Horizon Bancorp Inc /In/ (NASDAQ: HBNC)

Sector: Financial Services Industry: Banks - Regional CIK: 0000706129
Market Cap 818.46 Mn
P/B 1.24
P/E -4.35
P/S -10.34
ROIC (Qtr) -13.22
Div Yield % 4.69
Rev 1y % (Qtr) -506.74
Total Debt (Qtr) 458.82 Mn
Debt/Equity (Qtr) 0.69

About

Horizon Bancorp, Inc., or Horizon, is a bank holding company based in Indiana, operating in the financial services industry. It provides a broad range of commercial banking services through its subsidiary, Horizon Bank, and other affiliated entities in northern and central Indiana and southern and central Michigan. Horizon operates as a single segment, commercial banking, and generates revenue through various products and services catering to individuals, small businesses, and large corporations. Horizon's primary products and services include...

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 6.55B provides 14.27x coverage of total debt 458.82M, indicating robust asset backing and low credit risk.
  • Strong tangible asset base of 6.55B provides 40.16x coverage of intangibles 163.10M, indicating robust asset quality.

Bear case

  • Operating cash flow of (2.71M) barely covers its investment activities of 1.30B, with a coverage ratio of -0, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (2.71M) provides thin coverage of dividend payments of (28.34M) with a 0.10 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • The company's operating cash flow of (2.71M) shows concerning coverage of stock compensation expenses of 2.86M, with a -0.95 ratio indicating potential earnings quality issues.
  • Operating earnings of (255.78M) show weak coverage of depreciation charges of 14.38M, with a -17.78 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of (2.71M) provides minimal 0.04x coverage of tax expenses of (67.50M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.26 0.14
EV to Cash from Ops. EV/CFO -651.70 7.21
EV to Debt EV to Debt 3.86 5.20
EV to EBIT EV/EBIT -6.92 14.98
EV to EBITDA EV/EBITDA -7.33 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF -207.53 8.87
EV to Market Cap EV to Market Cap 2.16 1.04
EV to Revenue EV/Rev -22.35 -3.76
Price to Book Value [P/B] P/B 1.24 1.17
Price to Earnings [P/E] P/E -4.35 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -6.64 271.44
Dividend Payout Ratio % Div Payout % (Qtr) -16.30 35.28
Dividend per Basic Share Div per Share (Qtr) 0.64 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -331.61 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -25.75 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 94.53 15.78
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -992.52 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -663.70 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) -938.98 61.46
EBT Growth (1y) % EBT 1y % (Qtr) -938.98 61.37
EPS Growth (1y) % EPS 1y % (Qtr) -916.67 76.34
FCF Growth (1y) % FCF 1y % (Qtr) -113.10 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -143.09 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) -0.01 0.04
Cash Payout Ratio Cash Payout (Qtr) 9.15 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.69 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 304.90 147.97
EBIT Margin % EBIT Margin % (Qtr) 323.07 155.41
EBT Margin % EBT Margin % (Qtr) 323.07 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 237.80 115.63