Horizon Bancorp (HBNC) investor relations material

Executive summary

• Achieved strategic balance sheet repositioning ahead of expectations, optimizing securities, loan portfolios, and funding sources, and positioning for top-tier performance.

• Net interest margin expanded for the eighth consecutive quarter, with September's exit run rate above 4%.

• Core community banking franchise remains strong, with resilient deposit portfolios, solid commercial loan growth, stable deposits, excellent credit quality, and well-managed expenses.

• Completed equity and debt raises, redeemed previous sub-debt, and continued reduction of high-cost transactional accounts.

• Focus remains on profitable growth, disciplined execution, and redeployment of capital to create sustainable long-term value.

Financial highlights

• Reported net loss of $222.0 million ($-4.69 per diluted share) for Q3 2025, driven by a $299.1 million loss on securities sales and $7.7 million loss on indirect auto loan sale.

• Net interest income rose to $58.4 million, up 5.5% sequentially and 24.5% year-over-year, with net interest margin (FTE) expanding to 3.52%.

• Non-interest expense increased to $53.0 million, mainly due to a $12.7 million prepayment penalty on FHLB advances and $0.9 million in non-recurring expenses.

• Total loans held for investment declined to $4.8 billion, with commercial loan growth offset by consumer loan runoff and portfolio sales.

• Deposits fell to $5.5 billion, reflecting a reduction in high-cost transactional balances.

Outlook and guidance

• Q4 2025 net interest margin expected to expand to 4.15%-4.25%, with loan growth in the mid-single-digit annualized range, led by commercial lending.

• Deposit balances projected to decline in Q4 due to targeted runoff of high-cost non-relationship balances.

• Q4 non-interest income to approximate $11 million; non-interest expense to be about $40 million, including $700,000 non-recurring cost.

• 2026 guidance aligns with consensus: EPS around $2, low double-digit non-FTE net interest income growth, NIM of 4.2%-4.3%, and effective tax rate of 18%-20%.

• Management will focus on disciplined execution, profitable growth, and redeployment of capital to drive durable returns and long-term shareholder value.