Horizon Bancorp (HBNC) investor relations material

Executive summary

• Achieved strong profitability in Q2 2026, with ROA of 1.54% and ROTCE of 18.05%, supported by robust net interest margin expansion and solid loan growth, despite a $3.1 million legal charge impacting non-interest expense and EPS by $0.05.

• Net income was $24.9 million ($0.49 per diluted share), down from Q1 2026 due to the legal charge.

• Year-to-date deposit growth was 5% annualized, with quality lending growth at 4% annualized, led by commercial loan growth of 5.7% annualized in Q2.

• Asset quality remained excellent, with net charge-offs at 0.05% annualized and stable non-performing asset levels.

• The company maintained a disciplined approach to balance sheet growth and credit, focusing on expanding fee income and sustaining profitability.

Financial highlights

• Net interest margin expanded to 4.37% in Q2 2026, up from 4.29% in Q1, driven by higher loan yields, favorable asset mix, and disciplined pricing.

• Net interest income rose to $63.5 million, up 14.7% year-over-year; non-interest income grew 10% year-over-year, led by fiduciary activities and mortgage-related income, each up about 20%.

• Non-interest expense was $43.8 million, including the $3.1 million legal charge; efficiency ratio at 58.07%.

• CET1 capital ratio increased to 11.09%; total risk-based capital at 15.01%.

• Book value per share increased to $14.21; tangible book value per share rose to $11.06.

Outlook and guidance

• Net interest margin expected to remain in the 4.3%-4.35% range for H2 2026; non-FTE net interest income anticipated to grow in the low teens year-over-year.

• Loan and deposit balances projected to grow mid-single digits for the year, with balanced growth expected in H2.

• Non-interest income forecasted in the mid-$40 million range; non-interest expense in the low to mid-$160 million range, excluding the Q2 legal charge.

• Guidance assumes one 25-basis-point Fed rate hike in October.

• Management expects continued resiliency in profitability metrics despite interest rate shifts, with a focus on low-volatility, profitability-first growth.