Horizon Bancorp, Inc. Reports First Quarter 2025 Results
23-Apr-2025 16:05:09 EDT
Horizon Bancorp, Inc. Reports First Quarter 2025 Results
GlobeNewswire April 23, 2025
MICHIGAN CITY, Ind., April 23, 2025 (GLOBE NEWSWIRE) — (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”), the parent company of Horizon Bank (the “Bank”), announced its unaudited financial results for the three months ended March 31, 2025.
“Horizon's first quarter earnings displayed continued positive momentum in our core financial metrics and management's commitment to deliver long term value to its shareholders. Our results were highlighted by a sixth consecutive quarter of margin expansion, now above 3%, strong loan growth with exceptional credit metrics and a core funding base that continues to deliver value, even in an uncertain economic environment. The team also delivered a more efficient expense base entering 2025 and added optionality to our capital position through the successful sale of our mortgage warehouse business”, President and CEO, Thomas Prame stated. “We are pleased with our first quarter results and the positive momentum across our community banking model. The core franchise remains strong and our investments in expanding our local relationship banking model is paying dividends”.
Net income for the three months ended March 31, 2025 was $23.9 million, or $0.54 per diluted share, compared to net loss of $10.9 million, or $0.25, for the fourth quarter of 2024 and compared to $14.0 million, or $0.32 per diluted share, for the first quarter of 2024.
First Quarter 2025 Highlights
Net interest margin, on a fully taxable equivalent (“FTE”) basis1, expanded for the sixth consecutive quarter, to 3.04% compared with 2.97% for the three months ended December 31, 2024 and 2.50% for the three months ended March 31, 2024.
Total loans held for investment (“HFI”) increased 5% linked quarter annualized, with strong organic commercial loan growth of $103.3 million, or 14% annualized. This growth was partially funded by the continued strategic runoff of lowering yielding indirect auto loans of approximately $36 million.
Core deposits continued to be stable, with non-interest-bearing balances growing $62.5 million during the period, or 24% annualized.
Credit quality remained strong, with annualized net charge offs of 0.07% of average loans during the first quarter. Non-performing assets remain well within expected ranges, with no material change from the prior quarter.
On January 17, 2025, the Company completed the sale of its mortgage warehouse business to an unrelated third party, resulting in a pre-tax gain of $7.0 million.
Expenses were down $5.6 million from the fourth quarter of 2024, reflecting management's commitment to creating a more efficient expense base in 2025.
_________________________________ 1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Financial Highlights
(Dollars in Thousands Except Share and Per Share Data and Ratios)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2025
2024
2024
2024
2024
Income statement:
Net interest income
$
52,267
$
53,127
$
46,910
$
45,279
$
43,288
Credit loss expense
1,376
1,171
1,044
2,369
805
Non-interest income (loss)
16,499
(28,954
)
11,511
10,485
9,929
Non-interest expense
39,306
44,935
39,272
37,522
37,107
Income tax expense (benefit)
4,141
(11,051
)
(75
)
1,733
1,314
Net income (loss)
$
23,943
$
(10,882
)
$
18,180
$
14,140
$
13,991
Per share data:
Basic earnings (loss) per share
$
0.55
$
(0.25
)
$
0.42
$
0.32
$
0.32
Diluted earnings (loss) per share
0.54
(0.25
)
0.41
0.32
0.32
Cash dividends declared per common share
0.16
0.16
0.16
0.16
0.16
Book value per common share
17.72
17.46
17.27
16.62
16.49
Market value – High
17.76
18.76
16.57
12.74
14.44
Market value – Low
15.00
14.57
11.89
11.29
11.75
Weighted average shares outstanding – Basic
43,777,109
43,721,211
43,712,059
43,712,059
43,663,610
Weighted average shares outstanding – Diluted
43,954,164
43,721,211
44,112,321
43,987,187
43,874,036
Common shares outstanding (end of period)
43,785,932
43,722,086
43,712,059
43,712,059
43,726,380
Key ratios:
Return on average assets
1.25
%
(0.55
)%
0.92
%
0.73
%
0.72
%
Return on average stockholders' equity
12.44
(5.73
)
9.80
7.83
7.76
Total equity to total assets
10.18
9.79
9.52
9.18
9.18
Total loans to deposit ratio
85.21
87.75
83.92
85.70
82.78
Allowance for credit losses to HFI loans
1.07
1.07
1.10
1.08
1.09
Annualized net charge-offs of average total loans(1)
0.07
0.05
0.03
0.05
0.04
Efficiency ratio
57.16
185.89
67.22
67.29
69.73
Key metrics (Non-GAAP)(2) :
Net FTE interest margin
3.04
%
2.97
%
2.66
%
2.64
%
2.50
%
Return on average tangible common equity
15.79
(7.35
)
12.65
10.18
10.11
Tangible common equity to tangible assets
8.20
7.83
7.58
7.22
7.20
Tangible book value per common share
$
13.96
$
13.68
$
13.46
$
12.80
$
12.65
(1) Average total loans includes loans held for investment and held for sale.
(2) Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.
Income Statement Highlights
Net Interest Income
Net interest income was $52.3 million in the first quarter of 2025, compared to $53.1 million in the fourth quarter of 2024. Continued expansion of the Company's net FTE interest margin was offset by a decline in average interest earning asset balances and two fewer days when compared with the prior quarter. Horizon's net FTE interest margin2 was 3.04% for the first quarter of 2025, compared to 2.97% for the fourth quarter of 2024, attributable to the favorable mix shift in average interest earning assets toward higher-yielding loans and in the average funding mix toward deposit balances, in addition to continued disciplined pricing strategies on both sides of the balance sheet. Additionally, as previously noted, the fourth quarter net FTE interest margin included approximately five basis points related to interest recoveries on specific commercial loans that did not recur.
Provision for Credit Losses
During the first quarter of 2025, the Company recorded a provision for credit losses of $1.4 million. This compares to a provision for credit losses of $1.2 million during the fourth quarter of 2024, and $0.8 million during the first quarter of 2024. The increase in the provision for credit losses during the first quarter of 2025 when compared with the fourth quarter of 2024 was primarily attributable to increased net growth in commercial loans HFI and changes in economic factors, partially offset by the reduction of specific reserves and the reserves for unfunded commitments in the current quarter.
For the first quarter of 2025, the allowance for credit losses included net charge-offs of $0.9 million, or an annualized 0.07% of average loans outstanding, compared to net charge-offs of $0.6 million, or an annualized 0.05% of average loans outstanding for the fourth quarter of 2024, and net charge-offs of $0.3 million, or an annualized 0.04% of average loans outstanding, in the first quarter of 2024.
The Company's allowance for credit losses as a percentage of period-end loans HFI was 1.07% at March 31, 2025, compared to 1.07% at December 31, 2024 and 1.09% at March 31, 2024.
Non-Interest Income
For the Quarter Ended
March 31,
December 31,
September 30,
June 30,
March 31,
(Dollars in Thousands)
2025
2024
2024
2024
2024
Non-interest Income
Service charges on deposit accounts
$
3,208
$
3,276
$
3,320
$
3,130
$
3,214
Wire transfer fees
71
124
123
113
101
Interchange fees
3,241
3,353
3,511
3,826
3,109
Fiduciary activities
1,326
1,313
1,394
1,372
1,315
Loss on sale of investment securities
(407
)
(39,140
)
—
—
—
Gain on sale of mortgage loans
1,076
1,071
1,622
896
626
Mortgage servicing income net of impairment
385
376
412
450
439
Increase in cash value of bank owned life insurance
335
335
349
318
298
Other income
7,264
338
780
380
827
Total non-interest income (loss)
$
16,499
$
(28,954
)
$
11,511
$
10,485
$
9,929
Total non-interest income was $16.5 million in the first quarter of 2025, compared to non-interest loss of $29.0 million in the fourth quarter of 2024. The increase in non-interest income of $45.5 million is primarily due to a pre-tax loss on sale of investment securities of $39.1 million from the completion of the repositioning of $332.2 million of available-for-sale securities during the fourth quarter of 2024, compared to a loss on the sale of investment securities of $0.4 million in the first quarter of 2025. In addition, the Company completed the sale of its mortgage warehouse business to an unrelated third party in the current period, resulting in a pre-tax gain of $7.0 million.
_________________________________ 1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Non-Interest Expense
For the Quarter Ended
March 31,
December 31,
September 30,
June 30,
March 31,
(Dollars in Thousands)
2025
2024
2024
2024
2024
Non-interest Expense
Salaries and employee benefits
$
22,414
$
25,564
$
21,829
$
20,583
$
20,268
Net occupancy expenses
3,702
3,431
3,207
3,192
3,546
Data processing
2,872
2,841
2,977
2,579
2,464
Professional fees
826
736
676
714
607
Outside services and consultants
3,265
4,470
3,677
3,058
3,359
Loan expense
689
1,285
1,034
1,038
719
FDIC insurance expense
1,288
1,193
1,204
1,315
1,320
Core deposit intangible amortization
816
843
844
844
872
Merger related expenses
305
—
—
—
—
Other losses
228
371
297
515
16
Other expense
2,901
4,201
3,527
3,684
3,936
Total non-interest expense
$
39,306
$
44,935
$
39,272
$
37,522
$
37,107
Total non-interest expense was $39.3 million in the first quarter of 2025, compared with $44.9 million in the fourth quarter of 2024. The current period included $0.3 million of direct expenses related to the sale of the mortgage warehouse business. The decrease in non-interest expense during the first quarter of 2025 when compared with the prior period was primarily driven by a $3.2 million decrease in salaries and employee benefits expense, which is attributable to expenses incurred in the fourth quarter of 2024 related to the termination of legacy compensation and benefits programs that did not recur in the current period, and lower incentive compensation expense. Additionally, outside services and consultants expense decreased by $1.2 million, partially attributable to expense related to specific corporate initiatives in the fourth quarter of 2024 that did not recur in the current period. Other expenses decreased $1.3 million, partially attributable to a decrease in marketing expense.
Income Taxes
Horizon recorded a net tax expense of $4.1 million for the first quarter of 2025, representing an effective tax rate of 14.8%. Net tax expense in the fourth quarter of 2024 was impacted by the realized securities loss and the reversal of the $5.2 million tax valuation allowance.
Balance Sheet Highlights
Total assets decreased by $175.5 million, or 2.2%, to $7.6 billion as of March 31, 2025, from $7.8 billion as of December 31, 2024. The decrease in total assets is primarily due to the sale of the mortgage warehouse portfolio and a decrease in interest-bearing cash related to the payoff of FHLB advances and deposit outflows.
Total investment securities decreased by $26.1 million, or 1.2%, to $2.1 billion as of March 31, 2025.
Total loans were $4.9 billion at March 31, 2025, a decrease of $1.6 million from December 31, 2024 balances. The decrease is primarily due to the sale of the mortgage warehouse business during the quarter, which was offset by continued organic commercial loan growth.
Total deposits increased by $165.1 million, or 2.9%, to $5.8 billion as of March 31, 2025 when compared to balances as of December 31, 2024. Time deposits increased by $155.9 million, or 14.3% during the quarter, while non-interest bearing deposits grew by $62.5 million, or 5.9%. Total borrowings decreased by $330.1 million during the quarter, to $812.2 million as of March 31, 2025, due to the pay down of FHLB advances. Balances subject to repurchase agreements declined by $2.1 million, to $87.9 million.
Capital
The following table presents the consolidated regulatory capital ratios of the Company for the previous three quarters, and the Company's preliminary estimate of its consolidated regulatory capital ratios for the quarter ended March 31, 2025:
For the Quarter Ended
March 31,
December 31,
September 30,
June 30,
2025*
2024
2024
2024
Consolidated Capital Ratios
Total capital (to risk-weighted assets)
14.28
%
13.91
%
13.45
%
13.41
%
Tier 1 capital (to risk-weighted assets)
12.35
12.00
11.63
11.59
Common equity tier 1 capital (to risk-weighted assets)
11.34
11.00
10.68
10.63
Tier 1 capital (to average assets)
9.25
8.88
9.02
9.02
*Preliminary estimate – may be subject to change
As of March 31, 2025, the ratio of total stockholders' equity to total assets is 10.18%. Book value per common share was $17.72, increasing $0.26 during the first quarter of 2025.
Tangible common equity3 totaled $611.4 million at March 31, 2025, and the ratio of tangible common equity to tangible assets1 was 8.20% at March 31, 2025, up from 7.83% at December 31, 2024. Tangible book value, which excludes intangible assets from total equity, per common share1 was $13.96, increasing $0.28 during the first quarter of 2025 behind the growth in retained earnings.
Credit Quality
As of March 31, 2025, total non-accrual loans increased by $3.0 million, or 12%, from December 31, 2024, to 0.59% of total loans HFI. Total non-performing assets increased $4.0 million, or 15%, to $31.4 million, compared to $27.4 million as of December 31, 2024. The ratio of non-performing assets to total assets increased to 0.41% compared to 0.35% as of December 31, 2024.
As of March 31, 2025, net charge-offs increased by $0.2 million to $0.9 million, compared to $0.6 million as of December 31, 2024 and remain just 0.07% annualized of average loans.
_________________________________ 1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Earnings Conference Call
As previously announced, Horizon will host a conference call to review its first quarter financial results and operating performance.
Participants may access the live conference call on April 24, 2025 at 7:30 a.m. CT (8:30 a.m. ET) by dialing 833-974-2379 from the United States, 866-450-4696 from Canada or 1-412-317-5772 from international locations and requesting the “Horizon Bancorp, Inc. 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 May 2, 2025. The replay may be accessed by dialing 877-344-7529 from the United States, 855-669-9658 from Canada or 1-412-317-0088 from other international locations, and entering the access code 6313653.
About Horizon Bancorp, Inc.
Horizon Bancorp, Inc. (NASDAQ GS: HBNC) is the $8 billion-asset commercial bank holding company for Horizon Bank, which serves customers across diverse and economically attractive Midwestern markets through convenient digital and virtual tools, as well as its Indiana and Michigan branches. Horizon's retail offerings include prime residential and other secured consumer lending to in-market customers, as well as a range of personal banking and wealth management solutions. Horizon also provides a comprehensive array of in-market business banking and treasury management services, as well as equipment financing solutions for customers regionally and nationally, with commercial lending representing over half of total loans. More information on Horizon, headquartered in Northwest Indiana's Michigan City, is available at horizonbank.com and investor.horizonbank.com.
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, pre-tax, pre-provision net income, net interest margin, tangible stockholders' equity and tangible book value per share, efficiency ratio, the return on average assets, the return on average common equity, and return on average tangible equity. 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 and swap termination fees, 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 and financial results 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 information identified herein and its most comparable GAAP measures.
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 (the “SEC”). 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: effects on Horizon's business resulting from new U.S. domestic or foreign governmental trade measures, including but not limited to tariffs, import and export controls, foreign exchange intervention accomplished to offset the effects of trade policy or in response to currency volatility, and other restrictions on free trade; uncertain conditions within the domestic and international macroeconomic environment, including trade policy, monetary and fiscal policy, and conditions in the investment, credit, interest rate, and derivatives markets, and their impact on Horizon and its customers; current financial conditions within the banking industry; changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; the aggregate effects of elevated inflation levels in recent years; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon's assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the U.S. federal government to manage federal debt limits; climate change and social justice initiatives; the inability to realize cost savings or revenues or to effectively implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; acts of terrorism, war and global conflicts, such as the Russia and Ukraine conflict and the Israel and Hamas conflict; and supply chain disruptions and delays. These and additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Horizon's reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC's website (www.sec.gov). 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.
Condensed Consolidated Statements of Income
(Dollars in Thousands Except Per Share Data, Unaudited)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2025
2024
2024
2024
2024
Interest Income
Interest and fees on loans
$
74,457
$
76,747
$
75,488
$
71,880
$
66,954
Investment securities – taxable
6,039
6,814
8,133
7,986
7,362
Investment securities – tax-exempt
6,192
6,301
6,310
6,377
6,451
Other
2,487
3,488
957
738
4,497
Total interest income
89,175
93,350
90,888
86,981
85,264
Interest Expense
Deposits
25,601
27,818
30,787
28,447
27,990
Short and long-term borrowings
9,188
10,656
11,131
11,213
11,930
Subordinated notes
829
829
830
829
831
Junior subordinated debentures issued to capital trusts
1,290
920
1,230
1,213
1,225
Total interest expense
36,908
40,223
43,978
41,702
41,976
Net Interest Income
52,267
53,127
46,910
45,279
43,288
Provision for loan losses
1,376
1,171
1,044
2,369
805
Net Interest Income after Credit Loss Expense
50,891
51,956
45,866
42,910
42,483
Non-interest Income
Service charges on deposit accounts
3,208
3,276
3,320
3,130
3,214
Wire transfer fees
71
124
123
113
101
Interchange fees
3,241
3,353
3,511
3,826
3,109
Fiduciary activities
1,326
1,313
1,394
1,372
1,315
Loss on sale of investment securities
(407
)
(39,140
)
—
—
—
Gain on sale of mortgage loans
1,076
1,071
1,622
896
626
Mortgage servicing income net of impairment
385
376
412
450
439
Increase in cash value of bank owned life insurance
335
335
349
318
298
Other income
7,264
338
780
380
827
Total non-interest (loss) income
16,499
(28,954
)
11,511
10,485
9,929
Non-interest Expense
Salaries and employee benefits
22,414
25,564
21,829
20,583
20,268
Net occupancy expenses
3,702
3,431
3,207
3,192
3,546
Data processing
2,872
2,841
2,977
2,579
2,464
Professional fees
826
736
676
714
607
Outside services and consultants
3,265
4,470
3,677
3,058
3,359
Loan expense
689
1,285
1,034
1,038
719
FDIC insurance expense
1,288
1,193
1,204
1,315
1,320
Core deposit intangible amortization
816
843
844
844
872
Merger related expenses
305
—
—
—
—
Other losses
228
371
297
515
16
Other expense
2,901
4,201
3,527
3,684
3,936
Total non-interest expense
39,306
44,935
39,272
37,522
37,107
Income (Loss) Before Income Taxes
28,084
(21,933
)
18,105
15,873
15,305
Income tax expense (benefit)
4,141
(11,051
)
(75
)
1,733
1,314
Net Income (Loss)
$
23,943
$
(10,882
)
$
18,180
$
14,140
$
13,991
Basic Earnings (Loss) Per Share
$
0.55
$
(0.25
)
$
0.42
$
0.32
$
0.32
Diluted Earnings (Loss) Per Share
0.54
(0.25
)
0.41
0.32
0.32
Condensed Consolidated Balance Sheet
(Dollar in Thousands)
Three Months Ended for the Period
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31, 2024
Assets
Interest earning assets
Federal funds sold
$
—
$
—
$
113,912
$
34,453
$
161,704
Interest-bearing deposits in banks
80,023
201,131
12,107
4,957
9,178
Interest earning time deposits
—
735
735
1,715
1,715
Federal Home Loan Bank stock
45,412
53,826
53,826
53,826
53,826
Investment securities, available for sale
231,431
233,677
541,170
527,054
535,319
Investment securities, held to maturity
1,843,851
1,867,690
1,888,379
1,904,281
1,925,725
Loans held for sale
3,253
67,597
2,069
2,440
922
Gross loans held for investment (HFI)
4,909,815
4,847,040
4,803,996
4,822,840
4,618,175
Total Interest earning assets
7,113,785
7,271,696
7,416,194
7,351,566
7,306,564
Non-interest earning assets
Allowance for credit losses
(52,654
)
(51,980
)
(52,881
)
(52,215
)
(50,387
)
Cash and due from banks
89,643
92,300
108,815
106,691
100,206
Cash value of life insurance
37,409
37,450
37,115
36,773
36,455
Other assets
140,672
152,635
119,026
165,656
160,593
Goodwill
155,211
155,211
155,211
155,211
155,211
Other intangible assets
9,407
10,223
11,067
11,910
12,754
Premises and equipment, net
93,499
93,864
93,544
93,695
94,303
Interest receivable
38,663
39,747
39,366
43,240
40,008
Total non-interest earning assets
511,850
529,450
511,263
560,961
549,143
Total assets
$
7,625,635
$
7,801,146
$
7,927,457
$
7,912,527
$
7,855,707
Liabilities
Savings and money market deposits
$
3,393,371
$
3,446,681
$
3,420,827
$
3,364,726
$
3,350,673
Time deposits
1,245,088
1,089,153
1,220,653
1,178,389
1,136,121
Short and long-term borrowings
812,218
1,142,340
1,142,744
1,229,165
1,219,812
Repurchase agreements
87,851
89,912
122,399
128,169
139,309
Subordinated notes
55,772
55,738
55,703
55,668
55,634
Junior subordinated debentures issued to capital trusts
57,531
57,477
57,423
57,369
57,315
Total interest earning liabilities
5,651,831
5,881,301
6,019,749
6,013,486
5,958,864
Non-interest bearing deposits
1,127,324
1,064,818
1,085,535
1,087,040
1,093,076
Interest payable
11,441
11,137
11,400
11,240
7,853
Other liabilities
58,978
80,308
55,951
74,096
74,664
Total liabilities
6,849,574
7,037,564
7,172,635
7,185,862
7,134,457
Stockholders' Equity
Preferred stock
—
—
—
—
—
Common stock
—
—
—
—
—
Additional paid-in capital
360,522
363,761
358,453
357,673
356,599
Retained earnings
452,945
436,122
454,050
442,977
435,927
Accumulated other comprehensive loss
(37,406
)
(36,301
)
(57,681
)
(73,985
)
(71,276
)
Total stockholders' equity
776,061
763,582
754,822
726,665
721,250
Total liabilities and stockholders' equity
$
7,625,635
$
7,801,146
$
7,927,457
$
7,912,527
$
7,855,707
Loans and Deposits
(Dollars in Thousands)
March 31,
December 31,
September 30,
June 30,
March 31,
% Change
2025
2024
2024
2024
2024
Q1'25 vs Q4'24
Q1'25 vs Q1'24
Loans:
Commercial real estate
$
2,262,910
$
2,202,858
$
2,105,459
$
2,117,772
$
1,984,723
3
%
14
%
Commercial & Industrial
918,541
875,297
808,600
786,788
765,043
5
%
20
%
Total commercial
3,181,451
3,078,155
2,914,059
2,904,560
2,749,766
3
%
16
%
Residential Real estate
801,726
802,909
801,356
797,956
782,071
—
%
3
%
Mortgage warehouse
—
—
80,437
68,917
56,548
—
%
(100
)%
Consumer
926,638
965,976
1,008,144
1,051,407
1,029,790
(4
)%
(10
)%
Total loans held for investment
4,909,815
4,847,040
4,803,996
4,822,840
4,618,175
1
%
6
%
Loans held for sale
3,253
67,597
2,069
2,440
922
(95
)%
253
%
Total loans
$
4,913,068
$
4,914,637
$
4,806,065
$
4,825,280
$
4,619,097
—
%
6
%
Deposits:
Interest-bearing demand deposits
$
1,713,991
$
1,767,983
$
1,688,998
$
1,653,508
$
1,613,806
(3
)%
6
%
Savings and money market deposits
1,679,380
1,678,697
1,731,830
1,711,218
1,736,866
—
%
(3
)%
Time deposits
1,245,088
1,089,153
1,220,653
1,178,389
1,136,121
14
%
10
%
Total Interest bearing deposits
4,638,459
4,535,833
4,641,481
4,543,115
4,486,793
2
%
3
%
Non-interest bearing deposits
Non-interest bearing deposits
1,127,324
1,064,819
1,085,534
1,087,040
1,093,077
6
%
3
%
Total deposits
$
5,765,783
$
5,600,652
$
5,727,015
$
5,630,155
$
5,579,870
3
%
3
%
Average Balance Sheet
(Dollars in Thousands, Unaudited)
Three Months Ended
March 31, 2025
December 31, 2024
March 31, 2024
Average Balance
Interest(4)(6)
Average Rate(4)
Average Balance
Interest(4)(6)
Average Rate(4)
Average Balance
Interest(4)(6)
Average Rate(4)
Assets
Interest earning assets
Interest-bearing deposits in banks
$
223,148
$
2,487
4.52
%
$
290,693
$
3,488
4.77
%
$
331,083
4,497
5.46
%
Federal Home Loan Bank stock
51,769
1,012
7.93
%
53,826
1,516
11.20
%
37,949
784
8.31
%
Investment securities – taxable (1)
974,109
5,027
2.09
%
1,079,377
5,298
1.95
%
1,326,246
6,578
1.99
%
Investment securities – non-taxable (1)
1,120,249
7,838
2.84
%
1,129,622
7,976
2.81
%
1,149,957
8,166
2.86
%
Total investment securities
2,094,358
12,865
2.49
%
2,208,999
13,274
2.39
%
2,476,203
14,744
2.39
%
Loans receivable (2) (3)
4,865,449
74,840
6.24
%
4,842,660
77,142
6.34
%
4,448,324
67,307
6.09
%
Total interest earning assets
7,234,724
91,204
5.11
%
7,396,178
95,420
5.13
%
7,293,559
87,332
4.82
%
Non-interest earning assets
Cash and due from banks
88,624
85,776
105,795
Allowance for credit losses
(51,863
)
(52,697
)
(49,960
)
Other assets
483,765
409,332
486,652
Total average assets
$
7,755,250
$
7,838,589
$
7,836,046
Liabilities and Stockholders' Equity
Interest bearing liabilities
Interest-bearing demand deposits
$
1,750,446
$
6,491
1.50
%
$
1,716,598
$
6,861
1.59
%
$
1,658,709
$
6,516
1.58
%
Savings and money market deposits
1,674,590
8,263
2.00
%
1,701,012
9,336
2.18
%
1,664,518
9,373
2.26
%
Time deposits
1,212,386
10,847
3.63
%
1,160,527
11,621
3.98
%
1,176,921
12,101
4.14
%
Total interest bearing deposits
4,637,422
25,601
2.24
%
4,578,137
27,818
2.42
%
4,500,148
27,990
2.50
%
Borrowings
971,496
8,772
3.66
%
1,130,301
10,138
3.57
%
1,200,728
10,904
3.65
%
Repurchase agreements
88,469
416
1.91
%
91,960
518
2.24
%
138,052
1,026
2.99
%
Subordinated notes
55,750
829
6.03
%
55,717
829
5.92
%
55,558
831
6.02
%
Junior subordinated debentures issued to capital trusts
57,497
1,290
9.10
%
57,443
920
6.37
%
57,279
1,225
8.60
%
Total interest bearing liabilities
5,810,634
36,908
2.58
%
5,913,558
40,223
2.71
%
5,951,765
41,976
2.84
%
Non-interest bearing liabilities
Demand deposits
1,085,826
1,099,574
1,077,183
Accrued interest payable and other liabilities
78,521
70,117
82,015
Stockholders' equity
780,269
755,340
725,083
Total average liabilities and stockholders' equity
$
7,755,250
$
7,838,589
$
7,836,046
Net FTE interest income (non-GAAP) (5)
$
54,296
$
55,197
$
45,356
Less FTE adjustments (4)
2,029
2,070
2,068
Net Interest Income
$
52,267
$
53,127
$
43,288
Net FTE interest margin (Non-GAAP) (4)(5)
3.04
%
2.97
%
2.50
%
(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.
(2) Includes fees on loans held for sale and held for investment. 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.
(4) Management believes fully taxable equivalent, or FTE, interest income is useful to investors in evaluating the Company's performance as a comparison of the returns between a tax-free investment and a taxable alternative. The Company adjusts interest income and average rates for tax-exempt loans and securities to an FTE basis utilizing a 21% tax rate.
(5) Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
(6) Includes dividend income on Federal Home Loan Bank stock
Credit Quality
(Dollars in Thousands Except Ratios)
Quarter Ended
March 31,
December 31,
September 30,
June 30,
March 31,
% Change
2025
2024
2024
2024
2024
1Q25 vs 4Q24
1Q25 vs 1Q24
Non-accrual loans
Commercial
$
8,172
$
5,658
$
6,830
$
4,321
$
5,493
44
%
49
%
Residential Real estate
12,763
11,215
9,529
8,489
8,725
14
%
46
%
Mortgage warehouse
—
—
—
—
—
—
%
—
%
Consumer
7,875
8,919
7,208
5,453
4,835
(12
)%
63
%
Total non-accrual loans
28,810
25,792
23,567
18,263
19,053
12
%
22
%
90 days and greater delinquent – accruing interest
1,582
1,166
819
1,039
108
36
%
1365
%
Total non-performing loans
$
30,392
$
26,958
$
24,386
$
19,302
$
19,161
13
%
59
%
Other real estate owned
Commercial
360
407
1,158
1,111
1,124
(12
)%
(68
)%
Residential Real estate
641
—
—
—
—
—
%
—
%
Mortgage warehouse
—
—
—
—
—
—
%
—
%
Consumer
34
17
36
57
50
98
%
(32
)%
Total other real estate owned
1,035
424
1,194
1,168
1,174
144
%
(12
)%
Total non-performing assets
$
31,427
$
27,382
$
25,580
$
20,470
$
20,335
14.8
%
55
%
Loan data:
Accruing 30 to 89 days past due loans
$
19,034
$
23,075
$
18,087
$
19,785
$
15,154
(18
)%
26
%
Substandard loans
66,714
64,535
59,775
51,221
47,469
3
%
41
%
Net charge-offs (recoveries)
Commercial
$
(47
)
$
(32
)
$
(52
)
$
57
$
(171
)
(47
)%
73
%
Residential Real estate
(47
)
(10
)
(9
)
(4
)
(5
)
(370
)%
(840
)%
Mortgage warehouse
—
—
—
—
—
—
%
—
%
Consumer
963
668
439
534
488
44
%
97
%
Total net charge-offs
$
869
$
626
$
378
$
587
$
312
39
%
179
%
Allowance for credit losses
Commercial
$
32,640
$
30,953
$
32,854
$
31,941
$
30,514
5
%
7
%
Residential Real estate
3,167
2,715
2,675
2,588
2,655
17
%
19
%
Mortgage warehouse
—
—
862
736
659
—
%
(100
)%
Consumer
16,847
18,312
16,490
16,950
16,559
(8
)%
2
%
Total allowance for credit losses
$
52,654
$
51,980
$
52,881
$
52,215
$
50,387
1
%
4
%
Credit quality ratios
Non-accrual loans to HFI loans
0.59
%
0.53
%
0.49
%
0.38
%
0.41
%
Non-performing assets to total assets
0.41
%
0.35
%
0.32
%
0.26
%
0.26
%
Annualized net charge-offs of average total loans
0.07
%
0.05
%
0.03
%
0.05
%
0.04
%
Allowance for credit losses to HFI loans
1.07
%
1.07
%
1.10
%
1.08
%
1.09
%
Non-GAAP Reconciliation of Net Fully-Taxable Equivalent (“FTE”) Interest Margin
(Dollars in Thousands, Unaudited)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2025
2024
2024
2024
2024
Interest income (GAAP)
(A)
$
89,175
$
93,350
$
90,888
$
86,981
$
85,264
Taxable-equivalent adjustment:
Investment securities – tax exempt (1)
1,646
1,675
1,677
1,695
1,715
Loan receivable (2)
383
395
340
328
353
Interest income (non-GAAP)
(B)
91,204
95,420
92,905
89,004
87,332
Interest expense (GAAP)
(C)
36,908
40,223
43,978
41,702
41,976
Net interest income (GAAP)
(D) =(A) – (C)
$
52,267
$
53,127
$
46,910
$
45,279
$
43,288
Net FTE interest income (non-GAAP)
(E) = (B) – (C)
$
54,296
$
55,197
$
48,927
$
47,302
$
45,356
Average interest earning assets
(F)
7,234,724
7,396,178
7,330,263
7,212,788
7,293,559
Net FTE interest margin (non-GAAP)
(G) = (E*) / (F)
3.04
%
2.97
%
2.66
%
2.64
%
2.50
%
(1) The following represents municipal securities interest income for investment securities classified as available-for-sale and held-to-maturity
(2) The following represents municipal loan interest income for loan receivables classified as held for sale and held for investment
*Annualized
Non-GAAP Reconciliation of Return on Average Tangible Common Equity
(Dollars in Thousands, Unaudited)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2025
2024
2024
2024
2024
Net income (loss) (GAAP)
(A)
$
23,943
$
(10,882
)
$
18,180
$
14,140
$
13,991
Average stockholders' equity
(B)
$
780,269
$
755,340
$
738,372
$
726,332
$
725,083
Average intangible assets
(C)
165,138
165,973
166,819
167,659
168,519
Average tangible equity (Non-GAAP)
(D) = (B) – (C)
$
615,131
$
589,367
$
571,553
$
558,673
$
556,564
Return on average tangible common equity (“ROACE”) (non-GAAP)
(E) = (A*) / (D)
15.79
%
(7.35
)%
12.65
%
10.18
%
10.11
%
*Annualized
Non-GAAP Reconciliation of Tangible Common Equity to Tangible Assets
(Dollars in Thousands, Unaudited)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2025
2024
2024
2024
2024
Total stockholders' equity (GAAP)
(A)
$
776,061
$
763,582
$
754,822
$
726,665
$
721,250
Intangible assets (end of period)
(B)
164,618
165,434
166,278
167,121
167,965
Total tangible common equity (non-GAAP)
(C) = (A) – (B)
$
611,443
$
598,148
$
588,544
$
559,544
$
553,285
Total assets (GAAP)
(D)
$
7,625,635
$
7,801,146
$
7,927,457
$
7,912,527
$
7,855,707
Intangible assets (end of period)
(B)
164,618
165,434
166,278
167,121
167,965
Total tangible assets (non-GAAP)
(E) = (D) – (B)
$
7,461,017
$
7,635,712
$
7,761,179
$
7,745,406
$
7,687,742
Tangible common equity to tangible assets (Non-GAAP)
(G) = (C) / (E)
8.20
%
7.83
%
7.58
%
7.22
%
7.20
%
Non-GAAP Reconciliation of Tangible Book Value Per Share
