Horizon Bancorp(US:HBNC)2024-10-23 20:17Net Income and Earnings - Net income for Q3 2024 was $18.2 million, or $0.41 per diluted share, compared to $14.1 million in Q2 2024 and $16.2 million in Q3 2023[2] - Net income for Q3 2024 was $18.180 million, compared to $14.140 million in Q2 2024 and $16.205 million in Q3 2023[32] - Basic earnings per share for Q3 2024 were $0.42, up from $0.32 in Q2 2024 and $0.37 in Q3 2023[32] - Net income (GAAP) increased to $18.180 million in Q3 2024 from $14.140 million in Q2 2024[43] Net Interest Income and Margin - Net interest income increased to $46.9 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 $46.910 million, up from $45.279 million in Q2 2024 and $42.090 million in Q3 2023[32] - Net FTE interest income (non-GAAP) rose to $48,927 in Q3 2024, compared to $47,302 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 $48.927 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 $4.8 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 $2.4 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 $5.3 million (29.0%) to 0.49% of total loans HFI, and non-performing assets rose by $5.1 million (25.0%) to $25.6 million as of September 30, 2024[22] - Net charge-offs decreased to $0.4 million in Q3 2024 from $0.6 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 $2.369 million in Q2 2024 and $263,000 in Q3 2023[32] - Total loans receivable as of September 2024 were $75.488 million, compared to $71.880 million in June 2024 and $63.003 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 $2,914,059 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 $4,775,788 with an average rate of 6.32% in Q3 2024, up from $4,662,124 at 6.23% in Q2 2024 and $4,280,700 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 $24.386 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 $52.881 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 $96.9 million (1.7%) to $5.7 billion as of September 30, 2024, while total borrowings decreased by $86.4 million (7.0%) to $1.1 billion[19] - Total deposits as of September 2024 were $30.787 million, up from $28.447 million in June 2024 and $24.704 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 $3,420,827 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 $3,386,177 with an average rate of 2.14% in Q3 2024, up from $3,334,490 at 2.03% in Q2 2024 and $3,267,594 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 $1,134,590 at 4.12% in Q2 2024 and $1,271,104 at 3.76% in Q3 2023[38] - Borrowings decreased to $1,149,952 with an average rate of 3.54% in Q3 2024, compared to $1,184,172 at 3.49% in Q2 2024 and $1,180,452 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 $11.5 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 $11.5 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 $11.511 million, compared to $10.485 million in Q2 2024 and $11.830 million in Q3 2023[32] - Total non-interest expense increased to $39.3 million in Q3 2024 from $37.5 million in Q2 2024, primarily due to a $1.2 million rise in salaries and employee benefits and a $0.6 million increase in outside services and consultants[16] - Non-interest expense for Q3 2024 was $39.272 million, up from $37.522 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 $754,822 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 $693,369 thousand in September 2023[44][46] - Total tangible common equity (non-GAAP) rose to $588,544 thousand in September 2024, compared to $523,628 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 $12.00 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 $7.93 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 $7,416,194 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 $7,212,788 at 4.96% in Q2 2024 and $7,286,611 at 4.59% in Q3 2023[38] - Total investment securities stood at $2,427,125 with an average rate of 2.38% in Q3 2024, compared to $2,441,370 at 2.39% in Q2 2024 and $2,871,079 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 $1,521 at 11.36% in Q2 2024 and $618 at 7.10% in Q3 2023[38] - Total assets (GAAP) stood at $7,927,457 thousand as of September 30, 2024, slightly down from $7,959,434 thousand in September 2023[44] - Intangible assets decreased to $166,278 thousand in September 2024 from $169,741 thousand in September 2023[44][46] - Total tangible assets (non-GAAP) were $7,761,179 thousand in September 2024, compared to $7,789,693 thousand in September 2023[44] Strategic Actions and Outlook - Horizon announced the repositioning of $325 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 $86.981 million in Q2 2024 and $80.125 million in Q3 2023[32] - Total interest expense for Q3 2024 was $43.978 million, compared to $41.702 million in Q2 2024 and $38.035 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 $829 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]