What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-10 · 106 added, 207 removed, 316 unchanged (50% of the section changed)

25 unchanged sentences

• estimates of fair value of certain of Horizon’s assets and liabilities;

• volatility and disruption in financial markets;

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

• volatility and disruption in financial markets;

For the Three months ended March 31, 2026 and 2025

• changes in prepayment speeds, loan originations, credit losses and market values, collateral securing loans and other assets;

23 unchanged sentences

The Company considers these policies to be its critical accounting estimates.

Management has identified as critical accounting policies the allowance for credit losses, goodwill and intangible assets, mortgage servicing rights, hedge accounting and valuation measurements.

For additional information regarding critical accounting estimates, see Note 1 – Nature of Operations and Summary of Significant Accounting Policies included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended

Management has identified as critical accounting estimates as the allowance for credit losses, income taxes, and valuation measurements.

There have been no material changes in the Company’s application of critical accounting estimates since December 31, 2025.

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

December 31, 2024.

There have been no material changes in the Company’s application of critical accounting estimates since December 31, 2024.

For the Three months ended March 31, 2026 and 2025

Results of Operations

Net Income decreased $240.2 million, to a net loss of $222.0 million, or $(4.69) per diluted share, during the three months ended September 30, 2025 when compared to net income of $18.2 million, or $0.41 per diluted share, for the s ame period in 2024.

The decrease in net income when compared with the prior year period reflects a decrease in non-interest income of $306.8 million, of which $299.1 million related to a loss on sale of investment securities, and an increase in non-interest expense of $13.7 million, primarily owed to prepayment penalties on the redemption of borrowings.

The decrease was partially offset by an increase in interest income of $1.9 million, a decrease of in interest expense of $9.5 million and an decrease in tax expense of $64.3 million.

Net Income decreased $223.7 million, to a net loss of $177.4 million, or $(3.94) per diluted share, during the nine months ended September 30, 2025, compared to net income of $46.3 million, or $1.05 per share, for the same period in 2024 .

The decrease from the year ago period was primarily a result of a decrease in non-interest income of $299.8 million, of which $299.5 million related to a loss on sale of investment securities, and an increase in non-interest expense of $17.8 million primarily related to the prepayment penalties, partially offset by a decrease in interest expense of $20.2 million, an increase in interest income of $10.4 million and a decrease in tax expense of $59.4 million, to a net credit of $56.4 million.

Net Income increased $2.2 million, to $26.2 million, or $0.51 per diluted share, during the three months ended March 31, 2026 when compared to net income of $23.9 million, or $0.54 per diluted share, for the s ame period in 2025.

The increase in net income when compared with the prior year period reflects an increase in net interest income of $10.0 million and a decrease in provision expense of $1.0 million.

The increase was partially offset by a decrease of non-interest income of $5.3 million, an increase in tax expense of $2.0 million and an increase in non-interest expense of $1.4 million.

Net Interest Income

Net interest income increased $11.5 million, or 24.5% during the three months ended September 30, 2025 , to $58.4 million, when compared to the same period in 2024.

While average earning assets decreased, the reported net FTE interest margin 1 increased by 86 basis points, to 3.52% for the three months ended September 30, 2025 compared to the prior year period, attributable to the favorable mix shift in both average interest earning assets toward higher-yielding loans, and the funding mix toward lower cost deposit liabilities.

Additionally, loan and securities yields have expanded while deposit costs have declined when compared with the comparable year ago period.

Interest accretion from the fair value of acquired loans did not contribute significantly to net interest income, or net FTE interest margin 1 , in either comparable period.

Net interest income increased $30.5 million during the nine months ended September 30, 2025 , to $166.0 million when compared to the same period in 2024.

While average earning asset balances declined, the reported net FTE interest margin 1 increased by 66 basis points, to 3.26% for the nine months ended September 30, 2025 when compared to the prior year period.

The primary driver of the increase in net interest income compared with the prior year period is attributable to the favorable mix shift in both average interest earning assets toward higher-yielding loans, and the funding mix toward lower cost deposit liabilities.

Net interest income increased $10.0 million, or 19.1% during the three months ended March 31, 2026 , to $62.2 million, when compared to the same period in 2025.

While average earning assets decreased, owed to the balance sheet repositioning and deleveraging efforts in the third quarter of 2025, the reported net FTE interest margin 1 increased by 125 basis points, to 4.29% for the three months ended March 31, 2026 compared to the prior year period, driven by the favorable mix shift in both average interest earning assets toward higher-yielding loans, and the funding mix toward lower cost deposit liabilities.

Additionally, loan and securities yields have expanded while deposit costs have declined when compared with the comparable year ago period.

5 unchanged sentences

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

For the Three months ended March 31, 2026 and 2025

Following are the average balance sheets for the three months ended (dollars in thousands):

2 unchanged sentences

Three Months Ended

September 30, 2025 September 30, 2024

Interest earning assets

Interest earning deposits (incl.

Fed Funds Sold) $ 185,665 $ 2,062 4.41 % $ 73,524 $ 957 5.18 %

Federal Home Loan Bank stock (1)

45,549 862 7.51 % 53,826 1,607 11.88 %

Investment securities - taxable (2)

792,829 5,769 2.89 % 1,301,830 6,526 1.99 %

Investment securities - non-taxable (2)

763,488 5,799 3.01 % 1,125,295 7,987 2.82 %

Total investment securities 1,556,317 11,568 2.95 % 2,427,125 14,513 2.38 %

Loans receivable (3) (4)

4,979,211 79,941 6.37 % 4,775,788 75,828 6.32 %

Total interest earning assets $ 6,766,742 94,433 5.54 % $ 7,330,263 92,905 5.04 %

Non-interest earning assets

Cash and due from banks 83,616 108,609

Allowance for credit losses (54,072) (52,111)

Other assets 501,590 471,259

Total average assets $ 7,297,876 $ 7,858,020

Liabilities and Stockholders' Equity

Interest bearing liabilities

Interest bearing demand deposits $ 1,708,446 $ 6,687 1.55 % $ 1,656,576 $ 7,370 1.77 %

Saving and money market deposits 1,636,428 8,204 1.99 % 1,729,601 10,986 2.53 %

Time deposits 1,198,279 10,835 3.59 % 1,189,148 12,431 4.16 %

Total Deposits 4,543,153 25,726 2.25 % 4,575,325 30,787 2.68 %

Borrowings 601,889 5,535 3.65 % 1,149,952 10,221 3.54 %

Repurchase agreements 88,721 389 1.74 % 123,524 910 2.93 %

Subordinated notes 91,032 1,731 7.54 % 55,681 830 5.93 %

Junior subordinated debentures issued to capital trusts 57,602 1,069 7.36 % 57,389 1,230 8.53 %

Total interest bearing liabilities 5,382,397 34,450 2.54 % 5,961,871 43,978 2.93 %

Non-interest bearing liabilities

Demand deposits 1,120,719 1,083,214

Accrued interest payable and other liabilities 63,103 74,563

Stockholders' equity 731,657 738,372

Total average liabilities and stockholders' equity $ 7,297,876 $ 7,858,020

Net FTE interest income (Non-GAAP) (5)

$ 59,983 $ 48,927

Less FTE adjustments (5)

Net Interest Income $ 58,386 $ 46,910

Net FTE interest margin (Non-GAAP) (5)

3.52 % 2.66 %

(1) Includes dividend income on FHLB stock.

(2) Securities balances represent daily average balances for the fair value of securities.

The average rate is calculated based on the daily average balance for the amortized cost of securities.

(3) Includes fees on loans held for sale and held for investment.

The inclusion of loan fees does not have a material effect on the average interest rate.

(4) Non-accruing loans for the purpose of the computation above are included in the daily average loan amounts outstanding.

Loan totals are shown net of unearned income and deferred loan fees.

(5) Management believes fully taxable equivalent, or FTE, interest income is useful to investors in evaluating the Company's performance as a comparison of the returns between a tax-free investment and a taxable alternative.

The Company adjusts interest income and average rates for tax-exempt loans and securities to an FTE basis utilizing a 21% tax rate

(5) Non-GAAP financial metric.

See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.

(6) Average balances are calculated on a daily average basis

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

Following are the average balance sheets for the six months ended (dollars in thousands):

Average Balance Sheet

(Dollars in Thousands, Unaudited)

Nine Months Ended

September 30, 2025 September 30, 2024

March 31, 2026 March 31, 2025

Interest earning assets

54 unchanged sentences

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

For the Three months ended March 31, 2026 and 2025

The following table illustrates the impact of changes in the volume of interest earning assets and interest bearing liabilities and interest rates on net interest income for the periods indicated.

Three Months Ended September 30, 2025 vs.

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2025 vs.

Nine Months Ended September 30, 2024

Change Change

Volume Change

Three Months Ended March 31, 2026 vs.

Three Months Ended March 31, 2025

Change Change

20 unchanged sentences

Non-Interest Income

Three Months Ended Nine Months Ended

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

(Dollars in Thousands) 2025 2024 $ Change % Change 2025 2024 $ Change % Change

Non-interest (Loss) Income

Three Months Ended

March 31, March 31,

(Dollars in Thousands) 2026 2025 $ Change % Change

Non-interest Income

Service charges on deposit accounts $ 3,524 $ 3,208 $ 316 10 %

6 unchanged sentences

Increase in cash value of bank owned life insurance 333 335 (2) (1) %

Other income (loss) (6,558) 780 (7,338) (941) % 1,756 1,987 (231) (12) %

Total non-interest (loss) income $ (295,334) $ 11,511 $ (306,845) (2666) % $ (267,913) $ 31,925 $ (299,838) (939) %

Total non-interest income decreased $306.8 million, to a net loss of $295.3 million for the three months ended September 30, 2025 compared to the same period in 2024 and decreased $299.8 million, to a net loss of $267.9 million for the nine

Other income 967 7,264 (6,297) (87) %

Total non-interest income $ 11,243 $ 16,499 $ (5,256) (32) %

Total non-interest income decreased $5.3 million, to net income of $11.2 million for the three months ended March 31, 2026 compared to the same period in 2025.

The primary components of the change were as follows:

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

months ended September 30, 2025 compared to the same period in 2024.

The primary components of the change were as follows:

Loss on sale of investment securities increased by $299.1 million for the three months ended September 30, 2025 compared to zero in the comparable period in 2024, and a increased by $299.5 million for the nine months ended September 30, 2025 compared to zero in the comparable period in 2024.

The increase was primarily due to the sale of investment securities during the third quarter of 2025 related to the Company's balance sheet repositioning efforts.

Other income, which includes various miscellaneous income items as well as fair market value adjustments to certain other assets, decreased by $7.3 million, to a loss of $6.6 million for the three months ended September 30, 2025, compared to the same period in 2024.

The decrease was primarily related to the pre-tax loss of $7.7 million on the sale of the Company's Indirect Auto portfolio related to the balance sheet repositioning efforts.

Other income for the nine months ended September 30, 2025 included the pre-tax gain of $7.0 million on the sale of the Company's mortgage warehouse business in the first quarter of 2025.

Gain on sale of mortgage loans decreased by $0.4 million for the three months ended September 30, 2025 compared to the same period in 2024, driven lower realized gain-on-sale margins, and increased by $0.4 million for the nine months ended September 30, 2025, as compared to the same periods in 2024, driven by the increased volume of sold loans.

For the Three months ended March 31, 2026 and 2025

Service charges on deposit accounts increased by $0.3 million for the three months ended March 31, 2026, compared to the same period in 2025.

The increase is primarily related to higher transaction-based fee activity in the current period.

Fiduciary activities increased $0.2 million for the three months ended March 31, 2026, compared to the same period in 2025.

The increase is primarily related to an increase in trust fees in the current period related to increased volume in estate planning and annuity sales.

Other income, which includes various miscellaneous income items as well as fair market value adjustments to certain other assets, decreased by $6.3 million, to $1.0 million for the three months ended March 31, 2026, compared to the same period in 2025.

The decrease was primarily related to the pre-tax gain of $7.0 million on the sale of the Company's mortgage warehouse business in the first quarter of 2025, which did not recur.

The remaining changes were nominal amongst the remaining individual non-interest income accounts.

Non-Interest Expense

Three Months Ended Nine Months Ended

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

(Dollars in Thousands) 2025 2024 $ Change % Change 2025 2024 $ Change % Change

Three Months Ended

March 31, March 31,

(Dollars in Thousands) 2026 2025 $ Change % Change

Non-interest Expense

8 unchanged sentences

Merger related expense — 305 (305) (100) %

Prepayment penalties 12,680 — 12,680 100 % 12,680 — 12,680 100 %

Other losses 192 228 (36) (16) %

1 unchanged sentence

Total non-interest expense $ 40,747 $ 39,306 $ 1,441 4 %

Non-interest expense increased $13.7 million for the three months ended September 30, 2025 compared to the same period in 2024.

Non-interest expense increased $17.8 million for the nine months ended September 30, 2025 compared to the same period in 2024, the primary components of the change were as follows:

Prepayment penalties increased $12.7 million for the three and nine months ended September 30, 2025 when compared to the same period in 2024.

The increase was driven by a $12.7 million prepayment penalty related to the payoff of $700 million in FHLB advances during the quarter as part of the Company's balance sheet repositioning.

Salaries and employee benefits expense increased by $0.9 million for the three months ended September 30, 2025 when compared to the same period a year ago.

Salaries and employee benefits expense increased by $5.2 million for the nine

Non-interest expense increased $1.4 million for the three months ended March 31, 2026 compared to the same period in 2025.

The primary components of the change were as follows:

Salaries and employee benefits expense increased by $0.8 million for the three months ended March 31, 2026 compared to the same period in 2025.

T he increase is partially attributable to increased salary expense related to strategic hiring and annual merit increases, partially offset by a lower level of benefit expense compared with the year ago period.

Loan expense increased by $0.5 million for the three months ended March 31, 2026 compared to the same period in 2025.

The increase is primarily related to a higher amount of production related expense in the current period and a higher amount of reimbursements in the year ago period.

Net occupancy expenses increased by $0.5 million for the three months ended March 31, 2026 compared to the same period in 2025.

The increase is primarily driven by increases in building maintenance expenses in the current period.

Data processing expense increased by $0.5 million for the three months ended March 31, 2026 compared to the same period in 2025.

The increase is primarily driven by increases in debit card processing activity and software maintenance.

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

months ended September 30, 2025 compared to the same period in 2024.

T he increase is partially attributable to growth in salary expense related to ongoing hiring efforts in revenue generating roles in commercial lending, equipment finance and treasury management, and higher incentive compensation accruals.

Additionally, the prior comparable period benefited from a favorable expense adjustment on a legacy compensation program that was terminated in the fourth quarter of 2024.

Other expenses, which includes corporate and other service expenses, decreased by $0.3 million for the three months ended September 30, 2025 when compared to the same period a year ago and $1.9 million for the nine months ended September 30, 2025 compared to the same period in 2024.

This decrease was partially due to decreases in marketing and advertising expenses.

For the Three months ended March 31, 2026 and 2025

Outside services and consultants expense decreased by $0.5 million for the three months ended March 31, 2026 compared to the same period in 2025.

The decrease reflects management's ongoing efforts to reduce the reliance on third party services.

The remaining changes were nominal amongst the remaining individual non-interest expense accounts.

Provision and Allowance for Credit Losses

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

March 31, 2026 March 31, 2025

Allowance for Credit Losses on Loans

4 unchanged sentences

Residential Real estate (1) 47

Mortgage warehouse — — — —

Consumer (286) (963)

3 unchanged sentences

Balance at beginning of period $ 1,840 $ 2,149

Provision (reversal) for credit losses on unfunded lending commitments (41) — 705 90

Provision (benefit) for credit losses on unfunded lending commitments (233) (149)

Balance at end of period $ 1,607 $ 2,000

1 unchanged sentence

Horizon assesses the adequacy of its Allowance for Credit Losses (“ACL”) by regularly reviewing the performance of its loan portfolio against various economic backdrops, which periodically change.

During the three months ended September 30, 2025, the Company recorded a benefit for credit losses on loans of $3.4 million.

During the three months ended March 31, 2026, the Company recorded a provision for credit losses on loans of $0.6 million.

This compares to a provision for credit losses on loans of $1.5 million compared to the same period in 2025.

The decrease in the provision for credit losses on loans when compared to the year ago period was primarily attributable to the release of approximately $3.1 million in total Allowance against the sold portion of the indirect auto portfolio, and well as the continued improvement in the Company's historical loss metrics.

The benefit for credit losses in total was $3.6 million for three months ended September 30, 2025 compared to a provision for credit losses of $1.0 million for the same period in 2024.

The total provision, other than loans, benefitted from the release of the $0.2 million reserve against the previous Held-To-Maturity investment portfolio for three months ended September 30, 2025.

For the three months ended September 30, 2025, net loan charge-offs increased by $0.5 million to $0.8 million, compared to $0.4 million during the same period in 2024.

The increase in charge-offs was primarily due to increases in charge-offs in the commercial portfolio.

The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.04% at September 30, 2025, compared to 1.10% at September 30, 2024.

As of September 30, 2025, the liability for unfunded lending commitments was $2.3 million compared to $0.7 million as of September 30, 2024.

The decrease in the provision for credit losses on loans when compared to the year ago period was primarily attributable to modest net loan growth and slight changes in the baseline economic outlook.

The total provision for credit losses, including the benefit for credit losses on unfunded lending commitments of $0.2 million, was $0.4 million for three months ended March 31, 2026 compared to a provision for credit losses of $1.4 million for the same period in 2025.

For the three months ended March 31, 2026, net loan charge-offs decreased by $0.2 million to $0.6 million, compared to $0.9 million during the same period in 2025.

The decrease in charge-offs is due to decreases in charge-offs in the consumer portfolio, as a result of the sale of the indirect auto portfolio, which occurred in 2025.

The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.05% at March 31, 2026, compared to 1.07% at March 31, 2025.

As of March 31, 2026, the liability for unfunded lending commitments was $1.6 million compared to $2.0 million as of March 31, 2025.

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

The Company’s income tax benefit for the three months ended September 30, 2025 was $64.3 million compared to $0.1 million for the same period in 2024.

The Company’s income tax benefit for the nine months ended September 30, 2025 was $56.4 million compared to a tax expense of $3.0 million for the same period in 2024.

The net credit position for the three and nine months ended September 30, 2025 is attributable to the pre-tax loss generated from the Company's balance sheet repositioning efforts in the third quarter of 2025.

For the Three months ended March 31, 2026 and 2025

The Company’s income tax expense for the three months ended March 31, 2026 was $6.2 million compared to $4.1 million for the same period in 2025, resulting in effective tax rates of 19.1% and 14.7% for those periods, respectively.

The increase in the effective tax rate for three months ended March 31, 2026 was primarily due to expectations of higher pre-tax income in the first quarter of 2026 as compared to 2025, and less exposure to tax preferential assets in the investment portfolio.

The effective income tax rates differed from the U.S.

1 unchanged sentence

Financial Condition

Total assets decreased by $1.1 billion, or 14.0%, as of September 30, 2025, from $7.8 billion as of December 31, 2024.

The decrease in total assets is primarily due to the Company's balance sheet repositioning efforts, which resulted in a decrease in total investment securities of $1.2 billion and a decrease in loans held for investment of $21.6 million.

Additionally, the decrease is related to a decrease in loans held for sale of $65.7 million, to $1.9 million as a result of the Company's sale of its mortgage warehouse business in the first quarter of 2025.

The decrease was partially offset by an increase in cash and cash equivalents of $164.8 million, or 56.2%, to $458.3 million as of September 30, 2025.

Total investment securities decreased $1.2 billion, or 58.0%, to $0.9 billion as of September 30, 2025 when compared to balances as of December 31, 2024.

During the quarter, the Company moved its entire held to maturity securities portfolio to available for sale, sold approximately $1.7 billion in book value and reinvested approximately $580 million of the proceeds in the available for sale portfolio, resulting in a net increase in available for sale securities of $649.6 million as of September 30, 2025.

Total loans HFI decreased $23.4 million to $4.8 billion as of September 30, 2025 compared to balances as of December 31, 2024, due to the continued run-off of consumer balances and the sale of approximately $176 million of the Company's indirect auto portfolio during the third quarter of 2025.

The decrease was partially offset by organic commercial loan growth of $278.4 million.

Total assets increased by $127.6 million, or 2.0%, as of March 31, 2026, from $6.4 billion as of December 31, 2025.

The increase in total assets is primarily due to an increase in total cash and cash equivalents of $119.6 million, or 85.8%, and an increase in investment securities available-for-sale of $6.8 million, or 0.8%, and an increase in other assets of $2.2 million, or 1.0%.

The increase was partially offset by a decrease in premises and equipment of $2.0 million, or 2.2%.

Total loans HFI, net of ACL, increased $2.0 million, to $4.8 billion, as of March 31, 2026 compared to balances as of December 31, 2025, due to growth in commercial loans that was mostly offset by runoff within the consumer and residential loan portfolios.

The company continues to maintain a balanced growth profile across various geographies, products and industries, and holds a diverse lending portfolio consisting primarily of commercial real estate, consumer, residential and commercial and industrial portfolios.

Total deposit balances decreased by $79.8 million, or 1.4%, to $5.5 billion as of September 30, 2025 when compared to balances as of December 31, 2024.

The decrease was driven by the ongoing balance sheet repositioning efforts, which led to a decline of approximately $275 million in high-cost transactional deposit balances during the third quarter of 2025, which were partially offset by growth non-interest bearing balances, commercial interest-bearing balances and time deposit balances.

Total deposit balances increased by $146.9 million, or 2.8%, to $5.4 billion as of March 31, 2026 when compared to balances as of December 31, 2025.

The increase was driven by a $61.3 million increase in time deposits, a $60.8 million increase in non-interest-bearing demand deposits, and a $52.9 million increase in savings and money market balances, reflecting continued success in core deposit gathering efforts.

These increases were partially offset by a $28.1 million decrease in interest-bearing deposits.

The Company maintains a granular and tenured deposit base, with a continued focus on core commercial and consumer deposit gathering.

Total borrowings decreased by $985.1 million, or 79.9%, to $247.2 million as of September 30, 2025 when compared to balances as of December 31, 2024.

The decrease is due to the payoff of $700 million in FHLB advances related to the balance sheet repositioning and additional de-leveraging activities during the first quarter of 2025.

Subordinated notes balances increased by $98.3 million to $154.0 million as of September 30, 2025 when compared to balances as of December 31, 2024.

The increase is due to the Company's $100.0 million offering, which closed on August 29, 2025.

Subsequent to quarter end, on October 1, 2025, the Company redeemed the remaining $56.5 million subordinated note issuance previously outstanding (See Note 15 - Subsequent events).

Other assets balances increased by $73.6 million to $226.2 million as of September 30, 2025, when compared to balances as of December 31, 2024.

The increase is due to a $66.4 million increase in taxes receivable, due to the net loss generated

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

by the balance sheet repositioning activities in the third quarter, and an increase of $9.8 million in security receivables, related to the timing of the settlements of the security sales during the third quarter.

The increase was partially offset by fluctuations in the remaining other assets balances.

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

Total borrowings decreased by $22.8 million, or 9.2%, to $225.8 million as of March 31, 2026 when compared to balances as of December 31, 2025, related to a decrease in repurchase agreements.

Total investment securities increased $6.8 million, or 0.8%, to $882.2 million as of March 31, 2026 when compared to balances as of December 31, 2025.

During the quarter, the Company purchased approximately $33.4 million of available for sale securities, which was offset by amortization and maturities within the portfolio and changes in market value.

Investment securities are comprised of the following as of (dollars in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Value Amortized

3 unchanged sentences

government agency mortgage-backed securities 505,173 505,656 489,683 494,174

Private labeled mortgage-backed pools — — — —

Corporate notes 48,750 44,609 48,750 44,670

Total available for sale investment securities $ 926,040 $ 882,168 $ 908,829 $ 875,414

Held to maturity

Treasury, federal agencies, and government sponsored agencies $ — $ — $ 278,383 $ 239,130

State and municipal — — 1,048,862 866,706

government agency mortgage-backed securities — — 349,726 294,822

Private labeled mortgage–backed pools — — 29,278 25,320

Corporate notes — — 161,599 140,290

Total held to maturity investment securities $ — $ — $ 1,867,848 $ 1,566,268

Investment securities available for sale increased $649.6 million since December 31, 2024 to $883.2 million and securities held to maturity, net of the allowance for credit losses, decreased $1.9 billion when compared to balances as of December 31, 2024 to zero as of September 30, 2025.

HORIZON BANCORP, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three months ended March 31, 2026 and 2025

Credit Quality

The ACL balance at September 30, 2025 was $50.2 million, or 1.04% of period-end loans HFI compared to an ACL balance of $52.0 million at December 31, 2024 or 1.07% of loans HFI.

The decrease in the ACL was primarily attributable to the release of approximately $3.1 million in total Allowance against the sold portion of the Indirect Auto portfolio.

Additionally, the Provision benefitted from continued improvement in the Company's historical loss metrics.

These favorable items were partially offset by net growth in Commercial Loans HFI and a modest increase in specific reserves.

As of September 30, 2025, total non-accrual loans increased by $3.6 million, or 13.8%, from December 31, 2024 , to 0.61% of total loans HFI.

The ACL balance at March 31, 2026 was $51.3 million, or 1.05% of period-end loans HFI, compared to an ACL balance of $51.3 million at December 31, 2025, or 1.05% of loans HFI.

The ACL was essentially unchanged, due to modest net loan growth and immaterial changes in the baseline economic outlook.

As of March 31, 2026, total non-accrual loans increased by $2.3 million, or 7.2%, from December 31, 2025 , to 0.71% of total loans HFI.

Total non-performing assets increased $3.4 million, or 8.4%, from December 31, 2025 , to 0.67% of total asset s.

During the nine months ended September 30, 2025, net charge-offs were $2.0 million , or 5 basis points annualized of average loans in the period, a change from $0.9 million , or 4 basis point annualized of average loans in the year ago comparable period.

During the three months ended March 31, 2026, net charge-offs were $0.6 million , or 5 basis points annualized of average loans in the period, a change from $0.9 million , or 7 basis point annualized of average loans in the year ago comparable period.

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

For the Three months ended March 31, 2026 and 2025

Credit Quality

1 unchanged sentence

Quarter Ended

September 30, December 31,

March 31, December 31,

Non-accrual loans

11 unchanged sentences

Other non-performing assets (1)

$ 3,935 $ 3,991

Total non-performing assets $ 44,030 $ 40,628

20 unchanged sentences

And Results of Operations

For the Three and Nine months ended September 30, 2025 and 2024

For the Three months ended March 31, 2026 and 2025

The Bank maintains a stable base of core deposits provided by long–standing relationships with individuals and local businesses.

1 unchanged sentence

Other sources of liquidity for Horizon include earnings, loan repayment, investment security sales and maturities, proceeds from the sale of residential mortgage loans, unpledged investment securities and borrowing relationships with correspondent banks, including the FHLB.

At September 30, 2025, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $1.52 billion in unused credit lines with various money center banks, including the FHLB and the FRB Discount Window compared to $1.70 billion at December 31, 2024.

The cash flows from the operating, investing and financing activities of the Company resulted in a net increase in cash, cash equivalents and restricted cash of $164.8 million during the nine months ended September 30, 2025, as reported in the consolidated statements of cash flows in this report.

Operating activities, consisting mainly of net loss adjusted for certain non-cash items, provided cash flow of $45.7 million and have historically been a stable source of funds.

Investing activities, which occur mainly in the loan and investment securities portfolios, provided cash of $1.0 billion mainly due to the balance sheet repositioning of the securities portfolio, which provided proceeds from sales of AFS securities of $1.4 billion, partially offset by purchases of AFS securities of $583.5 million.

Financing activities used cash of $906.6 million, largely resulting from the repayment of long-term borrowings of $1.1 billion and $21.3 million in dividends paid on common stock, partially offset by proceeds from issuance of common stock of $98.0 million and proceeds from issuance of subordinated debt of $95.8 million during the nine months ended September 30, 2025.

At March 31, 2026, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $1.70 billion in unused credit lines with various money center banks, including the FHLB and the FRB Discount Window compared to $1.68 billion at December 31, 2025.

The cash flows from the operating, investing and financing activities of the Company resulted in a net increase in cash, cash equivalents and restricted cash of $119.6 million during the three months ended March 31, 2026, as reported in the consolidated statements of cash flows.

Operating activities, consisting mainly of net income adjusted for certain non-cash items, provided cash flow of $20.8 million and have historically been a stable source of funds.

Investing activities, which occur mainly in the loan and investment securities portfolios, used cash of $17.2 million mainly due to purchases of AFS securities of $33.4 million, which was partially offset by proceeds from maturities, calls and principal repayments of securities available for sale of $17.9 million.

Financing activities provided cash of $116.0 million, largely resulting from the proceeds from the net change in deposits of $146.9 million, which was partially offset by cash used in the net change in repurchase agreements of $22.5 million and $8.2 million in dividends paid on common stock, during the three months ended March 31, 2026.

Capital Resources

The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at September 30, 2025.

Stockholders’ equity totaled $660.8 million as of September 30, 2025, compared to $763.6 million as of December 31, 2024.

The decrease in stockholders’ equity during the period was due to a decrease in retained earnings related to the third quarter balance sheet repositioning activities and cash dividend payments on outstanding common stock, partially offset by an increase in additional paid-in-capital from the proceeds of the Company's third quarter common stock offering.

As of September 30, 2025, the ratio of total stockholders’ equity to total assets is 9.84%.

Book value per common share was $12.96, decreasing $4.50 compared to December 31, 2024 .

Tangible common equity 1 totaled $497.7 million at September 30, 2025, and the ratio of tangible common equity to tangible assets 1 was 7.60% at September 30, 2025.

Tangible book value, which excludes intangible assets from total equity, per common share 1 was $9.76, decreasing $3.92 compared to December 31, 2024 .

Horizon declared common stock dividends in the amount of $0.16 per share during the three months ended September 30, 2025 and $0.16 per share for the same period in 2024.

The dividend payout ratio (dividends as a percent of basic earnings per share) was (12.18)% and 38.47% for the nine months ended September 30, 2025 and 2024, respectively.

The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at March 31, 2026.

Stockholders’ equity totaled $699.0 million as of March 31, 2026, compared to $688.3 million as of December 31, 2025.

The increase in stockholders’ equity during the period was due to an increase in retained earnings related to net income for the quarter of $26.2 million, less cash dividend payments on outstanding common stock of $8.2 million, partially offset by an increase in accumulated other comprehensive loss of $7.7 million.

As of March 31, 2026, the ratio of total stockholders’ equity to total assets is 10.65%.

Book value per common share was $13.69, increasing $0.19 compared to December 31, 2025 .

Tangible common equity 1 totaled $537.3 million at March 31, 2026, and the ratio of tangible common equity to tangible assets 1 was 8.39% at March 31, 2026.

Tangible book value, which excludes intangible assets from total equity, per common share 1 was $10.52, increasing $0.20 compared to December 31, 2025 .

Horizon declared common stock dividends in the amount of $0.16 per share during the three months ended March 31, 2026 and $0.16 per share for the same period in 2025.

The dividend payout ratio (dividends as a percent of basic earnings per share) was 31.37% and 29.09% for the three months ended March 31, 2026 and 2025, respectively.

For additional information regarding dividends, see Horizon’s 2025 Annual Report on Form 10–K.

5 unchanged sentences

And Results of Operations

For the nine months ended September 30, 2025 and 2024

For the three months ended March 31, 2026 and 2025

Use of Non-GAAP Financial Measures

4 unchanged sentences

(Dollars in Thousands, Unaudited)

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Three Months Ended

March 31, 2026 March 31, 2025

Interest income (GAAP) (A) $ 86,651 $ 89,175

3 unchanged sentences

Loan receivable (2)

379 340 1,144 681

Total taxable-equivalent adjustment (3)

14 unchanged sentences

And Results of Operations

For the nine months ended September 30, 2025 and 2024

For the three months ended March 31, 2026 and 2025

Non–GAAP Reconciliation of Tangible Common Equity to Tangible Assets

1 unchanged sentence

Three Months Ended

September 30, 2025 September 30, 2024

March 31, 2026 December 31, 2025

Total stockholders' equity (GAAP) (A) $ 699,027 $ 688,251

8 unchanged sentences

Three Months Ended

September 30, 2025 September 30, 2024

March 31, 2026 December 31, 2025

Total stockholders' equity (GAAP) (A) $ 699,027 $ 688,251

6 unchanged sentences

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 2. Management’s Discussion and Analysis