Horizon Bancorp (HBNC) Q2 2026 earnings summary

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 reducing EPS by $0.05.

• Net income was $24.9 million ($0.49 per diluted share), down from $26.2 million in Q1 2026 due to the legal charge.

• Commercial loan growth led total loans up $81 million (6.6% LQA), with commercial balances increasing $64 million (7.4% LQA).

• Loans and deposits grew by $83 million and $125 million, respectively, in the first half of 2026, supporting mid-single digit organic growth.

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

Financial highlights

• Net interest margin (NIM) expanded to 4.37% from 4.29% in Q1 2026 and 3.23% in Q2 2025, driven by disciplined pricing and lower average cash balances.

• Net interest income rose to $63.5 million, up 14.7% year-over-year.

• Non-interest income grew 10% year-over-year to $12.0 million, led by fiduciary activities (+20%), mortgage-related income (+21%), and higher gains on mortgage loan sales and interchange fees.

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

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

Outlook and guidance

• Full-year 2026 guidance projects mid-single-digit growth in period-end total loans and deposits.

• Non-FTE net interest income expected to grow in the low teens; FTE NIM for H2 2026 guided to 4.30%-4.35%.

• 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.

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

• Loan pipelines remain consistent, supporting ongoing organic growth.