MICHIGAN CITY, Ind., July 24, 2019 (GLOBE NEWSWIRE) -- (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”) today announced its unaudited financial results for the three-month and six-month periods ended June 30, 2019. All share data has been adjusted to reflect Horizon’s three-for-two stock split effective June 15, 2018. 

SUMMARY:

• Net income for the quarter ended June 30, 2019 was $16.6 million, or $0.37 diluted earnings per share, compared to $14.1 million, or $0.37 diluted earnings per share, for the quarter ended June 30, 2018. This represents the highest quarterly net income in the Company’s history.
  
  
• Core net income for the quarter ended June 30, 2019 increased 26.0% to $17.6 million, or $0.39 diluted earnings per share, compared to $14.0 million, or $0.37 diluted earnings per share, for the same period in 2018. This represents the highest quarter-to-date core net income and core diluted earnings per share in the Company’s history. (See the “Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share” table on page 4 for a description of the elements of core net income) 
  
  
• Net income for the first six months of 2019 was $27.5 million, or $0.65 diluted earnings per share, compared to $26.9 million, or $0.70 diluted earnings per share for the first six months of 2018. This represents the highest year-to-date net income as of June 30^th in the Company’s history.  
  
  
• Core net income for the first six months of 2019 was $31.8 million, or $0.75 diluted earnings per share, compared to $26.8 million, or $0.70 diluted earnings per share, for the first six months of 2018. This represents the highest year-to-date core net income and core diluted earnings per share as of June 30^th in the Company’s history. (See the “Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share” table on page 4 for a description of the elements of core net income)
  
  
• Net interest margin for the quarter ended June 30, 2019 was 3.73% compared to 3.62% and 3.78% for the quarters ended March 31, 2019 and June 30, 2018, respectively. The increase in net interest margin from the first quarter of 2019 reflects an increase in the yield of interest-earning assets as loans continue to reprice upwards and a decrease in interest-bearing liabilities from reducing short-term borrowings with the liquidity obtained from the Salin acquisition, along with a stabilization in deposit pricing.
  
  
• Core net interest margin for the quarter ended June 30, 2019 was 3.61% compared to 3.46% and 3.60% for the quarters ended March 31, 2019 and June 30, 2018, respectively. (See the “Non-GAAP Reconciliation of Net Interest Margin” table on page 5 for a description of the elements of core net interest margin)
  
  
• Return on average assets was 1.32% for the second quarter of 2019 compared to 1.41% for the second quarter of 2018. Return on average assets was 1.18% for the first six months of 2019 compared to 1.36% for the first six months of 2018.
  
  
• Core return on average assets for the second quarter of 2019 was 1.40% compared to 1.39% for the second quarter of 2018. Core return on average assets was 1.36% for the first six months of 2019 compared to 1.35% for the first six months of 2018. (See the “Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” table on page 10 for the description of core return on average assets) 
  
  
• Return on average equity was 10.73% for the second quarter of 2019 compared to 12.15% for the second quarter of 2018. Return on average equity was 9.82% for the first six months of 2019 compared to 11.72% for the first six months of 2018. 
  
  
• Core return on average equity for the second quarter of 2019 was 11.34% compared to 12.02% for the second quarter of 2018. Core return on average equity was 11.38% for the first six months of 2019 compared to 11.65% for the first six months of 2018. (See the “Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” table on page 10 for the description of core return on average assets) 
  
  
• Horizon’s tangible book value per share increased to $9.91 at June 30, 2019 compared to $9.60 and $8.84 at March 31, 2019 and June 30, 2018, respectively. This represents the highest tangible book value per share in the Company’s history. 
  
  
• Horizon closed three full-service branches on April 19, 2019 and one loan production office on April 26, 2019. Horizon also plans to close one additional full-service branch on September 6, 2019. 
  
  
• Horizon consolidated five full-service branches acquired in the March 2019 acquisition of Salin Bancshares, Inc. and Salin Bank and Trust Company (“Salin”), in coordination with the core data conversion from the acquisition occurring on April 26, 2019. 
  
  
• On June 18, 2019, Horizon’s Board of Directors approved an increase in the Company’s quarterly cash dividend from $0.10 to $0.12 per share, paid on July 19, 2019, to shareholders of record as of July 5, 2019. 
  
  
• On July 16, 2019, Horizon’s Board of Directors authorized a stock repurchase program for up to 2,250,000 shares of Horizon’s issued and outstanding common stock, no par value.

Craig Dwight, Chairman and CEO of Horizon, commented:  “I am pleased to announce Horizon’s record 2019 second quarter and year-to-date core earnings of $17.6 million, or $0.39 per diluted share, and $31.8 million, or $0.75 per diluted share. Core earnings, exclude merger expenses and other non-core items.”

Dwight added, “Horizon’s total assets continued to grow reaching approximately $5.1 billion at June 30, 2019, as a result of the Salin acquisition and organic loan growth since the beginning of the year. We have experienced organic loan growth at an annualized rate of 5.7% during the first six months of 2019. Along with approximately $568.9 million in loans acquired from Salin, loan growth in the markets of Fort Wayne, Grand Rapids, Indianapolis and Kalamazoo totaled $99.7 million as of June 30, 2019.”

Dwight continued, “During the second quarter of 2019, Horizon continued to maximize operational leverage as a result of increased mass and scale. Annualized non-interest expense to average assets, excluding merger expenses, decreased to 2.39% for the second quarter of 2019 compared to 2.41% for the first quarter of 2019 and 2.49% for the second quarter of 2018. Although the anticipated cost savings from the Salin acquisition have not been fully-realized, our team has been able to leverage new technologies and develop operational efficiencies. In our efforts to improve efficiencies, we closed three legacy full-service branches on April 19, 2019 and we consolidated our existing Fort Wayne loan production office with the acquired Salin locations. We also closed five Salin full-service branches which were in close proximity to an existing Horizon office or that did not meet our branch hurdle rates in conjunction with our data conversion on April 26, 2019. We also plan to consolidate our Midland, Michigan full-service branches into one location on September 6, 2019.”

Dwight concluded, “We continue to look for opportunities to provide value for our shareholders. On June 18, 2019, our Board of Directors approved a 20.0% dividend increase from 10 cents to 12 cents per share. This was followed by the Board of Directors authorizing a stock repurchase program of up to 2,250,000 shares of Horizon’s issued and outstanding common stock on July 16, 2019. We believe that at current price levels, Horizon’s shares are an attractive investment and our repurchase program reflects our continuing confidence in Horizon’s financial strength. Given our strong balance sheet, we believe we can implement this program and continue to retain sufficient liquidity and capital to execute business strategies.”

Income Statement Highlights

Net income for the second quarter of 2019 was $16.6 million, or $0.37 diluted earnings per share, compared to $10.8 million, or $0.28 diluted earnings per share, for the first quarter of 2019 and $14.1 million, or $0.37 diluted earnings per share, for the second quarter of 2018. Excluding acquisition-related expenses, gain (loss) on sale of investment securities and death benefit on bank owned life insurance (“core net income”), core net income for the second quarter of 2019 was $17.6 million, or $0.39 diluted earnings per share, compared to $14.2 million, or $0.37 diluted earnings per share, for the first quarter of 2019 and $14.0 million, or $0.37 diluted earnings per share for the second quarter of 2018. 

The increase in net income and diluted earnings per share from the first quarter of 2019 to the second quarter of 2019 reflects increases in net interest income of $7.2 million and non-interest income of $2.2 million, offset by increases in non-interest expense of $1.8 million, income tax expense of $1.2 million and provision for loan losses of $532,000.

The increase in net income from the second quarter of 2018 when compared to the same period of 2019 reflects increases in net interest income of $8.0 million and non-interest income of $2.0 million, offset by increases in non-interest expense of $6.6 million, income tax expense of $515,000 and provision for loan losses of $261,000.

Net income for the six months ended June 30, 2019 was $27.5 million, or $0.65 diluted earnings per share, compared to $26.9 million, or $0.70 diluted earnings per share for the six months ended June 30, 2018. Core net income for the six months ended June 30, 2019 was $31.8 million, or $0.75 diluted earnings per share, compared to $26.8 million, or $0.70 diluted earnings per share, for the six months ended June 30, 2018. This represents a 7.1% increase in core diluted earnings per share for the first six months of 2019 compared to the same period in 2018.

The increase in net income when comparing the first six months of 2019 to the prior year period reflects increases in net interest income of $8.8 million and non-interest income of $2.4 million, offset by an increase in non-interest expense of $10.5 million.

Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share
(Dollars in Thousands, Except per Share Data, Unaudited)
	Three Months Ended												Six Months Ended
	June 30				March 31				June 30				June 30				June 30
		2019				2018				2018				2019				2018
Non-GAAP Reconciliation of Net Income
Net income as reported	$	16,642			$	10,816			$	14,115			$	27,458			$	26,919
Merger expenses		1,532				4,118				-				5,650				-
Tax effect		(295	)			(692	)			-				(987	)			-
Net income excluding merger expenses		17,879				14,242				14,115				32,121				26,919
Loss (gain) on sale of investment securities		100				(15	)			-				85				(11	)
Tax effect		(21	)			3				-				(18	)			2
Net income excluding gain on sale of investment securities		17,958				14,230				14,115				32,188				26,910
Death benefit on bank owned life insurance ("BOLI")		(367	)			-				(154	)			(367	)			(154	)
Net income excluding death benefit on BOLI		17,591				14,230				13,961				31,821				26,756
Core Net Income	$	17,591			$	14,230			$	13,961			$	31,821			$	26,756
Non-GAAP Reconciliation of Diluted Earnings per Share
Diluted earnings per share ("EPS") as reported	$	0.37			$	0.28			$	0.37			$	0.65			$	0.70
Merger expenses		0.03				0.11				-				0.13				-
Tax effect		-				(0.02	)			-				(0.02	)			-
Diluted EPS excluding merger expenses		0.40				0.37				0.37				0.76				0.70
Loss (gain) on sale of investment securities		-				-				-				-				-
Tax effect		-				-				-				-				-
Diluted EPS excluding gain on sale of investment securities		0.40				0.37				0.37				0.76				0.70
Death benefit on BOLI		(0.01	)			-				-				(0.01	)			-
Diluted EPS excluding death benefit on BOLI		0.39				0.37				0.37				0.75				0.70
Core Diluted EPS	$	0.39			$	0.37			$	0.37			$	0.75			$	0.70

Horizon’s net interest margin increased to 3.73% for the second quarter of 2019 when compared to 3.62% for the first quarter of 2019. The increase in net interest margin from the first quarter of 2019 reflects an increase in the yield on interest-earning assets of five basis points as loans continue to reprice upwards. The cost of interest-bearing liabilities decreased by six basis points primarily from reducing short-term borrowings during the second quarter with the liquidity obtained through the Salin acquisition. In addition, we are seeing a stabilization in deposit pricing within the markets we serve.

Net interest margin decreased to 3.73% for the second quarter of 2019 when compared to 3.78% for the second quarter of 2018. The decrease in net interest margin was due to an increase in the cost of interest-bearing liabilities of 40 basis points, offset by an increase in the yield on interest-earning assets of 24 basis points. The cost of interest-bearing deposits, borrowings and subordinated debentures increased by 50, 32 and 15 basis points, respectively. The increase in the yield of interest-earning assets was due to increases in the yields on loans receivable of 21 basis points, taxable investment securities of 22 basis points and non-taxable investment securities of 29 basis points.

Net interest margin decreased to 3.68% during the first six months of 2019 when compared to 3.81% for the first six months of 2018. This decrease reflects an increase in the cost of interest-bearing liabilities of 49 basis points, offset by an increase in the yield of interest-earning assets of 24 basis points. The increase in the cost of interest-bearing liabilities was due to an increase in the cost of interest-bearing deposits of 55 basis points and borrowings of 45 basis points. The increase in the yield of interest-earning assets was due to increases in the yields on loans receivable of 23 basis points, taxable investment securities of 25 basis points and non-taxable investment securities of 30 basis points.

Net interest margin, excluding acquisition-related purchase accounting adjustments (“core net interest margin”), was 3.61% for the second quarter of 2019 compared to 3.46% for the prior quarter and 3.60% for the second quarter of 2018. Interest income from acquisition-related purchase accounting adjustments was $1.3 million, $1.5 million and $1.6 million for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively. The increase in the core net interest margin during the second quarter of 2019 was due to the pay-down of short-term borrowings with the liquidity obtained through the acquisition of Salin and an increase in the yield on earning assets from higher mortgage warehouse lending balances, loans continuing to reprice higher and the addition of acquired Salin loans.

Non-GAAP Reconciliation of Net Interest Margin
(Dollars in Thousands, Unaudited)
	Three Months Ended												Six Months Ended
	June 30				March 31				June 30				June 30				June 30
		2019				2018				2018				2019				2018
Non-GAAP Reconciliation of Net Interest Margin
Net interest income as reported	$	41,529			$	34,280			$	33,550			$	75,809			$	66,961
Average interest-earning assets		4,566,674				3,929,296				3,638,801				4,249,644				3,600,676
Net interest income as a percentage of average interest-earning assets   ("Net Interest Margin")		3.73%				3.62%				3.78%				3.68%				3.81%
Acquisition-related purchase accounting adjustments ("PAUs")	$	(1,299	)		$	(1,510	)		$	(1,634	)		$	(2,809	)		$	(3,671	)
Core net interest income	$	40,230			$	32,770			$	31,916			$	73,000			$	63,290
Core net interest margin		3.61%				3.46%				3.60%				3.55%				3.61%

Lending Activity

Total loans increased $653.5 million from $3.014 billion as of December 31, 2018 to $3.668 billion as of June 30, 2019. Excluding acquired loans, total loans increased $84.6 million during the first six months of 2019 as residential mortgage loans increased by $14.9 million, consumer loans increased by $20.0 million and mortgage warehouse loans increased by $59.3 million, offset by a decrease in commercial loans of $11.8 million.

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)
	June 30			December 31			Amount			Acquired				Amount				Percent
		2019			2018		Change			Loans				Change				Change
Commercial	$	2,062,623		$	1,721,590		$	341,033		$	(352,798	)		$	(11,765	)		-0.7%
Residential mortgage		814,065			668,141			145,924			(131,008	)			14,916			2.2%
Consumer		654,552			549,481			105,071			(85,112	)			19,959			3.6%
Subtotal		3,531,240			2,939,212			592,028			(568,918	)			23,110			0.8%
Held for sale loans		3,185			1,038			2,147			-				2,147			206.8%
Mortgage warehouse loans		133,428			74,120			59,308			-				59,308			80.0%
Total loans	$	3,667,853		$	3,014,370		$	653,483		$	(568,918	)		$	84,565			2.8%

Total loans increased $44.8 million from $3.623 billion as of March 31, 2019 to $3.668 billion as of June 30, 2019. During the second quarter of 2019, consumer loans increased by $14.8 million and mortgage warehouse loans increased $61.5 million, offset by a decrease in commercial loans of $27.0 million and a decrease in residential mortgage loans of $5.8 million.

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)
	June 30			March 31			Amount				Acquired			Amount				Percent
		2019			2018		Change				Loans			Change				Change
Commercial	$	2,062,623		$	2,089,579		$	(26,956	)		$	-		$	(26,956	)		-1.3%
Residential mortgage		814,065			819,824			(5,759	)			-			(5,759	)		-0.7%
Consumer		654,552			639,710			14,842				-			14,842			2.3%
Subtotal		3,531,240			3,549,113			(17,873	)			-			(17,873	)		-0.5%
Held for sale loans		3,185			1,979			1,206				-			1,206			60.9%
Mortgage warehouse loans		133,428			71,944			61,484				-			61,484			85.5%
Total loans	$	3,667,853		$	3,623,036		$	44,817			$	-		$	44,817			1.2%

During the first six months of 2019, the Bank originated approximately $206.0 million of commercial loans; however, only 54.4%, or $112.1 million, of these loan originations had been funded as of June 30, 2019. These originations were offset by commercial loan payoffs totaling approximately $157.8 million during the first six months of 2019, as there was an increase in clients moving projects that had reached stabilization into the long-term, fixed rate conduit financing market.

Residential mortgage lending activity for the three months ended June 30, 2019 generated $2.1 million in income from the gain on sale of mortgage loans, an increase of $769,000 from the first quarter of 2019 and $182,000 from the second quarter of 2018. Total origination volume for the second quarter of 2019, including loans placed into portfolio, totaled $111.4 million, representing an increase of 78.1% from the first quarter of 2019 and an increase of 2.1% from the second quarter of 2018. Total origination volume for the second quarter of 2019 of loans sold to the secondary market totaled $60.6 million, representing an increase of 99.3% from the first quarter of 2019 and an increase of 18.8% from the second quarter of 2018.

Revenue derived from Horizon’s residential mortgage and warehouse lending activities was 5.6% of Horizon’s total revenue for the second quarter of 2019. 

The provision for loan losses totaled $896,000 for the second quarter of 2019 compared to $364,000 for the first quarter of 2019 and $635,000 for the second quarter of 2018. The increase in the provision for loan losses from the first quarter of 2019 and the second quarter of 2018 when compared to the second quarter of 2019 was primarily due to a specific reserve placed on a single credit.

The provision for loan losses totaled $1.3 million for the first six months of 2019 compared to $1.2 million for the first six months of 2018. The increase in provision for loan losses from 2018 was primarily due to organic loan growth experienced from June 30, 2018 until June 30, 2019.

The ratio of the allowance for loan losses to total loans decreased to 0.50% as of June 30, 2019 from 0.59% at December 31, 2018. The decrease in the ratio of the allowance for loan losses to total loans is primarily due to increased loan balances from the Salin acquisition. The ratio of the allowance for loan losses to total loans, excluding loans with credit-related purchase accounting adjustments, was 0.68% as of June 30, 2019 compared to 0.72% as of December 31, 2018. Loan loss reserves plus credit-related loan discounts on acquired loans as a percentage of total loans was 1.14% as of June 30, 2019 compared to 0.98% as of December 31, 2018.

Non-GAAP Allowance for Loan and Lease Loss Detail
As of June 30, 2019
(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	$	2,677,923		$	18,091		N/A			$	18,091		$	2,659,832		0.68%		0.00%		0.68%
Heartland		6,044			-			621			621			5,423		0.00%		10.27%		10.27%
Summit		17,194			-			1,003			1,003			16,191		0.00%		5.83%		5.83%
Peoples		75,918			-			1,732			1,732			74,186		0.00%		2.28%		2.28%
Kosciusko		34,056			195			567			762			33,294		0.57%		1.66%		2.24%
LaPorte		73,228			-			2,651			2,651			70,577		0.00%		3.62%		3.62%
CNB		3,701			-			94			94			3,607		0.00%		2.54%		2.54%
Lafayette		71,707			19			652			671			71,036		0.03%		0.91%		0.94%
Wolverine		161,066			-			2,120			2,120			158,946		0.00%		1.32%		1.32%
Salin		547,016			-			14,230			14,230			532,786		0.00%		2.60%		2.60%
Total	$	3,667,853		$	18,305		$	23,670		$	41,975		$	3,625,878		0.50%		0.65%		1.14%

As of June 30, 2019, non-performing loans totaled $18.9 million, which reflects a two basis point increase in non-performing loans to total loans, or a $3.8 million increase from $15.2 million in non-performing loans as of December 31, 2018. Compared to December 31, 2018, non-performing commercial loans increased by $1.8 million, non-performing real estate loans increased by $1.4 million and non-performing consumer loans increased by $523,000. Other real estate owned and repossessed assets totaled $3.9 million as of June 30, 2019 which is an increase of $1.8 million from December 31, 2018. The majority of this increase was due to other real estate owned properties acquired in the Salin transaction, including the closed branches, totaling $1.7 million. 

Expense Management

Total non-interest expense was $1.8 million higher in the second quarter of 2019 when compared to the first quarter of 2019. Salaries and employee benefits, net occupancy expenses, other expense and FDIC insurance expense increased by $2.5 million, $376,000, $213,000 and $205,000, respectively. Offsetting these increases was a decrease in outside services and consultants expense of $1.9 million. Excluding merger expenses, total non-interest expense increased by $4.4 million during the second quarter of 2019 when compared to the first quarter of 2019.

	Three Months Ended
	June 30												March 31
		2019												2019											Adjusted
Non-interest Expense	Actual				Merger Expenses				Adjusted				Actual				Merger Expenses				Adjusted				Amount Change				Percent Change
Salaries and employee benefits	$	16,951			$	(482	)		$	16,469			$	14,466			$	(2	)		$	14,464			$	2,005			13.9%
Net occupancy expenses		3,148				(75	)			3,073				2,772				-				2,772				301			10.9%
Data processing		2,139				(68	)			2,071				1,966				(292	)			1,674				397			23.7%
Professional fees		598				(153	)			445				493				(239	)			254				191			75.2%
Outside services and consultants		1,655				(176	)			1,479				3,530				(2,290	)			1,240				239			19.3%
Loan expense		2,048				(2	)			2,046				1,949				-				1,949				97			5.0%
FDIC deposit insurance		365				-				365				160				-				160				205			128.1%
Other losses		169				(69	)			100				104				(2	)			102				(2	)		-2.0%
Other expenses		4,511				(507	)			4,004				4,298				(1,293	)			3,005				999			33.2%
Total non-interest expense	$	31,584			$	(1,532	)		$	30,052			$	29,738			$	(4,118	)		$	25,620			$	4,432			17.3%
Annualized Non-interest Exp. to Avg. Assets		2.51%								2.39%				2.80%								2.41%

Total non-interest expense was $6.6 million higher during the second quarter of 2019 compared to the same period of 2018. Salaries and employee benefits, other expense, net occupancy expense, data processing and loan expense increased $3.1 million, $1.3 million, $628,000, $532,000 and $523,000, respectively. Excluding merger expenses, total non-interest expense increased $5.1 million during the second quarter of 2019 when compared to the second quarter of 2018.

	Three Months Ended
	June 30												June 30
		2019												2018										Adjusted
Non-interest Expense	Actual				Merger Expenses				Adjusted				Actual				Merger Expenses			Adjusted				Amount Change				Percent Change
Salaries and employee benefits	$	16,951			$	(482	)		$	16,469			$	13,809			$	-		$	13,809			$	2,660			19.3%
Net occupancy expenses		3,148				(75	)			3,073				2,520				-			2,520				553			21.9%
Data processing		2,139				(68	)			2,071				1,607				-			1,607				464			28.9%
Professional fees		598				(153	)			445				376				-			376				69			18.4%
Outside services and consultants		1,655				(176	)			1,479				1,267				-			1,267				212			16.7%
Loan expense		2,048				(2	)			2,046				1,525				-			1,525				521			34.2%
FDIC deposit insurance		365				-				365				345				-			345				20			5.8%
Other losses		169				(69	)			100				269				-			269				(169	)		-62.8%
Other expenses		4,511				(507	)			4,004				3,224				-			3,224				780			24.2%
Total non-interest expense	$	31,584			$	(1,532	)		$	30,052			$	24,942			$	-		$	24,942			$	5,110			20.5%
Annualized Non-interest Exp. to Avg. Assets		2.51%								2.39%				2.49%							2.49%

Total non-interest expense was $10.5 million higher during the first six months of 2019 when compared to the first six months of 2018. Salaries and employee benefits, outside services and consultants expense, other expense, loan expense and data processing increased $3.2 million, $2.7 million, $2.3 million, $1.2 million and $802,000, respectively. Excluding merger expenses, total non-interest expense increased $4.9 million during the first six months of 2019 when compared to the same period of 2018.

	Six Months Ended
	June 30												June 30
		2019												2018										Adjusted
Non-interest Expense	Actual				Merger Expenses				Adjusted				Actual				Merger Expenses			Adjusted				Amount Change				Percent Change
Salaries and employee benefits	$	31,417			$	(484	)		$	30,933			$	28,182			$	-		$	28,182			$	2,751			9.8%
Net occupancy expenses		5,920				(75	)			5,845				5,486				-			5,486				359			6.5%
Data processing		4,105				(360	)			3,745				3,303				-			3,303				442			13.4%
Professional fees		1,091				(392	)			699				877				-			877				(178	)		-20.3%
Outside services and consultants		5,185				(2,466	)			2,719				2,531				-			2,531				188			7.4%
Loan expense		3,997				(2	)			3,995				2,782				-			2,782				1,213			43.6%
FDIC deposit insurance		525				-				525				655				-			655				(130	)		-19.8%
Other losses		273				(71	)			202				415				-			415				(213	)		-51.3%
Other expenses		8,809				(1,800	)			7,009				6,548				-			6,548				461			7.0%
Total non-interest expense	$	61,322			$	(5,650	)		$	55,672			$	50,779			$	-		$	50,779			$	4,893			9.6%
Annualized Non-interest Exp. to Avg. Assets		2.64%								2.40%				2.57%							2.57%

Annualized non-interest expense as a percent of average assets were 2.51%, 2.80% and 2.49% for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively. Annualized non-interest expense, excluding merger expenses, as a percent of average assets continue to decline and were 2.39%, 2.41% and 2.49% for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively.

Annualized non-interest expense as a percent of average assets were 2.64% and 2.57% for the first six months of 2019 and 2018, respectively. Annualized non-interest expense, excluding merger expenses, as a percent of average assets were 2.40% and 2.57% for the first six months of 2019 and 2018, respectively. Horizon’s strategy to build mass and scale continues to prove effective.

Income tax expense totaled $3.3 million for the second quarter of 2019, an increase of $1.2 million when compared to the first quarter of 2019 and an increase of $515,000 when compared to the second quarter of 2018. The increase in income tax expense from the first quarter of 2019 and the second quarter of 2018 was primarily due to increases in income before income taxes of $7.1 million and $3.0 million, respectively, when compared to the second quarter of 2019.

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, 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)
	June 30			March 31			December 31			September 30			June 30
		2019			2019			2018			2018			2018
Total stockholders' equity	$	626,461		$	609,468		$	491,992		$	477,594		$	470,535
Less: Intangible assets		179,776			176,864			130,270			130,755			131,239
Total tangible stockholders' equity	$	446,685		$	432,604		$	361,722		$	346,839		$	339,296
Common shares outstanding		45,061,372			45,052,747			38,375,407			38,367,890			38,362,640
Tangible book value per common share	$	9.91		$	9.60		$	9.43		$	9.04		$	8.84

 

Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity
(Dollars in Thousands, Unaudited)
	Three Months Ended												Six Months Ended
	June 30				March 31				June 30				June 30				June 30
		2019				2019				2018				2019				2018
Non-GAAP Reconciliation of Return on Average Assets
Average Assets	$	5,047,365			$	4,307,189			$	4,017,551			$	4,679,423			$	3,980,864
Return on average assets ("ROAA") as reported		1.32%				1.02%				1.41%				1.18%				1.36%
Merger expenses		0.12%				0.39%				0.00%				0.24%				0.00%
Tax effect		-0.02%				-0.07%				0.00%				-0.04%				0.00%
ROAA excluding merger expenses		1.42%				1.34%				1.41%				1.38%				1.36%
Loss (gain) on sale of investment securities		0.01%				0.00%				0.00%				0.00%				0.00%
Tax effect		0.00%				0.00%				0.00%				0.00%				0.00%
ROAA excluding gain on sale of investment securities		1.43%				1.34%				1.41%				1.38%				1.36%
Death benefit on bank owned life insurance ("BOLI")		-0.03%				0.00%				-0.02%				-0.02%				-0.01%
ROAA excluding death benefit on BOLI		1.40%				1.34%				1.39%				1.36%				1.35%
Core ROAA		1.40%				1.34%				1.39%				1.36%				1.35%
Non-GAAP Reconciliation of Return on Average Common Equity
Average Common Equity	$	622,028			$	506,449			$	465,968			$	563,862			$	463,156
Return on average common equity ("ROACE") as reported		10.73%				8.66%				12.15%				9.82%				11.72%
Merger expenses		0.99%				3.30%				0.00%				2.02%				0.00%
Tax effect		-0.19%				-0.55%				0.00%				-0.35%				0.00%
ROACE excluding merger expenses		11.53%				11.41%				12.15%				11.49%				11.72%
Loss (gain) on sale of investment securities		0.06%				-0.01%				0.00%				0.03%				0.00%
Tax effect		-0.01%				0.00%				0.00%				-0.01%				0.00%
ROACE excluding gain on sale of investment securities		11.58%				11.40%				12.15%				11.51%				11.72%
Death benefit on bank owned life insurance ("BOLI")		-0.24%				0.00%				-0.13%				-0.13%				-0.07%
ROAA excluding death benefit on BOLI		11.34%				11.40%				12.02%				11.38%				11.65%
Core ROACE		11.34%				11.40%				12.02%				11.38%				11.65%

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:
Mark E. Secor
Chief Financial Officer
Phone: (219) 873-2611
Fax: (219) 874-9280

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

	June 30				March 31				December 31				September 30				June 30
		2019				2019				2018				2018				2018
Balance sheet:
Total assets	$	5,098,682			$	5,051,639			$	4,246,688			$	4,150,561			$	4,076,611
Investment securities		887,187				893,469				810,460				766,153				735,962
Commercial loans		2,062,623				2,089,579				1,721,590				1,698,582				1,672,998
Mortgage warehouse loans		133,428				71,944				74,120				71,422				109,016
Residential mortgage loans		814,065				819,824				668,141				651,250				634,636
Consumer loans		654,552				639,710				549,481				536,132				507,866
Earnings assets		4,577,487				4,538,952				3,842,903				3,743,592				3,681,583
Non-interest bearing deposit accounts		810,350				811,768				642,129				621,475				615,018
Interest bearing transaction accounts		2,153,189				2,115,847				1,684,336				1,605,825				1,644,758
Time deposits		967,236				960,408				812,911				901,254				756,387
Borrowings		436,233				457,788				550,384				477,719				524,846
Subordinated debentures		56,194				55,310				37,837				37,791				37,745
Total stockholders' equity		626,461				609,468				491,992				477,594				470,535
	Three months ended
Income statement:
Net interest income	$	41,529			$	34,280			$	33,836			$	33,772			$	33,550
Provision for loan losses		896				364				528				1,176				635
Non-interest income		10,898				8,712				8,477				8,686				8,932
Non-interest expenses		31,584				29,738				26,117				25,620				24,942
Income tax expense		3,305				2,074				2,535				2,597				2,790
Net income	$	16,642			$	10,816			$	13,133			$	13,065			$	14,115
Per share data:(1)
Basic earnings per share	$	0.37			$	0.28			$	0.34			$	0.34			$	0.37
Diluted earnings per share		0.37				0.28				0.34				0.34				0.37
Cash dividends declared per common share		0.12				0.10				0.10				0.10				0.10
Book value per common share		13.90				13.53				12.82				12.45				12.27
Tangible book value per common share		9.91				9.60				9.43				9.04				8.84
Market value - high		17.13				17.82				19.40				21.39				21.94
Market value - low	$	15.51			$	15.50			$	14.94			$	19.44			$	19.17
Weighted average shares outstanding - Basic		45,055,117				38,822,543				38,367,972				38,365,379				38,347,612
Weighted average shares outstanding - Diluted		45,130,408				38,906,172				38,488,002				38,534,970				38,519,401
Key ratios:
Return on average assets		1.32%				1.02%				1.25%				1.26%				1.41%
Return on average common stockholders' equity		10.73				8.66				10.73				10.87				12.15
Net interest margin		3.73				3.62				3.60				3.67				3.78
Loan loss reserve to total loans		0.50				0.49				0.59				0.60				0.58
Average equity to average assets		12.32				11.76				11.62				11.62				11.60
Bank only capital ratios:
Tier 1 capital to average assets		9.78				10.99				9.38				9.53				9.65
Tier 1 capital to risk weighted assets		12.22				11.84				11.91				12.09				12.21
Total capital to risk weighted assets		12.69				12.30				12.47				12.66				12.77
Loan data:
Substandard loans	$	47,764			$	41,728			$	38,775			$	34,655			$	40,941
30 to 89 days delinquent		9,633				9,980				7,161				6,878				3,978
90 days and greater delinquent - accruing interest	$	391			$	192			$	568			$	202			$	49
Trouble debt restructures - accruing interest		2,198				2,532				2,002				1,830				1,911
Trouble debt restructures - non-accrual		1,576				1,349				1,057				1,077				894
Non-accrual loans		14,764				15,313				11,548				11,417				12,555
Total non-performing loans	$	18,929			$	19,386			$	15,175			$	14,526			$	15,409
Non-performing loans to total loans		0.52%				0.54%				0.50%				0.49%				0.53%
(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)

	June 30				June 30
		2019				2018
Balance sheet:
Total assets	$	5,098,682			$	4,076,611
Investment securities		887,187				735,962
Commercial loans		2,062,623				1,672,998
Mortgage warehouse loans		133,428				109,016
Residential mortgage loans		814,065				634,636
Consumer loans		654,552				507,866
Earnings assets		4,577,487				3,681,583
Non-interest bearing deposit accounts		810,350				615,018
Interest bearing transaction accounts		2,153,189				1,644,758
Time deposits		967,236				756,387
Borrowings		436,233				524,846
Subordinated debentures		56,194				37,745
Total stockholders' equity		626,461				470,535
	Six months ended
Income statement:
Net interest income	$	75,809			$	66,961
Provision for loan losses		1,260				1,202
Non-interest income		19,610				17,250
Non-interest expenses		61,322				50,779
Income tax expense		5,379				5,311
Net income	$	27,458			$	26,919
Per share data:(1)
Basic earnings per share	$	0.65			$	0.70
Diluted earnings per share		0.65				0.70
Cash dividends declared per common share		0.22				0.20
Book value per common share		13.90				12.27
Tangible book value per common share		9.91				8.84
Market value - high		17.82				21.94
Market value - low	$	15.50			$	17.87
Weighted average shares outstanding - Basic		41,956,047				38,327,118
Weighted average shares outstanding - Diluted		42,054,352				38,484,321
Key ratios:
Return on average assets		1.18%				1.36%
Return on average common stockholders' equity		9.82				11.72
Net interest margin		3.68				3.81
Loan loss reserve to total loans		0.50				0.58
Average equity to average assets		12.05				11.63
Bank only capital ratios:
Tier 1 capital to average assets		9.78				9.65
Tier 1 capital to risk weighted assets		12.22				12.21
Total capital to risk weighted assets		12.69				12.77
Loan data:
Substandard loans	$	47,764			$	40,941
30 to 89 days delinquent		9,633				3,978
90 days and greater delinquent - accruing interest	$	391			$	49
Trouble debt restructures - accruing interest		2,198				1,911
Trouble debt restructures - non-accrual		1,576				894
Non-accrual loans		14,764				12,555
Total non-performing loans	$	18,929			$	15,409
Non-performing loans to total loans		0.52%				0.53%
(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)
	June 30				March 31				December 31				September 30				June 30
		2019				2019				2018				2018				2018
Commercial	$	11,881			$	11,556			$	10,495			$	10,581			$	8,865
Real estate		1,732				1,588				1,676				1,574				1,761
Mortgage warehousing		1,040				1,014				1,006				1,030				1,084
Consumer		3,652				3,663				4,643				4,613				5,361
Total	$	18,305			$	17,821			$	17,820			$	17,798			$	17,071
Net Charge-Offs (Recoveries)
(Dollars in Thousands, Unaudited)
	Three Months Ended
	June 30				March 31				December 31				September 30				June 30
		2019				2019				2018				2018				2018
Commercial	$	265			$	61			$	196			$	179			$	(40	)
Real estate		41				(27	)			47				(2	)			(2	)
Mortgage warehousing		-				-				-				-				-
Consumer		106				329				263				272				80
Total	$	412			$	363			$	506			$	449			$	38
Percent of net charge-offs to average   loans outstanding for the period		0.01%				0.01%				0.02%				0.02%				0.00%
Total Non-performing Loans
(Dollars in Thousands, Unaudited)
	June 30				March 31				December 31				September 30				June 30
		2019				2019				2018				2018				2018
Commercial	$	8,697			$	9,750			$	6,903			$	8,355			$	8,987
Real estate		6,444				5,995				5,007				3,754				3,915
Mortgage warehousing		-				-				-				-				-
Consumer		3,788				3,641				3,265				2,417				2,507
Total	$	18,929			$	19,386			$	15,175			$	14,526			$	15,409
Non-performing loans to total loans		0.52%				0.54%				0.55%				0.49%				0.53%
Other Real Estate Owned and Repossessed Assets
(Dollars in Thousands, Unaudited)
	June 30				March 31				December 31				September 30				June 30
		2019				2019				2018				2018				2018
Commercial	$	3,694			$	3,496			$	1,967			$	2,181			$	2,628
Real estate		113				126				60				58				302
Mortgage warehousing		-				-				-				-				-
Consumer		48				30				48				26				62
Total	$	3,855			$	3,652			$	2,075			$	2,265			$	2,992

HORIZON BANCORP, INC.
Average Balance Sheets
(Dollar Amounts in Thousands, Unaudited)

		Three Months Ended										Three Months Ended
		June 30, 2019										June 30, 2018
		Average Balance				Interest			Average Rate			Average Balance				Interest			Average Rate
	Assets
	Interest-earning assets
	Federal funds sold	$	18,251			$	120		2.64%			$	3,367			$	15		1.79%
	Interest-earning deposits		18,516				83		1.80%				25,946				107		1.65%
	Investment securities - taxable		480,036				3,070		2.57%				416,182				2,441		2.35%
	Investment securities - non-taxable(1)		411,944				2,793		3.44%				307,219				1,870		3.15%
	Loans receivable(2)(3)		3,637,927				47,784		5.29%				2,886,087				36,308		5.08%
	Total interest-earning assets(1)		4,566,674				53,850		4.81%				3,638,801				40,741		4.57%
	Non-interest-earning assets
	Cash and due from banks		67,537										44,213
	Allowance for loan losses		(18,036	)									(16,617	)
	Other assets		431,190										351,154
	Total average assets	$	5,047,365									$	4,017,551
	Liabilities and Stockholders' Equity
	Interest-bearing liabilities
	Interest-bearing deposits	$	3,118,821			$	8,938		1.15%			$	2,403,780			$	3,920		0.65%
	Borrowings		398,320				2,495		2.51%				489,608				2,679		2.19%
	Subordinated debentures		53,572				888		6.65%				36,525				592		6.50%
	Total interest-bearing liabilities		3,570,713				12,321		1.38%				2,929,913				7,191		0.98%
	Non-interest-bearing liabilities
	Demand deposits		818,872										605,188
	Accrued interest payable and other liabilities		35,752										16,482
	Stockholders' equity		622,028										465,968
	Total average liabilities and stockholders' equity	$	5,047,365									$	4,017,551
	Net interest income/spread					$	41,529		3.42%							$	33,550		3.59%
	Net interest income as a percentage of average   interest-earning assets(1)								3.73%										3.78%
(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)

		Six Months Ended										Six Months Ended
		June 30, 2019										June 30, 2018
		Average Balance				Interest			Average Rate			Average Balance				Interest			Average Rate
	Assets
	Interest-earning assets
	Federal funds sold	$	13,072			$	224		3.46%			$	3,560			$	29		1.64%
	Interest-earning deposits		22,414				191		1.72%				24,749				197		1.61%
	Investment securities - taxable		464,544				5,980		2.60%				409,669				4,767		2.35%
	Investment securities - non-taxable(1)		402,883				5,421		3.43%				307,462				3,735		3.13%
	Loans receivable(2)(3)		3,346,731				87,407		5.28%				2,855,236				71,439		5.05%
	Total interest-earning assets(1)		4,249,644				99,223		4.79%				3,600,676				80,167		4.55%
	Non-interest-earning assets
	Cash and due from banks		56,160										43,984
	Allowance for loan losses		(17,939	)									(16,480	)
	Other assets		391,558										352,684
	Total average assets	$	4,679,423									$	3,980,864
	Liabilities and Stockholders' Equity
	Interest-bearing liabilities
	Interest-bearing deposits	$	2,818,496			$	15,814		1.13%			$	2,354,578			$	6,791		0.58%
	Borrowings		487,266				6,116		2.53%				508,731				5,251		2.08%
	Subordinated debentures		45,735				1,484		6.54%				37,695				1,164		6.23%
	Total interest-bearing liabilities		3,351,497				23,414		1.41%				2,901,004				13,206		0.92%
	Non-interest-bearing liabilities
	Demand deposits		731,556										600,214
	Accrued interest payable and other liabilities		32,508										16,490
	Stockholders' equity		563,862										463,156
	Total average liabilities and stockholders' equity	$	4,679,423									$	3,980,864
	Net interest income/spread					$	75,809		3.38%							$	66,961		3.64%
	Net interest income as a percentage of average   interest-earning assets(1)								3.68%										3.81%
(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)

	June 30			December 31
		2019			2018
	(Unaudited)
Assets
Cash and due from banks	$	94,686		$	58,492
Interest-earning time deposits		8,090			15,744
Investment securities, available for sale		673,419			600,348
Investment securities, held to maturity (fair value of $219,891 and $208,273)		213,768			210,112
Loans held for sale		3,185			1,038
Loans, net of allowance for loan losses of $18,305 and $17,820		3,646,363			2,995,512
Premises and equipment, net		91,469			74,331
Federal Home Loan Bank stock		22,447			18,073
Goodwill		151,111			119,880
Other intangible assets		28,665			10,390
Interest receivable		19,015			14,239
Cash value of life insurance		94,613			88,062
Other assets		51,851			40,467
Total assets	$	5,098,682		$	4,246,688
Liabilities
Deposits
Non-interest bearing	$	810,350		$	642,129
Interest bearing		3,120,425			2,497,247
Total deposits		3,930,775			3,139,376
Borrowings		436,233			550,384
Subordinated debentures		56,194			37,837
Interest payable		3,005			2,031
Other liabilities		46,014			25,068
Total liabilities		4,472,221			3,754,696
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 45,086,441 and 38,400,476 shares (1), Outstanding 45,061,372 and 38,375,407 shares (1)		-			-
Additional paid-in capital		380,735			276,101
Retained earnings		241,519			224,035
Accumulated other comprehensive income (loss)		4,207			(8,144	)
Total stockholders' equity		626,461			491,992
Total liabilities and stockholders' equity	$	5,098,682		$	4,246,688
(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							Six Months Ended
	June 30							June 30
		2019				2018			2019				2018
Interest Income
Loans receivable	$	47,784			$	36,308		$	87,407			$	71,439
Investment securities
Taxable		3,273				2,563			6,395				4,993
Tax exempt		2,793				1,870			5,421				3,735
Total interest income		53,850				40,741			99,223				80,167
Interest Expense
Deposits		8,938				3,920			15,814				6,791
Borrowed funds		2,495				2,679			6,116				5,251
Subordinated debentures		888				592			1,484				1,164
Total interest expense		12,321				7,191			23,414				13,206
Net Interest Income		41,529				33,550			75,809				66,961
Provision for loan losses		896				635			1,260				1,202
Net Interest Income after Provision for Loan Losses		40,633				32,915			74,549				65,759
Non-interest Income
Service charges on deposit accounts		2,480				1,907			4,357				3,795
Wire transfer fees		167				180			285				330
Interchange fees		2,160				1,555			3,521				2,883
Fiduciary activities		2,063				1,818			4,152				3,743
Gains (losses) on sale of investment securities (includes $(100) and $0
for the three months ended June 30, 2019 and 2018, respectively, and $(85) and $11 for the six months ended June 30, 2019 and six months ended June 30, 2018 related to accumulated other comprehensive earnings reclassifications)		(100	)			-			(85	)			11
Gain on sale of mortgage loans		2,078				1,896			3,387				3,319
Mortgage servicing income net of impairment		570				511			1,176				860
Increase in cash value of bank owned life insurance		555				442			1,068				877
Death benefit on bank owned life insurance		367				154			367				154
Other income		558				469			1,382				1,278
Total non-interest income		10,898				8,932			19,610				17,250
Non-interest Expense
Salaries and employee benefits		16,951				13,809			31,417				28,182
Net occupancy expenses		3,148				2,520			5,920				5,486
Data processing		2,139				1,607			4,105				3,303
Professional fees		598				376			1,091				877
Outside services and consultants		1,655				1,267			5,185				2,531
Loan expense		2,048				1,525			3,997				2,782
FDIC insurance expense		365				345			525				655
Other losses		169				269			273				415
Other expense		4,511				3,224			8,809				6,548
Total non-interest expense		31,584				24,942			61,322				50,779
Income Before Income Taxes		19,947				16,905			32,837				32,230
Income tax expense (includes $(21) and $0 for the three months ended
June 30, 2019 and 2018, respectively, and $(18) and $2 for the six months ended June 30, 2019 and six months ended June 30, 2018 related to income tax expense (benefit) from reclassification items)		3,305				2,790			5,379				5,311
Net Income	$	16,642			$	14,115		$	27,458			$	26,919
Basic Earnings Per Share (1)	$	0.37			$	0.37		$	0.65			$	0.70
Diluted Earnings Per Share (1)		0.37				0.37			0.65				0.70
(1) Adjusted for 3:2 stock split on June 15, 2018

 

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