Ross Johnson, EVP/CFO, email@example.com
Horizon Bancorp, Inc. releases 4th Quarter 2020 financial highlights, including deposit growth of 39.03% and earnings per share growth of 30.30% year-over-year.
Lake Havasu City, AZ- February 3, 2021-Horizon Bancorp, Inc. (OTC Pink: HRRB), the holding company for Horizon Community Bank, announced growth in total deposits of 39.03% for the 12-month period ended December 31, 2020. Growth in total loans of 17.60% for the 12-month period ended December 31, 2020. Net income for the 12 months ended December 31, 2020 totaled $3,770,366 compared to net income for the 12 months ended December 31, 2019 of $2,893,555, an increase of 30.30%. Earnings per share increased 30.30% over this same time period.
December 31, 2020 highlights include:
- 30% 12-month net income growth
- 03% 12-month deposit growth
- 85% 12-month noninterest deposit growth
- 23% of total deposits are noninterest demand deposits
- 33% 12-month total asset growth
- 60% 12-month loan growth
- 00% of total loan portfolio on payment deferrals at December 31, 2020
“As I stated last quarter, this year has been anything but normal. We have adapted and modified operations to further enhance our strategic initiatives in this unique operating environment. Again, this release will be in an extended format to provide transparency into our operation. We have been challenged to deliver banking in new and different ways and we are blessed that our staff has delivered and remained safe through this period.” Stated Horizon Bancorp’s President and CEO, Ralph Tapscott.
The majority of the regional economy has rebounded nicely. Many clients have reported record revenue and some have faced challenges. Beginning late in the first quarter of 2020, the two largest questions surrounding the banking industry dealt with forward credit quality and margin compression. This release will expand on both of these issues. Tapscott reported “I have had the opportunity to call many clients and ask about their interest in participating in round two of the CARES Act recently. Many of these clients have told me they do not qualify and many of these clients had a banner year, despite a large drop in revenue in March and April of 2020. This supports the resiliency of many of our markets and the velocity of the recovery. We funded approximately 680 Paycheck Protection Loans for approximately $67.5 million in the second quarter of 2020. We picked up approximately $100 million in new deposits, and we picked up over 70 new business relationships. I expect we will have continued strong performance in the second round of Paycheck Protection Program participation.”
“Credit quality is obviously somewhat masked by CARES Act infused liquidity. A couple of national analysts have predicted this may not be fully understood until the latter half of 2021 or early 2022. We follow these metrics closely and often compare our metrics to available peer metrics.” Stated Tapscott. In the height of the fear associated with the pandemic, late first quarter and early second quarter of 2020, the Bank had placed $51.6 million, or 22.50% of the loan portfolio, on 90-day payment deferment. That subsided to $6.7 million or 2.15% of the portfolio by September 30, 2020, and no loans were on payment deferment on December 31, 2020. “We believe we have been very proactive in managing credit risk. Our provision this year is almost twice the average of the prior three years.” Stated Tapscott.
|30+ Days Delinquent / Loans||0.15%||0.12%||0.93%|
|Non-Accrual Loans / Loans||0.39%||0.39%||0.31%|
|Other Real Estate Owned||$1,226,312||$1,344,296||$1,600,594|
|Net Charge Offs/Loans||-0.01%||-0.01%||0.03%|
- ALLL/Loans excluding PPP loans outstanding is 1.65%
The Bank’s net interest margin rebounded slightly in the fourth quarter, again influenced by the recognition of unamortized lender fees associated with the Paycheck Protection Program forgiveness. The Bank’s net interest margin declined 12.67%, to 3.86%, for the year ended December 31, 2020 compared to this same period of 2019. Management reduced interest expense by 36.32% over this same period. Monthly management reporting reflects interest expense to average earning assets of 0.23% for December of 2020, as compared to 0.97% for December of 2019. “Horizon Community Bank benefits from a strong core deposit base, representing approximately 85% of total deposits, and this is further evident with non-interest demand deposits representing 33% of total deposits.” Tapscott reported.
Horizon Bancorp augmented capital in 2020 through earnings retention and executed a $7.2 million senior debt facility. The Bank remains well capitalized under regulatory guidelines. The Bank’s regulatory capital ratios are further addressed in the following table –
|Tier 1 Leverage Ratio||8.38%||7.04%||8.87%|
|Tier 1 Common Equity Ratio||13.74%||11.92%||11.47%|
|Tier 1 Capital Ratio||13.74%||11.92%||11.47%|
|Total Capital Ratio||14.99%||13.17%||12.72%|
“Horizon Bancorp has historically provided limited guidance, but this expanded release format supports a discussion of strategies. We are again participating in round two of the Paycheck Protection Program, and we are expecting application volumes to be between 20% – 30% of the initial round. As of year-end, we have received repayment or forgiveness on approximately 40% of the round one Paycheck Protection Program loans and have approximately an additional 20% submitted for and awaiting forgiveness. We believe we are far ahead of most financial institutions in applying for forgiveness. We have a robust pipeline of conventional commercial loans. We continue to develop our bankers and add new talent. 2021 reflects a number of new key performance indicators, and we have added metrics for efficiency and productivity.” States Tapscott.
In closing, the Bank has successfully navigated a challenging year and successfully grew earnings, asset size, and new client relationships. We thank our bankers, our clients, and our shareholders for their continued faith.
About the Company
Horizon Bancorp, Inc. (OTC: HRRB), the holding company for Horizon Community Bank has $476 million in assets 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, Mesa, Parker and Quartzsite, Arizona, plus loan offices in Goodyear and Phoenix, Arizona. It has 92 employees and provides high-touch, customized commercial financial services to those in the healthcare, transportation, construction, manufacturing, real estate, and technology industries, as well as general commercial and consumer services. 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.