Financial Data and Key Metrics Changes - Horizon Bancorp Inc. reported net interest margin expansion for the eighth consecutive quarter, with an exit run rate in September above 4% [5][16] - The net interest margin increased by 29 basis points to 3.52% for the quarter, with expectations to expand further in Q4 to a range of 4.15%-4.25% [19][26] - The allowance for credit losses decreased to $50.2 million, representing an allowance to credit loss to loans held for investment of 1.04% [11] Business Line Data and Key Metrics Changes - Net loan total for investment decreased to $162 million, primarily due to a $210 million impact from the runoff and sale of indirect auto loans, while commercial loans grew by $58 million [9][10] - The combined relationship-based fee income categories of service charges, card, and mortgage income increased from the third quarter [5] Market Data and Key Metrics Changes - The core relationship balances in the deposit portfolio remained resilient, with planned outflows in higher-cost non-core transactional accounts [14] - The company anticipates a decline in deposit balances in Q4, primarily due to the targeted reduction of high-cost non-relationship balances [26] Company Strategy and Development Direction - The company is focused on profitable loan growth and maintaining excellent credit quality as a cornerstone of its success [7] - Horizon Bancorp Inc. aims to create durable returns and sustainable long-term value for shareholders through disciplined capital management and potential M&A opportunities [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering superior community banking performance and capital generation metrics moving into 2026 [6][30] - The company is optimistic about growth opportunities in Michigan and Indiana, leveraging its strong brand reputation and community banking model [40][60] Other Important Information - The company has seen a significant positive increase in performance in September, indicating strong momentum heading into Q4 [7] - Non-interest income was materially impacted by balance sheet actions, including a $299 million loss in the sale of securities [22] Q&A Session Summary Question: Update on the new narrative for Horizon Bancorp Inc. and strategic emphasis - Management highlighted a focus on positive capital stewardship and a more efficient, de-risked balance sheet that will generate capital at a greater pace [36] Question: Potential outlets for capital outside of organic loan growth and M&A - Management indicated that M&A will focus on franchises that add to the current profitable franchise, with potential targets in Michigan and Indiana [39][40] Question: Balance sheet being rate neutral - Management clarified that while the balance sheet is modestly asset-sensitive, they do not expect significant impacts from rate changes [45] Question: Trends in credit quality and areas of stress - Management noted that non-performing loans increased slightly, but overall credit quality remains satisfactory with no significant areas of concern [70][74] Question: Loan growth outlook for 2026 - Management expects mid-single-digit growth primarily from organic commercial growth, without the need for significant additional headcount [87] Question: Capital accretion and buybacks - Management stated that while buybacks are an option for creating shareholder value, they are not a priority in the near term following recent capital raises [91]

Financial Data and Key Metrics Changes - Horizon Bancorp Inc. reported net interest margin expansion for the eighth consecutive quarter, with an exit run rate in September above 4% [5][16] - The net interest margin increased by 29 basis points to 3.52% for the quarter, with expectations to expand further in Q4 to a range of 4.15% to 4.25% [19][26] - The allowance for credit losses decreased to $50.2 million, representing an allowance to credit loss to loans held for investment of 1.04% [11][12] Business Line Data and Key Metrics Changes - Net loan total for investment decreased to $162 million, primarily due to a $210 million impact from the runoff and sale of indirect auto loans, while commercial loans grew by $58 million [9][10] - The combined relationship-based fee income categories of service charges, card, and mortgage income increased from the previous quarter [5] Market Data and Key Metrics Changes - The core relationship balances in the deposit portfolio remained resilient despite planned outflows from higher-rate transactional accounts [14] - The company anticipates a decline in deposit balances in Q4, primarily due to the targeted reduction of high-cost non-relationship balances [26] Company Strategy and Development Direction - The company is focused on creating durable returns and sustainable long-term value for shareholders through disciplined capital management and profitable loan growth [6][30] - Horizon Bancorp Inc. is considering M&A opportunities that are accretive to its community banking platform, with a focus on franchises that enhance profitability [37][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering superior community banking performance and capital generation metrics moving into 2026 [6][30] - The company is monitoring economic conditions closely, with future provision expenses driven by anticipated loan growth and credit quality trends [12] Other Important Information - The company executed a balance sheet restructuring that exceeded initial expectations, optimizing securities and loan portfolios [4][6] - Non-interest income was impacted by a $299 million loss in the sale of securities and a $7.7 million loss on the sale of the indirect auto loan portfolio [22] Q&A Session Summary Question: What is the new narrative for Horizon Bancorp Inc.? - Management indicated that the company is positioned to generate capital at a greater pace and will focus on measured deployment strategies for growth, including potential M&A opportunities [35][36] Question: Are there any other potential outlets for capital outside of organic loan growth and M&A? - Management confirmed that M&A will be a focus, targeting franchises that add to the current profitable platform, with potential sizes ranging from $300 million to several billion dollars [38][40] Question: How does the company support its rate-neutral position? - Management explained that while the balance sheet is modestly asset-sensitive, they do not expect significant impacts from rate changes due to their deposit positioning [44][45] Question: What are the trends in credit quality? - Management noted that non-performing loans increased slightly, but overall credit quality remains satisfactory, with no significant areas of stress identified [70][74] Question: What is the outlook for loan growth in 2026? - Management anticipates mid-single-digit growth primarily from organic commercial growth, with no immediate need for significant headcount increases [87][88]

Financial Data and Key Metrics Changes - Horizon Bancorp's net interest margin expanded for the eighth consecutive quarter, reaching 3.52% in Q3, with an exit run rate above 4% in September [5][17][20] - The company reported a net loan total for investment of $162 million, with a $210 million impact from the runoff and sale of indirect auto loans [10][12] - The allowance for credit losses decreased to $50.2 million, representing 1.04% of loans held for investment, with a net release of $3.6 million in provisions [12][25] Business Line Data and Key Metrics Changes - Commercial loans grew by $58 million in Q3, representing a 7% annualized increase, while residential mortgage lending volumes remained flat [10][11] - The combined relationship-based fee income categories, including service charges and card income, showed an increase from the previous quarter [5][24] Market Data and Key Metrics Changes - The company experienced predicted outflows in higher-cost non-core transactional accounts as part of its balance sheet restructuring plan [5][14] - Non-interest income was impacted by a $299 million loss in the sale of securities and a $7.7 million loss on the sale of the indirect auto loan portfolio [21][22] Company Strategy and Development Direction - Horizon Bancorp is focused on creating durable returns and sustainable long-term value for shareholders through disciplined capital management and profitable growth strategies [6][30] - The company plans to pursue M&A opportunities that are accretive to its community banking platform, with a focus on franchises that enhance profitability [35][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering superior community banking performance and capital generation metrics moving into 2026 [6][30] - The outlook for Q4 includes expectations for net interest margin expansion to 4.15% to 4.25%, with total reported expenses approximating $40 million [27][28] Other Important Information - The company has made significant improvements in its deposit portfolio, enhancing growth and stability in core client relationships [14][15] - The effective tax rate for Q4 is expected to be in the range of 18% to 20%, reflecting stronger pre-tax income [28] Q&A Session Summary Question: Update on the new narrative for Horizon Bancorp Inc. - Management indicated that the company is positioned to generate capital at a greater pace and will focus on measured deployment strategies for profitable growth [34][35] Question: Criteria for potential M&A opportunities - M&A will focus on franchises that add to the current profitable franchise, with potential targets in Michigan and Indiana [36][39] Question: Balance sheet's rate neutrality - Management acknowledged a modest asset sensitivity but emphasized that the balance sheet is designed to be rate neutral [42] Question: Trends in credit quality and areas of stress - Non-performing loans increased slightly, but management noted that the overall credit profile remains strong, with no significant areas of concern [58][61] Question: Loan growth outlook for 2026 - The company anticipates mid-single-digit loan growth driven primarily by commercial lending, with no immediate need for significant headcount increases [70][71]

Financial Data and Key Metrics Changes - Horizon Bancorp's net interest margin expanded for the eighth consecutive quarter, with an exit run rate in September above 4% [5][16] - The net interest margin increased by 29 basis points to 3.52% for Q3, with expectations for further expansion in Q4 to a range of 4.15% to 4.25% [17][19] - Net loans held for investment decreased by $162 million, primarily due to the runoff and sale of the indirect auto loan portfolio [10] - The allowance for credit losses decreased to $50.2 million, representing an allowance to credit loss to loans held for investment of 1.04% [12] Business Line Data and Key Metrics Changes - Commercial loans increased by $58 million, representing a 7% annualized growth for the linked quarter [10] - The combined relationship-based fee income categories, including service charges, wealth, card, and mortgage income, performed well and increased from the previous quarter [6] - Noninterest income was impacted by a $299 million loss in the sale of securities and a $7.7 million loss on the sale of the indirect auto portfolio [21] Market Data and Key Metrics Changes - The core relationship balances in the deposit portfolio remained resilient, with planned outflows in higher-cost non-core transactional accounts [14] - The deposit portfolio is expected to decline in Q4 due to the targeted reduction of high-cost non-relationship balances [27] Company Strategy and Development Direction - The company aims to deliver durable returns and sustainable long-term value for shareholders through a disciplined operating model and focus on profitable growth [31] - Horizon plans to pursue logical and accretive M&A opportunities that enhance its community banking platform [37][40] - The company is focused on maintaining a strong credit profile while pursuing steady, diversified growth [11][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering superior community banking performance and peer-leading capital generation metrics moving into 2026 [7][31] - The company is monitoring economic conditions, with future provision expenses driven by anticipated loan growth and credit quality trends [13] Other Important Information - The company has made significant improvements in its securities portfolio, reducing credit risk and increasing liquidity [20] - The effective tax rate for Q4 is expected to be in the range of 18% to 20% due to stronger pretax income [28] Q&A Session Summary Question: Update on the new narrative for Horizon and strategic emphasis - Management highlighted a new focus on positive capital stewardship and a well-positioned balance sheet for capital generation [36][37] Question: Potential outlets for capital outside of organic loan growth and M&A - Management indicated that M&A opportunities would focus on franchises that add to the current profitable franchise, with a size range of $300 million to several billion dollars [39][40] Question: Trends in credit quality and areas of stress - Management noted that nonperforming loans increased slightly, but overall credit quality remains satisfactory, with no significant areas of concern [68][70] Question: Loan growth outlook for 2026 - Management anticipates mid-single-digit growth primarily from commercial lending, with no immediate need for significant additional headcount [88][89] Question: Capital accretion and buybacks - Management confirmed that buybacks are considered a potential option for creating shareholder value but are not the immediate focus [92]

Financial Performance - Net income experienced a significant decline, moving from a profit of $20644000 in Q2 2025 to a loss of $221990000 in Q3 2025[6] - Diluted EPS decreased substantially from $047 in Q2 2025 to $(469) in Q3 2025[6] - Net interest income increased from $55355000 in Q2 2025 to $58386000 in Q3 2025[6] - The net interest margin (NIM) on a fully taxable equivalent (FTE) basis expanded to 352% in Q3 2025, up from 323% in Q2 2025[6] Balance Sheet Transformation - The company completed the sale of $17 billion in investment securities and redeployed $580 million at a yield of 527%[8] - $700 million in FHLB puttable advances were prepaid[8] - $176 million of indirect auto loans were sold near the end of September[8] - Non-core, higher-cost transactional deposits were reduced by approximately $275 million[8] Loan Portfolio - Total loans decreased by $162 million, a 325% linked quarter decline[14] - Commercial loans grew 70% LQA[20] - Indirect auto loans declined by $210 million due to the intentional run-off and sale of $176 million in the quarter[25] Deposits - Total deposits decreased from $5699757000 in Q2 2025 to $5520901000 in Q3 2025[6] - Loans to deposits ratio is 874%[37]

Core Insights - Horizon Bancorp reported revenue of $62.18 million for Q3 2025, a year-over-year increase of 6.4%, but fell short of the Zacks Consensus Estimate of $67 million, resulting in a surprise of -7.19% [1] - The company's EPS for the quarter was $0.30, down from $0.41 a year ago, with an EPS surprise of -34.78% compared to the consensus estimate of $0.46 [1] Financial Performance Metrics - Efficiency Ratio was reported at -22.4%, significantly better than the three-analyst average estimate of 58.5% [4] - Net Interest Margin stood at 3.5%, matching the three-analyst average estimate [4] - Annualized net charge-offs of average total loans were 0.1%, consistent with the two-analyst average estimate [4] - Average Balance of Total Interest Earning Assets was $6.77 billion, exceeding the $6.6 billion estimate by two analysts [4] - Net Interest Income was $58.39 million, surpassing the average estimate of $56.86 million based on three analysts [4] - Gain on Sale of Mortgage Loans was $1.21 million, slightly below the three-analyst average estimate of $1.28 million [4] - Interchange Fees totaled $3.51 million, slightly below the two-analyst average estimate of $3.54 million [4] - Other Income reported a loss of $6.56 million, significantly worse than the $1.03 million average estimate based on two analysts [4] - Mortgage Servicing Income net of impairment was $0.35 million, slightly below the two-analyst average estimate of $0.4 million [4] - Service Charges on Deposit Accounts were $3.47 million, exceeding the $3.24 million estimate by two analysts [4] - Fiduciary Activities generated $1.36 million, slightly above the $1.29 million average estimate based on two analysts [4] - Increase in Cash Value of Bank Owned Life Insurance was $0.38 million, above the two-analyst average estimate of $0.33 million [4] Stock Performance - Horizon Bancorp's shares have returned -3.2% over the past month, contrasting with the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

分组1 - Horizon Bancorp reported quarterly earnings of $0.3 per share, missing the Zacks Consensus Estimate of $0.46 per share, and down from $0.41 per share a year ago, representing an earnings surprise of -34.78% [1] - The company posted revenues of $62.18 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 7.19%, compared to year-ago revenues of $58.42 million [2] - Horizon Bancorp shares have lost about 2.4% since the beginning of the year, while the S&P 500 has gained 14.5% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $0.46 on revenues of $69.95 million, and for the current fiscal year, it is $1.82 on revenues of $268.55 million [7] - The Zacks Industry Rank for Banks - Northeast is currently in the top 29% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Performance - Horizon Bancorp reported a net loss of $222.0 million, or $(4.69) per diluted share, for Q3 2025, compared to a net income of $20.6 million, or $0.47 per diluted share, in Q2 2025[3]. - The company reported a net loss of $221,990,000 for Q3 2025, a significant decline from a net income of $20,644,000 in Q2 2025[42]. - Basic earnings per share for Q3 2025 were $(4.69), compared to $0.42 in Q3 2024, marking a significant drop in earnings per share[31]. - The return on average tangible common equity (ROACE) was reported at (155.03)% for Q3 2025, compared to 13.24% in Q2 2025[42]. Income and Revenue - Net interest income increased by 5.5% to $58.4 million in Q3 2025 from $55.4 million in Q2 2025, and rose 24.5% compared to $46.9 million in Q3 2024[7]. - Total interest income for Q3 2025 was $92,836,000, an increase from $90,888,000 in Q3 2024, representing a year-over-year growth of 2.1%[31]. - Non-interest income for Q3 2025 was a loss of $295.3 million, significantly down from a gain of $10.9 million in Q2 2025, primarily due to losses on the sale of investment securities[14]. - Non-interest income for Q3 2025 showed a loss of $295,334,000, compared to a gain of $11,511,000 in Q3 2024, indicating a significant decline in non-interest revenue[31]. Credit Quality and Losses - The provision for credit losses recorded a benefit of $(3.6) million in Q3 2025, compared to a provision expense of $2.5 million in Q2 2025[11]. - Credit quality remained strong with annualized net charge-offs of 0.07% of average loans in Q3 2025, compared to 0.02% in Q2 2025[12]. - Net charge-offs increased to $0.8 million in Q3 2025, compared to $0.3 million in Q2 2025, remaining at just 0.07% annualized of average loans[22]. - The allowance for credit losses as a percentage of loans held for investment was 1.04% at September 30, 2025, down from 1.09% at June 30, 2025[13]. Assets and Liabilities - Total assets decreased by $939.6 million, or 12.3%, to $6.7 billion as of September 30, 2025, primarily due to a $1.2 billion decrease in total investment securities[18]. - Total liabilities were reported at $6,051,726,000 in Q3 2025, down from $7,172,635,000 in Q3 2024, representing a decrease of 15.6%[34]. - The total stockholders' equity (GAAP) decreased to $660,771,000 in Q3 2025 from $790,852,000 in Q2 2025[44]. - Total stockholders' equity decreased to $660,771,000 from $790,852,000 in the previous quarter, representing a decline of 16.4%[46]. Loans and Deposits - Total loans held for investment decreased by 13.0% annualized compared to the previous quarter, despite strong organic commercial loan growth of $57.9 million, or 7.0% annualized[7]. - Total loans were $4.8 billion at September 30, 2025, a decrease of $163.0 million from Q2 2025, impacted by the sale of approximately $176 million of the indirect auto portfolio[18]. - Total deposits decreased by $178.9 million, or 3.1%, to $5.5 billion as of September 30, 2025, driven by a decline in high-cost transactional deposit balances[19]. - Total deposits decreased by 3% from Q2 2025 to $5,520,901,000, and decreased by 4% compared to Q3 2024[35]. Expenses - Total Non-Interest Expense was $53.0 million in Q3 2025, up from $39.4 million in Q2 2025, primarily due to a $12.7 million prepayment penalty related to $700 million in FHLB advances[16]. - Total non-interest expense increased to $52,952,000 in Q3 2025 from $39,272,000 in Q3 2024, an increase of 34.9%[31]. Strategic Focus - Horizon Bancorp aims to focus on profitable growth and smart redeployment of capital to create sustainable long-term value for shareholders[3]. - The company plans to continue its strategic balance sheet repositioning to achieve top-tier financial outcomes[3]. - The company plans to host a conference call on October 23, 2025, to review its third quarter financial results and operating performance[23].

Core Insights - Horizon Bancorp reported a net loss of $222.0 million, or $(4.69) per diluted share, for Q3 2025, a significant decline compared to net income of $20.6 million, or $0.47 per diluted share, in Q2 2025 and $18.2 million, or $0.41 per diluted share, in Q3 2024 [2][3][10] - The company successfully executed a strategic balance sheet repositioning, which is expected to yield top-tier financial outcomes and enhance shareholder value [2][20] - Despite the net loss, the core community banking franchise remains strong, with expanding net interest margins and solid commercial loan growth [2][7] Financial Highlights - Net interest income for Q3 2025 was $58.4 million, up 5.5% from $55.4 million in Q2 2025 and 24.5% from $46.9 million in Q3 2024 [7][10] - The net interest margin expanded to 3.52%, compared to 3.23% in Q2 2025 and 2.66% in Q3 2024, marking the eighth consecutive quarter of growth [7][10] - Total loans held for investment decreased by 13.0% annualized, with organic commercial loan growth of $57.9 million, or 7.0% annualized [7][20] Non-Interest Income and Expenses - Total non-interest loss was $295.3 million in Q3 2025, a decrease from non-interest income of $10.9 million in Q2 2025, primarily due to losses on the sale of investment securities and the indirect auto portfolio [16][21] - Non-interest expenses increased to $53.0 million in Q3 2025 from $39.4 million in Q2 2025, driven by a $12.7 million prepayment penalty related to the payoff of FHLB advances [18][21] Credit Quality - Credit quality remained strong, with annualized net charge-offs of 0.07% of average loans during Q3 2025, compared to 0.02% in Q2 2025 [12][26] - The allowance for credit losses as a percentage of loans held for investment was 1.04% as of September 30, 2025, down from 1.09% at June 30, 2025 [13][25] Balance Sheet Highlights - Total assets decreased by $939.6 million, or 12.3%, to $6.7 billion as of September 30, 2025, primarily due to balance sheet repositioning efforts [20][21] - Total deposits decreased by $178.9 million, or 3.1%, to $5.5 billion, driven by a decline in high-cost transactional deposit balances [21][22] - The ratio of total stockholders' equity to total assets was 9.84% as of September 30, 2025, with a book value per common share of $12.96 [23][24]

Core Viewpoint - Horizon Bancorp (HBNC) is expected to report a year-over-year increase in earnings and revenues for the quarter ended September 2025, with earnings per share (EPS) estimated at $0.46, reflecting a 12.2% increase, and revenues projected at $67 million, up 14.7% from the previous year [1][3]. Earnings Expectations - The stock price may rise if the actual earnings exceed expectations in the upcoming earnings report scheduled for October 22, while a miss could lead to a decline in stock price [2]. - The consensus EPS estimate has been revised down by 2.14% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][12]. Earnings Surprise Prediction - The Zacks Earnings ESP (Expected Surprise Prediction) model indicates that Horizon Bancorp has an Earnings ESP of -2.17%, suggesting a lower Most Accurate Estimate compared to the Zacks Consensus Estimate [8][12]. - The company currently holds a Zacks Rank of 3, making it challenging to predict a positive earnings surprise [12]. Historical Performance - In the last reported quarter, Horizon Bancorp exceeded the consensus EPS estimate of $0.44 by delivering earnings of $0.47, resulting in a surprise of +6.82% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Comparative Industry Analysis - Bridgewater (BWB), another player in the Zacks Banks - Northeast industry, is expected to report earnings of $0.41 per share, reflecting a significant year-over-year increase of 51.9%, with revenues projected at $37.1 million, up 36.8% [18][19]. - Bridgewater has an Earnings ESP of +4.88% and a Zacks Rank of 1 (Strong Buy), indicating a high likelihood of beating the consensus EPS estimate [20].