Horizon Bancorp, Inc.

to the Horizon Bancorp Inc. conference call to discuss financial results for the first quarter of 2025. All participants will be listed on the note. Should you need assistance, please signal a conference specialist by pressing star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone telephone. To withdraw your questions, please press Start and 2. Before turning the call over to the management, please remember that today's call may contain statements that are overlooking in nature. These statements are subject to risk, uncertainty, and other factors that could cause extra results to be served materially from those discussed, including those factors noted in the slide presentation. Additional information about factors that could cause extra results to differ materially is contained in Horizon's most recent form 10-K and its later filing with the Securities and Exchange Commission. In addition, management may refer to certain non-GAAP financial measures that are intended to help investors understand Horizon's business Reconciliations for these measures are contained in the presentation. The company assumes no obligation to update any forward-looking statements made during the call. For anyone who does not already have a copy of the press release and supplemental presentation issued by Horizon yesterday, they can be accessed at the company's website, horizonbank.com. Representing Horizon today are Executive Vice President and Senior Operation Officer, Kathy Luritin. Executive Vice President, Corporate Secretary and General Counsel, Scott Esler. Executive Vice President and Chief Commercial Banking Officer, Levine Herbert. Executive Vice President and Chief Financial Officer, John Stewart. Executive Vice President and Chief Administration Officer, Mark Seckles. and Chief Executive Officer and President Thomas Prey. At this time, I would like to turn the conference over to Thomas Prey. Please go ahead, sir.

Good morning, and thank you for joining us. Horizon's first quarter earnings reflect the continued positive momentum in our core financial performance metrics and management's commitment to deliver long-term value to its shareholders. Our results are highlighted by a sixth consecutive quarter of margin expansion, now above 3%, quality loan growth and exceptional credit metrics, and a funding base that continues to deliver value, even in uncertain economic environments. The team also delivered a more efficient expense base entry in 2025 and completed the successful sale of our mortgage warehouse business, adding optionality to our capital position. Page 4 provides insight into the quarter's results. The quarter displayed positive growth in a revenue model, with the margin continuing to expand and analyze loan growth of 5%, driven by a solid performance of our commercial team at 14% annualized. Non-interest income was aligned with expectations and reflected the positive gain from the sale of the mortgage warehouse division of $7 million. Additionally, the team delivered on the forecasted significant step down in expense run rate from the fourth quarter. This will add to our operating leverage in 2025 as we continue to be prudent on expenses while expanding top line revenue. Our first quarter results advanced the financial health of the organization and stated in my opening comments, we're very pleased with our momentum jumping into 2025. As noted in previous quarters, a key element of our go-forward success will be the execution of our asset mix strategy to higher-yielding lending portfolios that are accretive to the long-term franchise value of our community banking model. To provide additional insight on our lending growth and credit performance, I'll transition the presentation to our Executive Vice President and Chief Commercial Banking Officer, Lynn Kerber.

Thank you, Thomas. Good morning. During the first quarter, our loan growth performed well and was consistent with our expectations. Total loans held for investment grew $63 million and was principally in our core commercial lending segment with net loan growth of $105 million and also increased activity in the residential mortgage lending segment. This growth was partially funded by our planned continued reduction in indirect auto loans of $36 million. Transitioning to some detail on each portfolio, we have commercial loans highlighted on slide six. As noted, commercial loans grew $105 million, which represented a 14% annualized increase for the quarter. Our activity for the quarter was 58% commercial real estate, both owner-occupied and non-owner-occupied, and 42% commercial and industrial, which is considered a favorable mix, reflecting positive growth in our C&I category, and continuing to increasingly diversify our commercial books. We continue to be well diversified with no individual sector exceeding 10% of our commercial portfolio and no more than 6% of total loans. In the first quarter, we benefited from growth in key markets of Troy, Kalamazoo, Grand Rapids, and Midland, Michigan, and Northwest Indiana, as well as small-ticket equipment originations. While the timing from quarter to quarter may vary, we anticipate our annualized growth rate to remain generally consistent. We continue to stay focused in our core markets, primary segments of owner-occupied and non-owner-occupied commercial real estate, traditional C&I lending, and small and new ticket equipment finance. Pipelines remain stable at this time, and we are staying highly engaged with our client and prospects on potential impacts on macroeconomic environments. Commercial credit quality is performing well with March 31, 2025 key metrics at or below peer performance. Key metrics include past due loans greater than 30 days of 14 basis points, non-performing loan ratio of 27 basis points, and net recoveries of $42,000 year-to-date. Turning to slide 7, consumer loan balances decreased $40 million during the quarter and reflective of our continued wind-down in indirect auto lending. Excluding indirect auto lending, core consumer loans remain flat, with primary activity being residential mortgage and home equity lending. Residential mortgage lending modestly grew during the quarter. We continue to opportunistically expand our mortgage lending team with local in-market lenders that are relationship-focused and work well with our commercial and retail teams. We expect to realize increased mortgage lending activities in 2025 through a continued disciplined sales approach and outbound calling efforts. Overall, credit quality remains satisfactory in the consumer and mortgage portfolios with delinquencies and charge-offs within targeted ranges with improvement in past students for the first quarter versus prior quarters in 2024. Our asset quality metrics continue to be strong and perform within satisfactory ranges as outlined on slide eight. Substandard and non-performing loans of $67 million represented 1.36% of loans, reflecting an increase of $2 million for the quarter. Non-performing loans were $30 million, representing 62 basis points of total loans held for investment. The modest quarterly increase was predominantly in residential loans of $2 million and commercial loans of $2.5 million, offset by a reduction in revolving lines of $1.2 million. The results in the first quarter remain within historical ranges, and we do not expect this change to materially impact our outlook performance in these segments at this time. Net charge-offs for the first quarter. continue to be low at $874,000, representing seven basis points on an annualized basis. Both non-performing loans and net charge-offs continue to perform at or below peer data for our UVPR bankers. Finally, our allowance for credit losses increased by approximately $700,000 in the quarter to $52.7 million, with the ACL's loan ratio of 1.07%. Primary drivers in the ACL components are loan growth, an increased economic forecast allocation, and a positive elimination of a larger specific reserve. Provision expense of $1.4 million reflects the net effect of these key components. Future reserve amounts and related provision will be driven by loan growth and mix, economic forecast, and credit trends. Recent national macroeconomic trends and the impact of tariffs on our portfolio will continue to be actively monitored, and may result in additional allocations in the course of 2025. Now I'd like to turn things back to Thomas, who will provide an overview of our deposit trends.