What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 172 added, 85 removed, 337 unchanged (43% of the section changed)

14 unchanged sentences

• current financial conditions within the banking industry;

• the impact of continued partial shutdown of the U.S.

• changes in the level and volatility of interest rates, spreads on earning assets and interest bearing liabilities, and interest rate sensitivity;

• the aggregate effects of elevated inflation levels in recent years;

• the aggregate effects of elevated inflation levels in recent years, and continued inflation levels remaining above the Federal Reserve's 2% target;

• loss of key Horizon personnel;

11 unchanged sentences

And Results of Operations

For the Three months ended March 31, 2026 and 2025

For the Three and Six months ended June 30, 2026 and 2025

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

30 unchanged sentences

And Results of Operations

For the Three months ended March 31, 2026 and 2025

For the Three and Six months ended June 30, 2026 and 2025

Results of Operations

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 Income increased $4.3 million, to $24.9 million, or $0.49 per diluted share, during the three months ended June 30, 2026 when compared to net income of $20.6 million, or $0.47 per diluted share, for the s ame period in 2025.

The increase in net income when compared with the prior year period is the primary driven by an increase in net interest income of $8.1 million, a decrease in provision expense of $1.5 million and an increase in non-interest income of $1.1 million.

The increase was partially offset by an increase in non-interest expense of $4.4 million, driven primarily by the $3.1 million legal charge in the current period, and an increase in tax expense of $2.1 million.

Net income increased $6.5 million to $51.1 million, or $1.00 per diluted share, during the six months ended June 30, 2026 when compared to $44.6 million, or $1.01 per share, for the same period in 2025.

The increase from the year ago period was primarily a result of an increase in net interest income of $18.1 million and a decrease in provision expense of $2.5 million.

The increase was partially offset by an increase in non-interest expense of $5.9 million, a decrease in non-interest income of $4.2 million and an increase in tax expense of $4.1 million.

Net Interest Income

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.

Net interest income increased $8.1 million, or 14.7% during the three months ended June 30, 2026 , to $63.5 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 114 basis points, to 4.37% for the three months ended June 30, 2026 compared to the prior year period, driven by the favorable mix shift toward higher-yielding average interest earning assets, and the funding mix toward lower cost deposit liabilities.

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

Net interest income increased $18.1 million during the six months ended June 30, 2026, to $125.7 million when compared to the same period in 2025.

While average earning asset balances 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 119 basis points, to 4.33% for the six months ended June 30, 2026 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 higher-yielding average interest earning assets , and the funding mix toward lower cost deposit liabilities.

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

1 Non-GAAP financial metric.

4 unchanged sentences

And Results of Operations

For the Three months ended March 31, 2026 and 2025

For the Three and Six months ended June 30, 2026 and 2025

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

2 unchanged sentences

Three Months Ended

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025

Interest earning assets

54 unchanged sentences

And Results of Operations

For the Three months ended March 31, 2026 and 2025

For the Three and Six months ended June 30, 2026 and 2025

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

Average Balance Sheet

(Dollars in Thousands, Unaudited)

Six Months Ended

June 30, 2026 June 30, 2025

Interest earning assets

Interest earning deposits (incl.

Fed Funds Sold) 133,192 2,445 3.70 % 147,656 3,317 4.53 %

Federal Home Loan Bank stock (1)

30,691 809 5.32 % 48,573 2,086 8.66 %

Investment securities - taxable (2)

582,817 13,933 4.82 % 966,632 9,894 2.06 %

Investment securities - non-taxable (2)

316,656 6,490 4.13 % 1,110,436 15,544 2.82 %

Total investment securities 899,473 20,423 4.58 % 2,077,068 25,438 2.47 %

Loans receivable (3) (4)

4,895,395 153,627 6.33 % 4,906,496 153,840 6.32 %

Total interest earning assets 5,958,751 177,304 6.00 % 7,179,793 184,681 5.19 %

Non-interest earning assets

Cash and due from banks 69,859 87,460

Allowance for credit losses (51,161) (52,214)

Other assets 534,556 477,949

Total average assets $ 6,512,005 $ 7,692,988

Liabilities and Stockholders' Equity

Interest bearing liabilities

Interest bearing demand deposits 1,632,580 9,598 1.19 % 1,739,017 13,295 1.54 %

Saving and money market deposits 1,480,133 11,599 1.58 % 1,663,165 16,463 2.00 %

Time deposits 1,134,708 19,227 3.42 % 1,223,043 21,895 3.61 %

Total Deposits 4,247,421 40,424 1.92 % 4,625,225 51,653 2.25 %

Borrowings 150,174 2,855 3.83 % 909,338 16,550 3.67 %

Repurchase agreements 72,407 453 1.26 % 88,262 809 1.85 %

Subordinated notes 98,255 3,734 7.66 % 55,768 1,658 6.00 %

Junior subordinated debentures issued to capital trusts 57,732 1,962 6.85 % 57,524 2,360 8.27 %

Total interest bearing liabilities 4,625,989 49,428 2.15 % 5,736,117 73,030 2.57 %

Non-interest bearing liabilities

Demand deposits 1,117,520 1,100,485

Accrued interest payable and other liabilities 57,181 71,463

Stockholders' equity 711,315 784,923

Total average liabilities and stockholders' equity $ 6,512,005 $ 7,692,988

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

127,876 111,651

Less FTE adjustments (5)

Net Interest Income $ 125,730 $ 107,622

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

4.33 % 3.14 %

(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

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 March 31, 2026 vs.

Three Months Ended March 31, 2025

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, 2026 and 2025

Three Months Ended June 30, 2026 vs.

Three Months Ended June 30, 2025 Six Months Ended June 30, 2026 vs.

Six Months Ended June 30, 2025

Change Change

Volume Change

Change Change

Volume Change

Interest Income

18 unchanged sentences

Non-Interest Income

Three Months Ended

March 31, March 31,

(Dollars in Thousands) 2026 2025 $ Change % Change

Three Months Ended Six Months Ended

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

(Dollars in Thousands) 2026 2025 $ Change % Change 2026 2025 $ Change % Change

Non-interest Income

9 unchanged sentences

Total non-interest income $ 12,014 $ 10,920 $ 1,094 10.0 % $ 23,258 $ 27,419 $ (4,161) (15.2) %

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.

Total non-interest income increased $1.1 million, to net income of $12.0 million for the three months ended June 30, 2026 compared to the same period in 2025, and decreased $4.2 million for the six months ended June 30, 2026 compared to the same period in 2025.

The primary components of the change were as follows:

3 unchanged sentences

And Results of Operations

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.

For the Three and Six months ended June 30, 2026 and 2025

Service charges on deposit accounts increased by $0.2 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased $0.5 million for the six months ended June 30, 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.

Interchange fees increased $0.2 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased by $0.3 million for the six months ended June 30, 2026, as compared to the same periods in 2025.

The increase was primarily driven by increases in merchant and debit card fees.

Fiduciary activities increased $0.2 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased $0.5 million for the six months ended June 30, 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.

Gain on sale of mortgage loans increased $0.4 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased $0.4 million for the six months ended June 30, 2026 compared to the same period in 2025.

The increase is primarily driven by the increased volume of sold loans.

Other income, which includes various miscellaneous income items as well as fair market value adjustments to certain other assets, increased by $0.2 million for the three months ended June 30, 2026 compared to the same period in 2025 and decreased by $6.1 million for the six months ended June 30, 2026.

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.

1 unchanged sentence

Non-Interest Expense

Three Months Ended

March 31, March 31,

(Dollars in Thousands) 2026 2025 $ Change % Change

Three Months Ended Six Months Ended

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

(Dollars in Thousands) 2026 2025 $ Change % Change 2026 2025 $ Change % Change

Non-interest Expense

11 unchanged sentences

Total non-interest expense $ 43,844 $ 39,417 $ 4,427 11.2 % $ 84,592 $ 78,723 $ 5,869 7.5 %

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

Non-interest expense increased $4.4 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased $5.9 million for the six months ended June 30, 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.

Salaries and employee benefits expense increased by $1.5 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased $2.2 million for the six months ended June 30, 2026 compared to the same period

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, 2026 and 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.

Net occupancy expenses increased by $0.6 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased by $1.1 million for the six months ended June 30, 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.

Data processing expense increased by $0.7 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased by $1.2 million for the six months ended June 30, 2026 compared to the same period in 2025.

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

Loan expense increased by $0.2 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased by $0.7 million for the six months ended June 30, 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.

Professional fees decreased by $0.8 million for the three months ended June 30, 2026 compared to the same period in 2025, and decreased by $0.7 million for the six months ended June 30, 2026 compared to the same period in 2025.

The decrease is primarily related to a reimbursement of previously incurred legal fees and an overall reduction in gross expenses in the current period.

Outside services and consultants expense decreased by $0.7 million for the three months ended June 30, 2026 compared to the same period in 2025, and decreased $1.2 million for the six months ended June 30, 2026 compared to the same period in 2025.

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

Other expenses, which includes corporate and other service expenses, increased by $3.6 million for the three months ended June 30, 2026 compared to the same period in 2025, and increased by $3.9 million for the six months ended June 30, 2026 compared to the same period in 2025.

During the second quarter of 2026, the Company recorded a pre-tax expense accrual of $3.1 million related to a lawsuit stemming from 2018 related to a unique circumstance involving

the repossession and credit reporting of a single vehicle financed through our legacy indirect auto business, as previously announced.

The accrual will remain in place until the Company has finalized the appeal process.

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

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

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.

For the Three and Six months ended June 30, 2026 and 2025

Provision and Allowance for Credit Losses

Three Months Ended

March 31, 2026 March 31, 2025

Three Months Ended Six Months Ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Allowance for Credit Losses on Loans

13 unchanged sentences

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

During the three months ended June 30, 2026, the Company recorded a provision for credit losses on loans of $1.2 million.

This compares to a provision for credit losses on loans of $2.0 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 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.

The decrease in the provision for credit losses on loans compared to the prior-year period was primarily driven by a reduction in forecasted credit losses related to changes in economic assumptions, partially offset by increases in specific reserves on certain loans.

The total provision for credit losses, including the reduction in reserve for unfunded lending commitments of $0.3 million in the current period, was $0.9 million for three months ended June 30, 2026, compared to a provision for credit losses of $2.5 million for the same period in 2025.

For the three months ended June 30, 2026, net loan charge-offs increased by $0.4 million to $0.6 million, compared to $0.3 million during the same period in 2025.

The increase in charge-offs is due to modest increases in charge-offs in the commercial and consumer portfolios during the current period.

The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.05% at June 30, 2026, compared to 1.09% at June 30, 2025.

As of June 30, 2026, the liability for unfunded lending commitments was $1.3 million compared to $2.3 million as of June 30, 2025.

The Company’s income tax expense for the three months ended June 30, 2026 was $5.8 million compared to $3.8 million for the same period in 2025, resulting in effective tax rates of 19.0% and 15.4% for those periods, respectively.

The Company’s income tax expense for the six months ended June 30, 2026 was $12.0 million compared to $7.9 million for the same period in 2025, resulting in effective tax rates of 19.0% and 15.0%, respectively.

The increase in the effective tax rate for three months ended June 30, 2026 was primarily due to expectations of higher pre-tax income in 2026 as compared to 2025, and less exposure to tax preferential assets in the investment portfolio.

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

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.

For the Three and Six months ended June 30, 2026 and 2025

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

1 unchanged sentence

Financial Condition

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.

Total assets increased by $137.5 million, or 2.14%, as of June 30, 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 $78.5 million, or 56.28%, and an increase in investment securities available-for-sale of $22.4 million, or 2.55%.

The increase was partially offset by a decrease in FHLB stock of $38.3 million, or 83.77%, and a decrease in loans held for sale of $4.6 million, or 47.36%,

Total loans HFI, net of ACL, increased $82.0 million, to $4.9 billion, as of June 30, 2026 compared to balances as of December 31, 2025, due to growth in commercial loans that was partially offset by runoff within the consumer loan portfolio.

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 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.

Total investment securities increased $22.4 million, or 2.55%, to $897.8 million as of June 30, 2026 when compared to balances as of December 31, 2025.

During the first six months of 2026, the Company purchased approximately $60.9 million of available for sale securities, which was offset by amortization and maturities within the portfolio and changes in market value.

Total deposit balances increased by $124.8 million, or 2.37%, to $5.4 billion as of June 30, 2026 when compared to balances as of December 31, 2025.

The increase was driven by a $76.8 million increase in savings and money market deposits, reflecting continued success in core deposit gathering efforts, a $24.5 million increase in interest bearing deposits and a $21.6 million increase in non-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 $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.

Total borrowings decreased by $25.6 million, or 10.30%, to $223.0 million as of June 30, 2026 when compared to balances as of December 31, 2025, related to a decrease in repurchase agreements.

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Value Amortized

5 unchanged sentences

Total available for sale investment securities $ 930,926 $ 897,764 $ 908,829 $ 875,414

Credit Quality

The ACL balance at June 30, 2026 was $51.9 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 increase in the ACL is primarily due to net loan growth and an increase in specific reserves on select commercial loans.

HORIZON BANCORP, INC.

2 unchanged sentences

And Results of Operations

For the Three months ended March 31, 2026 and 2025

Credit Quality

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.

For the Three and Six months ended June 30, 2026 and 2025

As of June 30, 2026, total non-accrual loans decreased by $0.2 million, or 0.48%, from December 31, 2025 , to 0.65% of total loans HFI.

Total non-performing assets increased $3.1 million, or 7.54%, from December 31, 2025 , to 0.66% of total asset s.

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.

During the six months ended June 30, 2026, net charge-offs were $1.2 million , or 5 basis points annualized of average loans in the period, a change from $1.1 million , or 5 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 months ended March 31, 2026 and 2025

For the Three and Six months ended June 30, 2026 and 2025

Credit Quality

1 unchanged sentence

Quarter Ended

March 31, December 31,

June 30, December 31,

Non-accrual loans

34 unchanged sentences

And Results of Operations

For the Three months ended March 31, 2026 and 2025

For the Three and Six months ended June 30, 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 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.

At June 30, 2026, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $1.72 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 $78.5 million during the six months ended June 30, 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 $53.9 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.

Investing activities, which occur mainly in the loan and investment securities portfolios, used cash of $64.7 million mainly due to a net change in loans of $84.1 million and purchases of AFS securities of $60.9 million, which was partially offset by proceeds from maturities, calls and principal repayments of securities available for sale of $42.1 million and the redemption of FHLB stock of $38.3 million.

Financing activities provided cash of $89.3 million, largely resulting from the proceeds from proceeds from borrowing of $156.2 million and the net change in deposits of $124.8 million, which was partially offset by the repayment of borrowings of $156.4 million, cash used in the net change in repurchase agreements of $19.2 million and $16.5 million in dividends paid on common stock, during the six months ended June 30, 2026.

Capital Resources

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%.

The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at June 30, 2026.

Stockholders’ equity totaled $726.2 million as of June 30, 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 of $37.9 million for the six months ended June 30, 2026, and a decrease in accumulated other comprehensive loss of $2.0 million.

As of June 30, 2026, the ratio of total stockholders’ equity to total assets is 11.05%.

Book value per common share was $14.21, increasing $0.71 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 common equity 1 totaled $565.1 million at June 30, 2026, and the ratio of tangible common equity to tangible assets 1 was 8.81% at June 30, 2026.

Tangible book value, which excludes intangible assets from total equity, per common share 1 was $11.06, increasing $0.74 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.

Horizon declared common stock dividends in the amount of $0.16 per share during the three months ended June 30, 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 32% and 31% for the six months ended June 30, 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 three months ended March 31, 2026 and 2025

For the six months ended June 30, 2026 and 2025

Use of Non-GAAP Financial Measures

4 unchanged sentences

(Dollars in Thousands, Unaudited)

Three Months Ended

March 31, 2026 March 31, 2025

Three Months Ended Six Months Ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Interest income (GAAP) (A) $ 88,508 $ 91,477 $ 175,158 $ 180,652

3 unchanged sentences

Loan receivable (2)

402 382 783 765

Total taxable-equivalent adjustment (3)

14 unchanged sentences

And Results of Operations

For the three months ended March 31, 2026 and 2025

For the six months ended June 30, 2026 and 2025

Non–GAAP Reconciliation of Tangible Common Equity to Tangible Assets

1 unchanged sentence

Three Months Ended

March 31, 2026 December 31, 2025

June 30, 2026 June 30, 2025

Total stockholders' equity (GAAP) (A) $ 726,189 $ 790,852

8 unchanged sentences

Three Months Ended

March 31, 2026 December 31, 2025

June 30, 2026 June 30, 2025

Total stockholders' equity (GAAP) (A) $ 726,189 $ 790,852

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