on the Company’s investor website are not part of or incorporated by reference into this report.
In accordance with General Instruction B.2 of Form 8–K, the information in this Current Report on Form 8–K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
| (d) Exhibits | |||||||||||
| EXHIBIT INDEX | |||||||||||
| Exhibit No. | Description | Location | |||||||||
| 99.1 | Attached | ||||||||||
| 99.2 | Attached | ||||||||||
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document) | Within the Inline XBRL document | |||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | April 24, 2024 | HORIZON BANCORP, INC. | |||||||||
| By: | /s/ Mark E. Secor | ||||||||||
| Mark E. Secor, | |||||||||||
| Executive Vice President & Chief Financial Officer | |||||||||||
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| Contact: | Mark E. Secor | ||||
| Chief Financial Officer | |||||
| Phone: | (219) 873–2611 | ||||
| Fax: | (219) 874–9280 | ||||
| Date: | April 24, 2024 | ||||
FOR IMMEDIATE RELEASE
Horizon Bancorp, Inc. Reports Solid First Quarter 2024 Results Including EPS of $0.32, Net Interest Margin Expansion, Loan Growth and Well-Managed Operating Expenses
Michigan City, Indiana, April 24, 2024 (GLOBE NEWSWIRE) – (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”), the parent company of Horizon Bank (the “Bank”), announced its unaudited financial results for the three months ended March 31, 2024.
Net income for the first quarter of 2024 was $14.0 million, or $0.32 per diluted share compared to a net loss of $25.2 million, or $0.58, in the linked fourth quarter of 2023. During the fourth quarter of 2023, the Company recognized a net loss on the sale of securities of $31.6 million and the tax effect of the surrender of bank owned life insurance of $8.6 million.
“We are very pleased with our positive first quarter results which included a second consecutive quarter of margin and net interest income expansion. Throughout the quarter, we began to strategically leverage our excess liquidity into higher yielding commercial, equipment finance, residential and consumer loan portfolios. These activities were complimented by the resiliency of our deposit portfolio both in terms of balances and cost,” President and Chief Executive Officer Thomas M. Prame said. “Horizon's first quarter earnings not only reflect continued improvement in our margin, but highlights our disciplined approach to expenses and positive credit metrics through our active portfolio management and conservative lending approach. Even with the current economic outlook of higher rates for longer, we feel confident in our ability to continue to improve our net interest margin and the financial performance of the organization moving forward. We are encouraged by the positive momentum across our diversified operating model and we are experiencing consistent growth in our relationship banking platforms in our local markets. The team had a solid start to the year, and we feel optimistic about our trajectory as we move into the second quarter.”
First Quarter 2024 Highlights
•Net interest margin increased to 2.50% compared to 2.43% in the linked quarter. Net interest income was $43.3 million compared to $42.3 million in the linked quarter. The net interest margin for the month ended March 31, 2024 was 2.53%.
•Commercial loans grew 11.2% annualized in the quarter, including $22.8 million in new equipment finance production and a $52.0 million increase in other commercial loans.
•Total loans were $4.62 billion at period end, increasing by 18.2% annualized during the quarter. Balances included the strategic deployment of excess liquidity into higher yielding and excellent credit quality residential mortgages of $94.7 million and consumer loans with credit protection of $59.1 million.
•Cash totaled $271.1 million at period end, providing significant flexibility to drive future net interest margin growth through deployment into higher yielding assets throughout 2024.
•Excellent asset quality with net charge-offs representing only 0.01% of average loans, as well as delinquent and non-performing loans representing 0.33% and 0.41%, respectively, at period end. The Company's first quarter credit loss expense of $805,000 was primarily attributable to loan growth and replacement of net charge-offs.
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Horizon Bancorp, Inc. Reports First Quarter 2024 Results
•Stable deposit base with continued pricing discipline. Deposits totaled $5.58 billion at quarter end, compared to $5.66 billion on December 31, 2023. Modest outflows were primarily attributed to public fund certificates of deposits.
•Solid fee income results, even with backdrop of lower BOLI income and mortgage seasonality. Expenses were well-managed in the quarter and at the lower end of guidance.
Summary
| For the Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||||||||
| Net Interest Income and Net Interest Margin | 2024 | 2023 | 2023 | |||||||||||||||||
| Net interest income | $ | 43,288 | $ | 42,257 | $ | 45,237 | ||||||||||||||
| Net interest margin | 2.50 | % | 2.43 | % | 2.67 | % | ||||||||||||||
| Adjusted net interest margin | 2.50 | % | 2.42 | % | 2.65 | % | ||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||||||||
| Asset Yields and Funding Costs | 2024 | 2023 | 2023 | |||||||||||||||||
| Interest earning assets | 4.82 | % | 4.69 | % | 4.17 | % | ||||||||||||||
| Interest bearing liabilities | 2.84 | % | 2.74 | % | 1.85 | % | ||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| Non-interest Income and | March 31, | December 31, | March 31, | |||||||||||||||||
| Mortgage Banking Income | 2024 | 2023 | 2023 | |||||||||||||||||
Total non–interest income | $ | 9,929 | $ | (20,449) | $ | 9,620 | ||||||||||||||
| Gain on sale of mortgage loans | 626 | 951 | 785 | |||||||||||||||||
| Mortgage servicing income net of impairment | 439 | 724 | 713 | |||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||||||||
| Non-interest Expense | 2024 | 2023 | 2023 | |||||||||||||||||
Total non–interest expense | $ | 37,107 | $ | 39,330 | $ | 34,524 | ||||||||||||||
Annualized non–interest expense to average assets | 1.90 | % | 1.98 | % | 1.79 | % | ||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||||||||
| Credit Quality | 2024 | 2023 | 2023 | |||||||||||||||||
| Allowance for credit losses to total loans | 1.09 | % | 1.13 | % | 1.17 | % | ||||||||||||||
Non–performing loans to total loans | 0.41 | % | 0.46 | % | 0.47 | % | ||||||||||||||
Percent of net charge–offs to average loans outstanding for the period | 0.01 | % | 0.02 | % | 0.01 | % | ||||||||||||||
| March 31, | Net Reserve | December 31, | ||||||||||||||||||
| Allowance for Credit Losses | 2024 | 1Q24 | 2023 | |||||||||||||||||
| Commercial | $ | 30,514 | $ | 778 | $ | 29,736 | ||||||||||||||
| Retail Mortgage | 2,655 | 152 | 2,503 | |||||||||||||||||
| Warehouse | 659 | 178 | 481 | |||||||||||||||||
| Consumer | 16,559 | (750) | 17,309 | |||||||||||||||||
| Allowance for Credit Losses (“ACL”) | $ | 50,387 | $ | 358 | $ | 50,029 | ||||||||||||||
| ACL / Total Loans | 1.09 | % | 1.13 | % | ||||||||||||||||
| Acquired Loan Discount (“ALD”) | $ | 4,660 | $ | (130) | $ | 4,790 | ||||||||||||||
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Horizon Bancorp, Inc. Reports First Quarter 2024 Results
Income Statement Highlights
Net income for the first quarter of 2024 was $14.0 million, or $0.32 diluted earnings per share. The Company reported a net loss of $25.2 million, or $0.58, for the linked quarter and net income of $18.2 million, or $0.42, for the prior year period. The linked quarter net loss was due primarily to a $31.6 million net loss on the sale of securities resulting from the balance sheet restructuring which occurred in December 2023, income tax expense from the early surrender of bank owned life insurance, extraordinary non-interest expenses associated with staffing changes, the launch of Horizon Equipment Finance and the expansion of the Bank's treasury management capabilities. The change in net income for the first quarter of 2024 when compared to the linked quarter, also reflects growth in net-interest income of $1.0 million and decreases in credit loss expense of $469,000, income tax expense of $5.1 million and non-interest expense of $2.2 million.
Net interest income was $43.3 million in the first quarter of 2024, compared to $42.3 million in the linked quarter.
Total non–interest income was $9.9 million in the first quarter of 2024, compared to negative $20.4 million in the linked quarter when the Company recorded a $31.6 million pre-tax loss on the sale of investment securities associated with the balance sheet restructuring which occurred in December 2023.
Total non–interest expense was $2.2 million lower in the first quarter of 2024 when compared to the linked quarter, primarily due to decreases of $1.6 million in salaries and employee benefits, $626,000 in loan expense, $492,000 in other losses, and $478,000 in data processing, partially offset by increases of $965,000 in outside services and consultants, $286,000 in net occupancy expenses, and $120,000 in FDIC insurance expense.
Horizon's effective tax rate was 8.6% for the first quarter of 2024, with income tax expense of $1.3 million which is $5.1 million lower than the linked quarter when the Company recorded income tax associated with the surrender of bank owned life insurance.
Net Interest Margin
Horizon’s net interest margin (“NIM”) was 2.50% for the first quarter of 2024, compared to 2.43% for the fourth quarter of 2023.
Net interest margin, excluding acquisition–related purchase accounting adjustments (“adjusted net interest margin”), was 2.50% for the first quarter of 2024, compared to 2.42% for the linked quarter. (See the “Non–GAAP Reconciliation of Net Interest Margin” table below).
Lending Activity
Total loan balances and loans held for sale increased to $4.62 billion on March 31, 2024 compared to $4.42 billion on December 31, 2023. Balances at the end of the first quarter of 2024 included deployment of surplus liquidity into $59.1 million in consumer loans with credit protections and $94.7 million in residential mortgages. During the three months ended March 31, 2024, commercial loans grew organically by $74.8 million, including $22.8 million in equipment finance production. During the first quarter of 2024, consumer loans increased $13.3 million, residential mortgage loans increased $100.9 million, and mortgage warehouse loans increased $11.5 million, offset by a decrease in loans held for sale of $496,000.
3
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Loan Growth by Type | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | QTD | QTD | Annualized | ||||||||||||||||||||||||||||
| 2024 | 2023 | $ Change | % Change | % Change | ||||||||||||||||||||||||||||
| Commercial | $ | 2,749,766 | $ | 2,674,960 | $ | 74,806 | 2.8% | 11.2% | ||||||||||||||||||||||||
| Residential mortgage | 782,070 | 681,136 | 100,934 | 14.8% | 59.6% | |||||||||||||||||||||||||||
| Mortgage warehouse | 56,549 | 45,078 | 11,471 | 25.4% | 102.3% | |||||||||||||||||||||||||||
| Consumer | 1,029,790 | 1,016,456 | 13,334 | 1.3% | 5.3% | |||||||||||||||||||||||||||
| Total loans | 4,618,175 | 4,417,630 | 200,545 | 4.3% | 18.3% | |||||||||||||||||||||||||||
| Loans held for sale | 922 | 1,418 | (496) | (35.0)% | (140.7)% | |||||||||||||||||||||||||||
| Total loans and loans held for sale | $ | 4,619,097 | $ | 4,419,048 | $ | 200,049 | 4.3% | 18.2% | ||||||||||||||||||||||||
Deposit Activity
Total deposit balances of $5.58 billion on March 31, 2024 decreased 1.50% compared to $5.66 billion on December 31, 2023.
The deposit mix at the end of the first quarter of 2024 represented the demand for clients to earn more interest on their excess funds and seasonal fluctuation of commercial balances for taxes and distributions. The Bank's tenured and granular core deposit relationships remain steadfast, reflecting the value of Horizon's relationship banking model and local community engagement.
| Deposit Growth by Type | |||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | |||||||||||||||||||||||||||||
| March 31, | December 31, | QTD | QTD | Annualized | |||||||||||||||||||||||||
| 2024 | 2023 | $ Change | % Change | % Change | |||||||||||||||||||||||||
| Non–interest bearing | $ | 1,093,076 | $ | 1,116,005 | $ | (22,929) | (2.1)% | (8.3)% | |||||||||||||||||||||
| Interest bearing | 3,350,673 | 3,369,149 | (18,476) | (0.5)% | (2.2)% | ||||||||||||||||||||||||
| Time deposits | 1,136,121 | 1,179,739 | (43,618) | (3.7)% | (14.9)% | ||||||||||||||||||||||||
| Total deposits | $ | 5,579,870 | $ | 5,664,893 | $ | (85,023) | (1.5)% | (6.0)% | |||||||||||||||||||||
Capital
The capital resources of the Company and the Bank continued to exceed regulatory capital ratios for “well capitalized” banks at March 31, 2024. Stockholders’ equity totaled $721.3 million at March 31, 2024, and the ratio of average stockholders’ equity to average assets was 9.25% for the three months ended March 31, 2024.
Tangible book value, which excludes intangible assets from total equity, per common share (“TBVPS”) was $12.65, increasing $0.05 during the first quarter of 2024. Tangible common equity increased to 7.20% of tangible assets as of March 31, 2024, an increase of 11 basis points during the quarter.
4
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
The following table presents the actual regulatory capital dollar amounts and ratios of the Company and the Bank as of March 31, 2024.
| Actual | Required for Capital Adequacy Purposes | Required for Capital Adequacy Purposes with Capital Buffer | Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||||||||||||||||||||||||||||||
| $ | Ratio | $ | Ratio | $ | Ratio | $ | Ratio | |||||||||||||||||||||||||||||||||||||||||||
| Total capital (to risk–weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consolidated | $ | 793,832 | 13.82 | % | $ | 459,403 | 8.00 | % | $ | 602,967 | 10.50 | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||
| Bank | 721,280 | 12.59 | % | 458,163 | 8.00 | % | 601,338 | 10.50 | % | $ | 572,703 | 10.00 | % | |||||||||||||||||||||||||||||||||||||
| Tier 1 capital (to risk–weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consolidated | 742,695 | 12.93 | % | 344,553 | 6.00 | % | 488,116 | 8.50 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
| Bank | 670,143 | 11.70 | % | 343,622 | 6.00 | % | 486,798 | 8.50 | % | 458,163 | 8.00 | % | ||||||||||||||||||||||||||||||||||||||
| Common equity tier 1 capital (to risk–weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consolidated | 625,965 | 10.90 | % | 258,414 | 4.50 | % | 401,978 | 7.00 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
| Bank | 670,143 | 11.70 | % | 257,716 | 4.50 | % | 400,892 | 7.00 | % | 372,257 | 6.50 | % | ||||||||||||||||||||||||||||||||||||||
| Tier 1 capital (to average assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consolidated | 742,695 | 9.68 | % | 306,779 | 4.00 | % | 306,779 | 4.00 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||
| Bank | 670,143 | 8.63 | % | 310,602 | 4.00 | % | 310,602 | 4.00 | % | 388,253 | 5.00 | % | ||||||||||||||||||||||||||||||||||||||
Liquidity
The Bank maintains a stable base of core deposits provided by long–standing and new relationships with individuals and local businesses. These deposits are the principal source of liquidity for Horizon. Other sources of liquidity for Horizon include earnings, loan repayments, investment security cash flows, proceeds from the sale of residential mortgage loans, unpledged investment securities and borrowing relationships with correspondent banks, including the Federal Home Loan Bank of Indianapolis (the “FHLB”). On March 31, 2024, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $1.56 billion in unused credit lines with various money center banks, including the FHLB and the Federal Reserve Bank. The Bank had approximately $581.1 million of unpledged investment securities on March 31, 2024.
5
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
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 claims the protection of the safe harbor for forward–looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission (the “SEC”). Forward–looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward–looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance.
Although management believes that the expectations reflected in such forward–looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: current financial conditions within the banking industry, including the effects of recent failures of other financial institutions, liquidity levels, and responses by the Federal Reserve, Department of the Treasury, and the Federal Deposit Insurance Corporation to address these issues; changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; the ability of Horizon to remediate its material weaknesses in its internal control over financial reporting; continuing increases in inflation; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon’s assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; economic conditions and their impact on Horizon and its customers, including local and global economic recovery from the pandemic; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the U.S. federal government to manage federal debt limits; climate change and social justice initiatives; the inability to realize cost savings or revenues or to effectively implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; acts of terrorism, war and global conflicts, such as the Russia and Ukraine conflict and the Israel and Hamas conflict; and supply chain disruptions and delays. These and additional factors that could cause actual results to differ materially from those expressed in the forward–looking statements are discussed in Horizon’s reports (such as the Annual Report on Form 10–K, Quarterly Reports on Form 10–Q, and Current Reports on Form 8–K) filed with the SEC and available at the SEC’s website (www.sec.gov). Undue reliance should not be placed on the forward–looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward–looking statement to reflect the events or circumstances after the date on which the forward–looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.
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Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Financial Highlights | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Balance sheet: | ||||||||||||||||||||||||||||||||
| Total assets | $ | 7,855,707 | $ | 7,931,195 | $ | 7,959,434 | $ | 7,963,353 | $ | 7,897,995 | ||||||||||||||||||||||
| Interest earning deposits & federal funds sold | 170,882 | 413,744 | 76,293 | 119,637 | 30,221 | |||||||||||||||||||||||||||
| Interest earning time deposits | 1,715 | 2,205 | 2,207 | 2,452 | 3,098 | |||||||||||||||||||||||||||
| Investment securities | 2,461,044 | 2,492,889 | 2,831,651 | 2,889,309 | 2,958,978 | |||||||||||||||||||||||||||
| Commercial loans | 2,749,766 | 2,674,960 | 2,589,244 | 2,506,279 | 2,505,459 | |||||||||||||||||||||||||||
| Mortgage warehouse loans | 56,549 | 45,078 | 65,923 | 82,345 | 52,957 | |||||||||||||||||||||||||||
| Residential mortgage loans | 782,070 | 681,136 | 675,399 | 674,751 | 662,459 | |||||||||||||||||||||||||||
| Consumer loans | 1,029,790 | 1,016,456 | 1,028,436 | 1,002,885 | 1,026,076 | |||||||||||||||||||||||||||
| Total loans | 4,618,175 | 4,417,630 | 4,359,002 | 4,266,260 | 4,246,951 | |||||||||||||||||||||||||||
| Earning assets | 7,306,564 | 7,362,395 | 7,306,490 | 7,319,100 | 7,273,921 | |||||||||||||||||||||||||||
| Non–interest bearing deposit accounts | 1,093,076 | 1,116,005 | 1,126,703 | 1,170,055 | 1,231,845 | |||||||||||||||||||||||||||
| Interest bearing transaction accounts | 3,350,673 | 3,369,149 | 3,322,788 | 3,289,474 | 3,402,525 | |||||||||||||||||||||||||||
| Time deposits | 1,136,121 | 1,179,739 | 1,250,606 | 1,249,803 | 1,067,575 | |||||||||||||||||||||||||||
| Total deposits | 5,579,870 | 5,664,893 | 5,700,097 | 5,709,332 | 5,701,945 | |||||||||||||||||||||||||||
| Borrowings | 1,359,121 | 1,353,050 | 1,356,510 | 1,352,039 | 1,311,927 | |||||||||||||||||||||||||||
| Subordinated notes | 55,634 | 55,543 | 59,007 | 58,970 | 58,933 | |||||||||||||||||||||||||||
| Junior subordinated debentures issued to capital trusts | 57,315 | 57,258 | 57,201 | 57,143 | 57,087 | |||||||||||||||||||||||||||
| Total stockholders’ equity | 721,250 | 718,812 | 693,369 | 709,243 | 702,559 | |||||||||||||||||||||||||||
7
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Financial Highlights | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands Except Share and Per Share Data and Ratios, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Income statement: | ||||||||||||||||||||||||||||||||
| Net interest income | $ | 43,288 | $ | 42,257 | $ | 42,090 | $ | 46,160 | $ | 45,237 | ||||||||||||||||||||||
| Credit loss expense (recovery) | 805 | 1,274 | 263 | 680 | 242 | |||||||||||||||||||||||||||
| Non–interest income | 9,929 | (20,449) | 11,830 | 10,997 | 9,620 | |||||||||||||||||||||||||||
| Non–interest expense | 37,107 | 39,330 | 36,168 | 36,262 | 34,524 | |||||||||||||||||||||||||||
| Income tax expense | 1,314 | 6,419 | 1,284 | 1,452 | 1,863 | |||||||||||||||||||||||||||
| Net income | $ | 13,991 | $ | (25,215) | $ | 16,205 | $ | 18,763 | $ | 18,228 | ||||||||||||||||||||||
| Per share data: | ||||||||||||||||||||||||||||||||
| Basic earnings per share | $ | 0.32 | $ | (0.58) | $ | 0.37 | $ | 0.43 | $ | 0.42 | ||||||||||||||||||||||
| Diluted earnings per share | 0.32 | (0.58) | 0.37 | 0.43 | 0.42 | |||||||||||||||||||||||||||
| Cash dividends declared per common share | 0.16 | 0.16 | 0.16 | 0.16 | 0.16 | |||||||||||||||||||||||||||
| Book value per common share | 16.49 | 16.47 | 15.89 | 16.25 | 16.11 | |||||||||||||||||||||||||||
| Tangible book value per common share | 12.65 | 12.60 | 12.00 | 12.34 | 12.17 | |||||||||||||||||||||||||||
| Market value – high | 14.44 | 14.65 | 12.68 | 11.10 | 16.32 | |||||||||||||||||||||||||||
| Market value – low | $ | 11.75 | $ | 9.33 | $ | 9.90 | $ | 7.75 | $ | 10.31 | ||||||||||||||||||||||
| Weighted average shares outstanding – Basis | 43,663,610 | 43,649,585 | 43,646,609 | 43,639,987 | 43,583,554 | |||||||||||||||||||||||||||
| Weighted average shares outstanding – Diluted | 43,874,036 | 43,649,585 | 43,796,069 | 43,742,588 | 43,744,721 | |||||||||||||||||||||||||||
| Key ratios: | ||||||||||||||||||||||||||||||||
| Return on average assets | 0.72 | % | (1.27) | % | 0.81 | % | 0.96 | % | 0.94 | % | ||||||||||||||||||||||
| Return on average common stockholders’ equity | 7.76 | (14.23) | 8.99 | 10.59 | 10.66 | |||||||||||||||||||||||||||
| Net interest margin | 2.50 | 2.43 | 2.41 | 2.69 | 2.67 | |||||||||||||||||||||||||||
| Allowance for credit losses to total loans | 1.09 | 1.13 | 1.14 | 1.17 | 1.17 | |||||||||||||||||||||||||||
| Average equity to average assets | 9.25 | 8.92 | 9.03 | 9.07 | 8.86 | |||||||||||||||||||||||||||
| Efficiency ratio | 69.73 | 180.35 | 67.08 | 63.44 | 62.93 | |||||||||||||||||||||||||||
| Annualized non–interest expense to average assets | 1.90 | 1.98 | 1.81 | 1.86 | 1.79 | |||||||||||||||||||||||||||
| Bank only capital ratios: | ||||||||||||||||||||||||||||||||
| Tier 1 capital to average assets | 8.63 | 8.41 | 8.77 | 8.72 | 8.86 | |||||||||||||||||||||||||||
| Tier 1 capital to risk weighted assets | 11.70 | 11.96 | 12.22 | 12.12 | 12.65 | |||||||||||||||||||||||||||
| Total capital to risk weighted assets | 12.59 | 12.87 | 13.11 | 13.03 | 13.56 | |||||||||||||||||||||||||||
8
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Financial Highlights | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands Except Ratios, Unaudited) | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Loan data: | ||||||||||||||||||||||||||||||||
| Substandard loans | $ | 43,672 | $ | 49,526 | $ | 47,563 | $ | 41,484 | $ | 49,804 | ||||||||||||||||||||||
| 30 to 89 days delinquent | 15,272 | 16,595 | 13,089 | 10,913 | 13,971 | |||||||||||||||||||||||||||
| Non–performing loans: | ||||||||||||||||||||||||||||||||
| 90 days and greater delinquent – accruing interest | 108 | 559 | 392 | 1,313 | 137 | |||||||||||||||||||||||||||
| Non–accrual loans | 19,053 | 19,710 | 19,056 | 20,796 | 19,660 | |||||||||||||||||||||||||||
| Total non–performing loans | $ | 19,161 | $ | 20,269 | $ | 19,448 | $ | 22,109 | $ | 19,797 | ||||||||||||||||||||||
| Non–performing loans to total loans | 0.41 | % | 0.46 | % | 0.45 | % | 0.52 | % | 0.47 | % | ||||||||||||||||||||||
| Allocation of the Allowance for Credit Losses | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Commercial | $ | 30,514 | $ | 29,736 | $ | 29,472 | $ | 30,354 | $ | 31,156 | ||||||||||||||||||||||
| Residential mortgage | 2,655 | 2,503 | 2,794 | 3,648 | 4,447 | |||||||||||||||||||||||||||
| Mortgage warehouse | 659 | 481 | 714 | 893 | 798 | |||||||||||||||||||||||||||
| Consumer | 16,559 | 17,309 | 16,719 | 15,081 | 13,125 | |||||||||||||||||||||||||||
| Total | $ | 50,387 | $ | 50,029 | $ | 49,699 | $ | 49,976 | $ | 49,526 | ||||||||||||||||||||||
| Net Charge–offs (Recoveries) | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands Except Ratios, Unaudited) | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Commercial | $ | (57) | $ | 233 | $ | 142 | $ | 101 | $ | 104 | ||||||||||||||||||||||
| Residential mortgage | (5) | 21 | (39) | (10) | (6) | |||||||||||||||||||||||||||
| Mortgage warehouse | — | — | — | — | — | |||||||||||||||||||||||||||
| Consumer | 488 | 531 | 619 | 183 | 281 | |||||||||||||||||||||||||||
| Total | $ | 426 | $ | 785 | $ | 722 | $ | 274 | $ | 379 | ||||||||||||||||||||||
| Percent of net charge–offs (recoveries) to average loans outstanding for the period | 0.01 | % | 0.02 | % | 0.02 | % | 0.01 | % | 0.01 | % | ||||||||||||||||||||||
9
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Total Non–performing Loans | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands Except Ratios, Unaudited) | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Commercial | $ | 5,493 | $ | 7,362 | $ | 6,969 | $ | 8,275 | $ | 8,523 | ||||||||||||||||||||||
| Residential mortgage | 8,725 | 8,058 | 7,777 | 8,168 | 6,926 | |||||||||||||||||||||||||||
| Mortgage warehouse | — | — | — | — | — | |||||||||||||||||||||||||||
| Consumer | 4,943 | 4,849 | 4,702 | 5,666 | 4,348 | |||||||||||||||||||||||||||
| Total | $ | 19,161 | $ | 20,269 | $ | 19,448 | $ | 22,109 | $ | 19,797 | ||||||||||||||||||||||
| Non–performing loans to total loans | 0.41 | % | 0.46 | % | 0.45 | % | 0.52 | % | 0.47 | % | ||||||||||||||||||||||
| Other Real Estate Owned and Repossessed Assets | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Commercial | $ | 1,124 | $ | 1,124 | $ | 1,287 | $ | 1,567 | $ | 1,567 | ||||||||||||||||||||||
| Residential mortgage | — | 182 | 32 | 107 | 203 | |||||||||||||||||||||||||||
| Mortgage warehouse | — | — | — | — | — | |||||||||||||||||||||||||||
| Consumer | 50 | 205 | 72 | 7 | 78 | |||||||||||||||||||||||||||
| Total | $ | 1,174 | $ | 1,511 | $ | 1,391 | $ | 1,681 | $ | 1,848 | ||||||||||||||||||||||
10
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Average Balance Sheets | ||||||||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||||||||
| March 31, 2024 | March 31, 2023 | |||||||||||||||||||||||||||||||||||||
| Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||
| Interest earning assets | ||||||||||||||||||||||||||||||||||||||
| Federal funds sold | $ | 322,058 | $ | 4,387 | 5.48 | % | $ | 7,767 | $ | 83 | 4.33 | % | ||||||||||||||||||||||||||
| Interest earning deposits | 9,025 | 110 | 4.90 | % | 8,780 | 70 | 3.23 | % | ||||||||||||||||||||||||||||||
| Investment securities – taxable | 1,364,195 | 7,362 | 2.17 | % | 1,727,369 | 8,725 | 2.05 | % | ||||||||||||||||||||||||||||||
Investment securities – non–taxable (1) | 1,149,957 | 6,451 | 2.86 | % | 1,314,129 | 7,556 | 2.95 | % | ||||||||||||||||||||||||||||||
Loans receivable (2) (3) | 4,448,324 | 66,954 | 6.09 | % | 4,143,221 | 55,364 | 5.44 | % | ||||||||||||||||||||||||||||||
| Total interest earning assets | 7,293,559 | 85,264 | 4.82 | % | 7,201,266 | 71,798 | 4.17 | % | ||||||||||||||||||||||||||||||
| Non–interest earning assets | ||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 105,795 | 103,563 | ||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | (49,960) | (50,337) | ||||||||||||||||||||||||||||||||||||
| Other assets | 486,652 | 576,614 | ||||||||||||||||||||||||||||||||||||
| Total average assets | $ | 7,836,046 | $ | 7,831,106 | ||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
| Interest bearing liabilities | ||||||||||||||||||||||||||||||||||||||
| Interest bearing deposits | $ | 4,500,148 | $ | 27,990 | 2.50 | % | $ | 4,502,199 | $ | 14,819 | 1.33 | % | ||||||||||||||||||||||||||
| Borrowings | 1,200,728 | 10,904 | 3.65 | % | 1,053,317 | 9,268 | 3.57 | % | ||||||||||||||||||||||||||||||
| Repurchase agreements | 138,052 | 1,026 | 2.99 | % | 138,749 | 503 | 1.47 | % | ||||||||||||||||||||||||||||||
| Subordinated notes | 55,558 | 831 | 6.02 | % | 58,910 | 880 | 6.06 | % | ||||||||||||||||||||||||||||||
| Junior subordinated debentures issued to capital trusts | 57,279 | 1,225 | 8.60 | % | 57,048 | 1,091 | 7.76 | % | ||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 5,951,765 | 41,976 | 2.84 | % | 5,810,223 | 26,561 | 1.85 | % | ||||||||||||||||||||||||||||||
| Non–interest bearing liabilities | ||||||||||||||||||||||||||||||||||||||
| Demand deposits | 1,077,183 | 1,255,697 | ||||||||||||||||||||||||||||||||||||
| Accrued interest payable and other liabilities | 82,015 | 71,714 | ||||||||||||||||||||||||||||||||||||
| Stockholders’ equity | 725,083 | 693,472 | ||||||||||||||||||||||||||||||||||||
| Total average liabilities and stockholders’ equity | $ | 7,836,046 | $ | 7,831,106 | ||||||||||||||||||||||||||||||||||
| Net interest income / spread | $ | 43,288 | 1.98 | % | $ | 45,237 | 2.32 | % | ||||||||||||||||||||||||||||||
Net interest income as a percent of average interest earning assets (1) | 2.50 | % | 2.67 | % | ||||||||||||||||||||||||||||||||||
(1) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis. | ||||||||||||||||||||||||||||||||||||||
(2) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate. | ||||||||||||||||||||||||||||||||||||||
(3) Non–accruing loans for the purpose of the computation above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees. The average rate is presented on a tax equivalent basis. | ||||||||||||||||||||||||||||||||||||||
11
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Condensed Consolidated Balance Sheets | ||||||||||||||
| (Dollars in Thousands) | ||||||||||||||
| March 31, 2024 | December 31, 2023 | |||||||||||||
| (Unaudited) | ||||||||||||||
| Assets | ||||||||||||||
| Cash and due from banks | $ | 271,088 | $ | 526,515 | ||||||||||
| Interest earning time deposits | 1,715 | 2,205 | ||||||||||||
| Investment securities, available for sale | 535,319 | 547,251 | ||||||||||||
Investment securities, held to maturity (fair value $1,627,853 and $1,668,758) | 1,925,725 | 1,945,638 | ||||||||||||
| Loans held for sale | 922 | 1,418 | ||||||||||||
Loans, net of allowance for credit losses of $50,387 and $50,029 | 4,567,788 | 4,367,601 | ||||||||||||
| Premises and equipment, net | 94,303 | 94,583 | ||||||||||||
| Federal Home Loan Bank stock | 53,826 | 34,509 | ||||||||||||
| Goodwill | 155,211 | 155,211 | ||||||||||||
| Other intangible assets | 12,754 | 13,626 | ||||||||||||
| Interest receivable | 40,008 | 38,710 | ||||||||||||
| Cash value of life insurance | 36,455 | 36,157 | ||||||||||||
| Other assets | 160,593 | 177,061 | ||||||||||||
| Total assets | $ | 7,855,707 | $ | 7,940,485 | ||||||||||
| Liabilities | ||||||||||||||
| Deposits | ||||||||||||||
| Non–interest bearing | $ | 1,093,076 | $ | 1,116,005 | ||||||||||
| Interest bearing | 4,486,794 | 4,548,888 | ||||||||||||
| Total deposits | 5,579,870 | 5,664,893 | ||||||||||||
| Borrowings | 1,359,121 | 1,353,050 | ||||||||||||
| Subordinated notes | 55,634 | 55,543 | ||||||||||||
| Junior subordinated debentures issued to capital trusts | 57,315 | 57,258 | ||||||||||||
| Interest payable | 7,853 | 22,249 | ||||||||||||
| Other liabilities | 74,664 | 68,680 | ||||||||||||
| Total liabilities | 7,134,457 | 7,221,673 | ||||||||||||
| Commitments and contingent liabilities | ||||||||||||||
| Stockholders’ equity | ||||||||||||||
Preferred stock, Authorized, 1,000,000 shares, Issued 0 shares | — | — | ||||||||||||
Common stock, no par value, Authorized 99,000,000 shares Issued and outstanding 44,115,840 and 44,106,174 shares | — | — | ||||||||||||
| Additional paid–in capital | 356,599 | 356,400 | ||||||||||||
| Retained earnings | 435,927 | 429,021 | ||||||||||||
| Accumulated other comprehensive income (loss) | (71,276) | (66,609) | ||||||||||||
| Total stockholders’ equity | 721,250 | 718,812 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 7,855,707 | $ | 7,940,485 | ||||||||||
12
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Condensed Consolidated Statements of Income | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands Except Per Share Data, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Loans receivable | $ | 66,954 | $ | 65,583 | $ | 63,003 | $ | 60,594 | $ | 55,364 | ||||||||||||||||||||||
| Investment securities – taxable | 7,362 | 8,157 | 8,788 | 8,740 | 8,725 | |||||||||||||||||||||||||||
| Investment securities – non–taxable | 6,451 | 6,767 | 7,002 | 7,059 | 7,556 | |||||||||||||||||||||||||||
| Other | 4,497 | 3,007 | 1,332 | 475 | 153 | |||||||||||||||||||||||||||
| Total interest income | 85,264 | 83,514 | 80,125 | 76,868 | 71,798 | |||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||
| Deposits | 27,990 | 27,376 | 24,704 | 18,958 | 14,819 | |||||||||||||||||||||||||||
| Borrowed funds | 11,930 | 11,765 | 11,224 | 9,718 | 9,771 | |||||||||||||||||||||||||||
| Subordinated notes | 831 | 870 | 880 | 881 | 880 | |||||||||||||||||||||||||||
| Junior subordinated debentures issued capital trusts | 1,225 | 1,246 | 1,227 | 1,151 | 1,091 | |||||||||||||||||||||||||||
| Total interest expense | 41,976 | 41,257 | 38,035 | 30,708 | 26,561 | |||||||||||||||||||||||||||
| Net interest income | 43,288 | 42,257 | 42,090 | 46,160 | 45,237 | |||||||||||||||||||||||||||
| Credit loss expense (recovery) | 805 | 1,274 | 263 | 680 | 242 | |||||||||||||||||||||||||||
| Net interest income after credit loss expense | 42,483 | 40,983 | 41,827 | 45,480 | 44,995 | |||||||||||||||||||||||||||
| Non–interest Income | ||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 3,214 | 3,092 | 3,086 | 3,021 | 3,028 | |||||||||||||||||||||||||||
| Wire transfer fees | 101 | 103 | 120 | 116 | 109 | |||||||||||||||||||||||||||
| Interchange fees | 3,109 | 3,224 | 3,186 | 3,584 | 2,867 | |||||||||||||||||||||||||||
| Fiduciary activities | 1,315 | 1,352 | 1,206 | 1,247 | 1,275 | |||||||||||||||||||||||||||
| Gain (loss) on sale of investment securities | — | (31,572) | — | 20 | (500) | |||||||||||||||||||||||||||
| Gain on sale of mortgage loans | 626 | 951 | 1,582 | 1,005 | 785 | |||||||||||||||||||||||||||
| Mortgage servicing income net of impairment | 439 | 724 | 631 | 640 | 713 | |||||||||||||||||||||||||||
| Increase in cash value of bank owned life insurance | 298 | 658 | 1,055 | 1,015 | 981 | |||||||||||||||||||||||||||
| Other income | 827 | 1,019 | 964 | 349 | 362 | |||||||||||||||||||||||||||
| Total non–interest income | 9,929 | (20,449) | 11,830 | 10,997 | 9,620 | |||||||||||||||||||||||||||
| Non–interest expense | ||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 20,268 | 21,877 | 20,058 | 20,162 | 18,712 | |||||||||||||||||||||||||||
| Net occupancy expenses | 3,546 | 3,260 | 3,283 | 3,249 | 3,563 | |||||||||||||||||||||||||||
| Data processing | 2,464 | 2,942 | 2,999 | 3,016 | 2,669 | |||||||||||||||||||||||||||
| Professional fees | 607 | 772 | 707 | 633 | 533 | |||||||||||||||||||||||||||
| Outside services and consultants | 3,359 | 2,394 | 2,316 | 2,515 | 2,717 | |||||||||||||||||||||||||||
| Loan expense | 719 | 1,345 | 1,120 | 1,397 | 1,118 | |||||||||||||||||||||||||||
| FDIC insurance expense | 1,320 | 1,200 | 1,300 | 840 | 540 | |||||||||||||||||||||||||||
| Core deposit intangible amortization | 872 | 903 | 903 | 903 | 903 | |||||||||||||||||||||||||||
| Other losses | 16 | 508 | 188 | 134 | 221 | |||||||||||||||||||||||||||
| Other expenses | 3,936 | 4,129 | 3,294 | 3,413 | 3,548 | |||||||||||||||||||||||||||
| Total non–interest expense | 37,107 | 39,330 | 36,168 | 36,262 | 34,524 | |||||||||||||||||||||||||||
| Income before income taxes | 15,305 | (18,796) | 17,489 | 20,215 | 20,091 | |||||||||||||||||||||||||||
| Income tax expense | 1,314 | 6,419 | 1,284 | 1,452 | 1,863 | |||||||||||||||||||||||||||
| Net income | $ | 13,991 | $ | (25,215) | $ | 16,205 | $ | 18,763 | $ | 18,228 | ||||||||||||||||||||||
| Basic earnings per share | $ | 0.32 | $ | (0.58) | $ | 0.37 | $ | 0.43 | $ | 0.42 | ||||||||||||||||||||||
| Diluted earnings per share | 0.32 | (0.58) | 0.37 | 0.43 | 0.42 | |||||||||||||||||||||||||||
13
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
Use of Non–GAAP Financial Measures
Certain information set forth in this press release refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non–GAAP financial measures relating to net income, diluted earnings per share, pre–tax, pre–provision net income, net interest margin, tangible stockholders’ equity and tangible book value per share, efficiency ratio, the return on average assets, the return on average common equity, and return on average tangible equity. In each case, we have identified special circumstances that we consider to be non–recurring and have excluded them. We believe that this shows the impact of such events as acquisition–related purchase accounting adjustments and swap termination fees, among others we have identified in our reconciliations. Horizon believes these non–GAAP financial measures are helpful to investors and provide a greater understanding of our business and financial results without giving effect to the purchase accounting impacts and one–time costs of acquisitions and non–recurring items. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this press release for reconciliations of the non–GAAP information identified herein and its most comparable GAAP measures.
| Non–GAAP Reconciliation of Net Income | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Net income as reported | $ | 13,991 | $ | (25,215) | $ | 16,205 | $ | 18,763 | $ | 18,228 | ||||||||||||||||||||||
| Swap termination fee | — | — | — | (1,453) | — | |||||||||||||||||||||||||||
| Tax effect | — | — | — | 305 | — | |||||||||||||||||||||||||||
| Net income excluding swap termination fee | 13,991 | (25,215) | 16,205 | 17,615 | 18,228 | |||||||||||||||||||||||||||
| (Gain) / loss on sale of investment securities | — | 31,572 | — | (20) | 500 | |||||||||||||||||||||||||||
| Tax effect | — | (6,630) | — | 4 | (105) | |||||||||||||||||||||||||||
| Tax valuation reserve | — | 5,201 | — | — | — | |||||||||||||||||||||||||||
| Net income excluding (gain) / loss on sale of investment securities | 13,991 | 4,928 | 16,205 | 17,599 | 18,623 | |||||||||||||||||||||||||||
| Extraordinary expenses | — | 705 | — | — | — | |||||||||||||||||||||||||||
| Tax effect | — | (148) | — | — | — | |||||||||||||||||||||||||||
| Net income excluding extraordinary expenses | 13,991 | 5,485 | 16,205 | 17,599 | 18,623 | |||||||||||||||||||||||||||
| BOLI tax expense and excise tax | — | 8,597 | — | — | — | |||||||||||||||||||||||||||
| Net income excluding BOLI tax expense and excise tax | 13,991 | 14,082 | 16,205 | 17,599 | 18,623 | |||||||||||||||||||||||||||
| Adjusted net income | $ | 13,991 | $ | 14,082 | $ | 16,205 | $ | 17,599 | $ | 18,623 | ||||||||||||||||||||||
14
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Non–GAAP Reconciliation of Diluted Earnings per Share | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Diluted earnings per share (“EPS”) as reported | $ | 0.32 | $ | (0.58) | $ | 0.37 | $ | 0.43 | $ | 0.42 | ||||||||||||||||||||||
| Swap termination fee | — | — | — | (0.03) | — | |||||||||||||||||||||||||||
| Tax effect | — | — | — | 0.01 | — | |||||||||||||||||||||||||||
| Diluted EPS excluding swap termination fee | 0.32 | (0.58) | 0.37 | 0.41 | 0.42 | |||||||||||||||||||||||||||
| (Gain) / loss on sale of investment securities | — | 0.72 | — | — | 0.01 | |||||||||||||||||||||||||||
| Tax effect | — | (0.15) | — | — | — | |||||||||||||||||||||||||||
| Tax valuation reserve | — | 0.12 | — | — | — | |||||||||||||||||||||||||||
| Diluted EPS excluding (gain) / loss on sale of investment securities | 0.32 | 0.11 | 0.37 | 0.41 | 0.43 | |||||||||||||||||||||||||||
| Extraordinary expenses | — | 0.02 | — | — | — | |||||||||||||||||||||||||||
| Tax effect | — | — | — | — | — | |||||||||||||||||||||||||||
| Diluted EPS excluding extraordinary expenses | 0.32 | 0.13 | 0.37 | 0.41 | 0.43 | |||||||||||||||||||||||||||
| BOLI tax expense and excise tax | — | 0.20 | — | — | — | |||||||||||||||||||||||||||
| Diluted EPS excluding BOLI tax expense and excise tax | 0.32 | 0.33 | 0.37 | 0.41 | 0.43 | |||||||||||||||||||||||||||
| Adjusted diluted EPS | $ | 0.32 | $ | 0.33 | $ | 0.37 | $ | 0.41 | $ | 0.43 | ||||||||||||||||||||||
| Non–GAAP Reconciliation of Pre–Tax, Pre–Provision Net Income | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Pre–tax income | $ | 15,305 | $ | (18,796) | $ | 17,489 | $ | 20,215 | $ | 20,091 | ||||||||||||||||||||||
| Credit loss expense (recovery) | 805 | 1,274 | 263 | 680 | 242 | |||||||||||||||||||||||||||
| Pre–tax, pre–provision net income | $ | 16,110 | $ | (17,522) | $ | 17,752 | $ | 20,895 | $ | 20,333 | ||||||||||||||||||||||
| Pre–tax, pre–provision net income | $ | 16,110 | $ | (17,522) | $ | 17,752 | $ | 20,895 | $ | 20,333 | ||||||||||||||||||||||
| Swap termination fee | — | — | — | (1,453) | — | |||||||||||||||||||||||||||
| (Gain) / loss on sale of investment securities | — | 31,572 | — | (20) | 500 | |||||||||||||||||||||||||||
| Extraordinary expenses | — | 705 | — | — | — | |||||||||||||||||||||||||||
| Adjusted pre–tax, pre–provision net income | $ | 16,110 | $ | 14,755 | $ | 17,752 | $ | 19,422 | $ | 20,833 | ||||||||||||||||||||||
15
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Non–GAAP Reconciliation of Net Interest Margin | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Net interest income as reported | $ | 43,288 | $ | 42,257 | $ | 42,090 | $ | 46,160 | $ | 45,237 | ||||||||||||||||||||||
| Average interest earning assets | 7,293,559 | 7,239,034 | 7,286,611 | 7,212,640 | 7,201,266 | |||||||||||||||||||||||||||
| Net interest income as a percentage of average interest earning assets (“Net Interest Margin”) | 2.50 | % | 2.43 | % | 2.41 | % | 2.69 | % | 2.67 | % | ||||||||||||||||||||||
| Net interest income as reported | $ | 43,288 | $ | 42,257 | $ | 42,090 | $ | 46,160 | $ | 45,237 | ||||||||||||||||||||||
| Acquisition–related purchase accounting adjustments (“PAUs”) | (13) | (175) | (435) | (651) | (367) | |||||||||||||||||||||||||||
| Swap termination fee | — | — | — | (1,453) | — | |||||||||||||||||||||||||||
| Adjusted net interest income | $ | 43,275 | $ | 42,082 | $ | 41,655 | $ | 44,056 | $ | 44,870 | ||||||||||||||||||||||
| Adjusted net interest margin | 2.50 | % | 2.42 | % | 2.38 | % | 2.57 | % | 2.65 | % | ||||||||||||||||||||||
| Non–GAAP Reconciliation of Tangible Stockholders’ Equity and Tangible Book Value per Share | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Total stockholders’ equity | $ | 721,250 | $ | 718,812 | $ | 693,369 | $ | 709,243 | $ | 702,559 | ||||||||||||||||||||||
| Less: Intangible assets | 167,965 | 168,837 | 169,741 | 170,644 | 171,547 | |||||||||||||||||||||||||||
| Total tangible stockholders’ equity | $ | 553,285 | $ | 549,975 | $ | 523,628 | $ | 538,599 | $ | 531,012 | ||||||||||||||||||||||
| Common shares outstanding | 43,726,380 | 43,652,063 | 43,648,501 | 43,645,216 | 43,621,422 | |||||||||||||||||||||||||||
| Book value per common share | $ | 16.49 | $ | 16.47 | $ | 15.89 | $ | 16.25 | $ | 16.11 | ||||||||||||||||||||||
| Tangible book value per common share | $ | 12.65 | $ | 12.60 | $ | 12.00 | $ | 12.34 | $ | 12.17 | ||||||||||||||||||||||
16
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Non–GAAP Calculation and Reconciliation of Efficiency Ratio and Adjusted Efficiency Ratio | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Non–interest expense as reported | $ | 37,107 | $ | 39,330 | $ | 36,168 | $ | 36,262 | $ | 34,524 | ||||||||||||||||||||||
| Net interest income as reported | 43,288 | 42,257 | 42,090 | 46,160 | 45,237 | |||||||||||||||||||||||||||
| Non–interest income as reported | $ | 9,929 | $ | (20,449) | $ | 11,830 | $ | 10,997 | $ | 9,620 | ||||||||||||||||||||||
| Non–interest expense / (Net interest income + Non–interest income) (“Efficiency Ratio”) | 69.73 | % | 180.35 | % | 67.08 | % | 63.44 | % | 62.93 | % | ||||||||||||||||||||||
| Non–interest expense as reported | $ | 37,107 | $ | 39,330 | $ | 36,168 | $ | 36,262 | $ | 34,524 | ||||||||||||||||||||||
| Extraordinary expenses | — | (705) | — | — | — | |||||||||||||||||||||||||||
| Non–interest expense excluding extraordinary expenses | 37,107 | 38,625 | 36,168 | 36,262 | 34,524 | |||||||||||||||||||||||||||
| Net interest income as reported | 43,288 | 42,257 | 42,090 | 46,160 | 45,237 | |||||||||||||||||||||||||||
| Swap termination fee | — | — | — | (1,453) | — | |||||||||||||||||||||||||||
| Net interest income excluding swap termination fee | 43,288 | 42,257 | 42,090 | 44,707 | 45,237 | |||||||||||||||||||||||||||
| Non–interest income as reported | 9,929 | (20,449) | 11,830 | 10,997 | 9,620 | |||||||||||||||||||||||||||
| (Gain) / loss on sale of investment securities | — | 31,572 | — | (20) | 500 | |||||||||||||||||||||||||||
| Non–interest income excluding (gain) / loss on sale of investment securities | $ | 9,929 | $ | 11,123 | $ | 11,830 | $ | 10,977 | $ | 10,120 | ||||||||||||||||||||||
| Adjusted efficiency ratio | 69.73 | % | 72.36 | % | 67.08 | % | 65.12 | % | 62.37 | % | ||||||||||||||||||||||
17
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Non–GAAP Reconciliation of Return on Average Assets | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Average assets | $ | 7,836,046 | $ | 7,880,816 | $ | 7,924,751 | $ | 7,840,026 | $ | 7,831,106 | ||||||||||||||||||||||
| Return on average assets (“ROAA”) as reported | 0.72 | % | (1.27) | % | 0.81 | % | 0.96 | % | 0.94 | % | ||||||||||||||||||||||
| Swap termination fee | — | — | — | (0.07) | — | |||||||||||||||||||||||||||
| Tax effect | — | — | — | 0.02 | — | |||||||||||||||||||||||||||
| ROAA excluding swap termination fee | 0.72 | (1.27) | 0.81 | 0.91 | 0.94 | |||||||||||||||||||||||||||
| (Gain) / loss on sale of investment securities | — | 1.59 | — | — | 0.03 | |||||||||||||||||||||||||||
| Tax effect | — | (0.33) | — | — | (0.01) | |||||||||||||||||||||||||||
| Tax valuation reserve | — | 0.26 | — | — | — | |||||||||||||||||||||||||||
| ROAA excluding (gain) / loss on sale of investment securities | 0.72 | 0.25 | 0.81 | 0.91 | 0.96 | |||||||||||||||||||||||||||
| Extraordinary expenses | — | 0.04 | — | — | — | |||||||||||||||||||||||||||
| Tax effect | — | (0.01) | — | — | — | |||||||||||||||||||||||||||
| ROAA excluding extraordinary expenses | 0.72 | 0.28 | 0.81 | 0.91 | 0.96 | |||||||||||||||||||||||||||
| BOLI tax expense and excise tax | — | 0.43 | — | — | — | |||||||||||||||||||||||||||
| ROAA excluding BOLI tax expense and excise tax | 0.72 | 0.71 | 0.81 | 0.91 | 0.96 | |||||||||||||||||||||||||||
| Adjusted ROAA | 0.72 | % | 0.71 | % | 0.81 | % | 0.91 | % | 0.96 | % | ||||||||||||||||||||||
| Non–GAAP Reconciliation of Return on Average Common Equity | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Average common equity | $ | 725,083 | $ | 702,793 | $ | 715,485 | $ | 710,953 | $ | 693,472 | ||||||||||||||||||||||
| Return on average common equity (“ROACE”) as reported | 7.76 | % | (14.23) | % | 8.99 | % | 10.59 | % | 10.66 | % | ||||||||||||||||||||||
| Swap termination fee | — | — | — | (0.82) | — | |||||||||||||||||||||||||||
| Tax effect | — | — | — | 0.17 | — | |||||||||||||||||||||||||||
| ROACE excluding swap termination fee | 7.76 | (14.23) | 8.99 | 9.94 | 10.66 | |||||||||||||||||||||||||||
| (Gain) / loss on sale of investment securities | — | 17.82 | — | (0.01) | 0.29 | |||||||||||||||||||||||||||
| Tax effect | — | (3.74) | — | — | (0.06) | |||||||||||||||||||||||||||
| Tax valuation reserve | — | 2.94 | — | — | — | |||||||||||||||||||||||||||
| ROACE excluding (gain) / loss on sale of investment securities | 7.76 | 2.79 | 8.99 | 9.93 | 10.89 | |||||||||||||||||||||||||||
| Extraordinary expenses | — | 0.40 | — | — | — | |||||||||||||||||||||||||||
| Tax effect | — | (0.08) | — | — | — | |||||||||||||||||||||||||||
| ROACE excluding extraordinary expenses | 7.76 | 3.11 | 8.99 | 9.93 | 10.89 | |||||||||||||||||||||||||||
| BOLI tax expense and excise tax | — | 4.85 | — | — | — | |||||||||||||||||||||||||||
| ROACE excluding BOLI tax expense and excise tax | 7.76 | 7.96 | 8.99 | 9.93 | 10.89 | |||||||||||||||||||||||||||
| Adjusted ROACE | 7.76 | % | 7.96 | % | 8.99 | % | 9.93 | % | 10.89 | % | ||||||||||||||||||||||
18
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
| Non–GAAP Reconciliation of Return on Average Tangible Equity | ||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||
| Average common equity | $ | 725,083 | $ | 702,793 | $ | 715,485 | $ | 710,953 | $ | 693,472 | ||||||||||||||||||||||
| Less: Average intangible assets | 168,519 | 169,401 | 170,301 | 171,177 | 172,139 | |||||||||||||||||||||||||||
| Average tangible equity | $ | 556,564 | $ | 533,392 | $ | 545,184 | $ | 539,776 | $ | 521,333 | ||||||||||||||||||||||
| Return on average tangible equity (“ROATE”) as reported | 10.11 | % | (18.76) | % | 11.79 | % | 13.94 | % | 14.18 | % | ||||||||||||||||||||||
| Swap termination fee | — | — | — | (1.08) | — | |||||||||||||||||||||||||||
| Tax effect | — | — | — | 0.23 | — | |||||||||||||||||||||||||||
| ROATE excluding swap termination fee | 10.11 | (18.76) | 11.79 | 13.09 | 14.18 | |||||||||||||||||||||||||||
| (Gain) / loss on sale of investment securities | — | 23.48 | — | (0.01) | 0.39 | |||||||||||||||||||||||||||
| Tax effect | — | (4.93) | — | — | (0.08) | |||||||||||||||||||||||||||
| Tax valuation reserve | — | 3.87 | — | — | — | |||||||||||||||||||||||||||
| ROATE excluding (gain) / loss on sale of investment securities | 10.11 | 3.66 | 11.79 | 13.08 | 14.49 | |||||||||||||||||||||||||||
| Extraordinary expenses | — | 0.52 | — | — | — | |||||||||||||||||||||||||||
| Tax effect | — | (0.11) | — | — | — | |||||||||||||||||||||||||||
| ROATE excluding extraordinary expenses | 10.11 | 4.07 | 11.79 | 13.08 | 14.49 | |||||||||||||||||||||||||||
| BOLI tax expense and excise tax | — | 6.39 | — | — | — | |||||||||||||||||||||||||||
| ROATE excluding BOLI tax expense and excise tax | 10.11 | 10.46 | 11.79 | 13.08 | 14.49 | |||||||||||||||||||||||||||
| Adjusted ROATE | 10.11 | % | 10.46 | % | 11.79 | % | 13.08 | % | 14.49 | % | ||||||||||||||||||||||
Earnings Conference Call
As previously announced, Horizon will host a conference call to review its first quarter financial results and operating performance.
Participants may access the live conference call on April 25, 2024 at 7:30 a.m. CT (8:30 a.m. ET) by dialing 833–974–2379 from the United States, 866–450–4696 from Canada or 1–412–317–5772 from international locations and requesting the “Horizon Bancorp Call.” Participants are asked to dial in approximately 10 minutes prior to the call.
A telephone replay of the call will be available approximately one hour after the end of the conference through May 3, 2024. The replay may be accessed by dialing 877–344–7529 from the United States, 855–669–9658 from Canada or 1–412–317–0088 from other international locations, and entering the access code 4319315.
19
Horizon Bancorp, Inc. Reports First Quarter 2024 Results
About Horizon Bancorp, Inc.
Horizon Bancorp, Inc. (NASDAQ GS: HBNC) is the $7.9 billion–asset commercial bank holding company for Horizon Bank, which serve customers across diverse and economically attractive Midwestern markets through convenient digital and virtual tools, as well as its Indiana and Michigan branches. Horizon's retail offerings include prime residential, indirect auto, and other secured consumer lending to in-market customers, as well as a range of personal banking and wealth management solutions. Horizon also provides a comprehensive array of in-market business banking and treasury management services, as well as equipment financing solutions for customers regionally and nationally, with commercial lending representing over half of total loans. More information on Horizon, headquartered in Northwest Indiana's Michigan City, is available at horizonbank.com and investor.horizonbank.com.
20
Beyond ordinary banking Investor Presentation H o r i z o n B a n c o r p , I n c . ( N A S D A Q : H B N C ) F i r s t Q u a r t e r 2 0 2 4 A p r i l 2 4 , 2 0 2 4
Important Information Forward-Looking Statements 2 This presentation 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 claims the protection of the safe harbor for forward–looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this presentation should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission (the “SEC”). Forward– looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward–looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward–looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: current financial conditions within the banking industry, including the effects of recent failures of other financial institutions, liquidity levels, and responses by the Federal Reserve, Department of the Treasury, and the Federal Deposit Insurance Corporation to address these issues; changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; the ability of Horizon to remediate its material weaknesses in its internal control over financial reporting; continuing increases in inflation; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon’s assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; economic conditions and their impact on Horizon and its customers, including local and global economic recovery from the pandemic; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the U.S. federal government to manage federal debt limits; climate change and social justice initiatives; the inability to realize cost savings or revenues or to effectively implement integration plans and other consequences associated with mergers, acquisitions and divestitures; acts of terrorism, war and global conflicts, such as the ongoing conflicts between Russia and Ukraine and Israel and Hamas; and supply chain disruptions and delays. These and additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Horizon’s reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s website (www.sec.gov). Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law. Non-GAAP Measures Certain non-GAAP financial measures are presented herein. Horizon believes they are useful to investors and provide a greater understanding of Horizon’s business without giving effect to non-recurring costs and non-core items. For each non-GAAP financial measure, we have presented comparable GAAP measures and reconciliations of the non-GAAP measures to those GAAP measures in the Appendix to this presentation. Please see slides 25–27.
Seasoned Management Team 3 Kathie A. DeRuiter EVP & Senior Operations Officer • 34 Years of Banking and Operational Experience • 23 Years as Senior Bank Operations Officer • 26 Years with Horizon Todd A. Etzler EVP & Corporate Secretary & General Counsel • 32 Years of Corporate Legal Experience and 13 years of General Counsel Experience • 6 Years with Horizon Lynn M. Kerber EVP & Chief Commercial Banking Officer • 33 Years of Banking Experience • 6 Years with Horizon Thomas M. Prame President & Chief Executive Officer • 29 Years of Banking Experience • 2 Years with Horizon Mark E. Secor EVP & Chief Financial Officer • 35 Years of Banking and Public Accounting Experience • 16 Years with Horizon
First Quarter 2024 4 ($000S EXCEPT PER SHARE DATA) 1Q24 4Q23 INCOME STATEMENT Net interest income $43,288 $42,257 NIM 2.50% 2.43% Provision $805 $1,274 Non-interest income* $9,929 $(20,449) Non-interest expense^ $37,107 $39,330 Net income*, ^ $13,991 $(25,215) Diluted EPS*, ^ $0.32 $(0.58) BALANCE SHEET Total loans $4,619,097 $4,419,048 Total deposits $5,579,870 $5,664,893 CREDIT QUALITY NPA/total assets ratio 0.26% 0.27% Net charge-offs to avg. loans for the period 0.01% 0.02% * 4Q23 results reflect after-tax loss of $32.7 million from sale of $382.7mm of AFS securities announced on December 12, 2023, including a $31.6 million pre-tax loss on the sale of securities and tax penalties and charges on the surrender of $112.8 million in bank owned life insurance (BOLI) ^ In 4Q23, the company incurred $705,000 in extraordinary expenses including costs associated with previously disclosed staffing changes, the launch of Horizon Equipment Finance and the expansion of the Bank’s treasury management capabilities H I G H L I G H T S A N D D E V E L O P M E N T S • Net income $14.0MM o EPS $0.32 • NIM expansion of 7 bps to 2.50% o Early benefit of December balance sheet repositioning o March NIM results at 2.53% • Strong long growth and asset repositioning o $85MM organic o $154MM in acquired loans o $39MM reduction in indirect • Cash position of $271MM at period end o Flexibility to support continued margin expansion • Stable core deposit base o Modest balance changes with outflows primarily in public funds portfolio • Excellent credit metrics o Continued low NPLs and NCOs o Loan growth in higher credit performing segments • Continued disciplined operating model o 1.90% of non-interest expense/average assets, annualized
Loan Growth F I R S T Q U A R T E R H I G H L I G H T S • Total loan growth of $200MM o Led by Commercial growth of $75MM, 11.2% annualized o Equipment finance contributed $23MM late in the quarter • Deployment of $154MM in balance sheet restructuring proceeds into portfolio high quality acquisitions o $95MM of 1-4 family jumbo residential mortgages with 7.29% yield acquired o $59MM of consumer home improvement loans with 10.65% yield and credit protections • Continued reductions in indirect auto as part of strategic shift into higher yielding assets Data as of most-recent quarter (MRQ) end unless stated otherwise. 14% 8% 17% 17% 43% 1% Total Loans $4.6B MRQ end Consumer Direct Indirect Auto Resi C&I CRE Other 5
30% 19% 18% 14% 8% 7% 4% Geography $2.7B MRQ end Central Indiana West Michigan Southwest Michigan Northern Indiana Northern Michigan East Michigan Other Diversified Commercial Portfolio 47% 27% 22% 2% 1% 1% Mix $2.7B MRQ end Non-Owner Occupied Real Estate C&I Owner Occ. Real Estate Ag Loans Develop./Land Res. Spec. Homes F I R S T Q U A R T E R H I G H L I G H T S • Commercial loan portfolio o Grew organically by $75MM, 11.2% annualized • Commercial pipeline o At $187MM compared to $167MM at 4Q23 end • YTD net recoveries of $57K • Average portfolio yield of 6.14% up 9 basis points from 4Q23 o New production yield 7.52% o Average loan size $500K • Equipment finance o Launched at the beginning of 1Q24 o $23MM production YTD o Targeting $100MM-$125MM production in ’24 o $150K-$250K size deals o Financing for essential applications only, such as industrial, high-tech manufacturing, logistics, and medically necessary clinical and diagnostic equipment Data as of most-recent quarter (MRQ) unless stated otherwise. 6
Midwest Commercial Lending Strength 7 COMMERCIAL LOANS BY INDUSTRY ($M) 3/31/24 BALANCE % OF COMMERCIAL PORTFOLIO % OF TOTAL LOAN PORTFOLIO Lessors – Residential Multi Family $280 10.2% 6.1% Health Care, Educational & Social 249 9.1% 5.4% Warehouse/Industrial 180 6.5% 3.9% Individual and Other Services 173 6.3% 3.7% Retail 162 5.9% 3.5% Hotel 161 5.8% 3.5% Office (except medical) 158 5.7% 3.4% Real Estate Rental & Leasing 153 5.6% 3.3% Manufacturing 142 5.2% 3.1% Finance & Insurance 132 4.8% 2.9% Lessors – Student Housing 101 3.7% 2.2% Construction 94 3.4% 2.0% Retail Trade 89 3.2% 1.9% Mini Storage 79 2.9% 1.7% Lessors – Residential 1–4 Family 78 2.8% 1.7% Medical Office 74 2.7% 1.6% Government 65 2.4% 1.4% Restaurants 65 2.4% 1.4% Transportation & Warehousing 51 1.9% 1.1% Leisure and Hospitality 48 1.7% 1.0% Professional & Technical Services 44 1.6% 1.0% Wholesale Trade 40 1.5% 0.9% Farm Land 33 1.2% 0.7% Development Loans 24 0.9% 0.5% Other 75 2.6% 1.6% Total $2,750 100.0% 59.5% S T R O N G A N D T R A D I T I O N A L C O M M E R C I A L L E N D I N G • Multi-family represents 6% of loans o No major metros outside Indiana and Michigan, other than $12MM in the Columbus, OH area o Zero rent regulated/stabilized originated or in portfolio o $2MM average loan size • Non-owner-occupied office represents 3.4% of total loans o All in Indiana and Michigan o $1MM average loan size • Health Care, Educational & Social represents 5.4% of loans o Inclusive of skilled nursing and assisted living Data as of most-recent quarter (MRQ) unless stated otherwise.
Well-Managed CRE Maturities $ 0 0 0 s $213,000 $101,000 11% 5% All rates <7% rates Loans Outstanding % of Total Adjusted CRE* 2024 Maturities Remaining Average Rate 6.35% $ 0 0 0 s $188,000 $123,000 10% 6% All rates <7% rates Loans Outstanding % of Total Adjusted CRE* 2025 Maturities Average Rate 5.59% Data as of most-recent quarter (MRQ) end. * Adjusted CRE excludes loans closed, non-accrual and matured prior to 2024. 8
Prime Consumer Loans F I R S T Q U A R T E R H I G H L I G H T S Consumer Direct • Increased ~$52MM, consistent with plan o Includes deployment of $59MM in balance sheet restructuring proceeds into acquisition of consumer portfolio with 10.65% yield and credit protections • YTD net charge-offs ~ 4 basis points • Average portfolio yield of 8.23% o Average new production yield of 8.92% Indirect Auto • Decreased $39MM in 1Q24 o Decreased $140M since beginning of ‘23 o Replenishing with higher yielding assets • YTD net charge-offs ~ 7 basis points • Average portfolio yield of 3.28% in the quarter 48% 35% 6% 2% 2% 7% Consumer $1.0B MRQ end HELOCs Indirect Auto Home Equity Term RV & Boat Direct Auto Other DIRECT CONSUMER INDIRECT AUTO CREDIT SCORE 748 726 DEBT-TO-INCOME 40% 28% LOAN-TO-VALUE 66% 90% Data as of most-recent quarter (MRQ) unless stated otherwise. 9
Prime Mortgage Loans F I R S T Q U A R T E R H I G H L I G H T S • Portfolio increased by $101MM o Includes deployment of $95MM in balance sheet restructuring proceeds into acquisition of 1-4 family prime jumbo residential portfolio with 7.29% yield • Originations aligning with industry and limited inventory o Q1 ’24: $34MM • YTD net recoveries of $5K • Consistent higher quality borrowers, significant capacity to pay and low LTV • Average portfolio yield of 4.53%, up 21 bps from 4Q23 o Average new production yield of 7.25% 10 57% 39% 3% 1% Mortgage $782M MRQ end Jumbo Conforming Construction Rental CREDIT SCORE 760 DEBT-TO-INCOME 34% LOAN-TO-VALUE 70% Data as of most-recent quarter (MRQ) unless stated otherwise.
Strong Asset Quality Metrics $379 $274 $722 $785 $426 0.01% 0.01% 0.02% 0.02% 0.01% 1Q23 2Q23 3Q23 4Q23 1Q24 Net Charge Offs Commercial Resi Real Estate Consumer Total NCOs/Average Loans $ 0 0 0 s $19,797 $22,109 $19,448 $20,269 $19,161 0.47% 0.52% 0.45% 0.46% 0.41% 1Q23 2Q23 3Q23 4Q23 1Q24 Non-Performing Loans (period end) Commercial Resi Real Estate Consumer Total NPLs/Loans $ 0 0 0 s $ 0 0 0 s $49,526 $49,976 $49,699 $50,029 $50,387 1.17% 1.17% 1.14% 1.13% 1.09% 1Q23 2Q23 3Q23 4Q23 1Q24 ACL ACL/Loans Allowance for Credit Losses (period end) $ 0 0 0 s $13,971 $10,913 $13,090 $16,595 $15,154 0.33% 0.26% 0.30% 0.38% 0.33% 1Q23 2Q23 3Q23 4Q23 1Q24 39 to 89 days delinquent Delinquencies/Loans 30–89 Days Delinquent (period end) 11
NIM Expansion 12 * Commercial lending fees recognized in interest income. First Quarter Expansion Continued 2024 Momentum • Driven primarily by loan yields increasing and deliberate shift of balance sheet to higher yielding assets • Continued disciplined deposit pricing • Loan fees uneven, will balance out throughout the year • 2.50% NIM for the quarter o 2.46% January o 2.50% February o 2.53% March
Fee Income F I R S T Q U A R T E R H I G H L I G H T S • $9.9MM in non-interest income o Seasonal income platform with historical growth in subsequent quarters o Core service fees particular from cards, deposit service charges and wealth, displayed a good start to the year compared to Q1 ‘23 o “Other Income” reflective of surrender of $114 million of BOLI polices in the previous quarter, down $360,000 from Q4 13 Adjusted Non-interest Income Excluding Securities Gains and Losses* ($000s) $6,004 $6,721 $6,392 $6,419 $6,424 $1,275 $1,247 $1,206 $1,352 $1,316 $1,498 $1,645 $2,213 $1,675 $1,065 $843 $1,384 $2,019 $1,677 $1,124 $10,120 $10,977 $11,830 $11,123 * $9,929 1Q23 2Q23 3Q23 4Q23 1Q24 Service fees Fiduciary activities Mortgage related income All Other *See Footnote Index and non-GAAP reconciliations in AppendixData as of most-recent quarter (MRQ) unless stated otherwise.
Diligent Expense Management F I R S T Q U A R T E R H I G H L I G H T S • $37.1MM in non-interest expense o Well managed expenses across the franchise in salaries and third party services • Operating expenses inclusive of investments in revenue generating roles o C&I, CRE, Equipment Finance and Treasury Management capabilities o Continuing in Q2 ‘24 • Non-interest expense to average assets annualized o 1.90% for the quarter, supporting <2.00% outlook for FY24 14 Adjusted Non-interest Expense ($000s) $18,712 $20,162 $20,058 $21,172 $20,268 $15,812 $16,100 $16,110 $17,453 $16,839 $34,524 $36,262 $36,168 $38,625* $37,107 1.79% 1.86% 1.81% 1.94% 1.90% 1Q23 2Q23 3Q23 4Q23* 1Q24 All Other Non-interest Expense Salaries & Employee Benefits Annualized Non-Interest Expense to Average Assets * 4Q23 excludes $705,000 in extraordinary expenses, including costs associated with previously disclosed staffing changes, the launch of Horizon Equipment Finance and the expansion of the Bank’s treasury management capabilities. See Footnote Index and non-GAAP reconciliations in Appendix. Data as of most-recent quarter (MRQ) unless stated otherwise.
7.6% 6.6% 7.1% 7.2% 8.3% 7.2% 7.4% 7.4% 2021 2022 2023 2024 Q1 12.0% 11.3% 11.1% 10.9% 12.1% 11.4% 11.6% 11.6% 2021 2022 2023 2024 Q1 TCE/TA 7.0% CET1 Ratio Capital Position Provides Flexibility Peer Data Source: S&P Global Market Intelligence. Adequate + BufferKBW Regional Bank Index Median – MRQHBNC Ratio 9.2% 10.0% 9.4% 9.7% 8.9% 9.5% 9.4% 9.4% 2021 2022 2023 2024 Q1 15.4% 13.4% 14.1% 13.8% 14.2% 13.6% 14.0% 14.0% 2021 2022 2023 2024 Q1 Leverage Ratio Total RBC Ratio 4.0% 10.5% 15
Outlook 16 F U L L Y E A R E X P E C T A T I O N S • Continued Quality Loan Growth o Q2 led by commercial and leasing o Reinvesting cash flows from lower yielding assets into higher quality loans • Momentum in Net Interest Income and Margin o Continued discipline pricing of new loan production and funding costs o Modeling conservative view of two rate cuts in second half of 2024 • Consistent Fee Income Performance o Seasonal growth and performance in deposit service charges and card income o Wealth income and mortgage to growth throughout year • Disciplined Operating Expenses o Consistent and measured review across franchise for cost savings o Strategic adds to revenue producing teams 1Q 2024 Actual 2Q 2024 Expectations Total Loan Growth Annualized 18.2% 8 - 10% Net Interest Margin 2.50% 2.55 - 2.58% Net Interest Income $43.3 MM $44.7 – $45.5 MM Non-Interest Income $9.9 MM $10.0 - $10.5 MM Non-Interest Expense $37.1 MM $37.5 - $38.3 MM Annual Expenses to Average Assets 1.90% <2.00%
Why Horizon? 17 D I S T R I B U T I O N I N E X C E L L E N T G R O W T H M A R K E T S Economically Attractive Horizon’s branches are located strategically in markets with attractive business environments, tax rates, housing affordability, infrastructure and quality of life. Our markets are stable and strong with reduced volatility compared to major metropolitan markets. Major Brands Horizon’s markets are home to multi-national companies, flourishing ecosystems of suppliers, spin-offs and professional services firms, and thriving college towns. These regional economic engines include global leaders in medical devices, pharmaceuticals, agribusiness, automotive/mobility, alternative energy, and high-tech manufacturing, as well as world-renowned universities like Notre Dame, Purdue, Indiana, Michigan, Michigan State, and Grand Valley State. Diverse Opportunities Horizon’s Commercial and Retail Banking offerings are complimented by well-developed Treasury Management, Wealth, Mortgage Banking platforms. Horizon’s core deposit franchise is grounded in the long tenure of its clients, significant market share, and its relationship based banking model. Loans $2.1B Loans $1.8B Deposits $1.7B Deposits $3.8B Data as of most-recent quarter (MRQ). Loans outstanding by state exclude mortgage warehouse and acquired loans.
Why Horizon? 18 P R O V E N O P E R A T O R Consistent and Strong loan growth with Low Credit Risk Profile Positive momentum with annualized loan growth of 18.2%, with 4.2% annualized organic loan growth led by commercial platform Abundant cash position to continue to reinvest in core lending platforms and new equipment leasing vertical A proven history of excellent credit metrics: 1 basis points charge- offs and 1.09% allowance for credit losses Tenured And Stable Deposit Base With Significant Liquidity Stable, granular deposit base, average account tenure over 10 years Actively managing funding cost to create shareholder value Significant liquidity of $1.6 billion in availability; 80% deposits insured/ collateralized Disciplined Operating Culture Disciplined expense management results, 1.90% operating expenses/average assets year to date Excellent credit metrics with low non-performing loans and charge-offs Compelling Value Supported By Commitment To Dividend P/EPS of 9.25 5.4% dividend yield, and targeted dividend payout ratio of 30-40% aligned with capital retention strategy 30+ year record of uninterrupted quarterly cash dividends to shareholders Cash at the holding company represents approximately 8 quarters of the current dividend plus fixed costs Horizon financial data as of most-recent quarter (MRQ) unless stated otherwise. Price multiples as of 4/19/2024.
Appendix
Diversified Commercial Loans By Industry 20 1% 2% 3% 3% 3% 4% 6% 6% 6% 6% 10% 0% 5% 10% 15% Farm Land All Others Medical Office Lessors: Residential 1–4 Mini Storage Lessors: Student Housing Office (Except Medical) Hotel Retail Warehouse/Industrial Lessors: Residential Multi Non-Owner Occupied CRE – 50% of Total Commercial Loans ~$1.4 Billion 1% 1% 1% 1% 1% 2% 2% 2% 2% 3% 6% 0% 2% 4% 6% Wholesale Trade Professional & Technical Services All Others Construction Leisure and Hospitality Restaurants Retail Trade Manufacturing Real Estate Rental & Leasing Individuals and Other Services Health Care, Edu. Social Assist. Owner Occupied CRE – 22% of Total Commercial Loans ~$0.6 Billion 1% 1% 1% 1% 1% 1% 2% 2% 3% 3% 3% 4% 5% 0% 1% 2% 3% 4% 5% Professional & Technical Services Wholesale Trade Restaurants Retail Trade All Others Transportation & Warehousing Construction Government Manufacturing Real Estate Rental & Leasing Individuals and Other Services Health Care, Educational Social Assist. Finance & Insurance C&I Loans – 28% of Total Commercial Loans ~$0.8 Billion C O M M E R C I A L L O A N S – $ 2 . 7 5 0 B I L L I O N Data as of most-recent quarter (MRQ) end unless stated otherwise. All percentages are of total commercial loans.
Granular and Tenured Deposits 21 Seasoned, Core Deposit Base • Consumer: $7K avg. account balance 11 year avg. tenure • Commercial: $50K avg. account balance 10 year avg. tenure • Public: $782K avg. account balance 11 year avg. tenure 51% of Balances in Checking Accounts • Daily operating accounts of clients • Long tenured relationships of 11 years 80% of Balances Insured/Collateralized • Significant portion of deposits covered by FDIC, Collateralized or IntraFi • Additional coverage through Indiana Public Deposit Insurance Fund (PDIF) 57% 23% 20% Total Deposits $5.6B MRQ End FDIC Insured <$250K, Collateralized and/or Third-Party Insured (e.g., IntraFi and Indiana PDIF) 80% Data as of most-recent quarter (MRQ) end unless stated otherwise.
0.0% 1.0% 2.0% 3.0% 4.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 HBNC U.S. commercial banks¹ 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 HBNC U.S. commercial banks¹ Net charge offs as a % of average loans Nonperforming assets as % of assets Proven Credit Quality Through Cycles 0.15% 0.50% 0.63% 0.02% 0.20% 0.39 0.47% 0.26% Source: SNL Financial Note: Financial data as of December 31, 2023; ¹Based on regulatory financials for all U.S. commercial banks as defined by SNL Financial banking industry aggregates 22
High-Quality Investment Securities 23 1Q23 2Q23 3Q23 4Q23 1Q24 SCHEDULED NEXT QUARTER* SCHEDULED NEXT 12 MONTHS* ROLL-OFF/CASH FLOW $25,000 $41,000 $26,000 $28,000 $27,000 $28,000 $103,000 SALES $65,000 $24,000 – $383,000 – DURATION (YEARS) 6.58 6.41 6.70 6.97 6.92 BOOK YIELD 2.22% 2.21% 2.21% 2.25% 2.30% AVAILABLE FOR SALE (AFS) SECURITIES ON MARCH 31, 2024 HELD TO MATURITY (HTM) SECURITIES ON MARCH 31, 2024 AMORTIZED COST UNREALIZED LOSS, NET FAIR VALUE** DURATION (YEARS) AMORTIZED COST** UNREALIZED LOSS, NET FAIR VALUE DURATION (YEARS) $71,943 $(9,017) $62,926 ~4.4 U.S. TREASURY AND FEDERAL AGENCIES $284,236 $(43,199) $241,037 ~6.1 352,738 (53,483) 299,255 ~7.4 STATE AND MUNICIPAL 1,078,388 (166,758) 911,630 ~9.6 3,819 (369) 3,450 ~4.3 FEDERAL AGENCY CMOS 49,913 (8,088) 41,825 ~4.7 157,812 (24,670) 133,142 ~4.7 FEDERAL AGENCY MORTGAGE-BACKED POOLS 319,181 (50,329) 268,852 ~5.2 – – – – PRIVATE LABELED MORTGAGE-BACKED POOLS 31,712 (4,530) 27,182 ~3.7 42,119 (5,573) 36,546 ~4.4 CORPORATE NOTES 162,453 (25,126) 137,327 ~5.6 $628,431 $(93,112) $535,319 ~6.2 TOTAL $1,925,883 $(277,037) $1,627,853 ~7.6 • Book yield continues to increase • Cash flows to support funding of higher yielding loans All dollar amounts in thousands*Excludes securities sales **Book value, representing fair value for AFS securities and amortized cost for HTM securities
Footnote Index 24 Slides Footnote 13 • Adjusted non-interest income excludes gain/(loss) on sale of investment securities. (See further in the Appendix for a reconciliation of these non- GAAP amounts to their GAAP counterparts.) 14 • Adjusted non-interest expense excludes extraordinary expenses, including costs associated with previously disclosed staffing changes, the launch of Horizon Equipment Finance and the expansion of the Bank’s treasury management capabilities. (See further in the Appendix for a reconciliation of these non-GAAP amounts to their GAAP counterparts.) 25–27 Use of Non-GAAP Financial Measures • Certain information set forth in the presentation materials refers to financial measures determined by methods other than in accordance with GAAP. Horizon believes these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to purchase accounting impacts, one-time acquisition and other non-recurring costs and non-core items. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure.
Footnote Index 25 March 31 December 31 September 30 June 30 March 31 2024 2023 2023 2023 2023 Non-interest Income Service charges on deposit accounts 3,214$ 3,092$ 3,086$ 3,021$ 3,028$ Wire transfer fees 101 103 120 116 109 Interchange fees 3,109 3,224 3,186 3,584 2,867 Ficuciary activities 1,315 1,352 1,206 1,247 1,275 Gains (losses) on sale of investment securities - (31,572) - 20 (500) Gain on sale of mortgage loans 626 951 1,582 1,005 785 Mortgage servicing inccome net of impairment 439 724 631 640 713 Increase in cash value of bank owned life insurance 298 658 1,055 1,015 981 Other income 827 1,019 964 349 362 Total non-interest income 9,929$ (20,449)$ 11,830$ 10,997$ 9,620$ (Gains) losses on sale of investment securities - 31,572 - (20) 500 Adjusted non-interest income 9,929$ 11,123$ 11,830$ 10,977$ 10,120$ Three Months Ended (Dollars in Thousands, Unaudited) Non-GAAP Reconciliation of Non-Interest Income
Footnote Index 26 Actual Extraordinary Expenses Adjusted Actual Extraordinary Expenses Adjusted Non-interest Expense Salaries and employee benefits 20,268$ -$ 20,268$ 21,877$ (705)$ 21,172$ Net occupancy expenses 3,546 - 3,546 3,260 - 3,260 Data processing 2,464 - 2,464 2,942 - 2,942 Professional fees 607 - 607 772 - 772 Outside services and consultants 3,359 - 3,359 2,394 - 2,394 Loan expense 719 - 719 1,345 - 1,345 Core deposit intangible amortization 1,320 - 1,320 1,200 - 1,200 FDIC insurance expense 872 - 872 903 - 903 Other losses 16 - 16 508 - 508 Other expense 3,936 - 3,936 4,129 - 4,129 Total non-interest expense 37,107$ -$ 37,107$ 39,330$ (705)$ 38,625$ Annualized non-interest expense to average assets 1.90% 1.90% 1.98% 1.94% Three Months Ended Non-GAAP Reconciliation of Non-Interest Expense (Dollars in Thousands, Unaudited) March 31 2024 December 31 2023
Footnote Index 27 Actual Extraordinary Expenses Adjusted Actual Extraordinary Expenses Adjusted Actual Extraordinary Expenses Adjusted Non-interest Expense Salaries and employee benefits 20,058$ -$ 20,058$ 20,162$ -$ 20,162$ 18,712$ -$ 18,712$ Net occupancy expenses 3,283 - 3,283 3,249 - 3,249 3,563 - 3,563 Data processing 2,999 - 2,999 3,016 - 3,016 2,669 - 2,669 Professional fees 707 - 707 633 - 633 533 - 533 Outside services and consultants 2,316 - 2,316 2,515 - 2,515 2,717 - 2,717 Loan expense 1,120 - 1,120 1,397 - 1,397 1,118 - 1,118 Core deposit intangible amortization 1,300 - 1,300 840 - 840 540 - 540 FDIC insurance expense 903 - 903 903 - 903 903 - 903 Other losses 188 - 188 134 - 134 221 - 221 Other expense 3,294 - 3,294 3,413 - 3,413 3,548 - 3,548 Total non-interest expense 36,168$ -$ 36,168$ 36,262$ -$ 36,262$ 34,524$ -$ 34,524$ Annualized non-interest expense to average assets 1.81% 1.81% 1.86% 1.86% 1.79% 1.79% Three Months Ended Non-GAAP Reconciliation of Non-Interest Expense (Dollars in Thousands, Unaudited) September 30 2023 June 30 2023 March 31 2023
Thank you Mark E. Secor Executive Vice President and Chief Financial Officer 515 Franklin Street, Michigan City, IN 46360 219-873–2611 Investor.HorizonBank.com