Financial Data and Key Metrics Changes - Horizon Bancorp reported a net interest margin increase of 8 basis points to 3.04% in Q1 2025, marking the sixth consecutive quarter of margin expansion [26][27] - Noninterest income included a $7 million gain from the sale of the mortgage warehouse business, contributing to overall positive revenue growth [33][34] - Total expenses for Q1 2025 were $39.3 million, reflecting a sequential decline in salaries and benefits and outside services expenses [35][36] Business Line Data and Key Metrics Changes - Total loans held for investment grew by $63 million, with commercial loans increasing by $105 million, representing a 14% annualized growth rate [12][13] - Consumer loan balances decreased by $40 million, primarily due to a reduction in indirect auto lending, while core consumer loans remained flat [16][18] - Credit quality metrics remained strong, with nonperforming loans at 62 basis points of total loans held for investment [19][20] Market Data and Key Metrics Changes - Key markets contributing to loan growth included Troy, Kalamazoo, Grand Rapids, and Midland in Michigan, as well as Northwest Indiana [14] - The company noted stable pipelines and strong engagement with clients regarding potential macroeconomic impacts [15] Company Strategy and Development Direction - The company aims to execute an asset mix strategy focusing on higher-yielding lending portfolios to enhance long-term franchise value [9] - Horizon Bancorp is committed to maintaining a disciplined approach to deposit pricing and leveraging market volatility to improve funding costs [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future, citing strong local market presence and diversified portfolios as competitive advantages [70][72] - The outlook for loan growth remains in the mid-single-digit range, with expectations for deposit growth in the low single digits [39][40] Other Important Information - The company completed the sale of its mortgage warehouse business, which added optionality to its capital position [7][8] - The allowance for credit losses increased by approximately $700,000 to $52.7 million, with a ratio of 1.07% to loans [20][21] Q&A Session Summary Question: Can you unpack the added capital optionality from the warehouse gain and any appetite for share repurchases? - Management indicated that they are pleased with their capital strategy and are considering multiple options, including stock repurchases, to enhance shareholder returns [48][50] Question: What is the yield pickup as you run off indirect and fund commercial loans? - The yield runoff in the indirect auto portfolio is in the mid-3s, while the average weighted rate for the commercial book was approximately 7.15% [58][61] Question: How is the mood of your client base, and what gives you confidence in your positive outlook? - Management noted a strong local presence and diversified portfolio as key factors contributing to their optimistic outlook, despite some caution among clients regarding macroeconomic conditions [68][70] Question: Can you provide an update on deposit pricing and trajectory? - Deposit costs have increased slightly, but management anticipates stability in total deposit costs moving forward, with potential benefits when the Fed changes rates [88][90] Question: How do you weigh efficiency efforts with plans to hire veteran bankers? - The commercial team has remained stable, and management does not foresee a need for wholesale additions of new lenders at this time [102][103]

Financial Data and Key Metrics Changes - Horizon's first quarter earnings reflect a sixth consecutive quarter of margin expansion, now above 3% [4] - The net interest margin increased by eight basis points to 3.04% [16] - Total expenses for the quarter were $39.3 million, showing a sequential decline in salaries and benefits [21][22] Business Line Data and Key Metrics Changes - Total loans held for investment grew by $63 million, with commercial loans increasing by $105 million, representing a 14% annualized increase [7][8] - Consumer loan balances decreased by $40 million, primarily due to a reduction in indirect auto lending [9][10] - Non-interest income included a $7 million gain from the sale of the mortgage warehouse business [20] Market Data and Key Metrics Changes - Key markets showing growth included Troy, Kalamazoo, Grand Rapids, and Midland, Michigan, as well as Northwest Indiana [8] - Commercial credit quality metrics remained strong, with past due loans greater than thirty days at 14 basis points and a non-performing loan ratio of 27 basis points [9][11] Company Strategy and Development Direction - The company is focused on executing an asset mix strategy towards higher yielding lending portfolios [6] - Horizon aims to enhance shareholder returns through various options, including stock repurchases and balance sheet repositioning [32] - The outlook for loan growth remains unchanged in the mid-single digit range for the year [24] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive outlook due to strong local market presence and diversified portfolio [48][49] - The company is monitoring macroeconomic trends and their potential impact on the portfolio [13] - Management anticipates continued margin expansion and stable pipelines for commercial loans [17][24] Other Important Information - The allowance for credit losses increased by approximately $700,000 to $52.7 million, with an ACL to loan ratio of 1.07% [12] - The company expects total reported expenses for 2025 to be flat to up low single digits relative to 2024 [25] Q&A Session Summary Question: Can you unpack the capital optionality from the warehouse team and any appetite for share repurchases? - Management noted that they are pleased with their capital strategy and are considering stock repurchases due to attractive price-to-book levels [30][32] Question: What is the yield pickup as you run off indirect auto and fund commercial loans? - The effective yield on the indirect auto portfolio is in the mid-3s, while the average weighted rate for the commercial book was roughly 7-7.15% [37][40] Question: How is the mood of your client base regarding loan growth? - Management indicated a positive outlook, emphasizing strong local market engagement and a diversified portfolio [47][48] Question: What are the dynamics occurring on the funding side regarding deposit growth? - Management noted a shift towards more time deposits and less commercial growth, with competitive dynamics varying by market [82] Question: How do you weigh efficiency efforts with plans to hire veteran bankers? - The commercial team has been stable, with no immediate plans for wholesale additions, focusing instead on maximizing current capacity [75] Question: How do you weigh the worsening economic forecast into reserve levels? - Management acknowledged that economic forecasts could impact the allowance ratio, but specific reserves released masked some of the changes [78]

Core Viewpoint - Horizon Bancorp reported quarterly earnings of $0.54 per share, exceeding the Zacks Consensus Estimate of $0.40 per share, and showing an increase from $0.32 per share a year ago, representing a 35% earnings surprise [1][2] Financial Performance - The company posted revenues of $68.77 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 8.81%, compared to $53.22 million in the same quarter last year [2] - Over the last four quarters, Horizon Bancorp has exceeded consensus EPS estimates three times and has topped consensus revenue estimates three times as well [2] Stock Performance and Outlook - Horizon Bancorp shares have declined approximately 13.5% since the beginning of the year, while the S&P 500 has decreased by 10.1% [3] - The company's current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $65.43 million, and for the current fiscal year, it is $1.78 on revenues of $262.7 million [7] Industry Context - The Zacks Industry Rank for Banks - Northeast places it in the top 23% of over 250 Zacks industries, indicating that the industry is performing relatively well [8]

Financial Performance - Net income for Q1 2025 was $23.9 million, or $0.54 per diluted share, compared to a net loss of $10.9 million in Q4 2024 and $14.0 million in Q1 2024[5]. - Non-interest income totaled $16.5 million in Q1 2025, a significant recovery from a non-interest loss of $29.0 million in Q4 2024[14]. - Net income for Q1 2025 was $23,943,000, compared to a net loss of $10,882,000 in Q4 2024, marking a significant recovery[40]. - Basic earnings per share for Q1 2025 was $0.55, compared to a loss of $0.25 in Q4 2024[32]. - Return on average tangible common equity (ROACE) for Q1 2025 was 15.79%, a significant improvement from -7.35% in Q4 2024[40]. Loan and Deposit Growth - Total loans held for investment increased by 5% linked quarter annualized, with organic commercial loan growth of $103.3 million, or 14% annualized[7]. - Core deposits grew by $62.5 million during the period, representing a 24% annualized increase in non-interest-bearing balances[7]. - Total loans held for investment increased to $4,909,815 thousand, a 1% increase from Q4 2024 and a 6% increase from Q1 2024[35]. - Total deposits rose to $5,765,783 thousand, reflecting a 3% increase from Q4 2024 and Q1 2024[35]. - Commercial real estate loans grew by 3% from Q4 2024 to $2,262,910 thousand and by 14% compared to Q1 2024[35]. Interest Income and Margin - Total interest income for Q1 2025 was $89,175,000, a decrease of 4.1% from $93,350,000 in Q4 2024[32]. - Net interest income after credit loss expense was $50,891,000, compared to $51,956,000 in Q4 2024, reflecting a decline of 2.1%[32]. - The net FTE interest margin (non-GAAP) improved to 3.04% in Q1 2025, up from 2.97% in Q4 2024[39]. - Total interest-earning assets averaged $7,234,724 thousand with a net interest margin of 5.11% for Q1 2025[36]. - Net interest income for Q1 2025 was reported at $52,267 thousand, compared to $43,288 thousand in Q1 2024[36]. Asset and Equity Changes - Total assets decreased by $175.5 million, or 2.2%, to $7.6 billion as of March 31, 2025, primarily due to the sale of the mortgage warehouse portfolio[18]. - Stockholders' equity increased to $776,061,000 from $763,582,000 in Q4 2024, an increase of 1.3%[34]. - The ratio of total stockholders' equity to total assets was 10.18% as of March 31, 2025, with book value per common share increasing to $17.72[21]. - Total tangible common equity (non-GAAP) rose to $611,443 million, compared to $598,148 million in the previous quarter, reflecting a quarter-over-quarter increase of 1.08%[43]. - Tangible book value per common share (non-GAAP) reached $13.96, an increase from $13.68 in the prior quarter, indicating a growth of 2.05%[43]. Expense Management - The efficiency ratio improved to 57.16% in Q1 2025 from 185.89% in Q4 2024, reflecting a more efficient expense base[8]. - Total non-interest expense was $39.3 million in Q1 2025, down from $44.9 million in Q4 2024, primarily due to a $3.2 million decrease in salaries and employee benefits[16]. - The provision for loan losses was $1,376,000, up from $1,171,000 in Q4 2024, indicating a rise of 17.5%[32]. Credit Quality - The company recorded a provision for credit losses of $1.4 million in Q1 2025, compared to $1.2 million in Q4 2024[11]. - Annualized net charge-offs were 0.07% of average loans in Q1 2025, compared to 0.05% in Q4 2024[12]. - Total non-accrual loans increased by $3.0 million, or 12%, to 0.59% of total loans HFI as of March 31, 2025[22]. - Total non-performing assets rose to $31,427,000, reflecting a 14.8% increase from the previous quarter and a 55% increase year-over-year[37]. - The allowance for credit losses increased to $52,654,000, a 1% increase from the previous quarter[37]. Company Overview - Horizon Bancorp, Inc. is a commercial bank holding company with $8 billion in assets, serving customers through digital tools and branches in Indiana and Michigan[27].

Core Viewpoint - Horizon Bancorp, Inc. reported strong financial results for the first quarter of 2025, showcasing continued growth in key metrics, including net income and loan growth, alongside effective cost management strategies [2][3]. Financial Performance - Net income for Q1 2025 was $23.9 million, or $0.54 per diluted share, a significant improvement from a net loss of $10.9 million in Q4 2024 and an increase from $14.0 million in Q1 2024 [3][10]. - Net interest income was $52.3 million, slightly down from $53.1 million in Q4 2024, while the net interest margin expanded to 3.04%, up from 2.97% in the previous quarter [12][9]. - Total non-interest income was $16.5 million, a recovery from a loss of $29.0 million in Q4 2024, primarily due to a pre-tax gain from the sale of the mortgage warehouse business [17][9]. Loan and Deposit Growth - Total loans held for investment increased by 5% on an annualized basis, with organic commercial loan growth of $103.3 million, or 14% annualized [9]. - Total deposits rose by $165.1 million, or 2.9%, to $5.8 billion, with time deposits increasing by 14.3% during the quarter [25]. Expense Management - Non-interest expenses decreased to $39.3 million from $44.9 million in Q4 2024, driven by lower salaries and employee benefits expenses [19][21]. - The efficiency ratio improved to 57.16%, reflecting the company's commitment to cost management [10]. Credit Quality - Credit quality remained strong, with annualized net charge-offs at 0.07% of average loans, and non-performing assets increased slightly to 0.41% of total assets [29][30]. - The allowance for credit losses was stable at 1.07% of loans held for investment [16]. Capital Position - As of March 31, 2025, the total capital ratio was 14.28%, and the book value per common share increased to $17.72 [27][28]. - Tangible common equity totaled $611.4 million, with a tangible common equity to tangible assets ratio of 8.20% [28].

Core Viewpoint - Horizon Bancorp, Inc. will host a conference call on April 24, 2025, to discuss its first quarter 2025 financial results, with the news release published on April 23, 2025 [1]. Group 1: Conference Call Details - The conference call is scheduled for 7:30 a.m. CT (8:30 a.m. ET) on April 24, 2025, and participants can join by dialing specific numbers based on their location [2]. - A telephone replay of the call will be available approximately one hour after the call ends, accessible through designated numbers until May 2, 2025 [3]. Group 2: Company Overview - Horizon Bancorp, Inc. is a commercial bank holding company with $7.8 billion in assets, serving customers in the Midwest through digital tools and physical branches in Indiana and Michigan [4]. - The company offers a range of retail banking services, including secured consumer lending and wealth management solutions, with commercial lending making up over half of its total loans [4].

Core Viewpoint - Horizon Bancorp (HBNC) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are crucial for predicting near-term stock price movements [2][4]. - The recent upgrade for Horizon Bancorp reflects an improvement in its earnings outlook, likely leading to a favorable impact on its stock price [3][5]. Earnings Estimate Revisions - Horizon Bancorp is projected to earn $1.78 per share for the fiscal year ending December 2025, representing a year-over-year increase of 26.2% [8]. - Over the past three months, the Zacks Consensus Estimate for Horizon Bancorp has risen by 6.8%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Horizon Bancorp to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Financial Performance - As of December 31, 2024, Horizon Bank had total assets of $7.8 billion and total deposits of $5.6 billion[21]. - In 2024, revenues from loans accounted for 81.0% of total consolidated revenue, while revenues from investment securities accounted for 15.5%[23]. - Horizon has experienced financial growth through strategic mergers and acquisitions, enhancing its market presence[20]. - The company has experienced financial growth through a combination of organic expansion and strategic acquisitions[20]. Market Position - Horizon holds a market share of 58.25% in LaPorte County, making it the largest of 8 institutions in that area[32]. - In Carroll County, Horizon is the largest institution with a market share of 29.52% among 6 institutions[32]. - Horizon ranks 4th in Johnson County with a market share of 9.80% among 22 institutions[32]. - In Michigan, Horizon is the 2nd largest in Midland County and the 4th largest in Berrien County[33]. Employee and Operational Structure - Horizon employs 841 full-time and 21 part-time employees across all locations as of December 31, 2024[28]. - The company has a focus on developing employee skills and career goals, emphasizing internal promotions[27]. - Horizon operates 71 full-service offices in northern and central Indiana and southern and central Michigan[21]. Regulatory Environment - The company is subject to extensive regulation by the Federal Reserve and the Indiana Department of Financial Institutions[34][36]. - Horizon has qualified as a financial holding company, allowing it to engage in a broader range of financial activities[40]. - The company must maintain a common equity Tier 1 capital to risk-based assets ratio of 4.5% to meet federal capital standards[57]. - Horizon is required to act as a source of financial strength for its subsidiary bank in times of financial distress[42]. - Horizon is subject to the Sarbanes–Oxley Act, which imposes new requirements for audit committees and increased disclosure obligations[91]. - Horizon has incurred higher operating costs due to compliance with the Dodd–Frank Act, which are expected to continue in the foreseeable future[99]. Capital Adequacy - As of December 31, 2024, Horizon Bank's total capital ratio was 13.91%, exceeding the required 8.00% for capital adequacy purposes[72]. - Horizon Bank's Tier 1 capital ratio was 12.00%, above the minimum requirement of 6.00%[72]. - The common equity Tier 1 capital ratio for Horizon Bank was 11.00%, surpassing the required 4.50%[72]. - The leverage ratio for Horizon Bank was 8.88%, exceeding the minimum requirement of 4.00%[72]. - The total risk-based capital ratio for Horizon Bank was 12.64%, well above the 8.00% minimum[72]. - The Bank could declare dividends of approximately $54.5 million to Horizon without prior approval as of December 31, 2024[77]. - Horizon Bank was categorized as "well capitalized," meeting all regulatory capital requirements[81]. Competition - The company faces high competition from various financial institutions, including commercial banks, credit unions, and emerging FinTech start-ups[29]. - Horizon's business is not materially seasonal and does not rely on a small group of customers[23]. Stock Information - Horizon's common stock is traded on the NASDAQ Global Select Market under the symbol HBNC[19]. - Horizon's common stock is listed on NASDAQ under the symbol "HBNC" and is subject to NASDAQ rules for listed companies[90]. Deposit Insurance - The FDIC insures deposits up to $250,000 per depositor, with a long-term goal for the designated reserve ratio of 2% of estimated insured deposits[49][50]. - Assessment rates for deposit insurance premiums for small banks like Horizon range from 5 to 9 basis points[51].

Core Points - Horizon Bancorp, Inc. announced the retirement of Craig Dwight as Chairman of the Board effective May 1, 2025, after providing written notice on February 24, 2025, which was accepted by the Board on February 25, 2025 [1] - Eric Blackhurst has been elected as the new Independent Chairperson, effective upon Mr. Dwight's retirement, bringing over seven years of experience as a Company Director and a notable background in corporate governance [1][2] - The role of Independent Lead Director, currently held by Michele Magnuson, will be retired, although she will remain on the Board and continue serving on the Compensation and Governance Committees [1][2] - Larry Magnesen has joined the Horizon Bank's Board of Directors effective February 25, 2025, bringing over 20 years of experience in marketing and corporate communications from his previous roles at Fifth Third Bank [2] Company Overview - Horizon Bancorp, Inc. is a nearly $8 billion asset bank holding company for Horizon Bank, serving customers across Midwestern markets with a range of digital tools and physical branches in Indiana and Michigan [3] - The bank's retail offerings include residential, indirect auto, and secured consumer lending, along with personal banking and wealth management solutions [3] - Horizon also provides business banking and treasury management services, with commercial lending representing over half of total loans [3]

Financial Data and Key Metrics - No specific financial data or key metrics changes mentioned in the provided content [1][2][3][4] Business Line Data and Key Metrics - No specific business line data or key metrics changes mentioned in the provided content [1][2][3][4] Market Data and Key Metrics - No specific market data or key metrics changes mentioned in the provided content [1][2][3][4] Company Strategy and Industry Competition - No specific company strategy or industry competition details mentioned in the provided content [1][2][3][4] Management Commentary on Operating Environment and Future Outlook - No specific management commentary on the operating environment or future outlook mentioned in the provided content [1][2][3][4] Other Important Information - The conference call may contain forward-looking statements subject to risks and uncertainties, with additional information available in Horizon's SEC filings [2][3] - Management may refer to non-GAAP financial measures, with reconciliations provided in the presentation [3] - The press release and supplemental presentation are available on the company's website [3] Q&A Session Summary - No Q&A session details provided in the content [1][2][3][4]