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Horizon Bancorp, Inc. Announces Third Quarter 2020 Financial Results

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Horizon Bancorp reported strong third-quarter results for 2020, with net income of $20.3 million or $0.46 diluted EPS, up from $14.6 million in Q2 2020. Pre-tax, pre-provision income grew to $26.7 million. The company maintained stable asset quality, with non-performing loans at 0.72% of total loans. The allowance for credit losses increased to $56.3 million, reflecting prudent reserve building. Total loans rose by 11.1% year-over-year, led by commercial lending. The tangible book value per share reached an all-time high of $11.29.

Positive
  • Net income of $20.3 million, up from $14.6 million in Q2 2020.
  • Pre-tax, pre-provision income increased to $26.7 million.
  • Total loans grew by 11.1% year-over-year.
  • Tangible book value per share rose to $11.29, the highest in history.
Negative
  • Net interest margin decreased to 3.39%, down from 3.47% in Q2 2020.
  • Non-interest expenses increased by $3.0 million compared to Q2 2020.

MICHIGAN CITY, Ind., Oct. 28, 2020 (GLOBE NEWSWIRE) -- (NASDAQ GS: HBNC) — Horizon Bancorp, Inc. (“Horizon” or the “Company”) announced its unaudited financial results for the three and nine months ending September 30, 2020.

“Horizon is successfully navigating through these challenging times, thanks to our team’s unwavering focus on our communities, customers and our culture of accountability and operating discipline,” Chairman and CEO Craig M. Dwight said. “In the third quarter, we saw a healthy recovery in earnings and meaningful growth in pre–tax, pre–provision income, as Horizon maintained sound asset quality metrics and continued to conservatively build reserves, tightly managed operating expenses, stabilized net interest income and margin, and benefited from very strong performance from our mortgage business. In addition, in future periods, we expect to benefit from efforts initiated in the early fourth quarter to deleverage and optimize returns on earning assets.”

Third Quarter 2020 Highlights

  • Earned net income of $20.3 million, or $0.46 diluted earnings per share, compared to $14.6 million, or $0.33 diluted earnings per share, for the second quarter of 2020 and $20.5 million, or $0.46 diluted earnings per share, for the third quarter of 2019.
     
  • Grew pre–tax, pre–provision net income to $26.7 million for the quarter, compared to $23.7 million for the second quarter of 2020 and $24.9 million for the third quarter of 2019. This non–GAAP financial measure is utilized by banks to provide a greater understanding of pre–tax profitability before giving effect to credit loss expense. (See the “Non–GAAP Reconciliation of Pre–Tax, Pre–Provision Net Income” table below.)
     
  • Reported return on average assets (“ROAA”) of 1.40% and return on average common equity (“ROACE”) of 12.08% in the quarter, as well as adjusted ROAA of 1.34% and adjusted ROACE of 11.55%, excluding the impact of gains on sale of investment securities, net of tax. (See the “Non–GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” tables below.)
     
  • Increased the allowance for credit losses (“ACL”) 2.2% during the quarter and 218.8% year–to–date to $56.3 million at period end, representing 1.39% of total loans, reflecting implementation of the Current Expected Credit Losses (“CECL”) accounting method and prudent increases in the Company’s general reserves. ACL at period end also represented 1.51% of loans excluding $310.8 million in Federal Paycheck Protection Program (“PPP”) loans, and 192.1% of non–performing loans.
     
  • Maintained solid asset quality metrics, including non–performing and delinquent loans representing 0.72% and 0.15% of total loans, respectively, at September 30, 2020, while net charge–offs were 0.02% of average loans for the period.
     
  • COVID–19 deferral levels improved to 4.1% of total loans at period end, from 14.3% on June 30, 2020.
     
  • Reported non–interest expense of $33.4 million, representing 2.30% of average assets on an annualized basis compared to 2.18% for the second quarter of 2020 and 2.34% for the third quarter of 2019.
     
  • Improved the efficiency ratio in the period to 55.59% compared to 56.23% for the second quarter of 2020. (See the “Non–GAAP Calculation and Reconciliation of Efficiency Ratio and Adjusted Efficiency Ratio” tables below.)
     
  • Generated record gain on mortgage loan sales of $8.8 million, up 33.1% from the linked quarter and 226.2% from the prior year period, and originated $207.1 million in mortgage loans during the quarter, down 18.1% from the record second quarter of 2020 and up 71.0% from the third quarter of 2019.
     
  • Reported net interest margin of 3.39% and adjusted net interest margin of 3.27%, with each declining by 8 basis points from the second quarter of 2020. (See the “Non–GAAP Reconciliation of Net Interest Margin” table for the definition of this non–GAAP calculation). An estimated 1 basis points of compression is attributed to PPP lending and an estimated 10 basis points of compression is attributed to subordinated notes during the quarter, for both net interest margin and adjusted net interest margin.
     
  • Horizon’s tangible book value per share increased from $10.63 at December 31, 2019 to $11.29 at September 30, 2020, which includes the accounting adjustment for CECL as of January 1, 2020. This represents the highest tangible book value per share in the Company’s history. (See the “Non–GAAP Reconciliation of Tangible Stockholders’ Equity and Tangible Book Value per Share” tables below.)
     
  • Maintained strong liquidity position including approximately $1.3 billion in cash and investment securities, which is approximately 22.4% of total assets, and approximately $928.0 million in unused availability on lines of credit, at September 30, 2020.

Summary

  For the Three Months Ended
  September 30, June 30, September 30,
Net Interest Income and Net Interest Margin 2020 2020 2019
Net interest income $43,397  $42,996  $43,463 
Net interest margin 3.39% 3.47% 3.82%
Adjusted net interest margin 3.27% 3.35% 3.67%
          

Mr. Dwight commented, “Our team continues to actively manage our net interest margin by focusing on interest spreads for all loan portfolios and lowering deposit rates. As a result, Horizon’s third quarter net interest margin declined only 8 basis points from the second quarter of this year which includes an additional estimated 1 basis points of compression from PPP lending and an additional estimated 10 basis points of compression attributed to subordinated notes.”

  For the Three Months Ended
  September 30, June 30, September 30,
Asset Yields and Funding Costs 2020 2020 2019
Interest earning assets 3.90% 4.05% 4.87%
Interest bearing liabilities 0.67% 0.74% 1.35%
          


  For the Three Months Ended
Non–interest Income and  September 30, June 30, September 30,
Mortgage Banking Income 2020 2020 2019
Total non–interest income $16,700  $11,125  $11,514 
Gain on sale of mortgage loans 8,813  6,620  2,702 
Mortgage servicing income net of impairment (1,308) (2,760) 444 
          


  For the Three Months Ended
  September 30, June 30, September 30,
Non–interest Expense 2020 2020 2019
Total non–interest expense $33,407  $30,432  $30,060 
Annualized non–interest expense to average assets 2.30% 2.18% 2.34%
          


  For the Three Months Ended
  September 30, June 30, September 30,
Credit Quality 2020 2020 2019
Allowance for credit losses to total loans 1.39% 1.38% 0.49%
Non–performing loans to total loans 0.72  0.70  0.52 
Percent of net charge–offs to average loans outstanding for the period 0.02  0.01  0.02 
          


    CECL Adoption
Allowance for December 31,   January 1, Net Reserve Build September 30,
Credit Losses 2019 Impact 2020 1Q20 2Q20 3Q20 2020
Commercial $11,996  $13,618  $25,614  $6,936  $6,597  $648  $39,795 
Retail Mortgage 923  4,048  4,971  683  178  (368) 5,464 
Warehouse 1,077  —  1,077  (22) 135  60  1,250 
Consumer 3,671  4,911  8,582  599  (260) 889  9,810 
Allowance for Credit Losses (“ACL”) $17,667  $22,577  $40,244  $8,196  $6,650  $1,229  $56,319 
ACL / Total Loans 0.49%   1.10%       1.39%
Acquired Loan Discount (“ALD”) $20,228  $(2,786) $17,442  $—  $—  $—  $12,933 
                             

Horizon’s asset quality metrics continued to remain favorable through the third quarter, with low levels of delinquency and other real estate owned and a moderate increase in non–performing loans. Horizon’s reserve build reflects adoption of CECL on January 1, 2020 and the increase in our quarterly allocations to cover potential future loan losses related to economic factors and the nature and characteristics of our loan portfolios, primarily related to the impact on non–essential businesses caused by COVID–19 closures and the slow pace of reopening and economic recovery. Through September 30, 2020, Horizon has not recorded any material specific loan losses attributed to COVID–19 closures.

Income Statement Highlights

Net income for the third quarter of 2020 was $20.3 million, or $0.46 diluted earnings per share, compared to $14.6 million, or $0.33, for the linked quarter and $20.5 million, or $0.46, for the prior year period.

Adjusted net income for the third quarter of 2020 was $19.4 million, or $0.45 diluted earnings per share, compared to $14.4 million, or $0.32, for the linked quarter and $20.3 million, or $0.45, for the prior year period. Adjusted net income, which is not calculated according to generally accepted accounting principles (“GAAP”), is a measure that Horizon uses to provide a greater understanding of operating profitability.

The increase in net income for the third quarter of 2020 when compared to the second quarter of 2020 reflects an increase in non–interest income of $5.6 million, an increase of $401,000 in net interest income and a decrease in credit loss expense of $5.0 million, offset by an increase in non–interest expense of $3.0 million and an increase in tax expense of $2.3 million.

Third quarter 2020 non–interest income was reduced by a non–cash mortgage servicing asset impairment of $1.5 million recorded to reflect the national increase in mortgage prepayment speeds and past due levels and determined based on a third–party valuation of Horizon’s mortgage servicing asset. This was more than offset by record income from the gain on sale of mortgage loans, which grew to a record $8.8 million in the third quarter of 2020, up from $6.6 million in the linked quarter and $2.7 million in the prior year period.

Non–interest expense of $33.4 million in the third quarter of 2020 reflected a $3.2 million increase in salaries and employee benefits expense from the linked quarter. The increase in salaries and employee benefits expense reflected a catch-up in bonus related expense and the deferral of approximately $1.1 million in PPP loan origination costs in the second quarter of 2020, which will be amortized over the life of the PPP loans and would be recognized when the loans are forgiven or paid off.

The decrease in net income for the third quarter of 2020 when compared to the same prior year period reflects an increase in non–interest expense of $3.3 million, an increase in credit loss expense of $1.7 million and an increase in income tax expense of $322,000, offset by an increase in non–interest income of $5.2 million.

Net income for the first nine months of 2020 was $46.6 million, or $1.06 diluted earnings per share, compared to $48.0 million, or $1.11 diluted earnings per share, for the first nine months of 2019. Adjusted net income for the first nine months of 2020 was $45.0 million, or $1.02 diluted earnings per share, compared to $52.1 million, or $1.21 diluted earnings per share for the first nine months of 2019. The decrease in net income for the first nine months of 2020 when compared to the same prior year period reflects an increase in the provision for credit loss expense of $16.1 million and an increase in non–interest expense of $3.6 million, offset by an increase in net interest income of $8.0 million, an increase in non–interest income of $8.8 million and a decrease in tax expense of $1.5 million.

Non–GAAP Reconciliation of Net Income
(Dollars in Thousands, Unaudited)
  Three Months Ended Nine Months Ended
  September 30, June 30, March 31, December 31, September 30, September 30, September 30,
  2020 2020 2020 2019 2019 2020 2019
Net income as reported $20,312  $14,639  $11,655  $18,543  $20,537  $46,606  $47,995 
Merger expenses —  —  —  —  —  —  5,650 
Tax effect —  —  —  —  —  —  (987)
Net income excluding merger expenses 20,312  14,639  11,655  18,543  20,537  46,606  52,658 
(Gain) / loss on sale of investment securities (1,088) (248) (339) (10) —  (1,675) 85 
Tax effect 228  52  71  2  —  352  (18)
Net income excluding (gain) / loss on sale of investment securities 19,452  14,443  11,387  18,535  20,537  45,283  52,725 
Death benefit on bank owned life insurance (“BOLI”) (31) —  (233) —  (213) (264) (580)
Net income excluding death benefit on BOLI 19,421  14,443  11,154  18,535  20,324  45,019  52,145 
Adjusted net income $19,421  $14,443  $11,154  $18,535  $20,324  $45,019  $52,145 
                             


Non–GAAP Reconciliation of Diluted Earnings per Share
(Dollars in Thousands, Unaudited)
  Three Months Ended Nine Months Ended
  September 30, June 30, March 31, December 31, September 30, September 30, September 30,
  2020 2020 2020 2019 2019 2020 2019
Diluted earnings per share (“EPS”) as reported $0.46  $0.33  $0.26  $0.41  $0.46  $1.06  $1.11 
Merger expenses —  —  —  —  —  —  0.13 
Tax effect —  —  —  —  —  —  (0.02)
Diluted EPS excluding merger expenses 0.46  0.33  0.26  0.41  0.46  1.06  1.22 
(Gain) / loss on sale of investment securities (0.02) (0.01) (0.01) —  —  (0.04) — 
Tax effect 0.01  —  —  —  —  0.01  — 
Diluted EPS excluding (gain) / loss on sale of investment securities 0.45  0.32  0.25  0.41  0.46  1.03  1.22 
Death benefit on bank owned life insurance (“BOLI”) —  —  (0.01) —  (0.01) (0.01) (0.01)
Diluted EPS excluding death benefit on BOLI 0.45  0.32  0.24  0.41  0.45  1.02  1.21 
Adjusted diluted EPS $0.45  $0.32  $0.24  $0.41  $0.45  $1.02  $1.21 
                             


Non–GAAP Reconciliation of Pre–Tax, Pre–Provision Income
(Dollars in Thousands, Unaudited)
  Three Months Ended Nine Months Ended
  September 30, June 30, March 31, December 31, September 30, September 30, September 30,
  2020 2020 2020 2019 2019 2020 2019
Pre–tax income $24,638  $16,632  $13,239  $22,463  $24,541  $54,509  $57,378 
Credit loss expense 2,052  7,057  8,600  340  376  17,709  1,636 
Pre–tax, pre–provision income $26,690  $23,689  $21,839  $22,803  $24,917  $72,218  $59,014 
               
Pre–tax, pre–provision income $26,690  $23,689  $21,839  $22,803  $24,917  $72,218  $59,014 
Merger expenses —  —  —  —  —  —  5,650 
(Gain) / loss on sale of investment securities (1,088) (248) (339) (10) —  (1,675) 85 
Death benefit on BOLI (31) —  (233) —  (213) (264) (580)
Adjusted pre–tax, pre–provision income $25,571  $23,441  $21,267  $22,793  $24,704  $70,279  $64,169 
                             

Horizon’s net interest margin decreased to 3.39% for the third quarter of 2020 compared to 3.47% for the second quarter of 2020. The decrease in net interest margin reflects a decrease in the yield of interest earning assets of 15 basis points, offset by a decrease in the cost of interest bearing liabilities of 7 basis points. Interest income from acquisition–related purchase accounting adjustments was $65,000 lower during the third quarter of 2020 when compared to the second quarter of 2020.

Horizon’s net interest margin decreased to 3.39% for the third quarter of 2020 when compared to 3.82% for the third quarter of 2019. The decrease in net interest margin reflects a decrease in the yield on interest earning assets of 97 basis points offset by a decrease in the cost of interest bearing liabilities of 68 basis points.

Horizon’s net interest margin decreased to 3.48% for the first nine months of 2020 when compared to 3.72% for the same prior year period. The decrease in net interest margin reflects a decrease in the yield on interest earning assets of 68 basis points offset by a decrease in the cost of interest bearing liabilities of 55 basis points.

The net interest margin was impacted during the second and third quarters of 2020 due to the PPP loans that were originated. Horizon estimates that the PPP loans compressed the net interest margin by 3 and 4 basis points for the second and third quarters, respectively. This assumes these PPP loans were not included in average interest earning assets or interest income and were primarily funded by the growth in non–interest bearing deposits. The compression to the net interest margin for the first nine months of 2020 using the same assumptions was estimated to be 3 basis points.

The net interest margin was also impacted during the second and third quarters of 2020 due to the issuance of $60.0 million in subordinated notes in June 2020. Horizon estimates that the subordinated notes compressed the net interest margin by 1 and 10 basis points for the second and third quarters, respectively. This assumes the subordinated notes were not included in average interest bearing liabilities or interest expense and were primarily offset by a reduction in cash. The compression to the net interest margin for the first nine months of 2020 using the same assumptions was estimated to be 4 basis points.

Non–GAAP Reconciliation of Net Interest Margin
(Dollars in Thousands, Unaudited)
  Three Months Ended Nine Months Ended
  September 30, June 30, March 31, December 31, September 30, September 30, September 30,
  2020 2020 2020 2019 2019 2020 2019
Net interest income as reported $43,397  $42,996  $40,925  $41,519  $43,463  $127,318  $119,272 
Average interest earning assets 5,251,611  5,112,636  4,746,202  4,748,217  4,623,985  5,037,540  4,376,841 
Net interest income as a percentage of average interest earning assets (“Net Interest Margin”) 3.39% 3.47% 3.56% 3.58% 3.82% 3.48% 3.72%
               
Net interest income as reported $43,397  $42,996  $40,925  $41,519  $43,463  $127,318  $119,272 
Acquisition–related purchase accounting adjustments (“PAUs”) (1,488) (1,553) (1,434) (1,042) (1,739) (4,475) (4,548)
Adjusted net interest income $41,909  $41,443  $39,491  $40,477  $41,724  $122,843  $114,724 
Adjusted net interest margin 3.27% 3.35% 3.44% 3.49% 3.67% 3.36% 3.58%
                      

Net interest margin, excluding acquisition–related purchase accounting adjustments (“adjusted net interest margin”), was 3.27% for the third quarter of 2020 compared to 3.35% for the prior quarter and 3.67% for the third quarter of 2019. Interest income from acquisition–related purchase accounting adjustments was $1.5 million, $1.6 million and $1.7 million for the three months ended September 30, 2020, June 30, 2020 and September 30, 2019, respectively.

Adjusted net interest margin was 3.36% for the first nine months of 2020 compared to 3.58% for the same prior year period. Interest income from acquisition–related purchase accounting adjustments was $4.5 million for both the nine months ended September 30, 2020 and 2019.

Lending Activity

Total loans were $4.04 billion, or $3.73 billion excluding PPP loans, on September 30, 2020. Total loans were $3.99 billion on June 30, 2020, $3.64 billion on December 31, 2019 and $3.67 billion on September 30, 2019. During the nine months ended September 30, 2020, commercial loans increased $275.0 million, mortgage warehouse loans increased $224.4 million, and loans held for sale increased $9.0 million, offset by a decrease in residential mortgage loans of $95.5 million and a decrease in consumer loans of $10.3 million.

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)
  September 30, December 31, Amount Percent
  2020 2019 Change Change
Commercial $2,321,608  $2,046,651  $274,957  13.4%
Residential mortgage 675,220  770,717  (95,497) (12.4)%
Consumer 658,884  669,180  (10,296) (1.5)%
Subtotal 3,655,712  3,486,548  169,164  4.9%
Loans held for sale 13,053  4,088  8,965  219.3%
Mortgage warehouse 374,653  150,293  224,360  149.3%
Total loans $4,043,418  $3,640,929  $402,489  11.1%
                

Residential mortgage lending activity for the three months ended September 30, 2020 generated a record $8.8 million in income from the gain on sale of mortgage loans, an increase of $2.2 million from the second quarter of 2020 and $6.1 million from the third quarter of 2019. Total origination volume for the third quarter of 2020, including loans placed into the portfolio, totaled $207.1 million, representing a decrease of 18.1% from record second quarter 2020 levels, and an increase of 71.0% from the third quarter of 2019. As a percentage of total originations, 50% of the volume was for refinances and 50% was for new purchases during the third quarter of 2020. Total origination volume of loans sold to the secondary market totaled $166.4 million, representing a decrease of 13.5% from the second quarter of 2020 and an increase of 75.1% from the third quarter of 2019.

Expense Management

  Three Months Ended    
  September 30, June 30,    
  2020 2020 Adjusted
Non–interest Expense Actual Merger
Expenses		 Adjusted Actual Merger
Expenses		 Adjusted Amount
Change		 Percent
Change
Salaries and employee benefits $18,832  $—  $18,832  $15,629  $—  $15,629  $3,203  20.5%
Net occupancy expenses 3,107  —  3,107  3,190  —  3,190  (83) (2.6)%
Data processing 2,237  —  2,237  2,432  —  2,432  (195) (8.0)%
Professional fees 688  —  688  518  —  518  170  32.8%
Outside services and consultants 1,561  —  1,561  1,759  —  1,759  (198) (11.3)%
Loan expense 2,876  —  2,876  2,692  —  2,692  184  6.8%
FDIC insurance expense 570  —  570  235  —  235  335  142.6%
Other losses 114  —  114  193  —  193  (79) (40.9)%
Other expense 3,422  —  3,422  3,784  —  3,784  (362) (9.6)%
Total non–interest expense $33,407  $—  $33,407  $30,432  $—  $30,432  $2,975  9.8%
Annualized non–interest expense to average assets 2.30%   2.30% 2.18%   2.18%    
                     

Total non–interest expense was $3.0 million higher in the third quarter of 2020 when compared to the second quarter of 2020. Increased salaries and employee benefits reflected higher performance–based compensation accruals following improved financial performance in the second half of this year, as well as the second quarter deferral of approximately $1.1 million in PPP loan origination costs that will be amortized over the life of the PPP loans and recognized when the loans are forgiven or paid off. Higher FDIC insurance expense reflected significant growth in deposits through the end of the third quarter of 2020. Loan expense and professional fees were partially offset by decreases in other expense, outside services and consultants and data processing.

  Three Months Ended    
  September 30, September 30,    
  2020 2019 Adjusted
Non–interest Expense Actual Merger
Expenses		 Adjusted Actual Merger
Expenses		 Adjusted Amount
Change		 Percent
Change
Salaries and employee benefits $18,832  $—  $18,832  $16,948  $—  $16,948  $1,884  11.1%
Net occupancy expenses 3,107  —  3,107  3,131  —  3,131  (24) (0.8)%
Data processing 2,237  —  2,237  2,140  —  2,140  97  4.5%
Professional fees 688  —  688  335  —  335  353  105.4%
Outside services and consultants 1,561  —  1,561  1,552  —  1,552  9  0.6%
Loan expense 2,876  —  2,876  2,198  —  2,198  678  30.8%
FDIC insurance expense 570  —  570  (273) —  (273) 843  (308.8)%
Other losses 114  —  114  90  —  90  24  26.7%
Other expense 3,422  —  3,422  3,939  —  3,939  (517) (13.1)%
Total non–interest expense $33,407  $—  $33,407  $30,060  $—  $30,060  $3,347  11.1%
Annualized non–interest expense to average assets 2.30%   2.30% 2.34%   2.34%    
                     

Total non–interest expense was $3.3 million higher in the third quarter of 2020 when compared to the third quarter of 2019. Increases in salaries and employee benefits, FDIC insurance expense, loan expense and professional fees were offset in part by a decrease in other expense.

  Nine Months Ended    
  September 30, September 30,    
  2020 2019 Adjusted
Non–interest Expense Actual Merger
Expenses		 Adjusted Actual Merger
Expenses		 Adjusted Amount
Change		 Percent
Change
Salaries and employee benefits $51,052  $—  $51,052  $48,365  $(484) $47,881  $3,171  6.6%
Net occupancy expenses 9,549  —  9,549  9,051  (75) 8,976  573  6.4%
Data processing 7,074  —  7,074  6,245  (360) 5,885  1,189  20.2%
Professional fees 1,742  —  1,742  1,426  (392) 1,034  708  68.5%
Outside services and consultants 5,235  —  5,235  6,737  (2,466) 4,271  964  22.6%
Loan expense 7,667  —  7,667  6,195  (2) 6,193  1,474  23.8%
FDIC insurance expense 955  —  955  252  —  252  703  279.0%
Other losses 427  —  427  363  (71) 292  135  46.2%
Other expense 11,287  —  11,287  12,748  (1,800) 10,948  339  3.1%
Total non–interest expense $94,988  $—  $94,988  $91,382  $(5,650) $85,732  $9,256  10.8%
Annualized non–interest expense to average assets 2.29%   2.29% 2.53%   2.38%    
                     

Total non–interest expense was $3.6 million higher for the first nine months of 2020 when compared to the same prior year period. Increases in salaries and employee benefits, loan expenses, data processing, FDIC insurance expense and net occupancy expenses were offset in part by decreases in outside services and consultants expense and other expense.

Annualized non–interest expense as a percent of average assets were 2.30%, 2.18% and 2.34% for the three months ended September 30, 2020, June 30, 2020 and September 30, 2019, respectively.

Annualized non–interest expense as a percent of average assets were 2.29% and 2.53% for the nine months ended September 30, 2020 and 2019, respectively. Annualized non–interest expense, excluding merger expenses, as a percent of average assets were 2.29% and 2.38% for the nine months ended September 30, 2020 and 2019, respectively.

Income tax expense totaled $4.3 million for the third quarter of 2020, an increase of $2.3 million when compared to the second quarter of 2020 and an increase of $322,000 when compared to the third quarter of 2019. The increase in income tax expense in the third quarter of 2020 compared to the second quarter of 2020 and the third quarter of 2019 was primarily due to increases in income before taxes of $8.0 million and $97,000, respectively.

Income tax expense totaled $7.9 million for the nine months ended September 30, 2020, a decrease of $1.5 million when compared to the same prior year period. The decrease in income tax expense was primarily due to a decrease in income before taxes of $2.9 million.

Capital

The capital resources of the Company and Horizon Bank (the “Bank”) exceeded regulatory capital ratios for “well capitalized” banks at September 30, 2020. Stockholders’ equity totaled $670.3 million at September 30, 2020 and the ratio of average stockholders’ equity to average assets was 11.90% for the nine months ended September 30, 2020.

Capital levels benefited from the Company’s previously disclosed public offering of subordinated notes raising $60.0 million in June 2020. Horizon’s fortress balance sheet at September 30, 2020 maintained adequate regulatory capital ratios when stress testing for highly adverse scenarios.

The following table presents the actual regulatory capital dollar amounts and ratios of the Company and the Bank as of September 30, 2020.

  Actual Required for Capital
Adequacy Purposes		 Required for Capital
Adequacy Purposes
with Capital Buffer		 Well Capitalized
Under Prompt
Corrective Action
Provisions
  Amount Ratio Amount Ratio Amount Ratio Amount Ratio
Total capital (to risk–weighted assets)                
Consolidated $640,728  14.38% $356,455  8.00% $467,847  10.50% N/A N/A
Bank 514,974  11.56% 356,383  8.00% 467,753  10.50% $445,479  10.00%
Tier 1 capital (to risk–weighted assets)                
Consolidated 601,331  13.49% 267,456  6.00% 378,896  8.50% N/A N/A
Bank 475,588  10.67% 267,435  6.00% 378,866  8.50% 356,580  8.00%
Common equity tier 1 capital (to risk–weighted assets)                
Consolidated 485,235  10.89% 200,510  4.50% 311,905  7.00% N/A N/A
Bank 475,588  10.67% 200,576  4.50% 312,007  7.00% 289,721  6.50%
Tier 1 capital (to average assets)                
Consolidated 601,331  10.82% 222,304  4.00% 222,304  4.00% N/A N/A
Bank 475,588  8.57% 221,978  4.00% 221,978  4.00% 277,473  5.00%
                             

“The strength and resilience of Horizon’s business is demonstrated by the Company’s strong operating fundamentals, ability to consistently generate retained earnings and growth in tangible book value per share and the Company’s healthy capital position overall,” said Mr. Dwight. “Accordingly, we will continue to be opportunistic with share repurchases under our current buyback authorization, and we remain committed to maintaining our current quarterly cash dividend.”

Liquidity

The Bank maintains a stable base of core deposits provided by long–standing relationships with individuals and local businesses. These deposits are the principal source of liquidity for Horizon. Other sources of liquidity for Horizon include earnings, loan repayment, investment security sales and maturities, proceeds from the sale of residential mortgage loans, unpledged investment securities and borrowing relationships with correspondent banks, including the Federal Home Loan Bank of Indianapolis (the “FHLB”). At September 30, 2020, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $928.0 million in unused credit lines with various money center banks, including the FHLB and the Federal Reserve Discount Window. The Bank had approximately $517.2 million of unpledged investment securities at September 30, 2020.

Branch Network and Customer Experience

Horizon continues to implement its disciplined approach to enhancing the efficiency of its branch network on an ongoing basis, while leveraging technology to enhance the customer experience. At the same time, the Bank continues to invest in growth opportunities within its Midwest footprint, converting its Troy, Michigan loan production office into a full–service branch during the third quarter of 2020.

During the third quarter, Horizon also fully implemented live online chat support. During the fourth quarter the Bank expects to implement fully online and mobile enabled deposit account opening capabilities, for the convenience of new and prospective customers.

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, net interest margin, total loans and loan growth, the allowance for credit losses, tangible stockholders’ equity, tangible book value per share, efficiency ratio, the return on average assets, the return on average equity and pre–tax, pre–provision income. In each case, we have identified special circumstances that we consider to be non–recurring and have excluded them. We believe that this shows the impact of such events as acquisition–related purchase accounting adjustments, among others we have identified in our reconciliations. Horizon believes these non–GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to the purchase accounting impacts and one–time costs of acquisitions 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 figures identified herein and their most comparable GAAP measures.

Non–GAAP Reconciliation of Tangible Stockholders’ Equity and Tangible Book Value per Share
(Dollars in Thousands, Unaudited)
   
  September 30, June 30, March 31, December 31, September 30,
  2020 2020 2020 2019 2019
Total stockholders’ equity $670,293  $652,206  $630,842  $656,023  $642,711 
Less: Intangible assets 175,107  176,020  176,961  177,917  178,896 
Total tangible stockholders’ equity $495,186  $476,186  $453,881  $478,106  $463,815 
Common shares outstanding 43,874,353  43,821,878  43,763,623  44,975,771  44,969,021 
Book value per common share $15.28  $14.88  $14.41  $14.59  $14.29 
Tangible book value per common share $11.29  $10.87  $10.37  $10.63  $10.31 
                     


Non–GAAP Calculation and Reconciliation of Efficiency Ratio and Adjusted Efficiency Ratio
(Dollars in Thousands, Unaudited)
  Three Months Ended Nine Months Ended
  September 30, June 30, March 31, December 31, September 30, September 30, September 30,
  2020 2020 2020 2019 2019 2020 2019
Non–interest expense as reported $33,407  $30,432  $31,149  $30,650  $30,060  $94,988  $91,382 
Net interest income as reported 43,397  42,996  40,925  41,519  43,463  127,318  119,272 
Non–interest income as reported $16,700  $11,125  $12,063  $11,934  $11,514  $39,888  $31,124 
Non–interest expense / (Net interest income + Non–interest income)
(“Efficiency Ratio”)		 55.59% 56.23% 58.79% 57.34% 54.68% 56.81% 60.76%
               
Non–interest expense as reported $33,407  $30,432  $31,149  $30,650  $30,060  $94,988  $91,382 
Merger expenses —  —  —  —  —  —  (5,650)
Non–interest expense excluding merger expenses 33,407  30,432  31,149  30,650  30,060  94,988  85,732 
Net interest income as reported 43,397  42,996  40,925  41,519  43,463  127,318  119,272 
Non–interest income as reported 16,700  11,125  12,063  11,934  11,514  39,888  31,124 
(Gain) / loss on sale of investment securities (1,088) (248) (339) (10) —  (1,675) 85 
Death benefit on BOLI (31) —  (233) —  (213) (264) (580)
Non–interest income excluding (gain) / loss on sale of investment securities and death benefit on BOLI $15,581  $10,877  $11,491  $11,924  $11,301  $37,949  $30,629 
Adjusted efficiency ratio 56.64% 56.49% 59.43% 57.35% 54.89% 57.48% 57.19%
                      


Non–GAAP Reconciliation of Return on Average Assets
(Dollars in Thousands, Unaudited)
  Three Months Ended Nine Months Ended
  September 30, June 30, March 31, December 31, September 30, September 30, September 30,
  2020 2020 2020 2019 2019 2020 2019
Average assets $5,768,691  $5,620,695  $5,257,332  $5,250,574  $5,107,259  $5,549,696  $4,823,601 
Return on average assets (“ROAA”) as reported 1.40% 1.05% 0.89% 1.40% 1.60% 1.12% 1.33%
Merger expenses —  —  —  —  —  —  0.16 
Tax effect —  —  —  —  —  —  (0.03)
ROAA excluding merger expenses 1.40  1.05  0.89  1.40  1.60  1.12  1.46 
(Gain) / loss on sale of investment securities (0.08) (0.02) (0.03) —  —  (0.04) — 
Tax effect 0.02  —  0.01  —  —  0.01  — 
ROAA excluding (gain) / loss on sale of investment securities 1.34  1.03  0.87  1.40  1.60  1.09  1.46 
Death benefit on BOLI —  —  (0.02) —  (0.02) (0.01) (0.02)
ROAA excluding death benefit on BOLI 1.34  1.03  0.85  1.40  1.58  1.08  1.44 
Adjusted ROAA 1.34% 1.03% 0.85% 1.40% 1.58% 1.08% 1.44%
                      


Non–GAAP Reconciliation of Return on Average Common Equity
(Dollars in Thousands, Unaudited)
  Three Months Ended Nine Months Ended
  September 30, June 30, March 31, December 31, September 30, September 30, September 30,
  2020 2020 2020 2019 2019 2020 2019
Average common equity $668,797  $649,490  $667,588  $653,071  $640,770  $660,278  $589,766 
Return on average common equity (“ROACE”) as reported 12.08% 9.07% 7.02% 11.26% 12.72% 9.43% 10.88%
Merger expenses —  —  —  —  —  —  1.28 
Tax effect —  —  —  —  —  —  (0.22)
ROACE excluding merger expenses 12.08  9.07  7.02  11.26  12.72  9.43  11.94 
(Gain) / loss on sale of investment securities (0.65) (0.15) (0.20) (0.01) —  (0.34) 0.02 
Tax effect 0.14  0.03  0.04  —  —  0.07  — 
ROACE excluding (gain) / loss on sale of investment securities 11.57  8.95  6.86  11.25  12.72  9.16  11.96 
Death benefit on BOLI (0.02) —  (0.14) —  (0.13) (0.05) (0.13)
ROACE excluding death benefit on BOLI 11.55  8.95  6.72  11.25  12.59  9.11  11.83 
Adjusted ROACE 11.55% 8.95% 6.72% 11.25% 12.59% 9.11% 11.83%
                      

Conference Call

As previously announced, Horizon will host a conference call to review its third quarter financial results and operating performance.

Participants may access the live conference call on October 29, 2020 at 7:30 a.m. CT (8:30 a.m. ET) by dialing 877–317–6789 from the United States, 866–450–4696 from Canada or 412–317–6789 from international locations and requesting the “Horizon Bancorp 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 November 5, 2020. The replay may be accessed by dialing 877–344–7529 from the United States, 855–669–9658 from Canada or 412–317–0088 from other international locations, and entering the access code 10148396.

About Horizon Bancorp, Inc.

Horizon Bancorp, Inc. is an independent, commercial bank holding company serving northern and central Indiana, and southern and central Michigan through its commercial banking subsidiary, Horizon Bank. Horizon may be reached online at www.horizonbank.com. Its common stock is traded on the NASDAQ Global Select Market under the symbol HBNC.

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. 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 risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in Horizon’s Annual Report on Form 10–K and its quarterly reports on Form 10–Q. Further, statements about the effects of the COVID–19 pandemic on our business, operations, financial performance, and prospects may constitute forward–looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward–looking statements due to factors and future developments that are uncertain, unpredictable, and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties, and us. 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.

Financial Highlights
(Dollars in Thousands, Unaudited)
   
  September 30, June 30, March 31, December 31, September 30,
  2020 2020 2020 2019 2019
Balance sheet:          
Total assets $5,790,143  $5,739,262  $5,351,325  $5,246,829  $5,186,714 
Investment securities 1,195,613  1,126,075  1,099,943  1,042,675  977,536 
Commercial loans 2,321,608  2,312,715  2,050,402  2,046,651  2,046,165 
Mortgage warehouse loans 374,653  300,386  223,519  150,293  155,631 
Residential mortgage loans 675,220  704,410  757,529  770,717  796,497 
Consumer loans 658,884  660,871  675,849  669,180  668,332 
Earning assets 5,262,054  5,143,978  4,835,934  4,706,051  4,667,668 
Non–interest bearing deposit accounts 1,016,646  981,868  709,978  709,760  756,707 
Interest bearing transaction accounts 2,600,691  2,510,854  2,264,576  2,245,631  2,173,100 
Time deposits 718,952  814,877  907,717  975,611  986,150 
Borrowings 587,473  583,073  704,613  549,741  516,591 
Subordinated notes 58,566  58,824  —  —  — 
Junior subordinated debentures issued to capital trusts 56,491  56,437  56,374  56,311  56,250 
Total stockholders’ equity 670,293  652,206  630,842  656,023  642,711 
                


Financial Highlights
(Dollars in Thousands Except Share and Per Share Data and Ratios, Unaudited)
  Three Months Ended
  September 30, June 30, March 31, December 31, September 30,
  2020 2020 2020 2019 2019
Income statement:          
Net interest income $43,397  $42,996  $40,925  $41,519  $43,463 
Credit loss expense 2,052  7,057  8,600  340  376 
Non–interest income 16,700  11,125  12,063  11,934  11,514 
Non–interest expense 33,407  30,432  31,149  30,650  30,060 
Income tax expense 4,326  1,993  1,584  3,920  4,004 
Net income $20,312  $14,639  $11,655  $18,543  $20,537 
           
Per share data:          
Basic earnings per share $0.46  $0.33  $0.26  $0.41  $0.46 
Diluted earnings per share 0.46  0.33  0.26  0.41  0.46 
Cash dividends declared per common share 0.12  0.12  0.12  0.12  0.12 
Book value per common share 15.28  14.88  14.41  14.59  14.29 
Tangible book value per common share 11.29  10.87  10.37  10.63  10.31 
Market value – high 11.48  12.44  18.79  19.42  17.77 
Market value – low $9.05  $8.40  $7.97  $16.60  $15.93 
Weighted average shares outstanding – Basis 43,862,435  43,781,249  44,658,512  44,971,676  45,038,021 
Weighted average shares outstanding – Diluted 43,903,881  43,802,794  44,756,716  45,103,065  45,113,730 
           
Key ratios:          
Return on average assets 1.40% 1.05% 0.89% 1.40% 1.60%
Return on average common stockholders’ equity 12.08  9.07  7.02  11.26  12.72 
Net interest margin 3.39  3.47  3.56  3.58  3.82 
Allowance for credit losses to total loans 1.39  1.38  1.30  0.49  0.49 
Average equity to average assets 11.59  11.56  12.70  12.44  12.55 
Bank only capital ratios:          
Tier 1 capital to average assets 8.57  8.48  9.43  9.49  9.35 
Tier 1 capital to risk weighted assets 10.67  10.49  11.83  12.20  11.62 
Total capital to risk weighted assets 11.56  11.74  12.67  12.65  12.08 
                


Financial Highlights
(Dollars in Thousands Except Share and Per Share Data and Ratios, Unaudited)
  Nine Months Ended
  September 30, September 30,
  2020 2019
Income statement:    
Net interest income $127,318  $119,272 
Credit loss expense 17,709  1,636 
Non–interest income 39,888  31,124 
Non–interest expense 94,988  91,382 
Income tax expense 7,903  9,383 
Net income $46,606  $47,995 
     
Per share data:    
Basic earnings per share $1.06  $1.12 
Diluted earnings per share 1.06  1.11 
Cash dividends declared per common share 0.36  0.34 
Book value per common share 15.28  14.29 
Tangible book value per common share 11.29  10.31 
Market value – high 18.79  17.82 
Market value – low $7.97  $15.50 
Weighted average shares outstanding – Basis 44,099,862  42,995,082 
Weighted average shares outstanding – Diluted 44,165,650  43,070,095 
     
Key ratios:    
Return on average assets 1.12% 1.33%
Return on average common stockholders’ equity 9.43  10.88 
Net interest margin 3.48  3.72 
Allowance for credit losses to total loans 1.39  0.49 
Average equity to average assets 11.90  12.23 
Bank only capital ratios:    
Tier 1 capital to average assets 8.57  9.35 
Tier 1 capital to risk weighted assets 10.67  11.62 
Total capital to risk weighted assets 11.56  12.08 
       


Financial Highlights
(Dollars in Thousands Except Ratios, Unaudited)
   
  September 30, June 30, March 31, December 31, September 30,
  2020 2020 2020 2019 2019
Loan data:          
Substandard loans $88,286  $61,385  $61,322  $58,670  $62,130 
30 to 89 days delinquent 5,513  4,029  12,017  7,729  10,204 
           
Non–performing loans:          
90 days and greater delinquent – accruing interest 331  123  246  146  34 
Trouble debt restructures – accruing interest 1,825  2,039  2,115  3,354  3,491 
Trouble debt restructures – non–accrual 2,704  3,443  3,360  2,006  1,807 
Non–accrual loans 24,454  22,451  18,281  15,679  13,823 
Total non–performing loans $29,314  $28,056  $24,002  $21,185  $19,155 
Non–performing loans to total loans 0.72% 0.70% 0.65% 0.58% 0.52%
                


Allocation of the Allowance for Credit Losses
(Dollars in Thousands, Unaudited)
   
  September 30, June 30, March 31, December 31, September 30,
  2020 2020 2020 2019 2019
Commercial $39,795  $39,147  $32,550  $11,996  $12,082 
Residential mortgage 5,464  5,832  5,654  923  1,449 
Mortgage warehouse 1,250  1,190  1,055  1,077  1,041 
Consumer 9,810  8,921  9,181  3,671  3,384 
Total $56,319  $55,090  $48,440  $17,667  $17,956 
                     


Net Charge–offs (Recoveries)
(Dollars in Thousands Except Ratios, Unaudited)
   
  September 30, June 30, March 31, December 31, September 30,
  2020 2020 2020 2019 2019
Commercial $488  $6  $(20) $146  $192 
Residential mortgage 136  24  17  40  (7)
Mortgage warehouse —  —  —  —  — 
Consumer 199  377  407  443  540 
Total $823  $407  $404  $629  $725 
Percent of net charge–offs (recoveries) to average loans outstanding for the period 0.02% 0.01% 0.01% 0.02% 0.02%
                


Total Non–performing Loans
(Dollars in Thousands Except Ratios, Unaudited)
   
  September 30, June 30, March 31, December 31, September 30,
  2020 2020 2020 2019 2019
Commercial $16,169  $14,238  $9,579  $7,347  $8,193 
Residential mortgage 9,209  9,945  10,411  9,884  7,212 
Mortgage warehouse —  —  —  —  — 
Consumer 3,936  3,873  4,012  3,954  3,750 
Total $29,314  $28,056  $24,002  $21,185  $19,155 
Non–performing loans to total loans 0.72% 0.70% 0.65% 0.58% 0.52%
                


Other Real Estate Owned and Repossessed Assets
(Dollars in Thousands, Unaudited)
   
  September 30, June 30, March 31, December 31, September 30,
  2020 2020 2020 2019 2019
Commercial $2,191  $2,374  $2,464  $3,698  $3,972 
Residential mortgage 70  249  336  28  48 
Mortgage warehouse —  —  —  —  — 
Consumer 80  20  13  —  24 
Total $2,341  $2,643  $2,813  $3,726  $4,044 
                     


Average Balance Sheets
(Dollars in Thousands, Unaudited)
  Three Months Ended Three Months Ended
  September 30, 2020 September 30, 2019
  Average
Balance		 Interest Average
Rate		 Average
Balance		 Interest Average
Rate
Assets            
Interest earning assets            
Federal funds sold $45,307  $12  0.11% $18,133  $115  2.52%
Interest earning deposits 28,428  53  0.74% 17,823  93  2.07%
Investment securities – taxable 447,762  1,639  1.46% 478,764  2,949  2.44%
Investment securities – non–taxable (1) 720,111  4,391  3.07% 462,997  3,099  3.36%
Loans receivable (2) (3) 4,010,003  44,051  4.39% 3,646,268  49,455  5.41%
Total interest earning assets 5,251,611  50,146  3.90% 4,623,985  55,711  4.87%
Non–interest earning assets            
Cash and due from banks 94,039      66,970     
Allowance for credit losses (55,271)     (18,277)    
Other assets 478,312      434,581     
Total average assets $5,768,691      $5,107,259     
             
Liabilities and Stockholders’ Equity            
Interest bearing liabilities            
Interest bearing deposits $3,334,436  $3,616  0.43% $3,132,852  $9,109  1.15%
Borrowings 577,447  1,662  1.15% 413,859  2,275  2.18%
Subordinated notes 58,716  895  6.06% —  —  —%
Junior subordinated debentures issued to capital trusts 56,458  576  4.06% 54,433  864  6.30%
Total interest bearing liabilities 4,027,057  6,749  0.67% 3,601,144  12,248  1.35%
Non–interest bearing liabilities            
Demand deposits 996,427      818,164     
Accrued interest payable and other liabilities 76,410      47,181     
Stockholders’ equity 668,797      640,770     
Total average liabilities and stockholders’ equity $5,768,691      $5,107,259     
             
Net interest income / spread   $43,397  3.23%   $43,463  3.52%
Net interest income as a percent of average interest earning assets (1)     3.39%     3.82%
             
(1) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.
(3) Non–accruing loans for the purpose of the computation above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees. The average rate is presented on a tax equivalent basis.
 


Average Balance Sheets
(Dollars in Thousands, Unaudited)
  Nine Months Ended Nine Months Ended
  September 30, 2020 September 30, 2019
  Average
Balance		 Interest Average
Rate		 Average
Balance		 Interest Average
Rate
Assets            
Interest earning assets            
Federal funds sold $44,375  $125  0.38% $14,778  $339  3.07%
Interest earning deposits 25,083  216  1.15% 21,938  284  1.73%
Investment securities – taxable 476,735  6,582  1.84% 469,330  8,929  2.54%
Investment securities – non–taxable (1) 652,339  12,294  3.19% 423,141  8,520  3.37%
Loans receivable (2) (3) 3,839,008  132,927  4.64% 3,447,654  136,862  5.32%
Total interest earning assets 5,037,540  152,144  4.13% 4,376,841  154,934  4.81%
Non–interest earning assets            
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FAQ

What are Horizon Bancorp's Q3 2020 earnings results?

Horizon Bancorp reported net income of $20.3 million, or $0.46 diluted earnings per share for Q3 2020.

How did Horizon Bancorp's loan portfolio perform in Q3 2020?

The total loans increased by 11.1% year-over-year, with commercial loans driving growth.

What is the current net interest margin for Horizon Bancorp?

The net interest margin for Q3 2020 is 3.39%, down from 3.47% in the previous quarter.

What factors contributed to Horizon Bancorp's credit losses?

The allowance for credit losses increased to $56.3 million due to prudent reserve building amid economic uncertainties.

What is Horizon Bancorp's outlook based on Q3 2020 results?

The company expects continued benefit from initiatives aimed at optimizing returns on earning assets.

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Horizon Bancorp, Inc.

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