Horizon Bancorp (HBNC) investor relations material

Executive summary

• Strategic balance sheet repositioning exceeded expectations, optimizing securities, loan portfolios, and funding sources, and delivering financial benefits ahead of plan.

• Net interest margin expanded for the eighth consecutive quarter, with September's exit run rate above 4%.

• Core community banking franchise remains strong, with resilient relationship-based deposit portfolios, solid commercial loan growth, excellent credit quality, and well-managed expenses.

• Completed equity and debt raises, redeemed previous sub-debt, and continued reduction of high-cost transactional accounts.

• Focus remains on profitable growth, disciplined execution, and redeployment of capital to create sustainable long-term value.

Financial highlights

• Net interest income rose to $58.4 million in Q3 2025, up 5.5% sequentially and 24.5% year-over-year.

• Net loss of $222.0 million ($-4.69 per diluted share) in Q3 2025, driven by $299.1 million loss on securities sales and $7.7 million loss on indirect auto loan sale.

• Non-interest expense increased to $53.0 million, including $12.7 million FHLB prepayment penalties and $0.9 million in non-recurring costs.

• Total loans held for investment declined to $4.82 billion, with commercial loan growth of $58 million (7% annualized) offset by $210 million runoff/sale of indirect auto loans.

• Tangible book value per share fell to $9.76, and tangible common equity to tangible assets was 7.60% at quarter end.

Outlook and guidance

• Q4 net interest margin expected to expand to 4.15%-4.25%, with net interest income projected to grow high single digits and non-interest expense to approximate $40 million.

• Loan growth expected in the mid-single-digit annualized range, primarily from commercial lending; deposit balances to decline due to targeted runoff of high-cost non-relationship balances.

• Effective tax rate for Q4 expected in the 18%-20% range; 2026 guidance aligns with consensus: EPS around $2, low double-digit non-FTE net interest income growth, and NIM of 4.2%-4.3%.

• Management will focus on disciplined execution, profitable growth, and redeployment of capital to drive durable returns and long-term shareholder value.