HORIZON BANCORP INC /IN/
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
HBNC$20.81-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000706129-25-000085
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0000706129-25-000135
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 86 previous paragraphs and 92 current paragraphs.
54 unchanged; 30 reworded; 7 added; 1 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
•risks related to the development and use of artificial intelligence (AI);
Current report
Net income increased $16.5 million to $44.6 million, or $1.01 per diluted share, during the six months ended June 30, 2025 when compared to $28.1 million, or $0.64 per share, for the same period in 2024. The increase from the year ago period was primarily a result of a decrease in interest expense of $10.6 million, an increase in interest income of $8.4 million and an increase in non-interest income of $7.0 million. The increase was partially offset by an increase in non-interest expense of $4.1 million.
Current report
Net interest income increased $19.1 million during the six months ended June 30, 2025, to $107.6 million when compared to the same period in 2024. While average earning asset balances declined slightly, the reported net FTE interest margin 1 increased by 57 basis points, to 3.14% for thesix months ended June 30, 2025 when compared to the prior year period. The primary driver of the increase in net interest income compared with the prior year period is attributable to the favorable mix shift in both average interest earning assets toward higher-yielding loans, and the funding mix toward lower cost deposit liabilities. Additionally, loan yields have expanded while deposit costs have declined when compared with the comparable year ago period.
Current report
Interchange fees decreased $0.4 million, or 11.1%, for the three months ended June 30, 2025 compared to the same period in 2024, and decreased by $0.3 million, or 4.2%, for the six months ended June 30, 2025, as compared to the same periods in 2024. The decrease was primarily driven by decreases in merchant and debit card fees.
Current report
Mortgage servicing income net of impairment decreased by $0.1 million, or 14.5%, for the six months ended June 30, 2025, as compared to the same periods in 2024. The decrease was primarily driven by a decrease in servicing fees due lower balances of loans services for others, and modestly higher levels of amortization expense on the asset balance of mortgage servicing rights.
Current report
For the six months ended June 30, 2025 and 2024
Current report
For the six months ended June 30, 2025 and 2024
Removed paragraphs (1)
Previous report
•the potential influence on the U.S. financial markets and economy from the effects of climate change and social justice initiatives;
Reworded paragraphs (30)
Previous wording
•acts of terrorism, war and global conflicts, such as the Russia-Ukraine and Israel-Hamas conflicts, and the potential impact they may have on supply chains, the availability of commodities, commodity prices, inflationary pressure and the overall U.S. and global financial markets.
Current wording
•acts of terrorism, war and global conflicts, such as the Russia-Ukraine conflict and continued unrest in the Middle East, and the potential impact they may have on supply chains, the availability of commodities, commodity prices, and the overall U.S. and global financial markets.
Previous wording
Net income increased $9.9 million to $23.9 million, or $0.54 per diluted share, during the three months ended March 31, 2025 when compared to $14.0 million, or $0.32 per diluted share, for the same period in 2024. The increase in net income from the prior year period reflects an increase in interest income of$3.9 million, a decrease of in interest expense of $5.1 million and an increase in non-interest income of $6.6 million. The increase was partially offset by an increase in non-interest expense of $2.2 million and an increase in tax expense of $2.8 million.
Current wording
Net income increased $6.5 million to $20.6 million, or $0.47 per diluted share, during the three months ended June 30, 2025 when compared to $14.1 million, or $0.32 per diluted share, for the same period in 2024. The increase in net income from the prior year period reflects an increase in interest income of$4.5 million, a decrease of in interest expense of $5.6 million and an increase in non-interest income of $0.4 million. The increase was partially offset by an increase in non-interest expense of $1.9 million and an increase in tax expense of $2.0 million.
Previous wording
Net interest income increased $9.0 million, or 20.7% during the three months ended March 31, 2025, to $52.3 million, when compared to the same period in 2024. While average earning assets decreased, the reported net FTE interest margin 1 increased by 54 basis points, to 3.04% for the three months ended March 31, 2025 compared to the year ago period, attributable to the favorable mix shift in both average interest earning assets toward higher-yielding loans and the funding mix toward lower cost deposit liabilities. Interest accretion from the fair value of acquired loans did not contribute significantly to the first quarter net interest income, or net FTE interest margin 1.
Current wording
Net interest income increased $10.1 million, or 22.3% during thethree months ended June 30, 2025, to $55.4 million, when compared to the same period in 2024. While average earning assets decreased, the reported net FTE interest margin 1 increased by 59 basis points, to 3.23% for the three months ended June 30, 2025 compared to the prior year period, attributable to the favorable mix shift in both average interest earning assets toward higher-yielding loans, and the funding mix toward lower cost deposit liabilities. Additionally, loan yields have expanded while deposit costs have declined when compared with the comparable year ago period. Interest accretion from the fair value of acquired loans did not contribute significantly to the first quarter net interest income, or net FTE interest margin 1.
Previous wording
Total non-interest income increased $6.6 million for the three months ended March 31, 2025 compared to the same period in 2024. The primary components of the change were as follows:
Current wording
Total non-interest income increased $0.4 million for the three months ended June 30, 2025 compared to the same period in 2024 and increased $7.0 million for the six months ended June 30, 2025 compared to the same period in 2024. The primary components of the change were as follows:
Previous wording
Gain on sale of mortgage loans increased by $0.4 million, or 71.9%, for the three months ended March 31, 2025 compared to the same period in 2024, primarily driven by higher volumes of sold loans.
Current wording
Gain on sale of mortgage loans increased by $0.3 million, or 36.1%, for the three months ended June 30, 2025 compared to the same period in 2024, and increased by $0.8 million for the six months ended June 30, 2025, as compared to the same periods in 2024. The increase was primarily driven by higher volumes of sold loans.
Previous wording
Other income, which includes various miscellaneous income items as well as fair market value adjustments to certain other assets, increased by $6.4 million during the three months ended March 31, 2025 primarily due to the gain on sale of the Company's mortgage warehouse business to an unrelated third party, which resulted in a pre-tax gain of $7.0 million.
Current wording
Other income, which includes various miscellaneous income items as well as fair market value adjustments to certain other assets, increased by $7.1 million during the six months ended June 30, 2025 primarily due to the gain on sale of the Company's mortgage warehouse business to an unrelated third party in the first quarter of 2025, which resulted in a pre-tax gain of $7.0 million.
Previous wording
Non-interest expense increased$2.2 million for thethree months ended March 31, 2025 compared to the same period in 2024. The primary components of the change were as follows:
Current wording
Non-interest expense increased$1.9 million for thethree months ended June 30, 2025 compared to the same period in 2024. Non-interest expense increased$4.1 million for the six months ended June 30, 2025 compared to the same period in 2024, the primary components of the change were as follows:
Previous wording
Salaries and employee benefits expense increased by$2.1 million for thethree months ended March 31, 2025 when compared to the same period a year ago. The increase is partially attributable to growth in salary expense related to ongoing hiring efforts in revenue generating roles in commercial lending, equipment finance and treasury management. Additionally, the prior comparable period benefited from from a favorable expense adjustment on a legacy compensation program that was terminated in the fourth quarter of 2024.
Current wording
Salaries and employee benefits expense increased by$2.1 million for thethree months ended June 30, 2025 when compared to the same period a year ago. Salaries and employee benefits expense increased by$4.3 million for the six months ended June 30, 2025 compared to the same period in 2024. The increase is partially attributable to growth in salary expense related to ongoing hiring efforts in revenue generating roles in commercial lending, equipment finance and treasury management. Additionally, the prior comparable period benefited from a favorable expense adjustment on a legacy compensation program that was terminated in the fourth quarter of 2024.
Previous wording
Other expenses, which includes corporate and other service expenses, decreased by$1.0 million for thethree months ended March 31, 2025 when compared to the same period in 2024 partially due to decreases in marketing and advertising expenses.
Current wording
Other expenses, which includes corporate and other service expenses, decreased by$0.6 millionfor thethree months ended June 30, 2025 when compared to the same period a year ago and$1.6 million for thesix months ended June 30, 2025 compared to the same period in 2024. This decrease was partially due to decreases in marketing and advertising expenses.
Previous wording
Provision and Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments
Current wording
Provision and Allowance for Credit Losses
Previous wording
Horizon assesses the adequacy of its Allowance for Credit Losses (“ACL”) by regularly reviewing the performance of its loan portfolio against various economic backdrops, which periodically change. During the three months ended March 31, 2025, the Company recorded a provision for credit losses on loans of $1.5 million. This compares to a provision for credit losses on loans of $0.7 million compared to the same period in 2024. The increase in the provision for credit losses when compared to the year ago period was primarily attributable to loan growth experienced during the quarter.
Current wording
Horizon assesses the adequacy of its Allowance for Credit Losses (“ACL”) by regularly reviewing the performance of its loan portfolio against various economic backdrops, which periodically change. During the three months ended June 30, 2025, the Company recorded a provision for credit losses on loans of $2.0 million. This compares to a provision for credit losses on loans of $2.4 million compared to the same period in 2024. The decrease in the provision for credit losses on loans when compared to the year ago period was primarily attributable to a decrease in specific reserves related to the sale of the mortgage warehouse portfolio and payoffs of specific loans. The provision for credit losses in total was $2.5 million for three months ended June 30, 2025 compared to $2.4 million for the same period in 2024. The increase to the total provision is driven by an increase in provision for credit losses on unfunded lending commitments of $0.4 million and an increase in provision for credit losses on AFS securities of $0.2 million for three months ended June 30, 2025 compared to the same period in 2024, respectively.
Previous wording
For the three months ended March 31, 2025, net loan charge-offs increased by $0.6 million to $0.9 million, compared to $0.3 million to the same period in 2024. The increase in charge-offs was primarily due to increases in the consumer portfolio as a result of the run-off of the indirect auto portfolio.
Current wording
For the three months ended June 30, 2025, net loan charge-offs decreased by $0.3 million to $0.3 million, compared to $0.6 million during the same period in 2024. The decrease in charge-offs was primarily due to decreases in the consumer portfolio, and partially as a result of the run-off of the indirect auto portfolio.
Previous wording
The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.07% at March 31, 2025, compared to 1.09% at March 31, 2024.
Current wording
The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.09% at June 30, 2025, compared to 1.08% at June 30, 2024.
Previous wording
As of March 31, 2025, the liability for unfunded lending commitments was $2.0 million compared to $0.8 million as of March 31, 2024. The increase in liability for unfunded lending commitments was due to increases in unfunded lending commitments outstanding when compared to the prior period.
Current wording
As of June 30, 2025, the liability for unfunded lending commitments was $2.3 million compared to $0.7 million as of June 30, 2024.
Previous wording
The Company’s income tax expense for thethree months ended March 31, 2025 was $4.1 million compared to$1.3 million for the same period in 2024, resulting in effective tax rates of 14.7% and 8.6%, respectively. The increase in the effective tax rate for the for thethree months ended March 31, 2025 was primarily due to expectations of higher pre-tax income infirst quarter of 2025 as compared to 2024, causing tax preferential items to have a less favorable impact.
Current wording
The Company’s income tax expense for the three months ended June 30, 2025 was $3.8 million compared to $1.7 million for the same period in 2024, resulting in effective tax rates of 15.4% and 10.9%, respectively. The Company’s income tax expense for thesix months ended June 30, 2025 was $7.9 million compared to $3.0 million for the same period in 2024, resulting in effective tax rates of 15.0% and 9.8%, respectively. The increase in the effective tax rate for the comparative periods was primarily due to expectations of higher pre-tax income in 2025 as compared to 2024, causing tax preferential items to have a less favorable impact, and the Company's decision to discontinue further investment in certain tax credit structures.
Previous wording
Total assets decreased by $172.5 million, or 2.2%, as of March 31, 2025, from $7.8 billion as of December 31, 2024. The decrease in total assets is primarily due to decreases in cash and cash equivalents of $123.8 million, or 42.2%, to $169.7 million as of March 31, 2025, and a decrease in loans held for sale of $64.3 million, to $3.3 million as a result of the Company's sale of its mortgage warehouse business. The decrease was partially offset by increase in loans HFI of $62.1 million or 1.3% to $4.9 billion.
Current wording
Total assets decreased by $149.1 million, or 1.9%, as of June 30, 2025, from $7.8 billion as of December 31, 2024. The decrease in total assets is primarily due to decreases in cash and cash equivalents of $155.5 million, or 53.0%, to $137.9 million as of June 30, 2025, and a decrease in loans held for sale of $64.6 million, to $3.0 million as a result of the Company's sale of its mortgage warehouse business. The decrease was partially offset by increase in loans HFI of $136.1 million or 2.8% to $4.9 billion.
Previous wording
Total investment securities decreased $26.1 million, or 1.2%, to $2.1 billion as of March 31, 2025 when compared to balances as of December 31, 2024. The decrease is primarily a result of amortization and maturities, as well as the sale of one corporate debt security. There were no purchases of investment securities during the three months ended March 31, 2025.
Current wording
Total investment securities decreased $50.3 million, or 2.4%, to $2.1 billion as of June 30, 2025 when compared to balances as of December 31, 2024. The decrease is primarily a result of amortization and maturities, as well as the sale of one corporate debt security in the first quarter. There were no purchases of investment securities during the six months ended June 30, 2025.
Previous wording
Total loans HFI increased to $4.9 billion as of March 31, 2025 compared to $4.8 billion as of December 31, 2024, led by organic commercial loan growth of $103.3 million. The company continues to maintain a balanced growth profile across various geographies, products and industries, and holds a diverse lending portfolio consisting primarily of commercial real estate, consumer, residential and commercial and industrial portfolios.
Current wording
Total loans HFI increased to $4.9 billion as of June 30, 2025 compared to $4.8 billion as of December 31, 2024, led by organic commercial loan growth of $220.5 million. The company continues to maintain a balanced growth profile across various geographies, products and industries, and holds a diverse lending portfolio consisting primarily of commercial real estate, consumer, residential and commercial and industrial portfolios.
Previous wording
Total deposit balances increased by $165.1 million, or 2.9%, to $5.8 billion on March 31, 2025 when compared to balances as of December 31, 2024. The Company maintains a granular and tenured deposit base, with a continued focus on core commercial and consumer deposit gathering.
Current wording
Total deposit balances increased by $99.1 million, or 1.8%, to$5.7 billion as of June 30, 2025 when compared to balances as of December 31, 2024, driven by growth in non-interest-bearing and time deposit balances, partially offset by declines in other interest-bearing balances. The Company maintains a granular and tenured deposit base, with a continued focus on core commercial and consumer deposit gathering.
Previous wording
Total borrowings decreased by $332.2 million, or 27.0%, to $900.1 million as of March 31, 2025 when compared to balances as of December 31, 2024, primarily related to repayment of a portion of Federal Home Loan Bank advances.
Current wording
Total borrowings decreased by $256.8 million, or 20.8%, to $975.4 million as of June 30, 2025 when compared to balances as of December 31, 2024, primarily related to repayment of a portion of Federal Home Loan Bank advances.
Previous wording
Investment securities available for sale decreased $2.2 million since December 31, 2024 to $231.4 million and securities held to maturity decreased $23.8 million since December 31, 2024 to $1.8 billion as of March 31, 2025. The decrease in total investments was due to sale of certain corporate debt securities and maturities on investment securities. There were no purchases of investment securities through the three months ended March 31, 2025.
Current wording
Investment securities available for sale decreased $1.7 million since December 31, 2024 to $232.0 million and securities held to maturity, net of the allowance for credit losses, decreased $48.6 million since December 31, 2024 to $1.8 billion as of June 30, 2025. The decrease in total investments was primarily due to normal maturities and amortization of investment securities. There were no purchases of investment securities during the six months ended June 30, 2025.
Previous wording
The ACL balance at March 31, 2025 was $52.7 million, or 1.07% of period-end loans HFI compared to an ACL balance of $52.0 million at December 31, 2024 or 1.07% of loans HFI. The increase in the ACL was primarily due to the growth in commercial loans.
Current wording
The ACL balance at June 30, 2025 was $54.4 million, or 1.09% of period-end loans HFI compared to an ACL balance of$52.0 million at December 31, 2024 or 1.07% of loans HFI. The increase in the ACL was primarily due to the growth in commercial loans and a modestly less favorable baseline economic outlook.
Previous wording
As of March 31, 2025, total non-accrual loans increased by $3.0 million, or 11.7%, from December 31, 2024, to 0.59% of total loans HFI. Total non-performing assets increased $4.0 million, or 14.8%, from December 31, 2024, to 0.41% of total assets.
Current wording
As of June 30, 2025, total non-accrual loans decreased by $1.5 million, or 5.8%, from December 31, 2024, to 0.49% of total loans HFI. Total non-performing assets increased $3.1 million, or 11%, from December 31, 2024, to 0.40% of total assets.
Previous wording
During the three months ended March 31, 2025, net charge-offs were $0.9 million, or 7 basis points annualized of average loans in the period, an increase from $0.3 million, or 4 basis point annualized of average loans in the year ago comparable period.
Current wording
During the six months ended June 30, 2025, net charge-offs were$1.1 million, or 5 basis points annualized of average loans in the period, a change from$0.9 million, or 4 basis point annualized of average loans in the year ago comparable period.
Previous wording
The Bank maintains a stable base of core deposits provided by long–standing relationships with individuals and local businesses. These deposits are the principal source of liquidity for Horizon. Other sources of liquidity for Horizon include earnings, loan repayment, investment security sales and maturities, proceeds from the sale of residential mortgage loans, unpledged investment securities and borrowing relationships with correspondent banks, including the FHLB. At March 31,
Current wording
The Bank maintains a stable base of core deposits provided by long–standing relationships with individuals and local businesses. These deposits are the principal source of liquidity for Horizon. Other sources of liquidity for Horizon include earnings, loan repayment, investment security sales and maturities, proceeds from the sale of residential mortgage loans, unpledged investment securities and borrowing relationships with correspondent banks, including the FHLB. At June 30, 2025, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $1.75 billion in unused credit lines with various money center banks, including the FHLB and the FRB Discount Window compared to$1.70 billion at December 31, 2024.
Previous wording
The cash flows from the operating, investing and financing activities of the Company resulted in a net decrease in cash, cash equivalents and restricted cash of $123.8 million during the three months ended March 31, 2025, as reported in the consolidated statements of cash flows in this report. Operating activities, consisting mainly of net income adjusted for certain non-cash items, provided cash flow of $15.2 million and have historically been a stable source of funds. Investing activities, which occur mainly in the loan and investment securities portfolios, provided cash of $38.9 million mainly due to growth in the loan portfolio, which used cash of $47.2 million. Financing activities used cash of $177.9 million, largely resulting from the repayment of long-term borrowings of $530.1 million and $7.1 million in dividends paid on common stock during the first nine months of 2024.
Current wording
The cash flows from the operating, investing and financing activities of the Company resulted in a net decrease in cash, cash equivalents and restricted cash of $155.5 million during the six months ended June 30, 2025, as reported in the consolidated statements of cash flows in this report. Operating activities, consisting mainly of net income adjusted for certain non-cash items, provided cash flow of $34.7 million and have historically been a stable source of funds. Investing activities, which occur mainly in the loan and investment securities portfolios, used cash of $14.5 million mainly due to growth in the loan portfolio, which used cash of $122.9 million. Financing activities used cash of $175.8 million, largely resulting from the repayment of long-term borrowings of $632.0 million and $14.2 million in dividends paid on common stock during the first six months of 2025.
Previous wording
The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at March 31, 2025. Stockholders’ equity totaled $776.1 million as of March 31, 2025, compared to $763.6 million as of December 31, 2024. For the three months ended March 31, 2025, the ratio of average stockholders’ equity to average assets was 10.06% compared to 9.25% for same period in 2024. The increase in stockholders’ equity during the period was due to changes in accumulated other comprehensive loss related to unrealized gains on available-for-sale securities and retention of earnings, which is primarily offset by cash dividend payments on outstanding common stock.
Current wording
The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at June 30, 2025. Stockholders’ equity totaled $790.9 million as of June 30, 2025, compared to $763.6 million as of December 31, 2024. The increase in stockholders’ equity during the period was due to an increase in retained earnings, driven by higher net income during the period, which is primarily offset by cash dividend payments on outstanding common stock.
Previous wording
As of March 31, 2025, the ratio of total stockholders’ equity to total assets is 10.17%. Book value per common share was $17.72, increasing $0.26 compared to December 31, 2024.
Current wording
As of June 30, 2025, the ratio of total stockholders’ equity to total assets is 10.34%. Book value per common share was $18.06, increasing $0.59 compared to December 31, 2024.
Previous wording
Tangible common equity 1 totaled $611.4 million at March 31, 2025, and the ratio of tangible common equity to tangible assets 1 was 8.19% at March 31, 2025. Tangible book value, which excludes intangible assets from total equity, per common share 1 was $13.96, increasing $0.28 compared to December 31, 2024.
Current wording
Tangible common equity 1 totaled $627.0 million at June 30, 2025, and the ratio of tangible common equity to tangible assets 1 was 8.37% at June 30, 2025. Tangible book value, which excludes intangible assets from total equity, per common share 1 was $14.32, increasing $0.64 compared to December 31, 2024.
Previous wording
Horizon declared common stock dividends in the amount of$0.16 per share during the three months ended March 31, 2025 and$0.16 per share for the same period in 2024. The dividend payout ratio (dividends as a percent of basic earnings per share) was 29.09% and 50.00% for the three months ended March 31, 2025 and 2024, respectively. For additional information regarding dividends, see Horizon’s 2024 Annual Report on Form 10–K.
Current wording
Horizon declared common stock dividends in the amount of $0.16 per share during the three months ended June 30, 2025 and $0.16 per share for the same period in 2024. The dividend payout ratio (dividends as a percent of basic earnings per share) was 31.37% and 50.00%for the six months ended June 30, 2025 and 2024, respectively. For additional information regarding dividends, see Horizon’s 2024 Annual Report on Form 10–K.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Following are the average balance sheets for the six months ended (dollars in thousands):
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
2025, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately$1.78 billion in unused credit lines with various money center banks, including the FHLB and the FRB Discount Window compared to$1.70 billion at December 31, 2024.