Horizon Bancorp, Inc. Announces Record Earnings for 2018

Michigan City, Indiana, UNITED STATES


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.


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 

 


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