NasdaqGS:HBNC

Stock Analysis Report

Executive Summary

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that provides commercial and retail banking services.

Rewards

Trading at 29.4% below its fair value

Earnings are forecast to grow 7.08% per year

Earnings grew by 28.3% over the past year

Pays a high and reliable dividend of 2.6%

Risk Analysis

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record with excellent balance sheet and pays a dividend.


Similar Companies

Heartland Financial USA

NasdaqGS:HTLF

Share Price & News

How has Horizon Bancorp's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HBNC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.4%

HBNC

-0.7%

US Banks

1.2%

US Market


1 Year Return

11.0%

HBNC

15.6%

US Banks

24.2%

US Market

Return vs Industry: HBNC underperformed the US Banks industry which returned 21.7% over the past year.

Return vs Market: HBNC underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

HBNCIndustryMarket
7 Day0.4%-0.7%1.2%
30 Day-3.5%-1.6%3.5%
90 Day4.9%6.8%11.7%
1 Year14.0%11.0%19.0%15.6%26.9%24.2%
3 Year15.7%8.2%34.9%25.4%53.0%43.2%
5 Year92.9%72.5%85.1%64.3%75.3%56.0%

Price Volatility Vs. Market

How volatile is Horizon Bancorp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Horizon Bancorp undervalued compared to its fair value and its price relative to the market?

27.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HBNC ($18.47) is trading below our estimate of fair value ($26.16)

Significantly Below Fair Value: HBNC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HBNC is good value based on its PE Ratio (12.7x) compared to the Banks industry average (12.8x).

PE vs Market: HBNC is good value based on its PE Ratio (12.6x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: HBNC is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: HBNC is overvalued based on its PB Ratio (1.3x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Horizon Bancorp forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

7.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HBNC's forecast earnings growth (7.1% per year) is above the savings rate (1.7%).

Earnings vs Market: HBNC's earnings (7.1% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: HBNC's earnings are forecast to grow, but not significantly.

Revenue vs Market: HBNC's revenue (5.5% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: HBNC's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HBNC's Return on Equity is forecast to be low in 3 years time (10.5%).


Next Steps

Past Performance

How has Horizon Bancorp performed over the past 5 years?

26.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HBNC has high quality earnings.

Growing Profit Margin: HBNC's current net profit margins (32.2%) are higher than last year (29.1%).


Past Earnings Growth Analysis

Earnings Trend: HBNC's earnings have grown significantly by 26.7% per year over the past 5 years.

Accelerating Growth: HBNC's earnings growth over the past year (28.3%) exceeds its 5-year average (26.7% per year).

Earnings vs Industry: HBNC earnings growth over the past year (28.3%) exceeded the Banks industry 27.1%.


Return on Equity

High ROE: HBNC's Return on Equity (9.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Horizon Bancorp's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: HBNC has a low level of unsold assets or inventory.

Debt Coverage by Assets: HBNC's debt is not covered by short term assets (assets are 0.2x debt).


Financial Institutions Analysis

Asset Level: HBNC's level of assets compared to its equity is low.

Allowance for Bad Loans: HBNC has a low allowance for bad loans.

Low Risk Liabilities: HBNC's liabilities are made up of primarily low risk sources of funding.

Loan Level: HBNC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: HBNC's loans are broadly funded by customer deposits.

Level of Bad Loans: HBNC has an appropriate level of bad loans (0.52%)


Next Steps

Dividend

What is Horizon Bancorp's current dividend yield, its reliability and sustainability?

2.58%

Current Dividend Yield


Dividend Yield vs Market

company2.6%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: HBNC's dividend (2.6%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: HBNC's dividend (2.6%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: HBNC's dividends per share have been stable in the past 10 years.

Growing Dividend: HBNC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.1%), HBNC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HBNC's dividends in 3 years are forecast to be well covered by earnings (33.4% payout ratio).


Next Steps

Management

What is the CEO of Horizon Bancorp's salary, the management and board of directors tenure and is there insider trading?

6.0yrs

Average management tenure


CEO

Craig Dwight (62yo)

18.5yrs

Tenure

US$1,163,495

Compensation

Mr. Craig M. Dwight has been the Chief Executive Officer of Horizon Bancorp, Inc. (formerly, Horizon Bancorp). and its subsidiary, Horizon Bank, N.A. since July 01, 2001. Mr. Dwight served as the President ...


CEO Compensation Analysis

Compensation vs Market: Craig's total compensation ($USD1.16M) is below average for companies of similar size in the US market ($USD2.53M).

Compensation vs Earnings: Craig's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.0yrs

Average Tenure

59yo

Average Age

Experienced Management: HBNC's management team is seasoned and experienced (6 years average tenure).


Board Age and Tenure

8.6yrs

Average Tenure

63.5yo

Average Age

Experienced Board: HBNC's board of directors are considered experienced (8.6 years average tenure).


Insider Trading

Insider Buying: HBNC insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$84,46526 Nov 19
Mark Secor
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares4,500
Max PriceUS$18.77
SellUS$335,49020 Nov 19
Michele Magnuson
EntityIndividual
Role
Member of the Board of Directors
Director
Shares18,138
Max PriceUS$18.50
BuyUS$12,58407 Jun 19
James Neff
EntityIndividual
Role
President
President
Shares800
Max PriceUS$15.73
BuyUS$55,19530 May 19
James Neff
EntityIndividual
Role
President
President
Shares3,500
Max PriceUS$15.77

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 9.5%.


Management Team

  • Craig Dwight (62yo)

    Chairman & CEO

    • Tenure: 18.5yrs
    • Compensation: US$1.16m
  • Jim Neff (59yo)

    President

    • Tenure: 2yrs
    • Compensation: US$722.16k
  • Mark Secor (53yo)

    Executive VP & CFO

    • Tenure: 11yrs
    • Compensation: US$515.18k
  • Daniel Buresh (60yo)

    Asst. Chief Accounting Officer & Asst. Treasurer

    • Tenure: 21yrs
  • Dennis Kuhn (59yo)

    Executive Vice President

    • Tenure: 2.3yrs
    • Compensation: US$429.68k
  • Kathie DeRuiter (57yo)

    Executive Vice President

    • Tenure: 6yrs
    • Compensation: US$451.16k
  • Dona Lucker

    Shareholder Relations Officer & Executive Assistant

    • Tenure: 5yrs
  • Todd Etzler

    Corporate Secretary & General Counsel


    Board Members

    • Daniel Hopp (71yo)

      Lead Director

      • Tenure: 6.5yrs
      • Compensation: US$70.00k
    • Craig Dwight (62yo)

      Chairman & CEO

      • Tenure: 18.5yrs
      • Compensation: US$1.16m
    • Susan Aaron (64yo)

      Independent Director

      • Tenure: 25yrs
      • Compensation: US$65.00k
    • Spero Valavanis (66yo)

      Independent Director

      • Tenure: 20yrs
      • Compensation: US$62.00k
    • Peter Pairitz (63yo)

      Independent Director

      • Tenure: 19yrs
      • Compensation: US$62.00k
    • James Dworkin (70yo)

      Independent Director

      • Tenure: 16.3yrs
      • Compensation: US$62.00k
    • Lawrence Burnell (64yo)

      Independent Director

      • Tenure: 10.7yrs
      • Compensation: US$64.00k
    • Steven Reed (56yo)

      Independent Director

      • Tenure: 5.7yrs
      • Compensation: US$68.00k
    • Michele Magnuson (59yo)

      Director

      • Tenure: 3.5yrs
      • Compensation: US$60.00k
    • Eric Blackhurst (58yo)

      Independent Director

      • Tenure: 2.3yrs
      • Compensation: US$60.00k

    Company Information

    Horizon Bancorp, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Horizon Bancorp, Inc.
    • Ticker: HBNC
    • Exchange: NasdaqGS
    • Founded: 1873
    • Industry: Regional Banks
    • Sector: Banks
    • Market Cap: US$835.089m
    • Shares outstanding: 44.97m
    • Website: https://www.horizonbank.com

    Number of Employees


    Location

    • Horizon Bancorp, Inc.
    • 515 Franklin Street
    • Michigan City
    • Indiana
    • 46360
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    HBNCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 1987

    Biography

    Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that provides commercial and retail banking services. The company offers demand and time deposits. Its loan portfolio comprises commercial, residential real estate, mortgage warehouse, and consumer loans. The company also provides corporate and individual trust and agency, investment management, and real estate investment trust services; and sells various insurance products. It operates through a network of 63 full service offices and 3 loan and deposit production offices in Northern and Central regions of Indiana, as well as Southern, Central, and Great Lakes bay regions of Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/20 23:39
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.