An “excellent start” to calendar 2017 is now in the books for Horizon Bancorp following financial filings on unaudited results for the three-month period ended March 31st. The bank also underwent a three-for-two stock split which was effective November 14, 2016, and results are adjusted accordingly.
Horizon, which has multiple branches throughout Michigan’s Great Southwest and in Northwest Indiana, reports net income for the first quarter of 2017 was $8.2 million or $0.37 diluted earnings per share compared to $5.4 million or $0.30 diluted earnings per share for the same period in 2016. Bank officials say the first quarter of 2017 represents an excellent start to the year given that the first quarter is typically a seasonal low revenue point for Horizon.
Net income, excluding acquisition-related expenses, gain on sale of investment securities and purchase accounting adjustments (“core net income”), for the first quarter of 2017 increased 38.9-percent to $7.5 million or $0.34 diluted earnings per share compared to $5.4 million or $0.30 diluted earnings per share for the same period of 2016.
Return on average assets was 1.07-percent for the first quarter of 2017 compared to 0.83-percent for the same period in 2016.
Net interest income for the first quarter of 2017 increased $5.8 million, or 29.3-percent, compared to the same period in 2016.
Net interest margin was 3.80-percent for the first quarter of 2017 compared to 2.92-percent for the prior quarter and 3.45-percent for the same period in 2016. The improvement in net interest margin reflects Horizon’s execution on its plan to reduce expensive funding costs, which was accomplished in the fourth quarter of 2016.
Net interest margin, excluding the impact of prepayment penalties on borrowings and purchase accounting adjustments (“core net interest margin”), was 3.66-percent for the first quarter of 2017 compared to 3.45-percent for the prior quarter and 3.36-percent for the same period in 2016.
Horizon’s tangible book value per share rose to $11.79 at March 31, 2017, compared to $11.48 at December 31, 2016.
Commercial loans, excluding acquired commercial loans, increased by an annualized rate of 12.8-percent, or $33.8 million, during the first quarter of 2017.
Consumer loans, excluding acquired consumer loans, increased by an annualized rate of 18.8-percent, or $18.5 million, during the first quarter of 2017.
On February 3, 2017, Horizon completed the purchase and assumption of certain assets and liabilities of a single branch of First Farmers Bank & Trust Company located in Bargersville, Indiana. The acquired office was closed and consolidated into Horizon’s existing Bargersville location.
Horizon’s Grand Rapids team moved to their new downtown loan production office during February, after the office was approved to continue as a full service branch which will take place in the second quarter of 2017.
Early in the second quarter, Horizon hired two additional seasoned commercial lenders for their Fort Wayne, Indiana loan production office.
At the beginning of the second quarter of 2017, Michael Lamping, joined Horizon as Central Ohio Market President. A loan production office will be opened in the greater Columbus, Ohio area during the second quarter of 2017 and will focus on commercial business.
Horizon received regulatory approval to open a new office in Noblesville, Indiana, which will be open later this year.
Horizon, for the first time, hired a corporate general legal counsel in the first quarter. The objective for that position is, in part, to better manage legal costs and to more closely monitor changes in the regulatory and legal landscape.
Craig Dwight is Chairman and CEO at Horizon Bancorp. He says, “During the first quarter of 2017, Horizon’s business model of diversified and balanced revenue streams was proven to be effective as an increase in commercial and consumer lending helped to offset the seasonal low in residential mortgage revenues. Excluding non-core items, Horizon realized an increase in net income of $2.1 million, or 38.9-percent, in the first quarter of 2017 when compared to the same period of 2016 resulting in an increase in core diluted earnings per share of 13.3-percent.” He adds, “Core net interest margin increased in the first quarter of 2017 to 3.66-percent from 3.36-percent for the same period in 2016. Horizon also realized solid growth in service charges on deposit accounts of 8.7-percent, interchange fees of 26.3-percent and fiduciary activities of 17.6-percent in the first quarter of 2017 when compared to the same period in 2016.”
Dwight continues, “Although commercial and consumer loan growth was strong in the first quarter of 2017, total loan growth was tempered by a decrease in our mortgage warehouse portfolio. Excluding acquired loans, commercial loan growth increased by an annual rate of 12.8-percent and was fueled by our growth markets of Fort Wayne, Grand Rapids, Indianapolis and Kalamazoo, which combined produced total loan growth of $39.7 million for the quarter.” He concludes, “With our established presence in the growth markets of Kalamazoo and Indianapolis, coupled with our recent investments in Fort Wayne, Grand Rapids and Columbus, Horizon is well positioned to continue our growth momentum. In addition, Horizon’s solid growth in trust and service fee income has contributed to our plan to decrease dependence on margin income. ”
