Exhibit 99.2
| Filed by Horizon Bancorp pursuant to | |
| Rule 425 under the Securities Act of 1933 and deemed filed | |
| pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 | |
| Subject Company: LaPorte Bancorp, Inc. | |
| Commission File No. 001-35684 |
Horizon Bancorp announces the acquisition of LaPorte Bancorp, Inc. and its wholly-owned subsidiary, The LaPorte Savings BankMarch 10, 2016
FORWARD LOOKING STATEMENTS This presentation may contain forward-looking statements regarding the financial performance, business, and future operations of Horizon Bancorp and its affiliates (collectively, “Horizon”), as well as statements about the benefits of the proposed transaction, the merger parties’ plans, objectives, expectations and intentions, the expected timing of completion of the transaction; and other statements that are not historical fact. For these statements, Horizon claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future results or performance. As a result, undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions, and although management believes that the expectations reflected in such forward-looking statements are accurate and reasonable, actual results may differ materially from those expressed or implied in such statements. While there is no assurance that any list of risks and uncertainties is complete, some of the risk factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements include: the ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by LaPorte’s shareholders, on the expected terms and schedule; delay in closing the merger; difficulties and delays in integrating Horizon’s and LaPorte’s businesses or fully realizing cost savings and other benefits; business disruption following the merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of Horizon’s products and services; customer borrowing, repayment, investment, and deposit practices; customer disintermediation; the introduction, withdrawal, success, and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; economic conditions; and the impact, extent, and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms, including those associated with the Dodd-Frank Wall Street Reform and Consumer Protection Act. Additional risks and uncertainties that could cause our actual results to differ materially include risk factors relating to the banking industry and other factors set forth in Horizon’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K. Statements in this presentation should be considered in conjunction with such risk factors and the other information publicly available about Horizon, including the information in the filings we make with the Securities and Exchange Commission. Horizon does not undertake, and specifically disclaims any obligation, to publicly release any updates to any forward-looking statement to reflect events or circumstances occurring or arising after the date on which the forward-looking statement is made, or to reflect the occurrence of unanticipated events, except to the extent required by law. Disclosures
ADDITIONAL INFORMATION FOR SHAREHOLDERS In connection with the proposed merger, Horizon will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of LaPorte Bancorp, Inc. (“LaPorte”) and a Prospectus of Horizon, as well as other relevant documents concerning the proposed transaction. The proposed transaction involving Horizon and LaPorte will be submitted to LaPorte’s shareholders for their consideration. SHAREHOLDERS AND INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The proxy statement/prospectus and other relevant materials (when they become available), and any other documents Horizon has filed with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov. In addition, investors and security holders may obtain free copies of the proxy statement/prospectus and other documents Horizon has filed with the SEC in two ways, either (i) by contacting Dona Lucker, Shareholder Relations Officer, 515 Franklin Square, Michigan City, Indiana 46360, telephone: (219) 874-9272 or via a request form available on Horizon’s website at www.horizonbank.com under the tab “About Us – Investor Relations – Other Information – Information Request,” or (ii) at www.horizonbank.com under the tab “About Us – Investor Relations – Documents – SEC Filings.” The information available through Horizon’s website is not and shall not be deemed part of this presentation or incorporated by reference into other filings Horizon makes with the SEC. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. Horizon and LaPorte and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of LaPorte in connection with the proposed merger. Information about the directors and executive officers of Horizon is set forth in Horizon’s Annual Report on Form 10-K filed with the SEC on February 29, 2016, and in the proxy statement for Horizon’s 2015 annual meeting of shareholders, as filed with the SEC within a Registration Statement on Form S-4/A on May 22, 2015. Additional information regarding the interests of these participants and any other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph. Disclosures
4 LaPorte Bancorp, Inc. Overview Established 1871 in La Porte, INSeven Full-Service Locations$543 Million in Assets$349 Million in Loans $391 Million in Deposits$4.6 Million 2015 Net Income0.84% NPAs/Assets Financials as of 12/31/2015Note: Branches not pictured in map include a non-traditional branch located in LaPorte Community High School and a loan production office in St. Joseph, MI
5 Merger Highlights Strategic Financial Operational Aligned with Horizon’s plan to expand in the states of Indiana and MichiganLogical in-market consolidationSolidifies #1 deposit market share in La Porte CountyBolsters existing presence in high growth Porter County EPS accretion of ~5% in 2017, first full year pro formaInitial TBV dilution of $0.36 with a 2.6 year earn back (cross over method)Internal rate of return over 18%55% cost savings fully phased-in (75% realized in 2016 and 92% in 2017)$50 million of LaPorte’s mortgage warehouse loans estimated to be retained(1) Low risk integration between companies with similar cultures and valuesHorizon is an experienced acquirer (5 completed since 2009; 2 pending)Horizon’s infrastructure provides the capacity to drive operating leverageHorizon plans to consolidate 3 branches and LaPorte’s LPO in 2016(2)Revised Fed branch market area does not require branch divestiture LaPorte’s 12/31/2015 mortgage warehouse balance was $128.9 million. Pro forma analysis assumes retention of $50 million in average mortgage warehouse loans with the balance being invested into securities. Pro forma net income was reduced by the resulting impact to net interest income and the reduction in fees associated with lower pro forma production and the elimination of mortgage warehouse loan participation fees. Cost savings associated with the mortgage warehouse business are reflected in the total cost savings estimate of 55%. (2) Facilities to be consolidated include LaPorte’s branches in: Michigan City, IN; Chesterton, IN; La Porte, IN (west-side location); and the St. Joseph, MI loan production office.
HorizonLaPorteBranch Closing Pro Forma Franchise 55 branches throughout Indiana and Michigan$3.3 billion in assets$2.2 billion in loans$2.4 billion in depositsMarket capitalization of $358 millionBranch divestitures not required Source: SNL Financial LC, 2015 FDIC Summary of Deposits, Company estimates, Horizon market capitalization as of 3/9/2016Note: Pro forma financials as of 12/31/2015 reflect Horizon’s announced acquisition of Kosciusko Financial, Inc., excluding merger adjustments. Dashed red circles represent locations of planned branch closings. Deposit market share analysis and branch counts are pro forma for planned branch closings. Branches not pictured in map include a non-traditional branch located in LaPorte Community High School and a loan production office in St. Joseph, MI. 6 Pro Forma NW Indiana Branch Map Horizon branch
7 Based on Horizon’s closing price of $24.21 as of 3/9/2016 (includes $4.7 million value of options) Merger Summary Horizon Bancorp Acquiring LaPorte Bancorp, Inc. Consideration Mix 65% stock, 35% cash Consideration Structure 0.629 Horizon shares or $17.50 in cash for each outstanding LaPorte share or a combination of bothOptions will be cashed out Aggregate Deal Value (1) $94.1 million Termination Fee (% of Deal Value) 4.0% Required Approvals Customary regulatory and LaPorte shareholder approval Anticipated Closing Third quarter of 2016 Social Issues Michele Thompson, The LaPorte Savings Bank President and CFO, will be appointed as a director of Horizon Bancorp
8 Source: SNL Financial LCNationwide bank & thrift transactions announced after 12/31/2014 with target’s assets between $300.0 million and $1.0 billion, NPAs/Assets less than 3.0%, TCE/TA Ratio greater than 10.0%, and excluding transactions where pricing information is unavailable Transaction Pricing Metric Horizon/LaPorte Median ComparableTransactions(1) Price/ Tangible Book Value 122% 140% Price/ LTM Earnings 20.6x 22.1x Price/ 2017 Earnings + Cost Savings 10.3x NA Core Deposit Premium 4.9% 6.4%
9 Transaction Assumptions Category Assumption Cost saves 55% fully phased-in (75% realized in 2016 and 92% in 2017) Mortgage Warehouse Retention(1) $50.0 million of LaPorte’s mortgage warehouse loans estimated to be retained, resulting in approximately $2.5 million in lost annual revenue Fair Market Value Adjustmentsand Purchase Accounting Non-accretable: -$4.4 million or -1.25% of loansAccretable: -$6.2 million or -1.75% of loansFixed assets: -$2.0 millionTrust Preferred: -$2.0 million (positive impact to equity)$5.4 million after-tax benefit from elimination of ESOP and Stock Options Core deposit intangibles $6.0 million or 2.00% of core deposits Facilities(2) Consolidating 3 branches and LaPorte’s loan production office in 2016 Pre-tax deal charges $7.9 million LaPorte’s 12/31/2015 mortgage warehouse balance was $128.9 million. Pro forma analysis assumes retention of $50 million in average mortgage warehouse loans with the balance being invested into securities. Pro forma net income was reduced by the resulting impact to net interest income and the reduction in fees associated with lower pro forma production and the elimination of mortgage warehouse loan participation fees. Cost savings associated with the mortgage warehouse business are reflected in the total cost savings estimate of 55%.Facilities to be consolidated include LaPorte’s locations in: Michigan City, IN; Chesterton, IN; La Porte, IN (west-side location); and the St. Joseph, MI loan production office.
10 Cost Savings Thorough analysis of cost savings factoring in:Elevated expense structure from thrift benefit plansGeographic overlap of branch footprints (4 branches each within 1.5 miles of Horizon (2))Duplicative executive, back office and mortgage warehouse functionsHorizon’s considerable experience integrating acquisitionsAll LaPorte retail branch personnel who meet Horizon’s hiring standards will be retainedSignificant sources of savings:Branch consolidationConsolidation of back office infrastructure and processing systemsAlignment of business models Source: Company estimatesSource: SNL Financial LC
Assets ($ Mil.) $721 $3,344 Loans($ Mil.) $548 $2,212 Deposits($ Mil.) $489 $2,397 Branches 7 55 Horizon: A Company on the Move OrganicExpans.(7) St. JosephS. BendElkhart Lake County Kalamazoo Indianapolis Carmel M&A(9) Anchor Mortgage Alliance American Trust Heartland 1st MortgageSummitPeoples KosciuskoLaPorte 13% CAGR 11% CAGR 13% CAGR (1) Note: 2016 reflects Horizon as of 12/31/2015, including announced acquisition of Kosciusko Financial and LaPorte pro forma, excluding merger adjustments
12 Appendix
Source: SNL Financial LC. Data based on regulatory filings as of 12/31/2015Note: Horizon Bancorp loan portfolio pro forma for Kosciusko Financial, Inc. acquisition announced on 2/5/2016 excluding merger adjustments. The proforma table excludes merger adjustments and mortgage warehouse retention estimate. 13 Loan Portfolio Composition
14 Deposit Composition Source: SNL Financial LC. Data based on regulatory filings as of 12/31/2015.Note: Horizon Bancorp deposits pro forma for Kosciusko Financial, Inc. acquisition announced on 2/5/2016, excluding merger adjustments. Source: SNL Financial LC. Data based on regulatory filings as of 12/31/2015.Note: Horizon Bancorp loan portfolio pro forma for Kosciusko Financial, Inc. acquisition announced on 2/5/2016 excluding merger adjustments. The proforma table excludes merger adjustments. (1) LaPorte deposit detail based upon The LaPorte Savings Bank (bank level) regulatory data provided in 2015 fourth quarter bank call report. (1)
15 LaPorte Bancorp Financial Highlights Source: SNL Financial LC and 12/31/2015 LaPorte earnings release. Excludes loans held for saleNPAs exclude restructured loans
If you have questions please contact:Mark SecorChief Financial Officer515 Franklin SquareMichigan City, IN 46360(219) 873-2611