Horizon Bancorp, Inc. Reports Positive Fourth Quarter 2025 Results, Entering 2026 with Peer Leading Performance Metrics
MICHIGAN CITY, Ind., Jan. 21, 2026 (GLOBE NEWSWIRE) -- (NASDAQ GS: HBNC), Horizon Bancorp, Inc. ("Horizon" or the "Company"), the parent company of Horizon Bank (the "Bank"), announced its unaudited financial results for the three months ended December 31, 2025.
"Horizon's fourth quarter results demonstrate excellent execution of the balance sheet repositioning and the core strength of our community banking model. We have delivered on our commitment to shareholders to create a top performing community bank with durable, peer-leading performance metrics and shareholder returns. The fourth quarter exceeded our prior performance estimates, with annualized return on average assets exceeding 1.60%, returns on average equity approaching 16%, and a net interest margin of 4.29%. We are pleased with the results for our shareholders and the transparency the quarter provided to highlight the strength of Horizon's community banking model, which remains the cornerstone of our value proposition", President and CEO, Thomas Prame stated. "More importantly, the Company is kicking off the new year from a position of strength, with the franchise well positioned to deliver durable earnings and continued top-tier profitability metrics in 2026. The commercial loan engine continues to produce disciplined and high-quality growth, which we expect to fund through our client-focused branch distribution network and our relationship-based community bankers. Credit quality remains excellent, and expenses continue to be well managed. As we look ahead, we will remain focused on creating sustainable long-term value for our shareholders through our disciplined operating model, consistent profitable growth and peer leading capital generation".
Net income for the three months ended December 31, 2025 was $26.9 million, or $0.53 per diluted share, compared to a net loss of $222.0 million, or $(4.69), for the third quarter of 2025 and a net loss of $10.9 million, or $(0.25) per diluted share, for the fourth quarter of 2024.
Net loss for the twelve months ended December 31, 2025 was $150.5 million, or $(3.24) per diluted share, compared to net income of $35.4 million, or $0.80, for the twelve months ended December 31, 2024.
Fourth Quarter 2025 Highlights
Strong performance of the core community banking model, combined with the successful completion of the balance sheet repositioning efforts, resulted in significant performance improvement for the quarter. The Company's return on average assets and return on average equity improved to 1.63% and 15.71%, respectively. The franchise is well positioned to continue to achieve top performance metrics moving forward.
Net interest income of $63.5 million increased 8.7% compared with $58.4 million for the three months ended September 30, 2025, and 19.5% compared with $53.1 million in the year ago period. The net interest margin, on a fully taxable equivalent ("FTE") basis1, expanded for the ninth consecutive quarter, to 4.29%, compared with 3.52% for the three months ended September 30, 2025 and 2.97% for the three months ended December 31, 2024.
Total loans held for investment ("HFI") increased 4.4% compared to the linked quarter annualized, with strong organic commercial loan growth of $75.8 million, or 9.1% annualized. Loan pipelines continue to be consistent, reflective of Horizon's attractive markets and embedded community banking model.
Funding remains durable with costs trending favorably. Non-interest bearing deposits remained relatively flat, while declines in interest-bearing balances largely reflected the communicated planned exit of high-cost, transactional deposits. Total interest-bearing liability cost performed well, decreasing by another 34 bps during the quarter.
Credit quality remained strong, with annualized net charge offs of 0.08% of average loans during the fourth quarter. Non-performing assets remain well within expected ranges, with non-performing assets to total assets of 63 bps for the fourth quarter.
Expenses continued to be well managed, and were comparable to the third quarter when considering a select few items related to the balance sheet activities, displaying management's continued commitment to generate positive operating leverage through a more efficient expense base.
_________________________
1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Financial Highlights
(Dollars in Thousands Except Share and Per Share Data and Ratios)
Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
2025
2025
2025
2025
2024
Income statement:
Net interest income
$
63,476
$
58,386
$
55,355
$
52,267
$
53,127
Provision for credit losses
1,630
(3,572
)
2,462
1,376
1,171
Non-interest income (loss)
11,463
(295,334
)
10,920
16,499
(28,954
)
Non-interest expense
40,615
52,952
39,417
39,306
44,935
Income tax expense (benefit)
5,773
(64,338
)
3,752
4,141
(11,051
)
Net Income (Loss)
$
26,921
$
(221,990
)
$
20,644
$
23,943
$
(10,882
)
Per share data:
Basic earnings (loss) per share
$
0.53
$
(4.69
)
$
0.47
$
0.55
$
(0.25
)
Diluted earnings (loss) per share
0.53
(4.69
)
0.47
0.54
(0.25
)
Cash dividends declared per common share
0.16
0.16
0.16
0.16
0.16
Book value per common share
13.50
12.96
18.06
17.72
17.46
Market value - high
18.47
16.88
15.88
17.76
18.76
Market value - low
15.04
15.01
12.92
15.00
14.57
Weighted average shares outstanding - Basic
50,975,693
47,311,642
43,794,490
43,777,109
43,721,211
Weighted average shares outstanding - Diluted
51,277,134
47,311,642
44,034,663
43,954,164
43,721,211
Common shares outstanding (end of period)
50,978,030
50,970,530
43,801,507
43,785,932
43,722,086
Key ratios:
Return on average assets
1.63
%
(12.07
)%
1.09
%
1.25
%
(0.56
)%
Return on average stockholders' equity
15.71
(120.37
)
10.49
12.44
(5.73
)
Total equity to total assets
10.69
9.84
10.34
10.18
9.79
Total loans to deposit ratio
92.62
87.41
87.52
85.21
87.75
Allowance for credit losses to HFI loans
1.05
1.04
1.09
1.07
1.07
Annualized net charge-offs of average total loans(1)
0.08
0.07
0.02
0.07
0.05
Efficiency ratio
54.20
(22.35
)
59.47
57.16
185.89
Key metrics (Non-GAAP)(2)
Net FTE interest margin
4.29
%
3.52
%
3.23
%
3.04
%
2.97
%
Return on average tangible common equity
20.66
(155.03
)
13.24
15.79
(7.35
)
Tangible common equity to tangible assets
8.38
7.60
8.37
8.19
7.83
Tangible book value per common share
$
10.32
$
9.76
$
14.32
$
13.96
$
13.68
(1)Average total loans includes loans held for investment and held for sale.
(2)Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.
Income Statement Highlights
Net Interest Income
Net interest income was $63.5 million in the fourth quarter of 2025, compared to $58.4 million in the third quarter of 2025, driven by the continued expansion of the Company's net FTE interest margin1, which increased to 4.29% for the fourth quarter of 2025, compared to 3.52% for the third quarter of 2025. The margin saw continued expansion as a by product of the balance sheet repositioning, stronger realized deposit betas relative to recent reductions in short-term interest rates and relatively stable overall earning asset yields since affecting the balance sheet actions in late August.
Provision for Credit Losses
During the fourth quarter of 2025, the Company recorded a provision for credit losses of $1.6 million. This compares to a recorded benefit for credit losses of $3.6 million during the third quarter of 2025, and a provision for credit losses expense of $1.2 million during the fourth quarter of 2024. The increase in the provision for credit losses during the fourth quarter of 2025 when compared with the third quarter of 2025 was primarily attributable to the release of approximately $3.1 million in total Allowance against the sold portion of the Indirect Auto portfolio and the release of the $0.2 million reserve against the previous Held-To-Maturity investment portfolio in the third quarter, which did not recur in the fourth quarter. Additionally, the Provision increased primarily due to changes in the baseline economic outlook.
For the fourth quarter of 2025, Net Charge-Offs were $1.0 million, or an annualized 0.08% of average loans outstanding, compared to Net Charge-Offs of $0.8 million, or an annualized 0.07% of average loans outstanding for the third quarter of 2025, and Net Charge-Offs of $0.6 million, or an annualized 0.05% of average loans outstanding, in the fourth quarter of 2024.
The Company's Allowance for Credit Losses as a percentage of period-end loans HFI was 1.05% at December 31, 2025, compared to 1.04% at September 30, 2025 and 1.07% at December 31, 2024.
Non-Interest Income
For the Quarter Ended
December 31,
September 30,
June 30
March 31,
December 31,
(Dollars in Thousands)
2025
2025
2025
2025
2024
Non-interest (Loss) Income
Service charges on deposit accounts
$
3,341
$
3,474
$
3,208
$
3,208
$
3,276
Wire transfer fees
66
71
69
71
124
Interchange fees
3,445
3,510
3,403
3,241
3,353
Fiduciary activities
1,560
1,363
1,251
1,326
1,313
Gain (loss) on sale of investment securities
1
(299,132
)
—
(407
)
(39,140
)
Gain on sale of mortgage loans
1,296
1,208
1,219
1,076
1,071
Mortgage servicing income net of impairment
352
351
375
385
376
Increase in cash value of bank owned life insurance
360
379
346
335
335
Other income (loss)
1,042
(6,558
)
1,049
7,264
338
Total non-interest (loss) income
$
11,463
$
(295,334
)
$
10,920
$
16,499
$
(28,954
)
Total Non-Interest Income was $11.5 million in the fourth quarter of 2025, compared to Non-Interest (Loss) of $295.3 million in the third quarter of 2025. The increase in Non-Interest Income of $306.8 million is due to the $299.1 million loss on the sale investment securities and the pre-tax loss of $7.7 million on the sale of the Company's Indirect Auto portfolio, both of which were related to the balance sheet repositioning efforts during the third quarter, which did not recur. Other categories remained relatively unchanged when compared with the prior period.
_________________________
1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Non-Interest Expense
For the Quarter Ended
December 31,
September 30,
June 30,
March 31,
December 31,
(Dollars in Thousands)
2025
2025
2025
2025
2024
Non-interest Expense
Salaries and employee benefits
$
21,895
$
22,698
$
22,731
$
22,414
$
25,564
Net occupancy expenses
3,718
3,321
3,127
3,702
3,431
Data processing
3,128
2,933
2,951
2,872
2,841
Professional fees
1,083
808
735
826
736
Outside services and consultants
3,035
3,844
3,278
3,265
4,470
Loan expense
1,183
1,237
1,231
689
1,285
FDIC insurance expense
1,251
1,345
1,216
1,288
1,193
Core deposit intangible amortization
706
706
816
816
843
Merger related expenses
—
—
—
305
—
Prepayment penalties
—
12,680
—
—
—
Other losses
732
131
245
228
371
Other expense
3,884
3,249
3,087
2,901
4,201
Total non-interest expense
$
40,615
$
52,952
$
39,417
$
39,306
$
44,935
Total Non-Interest Expense was $40.6 million in the fourth quarter of 2025, compared with $53.0 million in the third quarter of 2025. The decrease in Non-Interest Expense during the fourth quarter of 2025 when compared with the prior period was primarily driven by a $12.7 million prepayment penalty related to the payoff of $700 million in FHLB advances during the third quarter, which did not recur. The increase in Other Losses was the result of the write off of unamortized issuance costs of $0.7 million related to the early redemption of the Company's subordinated notes due 2030. Apart from this specific item, expenses were relatively unchanged from the prior quarter, with declines in personnel expense offset by higher seasonal occupancy expenses, marketing expense and higher professional expense from legal fees to settle certain legacy items.
Income Taxes
Horizon recorded a net tax expense of $5.8 million for the fourth quarter of 2025, resulting in an effective tax rate of 17.7%, which is consistent with the Company's estimated annual effective tax rate.
Balance Sheet Highlights
Total assets decreased by $275.9 million, or 4.1%, to $6.4 billion as of December 31, 2025, from $6.7 billion as of September 30, 2025. The decrease in total assets is primarily due to the decrease in interest earning deposits of $309.2 million, a decrease in other assets of $10.8 million, a decrease in cash of $9.6 million, and a decrease in total investment securities of $4.5 million. Total loans were $4.9 billion at December 31, 2025, an increase of $60.7 million from September 30, 2025 balances, primarily driven by organic commercial loan growth.
Total deposits decreased by $245.5 million, or 4.4%, to $5.3 billion as of December 31, 2025 when compared to balances as of September 30, 2025, which is largely attributable to the intentional runoff of another $195 million in higher-cost transactional deposit balances. The decrease also was driven by a decrease in time deposits of $97.2 million, a decrease of interest bearing deposits of $75.6 million, and a decrease in savings and money market deposits of $28.5 million. Non-interest bearing deposit balances decreased $44.2 million in the current period, which is largely attributable to seasonal trends, but increased from the year ago period. Subordinated notes balances decreased by $55.8 million during the quarter related to the early redemption of the Company's subordinated notes due 2030, as previously planned.
Capital
The following table presents the Consolidated Regulatory Capital Ratios of the Company for the previous three quarters, and the Company's preliminary estimate of its consolidated regulatory capital ratios for the quarter ended December 31, 2025:
For the Quarter Ended
December 31,
September 30,
June 30,
March 31,
2025*
2025
2025
2025
Consolidated Capital Ratios
Total capital (to risk-weighted assets)
14.37
%
15.00
%
14.44
%
14.26
%
Tier 1 capital (to risk-weighted assets)
11.52
11.27
12.48
12.33
Common equity tier 1 capital (to risk-weighted assets)
10.43
10.17
11.48
11.32
Tier 1 capital (to average assets)
9.57
8.22
9.59
9.25
*Preliminary estimate - may be subject to change
As of December 31, 2025, the ratio of total stockholders' equity to total assets is 10.69%. Book value per common share was $13.50, increasing $0.54 during the fourth quarter of 2025.
Tangible common equity1 totaled $525.9 million at December 31, 2025, and the ratio of tangible common equity to tangible assets1 was 8.38% at December 31, 2025, up from 7.60% at September 30, 2025. Tangible book value, which excludes intangible assets from total equity, per common share1 was $10.32, increasing $0.56 during the fourth quarter of 2025.
Credit Quality
As of December 31, 2025, total non-accrual loans increased by $3.1 million from September 30, 2025, to 0.67% of total loans HFI. Total non-performing assets increased $4.9 million, to $40.6 million, compared to $35.7 million as of September 30, 2025. The ratio of non-performing assets to total assets was 0.63%, compared to 0.53% as of September 30, 2025.
For the quarter ended December 31, 2025, net charge-offs were $1.0 million, compared to $0.8 million as of September 30, 2025, or 0.08% annualized of average loans.
_________________________
1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Earnings Conference Call
As previously announced, Horizon will host a conference call to review its fourth quarter financial results and operating performance.
Participants may access the live conference call on January 22, 2026 at 7:30 a.m. CT (8:30 a.m. ET) by dialing 833-974-2379 from the United States, 866-450-4696 from Canada or 1-412-317-5772 from international locations and requesting the "Horizon Bancorp, Inc. Call." Participants are asked to dial in approximately 10 minutes prior to the call.
A telephone replay of the call will be available approximately one hour after the end of the conference through January 30, 2026. The replay may be accessed by dialing 855-669-9658 from the United States and Canada, or 1–412–317-0088 from other international locations, and entering the access code 1841881.
About Horizon Bancorp, Inc.
Horizon Bancorp, Inc. (NASDAQ GS: HBNC) is the $6.4 billion-asset commercial bank holding company for Horizon Bank, which serves customers across diverse and economically attractive Midwestern markets through convenient digital and virtual tools, as well as its Indiana and Michigan branches. Horizon's retail offerings include prime residential and other secured consumer lending to in-market customers, as well as a range of personal banking and wealth management solutions. Horizon also provides a comprehensive array of in-market business banking and treasury management services, as well as equipment financing solutions for customers regionally and nationally, with commercial lending representing over half of total loans. More information on Horizon, headquartered in Northwest Indiana's Michigan City, is available at horizonbank.com and investor.horizonbank.com.
Use of Non-GAAP Financial Measures
Certain information set forth in this press release refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non-GAAP financial measures relating to net income, diluted earnings per share, pre-tax, pre-provision net income, net interest margin, tangible stockholders' equity and tangible book value per share, efficiency ratio, the return on average assets, the return on average common equity, and return on average tangible equity. In each case, we have identified special circumstances that we consider to be non-recurring and have excluded them. Horizon believes these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business and financial results without giving effect to one-time costs and non–recurring items. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this press release for reconciliations of the non-GAAP information identified herein and its most comparable GAAP measures.
Forward Looking Statements
This press release may contain forward–looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon Bancorp, Inc. and its affiliates (collectively, "Horizon"). For these statements, Horizon claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission (the "SEC"). Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance.
Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, changes within the domestic and international macroeconomic environment, including trade policy, monetary and fiscal policy, inflation levels, and conditions in the investment, credit, interest rate, and derivatives markets, and their impact on Horizon and its customers; current financial conditions within the banking industry; changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon's assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the U.S. federal government to manage federal debt limits; climate change and social justice initiatives; the inability to realize cost savings or revenues or to effectively implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; acts of terrorism, war and global conflicts, and the effects of foreign and military policies of the U.S. government; and supply chain disruptions and delays. These and additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Horizon's reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC's website (www.sec.gov). Undue reliance should not be placed on the forward–looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward–looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.
Condensed Consolidated Statements of Income
(Dollars in Thousands Except Per Share Data, Unaudited)
Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
2025
2025
2025
2025
2024
Interest Income
Loans receivable
$
77,238
$
79,561
$
78,618
$
74,457
$
76,747
Investment securities - taxable
7,688
6,631
5,941
6,039
6,814
Investment securities - tax-exempt
2,498
4,581
6,088
6,192
6,301
Other
1,864
2,063
830
2,487
3,488
Total interest income
89,288
92,836
91,477
89,175
93,350
Interest Expense
Deposits
21,228
25,726
26,052
25,601
27,818
Borrowed funds
1,749
5,924
8,171
9,188
10,656
Subordinated notes
1,811
1,731
829
829
829
Junior subordinated debentures issued to capital trusts
1,024
1,069
1,070
1,290
920
Total interest expense
25,812
34,450
36,122
36,908
40,223
Net Interest Income
63,476
58,386
55,355
52,267
53,127
Provision for credit losses
1,630
(3,572
)
2,462
1,376
1,171
Net Interest Income after Provision for Credit Losses
61,846
61,958
52,893
50,891
51,956
Non-interest Income
Service charges on deposit accounts
3,341
3,474
3,208
3,208
3,276
Wire transfer fees
66
71
69
71
124
Interchange fees
3,445
3,510
3,403
3,241
3,353
Fiduciary activities
1,560
1,363
1,251
1,326
1,313
Gain (loss) on sale of investment securities
1
(299,132
)
—
(407
)
(39,140
)
Gain on sale of mortgage loans
1,296
1,208
1,219
1,076
1,071
Mortgage servicing income net of impairment
352
351
375
385
376
Increase in cash value of bank owned life insurance
360
379
346
335
