Horizon Bancorp, Inc. Reports Strong Second Quarter 2025 Results Led by Continued Net Interest Margin Expansion

MICHIGAN CITY, Ind., July 23, 2025 (GLOBE NEWSWIRE) -- (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”), the parent company of Horizon Bank (the “Bank”), announced its unaudited financial results for the three months ended June 30, 2025.

“Horizon’s second quarter earnings reflect the strength of the organization’s exceptional core community banking franchise. Strong loan growth, stable and granular core funding, excellent credit quality and prudent management of expenses fueled the quarter’s positive results and expanded on management’s commitment to improve the financial performance of the Company. The quarter was highlighted by a seventh consecutive quarter of net interest margin expansion, low net charge offs of 2 bps annualized and enhanced momentum in key performance metrics of ROAA and ROATCE", President and CEO, Thomas Prame stated. “We continue to show strength across our core community banking platform that is being driven by a disciplined approach to creating a more efficient balance sheet and effective deployment of capital. We are pleased with our results through the first six months of 2025, with reported earnings per share growing by 58% versus the comparable period a year ago, and look forward to continuing to create additional shareholder value throughout the remainder of the year.”

Net income for the three months ended June 30, 2025 was $20.6 million, or $0.47 per diluted share, compared to net income of $23.9 million, or $0.54, for the first quarter of 2025 and compared to net income of $14.1 million, or $0.32 per diluted share, for the second quarter of 2024. As previously disclosed, results in the first quarter of 2025 included the $7.0 million pre-tax gain on the sale of the Company's mortgage warehouse business.

Net income for the six months ended June 30, 2025 was $44.6 million, or $1.01 per diluted share, compared to net income of $28.1 million, or $0.64, for the six months ended June 30, 2024.

Second Quarter 2025 Highlights

• Net interest income of $55.4 million increased 5.9% compared with $52.3 million for the three months ended March 31, 2025, and 22.3% compared with $45.3 million in the year ago period. Net interest margin, on a fully taxable equivalent ("FTE") basis¹, expanded for the seventh consecutive quarter, to 3.23%, compared with 3.04% for the three months ended March 31, 2025 and 2.64% for the three months ended June 30, 2024.

• Total loans held for investment ("HFI") increased 6.2% compared to the linked quarter annualized, with strong organic commercial loan growth of $117.2 million, or 14.8% annualized. This growth was partially funded by the continued strategic runoff of lower yielding indirect auto loans of approximately $34.1 million.

• Funding continued to trend favorably, with non-time deposit balances remaining relatively flat for the fourth consecutive quarter and interest-bearing liability cost declining by another 2 bps during the quarter.

• Credit quality remained strong, with annualized net charge offs of 0.02% of average loans during the second quarter. Non-performing assets remain well within expected ranges, decreasing 12.4% from the prior quarter.

• Expenses continued to be well managed, up less than 1% from the first quarter of 2025. These results reflect management's commitment to generate higher earnings while maintaining a more efficient expense base.

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1</sup> Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.

Income Statement Highlights

Net Interest Income

Net interest income was $55.4 million in the second quarter of 2025, compared to $52.3 million in the first quarter of 2025, driven by the continued expansion of the Company's net FTE interest margin¹, which increased to 3.23% for the second quarter of 2025, compared to 3.04% for the first quarter of 2025. Expansion was attributable to the favorable mix shift in average interest earning assets toward higher-yielding loans and in the average funding mix toward deposit balances, in addition to continued disciplined pricing strategies on both sides of the balance sheet. The second quarter net FTE interest margin did benefit by approximately seven basis points related to interest recoveries on certain commercial and residential loans.

Provision for Credit Losses

During the second quarter of 2025, the Company recorded a provision for credit losses of $2.5 million. This compares to a provision for credit losses of $1.4 million during the first quarter of 2025, and $2.4 million during the second quarter of 2024. The increase in the provision for credit losses during the second quarter of 2025 when compared with the first quarter of 2025 was primarily attributable to net growth in commercial loans HFI and changes in economic factors, partially offset by the reduction of specific reserves and the reserves for unfunded commitments in the current quarter.

For the second quarter of 2025, the allowance for credit losses included net charge-offs of $0.3 million, or an annualized 0.02% of average loans outstanding, compared to net charge-offs of $0.9 million, or an annualized 0.07% of average loans outstanding for the first quarter of 2025, and net charge-offs of $0.6 million, or an annualized 0.05% of average loans outstanding, in the second quarter of 2024.

The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.09% at June 30, 2025, compared to 1.07% at March 31, 2025 and 1.08% at June 30, 2024.

Non-Interest Income

Total non-interest income was $10.9 million in the second quarter of 2025, compared to non-interest income of $16.5 million in the first quarter of 2025. The decrease in non-interest income of $5.6 million is due to the sale of the Company's mortgage warehouse business to an unrelated third party in the first quarter of 2025, resulting in a pre-tax gain of $7.0 million that did not recur in the current period. Interchange fees and gain on sale of mortgage loans benefited from normal seasonality, while other categories remained relatively unchanged when compared with the prior period.

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1</sup> Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.

Non-Interest Expense

Total non-interest expense was $39.4 million in the second quarter of 2025, compared with $39.3 million in the first quarter of 2025. The increase in non-interest expense during the second quarter of 2025 when compared with the prior period was primarily driven by a $0.5 million increase in loan expense. The increase was partially offset by a $0.6 million decrease in net occupancy expenses. Additionally, the Company incurred $0.3 million of direct expenses related to the sale of the mortgage warehouse business in the prior period that did not recur in the current period.   

Income Taxes

Horizon recorded a net tax expense of $3.8 million for the second quarter of 2025, representing an effective tax rate of 15.4%, which is consistent with the Company's estimated annual effective tax rate.

Balance Sheet Highlights

Total assets increased by $23.4 million, or 0.3%, to $7.7 billion as of June 30, 2025, from $7.6 billion as of March 31, 2025. The increase in total assets is primarily due to increases in loans HFI and non-interest earning cash, partially offset by a decrease in interest earning cash and investment securities. Total investment securities decreased by $24.2 million, or 1.2%, to $2.1 billion as of June 30, 2025. Total loans were $5.0 billion at June 30, 2025, an increase of $75.5 million from March 31, 2025 balances, due to organic commercial loan growth net of continued runoff in the indirect consumer portfolio.

Total deposits decreased by $66.0 million, or 1.1%, to $5.7 billion as of June 30, 2025 when compared to balances as of March 31, 2025. The decrease was partially related to a decline in time deposits of $51.9 million, or 4.2% and, to a lesser extent, a modest decrease in savings and money market deposits of $7.0 million, or 0.4%. Non-interest bearing deposit balances remained relatively unchanged in the current period. Total borrowings increased by $68.1 million during the quarter, to $880.3 million as of June 30, 2025. Balances subject to repurchase agreements increased by $7.2 million, to $95.1 million.

Capital

The following table presents the consolidated regulatory capital ratios of the Company for the previous three quarters, and the Company’s preliminary estimate of its consolidated regulatory capital ratios for the quarter ended June 30, 2025:

As of June 30, 2025, the ratio of total stockholders’ equity to total assets is 10.34%. Book value per common share was $18.06, increasing $0.34 during the second quarter of 2025.

Tangible common equity³ totaled $627.1 million at June 30, 2025, and the ratio of tangible common equity to tangible assets¹ was 8.37% at June 30, 2025, up from 8.19% at March 31, 2025. Tangible book value, which excludes intangible assets from total equity, per common share¹ was $14.32, increasing $0.36 during the second quarter of 2025 behind the growth in retained earnings.

Credit Quality

As of June 30, 2025, total non-accrual loans decreased by $4.5 million, or 15.7%, from March 31, 2025, to 0.49% of total loans HFI. Total non-performing assets decreased $3.9 million, or 12.4%, to $27.5 million, compared to $31.4 million as of March 31, 2025. The ratio of non-performing assets to total assets decreased to 0.36% compared to 0.41% as of March 31, 2025.

As of June 30, 2025, net charge-offs decreased by $0.6 million to $0.3 million, compared to $0.9 million as of March 31, 2025 and remain just 0.02% annualized of average loans.

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1</sup> Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.

Earnings Conference Call

As previously announced, Horizon will host a conference call to review its second quarter financial results and operating performance.

Participants may access the live conference call on July 24, 2025 at 7:30 a.m. CT (8:30 a.m. ET) by dialing 833-974-2379 from the United States, 866-450-4696 from Canada or 1-412-317-5772 from international locations and requesting the “Horizon Bancorp, Inc. Call.” Participants are asked to dial in approximately 10 minutes prior to the call.

A telephone replay of the call will be available approximately one hour after the end of the conference through August 1, 2025. The replay may be accessed by dialing 877-344-7529 from the United States, 855-669-9658 from Canada or 1–412–317-0088 from other international locations, and entering the access code 5878909.

About Horizon Bancorp, Inc.

Horizon Bancorp, Inc. (NASDAQ GS: HBNC) is the $7.7 billion-asset commercial bank holding company for Horizon Bank, which serves customers across diverse and economically attractive Midwestern markets through convenient digital and virtual tools, as well as its Indiana and Michigan branches. Horizon's retail offerings include prime residential and other secured consumer lending to in-market customers, as well as a range of personal banking and wealth management solutions. Horizon also provides a comprehensive array of in-market business banking and treasury management services, as well as equipment financing solutions for customers regionally and nationally, with commercial lending representing over half of total loans. More information on Horizon, headquartered in Northwest Indiana's Michigan City, is available at horizonbank.com and investor.horizonbank.com.

Use of Non-GAAP Financial Measures

Certain information set forth in this press release refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non-GAAP financial measures relating to net income, diluted earnings per share, pre-tax, pre-provision net income, net interest margin, tangible stockholders’ equity and tangible book value per share, efficiency ratio, the return on average assets, the return on average common equity, and return on average tangible equity. In each case, we have identified special circumstances that we consider to be non-recurring and have excluded them. Horizon believes these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business and financial results without giving effect to one-time costs and non–recurring items. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this press release for reconciliations of the non-GAAP information identified herein and its most comparable GAAP measures.

Forward Looking Statements

This press release may contain forward–looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon Bancorp, Inc. and its affiliates (collectively, “Horizon”). 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. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission (the “SEC”). Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance.

Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: effects on Horizon’s business resulting from new U.S. domestic or foreign governmental trade measures, including but not limited to tariffs, import and export controls, foreign exchange intervention accomplished to offset the effects of trade policy or in response to currency volatility, and other restrictions on free trade; uncertain conditions within the domestic and international macroeconomic environment, including trade policy, monetary and fiscal policy, and conditions in the investment, credit, interest rate, and derivatives markets, and their impact on Horizon and its customers; current financial conditions within the banking industry; changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; the aggregate effects of elevated inflation levels in recent years; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon’s assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the U.S. federal government to manage federal debt limits; climate change and social justice initiatives; the inability to realize cost savings or revenues or to effectively implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; acts of terrorism, war and global conflicts, such as the Russia and Ukraine conflict and the Israel and Hamas conflict; and supply chain disruptions and delays. These and additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Horizon’s reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s website (). Undue reliance should not be placed on the forward–looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward–looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.