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Horizon Bancorp(HBNC) - 2024 Q3 - Quarterly Results
HBNCHorizon Bancorp(HBNC)2024-10-23 20:17

Net Income and Earnings - Net income for Q3 2024 was 18.2million,or18.2 million, or 0.41 per diluted share, compared to 14.1millioninQ22024and14.1 million in Q2 2024 and 16.2 million in Q3 2023[2] - Net income for Q3 2024 was 18.180million,comparedto18.180 million, compared to 14.140 million in Q2 2024 and 16.205millioninQ32023[32]−BasicearningspershareforQ32024were16.205 million in Q3 2023[32] - Basic earnings per share for Q3 2024 were 0.42, up from 0.32inQ22024and0.32 in Q2 2024 and 0.37 in Q3 2023[32] - Net income (GAAP) increased to 18.180millioninQ32024from18.180 million in Q3 2024 from 14.140 million in Q2 2024[43] Net Interest Income and Margin - Net interest income increased to 46.9millioninQ32024,upfrom46.9 million in Q3 2024, up from 45.3 million in Q2 2024, with a net FTE interest margin of 2.66%[3] - Net interest income for Q3 2024 was 46.910million,upfrom46.910 million, up from 45.279 million in Q2 2024 and 42.090millioninQ32023[32]−NetFTEinterestincome(non−GAAP)roseto42.090 million in Q3 2023[32] - Net FTE interest income (non-GAAP) rose to 48,927 in Q3 2024, compared to 47,302inQ22024and47,302 in Q2 2024 and 44,202 in Q3 2023[38] - Net interest margin (Non-GAAP) improved to 2.66% in Q3 2024, up from 2.64% in Q2 2024 and 2.41% in Q3 2023[38] - Net FTE interest income (non-GAAP) increased to 48.927millioninQ32024from48.927 million in Q3 2024 from 47.302 million in Q2 2024[42] - Net FTE interest margin (non-GAAP) improved to 2.66% in Q3 2024 from 2.64% in Q2 2024[42] Loans and Credit Quality - Total loans held for investment remained stable at 4.8billion,withcommercialportfoliogrowthoffsetbyplannedrun−offoflower−yieldingindirectautoloans[3]−Annualizednetcharge−offswere0.034.8 billion, with commercial portfolio growth offset by planned run-off of lower-yielding indirect auto loans[3] - Annualized net charge-offs were 0.03% of average loans in Q3 2024, with non-performing assets to total assets at 0.32%[4] - Provision for credit losses in Q3 2024 was 1.0 million, down from 2.4millioninQ22024and2.4 million in Q2 2024 and 0.3 million in Q3 2023[11] - Allowance for credit losses as a percentage of period-end loans HFI was 1.10% at September 30, 2024, compared to 1.08% at June 30, 2024[12] - Non-accrual loans increased by 5.3million(29.05.3 million (29.0%) to 0.49% of total loans HFI, and non-performing assets rose by 5.1 million (25.0%) to 25.6millionasofSeptember30,2024[22]−Netcharge−offsdecreasedto25.6 million as of September 30, 2024[22] - Net charge-offs decreased to 0.4 million in Q3 2024 from 0.6millioninQ22024,representing0.030.6 million in Q2 2024, representing 0.03% annualized of average loans[23] - Provision for loan losses in Q3 2024 was 1.044 million, down from 2.369millioninQ22024and2.369 million in Q2 2024 and 263,000 in Q3 2023[32] - Total loans receivable as of September 2024 were 75.488million,comparedto75.488 million, compared to 71.880 million in June 2024 and 63.003millioninSeptember2023[32]−Grossloansheldforinvestment(HFI)reached63.003 million in September 2023[32] - Gross loans held for investment (HFI) reached 4,803,996 thousand in Q3 2024, a 10% increase compared to Q3 2023[34] - Total commercial loans grew to 2,914,059thousandinQ32024,up132,914,059 thousand in Q3 2024, up 13% from Q3 2023[36] - Residential real estate loans increased to 801,356 thousand in Q3 2024, a 19% rise compared to Q3 2023[36] - Loans receivable grew to 4,775,788withanaveragerateof6.324,775,788 with an average rate of 6.32% in Q3 2024, up from 4,662,124 at 6.23% in Q2 2024 and 4,280,700at5.894,280,700 at 5.89% in Q3 2023[38] - Total non-accrual loans increased by 29% to 23.567 million in Q3 2024 compared to Q2 2024[40] - Total non-performing loans rose by 26% to 24.386millioninQ32024comparedtoQ22024[40]−Netcharge−offsdecreasedby3624.386 million in Q3 2024 compared to Q2 2024[40] - Net charge-offs decreased by 36% to 375 thousand in Q3 2024 compared to Q2 2024[40] - Total allowance for credit losses increased by 1% to 52.881millioninQ32024comparedtoQ22024[40]DepositsandLiabilities−Depositgrowthof1.752.881 million in Q3 2024 compared to Q2 2024[40] Deposits and Liabilities - Deposit growth of 1.7% in Q3 2024, reaching 5.7 billion, driven by stable non-interest bearing deposits and growth in core relationship portfolios[3] - Total deposit balances grew by 96.9million(1.796.9 million (1.7%) to 5.7 billion as of September 30, 2024, while total borrowings decreased by 86.4million(7.086.4 million (7.0%) to 1.1 billion[19] - Total deposits as of September 2024 were 30.787million,upfrom30.787 million, up from 28.447 million in June 2024 and 24.704millioninSeptember2023[32]−Totaldepositsreached24.704 million in September 2023[32] - Total deposits reached 5,727,015 thousand in Q3 2024, a 2% increase from Q2 2024 and flat compared to Q3 2023[36] - Savings and money market deposits grew to 3,420,827thousandinQ32024,up33,420,827 thousand in Q3 2024, up 3% from Q3 2023[36] - Time deposits increased to 1,220,653 thousand in Q3 2024, a 4% rise from Q2 2024 but a 2% decline from Q3 2023[36] - Interest bearing deposits increased to 3,386,177withanaveragerateof2.143,386,177 with an average rate of 2.14% in Q3 2024, up from 3,334,490 at 2.03% in Q2 2024 and 3,267,594at1.543,267,594 at 1.54% in Q3 2023[38] - Time deposits grew to 1,189,148 with an average rate of 4.22% in Q3 2024, up from 1,134,590at4.121,134,590 at 4.12% in Q2 2024 and 1,271,104 at 3.76% in Q3 2023[38] - Borrowings decreased to 1,149,952withanaveragerateof3.541,149,952 with an average rate of 3.54% in Q3 2024, compared to 1,184,172 at 3.49% in Q2 2024 and 1,180,452at3.501,180,452 at 3.50% in Q3 2023[38] - Total liabilities stood at 7,172,635 thousand in Q3 2024, down 1.3% from Q2 2024 and 1.3% from Q3 2023[34] Non-Interest Income and Expense - Non-interest income increased to 11.5millioninQ32024,upfrom11.5 million in Q3 2024, up from 10.5 million in Q2 2024, due to higher realized gains on mortgage loan sales[13] - Total non-interest income for Q3 2024 was 11.5million,comparedto11.5 million, compared to 10.5 million in Q2 2024, driven by increases in service charges, interchange fees, and gains on mortgage loans[14] - Non-interest income for Q3 2024 was 11.511million,comparedto11.511 million, compared to 10.485 million in Q2 2024 and 11.830millioninQ32023[32]−Totalnon−interestexpenseincreasedto11.830 million in Q3 2023[32] - Total non-interest expense increased to 39.3 million in Q3 2024 from 37.5millioninQ22024,primarilyduetoa37.5 million in Q2 2024, primarily due to a 1.2 million rise in salaries and employee benefits and a 0.6millionincreaseinoutsideservicesandconsultants[16]−Non−interestexpenseforQ32024was0.6 million increase in outside services and consultants[16] - Non-interest expense for Q3 2024 was 39.272 million, up from 37.522millioninQ22024and37.522 million in Q2 2024 and 36.168 million in Q3 2023[32] Capital and Equity - Total capital ratio improved to 13.52% in Q3 2024, up from 13.41% in Q2 2024, with tangible common equity to tangible assets ratio rising to 7.58% from 7.22%[21][22] - Total stockholders' equity increased to 754,822thousandinQ32024,up3.9754,822 thousand in Q3 2024, up 3.9% from Q2 2024 and 8.9% from Q3 2023[34] - Total stockholders' equity (GAAP) increased to 754,822 thousand as of September 30, 2024, up from 693,369thousandinSeptember2023[44][46]−Totaltangiblecommonequity(non−GAAP)roseto693,369 thousand in September 2023[44][46] - Total tangible common equity (non-GAAP) rose to 588,544 thousand in September 2024, compared to 523,628thousandinSeptember2023[44][46]−Tangiblecommonequitytotangibleassetsratio(non−GAAP)improvedto7.58523,628 thousand in September 2023[44][46] - Tangible common equity to tangible assets ratio (non-GAAP) improved to 7.58% in September 2024 from 6.72% in September 2023[44] - Tangible book value per common share (non-GAAP) increased to 13.46 in September 2024, up from 12.00inSeptember2023[46]−Returnonaveragetangiblecommonequity(ROACE)(non−GAAP)increasedto12.6512.00 in September 2023[46] - Return on average tangible common equity (ROACE) (non-GAAP) increased to 12.65% in Q3 2024 from 10.18% in Q2 2024[43] Assets and Investments - Total assets increased by 14.9 million (0.2%) to 7.93billionasofSeptember30,2024,drivenbya7.93 billion as of September 30, 2024, driven by a 79.5 million (230.6%) increase in federal funds sold[18] - Total interest earning assets increased to 7,416,194thousandinQ32024,up0.97,416,194 thousand in Q3 2024, up 0.9% from Q2 2024 and 1.5% from Q3 2023[34] - Total interest earning assets increased to 7,330,263 with an average rate of 5.04% in Q3 2024, compared to 7,212,788at4.967,212,788 at 4.96% in Q2 2024 and 7,286,611 at 4.59% in Q3 2023[38] - Total investment securities stood at 2,427,125withanaveragerateof2.382,427,125 with an average rate of 2.38% in Q3 2024, compared to 2,441,370 at 2.39% in Q2 2024 and 2,871,079at2.352,871,079 at 2.35% in Q3 2023[38] - Federal Home Loan Bank stock interest income increased to 1,607 at an average rate of 11.88% in Q3 2024, compared to 1,521at11.361,521 at 11.36% in Q2 2024 and 618 at 7.10% in Q3 2023[38] - Total assets (GAAP) stood at 7,927,457thousandasofSeptember30,2024,slightlydownfrom7,927,457 thousand as of September 30, 2024, slightly down from 7,959,434 thousand in September 2023[44] - Intangible assets decreased to 166,278thousandinSeptember2024from166,278 thousand in September 2024 from 169,741 thousand in September 2023[44][46] - Total tangible assets (non-GAAP) were 7,761,179thousandinSeptember2024,comparedto7,761,179 thousand in September 2024, compared to 7,789,693 thousand in September 2023[44] Strategic Actions and Outlook - Horizon announced the repositioning of 325millionofavailable−for−salesecuritiesandtheintendedsaleofitsmortgagewarehousebusinessinQ42024[6]−HorizonexpectssustainableimprovementinprofitabilityfromQ42024strategicactions,positivelyimpactingfinancialperformancein2025[5]TaxandOtherFinancialMetrics−Horizon′seffectivetaxrateforQ32024was−0.4325 million of available-for-sale securities and the intended sale of its mortgage warehouse business in Q4 2024[6] - Horizon expects sustainable improvement in profitability from Q4 2024 strategic actions, positively impacting financial performance in 2025[5] Tax and Other Financial Metrics - Horizon's effective tax rate for Q3 2024 was -0.4%, down from 10.9% in Q2 2024, due to increased net realizable tax credits[17] - Total interest income for Q3 2024 was 90.888 million, compared to 86.981millioninQ22024and86.981 million in Q2 2024 and 80.125 million in Q3 2023[32] - Total interest expense for Q3 2024 was 43.978million,comparedto43.978 million, compared to 41.702 million in Q2 2024 and 38.035millioninQ32023[32]−Subordinatednotesinterestincomeremainedstableat38.035 million in Q3 2023[32] - Subordinated notes interest income remained stable at 830 with an average rate of 5.93% in Q3 2024, compared to 829at5.99829 at 5.99% in Q2 2024 and 880 at 5.92% in Q3 2023[38] - Common shares outstanding remained stable at 43,712,059 in September 2024, similar to 43,648,501 in September 2023[46]