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SEC filingHorizon Bancorp, Inc. reported a net loss of $150.5 million for fiscal year 2025, a significant decline from net income of $35.4 million in 2024. The loss was primarily driven by a $299.5 million loss on the sale of investment securities, which resulted in total non-interest loss income of -$256.4 million. This overshadowed a 21.7% increase in net interest income to $229.5 million, driven by higher interest income from loans and securities. Total assets decreased to $6.44 billion from $7.80 billion, while total deposits declined to $5.28 billion. The company's capital position remained strong with total stockholders' equity of $688.3 million, and regulatory capital ratios were well above required levels. Operating cash flow was positive at $79.2 million, but net cash decreased by $154.0 million due to significant investing and financing activities.
Horizon Bancorp reported a challenging fiscal year 2025 with a net loss of $150.5 million, a significant reversal from the $35.4 million net income in 2024. Total interest income increased modestly to $362.8 million from $356.5 million, while interest expense decreased to $133.3 million from $167.9 million, resulting in improved net interest income of $229.5 million. However, the company recorded a substantial $299.5 million loss on the sale of investment securities, which drove total non-interest loss income to -$256.4 million. Basic and diluted earnings per share were -$3.00, compared to $0.81 and $0.80 respectively in the prior year. The company's balance sheet repositioning included transferring $1.80 billion of held-to-maturity securities to available-for-sale and subsequent sales.
Total interest income of $362.8 million was driven primarily by interest and fees on loans ($309.9 million), investment securities - taxable ($26.3 million), investment securities - tax exempt ($19.4 million), and other interest income ($7.2 million). Interest expense decreased significantly to $133.3 million from $167.9 million, with deposits expense at $98.6 million, short and long term borrowings at $25.0 million, subordinated notes at $5.2 million, and junior subordinated debentures at $4.5 million. Non-interest income was severely impacted by the $299.5 million loss on sale of investment securities, though service charges on deposit accounts ($13.2 million), interchange fees ($13.6 million), and fiduciary activities ($5.5 million) provided positive contributions.
Net interest margin improved as net interest income increased to $229.5 million from $188.6 million, representing growth of 21.7%. Credit loss expense was $1.9 million, down from $5.4 million in 2024. Non-interest expense increased to $172.3 million from $158.8 million, with the largest components being salaries and employee benefits ($89.7 million), net occupancy expenses ($13.9 million), data processing ($11.9 million), outside services and consultants ($13.4 million), and prepayment expense ($12.7 million). The income tax benefit of $50.7 million partially offset the pre-tax loss of $201.2 million.
Operating activities generated $79.2 million in cash, primarily from adjustments to net loss including provision for credit losses ($1.9 million), depreciation and amortization ($10.3 million), and loss on sale of investment securities ($299.5 million). Investing activities provided $979.5 million, mainly from proceeds from sales of securities available for sale ($1.41 billion), partially offset by purchases of securities available for sale ($591.8 million). Financing activities used $1.21 billion, with net change in deposits (-$325.2 million) and repayment of borrowings ($1.13 billion) being the largest outflows. Total assets decreased to $6.44 billion, with loans net of allowance at $4.83 billion and investment securities at $875.4 million. Total liabilities were $5.75 billion, with deposits at $5.28 billion. Stockholders' equity was $688.3 million.
The company's risk factors include credit risk from commercial loans (70.4% of portfolio), market risk from interest rate changes, liquidity risk, operational risk including cybersecurity threats, and regulatory compliance risks. Management noted the impact of digital asset trends and disintermediation on traditional banking services. The company maintains a well-capitalized regulatory position with total capital to risk-weighted assets of 14.36% (consolidated) and 12.99% (bank), both above required levels. Strategic priorities include managing the repositioned balance sheet and navigating the competitive banking environment while maintaining adequate capital and liquidity.