HBNC - Horizon Bancorp Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

July, 24 2019 04:35 PM Horizon Bancorp Inc.

MICHIGAN CITY, Ind., July 24, 2019 (GLOBE NEWSWIRE) -- (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”) today announced its unaudited financial results for the three-month and six-month periods ended June 30, 2019. All share data has been adjusted to reflect Horizon’s three-for-two stock split effective June 15, 2018.

SUMMARY:

Net income for the quarter ended June 30, 2019 was $16.6 million, or $0.37 diluted earnings per share, compared to $14.1 million, or $0.37 diluted earnings per share, for the quarter ended June 30, 2018. This represents the highest quarterly net income in the Company’s history.
Core net income for the quarter ended June 30, 2019 increased 26.0% to $17.6 million, or $0.39 diluted earnings per share, compared to $14.0 million, or $0.37 diluted earnings per share, for the same period in 2018. This represents the highest quarter-to-date core net income and core diluted earnings per share in the Company’s history. (See the “Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share” table on page 4 for a description of the elements of core net income)
Net income for the first six months of 2019 was $27.5 million, or $0.65 diluted earnings per share, compared to $26.9 million, or $0.70 diluted earnings per share for the first six months of 2018. This represents the highest year-to-date net income as of June 30^th in the Company’s history.
Core net income for the first six months of 2019 was $31.8 million, or $0.75 diluted earnings per share, compared to $26.8 million, or $0.70 diluted earnings per share, for the first six months of 2018. This represents the highest year-to-date core net income and core diluted earnings per share as of June 30^th in the Company’s history. (See the “Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share” table on page 4 for a description of the elements of core net income)
Net interest margin for the quarter ended June 30, 2019 was 3.73% compared to 3.62% and 3.78% for the quarters ended March 31, 2019 and June 30, 2018, respectively. The increase in net interest margin from the first quarter of 2019 reflects an increase in the yield of interest-earning assets as loans continue to reprice upwards and a decrease in interest-bearing liabilities from reducing short-term borrowings with the liquidity obtained from the Salin acquisition, along with a stabilization in deposit pricing.
Core net interest margin for the quarter ended June 30, 2019 was 3.61% compared to 3.46% and 3.60% for the quarters ended March 31, 2019 and June 30, 2018, respectively. (See the “Non-GAAP Reconciliation of Net Interest Margin” table on page 5 for a description of the elements of core net interest margin)
Return on average assets was 1.32% for the second quarter of 2019 compared to 1.41% for the second quarter of 2018. Return on average assets was 1.18% for the first six months of 2019 compared to 1.36% for the first six months of 2018.
Core return on average assets for the second quarter of 2019 was 1.40% compared to 1.39% for the second quarter of 2018. Core return on average assets was 1.36% for the first six months of 2019 compared to 1.35% for the first six months of 2018. (See the “Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” table on page 10 for the description of core return on average assets)
Return on average equity was 10.73% for the second quarter of 2019 compared to 12.15% for the second quarter of 2018. Return on average equity was 9.82% for the first six months of 2019 compared to 11.72% for the first six months of 2018.
Core return on average equity for the second quarter of 2019 was 11.34% compared to 12.02% for the second quarter of 2018. Core return on average equity was 11.38% for the first six months of 2019 compared to 11.65% for the first six months of 2018. (See the “Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” table on page 10 for the description of core return on average assets)
Horizon’s tangible book value per share increased to $9.91 at June 30, 2019 compared to $9.60 and $8.84 at March 31, 2019 and June 30, 2018, respectively. This represents the highest tangible book value per share in the Company’s history.
Horizon closed three full-service branches on April 19, 2019 and one loan production office on April 26, 2019. Horizon also plans to close one additional full-service branch on September 6, 2019.
Horizon consolidated five full-service branches acquired in the March 2019 acquisition of Salin Bancshares, Inc. and Salin Bank and Trust Company (“Salin”), in coordination with the core data conversion from the acquisition occurring on April 26, 2019.
On June 18, 2019, Horizon’s Board of Directors approved an increase in the Company’s quarterly cash dividend from $0.10 to $0.12 per share, paid on July 19, 2019, to shareholders of record as of July 5, 2019.
On July 16, 2019, Horizon’s Board of Directors authorized a stock repurchase program for up to 2,250,000 shares of Horizon’s issued and outstanding common stock, no par value.

Craig Dwight, Chairman and CEO of Horizon, commented: “I am pleased to announce Horizon’s record 2019 second quarter and year-to-date core earnings of $17.6 million, or $0.39 per diluted share, and $31.8 million, or $0.75 per diluted share. Core earnings, exclude merger expenses and other non-core items.”

Dwight added, “Horizon’s total assets continued to grow reaching approximately $5.1 billion at June 30, 2019, as a result of the Salin acquisition and organic loan growth since the beginning of the year. We have experienced organic loan growth at an annualized rate of 5.7% during the first six months of 2019. Along with approximately $568.9 million in loans acquired from Salin, loan growth in the markets of Fort Wayne, Grand Rapids, Indianapolis and Kalamazoo totaled $99.7 million as of June 30, 2019.”

Dwight continued, “During the second quarter of 2019, Horizon continued to maximize operational leverage as a result of increased mass and scale. Annualized non-interest expense to average assets, excluding merger expenses, decreased to 2.39% for the second quarter of 2019 compared to 2.41% for the first quarter of 2019 and 2.49% for the second quarter of 2018. Although the anticipated cost savings from the Salin acquisition have not been fully-realized, our team has been able to leverage new technologies and develop operational efficiencies. In our efforts to improve efficiencies, we closed three legacy full-service branches on April 19, 2019 and we consolidated our existing Fort Wayne loan production office with the acquired Salin locations. We also closed five Salin full-service branches which were in close proximity to an existing Horizon office or that did not meet our branch hurdle rates in conjunction with our data conversion on April 26, 2019. We also plan to consolidate our Midland, Michigan full-service branches into one location on September 6, 2019.”

Dwight concluded, “We continue to look for opportunities to provide value for our shareholders. On June 18, 2019, our Board of Directors approved a 20.0% dividend increase from 10 cents to 12 cents per share. This was followed by the Board of Directors authorizing a stock repurchase program of up to 2,250,000 shares of Horizon’s issued and outstanding common stock on July 16, 2019. We believe that at current price levels, Horizon’s shares are an attractive investment and our repurchase program reflects our continuing confidence in Horizon’s financial strength. Given our strong balance sheet, we believe we can implement this program and continue to retain sufficient liquidity and capital to execute business strategies.”

Income Statement Highlights

Net income for the second quarter of 2019 was $16.6 million, or $0.37 diluted earnings per share, compared to $10.8 million, or $0.28 diluted earnings per share, for the first quarter of 2019 and $14.1 million, or $0.37 diluted earnings per share, for the second quarter of 2018. Excluding acquisition-related expenses, gain (loss) on sale of investment securities and death benefit on bank owned life insurance (“core net income”), core net income for the second quarter of 2019 was $17.6 million, or $0.39 diluted earnings per share, compared to $14.2 million, or $0.37 diluted earnings per share, for the first quarter of 2019 and $14.0 million, or $0.37 diluted earnings per share for the second quarter of 2018.

The increase in net income and diluted earnings per share from the first quarter of 2019 to the second quarter of 2019 reflects increases in net interest income of $7.2 million and non-interest income of $2.2 million, offset by increases in non-interest expense of $1.8 million, income tax expense of $1.2 million and provision for loan losses of $532,000.

The increase in net income from the second quarter of 2018 when compared to the same period of 2019 reflects increases in net interest income of $8.0 million and non-interest income of $2.0 million, offset by increases in non-interest expense of $6.6 million, income tax expense of $515,000 and provision for loan losses of $261,000.

Net income for the six months ended June 30, 2019 was $27.5 million, or $0.65 diluted earnings per share, compared to $26.9 million, or $0.70 diluted earnings per share for the six months ended June 30, 2018. Core net income for the six months ended June 30, 2019 was $31.8 million, or $0.75 diluted earnings per share, compared to $26.8 million, or $0.70 diluted earnings per share, for the six months ended June 30, 2018. This represents a 7.1% increase in core diluted earnings per share for the first six months of 2019 compared to the same period in 2018.

The increase in net income when comparing the first six months of 2019 to the prior year period reflects increases in net interest income of $8.8 million and non-interest income of $2.4 million, offset by an increase in non-interest expense of $10.5 million.

Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share
(Dollars in Thousands, Except per Share Data, Unaudited)

Three Months Ended

Six Months Ended

June 30

March 31

June 30

June 30

June 30


2019



2018



2018



2019



2018

Non-GAAP Reconciliation of Net Income









Net income as reported
$
16,642


$
10,816


$
14,115


$
27,458


$
26,919

Merger expenses

1,532



4,118



-



5,650



-

Tax effect

(295
)


(692
)


-



(987
)


-

Net income excluding merger expenses

17,879



14,242



14,115



32,121



26,919











Loss (gain) on sale of investment securities

100



(15
)


-



85



(11
)
Tax effect

(21
)


3



-



(18
)


2

Net income excluding gain on sale of investment securities

17,958



14,230



14,115



32,188



26,910











Death benefit on bank owned life insurance ("BOLI")

(367
)


-



(154
)


(367
)


(154
)
Net income excluding death benefit on BOLI

17,591



14,230



13,961



31,821



26,756











Core Net Income
$
17,591


$
14,230


$
13,961


$
31,821


$
26,756











Non-GAAP Reconciliation of Diluted Earnings per Share









Diluted earnings per share ("EPS") as reported
$
0.37


$
0.28


$
0.37


$
0.65


$
0.70

Merger expenses

0.03



0.11



-



0.13



-

Tax effect

-



(0.02
)


-



(0.02
)


-

Diluted EPS excluding merger expenses

0.40



0.37



0.37



0.76



0.70











Loss (gain) on sale of investment securities

-



-



-



-



-

Tax effect

-



-



-



-



-

Diluted EPS excluding gain on sale of investment securities

0.40



0.37



0.37



0.76



0.70











Death benefit on BOLI

(0.01
)


-



-



(0.01
)


-

Diluted EPS excluding death benefit on BOLI

0.39



0.37



0.37



0.75



0.70











Core Diluted EPS
$
0.39


$
0.37


$
0.37


$
0.75


$
0.70

Horizon’s net interest margin increased to 3.73% for the second quarter of 2019 when compared to 3.62% for the first quarter of 2019. The increase in net interest margin from the first quarter of 2019 reflects an increase in the yield on interest-earning assets of five basis points as loans continue to reprice upwards. The cost of interest-bearing liabilities decreased by six basis points primarily from reducing short-term borrowings during the second quarter with the liquidity obtained through the Salin acquisition. In addition, we are seeing a stabilization in deposit pricing within the markets we serve.

Net interest margin decreased to 3.73% for the second quarter of 2019 when compared to 3.78% for the second quarter of 2018. The decrease in net interest margin was due to an increase in the cost of interest-bearing liabilities of 40 basis points, offset by an increase in the yield on interest-earning assets of 24 basis points. The cost of interest-bearing deposits, borrowings and subordinated debentures increased by 50, 32 and 15 basis points, respectively. The increase in the yield of interest-earning assets was due to increases in the yields on loans receivable of 21 basis points, taxable investment securities of 22 basis points and non-taxable investment securities of 29 basis points.

Net interest margin decreased to 3.68% during the first six months of 2019 when compared to 3.81% for the first six months of 2018. This decrease reflects an increase in the cost of interest-bearing liabilities of 49 basis points, offset by an increase in the yield of interest-earning assets of 24 basis points. The increase in the cost of interest-bearing liabilities was due to an increase in the cost of interest-bearing deposits of 55 basis points and borrowings of 45 basis points. The increase in the yield of interest-earning assets was due to increases in the yields on loans receivable of 23 basis points, taxable investment securities of 25 basis points and non-taxable investment securities of 30 basis points.

Net interest margin, excluding acquisition-related purchase accounting adjustments (“core net interest margin”), was 3.61% for the second quarter of 2019 compared to 3.46% for the prior quarter and 3.60% for the second quarter of 2018. Interest income from acquisition-related purchase accounting adjustments was $1.3 million, $1.5 million and $1.6 million for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively. The increase in the core net interest margin during the second quarter of 2019 was due to the pay-down of short-term borrowings with the liquidity obtained through the acquisition of Salin and an increase in the yield on earning assets from higher mortgage warehouse lending balances, loans continuing to reprice higher and the addition of acquired Salin loans.

Non-GAAP Reconciliation of Net Interest Margin
(Dollars in Thousands, Unaudited)

Three Months Ended

Six Months Ended

June 30

March 31

June 30

June 30

June 30


2019



2018



2018



2019



2018

Non-GAAP Reconciliation of Net Interest Margin









Net interest income as reported
$
41,529


$
34,280


$
33,550


$
75,809


$
66,961











Average interest-earning assets

4,566,674



3,929,296



3,638,801



4,249,644



3,600,676











Net interest income as a percentage of average interest-earning assets ("Net Interest Margin")

3.73%



3.62%



3.78%



3.68%



3.81%











Acquisition-related purchase accounting adjustments ("PAUs")
$
(1,299
)

$
(1,510
)

$
(1,634
)

$
(2,809
)

$
(3,671
)










Core net interest income
$
40,230


$
32,770


$
31,916


$
73,000


$
63,290











Core net interest margin

3.61%



3.46%



3.60%



3.55%



3.61%

Lending Activity

Total loans increased $653.5 million from $3.014 billion as of December 31, 2018 to $3.668 billion as of June 30, 2019. Excluding acquired loans, total loans increased $84.6 million during the first six months of 2019 as residential mortgage loans increased by $14.9 million, consumer loans increased by $20.0 million and mortgage warehouse loans increased by $59.3 million, offset by a decrease in commercial loans of $11.8 million.

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)













June 30

December 31

Amount

Acquired

Amount

Percent


2019


2018

Change

Loans

Change

Change
Commercial
$
2,062,623

$
1,721,590

$
341,033

$
(352,798
)

$
(11,765
)

-0.7%

Residential mortgage

814,065


668,141


145,924


(131,008
)


14,916


2.2%

Consumer

654,552


549,481


105,071


(85,112
)


19,959


3.6%

Subtotal

3,531,240


2,939,212


592,028


(568,918
)


23,110


0.8%

Held for sale loans

3,185


1,038


2,147


-



2,147


206.8%

Mortgage warehouse loans

133,428


74,120


59,308


-



59,308


80.0%

Total loans
$
3,667,853

$
3,014,370

$
653,483

$
(568,918
)

$
84,565


2.8%

Total loans increased $44.8 million from $3.623 billion as of March 31, 2019 to $3.668 billion as of June 30, 2019. During the second quarter of 2019, consumer loans increased by $14.8 million and mortgage warehouse loans increased $61.5 million, offset by a decrease in commercial loans of $27.0 million and a decrease in residential mortgage loans of $5.8 million.

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)













June 30

March 31

Amount

Acquired

Amount

Percent


2019


2018

Change

Loans

Change

Change
Commercial
$
2,062,623

$
2,089,579

$
(26,956
)

$
-

$
(26,956
)

-1.3%

Residential mortgage

814,065


819,824


(5,759
)


-


(5,759
)

-0.7%

Consumer

654,552


639,710


14,842



-


14,842


2.3%

Subtotal

3,531,240


3,549,113


(17,873
)


-


(17,873
)

-0.5%

Held for sale loans

3,185


1,979


1,206



-


1,206


60.9%

Mortgage warehouse loans

133,428


71,944


61,484



-


61,484


85.5%

Total loans
$
3,667,853

$
3,623,036

$
44,817


$
-

$
44,817


1.2%

During the first six months of 2019, the Bank originated approximately $206.0 million of commercial loans; however, only 54.4%, or $112.1 million, of these loan originations had been funded as of June 30, 2019. These originations were offset by commercial loan payoffs totaling approximately $157.8 million during the first six months of 2019, as there was an increase in clients moving projects that had reached stabilization into the long-term, fixed rate conduit financing market.

Residential mortgage lending activity for the three months ended June 30, 2019 generated $2.1 million in income from the gain on sale of mortgage loans, an increase of $769,000 from the first quarter of 2019 and $182,000 from the second quarter of 2018. Total origination volume for the second quarter of 2019, including loans placed into portfolio, totaled $111.4 million, representing an increase of 78.1% from the first quarter of 2019 and an increase of 2.1% from the second quarter of 2018. Total origination volume for the second quarter of 2019 of loans sold to the secondary market totaled $60.6 million, representing an increase of 99.3% from the first quarter of 2019 and an increase of 18.8% from the second quarter of 2018.

Revenue derived from Horizon’s residential mortgage and warehouse lending activities was 5.6% of Horizon’s total revenue for the second quarter of 2019.

The provision for loan losses totaled $896,000 for the second quarter of 2019 compared to $364,000 for the first quarter of 2019 and $635,000 for the second quarter of 2018. The increase in the provision for loan losses from the first quarter of 2019 and the second quarter of 2018 when compared to the second quarter of 2019 was primarily due to a specific reserve placed on a single credit.

The provision for loan losses totaled $1.3 million for the first six months of 2019 compared to $1.2 million for the first six months of 2018. The increase in provision for loan losses from 2018 was primarily due to organic loan growth experienced from June 30, 2018 until June 30, 2019.

The ratio of the allowance for loan losses to total loans decreased to 0.50% as of June 30, 2019 from 0.59% at December 31, 2018. The decrease in the ratio of the allowance for loan losses to total loans is primarily due to increased loan balances from the Salin acquisition. The ratio of the allowance for loan losses to total loans, excluding loans with credit-related purchase accounting adjustments, was 0.68% as of June 30, 2019 compared to 0.72% as of December 31, 2018. Loan loss reserves plus credit-related loan discounts on acquired loans as a percentage of total loans was 1.14% as of June 30, 2019 compared to 0.98% as of December 31, 2018.

Non-GAAP Allowance for Loan and Lease Loss Detail
As of June 30, 2019
(Dollars in Thousands, Unaudited)

















Pre-discount Loan Balance

Allowance for Loan Losses (ALLL)

Loan Discount

ALLL + Loan Discount

Loans, net

ALLL/ Pre-discount Loan Balance

Loan Discount/ Pre-discount Loan Balance

ALLL + Loan Discount/ Pre-discount Loan Balance
Horizon Legacy
$
2,677,923

$
18,091

N/A

$
18,091

$
2,659,832

0.68%

0.00%

0.68%
Heartland

6,044


-


621


621


5,423

0.00%

10.27%

10.27%
Summit

17,194


-


1,003


1,003


16,191

0.00%

5.83%

5.83%
Peoples

75,918


-


1,732


1,732


74,186

0.00%

2.28%

2.28%
Kosciusko

34,056


195


567


762


33,294

0.57%

1.66%

2.24%
LaPorte

73,228


-


2,651


2,651


70,577

0.00%

3.62%

3.62%
CNB

3,701


-


94


94


3,607

0.00%

2.54%

2.54%
Lafayette

71,707


19


652


671


71,036

0.03%

0.91%

0.94%
Wolverine

161,066


-


2,120


2,120


158,946

0.00%

1.32%

1.32%
Salin

547,016


-


14,230


14,230


532,786

0.00%

2.60%

2.60%
Total
$
3,667,853

$
18,305

$
23,670

$
41,975

$
3,625,878

0.50%

0.65%

1.14%

As of June 30, 2019, non-performing loans totaled $18.9 million, which reflects a two basis point increase in non-performing loans to total loans, or a $3.8 million increase from $15.2 million in non-performing loans as of December 31, 2018. Compared to December 31, 2018, non-performing commercial loans increased by $1.8 million, non-performing real estate loans increased by $1.4 million and non-performing consumer loans increased by $523,000. Other real estate owned and repossessed assets totaled $3.9 million as of June 30, 2019 which is an increase of $1.8 million from December 31, 2018. The majority of this increase was due to other real estate owned properties acquired in the Salin transaction, including the closed branches, totaling $1.7 million.

Expense Management

Total non-interest expense was $1.8 million higher in the second quarter of 2019 when compared to the first quarter of 2019. Salaries and employee benefits, net occupancy expenses, other expense and FDIC insurance expense increased by $2.5 million, $376,000, $213,000 and $205,000, respectively. Offsetting these increases was a decrease in outside services and consultants expense of $1.9 million. Excluding merger expenses, total non-interest expense increased by $4.4 million during the second quarter of 2019 when compared to the first quarter of 2019.


Three Months Ended





June 30

March 31






2019



2019


Adjusted
Non-interest Expense
Actual

Merger Expenses

Adjusted

Actual

Merger Expenses

Adjusted

Amount Change

Percent Change
Salaries and employee benefits
$
16,951


$
(482
)

$
16,469


$
14,466


$
(2
)

$
14,464


$
2,005


13.9%

Net occupancy expenses

3,148



(75
)


3,073



2,772



-



2,772



301


10.9%

Data processing

2,139



(68
)


2,071



1,966



(292
)


1,674



397


23.7%

Professional fees

598



(153
)


445



493



(239
)


254



191


75.2%

Outside services and consultants

1,655



(176
)


1,479



3,530



(2,290
)


1,240



239


19.3%

Loan expense

2,048



(2
)


2,046



1,949



-



1,949



97


5.0%

FDIC deposit insurance

365



-



365



160



-



160



205


128.1%

Other losses

169



(69
)


100



104



(2
)


102



(2
)

-2.0%

Other expenses

4,511



(507
)


4,004



4,298



(1,293
)


3,005



999


33.2%

Total non-interest expense
$
31,584


$
(1,532
)

$
30,052


$
29,738


$
(4,118
)

$
25,620


$
4,432


17.3%

Annualized Non-interest Exp. to Avg. Assets

2.51%





2.39%



2.80%





2.41%

Total non-interest expense was $6.6 million higher during the second quarter of 2019 compared to the same period of 2018. Salaries and employee benefits, other expense, net occupancy expense, data processing and loan expense increased $3.1 million, $1.3 million, $628,000, $532,000 and $523,000, respectively. Excluding merger expenses, total non-interest expense increased $5.1 million during the second quarter of 2019 when compared to the second quarter of 2018.


Three Months Ended





June 30

June 30






2019



2018


Adjusted
Non-interest Expense
Actual

Merger Expenses

Adjusted

Actual

Merger Expenses

Adjusted

Amount Change

Percent Change
Salaries and employee benefits
$
16,951


$
(482
)

$
16,469


$
13,809


$
-

$
13,809


$
2,660


19.3%

Net occupancy expenses

3,148



(75
)


3,073



2,520



-


2,520



553


21.9%

Data processing

2,139



(68
)


2,071



1,607



-


1,607



464


28.9%

Professional fees

598



(153
)


445



376



-


376



69


18.4%

Outside services and consultants

1,655



(176
)


1,479



1,267



-


1,267



212


16.7%

Loan expense

2,048



(2
)


2,046



1,525



-


1,525



521


34.2%

FDIC deposit insurance

365



-



365



345



-


345



20


5.8%

Other losses

169



(69
)


100



269



-


269



(169
)

-62.8%

Other expenses

4,511



(507
)


4,004



3,224



-


3,224



780


24.2%

Total non-interest expense
$
31,584


$
(1,532
)

$
30,052


$
24,942


$
-

$
24,942


$
5,110


20.5%

Annualized Non-interest Exp. to Avg. Assets

2.51%





2.39%



2.49%





2.49%

Total non-interest expense was $10.5 million higher during the first six months of 2019 when compared to the first six months of 2018. Salaries and employee benefits, outside services and consultants expense, other expense, loan expense and data processing increased $3.2 million, $2.7 million, $2.3 million, $1.2 million and $802,000, respectively. Excluding merger expenses, total non-interest expense increased $4.9 million during the first six months of 2019 when compared to the same period of 2018.


Six Months Ended





June 30

June 30






2019



2018


Adjusted
Non-interest Expense
Actual

Merger Expenses

Adjusted

Actual

Merger Expenses

Adjusted

Amount Change

Percent Change
Salaries and employee benefits
$
31,417


$
(484
)

$
30,933


$
28,182


$
-

$
28,182


$
2,751


9.8%

Net occupancy expenses

5,920



(75
)


5,845



5,486



-


5,486



359


6.5%

Data processing

4,105



(360
)


3,745



3,303



-


3,303



442


13.4%

Professional fees

1,091



(392
)


699



877



-


877



(178
)

-20.3%

Outside services and consultants

5,185



(2,466
)


2,719



2,531



-


2,531



188


7.4%

Loan expense

3,997



(2
)


3,995



2,782



-


2,782



1,213


43.6%

FDIC deposit insurance

525



-



525



655



-


655



(130
)

-19.8%

Other losses

273



(71
)


202



415



-


415



(213
)

-51.3%

Other expenses

8,809



(1,800
)


7,009



6,548



-


6,548



461


7.0%

Total non-interest expense
$
61,322


$
(5,650
)

$
55,672


$
50,779


$
-

$
50,779


$
4,893


9.6%

Annualized Non-interest Exp. to Avg. Assets

2.64%





2.40%



2.57%





2.57%

Annualized non-interest expense as a percent of average assets were 2.51%, 2.80% and 2.49% for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively. Annualized non-interest expense, excluding merger expenses, as a percent of average assets continue to decline and were 2.39%, 2.41% and 2.49% for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively.

Annualized non-interest expense as a percent of average assets were 2.64% and 2.57% for the first six months of 2019 and 2018, respectively. Annualized non-interest expense, excluding merger expenses, as a percent of average assets were 2.40% and 2.57% for the first six months of 2019 and 2018, respectively. Horizon’s strategy to build mass and scale continues to prove effective.

Income tax expense totaled $3.3 million for the second quarter of 2019, an increase of $1.2 million when compared to the first quarter of 2019 and an increase of $515,000 when compared to the second quarter of 2018. The increase in income tax expense from the first quarter of 2019 and the second quarter of 2018 was primarily due to increases in income before income taxes of $7.1 million and $3.0 million, respectively, when compared to the second quarter of 2019.

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, net interest margin, total loans and loan growth, the allowance for loan and lease losses, tangible stockholders’ equity, tangible book value per share, the return on average assets and the return on average equity. In each case, we have identified special circumstances that we consider to be non-recurring and have excluded them, to show the impact of such events as acquisition-related purchase accounting adjustments, among others we have identified in our reconciliations. Horizon believes that these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to the purchase accounting impacts and one-time costs of acquisitions 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. See the tables and other information below and contained elsewhere in this press release for reconciliations of the non-GAAP figures identified herein and their most comparable GAAP measures.

Non-GAAP Reconciliation of Tangible Stockholders' Equity and Tangible Book Value per Share
(Dollars in Thousands Except per Share Data, Unaudited)











June 30

March 31

December 31

September 30

June 30


2019


2019


2018


2018


2018
Total stockholders' equity
$
626,461

$
609,468

$
491,992

$
477,594

$
470,535
Less: Intangible assets

179,776


176,864


130,270


130,755


131,239
Total tangible stockholders' equity
$
446,685

$
432,604

$
361,722

$
346,839

$
339,296










Common shares outstanding

45,061,372


45,052,747


38,375,407


38,367,890


38,362,640










Tangible book value per common share
$
9.91

$
9.60

$
9.43

$
9.04

$
8.84

Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity
(Dollars in Thousands, Unaudited)

Three Months Ended

Six Months Ended

June 30

March 31

June 30

June 30

June 30


2019



2019



2018



2019



2018

Non-GAAP Reconciliation of Return on Average Assets









Average Assets
$
5,047,365


$
4,307,189


$
4,017,551


$
4,679,423


$
3,980,864











Return on average assets ("ROAA") as reported

1.32%



1.02%



1.41%



1.18%



1.36%

Merger expenses

0.12%



0.39%



0.00%



0.24%



0.00%

Tax effect

-0.02%



-0.07%



0.00%



-0.04%



0.00%

ROAA excluding merger expenses

1.42%



1.34%



1.41%



1.38%



1.36%











Loss (gain) on sale of investment securities

0.01%



0.00%



0.00%



0.00%



0.00%

Tax effect

0.00%



0.00%



0.00%



0.00%



0.00%

ROAA excluding gain on sale of investment securities

1.43%



1.34%



1.41%



1.38%



1.36%











Death benefit on bank owned life insurance ("BOLI")

-0.03%



0.00%



-0.02%



-0.02%



-0.01%

ROAA excluding death benefit on BOLI

1.40%



1.34%



1.39%



1.36%



1.35%











Core ROAA

1.40%



1.34%



1.39%



1.36%



1.35%











Non-GAAP Reconciliation of Return on Average Common Equity









Average Common Equity
$
622,028


$
506,449


$
465,968


$
563,862


$
463,156











Return on average common equity ("ROACE") as reported

10.73%



8.66%



12.15%



9.82%



11.72%

Merger expenses

0.99%



3.30%



0.00%



2.02%



0.00%

Tax effect

-0.19%



-0.55%



0.00%



-0.35%



0.00%

ROACE excluding merger expenses

11.53%



11.41%



12.15%



11.49%



11.72%











Loss (gain) on sale of investment securities

0.06%



-0.01%



0.00%



0.03%



0.00%

Tax effect

-0.01%



0.00%



0.00%



-0.01%



0.00%

ROACE excluding gain on sale of investment securities

11.58%



11.40%



12.15%



11.51%



11.72%











Death benefit on bank owned life insurance ("BOLI")

-0.24%



0.00%



-0.13%



-0.13%



-0.07%

ROAA excluding death benefit on BOLI

11.34%



11.40%



12.02%



11.38%



11.65%











Core ROACE

11.34%



11.40%



12.02%



11.38%



11.65%

About Horizon

Horizon Bancorp, Inc. is an independent, commercial bank holding company serving northern and central Indiana, and southern, central and the Great Lakes Bay regions of Michigan through its commercial banking subsidiary Horizon Bank. Horizon also offers mortgage-banking services throughout the Midwest. Horizon may be reached online at www.horizonbank.com. Its common stock is traded on the NASDAQ Global Select Market under the symbol HBNC.

Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon. For these statements, Horizon claims the protections 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. 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 risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in its Form 10-K. 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.

Contact:
Mark E. Secor
Chief Financial Officer
Phone: (219) 873-2611
Fax: (219) 874-9280

HORIZON BANCORP, INC.
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)


June 30

March 31

December 31

September 30

June 30


2019



2019



2018



2018



2018

Balance sheet:









Total assets
$
5,098,682


$
5,051,639


$
4,246,688


$
4,150,561


$
4,076,611

Investment securities

887,187



893,469



810,460



766,153



735,962

Commercial loans

2,062,623



2,089,579



1,721,590



1,698,582



1,672,998

Mortgage warehouse loans

133,428



71,944



74,120



71,422



109,016

Residential mortgage loans

814,065



819,824



668,141



651,250



634,636

Consumer loans

654,552



639,710



549,481



536,132



507,866

Earnings assets

4,577,487



4,538,952



3,842,903



3,743,592



3,681,583

Non-interest bearing deposit accounts

810,350



811,768



642,129



621,475



615,018

Interest bearing transaction accounts

2,153,189



2,115,847



1,684,336



1,605,825



1,644,758

Time deposits

967,236



960,408



812,911



901,254



756,387

Borrowings

436,233



457,788



550,384



477,719



524,846

Subordinated debentures

56,194



55,310



37,837



37,791



37,745

Total stockholders' equity

626,461



609,468



491,992



477,594



470,535












Three months ended
Income statement:









Net interest income
$
41,529


$
34,280


$
33,836


$
33,772


$
33,550

Provision for loan losses

896



364



528



1,176



635

Non-interest income

10,898



8,712



8,477



8,686



8,932

Non-interest expenses

31,584



29,738



26,117



25,620



24,942

Income tax expense

3,305



2,074



2,535



2,597



2,790

Net income
$
16,642


$
10,816


$
13,133


$
13,065


$
14,115











Per share data:⁽¹⁾









Basic earnings per share
$
0.37


$
0.28


$
0.34


$
0.34


$
0.37

Diluted earnings per share

0.37



0.28



0.34



0.34



0.37

Cash dividends declared per common share

0.12



0.10



0.10



0.10



0.10

Book value per common share

13.90



13.53



12.82



12.45



12.27

Tangible book value per common share

9.91



9.60



9.43



9.04



8.84

Market value - high

17.13



17.82



19.40



21.39



21.94

Market value - low
$
15.51


$
15.50


$
14.94


$
19.44


$
19.17

Weighted average shares outstanding - Basic

45,055,117



38,822,543



38,367,972



38,365,379



38,347,612

Weighted average shares outstanding - Diluted

45,130,408



38,906,172



38,488,002



38,534,970



38,519,401











Key ratios:









Return on average assets

1.32%



1.02%



1.25%



1.26%



1.41%

Return on average common stockholders' equity

10.73



8.66



10.73



10.87



12.15

Net interest margin

3.73



3.62



3.60



3.67



3.78

Loan loss reserve to total loans

0.50



0.49



0.59



0.60



0.58

Average equity to average assets

12.32



11.76



11.62



11.62



11.60

Bank only capital ratios:









Tier 1 capital to average assets

9.78



10.99



9.38



9.53



9.65

Tier 1 capital to risk weighted assets

12.22



11.84



11.91



12.09



12.21

Total capital to risk weighted assets

12.69



12.30



12.47



12.66



12.77











Loan data:









Substandard loans
$
47,764


$
41,728


$
38,775


$
34,655


$
40,941

30 to 89 days delinquent

9,633



9,980



7,161



6,878



3,978











90 days and greater delinquent - accruing interest
$
391


$
192


$
568


$
202


$
49

Trouble debt restructures - accruing interest

2,198



2,532



2,002



1,830



1,911

Trouble debt restructures - non-accrual

1,576



1,349



1,057



1,077



894

Non-accrual loans

14,764



15,313



11,548



11,417



12,555

Total non-performing loans
$
18,929


$
19,386


$
15,175


$
14,526


$
15,409

Non-performing loans to total loans

0.52%



0.54%



0.50%



0.49%



0.53%











⁽¹⁾Adjusted for 3:2 stock split on June 15, 2018

HORIZON BANCORP, INC.
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)


June 30

June 30



2019



2018


Balance sheet:




Total assets
$
5,098,682


$
4,076,611


Investment securities

887,187



735,962


Commercial loans

2,062,623



1,672,998


Mortgage warehouse loans

133,428



109,016


Residential mortgage loans

814,065



634,636


Consumer loans

654,552



507,866


Earnings assets

4,577,487



3,681,583


Non-interest bearing deposit accounts

810,350



615,018


Interest bearing transaction accounts

2,153,189



1,644,758


Time deposits

967,236



756,387


Borrowings

436,233



524,846


Subordinated debentures

56,194



37,745


Total stockholders' equity

626,461



470,535








Six months ended
Income statement:




Net interest income
$
75,809


$
66,961


Provision for loan losses

1,260



1,202


Non-interest income

19,610



17,250


Non-interest expenses

61,322



50,779


Income tax expense

5,379



5,311


Net income
$
27,458


$
26,919







Per share data:⁽¹⁾




Basic earnings per share
$
0.65


$
0.70


Diluted earnings per share

0.65



0.70


Cash dividends declared per common share

0.22



0.20


Book value per common share

13.90



12.27


Tangible book value per common share

9.91



8.84


Market value - high

17.82



21.94


Market value - low
$
15.50


$
17.87


Weighted average shares outstanding - Basic

41,956,047



38,327,118


Weighted average shares outstanding - Diluted

42,054,352



38,484,321







Key ratios:




Return on average assets

1.18%



1.36%


Return on average common stockholders' equity

9.82



11.72


Net interest margin

3.68



3.81


Loan loss reserve to total loans

0.50



0.58


Average equity to average assets

12.05



11.63


Bank only capital ratios:




Tier 1 capital to average assets

9.78



9.65


Tier 1 capital to risk weighted assets

12.22



12.21


Total capital to risk weighted assets

12.69



12.77







Loan data:




Substandard loans
$
47,764


$
40,941


30 to 89 days delinquent

9,633



3,978







90 days and greater delinquent - accruing interest
$
391


$
49


Trouble debt restructures - accruing interest

2,198



1,911


Trouble debt restructures - non-accrual

1,576



894


Non-accrual loans

14,764



12,555


Total non-performing loans
$
18,929


$
15,409


Non-performing loans to total loans

0.52%



0.53%







⁽¹⁾Adjusted for 3:2 stock split on June 15, 2018

HORIZON BANCORP, INC.

Allocation of the Allowance for Loan and Lease Losses
(Dollars in Thousands, Unaudited)











June 30

March 31

December 31

September 30

June 30


2019



2019



2018



2018



2018

Commercial
$
11,881


$
11,556


$
10,495


$
10,581


$
8,865

Real estate

1,732



1,588



1,676



1,574



1,761

Mortgage warehousing

1,040



1,014



1,006



1,030



1,084

Consumer

3,652



3,663



4,643



4,613



5,361

Total
$
18,305


$
17,821


$
17,820


$
17,798


$
17,071











Net Charge-Offs (Recoveries)
(Dollars in Thousands, Unaudited)











Three Months Ended

June 30

March 31

December 31

September 30

June 30


2019



2019



2018



2018



2018

Commercial
$
265


$
61


$
196


$
179


$
(40
)
Real estate

41



(27
)


47



(2
)


(2
)
Mortgage warehousing

-



-



-



-



-

Consumer

106



329



263



272



80

Total
$
412


$
363


$
506


$
449


$
38

Percent of net charge-offs to average loans outstanding for the period

0.01%



0.01%



0.02%



0.02%



0.00%











Total Non-performing Loans
(Dollars in Thousands, Unaudited)











June 30

March 31

December 31

September 30

June 30


2019



2019



2018



2018



2018

Commercial
$
8,697


$
9,750


$
6,903


$
8,355


$
8,987

Real estate

6,444



5,995



5,007



3,754



3,915

Mortgage warehousing

-



-



-



-



-

Consumer

3,788



3,641



3,265



2,417



2,507

Total
$
18,929


$
19,386


$
15,175


$
14,526


$
15,409

Non-performing loans to total loans

0.52%



0.54%



0.55%



0.49%



0.53%











Other Real Estate Owned and Repossessed Assets
(Dollars in Thousands, Unaudited)











June 30

March 31

December 31

September 30

June 30


2019



2019



2018



2018



2018

Commercial
$
3,694


$
3,496


$
1,967


$
2,181


$
2,628

Real estate

113



126



60



58



302

Mortgage warehousing

-



-



-



-



-

Consumer

48



30



48



26



62

Total
$
3,855


$
3,652


$
2,075


$
2,265


$
2,992

HORIZON BANCORP, INC.
Average Balance Sheets
(Dollar Amounts in Thousands, Unaudited)



Three Months Ended

Three Months Ended


June 30, 2019

June 30, 2018


Average Balance

Interest

Average Rate

Average Balance

Interest

Average Rate

Assets












Interest-earning assets












Federal funds sold
$
18,251


$
120

2.64%


$
3,367


$
15

1.79%


Interest-earning deposits

18,516



83

1.80%



25,946



107

1.65%


Investment securities - taxable

480,036



3,070

2.57%



416,182



2,441

2.35%


Investment securities - non-taxable⁽¹⁾

411,944



2,793

3.44%



307,219



1,870

3.15%


Loans receivable⁽²⁾⁽³⁾

3,637,927



47,784

5.29%



2,886,087



36,308

5.08%


Total interest-earning assets⁽¹⁾

4,566,674



53,850

4.81%



3,638,801



40,741

4.57%















Non-interest-earning assets












Cash and due from banks

67,537







44,213






Allowance for loan losses

(18,036
)






(16,617
)





Other assets

431,190







351,154



















Total average assets
$
5,047,365






$
4,017,551



















Liabilities and Stockholders' Equity












Interest-bearing liabilities












Interest-bearing deposits
$
3,118,821


$
8,938

1.15%


$
2,403,780


$
3,920

0.65%


Borrowings

398,320



2,495

2.51%



489,608



2,679

2.19%


Subordinated debentures

53,572



888

6.65%



36,525



592

6.50%


Total interest-bearing liabilities

3,570,713



12,321

1.38%



2,929,913



7,191

0.98%















Non-interest-bearing liabilities












Demand deposits

818,872







605,188






Accrued interest payable and other liabilities

35,752







16,482






Stockholders' equity

622,028







465,968



















Total average liabilities and stockholders' equity
$
5,047,365






$
4,017,551



















Net interest income/spread


$
41,529

3.42%




$
33,550

3.59%


Net interest income as a percentage of average interest-earning assets⁽¹⁾




3.73%






3.78%














⁽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 computations 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.

HORIZON BANCORP, INC.
Average Balance Sheets
(Dollar Amounts in Thousands, Unaudited)



Six Months Ended

Six Months Ended


June 30, 2019

June 30, 2018


Average Balance

Interest

Average Rate

Average Balance

Interest

Average Rate

Assets












Interest-earning assets












Federal funds sold
$
13,072


$
224

3.46%


$
3,560


$
29

1.64%


Interest-earning deposits

22,414



191

1.72%



24,749



197

1.61%


Investment securities - taxable

464,544



5,980

2.60%



409,669



4,767

2.35%


Investment securities - non-taxable⁽¹⁾

402,883



5,421

3.43%



307,462



3,735

3.13%


Loans receivable⁽²⁾⁽³⁾

3,346,731



87,407

5.28%



2,855,236



71,439

5.05%


Total interest-earning assets⁽¹⁾

4,249,644



99,223

4.79%



3,600,676



80,167

4.55%















Non-interest-earning assets












Cash and due from banks

56,160







43,984






Allowance for loan losses

(17,939
)






(16,480
)





Other assets

391,558







352,684



















Total average assets
$
4,679,423






$
3,980,864



















Liabilities and Stockholders' Equity












Interest-bearing liabilities












Interest-bearing deposits
$
2,818,496


$
15,814

1.13%


$
2,354,578


$
6,791

0.58%


Borrowings

487,266



6,116

2.53%



508,731



5,251

2.08%


Subordinated debentures

45,735



1,484

6.54%



37,695



1,164

6.23%


Total interest-bearing liabilities

3,351,497



23,414

1.41%



2,901,004



13,206

0.92%















Non-interest-bearing liabilities












Demand deposits

731,556







600,214






Accrued interest payable and other liabilities

32,508







16,490






Stockholders' equity

563,862







463,156



















Total average liabilities and stockholders' equity
$
4,679,423






$
3,980,864



















Net interest income/spread


$
75,809

3.38%




$
66,961

3.64%


Net interest income as a percentage of average interest-earning assets⁽¹⁾




3.68%






3.81%














⁽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 computations 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.

HORIZON BANCORP, INC.
Condensed Consolidated Balance Sheets
(Dollar Amounts in Thousands)

June 30

December 31

2019

2018

(Unaudited)

Assets

Cash and due from banks

94,686

58,492

Interest-earning time deposits

8,090

15,744

Investment securities, available for sale

673,419

600,348

Investment securities, held to maturity (fair value of $219,891 and $208,273)

213,768

210,112

Loans held for sale

3,185

1,038

Loans, net of allowance for loan losses of $18,305 and $17,820

3,646,363

2,995,512

Premises and equipment, net

91,469

74,331

Federal Home Loan Bank stock

22,447

18,073

Goodwill

151,111

119,880

Other intangible assets

28,665

10,390

Interest receivable

19,015

14,239

Cash value of life insurance

94,613

88,062

Other assets

51,851

40,467

Total assets

5,098,682

4,246,688

Liabilities

Deposits

Non-interest bearing

810,350

642,129

Interest bearing

3,120,425

2,497,247

Total deposits

3,930,775

3,139,376

Borrowings

436,233

550,384

Subordinated debentures

56,194

37,837

Interest payable

3,005

2,031

Other liabilities

46,014

25,068

Total liabilities

4,472,221

3,754,696

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 (1)

Issued 45,086,441 and 38,400,476 shares (1),
Outstanding 45,061,372 and 38,375,407 shares (1)

Additional paid-in capital

380,735

276,101

Retained earnings

241,519

224,035

Accumulated other comprehensive income (loss)

4,207

(8,144

)

Total stockholders' equity

626,461

491,992

Total liabilities and stockholders' equity

5,098,682

4,246,688

(1) Adjusted for 3:2 stock split on June 15, 2018

HORIZON BANCORP, INC.
Condensed Consolidated Statements of Income
(Dollar Amounts in Thousands, Except Per Share Data, Unaudited)


Three Months Ended

Six Months Ended

June 30

June 30


2019



2018


2019



2018
Interest Income







Loans receivable
$
47,784


$
36,308

$
87,407


$
71,439
Investment securities







Taxable

3,273



2,563


6,395



4,993
Tax exempt

2,793



1,870


5,421



3,735
Total interest income

53,850



40,741


99,223



80,167
Interest Expense







Deposits

8,938



3,920


15,814



6,791
Borrowed funds

2,495



2,679


6,116



5,251
Subordinated debentures

888



592


1,484



1,164
Total interest expense

12,321



7,191


23,414



13,206
Net Interest Income

41,529



33,550


75,809



66,961
Provision for loan losses

896



635


1,260



1,202
Net Interest Income after Provision for Loan Losses

40,633



32,915


74,549



65,759
Non-interest Income







Service charges on deposit accounts

2,480



1,907


4,357



3,795
Wire transfer fees

167



180


285



330
Interchange fees

2,160



1,555


3,521



2,883
Fiduciary activities

2,063



1,818


4,152



3,743
Gains (losses) on sale of investment securities (includes $(100) and $0







for the three months ended June 30, 2019 and 2018, respectively, and $(85) and $11 for the six months ended June 30, 2019 and six months ended June 30, 2018 related to accumulated other comprehensive earnings reclassifications)

(100
)


-


(85
)


11
Gain on sale of mortgage loans

2,078



1,896


3,387



3,319
Mortgage servicing income net of impairment

570



511


1,176



860
Increase in cash value of bank owned life insurance

555



442


1,068



877
Death benefit on bank owned life insurance

367



154


367



154
Other income

558



469


1,382



1,278
Total non-interest income

10,898



8,932


19,610



17,250
Non-interest Expense







Salaries and employee benefits

16,951



13,809


31,417



28,182
Net occupancy expenses

3,148



2,520


5,920



5,486
Data processing

2,139



1,607


4,105



3,303
Professional fees

598



376


1,091



877
Outside services and consultants

1,655



1,267


5,185



2,531
Loan expense

2,048



1,525


3,997



2,782
FDIC insurance expense

365



345


525



655
Other losses

169



269


273



415
Other expense

4,511



3,224


8,809



6,548
Total non-interest expense

31,584



24,942


61,322



50,779
Income Before Income Taxes

19,947



16,905


32,837



32,230
Income tax expense (includes $(21) and $0 for the three months ended







June 30, 2019 and 2018, respectively, and $(18) and $2 for the six months ended June 30, 2019 and six months ended June 30, 2018 related to income tax expense (benefit) from reclassification items)

3,305



2,790


5,379



5,311
Net Income
$
16,642


$
14,115

$
27,458


$
26,919
Basic Earnings Per Share (1)
$
0.37


$
0.37

$
0.65


$
0.70
Diluted Earnings Per Share (1)

0.37



0.37


0.65



0.70








(1) Adjusted for 3:2 stock split on June 15, 2018

Company Name:	Horizon Bancorp Inc.
Stock Symbol:	HBNC
Market:	NASDAQ
Website:	horizonbank.com

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