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- **Margin Expansion**: Q3 net interest margin +29 bps to 3.52%, with Q4 exit rate targeting 4.2%-4.3%.
- **Loan Growth Momentum**: Commercial loans up $58M Q/Q, core deposit resilience supporting 4%+ margin.
- **M&A Focus**: Eyeing $300M-$400M+ deals in Michigan/Indiana, with 2026 EPS guidance at $2/share.
- **Credit Strength**: Substandard loans at 1.31%, no material stress in commercial portfolio post-indirect auto exit.
- **Capital Efficiency**: Peer-leading ROA and ROTCE, with 2026 non-FTE net interest income growth >10%.

**【CEO Summary Section】**
- **Balance Sheet Restructuring Success**: Exceeded initial expectations, achieving top-tier financial outcomes. Net interest margin expanded for the eighth consecutive quarter, exiting September above 4%. 
- **Loan Growth and Deposit Resilience**: Loan balances increased $48 million (excluding runoff), driven by commercial lending. Core deposit portfolios remained stable, with planned outflows in high-cost transactional accounts.
- **Fee Income Performance**: Service charges, wealth, card, and mortgage income rose, supported by disciplined expense management.
- **2026 Outlook**: Confident in delivering superior financial performance with a focus on profitable loan growth and peer-leading capital generation.

**【CFO Financial Commentary】**
- **Net Interest Margin Expansion**: Q3 margin increased 29 bps to 3.52%, driven by well-priced commercial loans and stable funding costs. Q4 margin expected to expand to 4.15%-4.25%, with year-end exit rate of 4.2%-4.3%.
- **Balance Sheet Repositioning**: Reduced liquidity and interest rate risk through $535M reinvestment, repayment of $700M FHLB advances, and $275M targeted deposit runoff. Securities portfolio now 80% liquid with reduced duration.
- **Expense Management**: Noninterest expense flat Q/Q, excluding one-time items. Q4 expenses expected at $40M, including $0.7M sub debt write-off.
- **Capital Generation**: Peer-leading ROA and ROTCE, with 2026 EPS guidance aligning with consensus ($2/share) and non-FTE net interest income growth in low double digits.

**【Q&A Highlights】**
- **M&A Strategy**: Focus on $300M-$400M+ transactions in Michigan and Indiana, leveraging strong community banking franchise. No immediate buyback plans, prioritizing M&A and organic growth.
- **Credit Quality**: Substandard loans at 1.31%, nonperforming loans at 0.64%, with minimal stress in commercial portfolio. Indirect auto portfolio exit reduced credit risk.
- **Rate Sensitivity**: Balance sheet neutral to rate changes, with 25% floating-rate loans and minimal repricing exposure on deposits.
- **Loan Growth Outlook**: Mid-single-digit annualized growth in 2026, driven by commercial lending and disciplined credit underwriting.

Horizon Bancorp, Inc. (HBNC) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

HBNC

HBNC fundamentals

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