Horizon Bancorp (HBNC) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $23.9 million ($0.54 per diluted share), up from a net loss of $10.9 million in Q4 2024 and $14.0 million in Q1 2024, reflecting strong margin expansion, organic commercial loan growth, and improved efficiency.

• Achieved sixth consecutive quarter of net interest margin expansion, now at 3.04%, with robust commercial loan growth and stable core deposits.

• Completed sale of mortgage warehouse business, generating a $7.0 million pre-tax gain and enhancing capital flexibility.

• Expense base became more efficient, supporting improved operating leverage and positive momentum for 2025.

• Total assets decreased by $175.5 million to $7.6 billion, mainly due to the sale of the mortgage warehouse portfolio and FHLB advance payoffs.

Financial highlights

• Net interest margin (FTE) rose to 3.04% in Q1 2025, up from 2.97% in Q4 2024 and 2.50% in Q1 2024.

• Net interest income was $52.3 million, with non-interest income of $16.5 million, including a $7.0 million gain from the mortgage warehouse sale.

• Non-interest expense was $39.3 million, down $5.6 million sequentially, reflecting cost control and strategic initiatives.

• Total loans held for investment increased by $62.1 million (1.3%) to $4.9 billion, led by organic commercial loan growth.

• Total deposits increased by $165.1 million (2.9%) to $5.8 billion; total borrowings decreased by $332.2 million to $900.1 million.

Outlook and guidance

• Full-year 2025 net interest income growth expected in the mid-teens, assuming two 25bp rate cuts.

• Loan growth forecast remains mid-single digits, net of indirect auto runoff; deposit growth expected in low single digits.

• Expense growth for 2025 projected to be flat to up low single digits; effective tax rate expected in the mid-teens.

• Management expects higher pre-tax income in 2025, with less favorable tax preferential items.

• Focus on core franchise strength, disciplined pricing, and expanding the local relationship banking model.