Horizon Bancorp's Q4 2024: Navigating Contradictions in Loan Growth, Margins, and Deposits

Loan Growth and Strategic Initiatives:
- Horizon reported annualized loan growth excluding warehouse balances of 10%, driven by a fifth consecutive quarter of expanded net interest margin.
- This growth is attributed to the organization's focus on expanding profitable core commercial relationships and reducing lower-yielding auto loans, aligning with strategic initiatives aimed at enhancing shareholder value.

Net Interest Margin Improvement:
- The company's Q4 net interest margin was stronger than anticipated, reaching 2.97%, up 31 basis points linked quarter.
- This improvement is due to the strategic redeployment of cash proceeds, a more profitable balance sheet mix, and a 5 basis point lift from interest recoveries on specific commercial loans.

Capitalization and Shareholder Value:
- Horizon plans to build significant capital organically throughout 2025, with a focus on potential share repurchases.
- This strategic approach is based on the company's disciplined capital deployment strategy, ensuring productive use of excess capital to enhance shareholder value.

Commercial Loan Portfolio Strength:
- Commercial loans grew by $164 million in Q4, representing 22% annualized growth.
- This growth is supported by strong demand in primary segments like owner-occupied and non-owner-occupied commercial real estate, along with positive credit metrics maintaining or improving upon peer performance.