Horizon Bancorp, Inc. Releases 4th Quarter 2021 Financial Highlights, Including Net Earnings of $5,665,499 and Earnings Per Share of $1.36 Over the Past 12 Months

Horizon Bancorp, Inc. (OTC Pink: HRRB), the holding company for Horizon Community Bank, announced net income for the quarter ended December 31, 2021 of $1,341,000 or $0.32 per share, down 15.66% from third quarter 2021 earnings, and up 17.73% over earnings for the quarter ended December 31, 2020. Net income for the 12 months ended December 31, 2021 totaled $5,665,499 compared to net income for the 12 months ended December 31, 2020 of $3,770,366, an increase of 50.26%. Earnings per share for the 12 months ended December 31, 2021 were $1.36, as compared to $0.91 the prior year, an increase of 49.45%.

December 31, 2021 highlights include:

• 12-month net income growth of 50.26%
• Book value per share of $9.06, a 10.89% increase over prior year-end
• Loan portfolio contraction of 11.4% year-over-year inclusive of Paycheck Protection Program (PPP) loans, and contraction of 0.12% without PPP activity influence
• Improved asset quality with non-performing assets ratio reduction to 0.10%
• Average quarterly cost of funds reduced to 0.08% at the bank level
• Non-interest demand deposit representing 35% of total deposits

Ralph Tapscott, President and CEO stated, “Overall we are pleased with the quarterly and annual earnings performance. Earnings are strong, asset quality is favorable and trending in the right direction, and our cost of funds is well managed. The challenge we faced over the last six months has been net loan production and the ability to grow our loan portfolio. Despite annual loan production of $175.3 million, the overall portfolio experienced contraction. Some of the identified components of the contraction are - $32.9 million related to forgiven and paid PPP loans, approximately $27.5 million in unfunded construction commitments, and prepayments of loans were approximately $75.0 million. An additional factor was related to loan participations sold, for both overline situations and the SBA secondary market. We have also implemented a strategic initiative to slow deposit growth until these liabilities can be effectively deployed in our loan portfolio.”

Tapscott added, “We are pleased with our generation of non-interest income, and this is largely generated through service charges, treasury management, our SBA department, and our mortgage department. Looking into 2022, we are in-process of renegotiating several major contracts, that we believe will meaningfully reduce non-interest expense. The Arizona economies have performed well throughout the pandemic, but we are now seeing supply chain and personnel related issues. Our allowance for loan and lease loss is more than ample, given our analysis, and this has not required any significant funding this past year.”

The bank’s strong PPP production performance, of $92.8 million through the various phases, assisted 947 clients and assisted in the retention of nearly 13,000 jobs. We have also been aggressive in supporting the associated forgiveness process and $8,225,949 in outstanding PPP loans remained on our balance sheet as of year-end.

Credit quality metrics are shown in the following table and reflect improvement year over year and are favorable relative to our peers. Other real estate has been dramatically reduced through both sales and write downs. The bank maintains an ample allowance for loan and lease loss at 1.60% of total outstanding loans, and this is inclusive of PPP.

The Bank remains well capitalized under regulatory guidelines. The Bank’s regulatory capital ratios are further addressed in the following table –

“In addition to monitoring the environment, our focus is on our core business, slowing deposit growth, enhancing loan and fee production, further developing our treasury platform, and using technology to further enhance efficiencies,” stated Tapscott.

About the Company

Horizon Bancorp, Inc. (OTC: HRRB), the holding company for Horizon Community Bank has $539 million in total assets as of December 31, 2021 and is headquartered in Lake Havasu City, Arizona. It owns, as its sole subsidiary, Horizon Community Bank, a locally owned and operated bank with branches in Fort Mohave, Kingman, Lake Havasu City, Phoenix Metro, Parker and Quartzsite, Arizona, plus loan offices in Goodyear and Phoenix, Arizona. The Bank has 88 employees that provide high-touch, customized financial services to largely small business and commercial clients. The Bank operates a mortgage operation and is a leader in government guaranteed lending. Consumer services are also offered in the communities the bank serves. FDIC insured. Learn more at http://www.horizoncommunitybank.com.

Forward Looking Statements

This press release may include forward-looking statements about Horizon Bancorp, Inc. and Horizon Community Bank. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: Annualized, proforma and projected or estimated numbers in this release are illustrative only, are not forecasts and may not reflect actual results. All forward-looking statements are based on information available at the time of this release, and Horizon Bancorp, Inc. and Horizon Community Bank assume no obligation to update any forward-looking statements.

Unaudited Financial Information follows.

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