"Horizon's third quarter results were highlighted by the successful execution of our previously announced strategic balance sheet repositioning, which has exceeded our initial expectations and is on pace to achieve the top tier financial outcomes outlined in our plan. At this point, there is little work left to be done, and the Company will continue its focus on improving shareholder value from a position of strength", President and CEO, Thomas Prame stated. "More importantly, underneath the specific impacts related to the balance sheet activities, our third quarter results further evidence the continued strength of the organization's exceptional core community banking franchise. Our net interest margin continues to expand, the commercial loan engine is producing solid results, the core client-driven deposit franchise is growing, credit quality is excellent and expenses are well managed. As we look ahead to the end of 2025 and into 2026, we will remain disciplined in our execution, focusing on profitable growth and smart redeployment of our peer-leading capital generation, all focused on creating durable returns and sustainable long-term value for our shareholders."
Net loss for the three months ended September 30, 2025 was $222.0 million, or $(4.69) per diluted share, compared to net income of $20.6 million, or $0.47, for the second quarter of 2025 and $18.2 million, or $0.41 per diluted share, for the third quarter of 2024. As previously disclosed, results for the third quarter of 2025 included several items impacting non-interest income, non-interest expense and the provision for credit loss directly related to the Company's successful efforts during the quarter to repositioning the balance sheet.
Net loss for the nine months ended September 30, 2025 was $177.4 million, or $(3.94) per diluted share, compared to net income of $46.3 million, or $1.05, for the nine months ended September 30, 2024.
Third Quarter 2025 Highlights
Successful execution of strategic Balance Sheet transformation, positioning the bank for top quartile performance.
Net interest income of $58.4 million increased 5.5% compared with $55.4 million for the three months ended June 30, 2025, and 24.5% compared with $46.9 million in the year ago period. Net interest margin, on a fully taxable equivalent ("FTE") basis1, expanded for the eighth consecutive quarter, to 3.52%, compared with 3.23% for the three months ended June 30, 2025 and 2.66% for the three months ended September 30, 2024.
Total loans held for investment ("HFI") decreased (13.0)% compared to the linked quarter annualized, with strong organic commercial loan growth of $57.9 million, or 7.0% annualized. The decrease in loans HFI is directly related to the continued planned runoff and the eventual sale of the Company's indirect auto portfolio of $176 million in the third quarter.
Funding continued to trend favorably, with non-interest bearing deposits remaining flat. Savings and money market balances were specifically impacted by the planned high-cost deposit runoff related to the balance sheet repositioning. Overall interest-bearing liability cost decreased by 2 bps during the quarter.
Credit quality remained strong, with annualized net charge offs of 0.07% of average loans during the third quarter. Non-performing assets remain well within expected ranges, with non-performing assets to total asset of 53 bps for the third quarter.
While reported expenses were impacted by a couple of items related to the balance sheet activities in the quarter, when considering these items, expenses continued to be well managed compared with the second quarter of 2025. These results reflect management's continued commitment to generate positive operating leverage with a more efficient expense base.
____________________________________1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Financial Highlights
(Dollars in Thousands Except Share and Per Share Data and Ratios)
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2025
2025
2025
2024
2024
Income statement:
Net interest income
$
58,386
$
55,355
$
52,267
$
53,127
$
46,910
Provision for credit losses
(3,572
)
2,462
1,376
1,171
1,044
Non-interest income (loss)
(295,334
)
10,920
16,499
(28,954
)
11,511
Non-interest expense
52,952
39,417
39,306
44,935
39,272
Income tax expense (benefit)
(64,338
)
3,752
4,141
(11,051
)
(75
)
Net Income (Loss)
$
(221,990
)
$
20,644
$
23,943
$
(10,882
)
$
18,180
Per share data:
Basic earnings (loss) per share
$
(4.69
)
$
0.47
$
0.55
$
(0.25
)
$
0.42
Diluted earnings (loss) per share
(4.69
)
0.47
0.54
(0.25
)
0.41
Cash dividends declared per common share
0.16
0.16
0.16
0.16
0.16
Book value per common share
12.96
18.06
17.72
17.46
17.27
Market value - high
16.88
15.88
17.76
18.76
16.57
Market value - low
15.01
12.92
15.00
14.57
11.89
Weighted average shares outstanding - Basic
47,311,642
43,794,490
43,777,109
43,721,211
43,712,059
Weighted average shares outstanding - Diluted
47,311,642
44,034,663
43,954,164
43,721,211
44,112,321
Common shares outstanding (end of period)
50,970,530
43,801,507
43,785,932
43,722,086
43,712,059
Key ratios:
Return on average assets
(12.07)%
1.09
%
1.25
%
(0.56)%
0.92
%
Return on average stockholders' equity
(120.37
)
10.49
12.44
(5.73
)
9.80
Total equity to total assets
9.84
10.34
10.18
9.79
9.52
Total loans to deposit ratio
87.41
87.52
85.21
87.75
83.92
Allowance for credit losses to HFI loans
1.04
1.09
1.07
1.07
1.10
Annualized net charge-offs of average total loans(1)
0.07
0.02
0.07
0.05
0.03
Efficiency ratio
(22.35
)
59.47
57.16
185.89
67.22
Key metrics (Non-GAAP)(2)
Net FTE interest margin
3.52
%
3.23
%
3.04
%
2.97
%
2.66
%
Return on average tangible common equity
(155.03
)
13.24
15.79
(7.35
)
12.65
Tangible common equity to tangible assets
7.60
8.37
8.19
7.83
7.58
Tangible book value per common share
$
9.76
$
14.32
$
13.96
$
13.68
$
13.46
(1)Average total loans includes loans held for investment and held for sale.
(2)Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.
Income Statement Highlights
Net Interest Income
Net interest income was $58.4 million in the third quarter of 2025, compared to $55.4 million in the second quarter of 2025, driven by the continued expansion of the Company's net FTE interest margin2, which increased to 3.52% for the third quarter of 2025, compared to 3.23% for the second quarter of 2025. While the margin saw expansion throughout the quarter, most of the increase came later in the quarter as a byproduct of the balance sheet repositioning, all of which transpired following the close of the Company's equity capital raise on August 22nd, 2025.
Provision for Credit Losses
During the third quarter of 2025, the Company recorded a benefit for credit losses of $(3.6) million. This compares to a provision for credit losses expense of $2.5 million during the second quarter of 2025, and a provision for credit losses expense of $1.0 million during the third quarter of 2024. The decrease in the provision for credit losses during the third quarter of 2025 when compared with the second quarter of 2025 was primarily attributable to the release of approximately $3.1 million in total Allowance against the sold portion of the Indirect Auto portfolio. Additionally, the Provision benefitted from continued improvement in the Company's historical loss metrics and the release of the $0.2 million reserve against the previous Held-To-Maturity investment portfolio. These favorable items were partially offset by net growth in Commercial Loans HFI and a modest increase in specific reserves.
For the third quarter of 2025, Net Charge-Offs were $0.8 million, or an annualized 0.07% of Average Loans Outstanding, compared to Net Charge-Offs of $0.3 million, or an annualized 0.02% of average loans outstanding for the second quarter of 2025, and Net Charge-Offs of $0.4 million, or an annualized 0.03% of Average Loans Outstanding, in the third quarter of 2024.
The Company's Allowance for Credit Losses as a percentage of period-end loans HFI was 1.04% at September 30, 2025, compared to 1.09% at June 30, 2025 and 1.10% at September 30, 2024.
Non-Interest Income
For the Quarter Ended
September 30,
June 30,
March 31,
December 31,
September 30,
(Dollars in Thousands)
2025
2025
2025
2024
2024
Non-interest (Loss) Income
Service charges on deposit accounts
$
3,474
$
3,208
$
3,208
$
3,276
$
3,320
Wire transfer fees
71
69
71
124
123
Interchange fees
3,510
3,403
3,241
3,353
3,511
Fiduciary activities
1,363
1,251
1,326
1,313
1,394
Loss on sale of investment securities
(299,132
)
—
(407
)
(39,140
)
—
Gain on sale of mortgage loans
1,208
1,219
1,076
1,071
1,622
Mortgage servicing income net of impairment
351
375
385
376
412
Increase in cash value of bank owned life insurance
379
346
335
335
349
Other income
(6,558
)
1,049
7,264
338
780
Total non-interest (loss) income
$
(295,334
)
$
10,920
$
16,499
$
(28,954
)
$
11,511
Total Non-Interest (Loss) was $295.3 million in the third quarter of 2025, compared to Non-Interest Income of $10.9 million in the second quarter of 2025. The decrease in Non-Interest Income of $306.3 million is due to the loss on the sale investment securities and the pre-tax loss of $7.7 million on the sale of the Company's Indirect Auto portfolio, both of which were related to the balance sheet repositioning efforts. Service Charges, Interchange Fees and Gain on Sale of Mortgage Loans benefited from normal seasonality. Other categories remained relatively unchanged when compared with the prior period.
____________________________________1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Non-Interest Expense
For the Quarter Ended
September 30,
June 30,
March 31,
December 31,
September 30,
(Dollars in Thousands)
2025
2025
2025
2024
2024
Non-interest Expense
Salaries and employee benefits
$
22,698
$
22,731
$
22,414
$
25,564
$
21,829
Net occupancy expenses
3,321
3,127
3,702
3,431
3,207
Data processing
2,933
2,951
2,872
2,841
2,977
Professional fees
808
735
826
736
676
Outside services and consultants
3,844
3,278
3,265
4,470
3,677
Loan expense
1,237
1,231
689
1,285
1,034
FDIC insurance expense
1,345
1,216
1,288
1,193
1,204
Core deposit intangible amortization
706
816
816
843
844
Merger related expenses
—
—
305
—
—
Prepayment penalties
12,680
—
—
—
—
Other losses
131
245
228
371
297
Other expense
3,249
3,087
2,901
4,201
3,527
Total non-interest expense
$
52,952
$
39,417
$
39,306
$
44,935
$
39,272
Total Non-Interest Expense was $53.0 million in the third quarter of 2025, compared with $39.4 million in the second quarter of 2025. The increase in Non-Interest Expense during the third quarter of 2025 when compared with the prior period was primarily driven by a $12.7 million prepayment penalty related to the payoff of $700 million in FHLB advances during the quarter. Additionally, the quarter included approximately $0.9 million of expenses related to the balance sheet initiatives and other efforts, which are not expected to recur in future periods. Apart from these specific items, total Non-Interest Expense was relatively unchanged when compared with the prior quarter.
Income Taxes
Resulting from the reported losses incurred during balance sheet repositioning efforts, Horizon recorded a net tax credit of $64.3 million for the third quarter of 2025, resulting in an effective tax rate of 22.5%.
Balance Sheet Highlights
Total assets decreased by $939.6 million, or 12.3%, to $6.7 billion as of September 30, 2025, from $7.7 billion as of June 30, 2025. The decrease in total assets is primarily due to the Company's balance sheet repositioning efforts, which resulted in a decrease in total investment securities of $1.2 billion and a decrease in loans held for investment of $161.9 million, partially offset by an increase in interest earning deposits. During the quarter, the Company moved its entire held to maturity securities portfolio to available for sale, sold approximately $1.7 billion in book value and reinvested approximately $580 million of the proceeds in the available for sale portfolio, resulting in a net increase in available for sale securities of $651.2 million. Total loans were $4.8 billion at September 30, 2025, a decrease of $163.0 million from June 30, 2025 balances, as organic commercial loan growth was offset by the continued run-off of consumer balances and the sale of approximately $176 million of the Company's indirect auto portfolio on September 26, 2025.
Total deposits decreased by $178.9 million, or 3.1%, to $5.5 billion as of September 30, 2025 when compared to balances as of June 30, 2025. The decrease was driven by the ongoing balance sheet repositioning efforts, which led to a decline of approximately $275 million in high-cost transactional deposit balances, which were partially offset by growth in commercial interest-bearing and seasonal inflows in relationship-based public funds balances. Non-interest bearing deposit balances remained relatively unchanged in the current period. Total borrowings decreased by $720.1 million during the quarter to $160.2 million as of September 30, 2025, due to the payoff of the FHLB advances related to the balance sheet repositioning. Subordinated notes balances increase by $98.3 million during the quarter from the closing of the Company's $100.0 million offering, which closed on August 29, 2025. Subsequent to quarter end, on October 1, 2025, the Company redeemed the remaining $56.5 million subordinated note issuance previously outstanding.
Capital
The following table presents the Consolidated Regulatory Capital Ratios of the Company for the previous three quarters, and the Company's preliminary estimate of its consolidated regulatory capital ratios for the quarter ended September 30, 2025:
For the Quarter Ended
September 30,
June 30,
March 31,
December 31,
2025*
2025
2025
2024
Consolidated Capital Ratios
Total capital (to risk-weighted assets)
15.03
%
14.44
%
14.26
%
13.91
%
Tier 1 capital (to risk-weighted assets)
11.29
12.48
12.33
12.00
Common equity tier 1 capital (to risk-weighted assets)
10.19
11.48
11.32
11.00
Tier 1 capital (to average assets)
8.22
9.59
9.25
8.88
*Preliminary estimate - may be subject to change
As of September 30, 2025, the ratio of total stockholders' equity to total assets is 9.84%. Book value per common share was $12.96, declining $(5.10) during the third quarter of 2025 related to the third quarter balance sheet actions.
Tangible common equity3 totaled $497.7 million at September 30, 2025, and the ratio of tangible common equity to tangible assets1 was 7.60% at September 30, 2025, down from 8.37% at June 30, 2025. Tangible book value, which excludes intangible assets from total equity, per common share1 was $9.76, decreasing $(4.56) during the third quarter of 2025.
Credit Quality
As of September 30, 2025, total non-accrual loans increased by $5.1 million, or 20.8%, from June 30, 2025, to 0.61% of total loans HFI. Total non-performing assets increased $5.3 million, or 17.2%, to $35.7 million, compared to $30.5 million as of June 30, 2025. The ratio of non-performing assets to total assets increased to 0.53% compared to 0.40% as of June 30, 2025.
As of September 30, 2025, net charge-offs increased by $0.5 million to $0.8 million, compared to $0.3 million as of June 30, 2025 and remain just 0.07% annualized of average loans.
____________________________________1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Earnings Conference Call
As previously announced, Horizon will host a conference call to review its third quarter financial results and operating performance.
Participants may access the live conference call on October 23, 2025 at 7:30 a.m. CT (8:30 a.m. ET) by dialing 833-974-2379 from the United States, 866-450-4696 from Canada or 1-412-317-5772 from international locations and requesting the "Horizon Bancorp, Inc. Call." Participants are asked to dial in approximately 10 minutes prior to the call.
A telephone replay of the call will be available approximately one hour after the end of the conference through August 1, 2025. The replay may be accessed by dialing 877-344-7529 from the United States, 855-669-9658 from Canada or 1–412–317-0088 from other international locations, and entering the access code 5878909.
About Horizon Bancorp, Inc.
Horizon Bancorp, Inc. (NASDAQ GS: HBNC) is the $6.7 billion-asset commercial bank holding company for Horizon Bank, which serves customers across diverse and economically attractive Midwestern markets through convenient digital and virtual tools, as well as its Indiana and Michigan branches. Horizon's retail offerings include prime residential and other secured consumer lending to in-market customers, as well as a range of personal banking and wealth management solutions. Horizon also provides a comprehensive array of in-market business banking and treasury management services, as well as equipment financing solutions for customers regionally and nationally, with commercial lending representing over half of total loans. More information on Horizon, headquartered in Northwest Indiana's Michigan City, is available at horizonbank.com and investor.horizonbank.com.
Use of Non-GAAP Financial Measures
Certain information set forth in this press release refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non-GAAP financial measures relating to net income, diluted earnings per share, pre-tax, pre-provision net income, net interest margin, tangible stockholders' equity and tangible book value per share, efficiency ratio, the return on average assets, the return on average common equity, and return on average tangible equity. In each case, we have identified special circumstances that we consider to be non-recurring and have excluded them. Horizon believes these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business and financial results without giving effect to one-time costs and non–recurring items. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this press release for reconciliations of the non-GAAP information identified herein and its most comparable GAAP measures.
Forward Looking Statements
This press release may contain forward–looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon Bancorp, Inc. and its affiliates (collectively, "Horizon"). For these statements, Horizon claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission (the "SEC"). Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance.
Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: effects on Horizon's business resulting from new U.S. domestic or foreign governmental trade measures, including but not limited to tariffs, import and export controls, foreign exchange intervention accomplished to offset the effects of trade policy or in response to currency volatility, and other restrictions on free trade; uncertain conditions within the domestic and international macroeconomic environment, including trade policy, monetary and fiscal policy, and conditions in the investment, credit, interest rate, and derivatives markets, and their impact on Horizon and its customers; current financial conditions within the banking industry; changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; the aggregate effects of elevated inflation levels in recent years; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon's assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the U.S. federal government to manage federal debt limits; climate change and social justice initiatives; the inability to realize cost savings or revenues or to effectively implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; acts of terrorism, war and global conflicts, such as the Russia and Ukraine conflict and the Israel and Hamas conflict; and supply chain disruptions and delays. These and additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Horizon's reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC's website (www.sec.gov). Undue reliance should not be placed on the forward–looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward–looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.
Condensed Consolidated Statements of Income
(Dollars in Thousands Except Per Share Data, Unaudited)
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2025
2025
2025
2024
2024
Interest Income
Loans receivable
$
79,561
$
78,618
$
74,457
$
76,747
$
75,488
Investment securities - taxable
6,631
5,941
6,039
6,814
8,133
Investment securities - tax-exempt
4,581
6,088
6,192
6,301
6,310
Other
2,063
830
2,487
3,488
957
Total interest income
92,836
91,477
89,175
93,350
90,888
Interest Expense
Deposits
25,726
26,052
25,601
27,818
30,787
Borrowed funds
5,924
8,171
9,188
10,656
11,131
Subordinated notes
1,731
829
829
829
830
Junior subordinated debentures issued to capital trusts
1,069
1,070
1,290
920
1,230
Total interest expense
34,450
36,122
36,908
40,223
43,978
Net Interest Income
58,386
55,355
52,267
53,127
46,910
Provision for credit losses
(3,572
)
2,462
1,376
1,171
1,044
Net Interest Income after Provision for Credit Losses
61,958
52,893
50,891
51,956
45,866
Non-interest Income
Service charges on deposit accounts
3,474
3,208
3,208
3,276
3,320
Wire transfer fees
71
69
71
124
123
Interchange fees
3,510
3,403
3,241
3,353
3,511
Fiduciary activities
1,363
1,251
1,326
1,313
1,394
Loss on sale of investment securities
(299,132
)
—
(407
)
(39,140
)
—
Gain on sale of mortgage loans
1,208
1,219
1,076
1,071
1,622
Mortgage servicing income net of impairment
351
375
385
376
412
Increase in cash value of bank owned life insurance
379
