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Mar 31, 2020
Horizon Bancorp Q1 2020 Earnings Report
Horizon Bancorp's financial performance for Q1 2020 was announced, revealing a solid quarter amidst the COVID-19 pandemic and the adoption of a new accounting standard for current expected credit losses.
Key Takeaways
Horizon Bancorp reported a net income of $11.7 million, or $0.26 diluted earnings per share, for the first quarter of 2020. The company's pre-tax, pre-provision net income totaled $21.8 million. The results reflect the adoption of the CECL accounting method and the impact of the COVID-19 pandemic.
Horizon prioritized the safety and well-being of employees, customers, and the community.
The company's balance sheet was well-positioned leading up to the COVID-19 National Health Emergency.
Horizon Bank's strong liquidity position included approximately $1.1 billion in cash and investment securities.
Horizon maintained stable asset quality metrics during the first quarter of 2020.
Revenue by Segment
Forward Guidance
Horizon's management expressed caution regarding future economic conditions, particularly concerning unemployment and consumer spending, and anticipated a better understanding of the health and economic emergency's impact over time.
Positive Outlook
- Horizon's funding team has done an excellent job of lowering the Bank’s cost of funds related to the Federal Reserve Bank’s 150–basis–point reduction in its benchmark interest rate
- Horizon's net interest margin has remained fairly stable for the quarter
- Horizon's capital and liquidity positions are well-managed
- Horizon was well-positioned going into this economic challenge
- Horizon will continue to be dynamic in our monitoring and approach to managing the balance sheet
Challenges Ahead
- Future headwinds are expected given that we are now close to the floors on our funding costs and assets will continue to reprice throughout the year.
- Losses are anticipated given the closure of our economy and non–essential businesses.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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