Horizon Bancorp, Inc. (HBNC): Business Model Canvas [Dec-2025 Updated]

You're digging into Horizon Bancorp, Inc. (HBNC) right now, trying to map out how this community bank is navigating the late 2025 rate environment. Honestly, their model hinges on a tight balance sheet: they've managed to push their Net Interest Margin to a solid 3.52% as of Q3 2025, all while keeping credit quality exceptionally clean with net charge-offs at just 0.07%. We'll break down how their $7.7 billion asset base, driven by core deposits and focused commercial lending, translates into real revenue, like the $58.4 million in Net Interest Income they booked last quarter. This canvas shows you the engine behind their community focus and strategic repositioning-it's a defintely interesting blueprint for regional banking.

Horizon Bancorp, Inc. (HBNC) - Canvas Business Model: Key Partnerships

You're looking at how Horizon Bancorp, Inc. (HBNC) structures its external relationships to run its business as of late 2025. These partnerships are critical for technology, capital, and community presence.

FIS for the HORIZON Core Banking System and processing.

Specific financial terms related to the FIS agreement for the HORIZON Core Banking System and processing are not publicly detailed in the latest filings. Horizon Bancorp, Inc. reported total assets of $7.7 billion as of June 30, 2025.

Lumen Technologies for dedicated internet and cybersecurity services.

Details on the financial commitment to Lumen Technologies for dedicated internet and cybersecurity services are proprietary. The bank's operational scale is supported by its balance sheet, which held total deposits of $5.5 billion at September 30, 2025.

MOCA, a FinTech partner for advanced card payment technologies.

The financial structure of the partnership with MOCA for advanced card payment technologies is not disclosed. Horizon Bancorp, Inc. reported total loans held for investment of $4.8 billion at September 30, 2025.

Capital markets firms for common stock and subordinated note offerings.

The engagement with capital markets firms resulted in significant balance sheet activity in the third quarter of 2025. Performance Trust Capital Partners, LLC and Keefe, Bruyette & Woods, A Stifel Company, acted as joint placement agents for the subordinated notes offering.

Here's a quick look at the capital raised and deployed through these partnerships:

The new subordinated notes are structured to bear interest at Three-Month Term SOFR plus 360 basis points after the initial fixed period, maturing on September 15, 2035.

Local community organizations to reinforce the community bank model.

Horizon Bancorp, Inc. emphasizes its community banking franchise, which contributed to a Net Interest Margin (FTE) of 3.52% for the three months ended September 30, 2025. The bank's operational focus is on this franchise, despite a reported Net loss of $222.0 million for the same period, largely due to balance sheet repositioning activities.

Community reinforcement activities are supported by:

• Net Interest Income of $58.4 million in Q3 2025.
• Organic commercial loan growth of $57.9 million annualized in Q3 2025.
• Net Charge-Offs of $0.8 million (annualized 0.07% of Average Loans) in Q3 2025.

Finance: review the Q4 2025 budget allocation for community outreach programs by November 15th.

Horizon Bancorp, Inc. (HBNC) - Canvas Business Model: Key Activities

You're focused on how Horizon Bancorp, Inc. (HBNC) is actively managing its operations to drive performance in late 2025. The key activities center on disciplined growth, balance sheet optimization following major repositioning, and expense control. Here's a breakdown of the numbers supporting those actions.

Organic commercial loan origination and portfolio management

Horizon Bancorp, Inc. continues to emphasize growing its loan book through internal efforts, which is a core part of its community banking model. This focus on organic growth is evident in the recent performance metrics.

• Organic commercial loan growth annualized rate in the second quarter of 2025 was 14.8%.
• Total loans held for investment (HFI) increased by 5% linked quarter annualized in the first quarter of 2025, driven by commercial growth of 14% annualized.
• The company's total assets stood at $7.7 billion as of June 30, 2025.

Strategic balance sheet repositioning and asset/liability management

A major key activity throughout 2025 has been the successful execution of a strategic balance sheet repositioning, which involved significant asset sales and liability restructuring to improve the earnings profile. This financial engineering was largely complete by the third quarter.

Here's a look at the scale of the repositioning activities completed or planned through late 2025:

This repositioning also included redeeming $56.5 million of outstanding subordinated notes on October 1, 2025. The result of these actions was a Net Interest Margin (NIM) expansion for the seventh consecutive quarter, reaching 3.23% in the second quarter of 2025.

Core deposit gathering and disciplined deposit pricing

Horizon Bancorp, Inc. is actively managing its funding mix, focusing on stabilizing and growing its core, client-driven deposits while shedding higher-cost, non-core balances. This is a direct response to the higher rate environment where depositors realize their money has a material earnings proposition.

• Management planned to reduce over $125 million in non-core deposit balances within the third quarter of 2025.
• The company noted that the core client-driven deposit franchise is growing, as stated in their third quarter 2025 commentary.

The disciplined pricing on loans and deposits helped fuel the net interest income growth of 5.9% from the first quarter of 2025 to $55.4 million in the second quarter of 2025.

Managing non-interest expense for a more efficient expense base

A consistent theme is the commitment to expense management to generate higher earnings and improve operating leverage. They are aiming for a flat reported expense base for the full year 2025.

You can see the tight control in the quarterly figures:

• The efficiency ratio improved to 59.48% in the second quarter of 2025.
• Total non-interest expense in the second quarter of 2025 was $39.4 million, only up less than 1% from the first quarter of 2025's $39.3 million.
• The outlook for full year reported expenses for 2025 is approximately flat compared to the $158.8 million reported for the full year 2024.

Finance: draft the Q4 2025 expense forecast against the flat-to-2024 target by next Wednesday.

Horizon Bancorp, Inc. (HBNC) - Canvas Business Model: Key Resources

You're looking at the hard assets Horizon Bancorp, Inc. (HBNC) relies on to run the business as of late 2025. These aren't abstract concepts; they are the tangible and intangible things the company owns or controls that make value creation possible.

The balance sheet foundation is significant. Horizon Bancorp, Inc. is the holding company for Horizon Bank, reporting total assets of approximately $7.7 billion as of June 30, 2025. That's the starting point for all operations.

Geographically, the physical footprint is concentrated. The resource base includes a strategically located branch network serving customers across both Indiana and Michigan. This physical presence supports the relationship banking model.

Funding is a core strength, centered on a strong, low-cost, and granular core deposit franchise. For instance, in the first quarter of 2025, non-interest-bearing balances grew by $62.5 million, representing a 24% annualized growth rate for that component. Furthermore, management executed a strategic reduction of over $125 million in non-core deposit balances during the third quarter of 2025.

Here's a quick look at some key financial metrics underpinning these resources as of mid-to-late 2025:

The human capital driving the lending engine is key. The experienced commercial lending teams delivered strong organic growth, evidenced by a $117.2 million increase, or 14.8% annualized, in total loans held for investment during the second quarter of 2025. The private wealth management teams support the retail offerings mentioned in their filings.

Operationally, the backbone is the core banking technology platform. Horizon Bancorp, Inc. utilizes the HORIZON system from FIS. This platform is described as a premier processing solution offering capabilities like role-based user experience and straight-through processing for both retail and commercial customers.

Finance: draft 13-week cash view by Friday.

Horizon Bancorp, Inc. (HBNC) - Canvas Business Model: Value Propositions

Horizon Bancorp, Inc. delivers value through a focused, high-quality banking model rooted in local market knowledge.

The foundation is an exceptional core community banking franchise with local expertise. This is evidenced by the continued strength of the core client-driven deposit franchise, which is growing. The organization serves commercial and retail customers across attractive Midwest markets through strategically located Indiana and Michigan branches, complemented by digital tools. The President and CEO noted that Q3 2025 results further evidenced this strength underneath balance sheet activities.

A key financial metric demonstrating operational success is the expanding Net Interest Margin (NIM). The NIM reached 3.52% in Q3 2025, marking the eighth consecutive quarter of expansion. This expansion was a byproduct of balance sheet repositioning completed after the August 22, 2025, equity capital raise. Net Interest Income for the quarter was $58.4 million, a 5.5% increase from the linked quarter.

Horizon Bancorp, Inc. offers comprehensive commercial banking and treasury management services to in-market businesses across diverse industries. The commercial loan engine is producing solid results, with strong organic commercial loan growth of $57.9 million, or 7.0% annualized, in the third quarter of 2025. Furthermore, the bank offers equipment financing solutions for small- and mid-sized enterprises across the Midwest and beyond.

The value proposition includes strong credit quality, a critical factor for stability. Annualized net charge-offs stood at 0.07% of average loans during the third quarter of 2025. This translated to net charge-offs of $800,000 for the quarter, representing 7 basis points annualized. The allowance for credit losses stood at $50.2 million, which is 1.04% of loans held for investment. Non-performing assets to total assets was reported at 53 bps for the third quarter.

The offering is rounded out with integrated private wealth management and trust services. The performance in fiduciary activities contributed income of $1.36 million in Q3 2025, which exceeded the average estimate of $1.29 million.

The core offerings can be summarized as follows:

• Local expertise in Midwest commercial and retail markets.
• Sophisticated treasury management solutions for businesses.
• Prime residential, indirect auto, and consumer lending.
• Private wealth management and trust capabilities.

The financial performance underpinning these value drivers in Q3 2025 is detailed below:

The bank is focused on profitable growth and smart redeployment of its capital generation moving into 2026.

Horizon Bancorp, Inc. (HBNC) - Canvas Business Model: Customer Relationships

Horizon Bancorp, Inc. maintains a customer relationship strategy centered on its community banking franchise across Indiana and Michigan.

Local relationship banking model for personalized service

Horizon Bank operates a physical network to support its local service model. As of June 30, 2025, Horizon Bank maintained $\text{44}$ full-service branches in Indiana and $\text{27}$ in Michigan, totaling approximately $\text{78}$ full-service offices across its footprint. The President and CEO noted in Q1 2025 that investments in expanding the $\text{local relationship banking model is paying dividends}$. The stability of the core funding base, with non-interest-bearing balances growing $\text{\$62.5 million}$ during Q1 2025 (a $\text{24%}$ annualized growth rate), reflects the success of these local relationships. Total deposits reached $\text{\$5.7 billion}$ as of June 30, 2025.

The overall holding company managed total assets of $\text{\$7.7 billion}$ as of June 30, 2025.

Dedicated commercial banking officer relationships

The commercial segment is a major relationship driver, with commercial lending representing $\text{over half of total loans}$. This segment saw strong organic growth, with commercial loans increasing by $\text{\$117 million}$ in Q2 2025, representing $\text{14.8%}$ growth for that quarter. The model relies on dedicated officers to cultivate these business relationships, evidenced by recent personnel additions, such as a new $\text{Vice President, Commercial Loan Officer}$ hired to support local businesses and build $\text{strong client relationships}$.

The focus is on reinvesting liquidity into these higher-value commercial lending relationships, as seen in the strategic shift away from the indirect auto portfolio.

High-touch advisory services for wealth management clients

Horizon Bank includes a trust department offering corporate and individual trust, agency services, and investment management services. The bank's retail offerings explicitly include a range of $\text{personal banking and wealth management solutions}$. The Investments figure reported for Horizon Bancorp, Inc. as of September 30, 2025, was $\text{\$1.3B USD}$.

The bank emphasizes its commitment to quality client relationships, which supports the wealth management component.

• The trust department provides corporate and individual trust services.
• Investment management services are offered alongside retail banking.
• Investments figure stood at $\text{\$1.3B USD}$ as of September 30, 2025.

Digital and virtual tools to complement in-person interactions

Horizon Bancorp, Inc. serves customers using both its physical branches and $\text{convenient digital and virtual tools}$. These tools are intended to complement the in-person interactions provided by the local banking model, not replace them entirely. The bank's strategy involves leveraging these tools while focusing on core community banking strengths.

The bank's efficiency ratio improved to $\text{59.48%}$ in Q2 2025, suggesting operational effectiveness in supporting both physical and digital channels.

You should review the Q3 2025 earnings call transcript, scheduled for October 23, 2025, for any specific updates on digital channel usage metrics.

Horizon Bancorp, Inc. (HBNC) - Canvas Business Model: Channels

You're looking at how Horizon Bancorp, Inc. (HBNC) gets its value proposition to the customer base, which is heavily rooted in its Midwestern footprint and expanding digital presence.

Strategically located physical branches in Indiana and Michigan.

Horizon Bank maintains 71 full service offices across its markets. These offices are strategically located to serve commercial and retail customers across attractive Midwestern markets, specifically within Indiana and Michigan.

Convenient digital and virtual banking tools (online/mobile).

The bank supports its physical network with convenient digital and virtual banking tools for both commercial and retail customers. This includes online and mobile platforms for banking services. The total asset base supported by these channels was $7.7 billion as of June 30, 2025.

Commercial lending teams for direct business engagement.

Direct engagement is driven by commercial lending teams. The loan portfolio reflects this channel's activity. Total loans held for investment (HFI) stood at $5.0 billion at June 30, 2025. Organic commercial loan growth showed significant momentum:

• Net increase of $117.2 million (14.8% annualized) in Q2 2025.
• Net increase of $57.9 million (7.0% annualized) in Q3 2025.
• Net increase of $58 million reported around November 2025.

Equipment financing solutions offered regionally and nationally.

Horizon Bank offers equipment financing solutions for small- and mid-sized enterprises across the Midwest and beyond. This indicates a channel that extends beyond the immediate branch footprint of Indiana and Michigan for this specific product line.

Here's a quick look at the balance sheet figures tied to these lending channels as of mid-2025:

Horizon Bancorp, Inc. (HBNC) - Canvas Business Model: Customer Segments

You're looking at the core client groups Horizon Bancorp, Inc. (HBNC) serves as of late 2025. This isn't just about who they lend to; it's about where the bank places its capital and focuses its relationship-building efforts. Honestly, the data shows a clear emphasis on the commercial side of the house.

The total loan book stood at $4.8 billion as of September 30, 2025. While the prompt suggests commercial loans are over half, the reported data confirms that commercial banking is the company's one principal business segment. Activity in this segment drove significant balance sheet movement; for instance, commercial loans saw a net growth of $58 million during the third quarter of 2025. This growth is consistent with an expansion of their Commercial & Industrial (C&I) portfolio.

Here's a quick look at how the activity across these segments shaped the balance sheet and fee income streams as of the third quarter of 2025:

For the small- and mid-sized enterprises (SMEs), the focus is on equipment financing solutions, which is part of the broader commercial offering. To be fair, the retail side saw some strategic contraction; the bank executed the sale of approximately $176 million of its indirect auto portfolio late in the third quarter, on September 26, 2025. This was offset by growth in other consumer lending, with consumer loans growing by $8 million in the second quarter.

The private wealth and trust clients contribute to the non-interest income line. For the third quarter of 2025, revenue from fiduciary activities was reported at $1.36 million. This indicates the advisory services component is a distinct, though smaller, revenue stream compared to the core lending activities.

You can see the composition of the commercial portfolio includes specific real estate categories, such as Multi-family loans at 5.9% of loans and Non-owner-occupied office loans at 3.8% of total loans (based on Q2 2025 data).

• Commercial banking is the principal business segment.
• The bank serves in-market businesses across Indiana and Michigan.
• Retail services include prime residential, indirect auto, and consumer lending.
• Credit quality remains a focus, with Nonperforming Assets at 0.64% of assets as of September 30, 2025.

Finance: draft the 13-week cash flow view incorporating the Q3 loan runoff/growth trends by Friday.

Horizon Bancorp, Inc. (HBNC) - Canvas Business Model: Cost Structure

You're looking at the core costs Horizon Bancorp, Inc. (HBNC) is managing right now, especially as they wrap up that big balance sheet repositioning. Honestly, the cost side in Q3 2025 was a bit noisy due to one-time items, but the underlying trends are what matter for future performance.

Interest expense on deposits and borrowings is a major lever affecting the Net Interest Margin (NIM). You saw the NIM expand for the eighth straight quarter to 3.52% in Q3 2025, up from 3.23% in Q2 2025. This expansion happened even as the company executed a planned runoff of high-cost deposits; they were working to reduce more than $125 million of these non-core, higher-cost transactional deposit balances during Q3 2025. To be fair, the overall interest-bearing liability cost actually decreased by 2 basis points during the quarter, which is a positive sign for funding costs despite the rate environment. This strategic shift is key to driving durable returns.

Personnel expenses fall under the broader umbrella of non-interest expense, and management has been vocal about discipline here. For the full year 2024, reported expenses were $158.8 million. Management modestly reduced the full-year 2025 outlook to be approximately flat compared to that 2024 figure, signaling a commitment to expense control supporting positive operating leverage as Net Interest Income grows. That's the goal: keep the staff costs in check while the core franchise grows.

Non-interest expense saw significant quarterly volatility. Total Non-Interest Expense for the three months ended September 30, 2025, hit $53.0 million, a jump from $39.4 million in Q2 2025. This increase was defintely driven by a one-time $12.7 million prepayment penalty incurred when Horizon paid off $700 million in Federal Home Loan Bank (FHLB) advances as part of the repositioning. Excluding that specific event, the underlying expense base is what management is actively restructuring for efficiency. For context, Q1 2025 non-interest expense was $39.3 million. Looking ahead, management guided non-interest expense to decrease to around $40 million for Q4 2025, showing the expected normalization after the strategic balance sheet moves.

Here's a quick look at how the main expense categories stacked up for the quarter, keeping in mind the Q3 2025 Non-Interest Expense included that large, non-recurring penalty:

The Provision for Credit Losses (PCL) was $0.8 million in Q3 2025. This aligns with the reported Net Charge-Offs for the period. Credit quality, overall, remains strong, with annualized net charge-offs at 0.07% of average loans for the quarter.

You should keep an eye on these key cost elements:

• Interest expense on deposits, especially as high-cost balances are reduced.
• The run-rate for non-interest expense now that the balance sheet repositioning is largely complete.
• Personnel costs remaining flat relative to the $158.8 million full-year 2024 spend.
• The impact of the new 7.00% fixed rate on the $100 million subordinated notes issued in August 2025.

Finance: draft 13-week cash view by Friday.

Horizon Bancorp, Inc. (HBNC) - Canvas Business Model: Revenue Streams

You're looking at how Horizon Bancorp, Inc. (HBNC) actually brings in the money, and as of late 2025, the core engine is still the spread between what they earn on assets and what they pay for liabilities.

The primary driver remains the Net Interest Income (NII) from loans and investments. For the third quarter of 2025, this figure hit $58.4 million, showing a sequential increase from the $55.4 million reported in the second quarter of 2025.

Here are the key categories making up the revenue profile for Horizon Bancorp, Inc.:

• Net Interest Income (NII) from loans and investments.
• Non-Interest Income derived from various fee-based services.
• Fiduciary and wealth management fees.
• Gains realized from the sale of mortgage loans.

To give you a clearer picture of the non-interest income streams for the third quarter of 2025, look at this breakdown:

Also, remember that the first quarter of 2025 included a significant, non-recurring boost to income. Horizon Bancorp, Inc. realized a one-time pre-tax gain of $7.0 million from the sale of its mortgage warehouse business on January 17, 2025.

The total reported revenue for the quarter ended September 2025 was $62.18 million, though this was impacted by strategic balance sheet repositioning activities that affected non-interest income, including a pre-tax loss of $7.7 million on the sale of the Indirect Auto portfolio during Q3 2025.