Attached files
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| 8-K - HORIZON BANCORP INC /IN/ | hb_8k0503.htm |
EXHIBIT 99.1
Filed by Horizon Bancorp (0-10792)
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Heartland Bancshares, Inc
Welcome Shareholders
Horizon’s
2012
Annual Meeting
Forward-Looking Statements
This presentation may contain forward-looking statements regarding the financial
performance, business, and future operations of Horizon Bancorp and its affiliates
(collectively, “Horizon”). For these statements, Horizon claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements provide current expectations or
forecasts of future events and are not guarantees of future results or performance. As a
result, undue reliance should not be placed on these forward-looking statements, which
speak only as of the date hereof.
performance, business, and future operations of Horizon Bancorp and its affiliates
(collectively, “Horizon”). For these statements, Horizon claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements provide current expectations or
forecasts of future events and are not guarantees of future results or performance. As a
result, undue reliance should not be placed on these forward-looking statements, which
speak only as of the date hereof.
We have tried, wherever possible, to identify such statements by using words such as
“anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar
expressions, and although management believes that the expectations reflected in such
forward-looking statements are accurate and reasonable, actual results may differ
materially from those expressed or implied in such statements. Risks and uncertainties
that could cause our actual results to differ materially include those set forth in “Item 1A
Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2011. Statements in this presentation should be considered in
conjunction with such risk factors and the other information publicly available about
Horizon, including the information in the filings we make with the Securities and
Exchange Commission.
“anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar
expressions, and although management believes that the expectations reflected in such
forward-looking statements are accurate and reasonable, actual results may differ
materially from those expressed or implied in such statements. Risks and uncertainties
that could cause our actual results to differ materially include those set forth in “Item 1A
Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2011. Statements in this presentation should be considered in
conjunction with such risk factors and the other information publicly available about
Horizon, including the information in the filings we make with the Securities and
Exchange Commission.
Horizon does not undertake, and specifically disclaims any obligation, to publicly release
any updates to any forward-looking statement to reflect events or circumstances
occurring or arising after the date on which the forward-looking statement is made, or to
reflect the occurrence of unanticipated events, except to the extent required by law.
any updates to any forward-looking statement to reflect events or circumstances
occurring or arising after the date on which the forward-looking statement is made, or to
reflect the occurrence of unanticipated events, except to the extent required by law.
Thomas H. Edwards
President & Chief Operating Officer
Horizon’s Sound Credit Culture
and
Asset Quality
Sound Credit Culture
• Team of Seasoned Underwriters
– Average Tenure > 20 years
• Primarily an In-Market and Full Recourse Lender
• Predominately a Secured Lender
• Retail & Business Focus
– Average Commercial Loan Size Approximately $225,000
– Sweet Spot - Retail and Business Focus
• We Manage Lending Limits
– House Limit $10 million
– Legal Limit > $20 million
– Seven Loan Relationships with Balances > $5 million
• Independent Loan Review
Investment Portfolio is Managed for
Liquidity - Not Yield
Liquidity - Not Yield
Primary Focus
• Agencies
• Municipal
− General Obligation
− National in Scope
− Diversify Risk
− $10 Million Maximum Per State (Except IN)
− Reduced Position in High Risk States
Loans Past Due 30 to 89 Days
Provision Expense Declining
As Non-Performing Loans Stabilize
As Non-Performing Loans Stabilize
Source: FDIC Uniform Bank Performance Reports as of 12/31/11. Peer is a custom group of 16 publicly traded banks headquartered in the
state of Indiana. National peer group consists of insured commercial banks having assets between 1 billion and 3 billion.
state of Indiana. National peer group consists of insured commercial banks having assets between 1 billion and 3 billion.
1st
Qtr.
Qtr.
Non-Performing Loans Plus OREO to Gross Loans Plus OREO
Craig M. Dwight
Chief Executive Officer
A Company on the Move
Horizon’s Story
Financial Strength
Consistent Performance
Superior Returns
Stable Growth
Financial Strength
Consistent Performance
Superior Returns
Stable Growth
Corporate Profile
• Shares Outstanding 4.9 Million
• Market Cap (1) $125.0 Million
• Total Assets (2) $1.5 Billion
• Total Deposits (2) $1.1 Billion
• Locations 24
• Ownership (2)
– Insiders 10%
– Employee Benefit Plans 16%
– Institutional & Mutual Funds 21%
(1) Based on price at the close of business on April 30, 2012 at $25.17 per common share
(2) Total assets, deposits and inside ownership as of March 31, 2012
24 Current Locations
State of the Banking Industry
&
Economic Outlook
Regional Earnings are Improving
|
Year
|
Indiana
|
Michigan
|
|
2011
|
$486.7
|
$260.0
|
|
2010
|
$267.8
|
-$321.0
|
|
2009
|
-$101.5
|
-$663.0
|
|
2008
|
-$ 57.2
|
-$2,128.7
|
|
2007
|
$442.8
|
$895.7
|
In Millions
Source: UBPR for States of IN & MI, represents aggregate earnings for all banks in each state
Source: www.fdic.gov - YTD 2012 through April 20th actual 17 failed banks annualized pace for 2012 is 51 failed banks
Total # Banks Failed 2000 to YTD 2012 = 492
Total # Banks Failed 1980 to 1992 =2,870
Economic Outlook
Slow Growth
Slow Growth
• Eleven Straight Quarters of Increasing Economic
Activity
• Slow GDP Growth - 2% to 3% Per Annum
• Fed Funds Rate - to be Maintained at
Exceptionally Low Levels through 2014
• Declining Unemployment Rates
• Declining Loan Default Rates
• Election Year - Expect No Major Changes
Horizon’s Financial Strength,
Consistent Performance &
Stable Growth
Consistent Performance &
Stable Growth
CAGR 10.65%
Source: Uniform Bank Performance Reports. Indiana and Michigan are state averages for all insured
commercial banks. National is all insured commercial banks with assets between $1 billion and $3 billion.
commercial banks. National is all insured commercial banks with assets between $1 billion and $3 billion.
2008
2009
2010
2011
As Measured By Return On Average Assets
Record Earnings First Quarter 2012
Core Funding CAGR 7.19%
Loans CAGR 8.04%
A Company on the Move
&
Culture Aligned with Shareholders’
Interests
&
Culture Aligned with Shareholders’
Interests
1999
2004
2005
2012
Mortgage
Warehousing
Established
Warehousing
Established
Entered St.
Joseph Michigan
Market
Joseph Michigan
Market
Entered South
Bend and
Elkhart Market
Bend and
Elkhart Market
Acquired
Alliance Bank
Alliance Bank
Entered Lake
County
Market
County
Market
Acquired
American
Trust Bank
American
Trust Bank
Entered
Kalamazoo
Michigan Market
Kalamazoo
Michigan Market
Entered
Indianapolis
Market
Indianapolis
Market
Announced
The
Acquisition Of
Heartland
Bank
The
Acquisition Of
Heartland
Bank
2010
2006
2002
2003
Acquired
Anchor
Mortgage
Anchor
Mortgage
2008
International
Liquidity Crisis
Liquidity Crisis
Mortgage
Loan
Originators
Loan
Originators
6
16
26
Full Service
Branches
Branches
9
14
24
Commercial
Loan
Officers
Loan
Officers
8
15
15
Recent Milestones
• Established New Wealth Mgmt. Office in Indianapolis
in the 4th Qtr. 2011
in the 4th Qtr. 2011
• Reached One Billion Dollars in Total Deposits in 2011
• Opened Two New Full Service Branches - 1st Qtr. 2012
• Announced Acquisition of Heartland - 1st Qtr. 2012
• Plans to Open Loan and Deposit Production Office in
Indianapolis - 2nd Qtr. 2012
Indianapolis - 2nd Qtr. 2012
Culture of Accountability
• Measurement
– Profit and Loss Statements for All Departments
– Performance Scorecards
• Semi-annual Performance Reviews
– Coaching Opportunity
– Progress Update
• Bi-Monthly Departmental Strategic Meetings
• Six Sigma - Customer Focused
• Recognize and Reward Success
• We are Aligned with Shareholders’ Interests
Continuous Expectation to Improve
• Minimum Expectation is for Each Department to
Beat Last Year’s Performance
Beat Last Year’s Performance
– Financial Results
– Internal Processes
– Productivity
• Utilize Third Parties
– To Test Critical Thinking and Strategies
– To Seek New Ideas
– Asset Liability/Enterprise Risk Management/Efficiency/
Acquisitions / Loan Review / Allowance Methodology
Acquisitions / Loan Review / Allowance Methodology
• Benchmark to Best Practices
Proven Enterprise Risk Management
(“ERM”)
(“ERM”)
• Single Bank Charter
• Diversified Loan Portfolio
– 1/3 Commercial; 1/3 Mortgage; 1/3 Consumer
– Low In-House Loan Approval Limits
• Centralized Data Processing & Loan Documentation
• ERM Dash Board Report
– Measures Against Internal Targets & Best Practices
– Quantifies Risk
Balanced & Counter-Cyclical
Business Model
Business Model
#1 - Business Banking
#2 - Retail Banking
#3 - Retail Mortgage Banking
#4 - Wealth Management
#5 - Mortgage Warehousing
Revenue Streams that are Counter-Cyclical to
Varying Economic Cycles
Varying Economic Cycles
We Listen and Communicate
• If We Do Not Know - We Cannot Improve
• Excellent, Participatory & Engaged Board of
Directors
Directors
• Surveys - Shareholders, Customers & Employees
• All Company Learning Conference
• Quarterly Company Conference Calls
• CEO Outreach Meetings
• Third Parities & Consultants
• Independent Board Presentations
Proven Growth Strategy
• People First
– 24/7 Recruitment Effort
– Experienced Community Bankers
– Retention
• De Novo Branching
– Breakeven Within First 18 Months
– Traditional Banking at its Best
• Acquisitions
– Branch
– Whole Bank
– FDIC
Grand Rapids
Franklin
Heartland Community Bank
Additional Information Relating to
the Heartland Merger
the Heartland Merger
• In connection with Horizon’s proposed acquisition of Heartland Bancshares, Inc. (“Heartland”), Horizon
will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of Heartland
and a Prospectus of Horizon, as well as other relevant documents concerning the proposed transaction.
SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY
STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND
ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION.
will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of Heartland
and a Prospectus of Horizon, as well as other relevant documents concerning the proposed transaction.
SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY
STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND
ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION.
• The final proxy statement/prospectus will be mailed to shareholders of Heartland. The proxy
statement/prospectus and other relevant materials (when they become available), and any other documents
Horizon has filed with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov. In
addition, investors and security holders may obtain free copies of the documents Horizon has filed with the
SEC by contacting Mary McColl, Shareholder Relations Officer, 515 Franklin Square, Michigan City,
Indiana 46360, telephone: (219)874-9272 or on Horizon’s website at www.accesshorizon.com under the tab
“Investor Relations” and then under the heading “Information Requested.” The information available
through Horizon’s website is not and shall not be deemed part of this presentation or incorporated by
reference into other filings Horizon makes with the SEC.
statement/prospectus and other relevant materials (when they become available), and any other documents
Horizon has filed with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov. In
addition, investors and security holders may obtain free copies of the documents Horizon has filed with the
SEC by contacting Mary McColl, Shareholder Relations Officer, 515 Franklin Square, Michigan City,
Indiana 46360, telephone: (219)874-9272 or on Horizon’s website at www.accesshorizon.com under the tab
“Investor Relations” and then under the heading “Information Requested.” The information available
through Horizon’s website is not and shall not be deemed part of this presentation or incorporated by
reference into other filings Horizon makes with the SEC.
• Horizon and certain of its directors and executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of Heartland in connection with the proposed merger.
Information about the directors and executive officers of Horizon is set forth in the proxy statement for
Horizon’s 2012 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 23, 2012.
solicitation of proxies from the shareholders of Heartland in connection with the proposed merger.
Information about the directors and executive officers of Horizon is set forth in the proxy statement for
Horizon’s 2012 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 23, 2012.
Heartland’s Corporate Profile
as of December 31, 2011
as of December 31, 2011
• Total Shares Outstanding 1,442,727
• Total Assets $246 Million
• Total Loans $138 Million
• Total Deposits $218 Million
• Branches 6
Heartland’s Locations
Transaction Summary
• Business Combination
• Form of Consideration - Stock for Stock
• Fixed Exchange Ratio at 0.54:1
(Subject to Possible Adjustments Per Definitive Agreement)
• Heartland’s Shareholders Will Own Approximately
16% of Horizon Bancorp
16% of Horizon Bancorp
• Name Retained - “Heartland Community Bank, a
Horizon Bank NA Company”
Horizon Bank NA Company”
Transaction Summary
Continued
Continued
• CEO & EVP Retained
• Heartland will Gain - One Bank Board Seat
• Community Advisory Board will be Established
• Subject to Approval by Regulators & Heartland’s
Shareholders
Shareholders
• Closing Date Targeted for the End of Second
Quarter or Early 3rd Quarter
Quarter or Early 3rd Quarter
Acquisition Improves Shareholder Value
• Strategic Considerations
– Expands Horizon’s Presence into Central Indiana
a Growth Market
– Lowers Geographic Concentration Risk
– Opens the Door for Future Opportunities
– Demonstrates Horizon’s Interest as a Statewide Bank
• Financial Considerations
– Heartland is #1 in Deposit Market Share
– Low Cost of Deposits
– Accretive to Horizon’s Earnings Per Share
– Cost Saves of Approximately 25%
– Revenue Enhancement Opportunities
Indiana Business Research Center
Invest in Horizon
Shareholder Value Plan - Since 2001
• Dividends
– Over 25 Years of Uninterrupted Dividend Payments to
Horizon’s Common Shareholders
Horizon’s Common Shareholders
– Recent Dividend Increases (2011 & 2012)
• Focuses on Improving Liquidity
– 3:2 Stock Split in 2011
– Heartland Acquisition Consideration is Common Stock
• Focuses on Growing Net Book Value
– Stable Earnings Growth Over Time
• Focuses on Qualifying for Major Index, Such as
Russell 2000
Russell 2000
Highly Regarded
In Our Communities
In Our Communities
• Nine out of Ten Customers - Would Refer a Friend
• Best Bank - The News Dispatch Readers Poll - Eleven
out of Last Twelve Years
out of Last Twelve Years
• Best Wealth Management Company - NW Indiana
Business Quarterly
Business Quarterly
• Best Place to Work - NW Indiana Business Quarterly
• Family Friendly Work Policies - Clarian Award
• High Visibility - Volunteerism and Contributions
Highly Regarded
for Financial Performance
for Financial Performance
• Ranked in the Top 200 Community Banks for
Financial Performance - US Banker & ABA Magazines
for the Years -2008, 2009, 2010 & 2011
Financial Performance - US Banker & ABA Magazines
for the Years -2008, 2009, 2010 & 2011
• Horizon Named to KBW Bank Honor Roll
– Only 45 Banks Selected Throughout the United States
– No Annual Loss in the Past Decade
– Honor Roll Banks Typically Outperformed the Market;
Growth, Earnings and Performance Ratios
Growth, Earnings and Performance Ratios
– Includes Names Such as JP Morgan and Wells Fargo
Horizon is an Attractive Value
|
Metric
|
Horizon
Bancorp(1) March 31, 2012
|
Horizon
Bancorp(2) April 30, 2012
|
Median
Indiana
Banks(3)
|
|
Dividend Yield
|
2.8%
|
2.1%
|
1.9%
|
|
Price to Book
|
80.5%
|
109.5%
|
82.0%
|
|
Price to Tangible
Book |
86.6%
|
117.9%
|
90.1%
|
|
Price to Earnings
(LTM) |
7.0x
|
9.5x
|
14.0x
|
(1) All data as of March 31, 2012
(2) Horizon Bancorp data as of March 31, 2012 and Stock Price as of April 30, 2012 at $25.17 per common share
(3) Peer Data Source: KBW Report as of March 2011 Covering Indiana Publicly Traded
Horizon Outperforms Market - Ten Years
Thank You