Horizon Bancorp, Inc. Releases 2nd Quarter 2022 Operating Results

Rhea-AI Summary

Horizon Bancorp, Inc. (HRRB) reported a 3.89% increase in total loans for Q2 2022, and a 4.93% rise excluding PPP effects. Despite these gains, total deposits and assets saw declines of 3.01% and 5.47%, respectively. The bank's net income for the quarter was $1,160,806, totaling $5,148,026 for the year. Improved asset quality showcased a non-performing assets ratio of 0.07%. Regulatory capital ratios are strong, with a Tier 1 leverage ratio of 8.65%, indicating a well-capitalized position.

Positive

• Total loans increased by 3.89%, and 4.93% excluding PPP.
• Net income for the quarter was $1,160,806.
• Non-performing assets ratio improved to 0.07%.
• Strong regulatory capital with Tier 1 leverage ratio at 8.65%.

Negative

• Total deposits contracted by 3.01%.
• Total assets decreased by 5.47%.
• Non-interest income declined due to reduced mortgage division revenue.

LAKE HAVASU CITY, Ariz.--(BUSINESS WIRE)-- Horizon Bancorp, Inc. (OTC Pink: HRRB), the holding company for Horizon Community Bank, announced growth in total loans of 3.89%, inclusive of PPP influence, and 4.93.% excluding the effects of PPP for the quarter ended June 30, 2022. Total deposits and total assets contracted for the quarter ended June 30, 2022, by 3.01% and 5.47%, respectively. Net Income for the quarter was $1,160,806 and $5,148,026 for the 12 months ended June 30, 2022.

June 30, 2022 highlights include:

• Year-to-date loan growth, exclusive of PPP influence, is $18,758,539 and 7.45%
• Improved asset quality with non-performing assets ratio reduction to 0.07% and loans past due 30 days or greater at 0.01% of total loans
• Non-interest demand deposit representing 37% of total deposits

Ralph Tapscott, President and CEO stated, “This quarter is highlighted with reasonably strong loan growth and exceptional credit quality. Net interest income and net interest margin are rebounding with the higher yield curve and deposit rates have been effectively managed. Non-interest income, although still strong and diversified, is reflective of lower mortgage division revenue. Non-interest expense appears higher than this same period last year, but much of this is reflective of PPP influence and the associated underwriting. We have experienced some contraction in deposits, but that is not necessarily a bad thing. Liquidity remains strong, and regulatory capital has improved, with a June 30, 2022, tier 1 leverage ratio of 8.65%.”

Tapscott added, “As you may be aware, on March 9, 2022, Horizon Bancorp, Inc., Horizon Community Bank and Arizona Federal Credit Union (now known as Arizona Financial Credit Union) entered into a Purchase and Assumption Agreement, which provides for Arizona Financial 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. The parties have filed regulatory applications for the proposed transaction, some of which are currently pending. In addition, the shareholders of Horizon Bancorp, Inc. voted affirmatively on the proposed transaction at the annual meeting of shareholders on June 15, 2022.”

Credit quality metrics are shown in the following table and reflect appropriate risk management in the loan portfolio. The bank’s analysis indicates it maintains an ample allowance for loan and lease loss at 1.62% of total outstanding loans, and this is inclusive of PPP.

		06/30/2022				03/31/2022				06/30/2021
30+ Days Delinquent / Loans			.00	%			1.03	%			0.13	%
Non-Accrual Loans / Loans			0.06	%			0.07	%			0.21	%
Other Real Estate Owned		$	200,100			$	200,100			$	495,946
Net Charge Offs/Loans			-.096	%			.01	%			0.002	%
ALLL/Loans		1.62%(1)					1.58	%			1.48	%

(1)

ALLL/Loans excluding PPP loans outstanding is 1.64%

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

		06/30/2022			03/31/2022			06/30/2021
Tier 1 Leverage Ratio		8.65	%		8.43	%		7.78	%
Tier 1 Common Equity Ratio		15.09	%		15.74	%		14.31	%
Tier 1 Capital Ratio		15.09	%		15.74	%		14.31	%
Total Capital Ratio		16.34	%		16.99	%		15.56	%

About the Company

Horizon Bancorp, Inc. (OTC: HRRB), the holding company for Horizon Community Bank has $522 million in total assets as of June 30, 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 Three Months									For the Six Months
			ended June 30									ended June 30								Year-End
			6/30/22				6/30/21					6/30/22				6/30/21				12/31/21
Summary Income Data:
Interest Income		$	4,395			$		4,200			$	8,401			$	8,763			$	17,601
Interest Expense			152					248				313				549				917
Net Interest Income			4,243					3,952				8,088				8,214				16,684
Provision for loans losses			0					0				0				75				75
Non-interest Income			1,143					1,560				2,610				2,467				5,098
Non-interest expense			3,785					3,679				7,708				6,998				14,451
Income (loss) before income taxes			1,601					1,834				2,990				3,608				7,256
Provision(benefit) for income taxes			439					451				774				885				1,600
Net Income		$	1,162			$		1,383			$	2,216			$	2,723			$	5,655
Per Share Data:
Shares outstanding end-of-period			4,300					4,132				4,300				4,132				4,145
Earnings per common share		$	0.27			$		0.33			$	0.52			$	0.66			$	1.36
Total shareholder's equity		$	31,329			$		35,588			$	31,329			$	35,588			$	37,539
Book Value per share		$	7.29			$		8.61			$	7.29			$	8.61			$	9.06
Selected Balance Sheet Data:
Total assets		$	521,477			$		532,518			$	521,477			$	532,518			$	539,484
Securities available-for-sale			174,960					131,152				174,960				131,152				174,141
Loans			272,687					288,395				272,687				288,395				259,902
Allowance for loan losses			4,423					4,260				4,423				4,260				4,168
Deposits			474,878					469,660				474,878				469,660				471,069
Other borrowings			2,384					14,428				2,384				14,428				13,228
Shareholder's Equity			31,329					35,588				31,329				35,588				37,539
Performance Ratios:
Return on average assets (annualized) (%)			0.87	%				1.03	%			0.82	%			1.05	%			16.01	%
Return on average shareholder's equity
(annualized) (%)			14.49	%				15.65	%			12.83	%			15.91	%			3.28	%
Shareholder's equity to assets (%)			6.01	%				6.19	%			6.01	%			6.68	%			0.18	%
Net interest margin (%)			3.58	%				3.58	%			3.13	%			3.31	%			3.34	%
Cost of funds			0.08	%				0.25	%			0.12	%			0.22	%			1.06	%
Average assets		$	536,857			$	$	501,179			$	543,635			$	520,050			$	532,005
Efficiency ratio (%)			70.28	%				64.24	%			72.05	%			65.52	%			66.64	%
Asset Quality Data:
Nonaccrual loans		$	150			$		616			$	150			$	616			$	527
Troubled debt restructurings		$	369			$		1,553			$	369			$	1,553			$	453
Other real estate		$	200			$		466			$	200			$	466			$	31
Nonperforming assets		$	350			$		1,082			$	350			$	1,082			$	558
Nonperforming assets to total assets (%)			0.07	%				0.20	%			0.07	%			0.20	%			0.10	%
Nonperforming loans to total loans (%)			0.06	%				0.21	%			0.06	%			0.21	%			0.20	%
Reserve for loan losses to total loans (%)			1.62	%				1.48	%			1.62	%			1.48	%			1.60	%
Reserve for loan losses to nonperforming loans (%)			2948.52	%				691.48	%			2948.52	%			691.48	%			790.89	%
Reserve for loan losses to nonperforming assets (%)			1263.65	%				393.67	%			1263.65	%			393.67	%			746.95	%
Net charge-offs for period			(272	)				5				(255	)			(6	)			86
Average Loans		$	272,047			$		286,385			$	265,064			$	286,986			$	280,232
Ratio of net charge-offs to average loans (%)			-0.100	%				0.002	%			-0.096	%			-0.002	%			0.031	%
Regulatory Capital Ratios
Horizon Community Bank:
Tier 1 leverage ratio (%)			8.65	%				7.78	%			8.65	%			7.78	%			8.14	%
Common Equity Tier 1 ratio (%)			15.09	%				14.31	%			15.09	%			14.31	%			15.49	%
Tier 1 risk-based capital ratio (%)			15.09	%				14.31	%			15.09	%			14.31	%			15.49	%
Total risk-based capital ratio (%)			16.34	%				15.56	%			16.34	%			15.56	%			16.74	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220809005732/en/

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

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

Source: Horizon Bancorp, Inc.

FAQ

What were the financial highlights for Horizon Bancorp, Inc. (HRRB) in Q2 2022?

Horizon Bancorp reported a 3.89% increase in total loans, net income of $1,160,806, and improved asset quality with a non-performing assets ratio of 0.07%.

How did Horizon Bancorp's deposits and assets perform in Q2 2022?

Total deposits decreased by 3.01%, while total assets contracted by 5.47% for the quarter.

What is the status of Horizon Bancorp's regulatory capital?

Horizon Bancorp maintains strong regulatory capital ratios, including a Tier 1 leverage ratio of 8.65% as of June 30, 2022.

What challenges did Horizon Bancorp face in Q2 2022?

Challenges included a decline in total deposits and assets, alongside a decrease in non-interest income due to lower mortgage division revenue.