Horizon Bancorp (NASDAQ: HBNC) reported a net interest margin of 4.37% for the second quarter of FY26, an expansion of 8 basis points from the prior quarter. The bank’s Common Equity Tier 1 (CET1) capital ratio rose by 28 basis points to 11.09%, reflecting strong profitability despite a $3.1 million legal accrual.

The margin improvement was driven by a widening spread between loan yields and deposit costs. Loan yields increased by 9 basis points, while total deposit costs rose by only 3 basis points. This dynamic offset the dilutive impact of higher average cash balances, which grew as the bank maintained liquidity for future lending opportunities.

What the Numbers Show

While net interest income dollars remained stable, the percentage margin expanded due to asset mix shifts. The weighted average new loan production rate stood at 6.75%, significantly higher than the expected runoff rate of approximately 6.2%. This yield pickup on new business provided a buffer against modest increases in interest-bearing deposit costs, which remained at 1.94% for the quarter.

Balance Sheet Growth

Loans held for investment reached nearly $5 billion, growing 6.6% annualized. Commercial and Industrial (C&I) lending led this growth, increasing by $62 million to represent 31% of the commercial portfolio. Deposit growth was equally robust, with year-to-date deposits up $125 million, or 4.8% annualized. The cost of interest-bearing deposits increased by just 4 basis points in the quarter, supporting margin stability.

Credit Quality and Expenses

Credit metrics remained strong with net charge-offs at just 5 basis points annualized. Non-performing loans declined to $34.9 million, or 0.70% of loans. Substandard loans totaled $64.6 million, unchanged from the prior period. The allowance for credit losses remained stable at $51.9 million, or 1.05% of loans held for investment.

Total expenses came in at $43.8 million, inclusive of the $3.1 million legal charge related to unfavorable litigation. Excluding this one-time item, operating expenses were largely unchanged from the prior quarter, demonstrating operational leverage. Non-interest income grew 10% year-over-year, driven by fiduciary activities and mortgage revenue.

Outlook and Guidance

Management expects mid-single-digit growth in loans and deposits for the full year. Non-interest income is projected to grow in the low teens year-over-year. The company anticipates the FTE net interest margin to range between 4.30% and 4.35% in the second half of FY26, assuming average cash balances exceed the $102 million seen in Q2. The outlook now incorporates expectations for one 25 basis point Federal Reserve rate hike later in the year.

Horizon Bancorp, Inc. (NASDAQ: HBNC) announced the appointment of Nicholas J. Ritter and Charles W. Sulerzyski as independent directors on its Board and that of its wholly owned subsidiary, Horizon Bank. The appointments were confirmed on August 18, 2026, strengthening the board’s oversight capabilities in risk management and strategic growth.

Ritter brings extensive experience in information security and enterprise risk. He served as Executive Vice President and Chief Information Security Officer at WorldPay, a global payments technology company headquartered in Cincinnati, Ohio. Ritter joined WorldPay in 2024 and retired in 2026 after building the firm’s information security program following its divestiture from Fidelity National Information Systems (FIS) and subsequent acquisition by Global Payments in 2025. Prior to this role, he was Senior Vice President and Chief Enterprise Security Officer for First Financial Bank in Cincinnati from 2020 to 2024. He holds a bachelor’s degree in Computer Science from the University of Kentucky.

Sulerzyski offers deep expertise in community banking leadership and asset growth. He is the retired President and CEO of Peoples Bancorp, Inc., headquartered in Marietta, Ohio. During his tenure starting in 2011, he grew Peoples Bancorp’s wholly owned subsidiary, People’s Bank, from $1.7 billion to $9.2 billion through acquisitions and organic growth before retiring in 2024. Previously, he served as President of KeyBank, N.A.’s Great Lakes Region from 2005 to 2010. Sulerzyski also served as National Chair of the Community Depository Institutions Advisory Council in 2024, following his role as Chair of the Cleveland District from 2021 to 2023. He holds a bachelor’s degree in Economics from New York University and an MBA from Fordham University Graduate School of Business.

Committee Assignments

The new directors have been assigned to specific committees to leverage their specialized backgrounds:

• Nicholas J. Ritter: Enterprise Risk Management Committee; Operations and Cyber Security Committee.
• Charles W. Sulerzyski: Enterprise Risk Management Committee; Wealth Committee.

Strategic Impact

Thomas M. Prame, Chairman and President of Horizon Bank and Chief Executive Officer and President of Horizon Bancorp, highlighted the value of the new appointments. He noted that their collective expertise spans P&L leadership, customer experience, audit, compliance, and strategic oversight. This combination aims to guide Horizon’s continued growth and support its commitment to delivering value for shareholders and communities.

About Horizon Bancorp

Horizon Bancorp, Inc. is a $6.6 billion-asset commercial bank holding company for Horizon Bank. The bank serves customers across Midwestern markets through digital tools and branches in Indiana and Michigan. Its retail offerings include prime residential lending, secured consumer lending, personal banking, and wealth management solutions. Commercial lending represents over half of total loans, supported by business banking, treasury management services, and equipment financing solutions.