What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-09 compared with 2023-08-08 · 187 added, 116 removed, 1355 unchanged (18% of the section changed)

4 unchanged sentences

(Dollar Amounts in Thousands)

September 30,

2023 December 31,

39 unchanged sentences

(Dollar Amounts in Thousands, Except Per Share Data)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

48 unchanged sentences

(Dollar Amounts in Thousands)

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2023 2022 2023 2022

26 unchanged sentences

Income (Loss) Total

Balances, April 1, 2022 $ — $ — $ 351,522 $ 380,700 $ ( 54,772 ) $ 677,450

Balances, July 1, 2022 $ — $ — $ 352,412 $ 398,517 $ ( 93,064 ) $ 657,865

Net income — — — 23,821 — 23,821

1 unchanged sentence

Amortization of unearned compensation — — 627 — — 627

Exercise of stock options — — 14 — — 14

Net settlement of share awards — — ( 89 ) — — ( 89 )

2 unchanged sentences

— — — ( 7,061 ) — ( 7,061 )

Balances, June 30, 2022 $ — $ — $ 352,412 $ 398,517 $ ( 93,064 ) $ 657,865

Balances, April 1, 2023 $ — $ — $ 354,035 $ 440,556 $ ( 92,032 ) $ 702,559

Balances, September 30, 2022 $ — $ — $ 352,837 $ 415,277 $ ( 123,121 ) $ 644,993

Balances, July 1, 2023 $ — $ — $ 354,953 $ 452,209 $ ( 97,919 ) $ 709,243

Net income — — — 16,205 — 16,205

2 unchanged sentences

Net settlement of share awards — — ( 482 ) — — ( 482 )

Stock retirement plans — — 63 — — 63

Cash dividends on common stock ($ 0.16 per share)

— — — ( 7,089 ) — ( 7,089 )

Balances, June 30, 2023 $ — $ — $ 354,953 $ 452,209 $ ( 97,919 ) $ 709,243

Balances, September 30, 2023 $ — $ — $ 355,478 $ 461,325 $ ( 123,434 ) $ 693,369

See notes to condensed consolidated financial statements

3 unchanged sentences

(Dollar Amounts in Thousands, Except Per Share Data)

Six Months Ended

Nine Months Ended

Stock Additional

13 unchanged sentences

— — — ( 20,708 ) — ( 20,708 )

Balances, June 30, 2022 $ — $ — $ 352,412 $ 398,517 $ ( 93,064 ) $ 657,865

Balances, September 30, 2022 $ — $ — $ 352,837 $ 415,277 $ ( 123,121 ) $ 644,993

Balances, January 1, 2023 $ — $ — $ 354,188 $ 429,385 $ ( 106,198 ) $ 677,375

6 unchanged sentences

— — — ( 21,256 ) — ( 21,256 )

Balances, June 30, 2023 $ — $ — $ 354,953 $ 452,209 $ ( 97,919 ) $ 709,243

Balances, September 30, 2023 $ — $ — $ 355,478 $ 461,325 $ ( 123,434 ) $ 693,369

See notes to condensed consolidated financial statements

3 unchanged sentences

(Dollar Amounts in Thousands)

Six Months Ended

Nine Months Ended

Operating Activities

32 unchanged sentences

Premises and equipment expenditures ( 6,440 ) ( 4,701 )

Purchases of bank owned life insurance — ( 50,000 )

Proceeds from bank owned life insurance 14 3,554

12 unchanged sentences

Cash and Cash Equivalents, End of Period $ 175,137 $ 109,659

Additional Supplemental Information

HORIZON BANCORP, INC.

2 unchanged sentences

(Dollar Amounts in Thousands)

Additional Supplemental Information

Interest paid $ 84,403 $ 18,384

11 unchanged sentences

All inter–company balances and transactions have been eliminated.

The results of operations for the periods ended June 30, 2023 and June 30, 2022 are not necessarily indicative of the operating results for the full year of 2023 or 2022.

The results of operations for the periods ended September 30, 2023 and September 30, 2022 are not necessarily indicative of the operating results for the full year of 2023 or 2022.

The accompanying unaudited condensed consolidated financial statements reflect all adjustments that are, in the opinion of Horizon’s management, necessary to fairly present the financial position, results of operations and cash flows of Horizon for the periods presented.

4 unchanged sentences

On July 16, 2019, the Board of Directors of the Company authorized a stock repurchase program for up to 2,250,000 shares of Horizon’s issued and outstanding common stock, no par value.

As of June 30, 2023, Horizon had repurchased a total of 803,349 shares at an average price per share of $ 16.89 .

As of September 30, 2023, Horizon had repurchased a total of 803,349 shares at an average price per share of $ 16.89 .

Basic earnings per share is computed by dividing net income available to common shareholders (net income less dividend requirements for preferred stock and accretion of preferred stock discount) by the weighted–average number of common shares outstanding.

1 unchanged sentence

The following table shows computation of basic and diluted earnings per share.

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2023 2022 2023 2022

15 unchanged sentences

(Table Dollar Amounts in Thousands, Except Per Share Data)

There were 484,650 and 415,455 shares for the three and six months ended June 30, 2023 which were not included in the computation of diluted earnings per share because they were non–dilutive.

There were 319,692 and 206,421 shares for the three and six months ended June 30, 2022 which were not included in the computation of diluted earnings per share because they were non–dilutive.

There were 665,063 and 624,189 shares for the three and nine months ended September 30, 2023 which were not included in the computation of diluted earnings per share because they were non–dilutive.

There were 316,760 and 316,760 shares for the three and nine months ended September 30, 2022 which were not included in the computation of diluted earnings per share because they were non–dilutive.

Reclassifications

3 unchanged sentences

We have revised amounts reported in previously issued financial statements for the periods presented in this Quarterly Report on Form 10–Q related to immaterial errors.

The errors relate to the amortization expense of the indirect loan dealer reserve asset not being reported as a reduction in interest income on loans and the non–cash transfer of available for sale securities to held to maturity securities.

The correction of these errors resulted in a reduction in interest income on loans receivable and a reduction in non–interest loan expense on the Company's consolidated income statement and the disclosure of the transfer of available for sale securities to held to maturity securities in the statements of cash flows.

This revision does not impact the Company's net income.

The errors relate to the amortization expense of the indirect loan dealer reserve asset not being reported as a reduction in interest income on loans, the non–cash transfer of available for sale securities to held to maturity securities and the incorrect classification of revolving lines of credit as term loans in the vintage loan disclosure.

The correction of these errors resulted in a reduction in interest income on loans receivable and a reduction in non–interest loan expense on the Company's consolidated income statement, the disclosure of the transfer of available for sale securities to held to maturity securities in the statements of cash flows and the classification of certain term loans as lines of credit in the vintage loan disclosure.

These revisions do not impact the Company's net income.

We evaluated the aggregate effects of these errors to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No.

108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements and disclosures included in our Quarterly Report on Form 10–Q for the three and six months ended June 30, 2022.

108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements and disclosures included in our Annual Report on Form 10–K for the year ended December 31, 2022 and in our Quarterly Report on Form 10–Q for the three and nine months ended September 30, 2022.

The following tables present the revisions to the line items of our previously issued financial statements to reflect the correction of the errors:

Consolidated Statements of Income

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

As Reported Indirect Loan Dealer Reserve Adjustment As Revised

13 unchanged sentences

Consolidated Statements of Income

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

As Reported Indirect Loan Dealer Reserve Adjustment As Revised

10 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

As Reported Indirect Loan Dealer Reserve Adjustment Transfer of AFS Securities to HTM Securities As Revised

8 unchanged sentences

Transfer of available for sale securities to held to maturity securities — — 120,881 120,881

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

The following tables present loans by credit grades and origination year at December 31, 2022.

As Reported As Revised

Term Revolving Total Term Revolving

Term Revolving Total

Owner occupied real estate

Pass $ 490,056 $ 76,493 $ 566,549 $ 484,893 $ 76,493 $ 5,163 $ 566,549

Special Mention 9,413 83 9,496 9,413 83 — 9,496

Substandard 15,641 2,876 18,517 15,641 2,876 — 18,517

Total owner occupied real estate $ 515,110 $ 79,452 $ 594,562 $ 509,947 $ 79,452 $ 5,163 $ 594,562

Non–owner occupied real estate

Pass $ 955,956 $ 182,681 $ 1,138,637 $ 944,105 $ 182,681 $ 11,851 $ 1,138,637

Special Mention 42,419 — 42,419 42,419 — — 42,419

Substandard 6,021 — 6,021 6,021 — — 6,021

Total non–owner occupied real estate $ 1,004,396 $ 182,681 $ 1,187,077 $ 992,545 $ 182,681 $ 11,851 $ 1,187,077

Residential spec homes

Pass $ 6,404 $ 4,334 $ 10,738 $ 779 $ 4,333 $ 5,626 $ 10,738

Special Mention — — — — — — —

Substandard — 100 100 — 100 — 100

Total residential spec homes $ 6,404 $ 4,434 $ 10,838 $ 779 $ 4,433 $ 5,626 $ 10,838

Development & spec land

Pass $ 13,279 $ 13,008 $ 26,287 $ 13,257 $ 13,008 $ 22 $ 26,287

Special Mention 145 — 145 145 — — 145

Substandard 178 748 926 178 748 — 926

Total development & spec land $ 13,602 $ 13,756 $ 27,358 $ 13,580 $ 13,756 $ 22 $ 27,358

Commercial & industrial

Pass $ 574,972 $ 49,859 $ 624,831 $ 419,702 $ 49,276 $ 159,017 $ 627,995

Special Mention 4,636 — 4,636 3,427 — 1,208 4,635

Substandard 12,603 5,517 18,120 5,468 2,322 7,167 14,957

Total commercial & industrial $ 592,211 $ 55,376 $ 647,587 $ 428,597 $ 51,598 $ 167,392 $ 647,587

Total commercial $ 2,131,723 $ 335,699 $ 2,467,422 $ 1,945,448 $ 331,920 $ 190,054 $ 2,467,422

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

As Reported As Revised

Term Revolving Total Term Revolving

Term Revolving Total

Residential mortgage

Performing $ 603,636 $ 792 $ 604,428 $ 604,428 $ — $ — $ 604,428

Non–performing 8,123 — 8,123 8,123 — — 8,123

Total residential mortgage $ 611,759 $ 792 $ 612,551 $ 612,551 $ — $ — $ 612,551

Residential construction

Performing $ 187 $ 40,554 $ 40,741 $ — $ 40,741 $ — $ 40,741

Non–performing — — — — — — —

Total residential construction $ 187 $ 40,554 $ 40,741 $ — $ 40,741 $ — $ 40,741

Mortgage warehouse

Performing $ — $ 69,529 $ 69,529 $ — $ — $ 69,529 $ 69,529

Non–performing — — — — — — —

Total mortgage warehouse $ — $ 69,529 $ 69,529 $ — $ — $ 69,529 $ 69,529

Total real estate $ 611,946 $ 110,875 $ 722,821 $ 612,551 $ 40,741 $ 69,529 $ 722,821

Direct installment

Performing $ 56,441 $ 9 $ 56,450 $ 54,290 $ 9 $ 2,151 $ 56,450

Non–performing 164 — 164 164 — — 164

Total direct installment $ 56,605 $ 9 $ 56,614 $ 54,454 $ 9 $ 2,151 $ 56,614

Indirect installment

Performing $ 499,781 $ — $ 499,781 $ 499,781 $ — $ — $ 499,781

Non–performing 768 — 768 768 — — 768

Total indirect installment $ 500,549 $ — $ 500,549 $ 500,549 $ — $ — $ 500,549

Performing $ 400,048 $ 7,089 $ 407,137 $ 53,226 $ 7,089 $ 346,822 $ 407,137

Non–performing 1,512 1,943 3,455 1,512 1,943 — 3,455

Total home equity $ 401,560 $ 9,032 $ 410,592 $ 54,738 $ 9,032 $ 346,822 $ 410,592

Total consumer $ 958,714 $ 9,041 $ 967,755 $ 609,741 $ 9,041 $ 348,973 $ 967,755

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Adoption of New Accounting Standards

5 unchanged sentences

These amendments eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan.

The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty.

Additionally, these amendments require that an entity disclose current–period gross write–offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326–20.

4 unchanged sentences

The Company adopted this standard during the first quarter of 2023 and it did not have a material impact on the consolidated financial statements.

Accounting Guidance Issued But Not Yet Adopted

2020–04, Reference Rate Reform (Topic 848):

12 unchanged sentences

For current elections in effect regarding the assertion of the probability of forecasted transactions, the Company elects the expedient to assert the probability of the hedged interest payments and receipts regardless of any expected modification in terms related to reference rate reform.

The Company believes the adoption of this guidance on activities subsequent to December 31, 2020 through December 31, 2022 will not have a material impact on the consolidated financial statements.

With the issuance of ASU 2022–6, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 , the sunset date for the adoption of ASU 2020–04 was extended from December 31, 2022 to December 31, 2024.

The Company adopted the expedients included in this ASU in the third quarter of 2023 as it transferred its loans and other financial instruments to another reference rate.

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Accounting Guidance Issued But Not Yet Adopted

2023–02, Investments Equity Method and Joint Ventures (Topic 323):

12 unchanged sentences

The fair value of securities is as follows:

June 30, 2023

September 30, 2023

Available for sale

38 unchanged sentences

The fair value of the transferred AFS securities became the book value of the HTM securities at March 31, 2022.

The amortized cost and fair value of securities available for sale and held to maturity at June 30, 2023 and December 31, 2022, by contractual maturity, are shown below.

The amortized cost and fair value of securities available for sale and held to maturity at September 30, 2023 and December 31, 2022, by contractual maturity, are shown below.

Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

June 30, 2023

September 30, 2023

Available for sale

22 unchanged sentences

The following table shows the gross unrealized losses and the fair value of the Company’s investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

June 30, 2023

September 30, 2023

Less than 12 Months 12 Months or More Total

24 unchanged sentences

Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost.

As of June 30, 2023 and December 31, 2022, the Company had 2,655 and 2,828 securities, respectively, with market values below their cost basis.

The total fair value of these investments at June 30, 2023 and December 31, 2022 was $ 2.5 billion and $ 2.6 billion, which is approximately 97.8 % and 97.0 %, respectively, of the Company's available for sale and held to maturity securities portfolio.

As of September 30, 2023 and December 31, 2022, the Company had 2,651 and 2,828 securities, respectively, with market values below their cost basis.

The total fair value of these investments at September 30, 2023 and December 31, 2022 was $ 2.4 billion and $ 2.6 billion, which is approximately 99.6 % and 97.0 %, respectively, of the Company's available for sale and held to maturity securities portfolio.

These declines resulted primarily from fluctuations in market interest rates after purchase.

Management believes the declines in fair value for these securities are temporary.

No allowance for credit losses for available for sale debt securities or held to maturity securities was recorded at June 30, 2023 or December 31, 2022.

Accrued interest receivable on available for sale debt securities and held to maturity securities totaled $ 16.7 million at June 30, 2023 and $ 17.8 million at December 31, 2022 and is excluded from the estimate of credit losses.

No allowance for credit losses for available for sale debt securities or held to maturity securities was recorded at September 30, 2023 or December 31, 2022.

Accrued interest receivable on available for sale debt securities and held to maturity securities totaled $ 16.7 million at September 30, 2023 and $ 17.8 million at December 31, 2022 and is excluded from the estimate of credit losses.

government sponsored entities and agencies and mortgage–backed securities are either explicitly or implicitly guaranteed by the U.S.

9 unchanged sentences

Information regarding security proceeds, gross gains and gross losses are presented below.

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2023 2022 2023 2022

24 unchanged sentences

(Table Dollar Amounts in Thousands, Except Per Share Data)

The following table presents total loans outstanding by portfolio class, as of June 30, 2023 and December 31, 2022:

The following table presents total loans outstanding by portfolio class, as of September 30, 2023 and December 31, 2022:

September 30,

2023 December 31,

16 unchanged sentences

Net loans $ 4,309,303 $ 4,107,534

Total loans include net deferred loan costs of $ 23.2 million at June 30, 2023 and $ 22.7 million at December 31, 2022, respectively.

Total loans include net deferred loan costs of $ 23.1 million at September 30, 2023 and $ 22.7 million at December 31, 2022, respectively.

The risk characteristics of each loan portfolio segment are as follows:

43 unchanged sentences

Non–performing Loans

The following table presents non–accrual loans and loans past due over 90 days still on accrual by class of loans at June 30, 2023:

June 30, 2023

The following table presents non–accrual loans and loans past due over 90 days still on accrual by class of loans at September 30, 2023:

September 30, 2023

Non–accrual Loans Past

45 unchanged sentences

Total $ 17,630 $ 92 $ 1,548 $ 2,570 $ 21,840 $ 18,980

There was no interest income recognized on non–accrual loans during the six months ended June 30, 2023 and 2022, respectively, while the loans were in non–accrual status.

There was no interest income recognized on non–accrual loans during the nine months ended September 30, 2023 and 2022, respectively, while the loans were in non–accrual status.

HORIZON BANCORP, INC.

2 unchanged sentences

(Table Dollar Amounts in Thousands, Except Per Share Data)

The following table presents the payment status by class of loan, excluding non–accrual loans of $ 20.8 million at June 30, 2023:

June 30, 2023

The following table presents the payment status by class of loan, excluding non–accrual loans of $ 19.1 million at September 30, 2023:

September 30, 2023

Current 30–59 Days

48 unchanged sentences

The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty.

During the first six months of 2023, the Company did not modify any loans.

During the first nine months of 2023, the Company did not modify any loans.

Prior to the adoption of ASU 2022–02, loans modified as TDRs generally consisted of allowing borrowers to defer scheduled principal payments and make interest only payments for a specified period of time at the stated interest rate of the original loan agreement or lower payments due to a modification of the loans' contractual terms.

34 unchanged sentences

The table below presents the amortized cost basis and allowance for credit losses (“ACL”) allocated for collateral dependent loans in accordance with ASC 326, which are individually evaluated to determine expected credit losses.

June 30, 2023

September 30, 2023

Real Estate Accounts Receivable/Equipment Other Total ACL

1 unchanged sentence

Non–owner occupied real estate 3,828 — — 3,828 789

Residential spec homes 101 — — 101 47

Development & spec land 641 — — 641 —

116 unchanged sentences

(Table Dollar Amounts in Thousands, Except Per Share Data)

The following tables present loans by credit grades and origination year at June 30, 2023.

June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Total

The following tables present loans by credit grades and origination year at September 30, 2023.

September 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Term Loans Revolving Loans Total

Owner occupied real estate

37 unchanged sentences

(Table Dollar Amounts in Thousands, Except Per Share Data)

June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Total

September 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Term Loans Revolving Loans Total

Residential mortgage

13 unchanged sentences

Gross charge–offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ —

June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Total

September 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Term Loans Revolving Loans Total

Direct installment

17 unchanged sentences

The following tables present loans by credit grades and origination year at December 31, 2022.

December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Loans Total

December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Term Loans Revolving Loans Total

Owner occupied real estate

33 unchanged sentences

(Table Dollar Amounts in Thousands, Except Per Share Data)

December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Loans Total

December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Term Loans Revolving Loans Total

Residential mortgage

11 unchanged sentences

Total real estate $ 107,224 $ 157,880 $ 91,599 $ 34,391 $ 36,778 $ 184,679 $ 40,741 $ 69,529 $ 722,821

December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Loans Total

December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Term Loans Revolving Loans Total

Direct installment

15 unchanged sentences

Note 4 – Allowance for Credit and Loan Losses

The following tables represent, by loan portfolio segment, a summary of changes in the ACL on loans for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023

The following tables represent, by loan portfolio segment, a summary of changes in the ACL on loans for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended September 30, 2023

Commercial Real Estate Mortgage Warehouse Consumer Total

5 unchanged sentences

Balance, end of period $ 29,472 $ 2,794 $ 714 $ 16,719 $ 49,699

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Commercial Real Estate Mortgage Warehouse Consumer Total

5 unchanged sentences

Balance, end of period $ 33,806 $ 5,137 $ 1,024 $ 11,402 $ 51,369

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Commercial Real Estate Mortgage Warehouse Consumer Total

5 unchanged sentences

Balance, end of period $ 29,472 $ 2,794 $ 714 $ 16,719 $ 49,699

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Commercial Real Estate Mortgage Warehouse Consumer Total

27 unchanged sentences

Loans serviced for others are not included in the accompanying condensed consolidated balance sheets.

The unpaid principal balances of loans serviced for others totaled approximately $ 1.491 billion and $ 1.532 billion at June 30, 2023 and December 31, 2022.

The unpaid principal balances of loans serviced for others totaled approximately $ 1.486 billion and $ 1.532 billion at September 30, 2023 and December 31, 2022.

HORIZON BANCORP, INC.

4 unchanged sentences

For purposes of measuring impairment, risk characteristics including product type, investor type and interest rates were used to stratify the originated mortgage servicing rights.

Mortgage servicing rights are included in other assets on the balance sheets as of June 30, 2023 and December 31, 2022.

Three Months Ended Six Months Ended

June 30, June 30, June 30, June 30,

Mortgage servicing rights are included in other assets on the balance sheets as of September 30, 2023 and December 31, 2022.

Three Months Ended Nine Months Ended

September 30, September 30, September 30, September 30,

2023 2022 2023 2022

13 unchanged sentences

Note 6 – Goodwill

The carrying amount of goodwill was $ 155.2 million as of June 30, 2023 and December 31, 2022, respectively.

There were no changes in the carrying amount of goodwill for the three and six months ended June 30, 2023 and 2022.

The carrying amount of goodwill was $ 155.2 million as of September 30, 2023 and December 31, 2022, respectively.

There were no changes in the carrying amount of goodwill for the three and nine months ended September 30, 2023 and 2022.

Goodwill is assessed for impairment annually, or more frequently if events occur or circumstances change that indicate an impairment may exist.

2 unchanged sentences

Alternatively, a quantitative goodwill test can be performed without performing a qualitative assessment.

Goodwill was assessed for impairment using a qualitative analysis as of June 30, 2023 which resulted in no goodwill impairment charges for the six months ended June 30, 2023.

Goodwill was assessed for impairment using a quantitative analysis as of August 31, 2023 which resulted in no goodwill impairment charges for the nine months ended September 30, 2023.

Note 7 – Repurchase Agreements

2 unchanged sentences

The securities underlying the agreement remained under the Company’s control.

The following tables show repurchase agreements accounted for as secured borrowings and the related securities, at fair value, pledged for repurchase agreements:

HORIZON BANCORP, INC.

2 unchanged sentences

(Table Dollar Amounts in Thousands, Except Per Share Data)

June 30, 2023

The following tables show repurchase agreements accounted for as secured borrowings and the related securities, at fair value, pledged for repurchase agreements:

September 30, 2023

Remaining Contractual Maturity of the Agreements

Continuous Up to one

year One to three

years Three to five

years Five to ten

years Beyond ten

Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total

Repurchase Agreements and repurchase-to-maturity transactions

Repurchase Agreements $ 141,656 $ — $ — $ — $ — $ — $ 141,656

Securities pledged for Repurchase Agreements

Federal agency collateralized mortgage obligations $ 8,346 $ — $ — $ — $ 8,346

1 unchanged sentence

Private labeled mortgage–backed pools 8,757 — — — 8,757

Total $ 165,632 $ — $ — $ — $ — $ — $ 165,632

Total borrowings $ 142,494 $ — $ — $ — $ 142,494

December 31, 2022

Remaining Contractual Maturity of the Agreements

Continuous Up to one

year One to three

years Three to five

years Five to ten

years Beyond ten

Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total

Repurchase Agreements and repurchase-to-maturity transactions

Repurchase Agreements $ 137,871 $ — $ — $ — $ — $ — $ 137,871

Securities pledged for Repurchase Agreements

Federal agency collateralized mortgage obligations $ 12,632 $ — $ — $ — $ 12,632

1 unchanged sentence

Private labeled mortgage–backed pools 9,198 — — — 9,198

Total $ 160,517 $ — $ — $ — $ — $ — $ 160,517

Total borrowings $ 137,871 $ — $ — $ — $ 137,871

Securities sold under agreements to repurchase are secured by securities with a carrying amount of $ 154.8 million and $ 160.5 million at September 30, 2023 and December 31, 2022, respectively.

Note 8 – Subordinated Notes

32 unchanged sentences

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings.

At June 30, 2023, the Company’s fair value hedges were effective and are not expected to have a significant impact on the Company’s net income over the next 12 months.

At September 30, 2023, the Company’s fair value hedges were effective and are not expected to have a significant impact on the Company’s net income over the next 12 months.

The change in fair value of both the hedge instruments and the underlying loan agreements are recorded as gains or losses in non–interest income.

6 unchanged sentences

The Company enters into non–hedging derivatives in the form of mortgage loan forward sale commitments with investors and commitments to originate mortgage loans as part of its mortgage banking business.

At June 30, 2023, the Company’s fair value of these derivatives were recorded and over the next 12 months are not expected to have a significant impact on the Company’s net income.

At September 30, 2023, the Company’s fair value of these derivatives were recorded and over the next 12 months are not expected to have a significant impact on the Company’s net income.

The change in fair value of both the forward sale commitments and commitments to originate mortgage loans were recorded and the net gains or losses included in the Company’s gain on sale of loans.

1 unchanged sentence

Asset Derivatives Liability Derivatives

June 30, 2023 June 30, 2023

September 30, 2023 September 30, 2023

Value Notional

24 unchanged sentences

(Table Dollar Amounts in Thousands, Except Per Share Data)

The effect of the derivative instruments on the condensed consolidated statements of comprehensive income for the three and six–month periods ended June 30 is as follows:

The effect of the derivative instruments on the condensed consolidated statements of comprehensive income for the three and nine–month periods ended September 30 is as follows:

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Three Months Ended Nine Months Ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Derivatives in cash flow hedging relationship

Interest rate contracts $ — $ 1,542 $ ( 1,561 ) $ 4,535

The effect of the derivative designated as a hedging instrument on the condensed consolidated statements of income for the three and six–month periods ended June 30 is as follows:

The effect of the derivative designated as a hedging instrument on the condensed consolidated statements of income for the three and nine–month periods ended September 30 is as follows:

Location of gain

recognized on derivative Amount of Gain (Loss) Recognized on Derivative

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Three Months Ended Nine Months Ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Derivative designated as hedging instruments

1 unchanged sentence

Total $ — $ ( 95 ) $ 1,832 $ ( 710 )

The effect of derivatives not designated as hedging instruments on the condensed consolidated statements of income for the three and six–month periods ended June 30 is as follows:

The effect of derivatives not designated as hedging instruments on the condensed consolidated statements of income for the three and nine–month periods ended September 30 is as follows:

Location of gain (loss)

recognized on derivative Amount of Gain (Loss) Recognized on Derivative

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Three Months Ended Nine Months Ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Derivatives not designated as hedging instruments

17 unchanged sentences

Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated financial statements, as well as the general classification of such instruments pursuant to the valuation hierarchy.

There have been no significant changes in the valuation techniques during the period ended June 30, 2023.

There have been no significant changes in the valuation techniques during the period ended September 30, 2023.

For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

20 unchanged sentences

The following table presents the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated financial statements measured at fair value on a recurring basis and the level within the FASB ASC fair value hierarchy in which the fair value measurements fall at the following:

June 30, 2023

September 30, 2023

Fair Value Quoted Prices in Active Markets

38 unchanged sentences

(Level 2) Significant

June 30, 2023

September 30, 2023

Collateral dependent loans $ 6,616 $ — $ — $ 6,616

6 unchanged sentences

The following table presents qualitative information about unobservable inputs used in recurring and non–recurring Level 3 fair value measurements, other than goodwill.

June 30, 2023

September 30, 2023

Value Valuation

17 unchanged sentences

The estimated fair values of financial instruments, as shown below, are not intended to reflect the estimated liquidation or market value of Horizon taken as a whole.

The disclosed fair value estimates are limited to Horizon’s significant financial instruments at June 30, 2023 and December 31, 2022.

The disclosed fair value estimates are limited to Horizon’s significant financial instruments at September 30, 2023 and December 31, 2022.

These include financial instruments recognized as assets and liabilities on the condensed consolidated balance sheets as well as certain off–balance sheet financial instruments.

23 unchanged sentences

The following tables present estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall.

June 30, 2023

September 30, 2023

Amount Quoted Prices in Active Markets

38 unchanged sentences

Note 12 – Accumulated Other Comprehensive Income (Loss)

September 30,

2023 December 31,

15 unchanged sentences

In addition, to be categorized as well capitalized, the Company and Bank must maintain Total risk–based, Tier I risk–based, common equity Tier I risk–based and Tier I leverage ratios as set forth in the table below.

As of June 30, 2023 and December 31, 2022, the Company and Bank met all capital adequacy requirements to be considered well capitalized.

There have been no conditions or events since the end of the second quarter of 2023 that management believes have changed the Bank’s classification as well capitalized.

As of September 30, 2023 and December 31, 2022, the Company and Bank met all capital adequacy requirements to be considered well capitalized.

There have been no conditions or events since the end of the third quarter of 2023 that management believes have changed the Bank’s classification as well capitalized.

There is no threshold for well capitalized status for bank holding companies.

3 unchanged sentences

(Table Dollar Amounts in Thousands, Except Per Share Data)

Horizon and the Bank’s actual and required capital ratios as of June 30, 2023 and December 31, 2022 were as follows:

Horizon and the Bank’s actual and required capital ratios as of September 30, 2023 and December 31, 2022 were as follows:

Actual Required for Capital

7 unchanged sentences

Amount Ratio Amount Ratio Amount Ratio Amount Ratio

June 30, 2023

September 30, 2023

Total capital (to risk–weighted assets) (1)

34 unchanged sentences

The Securities Action asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 alleging, among other things, the Company made materially false and misleading statements and failed to disclose material adverse facts which allegedly resulted in harm to a putative class of purchasers of our securities from March 9, 2022 and March 10, 2023.

We are still evaluating the complaint, which is subject to amendment, but based on current knowledge we believe that the claims are without merit.

We believe the likelihood of loss is remote.

Accordingly, no accrual has been made.

As of (1) August 28, 2023, a lawsuit related to the Securities Action was filed by Sally Hundley, derivatively on behalf of the Company, against the Company, as nominal defendant, and 2 of the Company's officers and 10 of its directors and (2) August 31, 2023, a lawsuit also related to the Securities Action was filed by Aziz Chowdhury, derivatively on behalf of the Company, against the Company, as nominal defendant, and 2 of the Company's officers and 10 of its directors (the “Derivatives Actions”) in the U.S.

District Court for the Eastern District of New York.

The Derivative Actions allege, among other things, breach of the officers and directors' fiduciary duties.

The Derivative Actions have been consolidated and stayed pending resolution of any motion to dismiss in the Securities Action.

Based on our initial review of these actions, management believes that the Company has strong defenses to the claims and intends to vigorously defend against them.

As of September 30, 2023, no liabilities related to the above matters were recorded because we have concluded such liabilities are not probable and the amounts of such liabilities are not reasonably estimable.

In addition to the matters described above, from time to time, Horizon and its subsidiaries are involved in various legal proceedings incidental to the conduct of their business.

Management does not expect that the outcome of any such proceedings will have a material adverse effect on our consolidated financial position or results of operations.

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

For the Three and Six Months ended June 30, 2023 and 2022

For the Three and Nine Months ended September 30, 2023 and 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements