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Horizon Bancorp, Inc. Releases 1st Quarter 2022 Operating Results

HRRB

Horizon Bancorp, Inc. (OTC Pink: HRRB), the holding company for Horizon Community Bank, announced growth in total deposits of 3.94% for the quarter ended March 31, 2022. Growth in total loans, excluding influence of PPP, of 1.65% for the quarter ended March 31, 2022. Growth in total assets of 2.25% for the quarter ended March 31, 2022. Net Income for the quarter was $1,054,483 and $5,370,700 for the 12 months ended March 31, 2022.

March 31, 2022 highlights include:

  • Deposit growth for the quarter of 3.94%
  • Loan growth for the quarter of .99% inclusive of Paycheck Protection Program (PPP) loans, and growth of 1.65% without PPP activity influence
  • Asset growth for the quarter of 2.25%
  • Improved asset quality with non-performing assets ratio reduction to 0.07% compared to 0.10% at December 31, 2021
  • Non-interest demand deposit representing 37% of total deposits

Ralph Tapscott, President and CEO stated, “This quarter the format will be changed from primarily communicating operating fundamentals, to addressing events that have transpired from the beginning of the year to present. From an operating fundamentals perspective, loan growth materialized for the quarter and has further escalated into the second quarter. Our lending team is working diligently, and we expect a continued increase in loan production for the remainder of 2022. Our Government Guaranteed Lending Division has also done an exceptional job. Approximately 95% of our PPP portfolio has been forgiven or repaid, with a resulting balance of $4.7 million outstanding as of quarter-end. As rates rise, we would expect mortgage volume to slow and it has; although our reverse mortgage activity remains strong. We further expect modest increases in our net interest margin as rates rise. The Bank’s cost of funds and operating expenses have been appropriately managed.”

With the increase in interest rates in the market during the first quarter of 2022, the accumulated other comprehensive loss in the Stockholders’ Equity section of the Consolidated Balance Sheet increased from $1,119,475 as of December 31, 2021 to $7,289,945 as of March 31, 2022. This change is due to the mark to market pricing of the securities available for sale on the Consolidated Balance Sheet. The Income Statement for the quarter ending March 31, 2022 also includes transaction expenses of $170,720 related to the Purchase and Assumption Agreement with Arizona Federal Credit Union.

Tapscott added, “As you may be aware, on March 9, 2022, Horizon Bancorp, Inc., Horizon Community Bank and Arizona Federal Credit Union entered into a Purchase and Assumption Agreement, which provides for Arizona Federal Credit Union’s acquisition of substantially all of the assets of and assumption of substantially all of the liabilities of Horizon Community Bank. The press release announcing the parties entering into the Purchase and Assumption Agreement may be viewed on Horizon Community Bank’s website at www.horizoncommunitybank.com. The proposed transaction is subject to customary legal conditions, including regulatory and shareholder approvals. The parties have filed regulatory applications for the proposed transaction, which are currently pending. In addition, the shareholders of Horizon Bancorp, Inc. will be asked to vote on the proposed transaction at the annual meeting of shareholders scheduled for June 15, 2022. The proxy materials for that meeting are being prepared for distributing in advance of the meeting.”

Credit quality metrics are shown in the following table and reflect appropriate risk management in the loan portfolio. The increase in the 30-day delinquencies was primarily caused by the delay of two loan renewals that have subsequently been renewed. The bank maintains an ample allowance for loan and lease loss at 1.58% of total outstanding loans, and this is inclusive of PPP.

03/31/2022

12/31/2021

03/31/2021

30+ Days Delinquent / Loans

1.03%

0.22%

0.00%

Non-Accrual Loans / Loans

0.07%

0.20%

0.31%

Other Real Estate Owned

$200,100

$30,984

$904,657

Net Charge Offs/Loans

.01%

.03%

-0.01%

ALLL/Loans

1.58%(1)

1.60%

1.51%

(1)

ALLL/Loans excluding PPP loans outstanding is 1.61%

The Bank remains well capitalized under regulatory guidelines. The Bank’s regulatory capital ratios are further addressed in the following table –

03/31/2022

12/31/2021

03/31/2021

Tier 1 Leverage Ratio

8.43%

8.14%

8.15%

Tier 1 Common Equity Ratio

15.74%

15.49%

14.39%

Tier 1 Capital Ratio

15.74%

15.49%

14.39%

Total Capital Ratio

16.99%

16.74%

15.64%

About the Company

Horizon Bancorp, Inc. (OTC: HRRB), the holding company for Horizon Community Bank has $552 million in total assets as of March 31, 2022 and is headquartered in Lake Havasu City, Arizona. It owns, as its sole subsidiary, Horizon Community Bank, a locally owned and operated bank with branches in Fort Mohave, Kingman, Lake Havasu City, Phoenix Metro, Parker and Quartzsite, Arizona, plus loan offices in Goodyear and Phoenix, Arizona. The Bank has 90 employees that provide high-touch, customized financial services to largely small business and commercial clients. The Bank operates a mortgage operation and is a leader in government guaranteed lending. Consumer services are also offered in the communities the bank serves. FDIC insured. Learn more at http://www.horizoncommunitybank.com.

Forward Looking Statements

This press release may include forward-looking statements about Horizon Bancorp, Inc. and Horizon Community Bank. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: Annualized, proforma and projected or estimated numbers in this release are illustrative only, are not forecasts and may not reflect actual results. All forward-looking statements are based on information available at the time of this release, and Horizon Bancorp, Inc. and Horizon Community Bank assume no obligation to update any forward-looking statements.

Unaudited Financial Information follows.

Horizon Bancorp, Inc.
Financial Information - Unaudited
In thousands - except per share data
For the Quarter Ended
3/31/22 12/31/21 3/31/21
Summary Income Data:
Interest Income $

4,006

$

4,209

$

4,563

Interest Expense

161

175

301

Net Interest Income

3,845

4,034

4,262

Provision for loans losses

0

0

75

Non-interest Income

1,467

1,092

907

Non-interest expense

3,923

3,591

3,320

Income (loss) before income taxes

1,389

1,535

1,773

Provision(benefit) for income taxes

335

193

434

Net Income $

1,055

$

1,341

$

1,339

Per Share Data:
Shares outstanding end-of-period

4,300

4,145

4,131

Earnings per common share $

0.25

$

0.32

$

0.32

Total shareholder's equity $

33,791

$

37,539

$

33,294

Book Value per share $

7.86

$

9.06

$

8.06

Selected Balance Sheet Data:
Total assets $

551,626

$

539,484

$

538,149

Securities available-for-sale

185,278

174,141

120,332

Loans

262,472

259,902

282,837

Allowance for loan losses

4,151

4,168

4,264

Deposits

489,630

471,069

476,187

Other borrowings

10,946

13,228

15,924

Shareholder's Equity

33,791

37,539

33,294

Performance Ratios:
Return on average shareholder's equity
(annualized) (%)

11.39%

14.69%

15.65%

Net interest margin (%)

2.93%

3.08%

3.58%

Cost of funds

0.12%

0.13%

0.25%

Average assets $

554,496

$

546,714

$

501,179

Return on average assets (annualized) (%)

0.76%

0.98%

1.07%

Shareholder's equity to assets (%)

6.13%

6.96%

6.19%

Efficiency ratio (%)

73.84%

70.06%

64.24%

Asset Quality Data:
Nonaccrual loans $

173

$

527

$

889

Troubled debt restructurings $

376

$

453

$

1,577

Other real estate $

200

$

31

$

905

Nonperforming assets $

373

$

558

$

1,794

Nonperforming assets to total assets (%)

0.07%

0.10%

0.33%

Nonperforming loans to total loans (%)

0.07%

0.20%

0.31%

Reserve for loan losses to total loans (%)

1.58%

1.60%

1.51%

Reserve for loan losses to nonperforming loans (%)

2399.22%

790.89%

479.63%

Reserve for loan losses to nonperforming assets (%)

1112.77%

746.95%

237.67%

Net charge-offs for period

17

96

(10)

Average Loans $

261,576

$

263,099

$

287,594

Ratio of net charge-offs to average loans (%)

0.01%

0.04%

-0.01%

Regulatory Capital Ratios
Horizon Community Bank:
Tier 1 leverage ratio (%)

8.44%

8.14%

8.15%

Common Equity Tier 1 ratio (%)

15.74%

15.49%

14.39%

Tier 1 risk-based capital ratio (%)

15.74%

15.49%

14.39%

Total risk-based capital ratio (%)

16.99%

16.74%

15.64%