
Performance Highlights Horizon Bancorp returned to profitability in Q1 2024 with $14.0M net income, driven by net interest margin expansion, strong loan growth, and managed expenses Q1 2024 vs. Q4 2023 Key Metrics | Metric | Q1 2024 | Q4 2023 | | :--- | :--- | :--- | | Net Income | $14.0M | ($25.2M) | | Diluted EPS | $0.32 | ($0.58) | | Net Interest Margin | 2.50% | 2.43% | | Net Interest Income | $43.3M | $42.3M | - Total loans grew by 18.2% annualized during the quarter to $4.62 billion, driven by strategic deployment of excess liquidity into residential mortgages (+$94.7 million) and consumer loans (+$59.1 million)5 - Commercial loans demonstrated strong growth of 11.2% annualized, which included $22.8 million in new equipment finance production5 - Asset quality remained excellent, with net charge-offs at only 0.01% of average loans and non-performing loans at 0.41% of total loans5 - The company maintained significant flexibility with $271.1 million in cash at period end, available for deployment into higher-yielding assets throughout 20245 Financial Performance Analysis Q1 2024 saw a significant turnaround to profitability, driven by increased net interest income, reduced non-interest expenses, and robust loan growth Income Statement Analysis Q1 2024 net income of $14.0M recovered from Q4 2023's $25.2M loss, driven by non-recurrence of one-time events and expense reductions - The rebound from a $25.2M net loss in Q4 2023 to a $14.0M net income in Q1 2024 was largely due to the non-recurrence of a $31.6M net loss on the sale of securities and an $8.6M tax effect from the surrender of bank-owned life insurance in the prior quarter28 - Non-interest expense decreased by $2.2 million from the linked quarter, primarily due to lower salaries and employee benefits (-$1.6 million), loan expense (-$626,000), and other losses (-$492,000)10 - The effective tax rate for Q1 2024 was 8.6%, with income tax expense $5.1 million lower than the linked quarter, which had included tax associated with the surrender of bank-owned life insurance11 Net Interest Margin (NIM) Net Interest Margin (NIM) expanded for the second consecutive quarter, increasing by 7 basis points to 2.50% in Q1 2024 Net Interest Margin Expansion | Metric | Q1 2024 | Q4 2023 | Change (bps) | | :--- | :--- | :--- | :--- | | Net Interest Margin (NIM) | 2.50% | 2.43% | +7 bps | | Adjusted NIM | 2.50% | 2.42% | +8 bps | Lending Activity Total loans grew robustly by $200.5 million, or 18.3% annualized, reaching $4.62 billion, driven by strategic liquidity deployment Loan Growth by Type (Q1 2024 vs Q4 2023) | Loan Type | Q1 2024 Balance ($M) | QTD $ Change ($M) | Annualized % Change | | :--- | :--- | :--- | :--- | | Commercial | 2,749.8 | +74.8 | 11.2% | | Residential mortgage | 782.1 | +100.9 | 59.6% | | Mortgage warehouse | 56.5 | +11.5 | 102.3% | | Consumer | 1,029.8 | +13.3 | 5.3% | | Total loans | 4,618.2 | +200.5 | 18.3% | Deposit Activity Total deposits decreased modestly by 1.5% (6.0% annualized) to $5.58 billion, primarily due to reductions in time and non-interest-bearing deposits Deposit Changes by Type (Q1 2024 vs Q4 2023) | Deposit Type | Q1 2024 Balance ($M) | QTD $ Change ($M) | | :--- | :--- | :--- | | Non-interest bearing | 1,093.1 | (22.9) | | Interest bearing | 3,350.7 | (18.5) | | Time deposits | 1,136.1 | (43.6) | | Total deposits | 5,579.9 | (85.0) | Capital and Liquidity The company maintained strong capital and liquidity, exceeding regulatory standards with a 10.90% CET1 ratio and substantial available liquidity - The capital resources of the Company and the Bank continued to exceed regulatory capital ratios for "well capitalized" banks at March 31, 20241821 - Tangible book value per common share (TBVPS) increased by $0.05 during the first quarter to $12.6519 - The Bank had significant available liquidity, including approximately $1.56 billion in unused credit lines and $581.1 million of unpledged investment securities22 Detailed Financial Statements This section provides unaudited financial tables, including balance sheets, income statements, and credit quality data, for a comprehensive financial overview Condensed Consolidated Balance Sheets Total assets decreased to $7.86 billion, driven by cash redeployment into loans, while liabilities decreased and equity slightly increased Key Balance Sheet Items | Item | March 31, 2024 ($M) | Dec 31, 2023 ($M) | | :--- | :--- | :--- | | Total Assets | 7,855.7 | 7,940.5 | | Cash and due from banks | 271.1 | 526.5 | | Loans, net | 4,567.8 | 4,367.6 | | Total Deposits | 5,579.9 | 5,664.9 | | Total Liabilities | 7,134.5 | 7,221.7 | | Total Stockholders' Equity | 721.3 | 718.8 | Condensed Consolidated Statements of Income Q1 2024 net income was $14.0M ($0.32 EPS), a significant improvement from Q4 2023's $25.2M loss, driven by higher net interest income Income Statement Summary (Q1 2024 vs Q4 2023) | Item | Q1 2024 ($M) | Q4 2023 ($M) | | :--- | :--- | :--- | | Net Interest Income | 43.3 | 42.3 | | Non-interest Income | 9.9 | (20.4) | | Non-interest Expense | 37.1 | 39.3 | | Net Income (Loss) | 14.0 | (25.2) | | Diluted EPS | $0.32 | ($0.58) | Credit Quality Analysis Credit quality improved in Q1 2024, with non-performing loans decreasing to 0.41% and minimal net charge-offs at 0.01% - Total non-performing loans decreased to $19.2 million (0.41% of total loans) from $20.3 million (0.46% of total loans) in the linked quarter3139 - Net charge-offs for the quarter were minimal at $426,000, representing just 0.01% of average loans outstanding36 Allowance for Credit Losses (ACL) | Metric | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total ACL | $50.4M | $50.0M | | ACL to Total Loans | 1.09% | 1.13% | Non-GAAP Financial Measures and Reconciliations This section reconciles GAAP to non-GAAP measures, clarifying core performance by excluding non-recurring items, with Q1 2024 reported and adjusted figures identical - The company uses non-GAAP measures to provide investors with a clearer view of its business and financial results by excluding the impact of non-recurring items such as acquisition-related adjustments and one-time costs49 Adjusted vs. Reported Metrics (Q4 2023) | Metric | Reported | Adjusted | | :--- | :--- | :--- | | Net Income (Loss) | ($25.2M) | $14.1M | | Diluted EPS | ($0.58) | $0.33 | | Efficiency Ratio | 180.35% | 72.36% | | ROAA | (1.27)% | 0.71% | - For Q1 2024, there were no adjustments made, so reported figures for net income ($14.0M), diluted EPS ($0.32), and other key metrics were the same as the adjusted figures5053 Other Information This section provides corporate disclosures, including forward-looking statements, earnings call details, and a profile of Horizon Bancorp's operations Forward-Looking Statements This section provides a safe harbor statement, cautioning that forward-looking statements are subject to risks like interest rate changes and economic conditions - The company claims protection under the safe harbor for forward-looking statements, which are not guarantees of future performance and are subject to risks and uncertainties24 - Key risks that could cause actual results to differ include changes in interest rates, inflation, regulatory actions, cybersecurity threats, and geopolitical conflicts25 About Horizon Bancorp, Inc. Horizon Bancorp, Inc. is a $7.9 billion-asset holding company for Horizon Bank, offering diverse banking services across Indiana and Michigan - Horizon Bancorp, Inc. (NASDAQ: HBNC) is a $7.9 billion-asset holding company for Horizon Bank, serving markets in Indiana and Michigan73 - The bank's business mix includes retail banking, wealth management, treasury management, and equipment financing, with commercial lending representing over 50% of total loans73 Earnings Conference Call Information Horizon will host an earnings conference call on April 25, 2024, at 7:30 a.m. CT, with replay available until May 3, 2024 - The earnings conference call is scheduled for April 25, 2024, at 7:30 a.m. CT. Dial-in information is provided for all participants71 - A replay of the conference call will be available through May 3, 2024, with the access code 431931572