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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.
Horizon Bancorp
Horizon Bancorp
Horizon Bancorp Revenue by Segment
Revenue by Segment
Service charges on deposit accounts Revenue
CapyFin.comWire transfer fees Revenue
CapyFin.comInterchange fees Revenue
CapyFin.comFiduciary activities Revenue
CapyFin.comGain on sale of mortgage loans Revenue
CapyFin.comMortgage servicing income Revenue
CapyFin.comIncrease in cash value of bank owned life insurance Revenue
CapyFin.comOther income Revenue
CapyFin.com 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.
- The shelter in place rules has increased unemployment applications and is limiting consumer spending.
- The impact of this health and economic emergency to Horizon's financial statements is still uncertain.
- The actual impacts of COVID-19 may differ, possibly materially, from expectations due to uncertain factors and future developments.