Horizon Bancorp(US:HBNC)2025-11-10 21:07Financial Performance - Net income for the three months ended September 30, 2025, decreased to a net loss of $222.0 million, or $(4.69) per diluted share, compared to net income of $18.2 million, or $0.41 per diluted share for the same period in 2024[178]. - For the nine months ended September 30, 2025, net income decreased to a net loss of $177.4 million, or $(3.94) per diluted share, compared to net income of $46.3 million, or $1.05 per share for the same period in 2024[179]. - Non-interest income decreased by $306.8 million during the three months ended September 30, 2025, primarily due to a loss on sale of investment securities amounting to $299.1 million[178]. - Non-interest income decreased by $306.8 million, resulting in a net loss of $295.3 million for the three months ended September 30, 2025, compared to a gain of $11.5 million in 2024[186]. - Total non-interest expense for the nine months ended September 30, 2025, was $131.7 million, an increase of $17.8 million compared to $113.9 million in 2024[192]. Interest Income and Expenses - Net interest income increased by $11.5 million, or 24.5%, to $58.4 million for the three months ended September 30, 2025, despite a decrease in average earning assets[180]. - For the nine months ended September 30, 2025, net interest income increased by $30.5 million to $166.0 million, with the net FTE interest margin rising by 66 basis points to 3.26%[180]. - The increase in interest income for the three months ended September 30, 2025, was $1.9 million, while interest expense decreased by $9.5 million[178]. - Total interest income for the three months ended September 30, 2025, was $1,528 million, a decrease of $1,499 million compared to the same period in 2024[185]. Asset and Liability Management - Total assets decreased by $1.1 billion, or 14.0%, to $6.7 billion as of September 30, 2025, primarily due to balance sheet repositioning efforts[201]. - Total investment securities decreased by $1.2 billion, or 58.0%, to $0.9 billion as of September 30, 2025, following the movement of the entire held-to-maturity securities portfolio to available-for-sale[202]. - Total loans HFI decreased by $23.4 million to $4.8 billion as of September 30, 2025, due to the sale of approximately $176 million of the indirect auto portfolio[203]. - Total deposit balances decreased by $79.8 million, or 1.4%, to $5.5 billion as of September 30, 2025, driven by a decline in high-cost transactional deposits[204]. - Total borrowings decreased by $985.1 million, or 79.9%, to $247.2 million as of September 30, 2025, due to the payoff of $700 million in FHLB advances[205]. Credit Quality and Losses - As of September 30, 2025, the allowance for credit losses (ACL) on loans was $50.2 million, or 1.04% of period-end loans held for investment (HFI), compared to $52.0 million, or 1.07% at December 31, 2024[211]. - The company recorded a benefit for credit losses on loans of $3.4 million for the three months ended September 30, 2025, compared to a provision of $1.0 million for the same period in 2024[196]. - Net loan charge-offs increased by $0.5 million to $0.8 million for the three months ended September 30, 2025, compared to $0.4 million during the same period in 2024[197]. - Total non-performing assets increased by $8.3 million, or 30%, from December 31, 2024, to 0.53% of total assets as of September 30, 2025[212]. - The allowance for credit losses decreased to $50,178,000 as of September 30, 2025, compared to $51,980,000 at December 31, 2024, a decline of 3.5%[213]. Equity and Capital Management - Stockholders' equity totaled $660.8 million as of September 30, 2025, down from $763.6 million at December 31, 2024, a decrease of 13.5%[217]. - The ratio of total stockholders' equity to total assets was 9.84% as of September 30, 2025, compared to 9.62% at December 31, 2024[218]. - Tangible common equity totaled $497.7 million at September 30, 2025, down from $588.5 million at September 30, 2024, a decrease of 15.4%[227]. Future Outlook and Risks - The company faces risks from macroeconomic conditions, including trade policy and interest rate volatility, which could impact future performance[172]. - The Company projected a $6,013,000 decrease in net interest income with a 200 basis points decline in interest rates, representing a 2.3% change[231].