Intangible Valuation
Value, contrarian, coat tail rider, idiosyncratic research

Horizon Bancorp: 14%+ ROE And Increasing Earnings

Horizon Bancorp (NASDAQ:HBNC) is an Indiana bank with origins tracing back to 1873. It has $1.7 billion in total assets and $1.3 billion in total deposits. Horizon is of interest for a few reasons. First, because of its historical ROE, which currently stands at 15%. Second, its earnings yield is a satisfactory 9%, and there are some dynamics, which suggest that future earnings will be higher; for instance, we are still learning how its July 2012 acquisition will affect income.

The bank is, unfortunately, selling at a market price, which is 40% above tangible book. But this premium is more likely to grow than to shrink, given the corporation's ROEs. The opportunity in the stock is likely reflective

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