What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-12 compared with 2024-08-09 · 299 added, 241 removed, 1250 unchanged (30% of the section changed)

4 unchanged sentences

(Dollar Amounts in Thousands)

September 30,

2024 December 31,

31 unchanged sentences

Common stock, no par value, Authorized 99,000,000 shares

43,712,059 shares issued and outstanding at June 30, 2024 and 43,652,063 shares issued and outstanding at December 31, 2023

43,712,059 shares issued and outstanding at September 30, 2024 and 43,652,063 shares issued and outstanding at December 31, 2023

Additional paid-in capital 358,453 356,400

8 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,

2024 2023 2024 2023

19 unchanged sentences

Fiduciary activities 1,394 1,206 4,081 3,728

Gain (loss) on sale of investment securities — 20 — ( 480 )

(Loss) on sale of investment securities — — — ( 480 )

Gain on sale of mortgage loans 1,622 1,582 3,144 3,372

16 unchanged sentences

Income Before Income Taxes 18,105 17,489 49,283 57,795

Income tax expense 1,733 1,452 3,047 3,315

Income tax expense (benefit) ( 75 ) 1,284 2,972 4,599

Net Income $ 18,180 $ 16,205 $ 46,311 $ 53,196

4 unchanged sentences

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Dollar Amounts in Thousands)

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30, September 30

2024 2023 2024 2023

13 unchanged sentences

Other Comprehensive Income (Loss), Net of Tax 16,304 ( 25,515 ) 8,928 ( 17,236 )

Comprehensive Income $ 11,431 $ 12,876 $ 20,755 $ 45,270

Comprehensive Income (Loss) $ 34,484 $ ( 9,310 ) $ 55,239 $ 35,960

See notes to condensed consolidated financial statements

9 unchanged sentences

Income (Loss) Total

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

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, April 1, 2024 $ — $ — $ 356,599 $ 435,927 $ ( 71,276 ) $ 721,250

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

Balances, July 1, 2024 $ — $ — $ 357,673 $ 442,977 $ ( 73,985 ) $ 726,665

Net income — — — 18,180 — 18,180

4 unchanged sentences

— — — ( 7,107 ) — ( 7,107 )

Balances, June 30, 2024 $ — $ — $ 357,673 $ 442,977 $ ( 73,985 ) $ 726,665

Balances, September 30, 2024 $ — $ — $ 358,453 $ 454,050 $ ( 57,681 ) $ 754,822

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

11 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

Balances, January 1, 2024 $ — $ — $ 356,400 $ 429,021 $ ( 66,609 ) $ 718,812

5 unchanged sentences

— — — ( 21,282 ) — ( 21,282 )

Balances, June 30, 2024 $ — $ — $ 357,673 $ 442,977 $ ( 73,985 ) $ 726,665

Balances, September 30, 2024 $ — $ — $ 358,453 $ 454,050 $ ( 57,681 ) $ 754,822

See notes to condensed consolidated financial statements

3 unchanged sentences

(Dollar Amounts in Thousands)

Six Months Ended

Nine Months Ended

Operating Activities

5 unchanged sentences

Amortization of mortgage servicing rights 1,435 832

Premium amortization on securities, net 4,355 5,265

Net amortization of premiums and discounts 6,496 7,742

Loss on sale of investment securities — 480

Gain on sale of mortgage loans ( 3,144 ) ( 3,372 )

Proceeds from sales of loans 52,329 62,541

Proceeds from sales of loans held for sale 91,515 107,436

Loans originated for sale ( 89,978 ) ( 101,948 )

46 unchanged sentences

Revisions to Previously Issued Financial Statements

During the second quarter of 2024 management corrected a prior computation of the Company’s total capital (to risk-weighted assets), Tier 1 capital (to risk-weighted assets), and Tier 1 capital (to average assets) ratios for purposes of the Company’s consolidated financial statements for holding companies filed with the Federal Reserve (the “Regulatory Filings”), which involved an incorrect classification of the Company’s subordinated notes as Tier 1 capital.

In connection with the preparation of its financial statements for the second quarter of 2024, management corrected a prior computation of the Company’s total capital (to risk-weighted assets), Tier 1 capital (to risk-weighted assets), and Tier 1 capital (to average assets) ratios for purposes of the Company’s consolidated financial statements for holding companies filed with the Federal Reserve (the “Regulatory Filings”), which involved an incorrect classification of the Company’s subordinated notes as Tier 1 capital.

This incorrect classification affected the Company's regulatory capital disclosures in certain prior period filings with the SEC, as those disclosures were sourced from the Regulatory Filings.

2 unchanged sentences

The Company has amended its Regulatory Filings for the periods ended March 31, 2024 and December 31, 2023 to reclassify the subordinated notes balance from Tier 1 capital into Tier 2 capital.

The correction of the classification had no effect on the Company’s consolidated balance sheets, statements of income, stockholders’ equity, or the amounts or disclosure of the regulatory capital ratios of the Bank as included in its call reports.

The Company continues to exceed regulatory proxy ratios to be considered “well capitalized”, plus the capital conservation buffer, at June 30, 2024.

See "Note 13 - Regulatory Capital" below for further information.

The correction of the classification had no effect on the Company’s consolidated financial statements and related disclosures or the amounts or disclosure of the regulatory capital ratios of the Bank as included in its call reports.

The Company continues to exceed regulatory proxy ratios to be considered “well capitalized”, plus the capital conservation buffer, at September 30, 2024.

Nature of Business and Basis of Reporting

2 unchanged sentences

All inter–company balances and transactions have been eliminated.

The results of operations for the periods ended June 30, 2024 and June 30, 2023 are not necessarily indicative of the operating results for the full year of 2024 or 2023.

The results of operations for the periods ended September 30, 2024 and September 30, 2023 are not necessarily indicative of the operating results for the full year of 2024 or 2023.

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, 2024, Horizon had repurchased a total of 803,349 shares at an average price per share of $ 16.89 .

As of September 30, 2024, 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.

5 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

(dollars in thousands, except per share data) 2024 2023 2024 2023

11 unchanged sentences

Diluted earnings per share $ 0.41 $ 0.37 $ 1.05 $ 1.21

There were 167,943 and 257,773 shares for the three and six months ended June 30, 2024 which were not included in the computation of diluted earnings per share because they were non–dilutive.

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 87,012 and 87,012 shares for the three and nine months ended September 30, 2024 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.

HORIZON BANCORP, INC.

4 unchanged sentences

The fair value of securities is as follows:

June 30, 2024

September 30, 2024

Available for sale

5 unchanged sentences

Total available for sale investment securities $ 616,744 $ 14 $ ( 75,588 ) $ 541,170

June 30, 2024

Value Allowance for Credit Losses Net

Carrying Amount

September 30, 2024

Held to maturity

6 unchanged sentences

Total held to maturity investment securities $ 1,888,537 $ 1,713 $ ( 249,803 ) $ 1,640,447

Allowance for credit losses ( 158 )

Held to maturity securities, net of allowance for credit losses $ 1,888,379

December 31, 2023

11 unchanged sentences

December 31, 2023

Value Allowance for Credit Losses Net

Held to maturity

6 unchanged sentences

Total held to maturity investment securities $ 1,945,795 $ 1,185 $ ( 278,222 ) $ 1,668,758

The amortized cost and fair value of securities available for sale and held to maturity at June 30, 2024 and December 31, 2023, by contractual maturity, are shown below.

Allowance for credit losses ( 157 )

Held to maturity securities, net of allowance for credit losses $ 1,945,638

The amortized cost and fair value of securities available for sale and held to maturity at September 30, 2024 and December 31, 2023, 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, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Value Amortized

18 unchanged sentences

Total held to maturity investment securities $ 1,888,537 $ 1,640,447 $ 1,945,795 $ 1,668,758

As of June 30, 2024, investment securities with a carrying value of $ 144.4 million were pledged as collateral against $ 1.2 billion of Federal Home Loan Bank (FHLB) borrowings.

As of September 30, 2024, investment securities with a fair value of $ 415.2 million were pledged as collateral against outstanding FHLB borrowings.

HORIZON BANCORP, INC.

3 unchanged sentences

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

June 30, 2024

September 30, 2024

Less than 12 Months 12 Months or More Total

2 unchanged sentences

Value Unrealized

Investment Securities

Available for Sale Investment Securities

Treasury and federal agencies $ 447 $ ( 1 ) $ 62,798 $ ( 6,175 ) $ 63,245 $ ( 6,176 )

3 unchanged sentences

Corporate notes — — 36,052 ( 4,507 ) 36,052 ( 4,507 )

Total temporarily impaired securities $ 1,664 $ ( 291 ) $ 524,724 $ ( 96,085 ) $ 526,388 $ ( 96,376 )

Total available for sale investment securities $ 2,165 $ ( 238 ) $ 538,326 $ ( 75,350 ) $ 540,491 $ ( 75,588 )

December 31, 2023

3 unchanged sentences

Value Unrealized

Investment Securities

Available for Sale Investment Securities

Treasury and federal agencies $ — $ — $ 64,377 $ ( 8,561 ) $ 64,377 $ ( 8,561 )

3 unchanged sentences

Corporate notes — — 36,359 ( 5,805 ) 36,359 ( 5,805 )

Total temporarily impaired securities $ 2,387 $ ( 236 ) $ 543,248 $ ( 87,583 ) $ 545,635 $ ( 87,819 )

Total available for sale investment securities $ 2,387 $ ( 236 ) $ 543,248 $ ( 87,583 ) $ 545,635 $ ( 87,819 )

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

As of June 30, 2024 and December 31, 2023, the Company had 2,314 and 2,290 securities, respectively, with market values below their cost basis.

The total fair value of these investments at June 30, 2024 and December 31, 2023 was $ 2.1 billion and $ 2.1 billion, which is approximately 86.5 % and 85.1 %, respectively, of the Company's available for sale and held to maturity securities portfolio.

As of September 30, 2024 and December 31, 2023, the Company had 2,338 and 2,290 securities, respectively, with market values below their cost basis.

The total fair value of these investments at September 30, 2024 and December 31, 2023 was $ 2.2 billion and $ 2.1 billion, which is approximately 89.7 % and 85.1 %, 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 was recorded at June 30, 2024 or December 31, 2023.

No allowance for credit losses for available for sale debt securities was recorded at September 30, 2024 or December 31, 2023.

The allowance for credit losses for held to maturity securities is a contra asset valuation account that is deducted from the carrying amount of held to maturity securities to present the net amount expected to be collected.

1 unchanged sentence

Adjustments to the allowance for credit loss are reported in our Condensed Consolidated Statements of Income in credit loss expense.

We measure expected credit losses on held to maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and consider historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

With regard to U.S.

Government-sponsored treasuries, agency and mortgage-backed securities, all these securities are issued by a U.S.

government-sponsored entity and have an implicit or explicit government guarantee;

therefore, no allowance for credit losses has been recorded for these securities.

With regard to obligations of states and

HORIZON BANCORP, INC.

2 unchanged sentences

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

municipal, private label mortgage-backed and corporate note held to maturity securities, we consider (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities.

supportable forecasts.

With regard to U.S.

Government-sponsored treasuries, agency and mortgage-backed securities, all these securities are issued by a U.S.

government-sponsored entity and have an implicit or explicit government guarantee;

therefore, no allowance for credit losses has been recorded for these securities.

With regard to obligations of states and municipal, private label mortgage-backed and corporate note held to maturity securities, we consider (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities.

Historical loss rates associated with securities having similar grades as those in our portfolio have been insignificant.

As of June 30, 2024 and December 31, 2023, there were no past due principal and interest payments associated with these securities.

An allowance for credit loss of $ 158,000 and $ 157,000 was recorded on these securities based on applying the long-term historical rating agency credit loss rate for similarly rated securities at June 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024 and December 31, 2023, there were no past due principal and interest payments associated with these securities.

On a quarterly basis, the Company refreshes the credit quality indicator of each held-to-maturity security.

1 unchanged sentence

For state and municipal securities where no rating is available from the NRSROs, a consistent internally-assigned rating methodology is applied.

The amortized cost of these securities in the following tables subject to this methodology totaled $ 131.9 million as of June 30, 2024, and $ 143.7 million as of December 31, 2023.

The amortized cost of these securities in the following tables subject to this methodology totaled $ 132.5 million as of September 30, 2024, and $ 143.7 million as of December 31, 2023.

The following table summarizes credit ratings of our held-to-maturity securities at amortized cost for the periods indicated:

June 30, 2024 AAA AA A BBB BB Not Rated Total

September 30, 2024 AAA AA A BBB BB Not Rated Total

Treasury and federal agencies $ — $ 283,851 $ — $ — $ — $ — $ 283,851

17 unchanged sentences

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

The following table details activity in the allowance for credit losses on held-to-maturity securities during the three and six months ended June 30, 2024 and 2023.

Three Months Ended Six Months Ended

June 30 June 30

2024 2023 2024 2023

The following table details activity in the allowance for credit losses on held-to-maturity securities during the three and nine months ended September 30, 2024 and 2023.

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Beginning balance $ 158 $ 164 $ 157 $ 257

1 unchanged sentence

Ending balance $ 158 $ 159 $ 158 $ 159

Accrued interest receivable on available for sale debt securities and held to maturity securities totaled $ 14.4 million at June 30, 2024 and $ 14.7 million at December 31, 2023 and is excluded from the estimate of credit losses.

Accrued interest receivable on available for sale debt securities and held to maturity secur ities totaled $ 13.8 million at September 30, 2024 and $ 14.7 million at December 31, 2023 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.

1 unchanged sentence

Therefore, for those securities, we do not record expected credit losses.

Based on an evaluation of available evidence, management believes the unrealized losses on state and municipal securities, private labeled mortgage–backed pools and corporate notes were due to changes in interest rates.

Based on an evaluation of available evidence, management believes the unrealized losses on available for sale state and municipal securities, private labeled mortgage–backed pools and corporate notes were due to changes in interest rates.

Due to the contractual terms, the issuers of state and municipal securities are not allowed to settle for less than the amortized cost of the security.

In addition, the Company does not intend to sell these securities prior to the recovery of the amortized cost, which may not occur until maturity.

No allowance for credit losses was recognized for available for sale debt securities at September 30, 2024 and December 31, 2023.

Information regarding security proceeds, gross gains and gross losses, based on specific identification method, are presented below.

Three Months Ended Six Months Ended

June 30 June 30

2024 2023 2024 2023

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Sales of securities available for sale

23 unchanged sentences

Construction loans are reviewed and rewritten prior to being originated as a term loan.

The following table presents total loans outstanding by portfolio class, as of June 30, 2024 and December 31, 2023:

The following table presents total loans outstanding by portfolio class, as of September 30, 2024 and December 31, 2023:

September 30,

2024 December 31,

16 unchanged sentences

Net loans $ 4,751,115 $ 4,367,601

Total loans include net deferred loan costs of $ 21.2 million at June 30, 2024 and $ 21.9 million at December 31, 2023, respectively.

Total loans include net deferred loan costs of $ 19.1 million at September 30, 2024 and $ 21.9 million at December 31, 2023, respectively.

HORIZON BANCORP, INC.

3 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, 2024:

June 30, 2024

The following table presents non–accrual loans and loans past due over 90 days still on accrual by class of loans at September 30, 2024:

September 30, 2024

Non–accrual Loans Past

38 unchanged sentences

Total $ 19,710 $ 559 $ 3,668

There was no interest income recognized on non-accrual loans during the three and six months ended June 30, 2024 and 2023, respectively, while the loans were in non-accrual status.

The amount of accrued interest receivable written off by the Company by reversing interest income was not material for the three and six months ended June 30, 2024 and June 30, 2023, respectively.

There was no interest income recognized on non-accrual loans during the three and nine months ended September 30, 2024 and 2023, respectively, while the loans were in non-accrual status.

The amount of accrued interest receivable written off by the Company by reversing interest income was not material for the three and nine months ended September 30, 2024 and September 30, 2023, respectively.

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 at June 30, 2024:

June 30, 2024

The following table presents the payment status by class of loan at September 30, 2024:

September 30, 2024

Current 30–59 Days

44 unchanged sentences

Modified Loans

The Company adopted ASU 2022–02, Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures, during the first quarter of 2023.

These amendments eliminated the troubled debt restructured (“TDR”) recognition 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 difficulty.

For the three and six months ended June 30, 2024, the Company did not have material modifications of loans with borrowers experiencing financial difficulty.

Similarly, the Company did not modify any loans with borrowers experiencing financial difficulty for the three and six months ended June 30, 2023.

The following tables detail the amortized cost at September 30, 2024 of loans that were modified to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024 and the amortized cost at September 30, 2023, of loans that were modified to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023:

Three Months Ended September 30, 2024

Principal Forgiveness Term Extension Interest Rate Reduction Other-Than-Insignificant Payment Delay Term Extension and Interest Rate Reduction Multiple 1

Total % of Loans Held for Investment

Owner occupied real estate — $ 2,038 $ — $ — $ — $ — $ 2,038 0.3 %

Commercial and industrial — 1,111 — — — — 1,111 0.1 %

Total $ — $ 3,149 $ — $ — $ — $ — $ 3,149 0.1 %

1 Multiple modifications represents modifications to borrowers in the form of term extensions and other-than-insignificant payment deferrals.

HORIZON BANCORP, INC.

2 unchanged sentences

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

Nine Months Ended September 30, 2024

Principal Forgiveness Term Extension Interest Rate Reduction Other-Than-Insignificant Payment Delay Term Extension and Interest Rate Reduction Multiple 1

Total % of Loans Held for Investment

Owner occupied real estate $ — $ 3,986 $ — $ — $ — $ — $ 3,986 0.6 %

Non–owner occupied real estate — 1,720 — 651 — — 2,371 0.2 %

Commercial and industrial — 2,205 — — 437 — 2,642 0.3 %

Total $ — $ 7,911 $ — $ 651 $ 437 $ — $ 8,999 0.3 %

1 Multiple modifications represents modifications to borrowers in the form of term extensions and other-than-insignificant payment deferrals.

Three Months Ended September 30, 2023

Principal Forgiveness Term Extension Interest Rate Reduction Other-Than-Insignificant Payment Delay Term Extension and Interest Rate Reduction Multiple 1

Total % of Loans Held for Investment

Owner occupied real estate $ — $ 2,082 $ — $ — $ — $ — $ 2,082 0.3 %

Commercial and industrial — 1,278 — — 171 69 1,518 0.2 %

Total $ — $ 3,360 $ — $ — $ 171 $ 69 $ 3,600 0.1 %

1 Multiple modifications represents modifications to borrowers in the form of term extensions and other-than-insignificant payment deferrals.

Nine Months Ended September 30, 2023

Principal Forgiveness Term Extension Interest Rate Reduction Other-Than-Insignificant Payment Delay Term Extension and Interest Rate Reduction Multiple 1

Total % of Loans Held for Investment

Owner occupied real estate $ — $ 2,762 $ — $ — $ — $ — $ 2,762 0.4 %

Commercial and industrial — 1,347 — — 1,243 165 2,755 0.3 %

Total $ — $ 4,109 $ — $ — $ 1,243 $ 165 $ 5,517 0.2 %

1 Multiple modifications represents modifications to borrowers in the form of term extensions and other-than-insignificant payment deferrals.

The following tables summarize the financial impacts of loan modifications and payment deferrals, as applicable, during the three and nine months ended September 30, 2024 and September 30, 2023:

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Three Months Ended September 30, 2024

Weighted Average Term Extension (In Months) Weighted Average Payment Delay (In Months) Term Extension (In Months) & Rate Reduction (In Percentage Terms)

Owner occupied real estate 6 — —

Commercial and industrial 21 — —

Nine Months Ended September 30, 2024

Weighted Average Term Extension (In Months) Weighted Average Payment Delay (In Months) Term Extension (In Months) & Rate Reduction (In Percentage Terms)

Owner occupied real estate 7 — —

Non–owner occupied real estate 15 5 —

Commercial and industrial 15 — Weighted average term extension of 14 months & Weighted-average interest rate reduction of 2.03 %

Three Months Ended September 30, 2023

Weighted Average Term Extension (In Months) Term Extension (In Months) & Rate Reduction (In Percentage Terms) Multiple 1

Owner occupied real estate 6 — —

Commercial and industrial 4 Weighted average term extension of 96 months and weighted average rate reduction of 1.95 %

Weighted Average term extension of 36 months and weighted average payment delay of 4 months

1 Multiple modifications represents modifications to borrowers in the form of term extensions and other-than-insignificant payment deferrals.

Nine Months Ended September 30, 2023

Weighted Average Term Extension (In Months) Term Extension (In Months) & Rate Reduction (In Percentage Terms) Multiple 1

Owner occupied real estate 15 — —

Commercial and industrial 6 Weighted average term extension of 75 months and weighted average rate reduction of 1.04 %

Weighted Average term extension of 40 months and weighted average payment delay of 7 months

1 Multiple modifications represents modifications to borrowers in the form of term extensions and other-than-insignificant payment deferrals.

The financial impacts of the modifications did not significantly impact our determination of the allowance for credit losses during the periods presented above.

The Company had commitments to commercial and industrial borrowers of $ 0.3 million and $ 0.1 million at September 30, 2024 and December 31, 2023, respectively, to lend additional funds to borrowers experiencing financial difficulty and for whom the Company has modified the terms of loans in the form of an interest rate reduction;

an other-than-insignificant payment delay;

forgiveness of principal, or a term extension during the current reporting period.

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

The following table presents the amortized cost basis at September 30, 2024 of loans to borrowers experiencing financial difficulty that had been modified within the previous 12 months:

September 30, 2024

Current 30-89 Days Past Due 90 Days Past Due Total

Owner occupied real estate $ 3,986 $ — $ — $ 3,986

Non–owner occupied real estate 2,371 — — 2,371

Commercial and industrial 2,641 — — 2,641

Total commercial 8,998 — — 8,998

Total $ 8,998 $ — $ — $ 8,998

The following table presents the amortized cost basis at September 30, 2023 of loans to borrowers experiencing financial difficulty that had been modified on or after January 1, 2023 (the date we adopted ASU 2022-02) through September 30, 2023:

September 30, 2023

Current 30-89 Days Past Due 90 Days Past Due Total

Owner occupied real estate $ 2,762 $ — $ — $ 2,762

Commercial and industrial 2,755 — — 2,755

Total $ 5,517 $ — $ — $ 5,517

The Company did not have any loans to borrowers experiencing financial difficulty that had a payment default during the three and nine months ended September 30, 2024 and were modified within the twelve months prior to the payment default.

For purposes of this disclosure, the Company considers “default” to mean 30 days or more past due of contractual interest or principal.

The Company did not have any loans to borrowers experiencing financial difficulty that had a payment default during the three and nine month ended September 30, 2023 and had been modified on or after January 1, 2023 (date the Company adopted ASU 2022-02).

Collateral Dependent Financial Assets

4 unchanged sentences

However, as other sources of repayment become inadequate over time, the significance of the collateral's value increases and the loan may become collateral dependent.

The tables below present 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, at June 30, 2024 and December 31, 2023.

June 30, 2024

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

September 30, 2024

Real Estate Accounts Receivable/Equipment Other Total (1)

6 unchanged sentences

Total collateral dependent loans $ 6,321 $ 509 $ — $ 6,830 $ 1,033

(1) Collateral dependent loans had a collateral fair value of $ 5.1 million at June 30, 2024

(1) Collateral dependent loans had a collateral fair value of $ 3.0 million at September 30, 2024

December 31, 2023

8 unchanged sentences

(1) Collateral dependent loans had a collateral fair value of $ 6.3 million at December 31, 2023

As of June 30, 2024, the Company had a carrying value of $ 1.2 million of repossessed assets.

As of June 30, 2024, the Company had a recorded net investment of $ 0.4 million of consumer mortgage loans in which foreclosure proceedings have commenced.

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

As of September 30, 2024, the Company had a carrying value of $ 1.2 million of repossessed assets.

As of September 30, 2024, the Company had a recorded net investment of $ 0.6 million o f consumer mortgage loans in which foreclosure proceedings have commenced.

Credit Quality Indicators

7 unchanged sentences

Downgrades to impaired status require the concurrence of the CCBO and the Senior Workout Loan Manager.

• The CCBO, or a designee, meets periodically with loan officers to discuss the status of past due loans and classified loans.

• The CCBO, or a designee, meets periodically with loan officers to discuss the status of past due loans and

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

classified loans.

These meetings are also designed to give the loan officers an opportunity to identify an existing loan that should be downgraded to a classified grade.

22 unchanged sentences

Loans supported by financial statements (audited or unaudited) that indicate average or slightly below average risk and having some deficiency or vulnerability to changing economic conditions;

loans with some weakness but

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

offsetting features of other support are readily available;

loans with some weakness but offsetting features of other support are readily available;

loans that are meeting the terms of repayment, but which may be susceptible to deterioration if adverse factors are encountered and meeting defined key financial metric ranges.

8 unchanged sentences

Satisfactory/Monitored (Pass)

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Loans in this category are considered to be of acceptable credit quality, but contain greater credit risk than Satisfactory rated loans and meet defined key financial metric ranges.

24 unchanged sentences

• The primary source of repayment is gone, and the Bank is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees.

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

• Loans have a distinct possibility that the Bank will sustain some loss if deficiencies are not corrected.

11 unchanged sentences

However, based on existing conditions, these weaknesses make full collection of principal highly improbable.

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

• The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment.

8 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, 2024.

June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Term Loans Revolving Loans Total

The following tables present loans by credit grades and origination year at September 30, 2024.

September 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Term Loans Revolving Loans Total

Owner occupied real estate

4 unchanged sentences

Total owner occupied real estate $ 46,612 $ 80,445 $ 94,882 $ 78,552 $ 38,512 $ 204,335 $ 79,812 $ 11,320 $ 634,470

Gross charge–offs for the six months ended June 30, 2024 $ — $ — $ — $ — $ — $ 1 $ — $ — $ 1

Gross charge–offs for the nine months ended September 30, 2024 $ — $ — $ — $ — $ — $ 1 $ — $ — $ 1

Non–owner occupied real estate

4 unchanged sentences

Total non–owner occupied real estate $ 138,393 $ 119,685 $ 242,245 $ 137,959 $ 102,266 $ 396,536 $ 274,678 $ 12,486 $ 1,424,248

Gross charge–offs for the six months ended June 30, 2024 $ — $ — $ — $ — $ — $ — $ — $ — $ —

Gross charge–offs for the nine months ended September 30, 2024 $ — $ — $ — $ — $ — $ 1 $ — $ — $ 1

Residential spec homes

4 unchanged sentences

Total residential spec homes $ 364 $ 500 $ — $ 420 $ — $ — $ 6,932 $ 8,231 $ 16,447

Gross charge–offs for the six months ended June 30, 2024 $ — $ — $ — $ — $ — $ — $ — $ — $ —

Gross charge–offs for the nine months ended September 30, 2024 $ — $ — $ — $ — $ — $ — $ — $ — $ —

Development & spec land

4 unchanged sentences

Total development & spec land $ 721 $ 4,152 $ 796 $ 119 $ 343 $ 2,403 $ 21,468 $ 292 $ 30,294

Gross charge–offs for the six months ended June 30, 2024 $ — $ — $ — $ — $ — $ — $ — $ — $ —

Gross charge–offs for the nine months ended September 30, 2024 $ — $ — $ — $ — $ — $ — $ — $ — $ —

Commercial & industrial

4 unchanged sentences

Total commercial & industrial $ 149,479 $ 111,358 $ 135,781 $ 77,395 $ 9,321 $ 71,695 $ 66,562 $ 187,009 $ 808,600

Gross charge–offs for the six months ended June 30, 2024 $ — $ — $ — $ — $ — $ — $ 108 $ — $ 108

Gross charge–offs for the nine months ended September 30, 2024 $ — $ — $ — $ — $ — $ 40 $ 108 $ — $ 148

HORIZON BANCORP, INC.

2 unchanged sentences

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

June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Term Loans Revolving Loans Total

September 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Term Loans Revolving Loans Total

Residential mortgage

2 unchanged sentences

Total residential mortgage $ 52,449 $ 150,392 $ 165,790 $ 144,023 $ 80,428 $ 190,875 $ — $ — $ 783,957

Gross charge–offs for the six months ended June 30, 2024 $ — $ — $ — $ — $ — $ 2 $ — $ — $ 2

Gross charge–offs for the nine months ended September 30, 2024 $ — $ — $ — $ — $ — $ 5 $ — $ — $ 5

Residential construction

2 unchanged sentences

Total residential construction $ — $ — $ — $ — $ — $ — $ 17,359 $ 40 $ 17,399

Gross charge–offs for the six months ended June 30, 2024 $ — $ — $ — $ — $ — $ — $ — $ — $ —

Gross charge–offs for the nine months ended September 30, 2024 $ — $ — $ — $ — $ — $ — $ — $ — $ —

Mortgage warehouse

2 unchanged sentences

Total mortgage warehouse $ — $ — $ — $ — $ — $ — $ — $ 80,437 $ 80,437

Gross charge–offs for the six months ended June 30, 2024 $ — $ — $ — $ — $ — $ — $ — $ — $ —

June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Term Loans Revolving Loans Total

Gross charge–offs for the nine months ended September 30, 2024 $ — $ — $ — $ — $ — $ — $ — $ — $ —

September 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Term Loans Revolving Loans Total

Performing $ 9,771 $ 63,461 $ 10,359 $ 5,899 $ 3,010 $ 6,719 $ 5 $ 1,932 $ 101,156

1 unchanged sentence

Total installment $ 9,771 $ 63,763 $ 10,382 $ 5,951 $ 3,010 $ 6,740 $ 5 $ 1,932 $ 101,554

Gross charge–offs for the six months ended June 30, 2024 $ 61 $ 32 $ 124 $ 1 $ 17 $ 21 $ — $ — $ 256

Gross charge–offs for the nine months ended September 30, 2024 $ 66 $ 59 $ 166 $ 1 $ 35 $ 22 $ 8 $ — $ 357

Indirect auto

2 unchanged sentences

Total indirect auto $ 29,297 $ 76,789 $ 146,161 $ 57,530 $ 21,800 $ 10,402 $ — $ — $ 341,979

Gross charge–offs for the six months ended June 30, 2024 $ — $ 145 $ 606 $ 224 $ 77 $ 67 $ — $ — $ 1,119

Gross charge–offs for the nine months ended September 30, 2024 $ — $ 227 $ 852 $ 330 $ 125 $ 80 $ — $ — $ 1,614

Performing $ 10,936 $ 23,248 $ 17,222 $ 5,498 $ 1,992 $ 10,142 $ 18,999 $ 470,548 $ 558,585

1 unchanged sentence

Total home equity $ 10,936 $ 23,438 $ 17,540 $ 5,498 $ 2,023 $ 10,466 $ 24,162 $ 470,548 $ 564,611

Gross charge–offs for the six months ended June 30, 2024 $ — $ — $ 52 $ 88 $ — $ 38 $ — $ 11 $ 189

Gross charge–offs for the nine months ended September 30, 2024 $ — $ 25 $ 52 $ 88 $ — $ 39 $ 109 $ 11 $ 324

HORIZON BANCORP, INC.

78 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, 2024 and 2023:

Three Months Ended June 30, 2024

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, 2024 and 2023:

Three Months Ended September 30, 2024

Commercial Real Estate Mortgage Warehouse Consumer Total

1 unchanged sentence

Credit loss expense (reversal) 861 78 126 ( 21 ) 1,044

PCD loan charge–offs ( 3 ) — — — ( 3 )

Charge–offs ( 38 ) ( 2 ) — ( 731 ) ( 771 )

1 unchanged sentence

Balance, end of period $ 32,854 $ 2,675 $ 862 $ 16,490 $ 52,881

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Commercial Real Estate Mortgage Warehouse Consumer Total

1 unchanged sentence

Credit loss expense (reversal) ( 665 ) ( 893 ) ( 179 ) 2,257 520

PCD loan charge–offs ( 17 ) — — — ( 17 )

Charge–offs ( 263 ) ( 15 ) — ( 927 ) ( 1,205 )

1 unchanged sentence

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Commercial Real Estate Mortgage Warehouse Consumer Total

1 unchanged sentence

Credit loss expense (reversal) 2,951 154 381 642 4,128

PCD loan charge–offs 112 — — — 112

Charge–offs ( 149 ) ( 5 ) — ( 2,295 ) ( 2,449 )

1 unchanged sentence

Balance, end of period $ 32,854 $ 2,675 $ 862 $ 16,490 $ 52,881

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Commercial Real Estate Mortgage Warehouse Consumer Total

1 unchanged sentence

Credit loss expense (reversal) ( 2,380 ) ( 2,838 ) ( 306 ) 6,380 856

PCD loan charge–offs ( 171 ) — — — ( 171 )

Charge–offs ( 767 ) ( 19 ) — ( 1,941 ) ( 2,727 )

2 unchanged sentences

The accrued interest receivable on our loan receivables is excluded from the allowance for credit loss estimate and is included in interest receivable on our consolidated balance sheets.

As of June 30, 2024 and December 31, 2023, the accrued interest on our loan portfolio was $ 28.1 million and $ 23.7 million, respectively.

As of September 30, 2024 and December 31, 2023, the accrued interest on our loan portfolio was $ 18.2 million and $ 23.7 million, respectively.

The Company utilized the Cumulative Loss Rate method in determining expected future credit losses.

The loss rate method measures the amount of loan charge–offs, net of recoveries, (“loan losses”) recognized over the life of a closed pool and compares those loan losses to the outstanding loan balance of that pool as of a specific point in time (“pool date”).

HORIZON BANCORP, INC.

2 unchanged sentences

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

The Company utilized the Cumulative Loss Rate method in determining expected future credit losses.

To estimate a CECL loss rate for the pool, management first identifies the loan losses recognized between the pool date and the reporting date for the pool and determines which loan losses were related to loans outstanding at the pool date.

12 unchanged sentences

financial asset type, loan purpose, collateral type, loan characteristics, credit characteristics, outstanding loan balances, contractual terms and prepayment assumptions, industry of the borrower and concentrations, and historical or expected credit loss patterns.

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Liability for Commitments to Extend Credit and Standby Letters of Credit

1 unchanged sentence

Three Months Ended

June 30, 2024 June 30, 2023

September 30, 2024 September 30, 2023

Balance, beginning of period Credit loss expense (reversal) Ending balance Balance, beginning of period Credit loss expense (reversal) Ending balance

4 unchanged sentences

Total $ 705 $ — $ 705 $ 989 $ ( 257 ) $ 732

Six Months Ended

June 30, 2024 June 30, 2023

Nine Months Ended

September 30, 2024 September 30, 2023

Balance, beginning of period Credit loss expense (reversal) Ending balance Balance, beginning of period Credit loss expense (reversal) Ending balance

5 unchanged sentences

Note 5 – Loan Servicing

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 $ 1.451 billion and $ 1.479 billion at June 30, 2024 and December 31, 2023.

Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value.

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, 2024 and December 31, 2023.

HORIZON BANCORP, INC.

2 unchanged sentences

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

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Three Months Ended Six Months Ended

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

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 $ 1.44 billion and $ 1.479 billion at September 30, 2024 and December 31, 2023.

Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value.

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 September 30, 2024 and December 31, 2023.

Three Months Ended Nine Months Ended

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

2024 2023 2024 2023

13 unchanged sentences

Note 6 – Goodwill

The carrying amount of goodwill was $ 155.2 million as of June 30, 2024 and December 31, 2023, respectively.

There were no changes in the carrying amount of goodwill for the three and six months ended June 30, 2024 and 2023.

The carrying amount of goodwill was $ 155.2 million as of September 30, 2024 and December 31, 2023, respectively.

There were no changes in the carrying amount of goodwill for the three and nine months ended September 30, 2024 and 2023.

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.

No goodwill impairment charges were recorded for the three and six months ended June 30, 2024 and 2023.

During the first quarters of 2024 and 2023, Horizon considered the amount by which fair value exceeded book value by performing a quantitative analysis.

No goodwill impairment charges were recorded for the three and nine months ended September 30, 2024 and 2023.

During the third quarter of 2024, Horizon considered the amount by which fair value exceeded book value by performing a qualitative analysis.

The Company engaged a third-party valuation specialist in performing its quantitative impairment analysis during the third quarter of 2023, which included a combination of valuation approaches to determine the fair value of the Bank reporting unit.

These valuation approaches required certain assumptions such as the discount rate, economic conditions impacting interest and growth rates, the control premium, and a relative weighting given to the fair value derived by each of the valuation approaches used.

At the conclusion of the assessment, the Company determined that as of June 30, 2024, it was more likely than not that the fair value of goodwill exceeded its carrying value.

At the conclusion of the quantitative analysis for the third quarter of 2023, the Company determined that as of September 30, 2023, it was more likely than not that the fair value of goodwill exceeded its carrying value.

Note 7 – Repurchase Agreements

The Company transfers various securities to customers in exchange for cash at the end of each business day and agrees to acquire the securities at the end of the next business day for the cash exchanged plus interest.

The process is repeated at the end of each business day until the agreement is terminated.

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

The Company transfers various securities to customers in exchange for cash at the end of each business day and agrees to

HORIZON BANCORP, INC.

2 unchanged sentences

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

acquire the securities at the end of the next business day for the cash exchanged plus interest.

The process is repeated at the end of each business day until the agreement is terminated.

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:

June 30, 2024

September 30, 2024

Remaining Contractual Maturity of the Agreements

5 unchanged sentences

Total borrowings $ 122,399 $ — $ — $ — $ 122,399

Repurchase Agreements subject to offsetting arrangements —

December 31, 2023

6 unchanged sentences

Total borrowings $ 136,030 $ — $ — $ — $ 136,030

Securities sold under agreements to repurchase are secured by securities with a carrying amount of $ 144.0 million and $ 145.2 million at June 30, 2024 and December 31, 2023, respectively.

Repurchase Agreements subject to offsetting arrangements —

Securities sold under agreements to repurchase are secured by securities with a carrying amount of $ 146.9 million and $ 145.2 million at September 30, 2024 and December 31, 2023, respectively.

Note 8 – Subordinated Notes

6 unchanged sentences

Notwithstanding the foregoing, in the event that the Benchmark Rate is less than zero, the Benchmark Rate shall be deemed to be zero.

Horizon may, at its option, beginning with the interest payment date of July 1, 2025 and on any interest payment date thereafter, redeem the Notes, in whole or in part.

The Notes will not otherwise be redeemable by Horizon prior to maturity, unless certain events occur.

The redemption price for any redemption is 100 % of the principal amount of the Notes, plus accrued and unpaid interest thereon to, but excluding, the date of redemption.

Any early redemption of the Notes will be subject to the receipt of the approval of the Board of Governors of the Federal Reserve System to the extent then required under applicable laws or regulations, including capital regulations.

The Notes are unsecured subordinated obligations, and rank pari passu, or equally, with all of Horizon's future unsecured

HORIZON BANCORP, INC.

2 unchanged sentences

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

subordinated debt and are junior to all existing and future senior debt.

Horizon may, at its option, beginning with the interest payment date of July 1, 2025 and on any interest payment date thereafter, redeem the Notes, in whole or in part.

The Notes will not otherwise be redeemable by Horizon prior to maturity, unless certain events occur.

The redemption price for any redemption is 100 % of the principal amount of the Notes, plus accrued and unpaid interest thereon to, but excluding, the date of redemption.

The Notes are unsecured subordinated obligations, and rank pari passu, or equally, with all of Horizon's future unsecured subordinated debt and are junior to all existing and future senior debt.

The Notes are structurally subordinated to all existing and future liabilities of Horizon's subsidiaries, including the deposit liabilities and claims of other creditors of Horizon Bank, and are effectively subordinated to Horizon’s existing and future secured indebtedness.

2 unchanged sentences

On December 8, 2023, Horizon cancelled $ 3.5 million of the $ 60.0 million in Notes at a price of 89.5 recording a gain of $ 368,000 .

The balance net of unamortized issuance costs of the Notes was $ 55.7 million and $ 55.5 million at June 30, 2024 and December 31, 2023, respectively.

The balance net of unamortized issuance costs of the Notes was $ 55.7 million and $ 55.5 million at September 30, 2024 and December 31, 2023, respectively.

Note 9 – Derivative Financial Instruments

16 unchanged sentences

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

At June 30, 2024, 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.

Other Derivative Instruments

From time to time, we may enter into certain interest rate swaps that are not designated as hedging instruments.

These interest rate derivative contracts relate to transactions in which we enter into an interest rate swap with a customer while concurrently entering into an offsetting interest rate swap with a third-party financial institution.

We agree to pay interest to the customer on a notional amount at a variable rate and receive interest from the customer on a similar notional amount at a fixed interest rate.

At the same time, we agree to pay a third-party financial institution the same fixed interest rate on the

At September 30, 2024, 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.

HORIZON BANCORP, INC.

2 unchanged sentences

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

same notional amount and receive the same variable interest rate on the same notional amount.

Other Derivative Instruments

From time to time, we may enter into certain interest rate swaps that are not designated as hedging instruments.

We agree to pay interest to the customer on a notional amount at a variable rate and receive interest from the customer on a similar notional amount at a fixed interest rate.

At the same time, we agree to pay a third-party financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount.

These interest rate derivative contracts allow our customers to effectively convert a variable rate loan to a fixed rate loan.

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, 2024, 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, 2024, 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, 2024 June 30, 2024

September 30, 2024 September 30, 2024

Value Notional

32 unchanged sentences

Collateral exchanged between the Company and dealer bank counterparties is generally subject to thresholds and transfer minimums, and usually consists of marketable securities.

At June 30, 2024, the Company pledged marketable securities as collateral with a carrying value of $ 19.0 million.

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

At September 30, 2024, the Company pledged marketable securities as collateral with a carrying value of $ 19.0 million.

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

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

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Derivatives in cash flow hedging relationship

Interest rate contracts $ — $ — $ — $ ( 1,561 )

The effect of the derivatives in cash flow hedging relationships on the condensed consolidated statements of income for three and six month periods ended June 30 is as follows:

The effect of the derivatives in cash flow hedging relationships on the condensed consolidated statements of income for three and nine month periods ended September 30 is as follows:

Location of gain

recognized Amount of Gain (Loss) Recognized

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Derivatives in cash flow hedging relationship

4 unchanged sentences

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

The effect of the derivative and the hedged item in fair value hedging relationships on the condensed consolidated statements of income for three and six month periods ended June 30 is as follows:

The effect of the derivative and the hedged item in fair value hedging relationships on the condensed consolidated statements of income for three and nine month periods ended September 30 is as follows:

Location of gain (loss)

recognized on derivative and hedged item Amount of Gain (Loss) Recognized on Derivative and Hedged Item

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Derivatives designated as hedging instruments

4 unchanged sentences

Total $ — $ — $ — $ —

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

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

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Derivatives not designated as hedging instruments

1 unchanged sentence

Commitments to originate mortgage loans Non-interest income - Gain on sale of loans 378 182 181 118

Totals $ ( 34 ) $ ( 207 ) $ ( 115 ) $ ( 185 )

Total $ 354 $ 176 $ 215 $ 144

The following tables summarize the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships.

Amortized Cost of Hedged Items Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Items

September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023

Loans $ 38,787 $ 40,788 $ ( 1,793 ) $ ( 2,532 )

HORIZON BANCORP, INC.

11 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, 2024.

There have been no significant changes in the valuation techniques during the period ended September 30, 2024.

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

17 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, 2024

September 30, 2024

Fair Value Quoted Prices in Active Markets

9 unchanged sentences

Total available for sale securities 541,170 — 541,170 —

Equity securities 573 573 — —

Interest rate swap agreements asset 17,224 — 17,224 —

14 unchanged sentences

Total available for sale securities 547,251 — 547,251 —

Equity securities (1)

Interest rate swap agreements asset 26,556 — 26,556 —

2 unchanged sentences

Interest rate swap agreements liability 24,024 — 24,024 —

(1) Prior period securities were included in available-for-sale.

Updated to align with comparable period.

HORIZON BANCORP, INC.

7 unchanged sentences

(Level 2) Significant

June 30, 2024

September 30, 2024

Collateral dependent loans $ 3,455 $ — $ — $ 3,455

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, 2024

September 30, 2024

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, 2024 and December 31, 2023.

The disclosed fair value estimates are limited to Horizon’s significant financial instruments at September 30, 2024 and December 31, 2023.

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

25 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, 2024

September 30, 2024

Amount Quoted Prices in Active Markets

42 unchanged sentences

Note 12 – Stockholders' Equity

On June 18, 2024, the Company declared a quarterly dividend to common shareholders of $ 0.16 per share, which was paid on July 19, 2024 to shareholders of record on July 5, 2024.

Dividends declared were $ 0.16 and $ 0.32 per share during the three and six months ended June 30, 2024 and $ 0.16 and $ 0.32 per share during the three and six months ended June 30, 2023.

On September 17, 2024, the Company declared a quarterly dividend to common shareholders of $ 0.16 per share, which was paid on October 18, 2024 to shareholders of record on October 04, 2024.

Dividends declared were $ 0.16 and $ 0.48 per share during the three and nine months ended September 30, 2024, and $ 0.16 and $ 0.48 per share during the three and nine months ended September 30, 2023.

Accumulated Other Comprehensive Income (Loss)

September 30,

2024 December 31,

2 unchanged sentences

Total accumulated other comprehensive income (loss) $ ( 57,681 ) $ ( 66,609 )

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Note 13 – Regulatory Capital

3 unchanged sentences

Failure to meet the minimum regulatory capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators, which if undertaken, could have a direct material effect on the Company’s financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective actions, the Company and Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off–balance–sheet items as calculated under regulatory accounting practices.

Under capital

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

adequacy guidelines and the regulatory framework for prompt corrective actions, the Company and Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off–balance–sheet items as calculated under regulatory accounting practices.

The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

3 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, 2024, March 31, 2024 and December 31, 2023, 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 2024 that management believes have changed the Bank’s classification as well capitalized.

As of September 30, 2024 and December 31, 2023, 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 2024 that management believes have changed the Bank’s classification as well capitalized.

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

This incorrect classification affected the Company's regulatory capital disclosures in certain prior period filings with the SEC, as those disclosures were sourced from the Regulatory Filings.

The Company evaluated the effects of the incorrect classification to its previously filed Regulatory Filings and previously issued financial statements in accordance with SEC Staff Accounting Bulletins No.

108 and, based upon qualitative and quantitative factors, determined the errors were not material to the previously filed Regulatory Filings or the previously issued financial statements and disclosures included in our Annual Reports on Form 10-K for the years ended December 31, 2020, 2021, 2022 and 2023, or for any of the quarterly reports included therein or through our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.

The Company has amended its Regulatory Filings for the periods ended March 31, 2024 and December 31, 2023 to reclassify the subordinated notes balance from Tier 1 capital into Tier 2 capital.

The Company continues to exceed regulatory proxy ratios to be considered “well capitalized”, plus the capital conservation buffer, at June 30, 2024.

The following table presents Horizon and the Bank’s actual and required capital ratios as of June 30, 2024, March 31, 2024 and December 31, 2023, as well as the revisions to Horizon's regulatory capital ratios to reflect the correction of the capital computations for the foregoing periods:

HORIZON BANCORP, INC.

2 unchanged sentences

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

The following table presents Horizon and the Bank’s actual and required capital ratios as of September 30, 2024 and December 31, 2023, as well as the revisions to Horizon's regulatory capital ratios to reflect the correction of the capital computations for the foregoing periods:

Actual Required for Capital

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Amount Ratio Amount Ratio Amount Ratio Amount Ratio

June 30, 2024

September 30, 2024

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

10 unchanged sentences

Bank 685,477 8.84 310,096 4.00 310,096 4.00 387,621 5.00

March 31, 2024

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

Consolidated (As Revised)* $ 789,786 13.75 % $ 459,485 8.00 % $ 603,074 10.50 % N/A N/A

Consolidated (As Reported) 793,567 13.82 459,485 8.00 603,074 10.50 N/A N/A

Bank 721,018 12.59 458,163 8.00 601,338 10.50 $ 572,703 10.00 %

Tier 1 capital (to risk-weighted assets) (1)

Consolidated (As Revised)* 683,015 11.89 344,614 6.00 488,203 8.50 N/A N/A

Consolidated (As Reported) 742,430 12.93 344,614 6.00 488,203 8.50 N/A N/A

Bank 669,881 11.70 343,622 6.00 486,798 8.50 458,163 8.00

Common equity tier 1 capital (to risk-weighted assets) (1)

Consolidated 625,700 10.89 258,460 4.50 402,049 7.00 N/A N/A

Bank 669,881 11.70 257,716 4.50 400,892 7.00 372,257 6.50

Tier 1 capital (to total assets) (1)

Consolidated (As Revised)* 683,015 8.91 306,716 4.00 306,716 4.00 N/A N/A

Consolidated (As Reported) 742,430 9.68 306,716 4.00 306,716 4.00 N/A N/A

Bank 669,881 8.63 310,592 4.00 310,592 4.00 388,240 5.00

(1) As defined by regulatory agencies

*Prior periods have been revised (see disclosures above)

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Actual Required for Capital

19 unchanged sentences

Bank 663,758 11.96 249,833 4.50 388,629 7.00 360,870 6.50

Tier 1 capital (to average assets) (1)

Tier 1 capital (to total assets) (1)

Consolidated (As Revised)* 676,411 8.61 314,306 4.00 314,306 4.00 N/A N/A

3 unchanged sentences

*Prior periods have been revised (see disclosures above)

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Note 14 – Off-Balance Sheet Arrangements, Commitments, and Contingencies

10 unchanged sentences

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 June 30, 2024, 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.

As of September 30, 2024, 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.

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2024 and 2023

Financial Instruments with Off-Balance Sheet Risk

8 unchanged sentences

The methodology for estimating the liability for unfunded loan commitments is consistent with the allowance for credit losses on loans.

The following table represents the commitments to extend credit and standby letters of credit as of June 30, 2024 and December 31, 2023, respectively:

June 30, 2024 December 31, 2023

The following table represents the commitments to extend credit and standby letters of credit as of September 30, 2024 and December 31, 2023, respectively:

September 30, 2024 December 31, 2023

Commitments to extend credit 1,025,186 1,118,417

1 unchanged sentence

Total $ 1,049,564 1,134,910

Note 15 - Subsequent Events

In October, the Company sold certain available-for-sale securities with a total fair market value of $ 293.1 million, and an amortiz ed cost of $ 332.2 million .

As a result, the Company incurred a net realized loss on sale of securitie s of $ 39.1 million .

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Additionally, in October, the Company has signed a letter of intent to sell its mortgage warehouse business, which is expected to generate a gain-on-sale.

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2024 and 2023

For the Three and Nine Months ended September 30, 2024 and 2023

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