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Horizon Bancorp, Inc. Announces Record Earnings for 2018

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MICHIGAN CITY, Ind., Jan. 29, 2019 (GLOBE NEWSWIRE) -- (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”) today announced its unaudited financial results for the three-month and twelve-month periods ended December 31, 2018. All share data has been adjusted to reflect Horizon’s three-for-two stock split effective June 15, 2018.

SUMMARY:

  • Net income for the year ended December 31, 2018 was $53.1 million, or $1.38 diluted earnings per share, compared to $33.1 million, or $0.95 diluted earnings per share for year-end 2017. This represents the highest annual net income and diluted earnings per share in the Company’s 145-year history.

  • Core net income for the year 2018 increased 38.0% to $48.9 million, or $1.27 diluted earnings per share, compared to $35.5 million, or $1.02 diluted earnings per share, for the year of 2017. (See the “Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share” table on page 4 for the definition of core net income)

  • Net income for the fourth quarter of 2018 was $13.1 million, or $0.34 diluted earnings per share, compared to $7.6 million, or $0.20 diluted earnings per share, for the fourth quarter of 2017.

  • Core net income for the fourth quarter of 2018 was $12.5 million, or $0.33 diluted earnings per share, compared to $10.1 million, or $0.27 diluted earnings per share, for the fourth quarter of 2017.

  • Return on average assets was 1.31% for the year ended December 31, 2018 compared to 0.97% for the year ended December 31, 2017.

  • Core return on average assets for the year ended December 31, 2018 was 1.21% compared to 1.04% for the year ended December 31, 2017. (See the “Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” table on page 10 for the definition of core return on average assets)

  • Total loans increased by an annualized rate of 7.4%, or $55.0 million, during the three months ended December 31, 2018.

  • Total loans increased by a rate of 6.2%, or $176.1 million, during the year ended December 31, 2018. Total loans, excluding loans held for sale and mortgage warehouse loans, increased by a rate of 7.2%, or $198.5 million, during the year ended December 31, 2018.

  • Commercial loans increased by an annualized rate of 5.4%, or $23.0 million, during the three months ended December 31, 2018. For the year ended December 31, 2018, commercial loans increased by a rate of 3.1%, or $51.7 million.

  • Residential mortgage loans increased by an annualized rate of 10.3%, or $16.9 million, during the three months ended December 31, 2018. For the year ended December 31, 2018, residential mortgage loans increased at a rate of 9.6%, or $58.4 million.

  • Consumer loans increased by an annualized rate of 9.9%, or $13.3 million, during the three months ended December 31, 2018. For the year ended December 31, 2018, consumer loans increased at a rate of 19.2%, or $88.5 million.

  • Total deposits increased by a rate of 9.0%, or $258.4 million, during 2018.

  • Net interest income increased $2.4 million, or 7.6%, to $33.8 million for the three months ended December 31, 2018 compared to $31.5 million for the three months ended December 31, 2017. Net interest income increased $22.5 million, or 20.0%, to $134.6 million for the year ended December 31, 2018 compared to $112.1 million for the year ended December 31, 2017.

  • Net interest margin was 3.60% for the three months ended December 31, 2018 compared to 3.71% for the three months ended December 31, 2017. Net interest margin was 3.71% for the year 2018 and 3.75% for the year 2017.

  • Horizon’s tangible book value per share increased to $9.43 at December 31, 2018 compared to $9.04 and $8.48 at September 30, 2018 and December 31, 2017, respectively. This represents the highest tangible book value per share in the Company’s 145-year history.

  • On October 29, 2018, Horizon announced the pending acquisition of Salin Bancshares, Inc. (“Salin”) and its wholly-owned subsidiary, Salin Bank and Trust Company (“Salin Bank”), headquartered in Indianapolis, Indiana which is anticipated to close during February 2019.

Craig Dwight, Chairman and CEO of Horizon, commented: “I am very pleased to announce Horizon Bancorp’s 2018 results. Our ability to generate organic growth through investments in growth markets, along with increased mass and scale, produced record earnings for 2018. Horizon’s 2018 diluted earnings per share of $1.38 is a 45.3% increase over our 2017 diluted earnings per share of $0.95. Net income increased $20.0 million, or 60.4%, when compared to 2017.”

Dwight added, “At December 31, 2018, Horizon’s total assets surpassed $4.2 billion, driven by loan growth since the beginning of the year. An increase in consumer loans of $88.5 million, mortgage loans of $58.4 million and commercial loans of $51.7 million resulted in a $176.1 million, or 6.3%, increase in total loans. Horizon originated approximately $337.1 million in commercial loans during 2018; however, only 58.0%, or $195.6 million, of these originations were funded at the time of the closing of the loan. The markets of Fort Wayne, Grand Rapids, Indianapolis and Kalamazoo experienced an increase in loan balances of $116.4 million, or 20.8%, during 2018 due to our talented local teams’ commitment to these growth markets.”

Dwight continued, “The acquisitions of Lafayette Community Bancorp and Wolverine Bancorp, Inc. in 2017, along with other operational leverage strategies have resulted in an improved efficiency ratio during 2018. Horizon’s efficiency ratio has decreased from 65.28% during 2017, which included a higher amount of merger expenses, to 60.67% during 2018. The improvement in Horizon’s efficiency ratio is a result of good execution by our entire team of Horizon’s merger and integration plans.”

On October 29, 2018, Horizon entered into an agreement to acquire Salin and its wholly-owned subsidiary, Salin Bank in a cash and stock merger. The acquisition is expected to close in February 2019, subject to regulatory and Salin shareholder approval. Salin Bank is the third largest privately held bank in Indiana, with 20 banking centers in 10 Indiana counties, serving Columbus, Delphi, Edinburgh, Fishers, Flora, Fort Wayne, Galveston, Gas City, Kokomo, Lafayette, Logansport, Marion, West Lafayette and Indianapolis. As of September 30, 2018, Salin had total assets of approximately $918.4 million.

Dwight commented, “We are excited about the pending merger with Salin, as it provides entry into the attractive growth markets of Fort Wayne and Columbus, Indiana while also complementing our current Indiana locations. Salin Bank’s presence in the dynamic markets of Indianapolis and Lafayette, Indiana will add to Horizon’s current footprint. In addition, Salin has a talented team who will add depth and experience to our current sales network. Horizon’s strategic plan calls for continued expansion in the States of Indiana and Michigan with an emphasis on strong core deposit growth, investment in growth markets and to add mass and scale to gain additional efficiencies. Horizon’s pending merger with Salin is in alignment with our strategic plan.”

Income Statement Highlights

Net income for the fourth quarter of 2018 was $13.1 million, or $0.34 diluted earnings per share, compared to $7.6 million, or $0.20 diluted earnings per share, for the fourth quarter of 2017. Core net income for the fourth quarter of 2018 was $12.5 million, or $0.33 diluted earnings per share, compared to $10.1 million, or $0.27 diluted earnings per share, for the fourth quarter of 2017.

The increase in net income and diluted earnings per share from the fourth quarter of 2017 when compared to the same period of 2018 reflects an increase in net interest income of $2.4 million along with decreases in income tax expense of $3.2 million, provision for loan losses of $572,000 and non-interest expense of $174,000. These positive impacts to net income were partially offset by a decrease in non-interest income of $867,000 when comparing the fourth quarter of 2018 to the fourth quarter of 2017.

Net income for the year ended December 31, 2018 was $53.1 million, or $1.38 diluted earnings per share, compared to $33.1 million, or $0.95 diluted earnings per share, for the year ended December 31, 2017. Core net income for the year ended December 31, 2018 was $48.9 million, or $1.27 diluted earnings per share, compared to $35.5 million, or $1.02 diluted earnings per share, for the year ended December 31, 2017. This represents a 24.5% increase in core diluted earnings per share for 2018 compared to 2017.

The increase in net income and diluted earnings per share during 2018 when compared to the same period of 2017 reflects increases in core net interest income of $19.9 million and non-interest income of $1.3 million and a decrease in income tax expense of $4.4 million, partially offset by increases in non-interest expense of $7.7 million and provision for loan losses of $436,000.

Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share

(Dollars in Thousands, Except per Share Data, Unaudited)

Three Months Ended

Twelve Months Ended

December 31

September 30

December 31

December 31

December 31

2018

2018

2017

2018

2017

Non-GAAP Reconciliation of Net Income

Net income as reported

$

13,133

$

13,065

$

7,650

$

53,117

$

33,117

Merger expenses

487

-

1,444

487

3,656

Tax effect

(102

)

-

(418

)

(102

)

(1,003

)

Net income excluding merger expenses

13,518

13,065

8,676

53,502

35,770

Loss (gain) on sale of investment securities

332

122

-

443

(38

)

Tax effect

(70

)

(25

)

-

(93

)

13

Net income excluding gain on sale of investment securities

13,780

13,162

8,676

53,852

35,745

Death benefit on bank owned life insurance ("BOLI")

-

-

-

(154

)

-

Tax effect

-

-

-

32

-

Net income excluding death benefit on BOLI

13,780

13,162

8,676

53,730

35,745

Gain on remeasurement of equity interest in Lafayette

-

-

(530

)

-

(530

)

Tax effect

-

-

78

-

78

Net income excluding gain on remeasurement of equity interest in Lafayette

13,780

13,162

8,224

53,730

35,293

Tax reform bill impact

-

-

2,426

-

2,426

Net income excluding tax reform bill impact

13,780

13,162

10,650

53,730

37,719

Acquisition-related purchase accounting adjustments ("PAUs")

(1,629

)

(789

)

(868

)

(6,089

)

(3,484

)

Tax effect

342

166

304

1,279

1,219

Core Net Income

$

12,493

$

12,539

$

10,086

$

48,920

$

35,454

Non-GAAP Reconciliation of Diluted Earnings per Share

Diluted earnings per share ("EPS") as reported

$

0.34

$

0.34

$

0.20

$

1.38

$

0.95

Merger expenses

0.01

-

0.04

0.01

0.11

Tax effect

-

-

(0.01

)

-

(0.03

)

Diluted EPS excluding merger expenses

0.35

0.34

0.23

1.39

1.03

Loss (gain) on sale of investment securities

0.01

-

-

0.01

-

Tax effect

-

-

-

-

-

Diluted EPS excluding gain on sale of investment securities

0.36

0.34

0.23

1.40

1.03

Death benefit on BOLI

-

-

-

-

-

Tax effect

-

-

-

-

-

Diluted EPS excluding death benefit on BOLI

0.36

0.34

0.23

1.40

1.03

Gain on remeasurement of equity interest in Lafayette

-

-

(0.01

)

-

(0.01

)

Tax effect

-

-

-

-

-

Diluted EPS excluding gain on remeasurement of equity interest in Lafayette

0.36

0.34

0.22

1.40

1.02

Tax reform bill impact

-

-

0.07

-

0.07

Diluted EPS excluding tax reform bill impact

0.36

0.34

0.29

1.40

1.09

Acquisition-related PAUs

(0.04

)

(0.02

)

(0.02

)

(0.16

)

(0.10

)

Tax effect

0.01

-

-

0.03

0.03

Core Diluted EPS

$

0.33

$

0.32

$

0.27

$

1.27

$

1.02

Horizon’s net interest margin decreased to 3.60% for the fourth quarter of 2018 when compared to 3.67% for the third quarter of 2018 and 3.71% for the fourth quarter of 2017. The decrease in net interest margin from the third quarter of 2018 reflects slower increases on the yields for earning assets along with lower loan fees offset by an increase in the cost of interest-bearing liabilities of 17 basis points. This is a result of the flat to inverted yield curve and the mix of interest earning assets being originated and repriced. The increase in the cost of interest-bearing liabilities was due to an increase in the cost of interest-bearing deposits of 19 basis points and borrowings of 19 basis points.

The decrease in net interest margin from the fourth quarter of 2017 reflects an increase in the cost of interest-bearing liabilities of 54 basis points, offset by an increase in the yield of interest-earning assets of 31 basis points. The increase in the cost of interest-bearing liabilities was due to an increase in the cost of interest-bearing deposits of 56 basis points and borrowings of 60 basis points. The increase in the yield of interest-earning assets was due to an increase in the yield on loans receivable of 32 basis points and taxable investment securities of 45 basis points, offset by a decrease in the yield on non-taxable investment securities of 18 basis points.

Net interest margin, excluding acquisition-related purchase accounting adjustments (“core net interest margin”), was 3.43% for the fourth quarter of 2018 compared to 3.59% for the prior quarter and 3.61% for the fourth quarter of 2017. Interest income from acquisition-related purchase accounting adjustments was $1.6 million, $789,000 and $868,000 for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively.

Non-GAAP Reconciliation of Net Interest Margin

(Dollars in Thousands, Unaudited)

Three Months Ended

Nine Months Ended

December 31

September 30

December 31

December 31

December 31

2018

2018

2017

2018

2017

Non-GAAP Reconciliation of Net Interest Margin

Net interest income as reported

$

33,836

$

33,772

$

31,455

$

134,569

$

112,100

Average interest-earning assets

3,808,822

3,717,139

3,471,169

3,697,938

3,074,464

Net interest income as a percentage of average interest-earning assets
("Net Interest Margin")

3.60

%

3.67

%

3.71

%

3.71

%

3.75

%

Acquisition-related purchase accounting adjustments ("PAUs")

$

(1,629

)

$

(789

)

$

(868

)

$

(6,089

)

$

(3,484

)

Core net interest income

$

32,207

$

32,983

$

30,587

$

128,480

$

108,616

Core net interest margin

3.43

%

3.59

%

3.61

%

3.54

%

3.64

%

Horizon’s net interest margin decreased to 3.71% for the year ended December 31, 2018 when compared to 3.75% for the year ended December 31, 2017. The cost of interest-bearing liabilities increased 41 basis points, primarily due to an increase in the cost of interest-bearing deposits of 36 basis points and borrowings of 61 basis points. The yield on interest-earning assets increased 27 basis points, primarily due to an increase in the yields earned on loans receivable of 25 basis points and taxable investment securities of 26 basis points, offset by a decrease in the yield earned on non-taxable securities of 26 basis points.

Core net interest margin for the year ended December 31, 2018 was 3.54% compared to 3.64% for the year ended December 31, 2017. Interest income from acquisition-related purchase accounting adjustments was $6.1 million and $3.5 million for the years ended December 31, 2018 and 2017, respectively.

Lending Activity

Total loans increased $176.1 million from $2.838 billion as of December 31, 2017 to $3.014 billion as of December 31, 2018 as consumer loans increased by $88.5 million, residential mortgage loans increased by $58.4 million and commercial loans increased by $51.7 million, offset by a decrease in mortgage warehouse loans of $20.4 million. Consumer loans increased at a rate of 19.2%, primarily due to our experienced consumer loan team and increased focus on growing this portfolio. During 2018, Horizon originated approximately $337.1 million in commercial loans; however, only $195.6 million, or 58.0%, of the total originated loans were funded at the time of the closing of the loan.

Loan Growth by Type

(Dollars in Thousands, Unaudited)

December 31

September 30

Amount

Percent

2018

2018

Change

Change

Commercial

$

1,721,590

$

1,698,582

$

23,008

1.4

%

Residential mortgage

668,141

651,250

16,891

2.6

%

Consumer

549,481

536,132

13,349

2.5

%

Subtotal

2,939,212

2,885,964

53,248

1.8

%

Held for sale loans

1,038

1,980

(942

)

-47.6

%

Mortgage warehouse loans

74,120

71,422

2,698

3.8

%

Total loans

$

3,014,370

$

2,959,366

$

55,004

1.9

%

Loan Growth by Type

(Dollars in Thousands, Unaudited)

December 31

December 31

Amount

Percent

2018

2017

Change

Change

Commercial

$

1,721,590

$

1,669,934

$

51,656

3.1

%

Residential mortgage

668,141

609,739

58,402

9.6

%

Consumer

549,481

460,999

88,482

19.2

%

Subtotal

2,939,212

2,740,672

198,540

7.2

%

Held for sale loans

1,038

3,094

(2,056

)

-66.5

%

Mortgage warehouse loans

74,120

94,508

(20,388

)

-21.6

%

Total loans

$

3,014,370

$

2,838,274

$

176,096

6.2

%

Residential mortgage lending activity for the three months ended December 31, 2018 generated $1.5 million in income from the gain on sale of mortgage loans, a decrease of $384,000 from the third quarter of 2018 and a decrease of $533,000 from the fourth quarter of 2017. Total origination volume for the fourth quarter of 2018, including loans placed into portfolio, totaled $83.9 million, representing a decrease of 16.6% from the third quarter of 2018 and a decrease of 6.8% from the fourth quarter of 2017.

Residential mortgage lending activity for the year ended December 31, 2018 generated $6.6 million in income from the gain on sale of mortgage loans, a decrease of $1.3 million when compared to the year ended December 31, 2017. Total origination volume for the year ended December 31, 2018, including loans placed into portfolio, totaled $365.9 million, an increase of $4.4 million when compared to the year ended December 31, 2017. Purchase money mortgage originations for the year ended December 31, 2018 represented 81.0% of total originations compared to 76.1% for the year ended December 31, 2017.

Revenue derived from Horizon’s residential mortgage lending activities was only 4.9% and 5.9% of Horizon’s total revenue for the fourth quarter of 2018 and the year ended December 31, 2018, respectively.

The provision for loan losses totaled $528,000 for the fourth quarter of 2018 compared to $1.2 million for the third quarter of 2018 and $1.1 million for the fourth quarter of 2017. The decrease in the provision for loan losses from the third quarter of 2018 and the fourth quarter of 2017 when compared to the fourth quarter of 2018 was primarily due to improving credit trends and a continued low level of charge-offs.

The provision for loan losses totaled $2.9 million for the year ended December 31, 2018 compared to $2.5 million for the year ended December 31, 2017. The increase in the provision for loan losses from 2017 to 2018 was due to an increase in specific allocations of approximately $851,000, along with additional general and non-specific allocations for loan growth in new markets, higher than anticipated growth of the indirect loan portfolio and an increase in allocation for other economic factors, offset by improving credit trends and a continued low level of charge-offs.

The ratio of the allowance for loan losses to total loans increased to 0.59% as of December 31, 2018 from 0.58% at December 31, 2017. The ratio of the allowance for loan losses to total loans, excluding loans with credit-related purchase accounting adjustments, was 0.72% as of December 31, 2018 compared to 0.81% as of December 31, 2017. Loan loss reserves and credit-related loan discounts on acquired loans as a percentage of total loans was 0.98% as of December 31, 2018 compared to 1.23% as of December 31, 2017.

Non-GAAP Allowance for Loan and Lease Loss Detail

As of December 31, 2018

(Dollars in Thousands, Unaudited)

Pre-discount
Loan
Balance

Allowance
for Loan
Losses
(ALLL)

Loan
Discount

ALLL
+
Loan
Discount

Loans, net

ALLL/
Pre-discount
Loan Balance

Loan
Discount/
Pre-discount
Loan Balance

ALLL + Loan
Discount/
Pre-discount
Loan Balance

Horizon Legacy

$

2,482,496

$

17,760

N/A

$

17,760

$

2,464,736

0.72

%

0.00

%

0.72

%

Heartland

9,085

-

685

685

8,400

0.00

%

7.54

%

7.54

%

Summit

21,691

-

1,186

1,186

20,505

0.00

%

5.47

%

5.47

%

Peoples

86,634

-

1,958

1,958

84,676

0.00

%

2.26

%

2.26

%

Kosciusko

38,578

-

615

615

37,963

0.00

%

1.59

%

1.59

%

LaPorte

88,134

60

2,985

3,045

85,089

0.07

%

3.39

%

3.46

%

CNB

4,499

-

118

118

4,381

0.00

%

2.62

%

2.62

%

Lafayette

89,446

-

1,427

1,427

88,019

0.00

%

1.60

%

1.60

%

Wolverine

193,807

-

2,723

2,723

191,084

0.00

%

1.41

%

1.41

%

Total

$

3,014,370

$

17,820

$

11,697

$

29,517

$

2,984,853

0.59

%

0.39

%

0.98

%

As of December 31, 2018, non-performing loans totaled $15.2 million, which reflects an 8 basis point decrease in non-performing loans to total loans, or a $1.2 million decline from $16.4 million in non-performing loans as of December 31, 2017. Compared to December 31, 2017, non-performing commercial loans decreased by $451,000, non-performing real estate loans decreased by $709,000 and non-performing consumer loans decreased by $79,000. Other real estate owned and repossessed assets totaled $2.1 million as of December 31, 2018 which is an increase of $1.2 million from December 31, 2017. The majority of this increase was because several bank owned properties acquired through acquisitions and listed for sale that were re-classified to other real estate owned and recorded at fair value during the second quarter of 2018.

Expense Management

Total non-interest expense was $497,000 higher in the fourth quarter of 2018 when compared to the third quarter of 2018, of which $487,000 was due to acquisition-related expenses. Outside services and consultants and professional fees increased $332,000 and $175,000, respectively, primarily due to acquisition-related expenses incurred during the fourth quarter of 2018. Other expenses increased $194,000 during the fourth quarter of 2018 when compared to the third quarter of 2018 primarily due to recruiting expenses. Loan expense increased $115,000 when compared to the third quarter primarily due to the increased volume in indirect lending and the timing of related origination and amortization costs. These increases were offset by a decrease in salaries and employee benefits of $245,000 when comparing the fourth quarter of 2018 to the third quarter of 2018. A decrease in salaries, commissions and bonus expense was offset by an increase in health insurance expense during the fourth quarter of 2018.

Total non-interest expense was $174,000 lower during the fourth quarter of 2018 compared to the same period of 2017. Outside services and consultants and professional fees decreased $491,000 and $81,000, respectively, primarily due to acquisition-related expenses incurred as a result of the Wolverine Bancorp, Inc. (“Wolverine”) acquisition during the fourth quarter of 2017. Salaries and employee benefits decreased $191,000 when comparing the fourth quarter of 2017 to the fourth quarter of 2018. These decreases were partially offset by increases in loan expense of $439,000, data processing of $151,000 and FDIC insurance expense of $123,000. Loan expense increased due to the increased volume in indirect lending and the timing of related origination and amortization costs. The increase in data processing and FDIC insurance expense reflect overall company growth and the acquisitions of Lafayette and Wolverine.

Total non-interest expense was $7.7 million higher for 2018 when compared to 2017. The increase was primarily due to increases in salaries and employee benefits of $5.2 million, loan expense of $1.4 million, net occupancy expenses of $947,000, data processing of $902,000, other expense of $851,000, FDIC insurance expense of $398,000 and other losses of $297,000. The increase in salaries and employee benefits, net occupancy expense, data processing, other expense and FDIC insurance expense reflect overall company growth and the acquisitions of Lafayette and Wolverine during the third and fourth quarters of 2017. Loan expense increased primarily due to the increased volume in indirect lending and the timing of related origination and amortization costs during 2018. Offsetting these increases was a decrease of $1.7 million and $564,000 in outside services and consultants expense and professional fees, respectively, primarily due to lower acquisition-related expenses in 2018.

Income tax expense totaled $2.5 million for the fourth quarter of 2018, a decrease of $62,000 when compared to the third quarter of 2018 and a decrease of $3.2 million when compared to the fourth quarter of 2017. The decrease in income tax expense from the third quarter of 2018 was primarily due to an increase in tax exempt interest income during the fourth quarter of 2018 when compared to the third quarter of 2018. The decrease when comparing the fourth quarter of 2018 to the same prior year period was primarily due to the impact of the corporate tax rate signed into law at the end of 2017. In addition to a lower corporate tax rate being applied to 2018 income, a revaluation to Horizon’s net deferred tax asset of $2.4 million was recorded to income tax expense during the fourth quarter of 2017. Partially offsetting these decreases to income tax expense was an increase in income before taxes of $2.3 million during the fourth quarter of 2018 when compared to the same prior year period.

Income tax expense totaled $10.4 million for the year ended December 31, 2018, a decrease of $4.4 million when compared to the year ended December 31, 2017. The decrease was primarily due to the impact of the new corporate tax rate which was signed into law at the end of 2017 and the benefits from the exercising of stock options. This decrease was offset by an increase in income before income tax expense of $15.6 million when comparing 2018 to the prior year.

Use of Non-GAAP Financial Measures

Certain information set forth in this press release refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non-GAAP financial measures relating to net income, diluted earnings per share, net interest margin, total loans and loan growth, the allowance for loan and lease losses, tangible stockholders’ equity, tangible book value per share, the return on average assets and the return on average equity. In each case, we have identified special circumstances that we consider to be non-recurring and have excluded them, to show the impact of such events as acquisition-related purchase accounting adjustments, prepayment penalties on borrowings and the tax reform bill, among others we have identified in our reconciliations. Horizon believes that these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to the purchase accounting impacts and one-time costs of acquisitions and non-core items. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this press release for reconciliations of the non-GAAP figures identified herein and their most comparable GAAP measures.

Non-GAAP Reconciliation of Tangible Stockholders' Equity and Tangible Book Value per Share

(Dollars in Thousands Except per Share Data, Unaudited)

December 31

September 30

June 30

March 31

December 31

2018

2018

2018

2018

2017

Total stockholders' equity

$

491,992

$

477,594

$

470,535

$

460,416

$

457,078

Less: Intangible assets

130,270

130,755

131,239

131,724

132,282

Total tangible stockholders' equity

$

361,722

$

346,839

$

339,296

$

328,692

$

324,796

Common shares outstanding

38,375,407

38,367,890

38,362,640

38,332,853

38,294,729

Tangible book value per common share

$

9.43

$

9.04

$

8.84

$

8.57

$

8.48


Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity

(Dollars in Thousands, Unaudited)

Three Months Ended

Twelve Months Ended

December 31

September 30

December 31

December 31

December 31

2018

2018

2017

2018

2017

Non-GAAP Reconciliation of Return on Average Assets

Average Assets

$

4,179,140

$

4,105,096

$

3,841,551

$

4,062,635

$

3,396,873

Return on average assets ("ROAA") as reported

1.25

%

1.26

%

0.79

%

1.31

%

0.97

%

Merger expenses

0.05

%

0.00

%

0.15

%

0.01

%

0.11

%

Tax effect

-0.01

%

0.00

%

-0.04

%

0.00

%

-0.03

%

ROAA excluding merger expenses

1.29

%

1.26

%

0.90

%

1.32

%

1.05

%

Gain on sale of investment securities

0.03

%

0.01

%

0.00

%

0.01

%

0.00

%

Tax effect

-0.01

%

0.00

%

0.00

%

0.00

%

0.00

%

ROAA excluding gain on sale of investment securities

1.31

%

1.27

%

0.90

%

1.33

%

1.05

%

Death benefit on bank owned life insurance ("BOLI")

0.00

%

0.00

%

0.00

%

0.00

%

0.00

%

Tax effect

0.00

%

0.00

%

0.00

%

0.00

%

0.00

%

ROAA excluding death benefit on BOLI

1.31

%

1.27

%

0.90

%

1.33

%

1.05

%

Gain on remeasurement of equity interest in Lafayette

0.00

%

0.00

%

-0.05

%

0.00

%

-0.02

%

Tax effect

0.00

%

0.00

%

0.01

%

0.00

%

0.00

%

ROAA excluding gain on remeasurement of equity interest in Lafayette

1.31

%

1.27

%

0.86

%

1.33

%

1.03

%

Tax reform bill impact

0.00

%

0.00

%

0.25

%

0.00

%

0.07

%

ROAA excluding tax reform bill impact

1.31

%

1.27

%

1.11

%

1.33

%

1.10

%

Acquisition-related purchase accounting adjustments ("PAUs")

-0.15

%

-0.08

%

-0.09

%

-0.15

%

-0.10

%

Tax effect

0.03

%

0.02

%

0.03

%

0.03

%

0.04

%

Core ROAA

1.19

%

1.21

%

1.05

%

1.21

%

1.04

%

Non-GAAP Reconciliation of Return on Average Common Equity

Average Common Equity

$

485,662

$

476,959

$

449,318

$

473,420

$

378,709

Return on average common equity ("ROACE") as reported

10.73

%

10.87

%

6.75

%

11.22

%

8.74

%

Merger expenses

0.40

%

0.00

%

1.28

%

0.10

%

0.97

%

Tax effect

-0.08

%

0.00

%

-0.37

%

-0.02

%

-0.26

%

ROACE excluding merger expenses

11.05

%

10.87

%

7.66

%

11.30

%

9.45

%

Gain on sale of investment securities

0.27

%

0.10

%

0.00

%

0.09

%

-0.01

%

Tax effect

-0.06

%

-0.02

%

0.00

%

-0.02

%

0.00

%

ROACE excluding gain on sale of investment securities

11.26

%

10.95

%

7.66

%

11.37

%

9.44

%

Death benefit on bank owned life insurance ("BOLI")

0.00

%

0.00

%

0.00

%

-0.03

%

0.00

%

Tax effect

0.00

%

0.00

%

0.00

%

0.01

%

0.00

%

ROACE excluding death benefit on BOLI

11.26

%

10.95

%

7.66

%

11.35

%

9.44

%

Gain on remeasurement of equity interest in Lafayette

0.00

%

0.00

%

-0.47

%

0.00

%

-0.14

%

Tax effect

0.00

%

0.00

%

0.07

%

0.00

%

0.02

%

ROACE excluding gain on remeasurement of equity interest in Lafayette

11.26

%

10.95

%

7.26

%

11.35

%

9.32

%

Tax reform bill impact

0.00

%

0.00

%

2.14

%

0.00

%

0.64

%

ROACE excluding tax reform bill impact

11.26

%

10.95

%

9.40

%

11.35

%

9.96

%

Acquisition-related purchase accounting adjustments ("PAUs")

-1.33

%

-0.66

%

-0.77

%

-1.29

%

-0.92

%

Tax effect

0.28

%

0.14

%

0.27

%

0.27

%

0.32

%

Core ROACE

10.21

%

10.43

%

8.90

%

10.33

%

9.36

%

About Horizon

Horizon Bancorp, Inc. is an independent, commercial bank holding company serving northern and central Indiana, and southern, central and the Great Lakes Bay regions of Michigan through its commercial banking subsidiary Horizon Bank. Horizon also offers mortgage-banking services throughout the Midwest. Horizon may be reached online at www.horizonbank.com. Its common stock is traded on the NASDAQ Global Select Market under the symbol HBNC.

Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon. For these statements, Horizon claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance.

Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in its Form 10-K. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Contact:
Horizon Bancorp, Inc.
Mark E. Secor
Chief Financial Officer
(219) 873-2611
Fax: (219) 874-9280


HORIZON BANCORP, INC.
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)

December 31

September 30

June 30

March 31

December 31

2018

2018

2018

2018

2017

Balance sheet:

Total assets

$

4,246,688

$

4,150,561

$

4,076,611

$

3,969,750

$

3,964,303

Investment securities

810,460

766,153

735,962

714,425

710,113

Commercial loans

1,721,590

1,698,582

1,672,998

1,656,374

1,669,934

Mortgage warehouse loans

74,120

71,422

109,016

101,299

94,508

Residential mortgage loans

668,141

651,250

634,636

618,131

609,739

Consumer loans

549,481

536,132

507,866

480,989

460,999

Earnings assets

3,842,903

3,743,592

3,681,583

3,591,296

3,566,492

Non-interest bearing deposit accounts

642,129

621,475

615,018

602,175

601,805

Interest bearing transaction accounts

1,684,336

1,605,825

1,644,758

1,619,859

1,712,246

Time deposits

812,911

901,254

756,387

711,642

566,952

Borrowings

550,384

477,719

524,846

520,300

564,157

Subordinated debentures

37,837

37,791

37,745

37,699

37,653

Total stockholders' equity

491,992

477,594

470,535

460,416

457,078

Income statement:

Three months ended

Net interest income

$

33,836

$

33,772

$

33,550

$

33,411

$

31,455

Provision for loan losses

528

1,176

635

567

1,100

Non-interest income

8,477

8,686

8,932

8,318

9,344

Non-interest expenses

26,117

25,620

24,942

25,837

26,291

Income tax expense

2,535

2,597

2,790

2,521

5,758

Net income

$

13,133

$

13,065

$

14,115

$

12,804

$

7,650

Per share data:(1)

Basic earnings per share

$

0.34

$

0.34

$

0.37

$

0.33

$

0.20

Diluted earnings per share

0.34

0.34

0.37

0.33

0.20

Cash dividends declared per common share

0.10

0.10

0.10

0.10

0.09

Book value per common share

12.82

12.45

12.27

12.01

11.93

Tangible book value per common share

9.43

9.04

8.84

8.57

8.48

Market value - high

19.40

21.39

21.94

20.59

19.47

Market value - low

$

14.94

$

19.44

$

19.17

$

17.87

$

17.33

Weighted average shares outstanding - Basic

38,367,972

38,365,379

38,347,612

38,306,395

37,711,200

Weighted average shares outstanding - Diluted

38,488,861

38,534,970

38,519,401

38,468,811

37,897,012

Key ratios:

Return on average assets

1.25

%

1.26

%

1.41

%

1.32

%

0.79

%

Return on average common stockholders' equity

10.73

10.87

12.15

11.29

6.75

Net interest margin

3.60

3.67

3.78

3.81

3.71

Loan loss reserve to total loans

0.59

0.60

0.58

0.58

0.58

Average equity to average assets

11.62

11.62

11.60

11.67

11.70

Bank only capital ratios:

Tier 1 capital to average assets

9.38

9.53

9.65

9.66

9.89

Tier 1 capital to risk weighted assets

11.91

12.09

12.21

12.32

12.29

Total capital to risk weighted assets

12.47

12.66

12.77

12.87

12.85

Loan data:

Substandard loans

$

38,775

$

34,655

$

40,941

$

43,035

$

46,162

30 to 89 days delinquent

7,161

6,878

3,978

8,932

9,329

90 days and greater delinquent - accruing interest

$

568

$

202

$

49

$

30

$

167

Trouble debt restructures - accruing interest

2,002

1,830

1,911

1,899

1,958

Trouble debt restructures - non-accrual

1,057

1,077

894

1,090

1,013

Non-accural loans

11,548

11,417

12,555

12,062

13,276

Total non-performing loans

$

15,175

$

14,526

$

15,409

$

15,081

$

16,414

Non-performing loans to total loans

0.50

%

0.49

%

0.53

%

0.53

%

0.58

%

(1)Adjusted for 3:2 stock split on June 15, 2018


HORIZON BANCORP, INC.
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)


December 31

December 31

2018

2017

Balance sheet:

Total assets

$

4,246,688

$

3,964,303

Investment securities

810,460

710,113

Commercial loans

1,721,590

1,669,934

Mortgage warehouse loans

74,120

94,508

Residential mortgage loans

668,141

609,739

Consumer loans

549,481

460,999

Earnings assets

3,842,903

3,566,492

Non-interest bearing deposit accounts

642,129

601,805

Interest bearing transaction accounts

1,684,336

1,712,246

Time deposits

812,911

566,952

Borrowings

550,384

564,157

Subordinated debentures

37,837

37,653

Total stockholders' equity

491,992

457,078

Twelve Months Ended

Income statement:

Net interest income

$

134,569

$

112,100

Provision for loan losses

2,906

2,470

Non-interest income

34,413

33,136

Non-interest expenses

102,516

94,813

Income tax expense

10,443

14,836

Net income

$

53,117

$

33,117

Per share data:(1)

Basic earnings per share

$

1.39

$

0.96

Diluted earnings per share

1.38

0.95

Cash dividends declared per common share

0.40

0.33

Book value per common share

12.82

11.93

Tangible book value per common share

9.43

8.48

Market value - high

21.94

19.47

Market value - low

$

14.94

$

16.49

Weighted average shares outstanding - Basic

38,347,059

34,553,736

Weighted average shares outstanding - Diluted

38,495,980

34,774,930

Key ratios:

Return on average assets

1.31

%

0.97

%

Return on average common stockholders' equity

11.22

8.74

Net interest margin

3.71

3.75

Loan loss reserve to total loans

0.59

0.58

Average equity to average assets

11.65

11.15

Bank only capital ratios:

Tier 1 capital to average assets

9.38

9.89

Tier 1 capital to risk weighted assets

11.91

12.29

Total capital to risk weighted assets

12.47

12.85

Loan data:

Substandard loans

$

38,775

$

46,162

30 to 89 days delinquent

7,161

9,329

90 days and greater delinquent - accruing interest

$

568

$

167

Trouble debt restructures - accruing interest

2,002

1,958

Trouble debt restructures - non-accrual

1,057

1,013

Non-accural loans

11,548

13,276

Total non-performing loans

$

15,175

$

16,414

Non-performing loans to total loans

0.50

%

0.58

%

(1)Adjusted for 3:2 stock split on June 15, 2018


HORIZON BANCORP, INC.

Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands, Unaudited)

December 31

September 30

June 30

March 31

December 31

2018

2018

2018

2018

2017

Commercial

$

10,495

$

10,581

$

8,865

$

7,840

$

9,093

Real estate

1,676

1,574

1,761

1,930

2,188

Mortgage warehousing

1,006

1,030

1,084

1,030

1,030

Consumer

4,643

4,613

5,361

5,674

4,083

Total

$

17,820

$

17,798

$

17,071

$

16,474

$

16,394

Net Charge-Offs (Recoveries)

(Dollars in Thousands, Unaudited)

Three Months Ended

December 31

September 30

June 30

March 31

December 31

2018

2018

2018

2018

2017

Commercial

$

196

$

179

$

(40

)

$

(38

)

$

84

Real estate

47

(2

)

(2

)

6

(9

)

Mortgage warehousing

-

-

-

-

-

Consumer

263

272

80

519

217

Total

$

506

$

449

$

38

$

487

$

292

Percent of net charge-offs to average
loans outstanding for the period

0.02

%

0.02

%

0.00

%

0.01

%

0.01

%

Total Non-performing Loans

(Dollars in Thousands, Unaudited)

December 31

September 30

June 30

March 31

December 31

2018

2018

2018

2018

2017

Commercial

$

6,903

$

8,355

$

8,987

$

6,778

$

7,354

Real estate

5,007

3,754

3,915

5,276

5,716

Mortgage warehousing

-

-

-

-

-

Consumer

3,265

2,417

2,507

3,027

3,344

Total

$

15,175

$

14,526

$

15,409

$

15,081

$

16,414

Non-performing loans to total loans

0.50

%

0.49

%

0.53

%

0.53

%

0.58

%

Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands, Unaudited)

December 31

September 30

June 30

March 31

December 31

2018

2018

2018

2018

2017

Commercial

$

1,967

$

2,181

$

2,628

$

547

$

578

Real estate

60

58

302

281

200

Mortgage warehousing

-

-

-

-

-

Consumer

48

26

62

42

60

Total

$

2,075

$

2,265

$

2,992

$

870

$

838


HORIZON BANCORP, INC.

Average Balance Sheets
(Dollar Amounts in Thousands, Unaudited)


Three Months Ended

Three Months Ended

December 31, 2018

December 31, 2017

Average
Balance

Interest

Average
Rate

Average
Balance

Interest

Average
Rate

Assets

Interest-earning assets

Federal funds sold

$

10,093

$

62

2.44

%

$

10,175

$

24

0.94

%

Interest-earning deposits

21,763

93

1.70

%

22,939

49

0.85

%

Investment securities - taxable

432,620

2,734

2.51

%

422,864

2,196

2.06

%

Investment securities - non-taxable(1)

364,236

2,324

3.20

%

309,902

1,875

3.38

%

Loans receivable(2)(3)

2,980,110

38,517

5.14

%

2,705,289

32,630

4.82

%

Total interest-earning assets(1)

3,808,822

43,730

4.63

%

3,471,169

36,774

4.32

%

Non-interest-earning assets

Cash and due from banks

44,732

44,765

Allowance for loan losses

(17,792

)

(15,692

)

Other assets

343,378

341,309

Total average assets

$

4,179,140

$

3,841,551

Liabilities and Stockholders' Equity

Interest-bearing liabilities

Interest-bearing deposits

$

2,526,209

$

6,411

1.01

%

$

2,278,651

$

2,586

0.45

%

Borrowings

458,485

2,882

2.49

%

451,866

2,150

1.89

%

Subordinated debentures

36,616

601

6.51

%

36,431

583

6.35

%

Total interest-bearing liabilities

3,021,310

9,894

1.30

%

2,766,948

5,319

0.76

%

Non-interest-bearing liabilities

Demand deposits

656,114

603,733

Accrued interest payable and other liabilities

16,054

21,552

Stockholders' equity

485,662

449,318

Total average liabilities and stockholders' equity

$

4,179,140

$

3,841,551

Net interest income/spread

$

33,836

3.33

%

$

31,455

3.55

%

Net interest income as a percentage of average
interest-earning assets(1)

3.60

%

3.71

%

(1)

Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.

(2)

Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.

(3)

Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees. The average rate is presented on a tax equivalent basis.



HORIZON BANCORP, INC.

Average Balance Sheets
(Dollar Amounts in Thousands, Unaudited)

Twelve Months Ended

Twelve Months Ended

December 31, 2018

December 31, 2017

Average
Balance

Interest

Average
Rate

Average
Balance

Interest

Average
Rate

Assets

Interest-earning assets

Federal funds sold

$

4,696

$

115

2.45

%

$

5,450

$

80

1.47

%

Interest-earning deposits

24,491

393

1.60

%

23,865

301

1.26

%

Investment securities - taxable

431,970

10,113

2.34

%

417,993

8,705

2.08

%

Investment securities - non-taxable(1)

326,040

8,069

3.13

%

292,030

7,068

3.39

%

Loans receivable(2)(3)

2,910,741

147,478

5.08

%

2,335,126

112,329

4.83

%

Total interest-earning assets(1)

3,697,938

166,168

4.56

%

3,074,464

128,483

4.29

%

Non-interest-earning assets

Cash and due from banks

44,645

42,578

Allowance for loan losses

(16,964

)

(15,226

)

Other assets

337,016

295,057

Total average assets

$

4,062,635

$

3,396,873

Liabilities and Stockholders' Equity

Interest-bearing liabilities

Interest-bearing deposits

$

2,418,987

$

18,225

0.75

%

$

2,045,896

$

7,901

0.39

%

Borrowings

492,830

11,009

2.23

%

381,488

6,178

1.62

%

Subordinated debentures

36,547

2,365

6.47

%

36,362

2,304

6.34

%

Total interest-bearing liabilities

2,948,364

31,599

1.07

%

2,463,746

16,383

0.66

%

Non-interest-bearing liabilities

Demand deposits

624,576

533,852

Accrued interest payable and other liabilities

16,275

20,566

Stockholders' equity

473,420

378,709

Total average liabilities and stockholders' equity

$

4,062,635

$

3,396,873

Net interest income/spread

$

134,569

3.49

%

$

112,100

3.63

%

Net interest income as a percentage of average
interest-earning assets(1)

3.71

%

3.75

%

(1)

Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.

(2)

Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.

(3)

Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees. The average rate is presented on a tax equivalent basis.


HORIZON BANCORP, INC.
Condensed Consolidated Balance Sheets
(Dollar Amounts in Thousands)

December 31

December 31

2018

2017

(Unaudited)

Assets

Assets

$

74,236

$

76,441

Cash and due from banks

600,348

509,665

Investment securities, available for sale

210,112

200,448

Investment securities, held to maturity (fair value of $208,274 and $201,085)

1,038

3,094

Loans held for sale

2,995,512

2,818,786

Loans, net of allowance for loan losses of $17,820 and $16,394

74,331

75,529

Premises and equipment, net

18,073

18,105

Federal Home Loan Bank stock

119,880

119,880

Goodwill

10,390

12,402

Other intangible assets

14,239

13,059

Interest receivable

88,062

75,931

Cash value of life insurance

40,467

40,963

Other assets

$

4,246,688

$

3,964,303

Liabilities

Deposits

Non-interest bearing

$

642,129

$

601,805

Interest bearing

2,497,247

2,279,198

Total deposits

3,139,376

2,881,003

Borrowings

550,384

564,157

Subordinated debentures

37,837

37,653

Interest payable

2,031

886

Other liabilities

25,068

23,526

Total liabilities

3,754,696

3,507,225

Commitments and contingent liabilities

Stockholders’ Equity

Preferred stock, Authorized, 1,000,000 shares, Issued 0 shares

-

-

Common stock, no par value, Authorized 99,000,000 shares (1)

Issued 38,400,476 and 38,323,604 shares (1),
Outstanding 38,375,407 and 38,294,729 shares (1)

-

-

Additional paid-in capital

276,101

275,059

Retained earnings

224,035

185,570

Accumulated other comprehensive loss

(8,144

)

(3,551

)

Total stockholders' equity

491,992

457,078

Total liabilities and stockholders' equity

$

4,246,688

$

3,964,303

(1) Adjusted for 3:2 stock split on June 15, 2018


HORIZON BANCORP, INC.

Condensed Consolidated Statements of Income
(Dollar Amounts in Thousands, Except Per Share Data, Unaudited)

Three Months Ended

Twelve Months Ended

December 31

December 31

2018

2017

2018

2017

Interest Income

Loans receivable

$

38,517

$

32,630

$

147,478

$

112,329

Investment securities

Taxable

2,889

2,269

10,621

9,086

Tax exempt

2,324

1,875

8,069

7,068

Total interest income

43,730

36,774

166,168

128,483

Interest Expense

Deposits

6,411

2,586

18,225

7,901

Borrowed funds

2,882

2,150

11,009

6,178

Subordinated debentures

601

583

2,365

2,304

Total interest expense

9,894

5,319

31,599

16,383

Net Interest Income

33,836

31,455

134,569

112,100

Provision for loan losses

528

1,100

2,906

2,470

Net Interest Income after Provision for Loan Losses

33,308

30,355

131,663

109,630

Non-interest Income

Service charges on deposit accounts

1,958

1,745

7,762

6,383

Wire transfer fees

122

155

612

658

Interchange fees

1,422

1,295

5,715

5,104

Fiduciary activities

2,229

2,142

7,827

7,894

Gains on sale of investment securities (includes $(332) and $0 for the

three months ended December 31, 2018 and 2017, respectively, and
$(443) and $38 for the twelve months ended December 31, 2018 and
2017, respectively, related to accumulated other comprehensive
earnings reclassifications)

(332

)

-

(443

)

38

Gain on sale of mortgage loans

1,455

1,988

6,613

7,906

Mortgage servicing income net of impairment

697

408

2,120

1,583

Increase in cash value of bank owned life insurance

532

451

1,912

1,797

Death benefit on bank owned life insurance

-

-

154

-

Other income

394

1,160

2,141

1,773

Total non-interest income

8,477

9,344

34,413

33,136

Non-interest Expense

Salaries and employee benefits

14,098

14,289

56,623

51,375

Net occupancy expenses

2,501

2,487

10,482

9,535

Data processing

1,754

1,603

6,816

5,914

Professional fees

612

693

1,926

2,490

Outside services and consultants

1,536

2,027

5,271

7,018

Loan expense

1,837

1,398

6,341

4,970

FDIC insurance expense

393

270

1,444

1,046

Other losses

89

182

665

368

Other expense

3,297

3,342

12,948

12,097

Total non-interest expense

26,117

26,291

102,516

94,813

Income Before Income Tax

15,668

13,408

63,560

47,953

Income tax expense (includes $(70) and $0 for the three months ended

December 31, 2018 and 2017, respectively, and $(93) and $13 for the
twelve months ended December 31, 2018 and 2017, respectively,
related to income tax expense from reclassification items)

2,535

5,758

10,443

14,836

Net Income

$

13,133

$

7,650

$

53,117

$

33,117

Basic Earnings Per Share (1)

$

0.34

$

0.20

$

1.39

$

0.96

Diluted Earnings Per Share (1)

0.34

0.20

1.38

0.95

(1) Adjusted for 3:2 stock split on June 15, 2018