Third Quarter 2026
Filed Oct 21, 2026Horizon Bancorp, Inc. Reports Strong Third Quarter 2026 Results, Highlighted by Continued Peer Leading Profitability Metrics and Positive Balance Sheet Momentum
Third-quarter net income was $28.7 million and diluted earnings per share were $0.56, while net interest income increased 11.6% from the year-ago period, net FTE interest margin held at 4.37%, deposits increased by $81.1 million, and return on average assets was 1.73%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest income, three months ended September 30, 2026GAAP | $65.16M | – | 11.6% |
| Provision for credit losses, three months ended September 30, 2026GAAP | $1.3M | – | – |
| Net interest income after provision for credit losses, three months ended September 30, 2026GAAP | $63.86M | – | – |
| Total non-interest income (loss), three months ended September 30, 2026GAAP | $11.93M | – | – |
| Service charges on deposit accounts, three months ended September 30, 2026GAAP | $3.52M | – | – |
| Wire transfer fees, three months ended September 30, 2026GAAP | $65K | – | – |
| Interchange fees, three months ended September 30, 2026GAAP | $3.54M | – | – |
| Fiduciary activities, three months ended September 30, 2026GAAP | $1.47M | – | – |
| Gain (loss) on sale of investment securities, three months ended September 30, 2026GAAP | −$8K | – | – |
| Gain on sale of mortgage loans, three months ended September 30, 2026GAAP | $2.13M | – | – |
| Mortgage servicing income net of impairment, three months ended September 30, 2026GAAP | $246K | – | – |
| Total non-interest expense, three months ended September 30, 2026GAAP | $41.51M | – | – |
| Income before income taxes, three months ended September 30, 2026GAAP | $34.28M | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $5.61M | – | – |
| Effective tax rate, three months ended September 30, 2026GAAP | 16.4% | – | – |
| Net income, three months ended September 30, 2026GAAP | $28.67M | – | – |
| Diluted earnings (loss) per share, three months ended September 30, 2026GAAP | $ 0.56 | – | – |
| Basic earnings (loss) per share, three months ended September 30, 2026GAAP | $ 0.56 | – | – |
| Net income, nine months ended September 30, 2026GAAP | $79.7M | – | – |
| Diluted earnings (loss) per share, nine months ended September 30, 2026GAAP | $1.55 per diluted share | – | – |
| Net FTE interest margin, three months ended September 30, 2026non-GAAP | 4.37 % | – | – |
| Net FTE interest income, three months ended September 30, 2026non-GAAP | $66.22M | – | – |
| Return on average assets, three months ended September 30, 2026GAAP | 1.73 % | – | – |
| Return on average tangible common equity, three months ended September 30, 2026non-GAAP | 20.03 % | – | – |
| Efficiency ratio, three months ended September 30, 2026non-GAAP | 53.85 | – | – |
| Gross loans held for investment, September 30, 2026GAAP | $5.01B | 1 % | 4 % |
| Total deposits, September 30, 2026GAAP | $5.48B | 2 % | (1) % |
| Total assets, September 30, 2026GAAP | $6.59B | 0.3% | – |
| Total stockholders' equity, September 30, 2026GAAP | $699.3M | – | – |
| Cash, September 30, 2026GAAP | $84.22M | – | – |
| Borrowings, September 30, 2026GAAP | $150.6M | – | – |
| Subordinated notes, September 30, 2026GAAP | $98.37M | – | – |
| Junior subordinated debentures issued to capital trusts, September 30, 2026GAAP | $57.84M | – | – |
| Total non-performing assets, September 30, 2026GAAP | $44.64M | 2 % | 25 % |
| Non-performing assets to total assets, September 30, 2026GAAP | 0.68 % | – | – |
| Net charge-offs, three months ended September 30, 2026GAAP | $1.19M | 97 % | 44 % |
| Annualized net charge-offs of average total loans, three months ended September 30, 2026GAAP | 0.10 % | – | – |
| Allowance for credit losses, September 30, 2026GAAP | $52.31M | 1 % | 4 % |
| Allowance for credit losses to HFI loans, September 30, 2026GAAP | 1.04 % | – | – |
| Tangible common equity, September 30, 2026non-GAAP | $538.9M | – | – |
| Tangible common equity to tangible assets, September 30, 2026non-GAAP | 8.38 % | – | – |
| Tangible book value per common share, September 30, 2026non-GAAP | $ 10.54 | – | – |
| Total capital to risk-weighted assets, September 30, 2026other | 15.48 % | – | – |
| Common equity tier 1 capital to risk-weighted assets, September 30, 2026other | 11.53 % | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Cash dividends declared per common share: $ 0.16.
What drove it
- Net interest income rose to $65.2 million, driven by a net FTE interest margin of 4.37%, disciplined loan and deposit pricing, and a favorable cashflow redeployment profile.
- Total deposits increased by $81.1 million, driven by increases in interest bearing deposits, savings and money market deposits, and non-interest-bearing demand deposits, partly offset by lower time deposits.
- Gain on sale of mortgage loans increased due to increased volumes and wider margins on loan sales.
- Non-interest expense declined because a previously announced $3.1 million second-quarter legal charge in other expense did not recur, alongside lower FDIC insurance expense and data processing expenses.
Concerns
- Provision for credit losses was $1.3 million, compared with $0.9 million in the second quarter of 2026, primarily due to changes in the economic forecast, net loan growth and increased specific reserves on commercial loans.
- Net charge-offs were $1.2 million, or an annualized 0.10% of average loans outstanding, compared with $0.6 million, or 0.05%, in the second quarter of 2026.
- Total non-performing assets increased to $44.6 million from $43.7 million at June 30, 2026, and non-performing assets to total assets increased to 0.68% from 0.66%.
- Book value per common share decreased $0.53 during the quarter, primarily due to increased unrealized losses in accumulated other comprehensive income.
- Tangible common equity to tangible assets declined to 8.38% from 8.81% at June 30, 2026.
What to watch
- Whether the net FTE interest margin remains at 4.37% amid the changing interest-rate outlook.
- Loan and deposit growth, including the stated mid-single-digit organic growth outlook.
- Provision expense, specific commercial-loan reserves, net charge-offs and non-performing assets.
- The sustainability of mortgage loan-sale volumes and margins, and the effect of expense normalization after the nonrecurrence of the legal charge.
Balance sheet and cash flow
- Total assets were $ 6,591,145 at September 30, 2026, compared with $ 6,574,160 at June 30, 2026.
- Cash was $ 84,222 at September 30, 2026, compared with $ 72,378 at June 30, 2026.
- Gross loans held for investment were $ 5,005,979 at September 30, 2026, compared with $ 4,959,120 at June 30, 2026.
- Total deposits were $ 5,481,374 at September 30, 2026, compared with $ 5,400,224 at June 30, 2026.
- Cash flow from operations and free cash flow were not reported.
Analysis
Horizon reported third-quarter net income of $28.7 million, or $0.56 per diluted share, compared with $24.9 million, or $0.49, in the second quarter of 2026. The release reported net interest income of $65.2 million, up 11.6% from $58.4 million in the year-ago period and above $63.5 million in the preceding quarter. Net FTE interest margin was 4.37%, unchanged sequentially and above 3.52% in the comparable year-ago period. Return on average assets was 1.73% and return on average tangible common equity was 20.03%.
Balance-sheet activity was positive in the quarter. Gross loans held for investment increased to $5,005,979 from $4,959,120 at June 30, 2026, while total deposits increased to $5,481,374 from $5,400,224. Management attributed deposit growth to core deposit gathering efforts. The increase included interest-bearing, savings and money market, and non-interest-bearing demand deposits, partly offset by a decline in time deposits. Management cited balanced loan growth across commercial, mortgage and consumer portfolios.
Fee income was broadly stable sequentially. Total non-interest income was $11.9 million versus $12.0 million in the second quarter. Higher gain on sale of mortgage loans, resulting from increased volumes and wider margins on loan sales, was offset by lower other income and lower net mortgage servicing revenue. Non-interest expense declined to $41.5 million from $43.8 million, principally because the prior-quarter $3.1 million legal charge did not recur. The effective tax rate was 16.4%, aided by a discrete benefit of $0.9 million.
Credit metrics remain a focal point. The provision for credit losses increased to $1.3 million from $0.9 million as the company cited changes in the economic forecast, net loan growth and higher specific reserves on commercial loans. Net charge-offs were $1.2 million, or 0.10% annualized of average loans, compared with $0.6 million and 0.05% in the second quarter. Total non-performing assets rose to $44.6 million from $43.7 million, while the ratio to total assets increased to 0.68% from 0.66%.
Capital ratios improved on the reported preliminary estimates, including total capital to risk-weighted assets of 15.48% and common equity tier 1 capital to risk-weighted assets of 11.53%. However, total stockholders' equity declined to $699.3 million from $726.2 million and tangible common equity to tangible assets declined to 8.38% from 8.81%. Book value per common share declined by $0.53, which the company attributed primarily to increased unrealized losses in accumulated other comprehensive income. The filing provided no numerical forward guidance.
Management, verbatim
Horizon’s high-quality community banking model continues to demonstrate consistency and durability in an ever-changing macroeconomic environment. Our results through the first nine months of 2026 reflect that strength, with annualized return on average assets remaining above 1.60%, return on tangible common equity of 20%, and the net interest margin sustained in the mid-4.30% range.
Thomas Prame, President and CEO
Not in the filing
stated, not guessed- Forward revenue, gross margin, operating expense, tax rate, earnings per share, loan growth, deposit growth or other numerical guidance were not provided.
- Prior outlook was not provided, so comparison of actual results versus prior guidance is unavailable.
- Total revenue was not reported as a line item.
- Gross margin was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Share repurchases were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.