Horizon Bancorp, Inc. · NASDAQ:HBNC
Horizon Bancorp — Investor Presentation (May 2007)
43 slides from Horizon Bancorp's investor presentation, May 3, 2007
Slide 1: NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements regarding financial pertormance, business prospects, growth and operating on claims strategies. For these statements, Hort the protection of the sate harbor for torward- looking statements contained in the Private Se
Slide 3: Outline
Outline • Industry Challenges • Horizon’s Financial Results • Horizon’s Key Objectives • Horizon’s Business Model – Be Horizon – Customer Satisfaction
Slide 4: Industry Challenges
Industry Challenges • Flat Yield Curve • Asset Quality • Residential Real Estate – Decline in Real Estate Volume – Depreciation in Property Values – Subprime Lending
Slide 5: Yield Curve
7.0% 6.5% 6.0% 5.5% 5.0% 45% 4.0% Yield Curve 3 month 6 month 2 year —@ 31-Jan-07 3 year 5 year —t- 31-Jan-97 10 year 30 year HORIZON: _HORIZO
Slide 6: 2007 Year to Date Returns
2007 Year to Date Returns Through April 30, 2007
Slide 7: Financial Results
Financial Results
Slide 8: How Do Banks Make Money
How Do Banks Make Money Interest Income Revenue Fee Income Avoid Mistakes Charge-offs / Losses Interest Expense Attract Deposits Salary & Benefits Invest In Team / Advisors Operating Expenses Invest In the Team’s Needs Tax Expense Pay Uncle Sam EPS Net Income
Slide 9: Growth in Average Assets (CAGR 13.43%)
CAGR = 13.43% Growth in Average Assets
Slide 10: Mortgage Warehousing
Mortgage Warehousing 18% Mortgage Installment Warehousing 1h 3% ‘3
Slide 11: Net Interest Margin
Net Interest Margin 375% 3.25% 2.75% FEE EEE ELE EEE EOEE HORIZON _ HORIZO
Slide 12: Net Charge Off Trends
Net Charge Off Trends $1,100 0.45% 1,58 0.40% 0.5% 0.30% 0.25% 0.20% 0.15% 0.10% 0.05% 0.00% 2000 «2001 «2002 02S OG [Net charge offs —#-As a Percentage of 1% HORIZON ———
Slide 13: FDIC Uniform Bank Performance Report
Source: FDIC Uniform Bank Performance Report
Slide 14: Non Interest Expense
535 $30 $25 $20 515 $10 Non Interest Expense 4.00% 3.80% 3.60% 3.40% 3.20% 3.00% 2.80% 2.60% 2.40% 2.20% 2.00% 2000 2001 2002 2003 2004 2005 2006 ‘|actual Expense Percent of Assets HORIZON ————
Slide 15: alll
$8.0 5 alll 2000 200 2002 2003 2004 2005 2006 HORIZON ————
Slide 16: Stock Price & EPS
Stock Price & EPS §2.50 20 2 2 & §2.00 $150 $1.00 Dec- Dec- Dec- Dec- Dec- Dec- Dec- Dec Dec- Dec- Dec- Dec- Dec- Dec 83 OS 9 98 OF 98 8 O OF O02 O8 OF 05 06 Year-End aBtock Prive (LHS) #-EPS Fully Diluted (RHE) _ HORIZON
Slide 17: Key Strategies for 2007
Key Strategies for 2007 • Increase Fee Income • Improve Management of Net Interest Margin • Add New Revenue Streams • De Novo Branching
Slide 18: Increase Fee Income
Increase Fee Income • Trust Growth – Employee Stock Ownership Plans – Employee Benefits – Core Assets Under Management – Management Change • Deposit Service Charges • Gain on Sale of Mortgage Loans
Slide 19: Improve Net Interest Margin
Improve Net Interest Margin • Third Party Consultant – Vining Sparks • Implement Hedging Strategies • Core Deposit Growth
Slide 20: New Revenue Streams
New Revenue Streams • People First - Location Second • Pursue Opportunities • Wholesale Lending • Indirect Lending – Chicago – Northern Indiana – Southwest Michigan – Sell majority of out of market production
Slide 21: County map of market area
asine Count fatwertn count Fanoana Ceunty otwary count | Lave county naa Count sa County Lane Count le Gout: vont] J Tamnanes county |“ Tongro] ‘ogan Count amy Count) fsbn coun wvan euvn count | yalamazce Count; | csthoun Count can count 4 goreph caunty | anet-count * Ls pork county i * Ht sovspirco
Slide 22: Year to 2007 stock chart
5 Year 42007 260, 260 240, 230 220 210 200) 190 120 170) 160 160 140 Jul Det 03 Apr Jul Cet 04 Apr Jul Get 05 Apr Jul Det 06 Apr Jul Oct 07 Apr INL HBNC fh BANK lm SPX HORIZON ———
Slide 23: Be Horizon: Commitment to Service Quality
Be Horizon Commitment to Service Quality Thomas H. Edwards Executive Vice President
Slide 24: Be Horizon Commitment to Service Quality
Be Horizon Commitment to Service Quality 2000 • Tag-line - Exceptional Service, Sensible Advice • Company Values 2003 • Be Horizon 2004 • Through the Lens of the Customer • Service Philosophy • Service Standards
Slide 25: Be Horizon Commitment to Service Quality
Be Horizon Commitment to Service Quality 2005 • Service Plus Skills 2006 • Sales Plus Skills 2007 • Referral Plus Skills • Sensible Advice
Slide 26: Be Horizon Service Quality Pyramid
Be Horizon Service Quality Pyramid
Slide 27: Be Horizon Service Quality Pyramid
Be Horizon Service Quality Pyramid
Slide 28: Be Horizon Service Quality Pyramid
Be Horizon Service Quality Pyramid
Slide 29: Be Horizon Service Quality Pyramid
Be Horizon Service Quality Pyramid
Slide 30: Be Horizon Service Quality Pyramid
Be Horizon Service Quality Pyramid
Slide 31: Be Horizon Service Quality Pyramid
Be Horizon Service Quality Pyramid
Slide 32: Horizon Bank Customer Service Survey Results and Analysis
HORIZON BANK CUSTOMER SERVICE SURVEY RESULTS AND ANALYSIS JANUARY 11, 2007 Stratus Group Consultants, Inc. Lee A. Gill, J.D., CEO Greg Ladewski, Esq., COO
Slide 33: Are we courteous and friendly?
‘Respanse Response Are we courteous and friendly? “Percent Total ‘Poor - 0% 5 | | ‘CouldBeBetter | 0% 5 | Satisfactory I 2% 34 (Good Hi | 18% 226 (Excellent 1055 (1525 HORIZON ——
Slide 34: Do we greet you promptly?
Do we greet you promptly? Sa eal ‘a | Poor ] 1% 10 Could Be Better | 1% 13 Satisfactory I 5% 19 Good i 19% 296 Excellent | 74% 1126 Total Responses 1524 HORIZON ———
Slide 35: Do we handle your business accurately and efficiently?
Do we handle your business accurately and Response Response efficiently? Percent | Total Poor l 0% 5 Could Be Better | 1% 9 Satisfactory | % 58 Good ee) 19% | 289 Excellent fs 76% | 1163 Total Responses 1524 HORIZON ——
Slide 36: Do we explain our services and products clearly?
Do we explain our services and products Response Response clearly? Percent Total Poor | 0% 7 Could Be Better | 2% 29 Satisfactory | 9% 143 Good || 24% | 362 Excellent fF 65% 985 Total Responses 1526 HORIZON —_——_
Slide 37: Do we offer options to meet your specific needs?
Dowe offer options to meet your specific needs? cmon ry Poor 1% 8 Could Be Better 2% 27 Satisfactory | | 10% 152 Good Hl 26% 392 Excellent 62% 944 Total Responses 1523 HORIZON ——
Slide 38: Do we demonstrate that you are a valued customer?
. Do we demonstrate that you are a valued Response Response customer? Percent Total Poor 1% 15 Could Be Better 2% 29 Satisfactory 7% 113 Good 21% 321 | |__| Excellent | 69% 1045 Total Responses 1523 HORIZON ——
Slide 39: Overall, how would you rate the service you receive?
Overall, how would you rate the service you Response Response receive from Horizon Bank? Percent Total Poor 0% 3 Could Be Better 1% 20 Satisfactory I 4% 59 Good iia 22% = 335 Excellent hy 73% 1104 Total Responses 1521 HORIZON —_——_
Slide 40: Would you recommend us to your family and friends?
Would you recommend us to your family, Response Response friends and business associates? Percent Total Yes Ds sa No | mm 2 Total Responses 1523 HORIZON ———
Slide 41: An independent survey revealed Horizon customers would refer
www.accesshorizon.com An independent survey revealed 9 of 10 Horizon customers would refer Horizon to their friends, family or business associates. We want to say THANK YOU! And, to show our appreciation, each time you make a referral that results In a new checking, it savings or money market accoun
Slide 42: Referral coupon
I'm happy to refer you to Horizon Bank to open your new checking, savings or money market account. Please credit my account $10 when my referral opens their new account. Insemal Ure Only fr new acon opening: Rew eter ma ‘New eco ae ADDRESS: Acco open date Refs acount 8 ease depot me B10 eo my Horton
Slide 43: NASDAQ Traded Company - Symbol HBNC
A NASDAQ Traded Company - Symbol HBNC