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

Rhea-AI Summary

Horizon Bancorp, Inc. (OTC Pink: HRRB) reported a 3.94% increase in total deposits for Q1 2022, alongside a 1.65% growth in total loans (excluding PPP). Total assets grew by 2.25%, with net income of $1,054,483 for the quarter and $5,370,700 over the last 12 months. The non-performing assets ratio improved to 0.07%, and demand deposits represented 37% of total deposits. However, accumulated comprehensive loss increased from $1,119,475 to $7,289,945 due to market adjustments. The upcoming annual shareholder vote on a proposed asset acquisition by Arizona Federal Credit Union is scheduled for June 15, 2022.

Positive

• Total deposits grew by 3.94% in Q1 2022.
• Net income for the quarter was $1,054,483, up from previous periods.
• Non-performing assets ratio improved to 0.07%.
• Total assets increased by 2.25% for the quarter.

Negative

• Accumulated other comprehensive loss rose from $1,119,475 to $7,289,945.
• Transaction expenses for the Purchase and Assumption Agreement totaled $170,720.
• 30-day loan delinquencies increased, largely due to delays in loan renewals.

LAKE HAVASU CITY, Ariz.--(BUSINESS WIRE)-- 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%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220506005310/en/

Ralph Tapscott, President/CEO, ralpht@horizoncommunitybank.com

Ross Johnson, EVP/CFO, rossj@horizoncommunitybank.com

Source: Horizon Bancorp, Inc.

FAQ

What was Horizon Bancorp's deposit growth percentage for Q1 2022?

Horizon Bancorp reported a deposit growth of 3.94% for Q1 2022.

What was the net income for Horizon Bancorp in the quarter ended March 31, 2022?

The net income for Horizon Bancorp in the quarter ended March 31, 2022, was $1,054,483.

When is the annual shareholder meeting for Horizon Bancorp scheduled?

The annual shareholder meeting for Horizon Bancorp is scheduled for June 15, 2022.

What is the non-performing assets ratio for Horizon Bancorp as of March 31, 2022?

As of March 31, 2022, Horizon Bancorp's non-performing assets ratio was 0.07%.

What are the transaction expenses related to Horizon Bancorp's Purchase and Assumption Agreement?

The transaction expenses related to the Purchase and Assumption Agreement amount to $170,720.