Horizon Bancorp Q2 profit misses estimates on legal charge

Overview

• U.S. regional bank's Q2 adjusted EPS and net income missed analyst expectations

• Net interest income rose 14.7% yr/yr, with net interest margin expanding to 4.37%

• Q2 results included a $3.1 mln pre-tax legal charge, impacting profitability

Outlook

• Horizon expects mid-single digit organic growth in loans and deposits going forward

• Company anticipates continued advancement in fee income and disciplined expense management

• Horizon says its low-volatility, profitability-first growth model will drive shareholder value over time

Result Drivers

• NET INTEREST MARGIN - Higher net interest margin, driven by disciplined loan and deposit pricing, favorable cash reinvestment, and commercial loan growth, supported net interest income

• NON-INTEREST INCOME - Higher gains on sale of mortgage loans and increased interchange fees contributed to growth in non-interest income

• LEGAL CHARGE - Q2 expenses rose due to a $3.1 mln legal charge, impacting profitability

Company press release: ID:nGNX6JFGSt

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Horizon Bancorp Inc is $21.00, about 2.9% above its July 21 closing price of $20.41

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

• July 21 - United Community Banks Q2 adjusted EPS misses estimates

• July 22 - Norwood Financial posts record Q2 net income, net interest income

• July 21 - Webster Financial Q2 revenue beats estimates on loan, deposit growth

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)