HBNC 10-Q Quarterly Report June 30, 2025

HORIZON BANCORP INC /IN/

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hbnc-20250630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from________to

Commission file number 0-10792

HORIZON BANCORP, INC.

(Exact name of registrant as specified in its charter)


Indiana			35-1562417
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

515 Franklin Street , Michigan City , Indiana 46360

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: ( 219 ) 879-0211

Former name, former address and former fiscal year, if changed since last report: N/A

____________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange
on which registered

Common stock, no par value

HBNC

The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☒
Non-accelerated Filer	☐	Smaller Reporting Company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 44,097,891 shares of Common Stock, no par value, at August 8, 2025.

Table of Contents

HORIZON BANCORP, INC.

FORM 10–Q

INDEX


PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	65
Item 4.	Controls and Procedures	65
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 3.	Defaults Upon Senior Securities	67
Item 4.	Mine Safety Disclosures	67
Item 5.	Other Information	67
Item 6.	Exhibits	67
Index to Exhibits		67
Signatures		69

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)


	June 30, 2025		December 31, 2024

Assets
Cash and due from banks	$	101,719	$	92,300
Interest-bearing deposits in banks	34,174		201,131
Federal funds sold	2,024		—
Total cash and cash equivalents	137,917		293,431
Interest earning time deposits	—		735
Investment securities, available for sale	231,999		233,677
Investment securities, held to maturity (fair value of $ 1,536,980 and $ 1,566,268 )	1,819,087		1,867,690
Loans held for sale	2,994		67,597
Loans, net of allowance for credit losses of $ 54,399 and $ 51,980	4,931,183		4,795,060
Premises and equipment, net	93,398		93,864
Federal Home Loan Bank stock	45,412		53,826
Goodwill	155,211		155,211
Other intangible assets	8,592		10,223
Interest receivable	39,730		39,747
Cash value of life insurance	37,755		37,450
Other assets	148,773		152,635
Total assets	$	7,652,051	$	7,801,146
Liabilities
Deposits
Non-interest bearing	$	1,121,163	$	1,064,818
Interest bearing	4,578,594		4,535,834
Total deposits	5,699,757		5,600,652
Short and long term borrowings	975,425		1,232,252
Subordinated notes	55,807		55,738
Junior subordinated debentures issued to capital trusts	57,583		57,477
Interest payable	14,007		11,137
Other liabilities	58,620		80,308
Total liabilities	6,861,199		7,037,564
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, Authorized, 1,000,000 shares, Issued 0 shares	—		—
Common stock, no par value, Authorized 99,000,000 shares	—		—
44,098,521 and 44,226,819 shares issued at June 30, 2025 and December 31, 2024, respectively
Additional paid-in capital	360,758		363,761
Retained earnings	466,497		436,122
Accumulated other comprehensive income (loss)	( 36,403 )		( 36,301 )
Total stockholders’ equity	790,852		763,582
Total liabilities and stockholders’ equity	$	7,652,051	$	7,801,146

See notes to condensed consolidated financial statements

Table of Contents

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Unaudited)

(Dollar Amounts in Thousands, Except Per Share Data)


	Three Months Ended				Six Months Ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Interest Income
Interest and fees on loans	$	78,618	$	71,880	153,075		138,834
Investment securities - taxable	5,941		7,986		11,980		15,348
Investment securities - tax exempt	6,088		6,377		12,280		12,828
Other	830		738		3,317		5,235
Total interest income	91,477		86,981		180,652		172,245
Interest Expense
Deposits	26,052		28,447		51,653		56,437
Short and long term borrowings	8,171		11,213		17,359		23,143
Subordinated notes	829		829		1,658		1,660
Junior subordinated debentures issued to capital trusts	1,070		1,213		2,360		2,438
Total interest expense	36,122		41,702		73,030		83,678
Net Interest Income	55,355		45,279		107,622		88,567
Credit loss expense	2,462		2,369		3,838		3,174
Net Interest Income after Provision for Credit Losses	52,893		42,910		103,784		85,393
Non-interest Income
Service charges on deposit accounts	3,208		3,130		6,416		6,344
Wire transfer fees	69		113		140		214
Interchange fees	3,403		3,826		6,644		6,935
Fiduciary activities	1,251		1,372		2,577		2,687
Loss on sale of investment securities	—		—		( 407 )		—
Gain on sale of mortgage loans	1,219		896		2,295		1,522
Mortgage servicing income net of impairment	375		450		760		889
Increase in cash value of bank owned life insurance	346		318		681		616
Other income	1,049		380		8,313		1,207

Total non-interest income	10,920		10,485		27,419		20,414
Non-interest Expense
Salaries and employee benefits	22,731		20,583		45,145		40,851
Net occupancy expenses	3,127		3,192		6,829		6,738
Data processing	2,951		2,579		5,823		5,043
Professional fees	735		714		1,561		1,321
Outside services and consultants	3,278		3,058		6,543		6,417
Loan expense	1,231		1,038		1,920		1,757
FDIC insurance expense	1,216		1,315		2,504		2,635
Core deposit intangible amortization	816		844		1,632		1,716
Merger related expense	—		—		305		—
Other losses	245		515		473		531
Other expense	3,087		3,684		5,988		7,620
Total non-interest expense	39,417		37,522		78,723		74,629
Income Before Income Taxes	24,396		15,873		52,480		31,178
Income tax expense	3,752		1,733		7,893		3,047
Net Income Available to Common Shareholders	$	20,644	$	14,140	$	44,587	$	28,131
Basic Earnings Per Share	$	0.47	$	0.32	$	1.02	$	0.64
Diluted Earnings Per Share	$	0.47	$	0.32	$	1.01	$	0.64

See notes to condensed consolidated financial statements

Table of Contents

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollar Amounts in Thousands)


	Three Month Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Net Income	$	20,644	$	14,140	$	44,587	$	28,131
Other Comprehensive Income (Loss)





Change in securities:
Unrealized gain (loss) for the period on AFS securities	1,678		( 3,262 )		37		( 9,010 )

Amortization from transfer of securities from available for sale to held to maturity securities	( 408 )		( 167 )		( 573 )		( 327 )
Reclassification adjustment for securities (gains) losses realized in income	—		—		407		—
Income tax effect	( 267 )		720		27		1,961
Unrealized gains (losses) on securities	1,003		( 2,709 )		( 102 )		( 7,376 )
Other Comprehensive Income (Loss), Net of Tax	1,003		( 2,709 )		( 102 )		( 7,376 )
Comprehensive Income	$	21,647	$	11,431	$	44,485	$	20,755

See notes to condensed consolidated financial statements

Table of Contents

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(Dollar Amounts in Thousands, Except Per Share Data)

Three Months Ended


	Three Months Ended
	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balances, April 1, 2024	$	—	$	—	$	356,599	$	435,927	$	( 71,276 )	$	721,250
Net income	—		—		—		14,140		—		14,140
Other comprehensive loss, net of tax	—		—		—		—		( 2,709 )		( 2,709 )

Amortization of unearned compensation	—		—		1,134		—		—		1,134








Net settlement of share awards	—		—		( 60 )		—		—		( 60 )


Cash dividends on common stock ($ 0.16 per share)	—		—		—		( 7,090 )		—		( 7,090 )
Balances, June 30, 2024	$	—	$	—	$	357,673	$	442,977	$	( 73,985 )	$	726,665

Balances, April 1, 2025	—		—		360,522		452,945		( 37,406 )		776,061
Net income	—		—		—		20,644		—		20,644
Other comprehensive income, net of tax	—		—		—		—		1,003		1,003

Amortization of unearned compensation	—		—		387		—		—		387







Net settlement of share awards	—		—		( 151 )		—		—		( 151 )

Cash dividends on common stock ($ 0.16 per share)	—		—		—		( 7,092 )		—		( 7,092 )
Balances, June 30, 2025	$	—	$	—	$	360,758	$	466,497	$	( 36,403 )	$	790,852

See notes to condensed consolidated financial statements

Table of Contents

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(Dollar Amounts in Thousands, Except Per Share Data)



	Six Months Ended
	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balances, January 1, 2024	—		—		356,400		429,021		( 66,609 )		718,812
Net income	—		—		—		28,131		—		28,131
Other comprehensive loss, net of tax	—		—		—		—		( 7,376 )		( 7,376 )

Amortization of unearned compensation	—		—		2,041		—		—		2,041







Net settlement of share awards	—		—		( 768 )		—		—		( 768 )

Cash dividends on common stock ($ 0.32 per share)	—		—		—		( 14,175 )		—		( 14,175 )
Balances, June 30, 2024	$	—	$	—	$	357,673	$	442,977	$	( 73,985 )	$	726,665

Balances, January 1, 2025	—		—		363,761		436,122		( 36,301 )		763,582
Net income	—		—		—		44,587		—		44,587
Other comprehensive loss, net of tax	—		—		—		—		( 102 )		( 102 )

Amortization of unearned compensation	—		—		846		—		—		846



Net settlement of share awards	—		—		( 3,849 )		—		—		( 3,849 )



Cash dividends on common stock ($ 0.32 per share)	—		—		—		( 14,212 )		—		( 14,212 )
Balances, June 30, 2025	$	—	$	—	$	360,758	$	466,497	$	( 36,403 )	$	790,852

Table of Contents

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollar Amounts in Thousands)


	Six Months Ended
	June 30, 2025		June 30, 2024
Operating Activities
Net income	$	44,587	$	28,131
Items not requiring (providing) cash
Provision for credit losses	3,838		3,174
Depreciation and amortization	4,894		5,170
Share based compensation	846		2,041
Amortization of mortgage servicing rights	1,025		942

Net amortization of premiums and discounts on securities	3,691		4,355

Loss on sale of investment securities	407		—
Gain on sale of mortgage loans	( 2,295 )		( 1,522 )
Gain on sale of portfolio loans	( 7,000 )		—
Proceeds from sales of loans	61,462		52,329
Loans originated for sale	( 61,796 )		( 52,396 )
Gain on cash value life insurance	( 681 )		( 616 )
Gain on other real estate owned	( 69 )		( 74 )
Net change in:
Interest receivable	17		( 4,530 )
Interest payable	2,870		( 11,009 )
Other assets	4,799		( 8,855 )
Other liabilities	( 21,850 )		5,323
Net cash provided by operating activities	$	34,745	$	22,463
Investing Activities

Proceeds from sales of securities available for sale	4,132		—
Proceeds from maturities, calls and principal repayments of securities available for sale	1,140		8,704
Purchases of securities held to maturity	—		( 312 )
Proceeds from maturities of securities held to maturity	40,647		38,317
Net change in interest-earning time deposits	735		490
Purchase of FHLB stock	—		( 19,317 )
Redemption of FHLB stock	8,414		—
Purchase of loans	—		( 240,020 )
Proceeds from sale of portfolio loans	54,990		—
Net change in loans	( 122,916 )		( 166,999 )
Proceeds on the sale of OREO and repossessed assets	510		748
Premises and equipment expenditures	( 2,504 )		( 2,007 )

Proceeds from bank owned life insurance	376		22,917







Net cash used in investing activities	$	( 14,476 )	$	( 357,479 )

Financing Activities
Net change in deposits	99,105		( 34,738 )
Proceeds from borrowings	370,000		512,759
Repayment of borrowings	( 632,005 )		( 500,615 )

Net change in repurchase agreements	5,178		( 7,860 )
Net settlement of share awards	( 3,849 )		( 768 )






Dividends paid on common stock	( 14,212 )		( 14,176 )
Net cash used in financing activities	$	( 175,783 )	$	( 45,398 )
Net Change in Cash and Cash Equivalents	$	( 155,514 )	$	( 380,414 )
Cash and Cash Equivalents, Beginning of Period	$	293,431	$	526,515
Cash and Cash Equivalents, End of Period	$	137,917	$	146,101
Additional Supplemental Information
Interest paid	$	70,160	$	94,687
Income taxes paid	12,300		8,000
Transfer of loans to other real estate and repossessed assets	1,912		915
Transfer of held to maturity securities to available for sale	4,539		—
Cash dividends declared, not paid	7,090		—

Table of Contents

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollar Amounts in Thousands)

See notes to condensed consolidated financial statements

Table of Contents

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Note 1 - Accounting Policies

Nature of Business and Basis of Reporting

The accompanying unaudited condensed consolidated financial statements include the accounts of Horizon Bancorp, Inc. (“Horizon” or the “Company”) and its wholly-owned subsidiaries, including Horizon Bank (“Horizon Bank” or the “Bank”), which is an Indiana commercial bank. All inter–company balances and transactions have been eliminated. The results of operations for the periods ended June 30, 2025 and June 30, 2024 are not necessarily indicative of the operating results for the full year of 2025 or 2024. 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. Those adjustments consist only of normal recurring adjustments.

Certain information and note disclosures normally included in Horizon’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Horizon’s Annual Report on Form 10–K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission on March 14, 2025 (the “2024 Annual Report on Form 10–K”).. The condensed consolidated balance sheet of Horizon as of December 31, 2024 has been derived from the audited balance sheet as of that date.

Horizon Bancorp has one reportable segment. Business activities are managed on a consolidated basis and revenues are derived primarily through commercial banking, offering retail banking and private wealth management from North America. Horizon Bancorp’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM assesses performance and allocates resources based on consolidated net income, as reported on the Consolidated Statement of Income , and the same accounting policies are applied as described in the Note 1 - Nature of Operations and Su mmary of Significant Accounting Policies included in Horizon’s 2024 Annual Report on Form 10–K.

The CODM uses net income to evaluate income generated from segment assets in deciding whether to reinvest profits into the business or distribute dividends to shareholders. The CODM also uses net income in competitive analysis by benchmarking against Horizon Bancorp’s competitors. The competitive analysis, along with the monitoring of budgeted versus actual results, is used in assessing performance of the segment and in establishing management’s compensation

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, 2025 , 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. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

Table of Contents

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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


	Three Months Ended				Six Months Ended
(dollar amounts in thousands, except per share)	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Basic earnings per share
Net income	$	20,644	$	14,140	$	44,587	$	28,131
Weighted average common shares outstanding	43,794,490		43,712,059		43,785,847		43,686,576
Basic earnings per share	$	0.47	$	0.32	$	1.02	$	0.64
Diluted earnings per share
Net income available to common shareholders	20,644		14,140		44,587		28,131
Weighted average common shares outstanding	43,794,490		43,712,059		43,785,847		43,686,576
Effect of dilutive securities:
Restricted stock	239,518		270,833		207,882		226,864
Stock options	655		4,295		732		4,850
Weighted average common shares outstanding	44,034,663		43,987,187		43,994,461		43,918,290
Diluted Earnings per Share	$	0.47	$	0.32	$	1.01	$	0.64

There were 190,772 and 89,728 shares for the three and six months ended June 30, 2025 which were not included in the computation of diluted earnings per share because they were non–dilutive. 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.

Note 2 – Securities

The fair value of securities is as follows:


	June 30, 2025
	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale
U.S. Treasury, federal agencies, and government sponsored agencies	$	2,143	—		2,143		$	—	$	( 391 )	$	1,752
State and municipal	242,682		—		242,682		—		( 40,941 )		201,741
U.S. government agency mortgage-backed securities	16,967		—		16,967		—		( 2,872 )		14,095

Corporate notes	18,257		( 150 )		18,107		—		( 3,696 )		14,411
Total available for sale investment securities	$	280,049	$	( 150 )	$	279,899	$	—	$	( 47,900 )	$	231,999

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	June 30, 2025
	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held to maturity
U.S. Treasury, federal agencies, and government sponsored agencies	$	275,720	—		275,720		$	—	$	( 32,635 )	$	243,085
State and municipal	1,023,861		( 13 )		1,023,848		948		( 187,047 )		837,762
U.S. government agency mortgage-backed securities	335,333		—		335,333		—		( 43,481 )		291,852
Private labeled mortgage–backed pools	27,816		( 1 )		27,815		—		( 3,372 )		24,444
Corporate notes	156,499		( 128 )		156,371		—		( 16,662 )		139,837
Total held to maturity investment securities	$	1,819,229	$	( 142 )	$	1,819,087	$	948	$	( 283,197 )	$	1,536,980


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Available for sale
U.S. Treasury, federal agencies, and government sponsored agencies	$	2,258	$	—	$	( 457 )	$	—	$	1,801
State and municipal	243,521		—		( 41,687 )		—		201,834
U.S. government agency mortgage-backed securities	17,984		—		( 3,441 )		—		14,543
Corporate notes	18,259		—		( 2,760 )		—		15,499
Total available for sale investment securities	$	282,022	$	—	$	( 48,345 )	$	—	$	233,677


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held to maturity
U.S. Treasury, federal agencies, and government sponsored agencies	$	278,383	$	—	$	( 39,253 )	$	239,130
State and municipal	1,048,862		958		( 183,114 )		866,706
U.S. government agency mortgage-backed securities	349,726		—		( 54,904 )		294,822
Private labeled mortgage–backed pools	29,278		—		( 3,958 )		25,320
Corporate notes	161,599		—		( 21,309 )		140,290
Total held to maturity investment securities	$	1,867,848	$	958	$	( 302,538 )	$	1,566,268
Less: Allowance for credit losses	( 158 )
Held to maturity securities, net of allowance for credit losses	$	1,867,690

The amortized cost and fair value of securities available for sale and held to maturity at June 30, 2025 and December 31, 2024, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers

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may have the right to call or prepay obligations with or without call or prepayment penalties.


	June 30, 2025				December 31, 2024
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Within one year	$	—	$	—	$	—	$	—
One to five years	19,160		15,351		—		—
Five to ten years	140,316		115,922		173,533		141,915
After ten years	103,606		86,631		90,505		77,219
	263,082		217,904		264,038		219,134
U.S. government agency mortgage-backed securities	16,967		14,095		17,984		14,543

Total available for sale investment securities	$	280,049	$	231,999	$	282,022	$	233,677
Held to maturity
Within one year	$	60,730	$	60,331	$	59,129	$	58,304
One to five years	278,260		264,608		298,362		278,007
Five to ten years	310,414		269,468		366,493		312,748
After ten years	806,676		626,277		764,860		597,067
	1,456,080		1,220,684		1,488,844		1,246,126
U.S. government agency mortgage-backed securities	335,333		291,852		349,726		294,822
Private labeled mortgage-backed pools	27,816		24,444		29,278		25,320
Total held to maturity investment securities	$	1,819,229	$	1,536,980	$	1,867,848	$	1,566,268

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

The following tables show the gross unrealized losses and the fair value of the Company’s available for sale investments in which an allowance for credit losses were not recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.


	June 30, 2025
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale Investment Securities
U.S. Treasury, federal agencies, and government sponsored agencies	$	—	$	—	$	1,752	$	( 391 )	$	1,752	$	( 391 )
State and municipal	988		( 73 )		200,753		( 40,868 )		201,741		( 40,941 )
U.S. government agency mortgage-backed securities	—		—		14,095		( 2,872 )		14,095		( 2,872 )

Corporate notes	—		—		11,474		( 1,783 )		11,474		( 1,783 )
Total available for sale investment securities	$	988	$	( 73 )	$	228,074	$	( 45,914 )	$	229,062	$	( 45,987 )


	December 31, 2024
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale Investment Securities
U.S. Treasury, federal agencies, and government sponsored agencies	$	—	$	—	$	1,801	$	( 457 )	$	1,801	$	( 457 )
State and municipal	—		—		201,834		( 41,687 )		201,834		( 41,687 )
U.S. government agency mortgage-backed securities	—		—		14,543		( 3,441 )		14,543		( 3,441 )

Corporate notes	—		—		15,499		( 2,760 )		15,499		( 2,760 )
Total available for sale investment securities	$	—	$	—	$	233,677	$	( 48,345 )	$	233,677	$	( 48,345 )

Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. As of June 30, 2025 and December 31, 2024, the Company had 2,025 and 2,115 securities, respectively, with market values below their cost basis. The total fair value of these investments at June 30, 2025 and December 31, 2024 remained consistent at $ 1.8 billion, which is approximately 86.0 % of the Company's available for sale and held to maturity securities portfolio.

The Company determines credit losses on available-for-sale investment securities by a discounted cash flow approach using the security’s prepayment-adjusted effective interest rate. The allowance for credit losses is measured as the amount by which an investment security’s amortized cost exceeds the net present value of expected future cash flows. However, the amount of credit losses for available-for-sale investment securities is limited to the amount of a security’s unrealized loss.

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

The following table details activity in the allowance for credit losses on available for sale debt securities during the three and six months ended June 30, 2025 and 2024.


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2025		2024		2025		2024

Beginning balance	$	—	$	—	$	—	$	—
Credit loss expense (benefit)	150		—		150		—
Ending balance	$	150	$	—	$	150	$	—

Due to a specific issuer's deferral of principal and interest payments, the Company placed the security with a fair value of $ 2.9 million on non-accrual status and recorded a $ 150 thousand allowance for credit losses on certain corporate debt securities. The Company did no t record an allowance as of the three and six months ended June 30, 2024, respectively.

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, excluding certain securities disclosed above, 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.

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. Held to maturity securities are charged off against the allowance for credit loss when deemed uncollectible. Adjustments to the allowance for credit loss are reported in our Condensed Consolidated Statements of Income in credit loss expense. The Company measures expected credit losses on held to maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regards 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, 2025 and December 31, 2024, there were no past due principal and interest payments associated with these securities. An allowance for credit loss of $ 142 thousand and $ 158 thousand was recorded on these securities based on applying the long-term historical rating agency credit loss rate for similarly rated securities at June 30, 2025 and December 31, 2024, respectively.

On a quarterly basis, the Company refreshes the credit quality indicator of each held-to-maturity security. The Company applies ratings derived from Nationally Recognized Statistical Rating Organizations ("NRSRO"), specifically Moody's and Standard & Poor's. 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 the state and municipal securities in the following tables subject to this methodology totaled $ 109.9 million as of June 30, 2025, and $ 125.0 million as of December 31, 2024.

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


June 30, 2025	AAA		AA		A		BBB		BB		Not Rated		Total
U.S. Treasury, federal agencies, and government sponsored agencies	$	—	$	275,720	$	—	$	—	$	—	$	—	$	275,720
State and municipal	248,506		695,832		75,133		4,390		—		—		1,023,861
U.S. government agency mortgage-backed securities	335,333		—		—		—		—		—		335,333
Private labeled mortgage-backed pools	27,816		—		—		—		—		—		27,816
Corporate notes	—		6,159		11,406		75,275		—		63,659		156,499
Total	$	611,655	$	977,711	$	86,539	$	79,665	$	—	$	63,659	$	1,819,229

December 31, 2024	AAA		AA		A		BBB		BB		Not Rated		Total
U.S. Treasury, federal agencies, and government sponsored agencies	$	—	$	278,383	$	—	$	—	$	—	$	—	$	278,383
State and municipal	273,629		698,428		66,079		10,726		—		—		1,048,862
U.S. government agency mortgage-backed securities	349,726		—		—		—		—		—		349,726
Private labeled mortgage-backed pools	29,278		—		—		—		—		—		29,278
Corporate notes	—		6,176		11,549		75,603		4,543		63,728		161,599
Total	$	652,633	$	982,987	$	77,628	$	86,329	$	4,543	$	63,728	$	1,867,848

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, 2025 and 2024.


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2025		2024		2025		2024

Beginning balance	$	140	$	158	$	158	$	157
Credit loss expense (benefit)	$	2	$	—	$	( 16 )	$	1
Ending balance	$	142	$	158	$	142	$	158

Accrued interest receivable on available for sale debt securities and held to maturity secur ities totaled $ 12.5 million at June 30, 2025 and $ 12.7 million at December 31, 2024 and is excluded from the estimate of credit losses.

The U.S. government sponsored entities and agencies and mortgage–backed securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. Therefore, for those securities, we do not record expected credit losses.

Information regarding securities proceeds, gross gains, and gross losses are presented below:

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


	Three Months Ended		Six Months Ended
	June 30,	June 30,	June 30,	June 30,
	2025	2024	2025	2024
Sales of securities available for sale
Proceeds	—	—	4,132	—
Gross gains	—	—	—	—
Gross losses	—	—	( 407 )	—

The tax benefit of the proceeds from the sale of securities available for sale was $ 0.1 million for the six months ended June 30, 2025 .

The Company pledges securities related to borrowings capacity at the Federal Reserve and Federal Home Loan Bank. The following table represents the fair value and amortized costs of these pledged securities.


	June 30, 2025				December 31, 2024
	Fair Value		Amortized Cost		Fair Value		Amortized Cost
Pledge securities for borrowing availability at the Federal Reserve	$	849,709	$	1,042,168	$	851,384	$	1,032,916
Pledge securities for FHLB borrowings	$	297,446	$	345,111	$	279,136	$	333,613

Note 3 – Loans

The table below identifies the Company’s loan portfolio segments and classes.


Portfolio Segment						Class of Financing Receivable
Commercial						Owner occupied real estate
						Non-owner occupied real estate
						Residential spec homes
						Development & spec land
						Commercial and industrial
Residential real estate						Residential mortgage
						Residential construction

Consumer						Direct installment
						Indirect installment
						Home equity

Portfolio segment is defined as a level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses. Class of financing receivable is defined as a group of financing receivables determined on the basis of both of the following, 1) risk characteristics of the financing receivable, and 2) an entity’s method for monitoring and assessing credit risk. Generally, the Bank does not move loans from a revolving loan to a term loan other than construction loans. Construction loans are reviewed and rewritten prior to being originated as a term loan.

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The following table presents outstanding loans held for investment by portfolio class, as of June 30, 2025 and December 31, 2024:


	June 30, 2025		December 31, 2024
Commercial
Owner occupied real estate	$	705,069	$	667,165
Non–owner occupied real estate	1,577,782		1,501,456
Residential spec homes	17,386		15,611
Development & spec land	21,714		18,627
Commercial and industrial	976,740		875,297
Total commercial	3,298,691		3,078,156
Real estate
Residential mortgage	763,614		783,961
Residential construction	22,412		18,948

Total real estate	786,026		802,909
Consumer
Direct installment	87,549		97,190
Indirect installment	233,648		303,901
Home equity	579,668		564,884
Total consumer	900,865		965,975
Total loans	4,985,582		4,847,040
Allowance for credit losses	( 54,399 )		( 51,980 )
Net loans	$	4,931,183	$	4,795,060

Total loans include net unearned discounts and deferred loan costs of $ 11.9 million at June 30, 2025 and $ 14.9 million at December 31, 2024, respectively.

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

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, 2025:


	June 30, 2025
	Total Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non-accruing Loans with no Allowance for Credit Losses
Commercial
Owner occupied real estate	$	4,240	$	1,123	$	1,469
Non–owner occupied real estate	421		—		143
Residential spec homes	—		—		—
Development & spec land	523		—		—
Commercial and industrial	2,363		—		1,137
Total commercial	7,547		1,123		2,749
Real estate
Residential mortgage	9,525		102		—
Residential construction	—		—		—

Total real estate	9,525		102		—
Consumer
Direct installment	304		306		—
Indirect installment	1,527		70		—
Home equity	5,391		512		—
Total consumer	7,222		888		—
Total	$	24,294	$	2,113	$	2,749

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

The following table presents non–accrual loans and loans past due over 90 days still on accrual by class of loan at December 31, 2024:


	December 31, 2024
	Total Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non-accruing Loans with no Allowance for Credit Losses
Commercial
Owner occupied real estate	$	2,448	$	—	$	1,419
Non–owner occupied real estate	444		—		444
Residential spec homes	—		—		—
Development & spec land	534		—		534
Commercial and industrial	2,232		—		1,239
Total commercial	5,658		—		3,636
Real estate
Residential mortgage	11,215		—		—
Residential construction	—		—		—

Total real estate	11,215		—		—
Consumer
Direct installment	338		128		—
Indirect installment	1,542		358		—
Home equity	7,039		680		—
Total consumer	8,919		1,166		—
Total	$	25,792	$	1,166	$	3,636

There was no interest income recognized on non-accrual loans during the three and six months periods ended June 30, 2025 and 2024, 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 during the three and six months periods ended June 30, 2025 and 2024, respectively.

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

The following table presents the payment status by class of loan at June 30, 2025:


	June 30, 2025
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Total Loans
Commercial
Owner occupied real estate	$	701,219	$	388	$	919	$	2,543	$	3,850	$	705,069
Non–owner occupied real estate	1,568,442		5,412		3,928		—		9,340		1,577,782
Residential spec homes	17,386		—		—		—		—		17,386
Development & spec land	21,714		—		—		—		—		21,714
Commercial and industrial	971,014		2,457		1,472		1,797		5,726		976,740
Total commercial	3,279,775		8,257		6,319		4,340		18,916		3,298,691
Real estate
Residential mortgage	754,493		—		4,702		4,419		9,121		763,614
Residential construction	22,412		—		—		—		—		22,412

Total real estate	776,905		—		4,702		4,419		9,121		786,026
Consumer
Direct installment	86,013		855		290		391		1,536		87,549
Indirect installment	229,039		3,534		451		624		4,609		233,648
Home equity	566,447		7,587		1,911		3,723		13,221		579,668
Total consumer	881,499		11,976		2,652		4,738		19,366		900,865
Total	$	4,938,179	$	20,233	$	13,673	$	13,497	$	47,403	$	4,985,582

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

The following table presents the payment status by class of loan at December 31, 2024:


	December 31, 2024
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Total Loans
Commercial
Owner occupied real estate	$	665,875	$	1,195	$	—	$	95	$	1,290	$	667,165
Non–owner occupied real estate	1,500,229		931		—		296		1,227		1,501,456
Residential spec homes	15,611		—		—		—		—		15,611
Development & spec land	18,627		—		—		—		—		18,627
Commercial and industrial	872,893		2,155		70		179		2,404		875,297
Total commercial	3,073,235		4,281		70		570		4,921		3,078,156
Real estate
Residential mortgage	773,214		—		4,163		6,584		10,747		783,961
Residential construction	18,948		—		—		—		—		18,948

Total real estate	792,162		—		4,163		6,584		10,747		802,909
Consumer
Direct installment	95,337		1,325		181		347		1,853		97,190
Indirect installment	298,048		4,179		806		868		5,853		303,901
Home equity	551,483		7,143		1,537		4,721		13,401		564,884
Total consumer	944,868		12,647		2,524		5,936		21,107		965,975
Total	$	4,810,265	$	16,928	$	6,757	$	13,090	$	36,775	$	4,847,040

The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date.

Modified Loans

The following tables detail the amortized cost at June 30, 2025 of loans that were modified to borrowers experiencing financial difficulty during the three months ended June 30, 2025 and the amortized cost at June 30, 2024, of loans that were modified to borrowers experiencing financial difficulty during the three and six months periods ended June 30, 2024:


	Three Months Ended June 30, 2025
		Term Extension		Interest Rate Reduction		Other-Than-Insignificant Payment Delay		Term Extension and Interest Rate Reduction		Total		% of Loans Held for Investment

Commercial
Owner occupied real estate		$	500	$	—	$	—	$	—	$	500	0.07	%



Non-owner occupied real estate		—		—		—		—		—		—	%
Development spec & land		—		—		—		—		—		—	%
Commercial and industrial		877		—		—		1,545		2,422		0.25	%
Total		$	1,377	$	—	$	—	$	1,545	$	2,922	0.06	%

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


	Six Months Ended June 30, 2025
	Term Extension		Interest Rate Reduction		Other-Than-Insignificant Payment Delay		Term Extension and Interest Rate Reduction		Total		% of Loans Held for Investment

Commercial
Owner occupied real estate	$	500	$	—	$	425	$	—	$	925	0.13	%
Non-owner occupied real estate	421		—		—		—		421		0.03	%
Development spec & land	523		—		—		—		523		2.41	%
Commercial and industrial	1,253		—		416		1,545		3,214		0.33	%
Total	$	2,697	$	—	$	841	$	1,545	$	5,083	0.10	%


	Three Months Ended June 30, 2024
		Term Extension		Interest Rate Reduction		Other-Than-Insignificant Payment Delay		Term Extension and Interest Rate Reduction		Total		% of Loans Held for Investment
Commercial
Owner occupied real estate		$	—	$	—	$	668	$	—	$	668	0.11	%
Non-owner occupied real estate		696		—		—		—		696		0.05	%
Development spec & land		748		—		—		—		748		2.23	%
Commercial and industrial		1,097		—		—		398		1,495		0.19	%











Total		$	2,541	$	—	$	668	$	398	$	3,607	0.07	%


	Six Months Ended June 30, 2024
		Term Extension		Interest Rate Reduction		Other-Than-Insignificant Payment Delay		Term Extension and Interest Rate Reduction		Total		% of Loans Held for Investment
Commercial
Owner occupied real estate		$	1,948	$	—	$	668	$	—	$	2,616	0.41	%
Non-owner occupied real estate		696		—		—		—		696		0.05	%
Development spec & land		748		—		—		—		748		2.23	%
Commercial and industrial		1,347		—		25		437		1,809		0.23	%
Total		$	4,739	$	—	$	693	$	437	$	5,869	0.12	%

The following tables summarize the financial impacts of loan modifications and payment deferrals, as applicable, during the three and six months periods ended June 30, 2025 and 2024:

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	Three Months Ended June 30, 2025
	Weighted Average Term Extension (In Months)	Weighted average interest rate reduction (In Percentage Terms)		Weighted Average Payment Delay (In Months)	Term Extension (In Months) & Rate Reduction (In Percentage Terms)
Commercial
Owner occupied real estate	6	—	%	—	—
Non-owner occupied real estate	—	—	%	—	—
Development spec & land	—	—	%	—	—
Commercial and industrial	10	—	%	—	Weighted average term extension of 36 months & weighted average interest rate reduction of 1.73 %


	Six Months Ended June 30, 2025
	Weighted Average Term Extension (In Months)	Weighted average interest rate reduction (Int Percentage Terms)		Weighted Average Payment Delay (In Months)	Term Extension (In Months) & Rate Reduction (In Percentage Terms)
Commercial
Owner occupied real estate	6	—	%	6	—
Non-owner occupied real estate	14	—	%	—	—
Development spec & land	18	—	%	—	—
Commercial and industrial	10	—	%	6	Weighted average term extension of 36 months & weighted average interest rate reduction of 1.73 %


	Three Months Ended June 30, 2024
	Weighted Average Term Extension (In Months)	Weighted average interest rate reduction (In Percentage Terms)		Weighted Average Payment Delay (In Months)	Term Extension (In Months) & Rate Reduction (In Percentage Terms)
Commercial
Owner occupied real estate	—	—	%	5	—
Non-owner occupied real estate	31	—	%	—	—
Development spec & land	3	—	%	—	—
Commercial and industrial	5	—	%	—	Weighted average term extension of 6 months & Weighted average interest rate reduction of 1.75 %

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	Six Months Ended June 30, 2024
	Weighted Average Term Extension (In Months)	Weighted average interest rate reduction (Int Percentage Terms)		Weighted Average Payment Delay (In Months)	Term Extension (In Months) & Rate Reduction (In Percentage Terms)

Commercial
Owner occupied real estate	9	—	%	5	—
Non-owner occupied real estate	31	—	%	—	—
Development spec & land	3	—	%	—	—
Commercial and industrial	6	—	%	3	Weighted average term extension of 14 months & weighted average interest rate reduction of 1.59 %

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

The following table presents the amortized cost basis at June 30, 2025 of loans to borrowers experiencing financial difficulty that had been modified within the previous 12 months:


	June 30, 2025
	Current		30-89 Days Past Due		90 Days Past Due		Total

Commercial
Owner occupied real estate	$	5,302	$	—	$	—	$	5,302
Non-owner occupied real estate	421		—		—		421
Development spec & land	523		—		—		523
Commercial and industrial	4,864		—		—		4,864
Total	$	11,110	$	—	$	—	$	11,110

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


	June 30, 2024
	Current		30-89 Days Past Due		90 Days Past Due		Total

Commercial
Owner occupied real estate	$	2,615	$	—	$	—	$	2,615
Non-owner occupied real estate	696		—		—		696
Development spec & land	748		—		—		748
Commercial and industrial	3,142		25		—		3,167
Total	$	7,201	$	25	$	—	$	7,226

On an ongoing basis, we monitor the performance of all modified loans according to their modified terms. The amortized cost of modified loans that had a payment default during the three and six months ended June 30, 2025, which were still in default at period end, and were within 12 months or less of being modified was not significant. For the three and six months ended June 30, 2024, the Company had $ 0 and $ 0.3 million in payment defaults, respectively.

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For purposes of the six months ended June 30, 2025 and June 30, 2024, the previously repo rted $ 2.8 millions and $ 1.2 million in defaulted receivables, respectively, were made current during the second quarter.

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

Collateral Dependent Financial Assets

A collateral dependent financial loan relies solely on the operation or sale of the collateral for repayment. In evaluating the overall risk associated with the loan, the Company considers character, overall financial condition and resources, and payment record of the borrower; the prospects for support from any financially responsible guarantors; and the nature and degree of protection provided by the cash flow and value of any underlying collateral. 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, 2025 and December 31, 2024.


	June 30, 2025
	Real Estate		Accounts Receivable/ Equipment		Other		Total		ACL Allocation
Commercial
Owner occupied real estate	$	4,240	$	—	$	—	$	4,240	$	315
Non–owner occupied real estate	421		—		—		421		—

Development & spec land	523		—		—		523		—
Commercial and industrial	1,012		1,246		—		2,258		603
Total commercial	6,196		1,246		—		7,442		918










Total collateral dependent loans (1)	$	6,196	$	1,246	$	—	$	7,442	$	918

(1) Collateral dependent loans had a collateral fair value of $ 5.4 million at June 30, 2025


	December 31, 2024
	Real Estate		Accounts Receivable/ Equipment		Other		Total		ACL Allocation
Commercial
Owner occupied real estate	$	2,448	$	—	$	—	$	2,448	$	224
Non–owner occupied real estate	444		—		—		444		—

Development & spec land	534		—		—		534		—
Commercial and industrial	1,756		476		—		2,232		731
Total commercial	5,182		476		—		5,658		955










Total collateral dependent loans (1)	$	5,182	$	476	$	—	$	5,658	$	955

(1) Collateral dependent loans had a collateral fair value of $ 3.4 million at December 31, 2024

As of June 30, 2025, the Company had a carrying value of $ 1.1 million of repossessed assets. As of June 30, 2025, the Company had a recorded net investment of $ 1.5 million o f consumer mortgage loans in which foreclosure proceedings have commenced. Repossessed assets are a component of other assets within the condensed consolidated balance sheet.

Credit Quality Indicators

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Horizon Bank’s processes for determining credit quality differ slightly depending on whether a new loan or a renewed loan is being underwritten, or whether an existing loan is being re–evaluated for credit quality. The latter usually occurs upon receipt of current financial information or other pertinent data that would trigger a change in the credit quality grade.

• For new and renewed commercial loans, the Bank’s Credit Department, which acts independently of the loan officer, assigns the credit quality grade to the loan. Loan grades for loans with an aggregate credit exposure that exceeds the authorities in the respective regions (ranging from $ 3,000,000 to $ 6,000,000 ) are validated by the Loan Committee, which is chaired by the Chief Commercial Banking Officer (“CCBO”).

• Commercial loan officers are responsible for reviewing their loan portfolios and promptly assessing any adverse change in credit quality and revising the risk rating appropriately. When circumstances warrant a change in the credit quality grade, loan officers are required to notify the Credit Department of the change in the credit quality grade. Downgrades are accepted immediately, however, lenders must present their factual information to the Credit Department when recommending an upgrade. 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. 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.

• Monthly, senior management meets as members of the Watch Committee, which reviews all of the past due, classified, and impaired loans and the relative trends of these assets. This committee also reviews the actions taken by management regarding foreclosure mitigation, loan extensions, loan modifications, other real estate owned and personal property repossessions. The information reviewed in this meeting acts as a precursor for developing management’s analysis of the adequacy of the Allowance for Credit Losses on Loans and Leases.

For residential real estate and consumer loans, Horizon uses a grading system based on delinquency. Loans that are 90 days or more past due, on non–accrual, or are classified as modified loans are graded “Substandard.” After being 90 to 120 days delinquent a loan is charged off unless it is well secured and in the process of collection. If the latter case exists, the loan is placed on non–accrual. Occasionally a mortgage loan may be graded as “Special Mention.” When this situation arises, it is because the characteristics of the loan and the borrower fit the definition of a Risk Grade 5 described below, which is normally used for grading commercial loans. Loans not graded Substandard are considered Pass.

Horizon Bank employs a nine–grade rating system to determine the credit quality of commercial loans. The first five grades represent acceptable quality, and the last four grades mirror the criticized and classified grades used by the bank regulatory agencies (special mention, substandard, doubtful, and loss). The loan grade definitions are detailed below.

Risk Grade 1: Excellent (Pass)

Loans secured by liquid collateral, such as certificates of deposit, reputable bank letters of credit, or other cash equivalents or loans to any publicly held company with a current long–term debt rating of A or better and meeting defined key financial metric ranges.

Risk Grade 2: Good (Pass)

Loans to businesses that have strong financial statements containing an unqualified opinion from a CPA firm and at least three years consecutive years of profits; loans supported by unaudited financial statements containing strong balance sheets, five consecutive years of profits, a five year satisfactory relationship with the Bank, and key balance sheet and income statement trends that are either stable or positive; loans secured by publicly traded marketable securities with required margins where there is no impediment to liquidation; loans to individuals backed by liquid personal assets and unblemished credit histories; or loans to publicly held companies with current long–term debt ratings of Baa or better and meeting defined key financial metric ranges.

Risk Grade 3: Satisfactory (Pass)

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 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

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ranges. Loans may be graded Satisfactory when there is no recent information on which to base a current risk evaluation and the following conditions apply:

• At inception, the loan was properly underwritten, did not possess an unwarranted level of credit risk, and the loan met the above criteria for a risk grade of Excellent, Good, or Satisfactory;

• At inception, the loan was secured with collateral possessing a loan value adequate to protect the Bank from loss.

• The loan has exhibited two or more years of satisfactory repayment with a reasonable reduction of the principal balance.

• During the period that the loan has been outstanding, there has been no evidence of any credit weakness. Some examples of weakness include slow payment, lack of cooperation by the borrower, breach of loan covenants, or the borrower is in an industry known to be experiencing problems. If any of these credit weaknesses is observed, a lower risk grade may be warranted.

Risk Grade 4: Satisfactory/Monitored

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. Borrower displays acceptable liquidity, leverage, and earnings performance within the Bank’s minimum underwriting guidelines. The level of risk is acceptable but conditioned on the proper level of loan officer supervision. Loans that normally fall into this grade include acquisition, construction and development loans and income producing properties that have not reached stabilization.

Risk Grade 4W: Management Watch

Loans in this category are considered to be of acceptable quality and meet defined key financial metric ranges, but with above normal risk. Borrower displays potential indicators of weakness in the primary source of repayment resulting in a higher reliance on secondary sources of repayment. Balance sheet may exhibit weak liquidity and/or high leverage. There is inconsistent earnings performance without the ability to sustain adverse economic conditions. Borrower may be operating in a declining industry or the property type, as for a commercial real estate loan, may be high risk or in decline. These loans require an increased level of loan officer supervision and monitoring to assure that any deterioration is addressed in a timely fashion. Commercial construction loans are graded as 4W Management Watch until the projects are completed and stabilized.

Risk Grade 5: Special Mention

Loans which possess some temporary (normally less than one year) credit deficiency or potential weakness which deserves close attention. Such loans pose an unwarranted financial risk that, if not corrected, could weaken the loan by adversely impacting the future repayment ability of the borrower. The key distinctions of a Special Mention classification are that (1) it is indicative of an unwarranted level of risk and (2) weaknesses are considered “potential,” not “defined,” impairments to the primary source of repayment. These loans may be to borrowers with adverse trends in financial performance, collateral value and/or marketability, or balance sheet strength and must meet defined key financial metric ranges.

Risk Grade 6: Substandard

One or more of the following characteristics may be exhibited in loans classified Substandard:

• Loans which possess a defined credit weakness. The likelihood that a loan will be paid from the primary source of repayment is uncertain. Financial deterioration is under way and very close attention is warranted to ensure that the loan is collected without loss.

• Loans are inadequately protected by the current net worth and paying capacity of the obligor.

• 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.

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

• Unusual courses of action are needed to maintain a high probability of repayment.

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• The borrower is not generating enough cash flow to repay loan principal; however, it continues to make interest payments.

• The lender is forced into a subordinated or unsecured position due to flaws in documentation.

• Loans have been restructured so that payment schedules, terms, and collateral represent concessions to the borrower when compared to the normal loan terms.

• The lender is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan.

• There is a significant deterioration in market conditions to which the borrower is highly vulnerable.

• The borrower meets defined key financial metric ranges.

Risk Grade 7: Doubtful

One or more of the following characteristics may be present in loans classified Doubtful:

• Loans have all of the weaknesses of those classified as Substandard. However, based on existing conditions, these weaknesses make full collection of principal highly improbable.

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

• The possibility of loss is high but because of certain important pending factors which may strengthen the loan, loss classification is deferred until the exact status of repayment is known.

• The borrower meets defined key financial metric ranges.

Risk Grade 8: Loss

Loans are considered uncollectible and of such little value that continuing to carry them as assets is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

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The following tables present loans by credit grades and origination year at June 30, 2025.


June 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving Term Loans		Revolving Loans		Total
Commercial
Owner occupied real estate
Pass	$	59,279	$	74,736	$	72,793	$	84,695	$	65,295	$	201,390	$	96,330	$	20,945	$	675,463
Special Mention	—		1,033		1,855		—		1,407		4,362		2,371		150		11,178
Substandard	—		3,208		8,450		3,659		—		2,611		—		500		18,428
Doubtful	—		—		—		—		—		—		—		—		—
Total owner occupied real estate	$	59,279	$	78,977	$	83,098	$	88,354	$	66,702	$	208,363	$	98,701	$	21,595	$	705,069
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Non–owner occupied real estate
Pass	$	106,058	$	185,657	$	109,738	$	236,996	$	125,371	$	434,273	$	338,165	$	11,006	$	1,547,264
Special Mention	—		—		1,467		16,419		1,205		94		—		—		19,185
Substandard	—		2,181		3,763		—		—		5,289		100		—		11,333
Doubtful	—		—		—		—		—		—		—		—		—
Total non–owner occupied real estate	$	106,058	$	187,838	$	114,968	$	253,415	$	126,576	$	439,656	$	338,265	$	11,006	$	1,577,782
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Residential spec homes
Pass	$	1,883	$	306	$	—	$	—	$	—	$	—	$	12,157	$	3,040	$	17,386
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total residential spec homes	$	1,883	$	306	$	—	$	—	$	—	$	—	$	12,157	$	3,040	$	17,386
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Development & spec land
Pass	$	1,300	$	818	$	4,048	$	767	$	1,306	$	2,128	$	10,461	$	363	$	21,191
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		523		—		523
Doubtful	—		—		—		—		—		—		—		—		—
Total development & spec land	$	1,300	$	818	$	4,048	$	767	$	1,306	$	2,128	$	10,984	$	363	$	21,714
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial and industrial
Pass	$	144,449	$	245,297	$	87,476	$	124,977	$	61,662	$	54,197	$	52,456	$	164,743	$	935,257
Special Mention	1,488		1,289		622		745		43		720		10,852		9,782		25,541
Substandard	1,545		1,715		6,136		99		26		1,736		1,037		3,648		15,942
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	147,482	$	248,301	$	94,234	$	125,821	$	61,731	$	56,653	$	64,345	$	178,173	$	976,740
Gross charge-offs during period	$	—	$	121	$	—	$	—	$	—	$	22	$	8	$	—	$	151
Total commercial	$	316,002	$	516,240	$	296,348	$	468,357	$	256,315	$	706,800	$	524,452	$	214,177	$	3,298,691

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June 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving Term Loans		Revolving Loans		Total
Real estate
Residential mortgage
Performing	$	28,606	$	70,218	$	122,023	$	155,869	$	135,542	$	241,729	$	—	$	—	$	753,987
Non–performing	—		189		3,373		1,034		675		4,356		—		—		9,627
Total residential mortgage	$	28,606	$	70,407	$	125,396	$	156,903	$	136,217	$	246,085	$	—	$	—	$	763,614
Gross charge-offs during period	$	—	$	136	$	—	$	62	$	226	$	3	$	—	$	—	$	427

Residential construction
Performing	$	—	$	—	$	—	$	—	$	—	$	—	$	22,412	$	—	$	22,412
Non–performing	—		—		—		—		—		—		—		—		—
Total residential construction	$	—	$	—	$	—	$	—	$	—	$	—	$	22,412	$	—	$	22,412
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—






Total real estate	$	28,606	$	70,407	$	125,396	$	156,903	$	136,217	$	246,085	$	22,412	$	—	$	786,026


June 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving Term Loans		Revolving Loans		Total
Consumer
Direct installment
Performing	$	5,502	$	8,069	$	53,290	$	7,792	$	4,136	$	6,542	$	44	$	1,564	$	86,939
Non–performing	—		27		426		19		88		50		—		—		610
Total direct installment	$	5,502	$	8,096	$	53,716	$	7,811	$	4,224	$	6,592	$	44	$	1,564	$	87,549
Gross charge-offs during period	$	1	$	73	$	46	$	50	$	6	$	—	$	7	$	—	$	183

Indirect installment
Performing	$	—	$	21,808	$	57,327	$	102,055	$	36,610	$	14,251	$	—	$	—	$	232,051
Non–performing	—		33		323		725		305		211		—		—		1,597
Total indirect installment	$	—	$	21,841	$	57,650	$	102,780	$	36,915	$	14,462	$	—	$	—	$	233,648
Gross charge-offs during period	$	—	$	159	$	366	$	641	$	144	$	116	$	—	$	—	$	1,426

Home equity
Performing	$	6,917	$	12,311	$	19,290	$	14,283	$	4,796	$	9,324	$	27,508	$	479,336	$	573,765
Non–performing	—		68		258		445		—		204		4,928		—		5,903
Total home equity	$	6,917	$	12,379	$	19,548	$	14,728	$	4,796	$	9,528	$	32,436	$	479,336	$	579,668
Gross charge-offs during period	$	—	$	—	$	20	$	7	$	—	$	52	$	644	$	—	$	723
Total consumer	$	12,419	$	42,316	$	130,914	$	125,319	$	45,935	$	30,582	$	32,480	$	480,900	$	900,865

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The following tables present loans by credit grades and origination year at December 31, 2024.


December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Term Loans		Revolving Loans		Total
Commercial
Owner occupied real estate
Pass	$	75,649	$	74,305	$	90,872	$	68,978	$	36,778	$	178,936	$	92,227	$	12,365	$	630,110
Special Mention	129		—		1,724		1,769		142		8,759		—		100		12,623
Substandard	2,970		8,761		1,051		6,307		—		4,843		—		500		24,432
Doubtful	—		—		—		—		—		—		—		—		—
Total owner occupied real estate	$	78,748	$	83,066	$	93,647	$	77,054	$	36,920	$	192,538	$	92,227	$	12,965	$	667,165
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	—	$	1

Non–owner occupied real estate
Pass	$	194,167	$	115,378	$	244,266	$	133,689	$	100,688	$	344,558	$	298,288	$	11,726	$	1,442,760
Special Mention	—		4,211		16,409		1,249		—		31,083		—		—		52,952
Substandard	83		297		—		—		—		5,364		—		—		5,744
Doubtful	—		—		—		—		—		—		—		—		—
Total non–owner occupied real estate	$	194,250	$	119,886	$	260,675	$	134,938	$	100,688	$	381,005	$	298,288	$	11,726	$	1,501,456
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Residential spec homes
Pass	$	362	$	—	$	—	$	420	$	—	$	—	$	10,986	$	3,843	$	15,611
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total residential spec homes	$	362	$	—	$	—	$	420	$	—	$	—	$	10,986	$	3,843	$	15,611
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Development & spec land
Pass	$	819	$	4,139	$	788	$	1,133	$	328	$	2,039	$	7,931	$	599	$	17,776
Special Mention	—		—		—		—		—		317		—		—		317
Substandard	—		—		—		—		—		—		534		—		534
Doubtful	—		—		—		—		—		—		—		—		—
Total development & spec land	$	819	$	4,139	$	788	$	1,133	$	328	$	2,356	$	8,465	$	599	$	18,627
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial and industrial
Pass	$	242,562	$	105,877	$	128,707	$	73,008	$	6,954	$	54,764	$	48,313	$	179,370	$	839,555
Special Mention	1,246		324		1,245		28		1		1,573		9,519		9,281		23,217
Substandard	843		2,599		318		217		266		3,170		1,003		4,109		12,525
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	244,651	$	108,800	$	130,270	$	73,253	$	7,221	$	59,507	$	58,835	$	192,760	$	875,297
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	45	$	108	$	—	$	153
Total commercial	$	518,830	$	315,891	$	485,380	$	286,798	$	145,157	$	635,406	$	468,801	$	221,893	$	3,078,156

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Notes to Condensed Consolidated Financial Statements

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


December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Term Loans		Revolving Loans		Total
Real estate
Residential mortgage
Performing	$	69,264	$	145,927	$	160,780	$	140,310	$	78,563	$	177,902	$	—	$	—	$	772,746
Non–performing	201		1,619		2,125		1,472		706		5,092		—		—		11,215
Total residential mortgage	$	69,465	$	147,546	$	162,905	$	141,782	$	79,269	$	182,994	$	—	$	—	$	783,961
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	5	$	—	$	—	$	5

Residential construction
Performing	$	—	$	—	$	—	$	—	$	—	$	—	$	18,948	$	—	$	18,948
Non–performing	—		—		—		—		—		—		—		—		—
Total residential construction	$	—	$	—	$	—	$	—	$	—	$	—	$	18,948	$	—	$	18,948
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Mortgage warehouse
Performing	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Non–performing	—		—		—		—		—		—		—		—		—
Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Gross charge-offs during period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total real estate	$	69,465	$	147,546	$	162,905	$	141,782	$	79,269	$	182,994	$	18,948	$	—	$	802,909


December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Term Loans		Revolving Loans		Total
Consumer
Direct installment
Performing	$	11,306	$	59,850	$	9,510	$	5,398	$	2,679	$	6,003	$	60	$	1,918	$	96,724
Non–performing	1		374		46		19		—		26		—		—		466
Total direct installment	$	11,307	$	60,224	$	9,556	$	5,417	$	2,679	$	6,029	$	60	$	1,918	$	97,190
Gross charge-offs during period	$	72	$	93	$	169	$	1	$	35	$	78	$	9	$	—	$	457

Indirect installment
Performing	$	26,839	$	70,143	$	130,610	$	49,458	$	17,647	$	7,304	$	—	$	—	$	302,001
Non–performing	—		425		800		304		242		129		—		—		1,900
Total indirect installment	$	26,839	$	70,568	$	131,410	$	49,762	$	17,889	$	7,433	$	—	$	—	$	303,901
Gross charge-offs during period	$	161	$	449	$	1,345	$	527	$	188	$	99	$	—	$	—	$	2,769

Home equity
Performing	$	13,552	$	21,845	$	16,136	$	5,110	$	1,902	$	9,210	$	18,657	$	470,753	$	557,165
Non–performing	—		421		426		—		30		296		6,465		81		7,719
Total home equity	$	13,552	$	22,266	$	16,562	$	5,110	$	1,932	$	9,506	$	25,122	$	470,834	$	564,884
Gross charge-offs during period	$	—	$	23	$	52	$	88	$	—	$	39	$	110	$	11	$	323
Total consumer	$	51,698	$	153,058	$	157,528	$	60,289	$	22,500	$	22,968	$	25,182	$	472,752	$	965,975

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Notes to Condensed Consolidated Financial Statements

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

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, 2025 and 2024:


	Three Months Ended June 30, 2025
	Commercial		Real Estate		Mortgage Warehouse		Consumer		Total
Balance, beginning of period	$	32,640	$	3,167	$	—	$	16,847	$	52,654
Credit loss expense (recovery)	1,857		114		—		28		1,999
Charge-offs	( 144 )		( 425 )		—		( 879 )		( 1,448 )
Recoveries	60		373		—		761		1,194
Balance, end of period	$	34,413	$	3,229	$	—	$	16,757	$	54,399


	Three Months Ended June 30, 2024
	Commercial		Real Estate		Mortgage Warehouse		Consumer		Total
Balance, beginning of period	$	30,514	$	2,655	$	659	$	16,559	$	50,387
Credit loss expense (recovery)	1,484		( 71 )		77		925		2,415
Charge-offs	( 111 )		( 1 )		—		( 741 )		( 853 )
Recoveries	54		5		—		207		266
Balance, end of period	$	31,941	$	2,588	$	736	$	16,950	$	52,215


	Six Months Ended June 30, 2025
	Commercial		Real Estate		Mortgage Warehouse		Consumer		Total
Balance, beginning of period	$	30,953	$	2,715	$	—	$	18,312	$	51,980
Provision for credit losses on loans	3,497		519		—		( 474 )		3,542
Charge-offs	( 152 )		( 427 )		—		( 2,332 )		( 2,911 )
Recoveries	115		422		—		1,251		1,788
Balance, end of period	$	34,413	$	3,229	$	—	$	16,757	$	54,399


	Six Months Ended June 30, 2024
	Commercial		Real Estate		Mortgage Warehouse		Consumer		Total
Balance, beginning of period	$	29,736	$	2,503	$	481	$	17,309	$	50,029
Provision for credit losses on loans	2,090		76		255		663		3,084
Charge-offs	3		( 2 )		—		( 1,564 )		( 1,563 )
Recoveries	112		11		—		542		665
Balance, end of period	$	31,941	$	2,588	$	736	$	16,950	$	52,215

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Notes to Condensed Consolidated Financial Statements

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

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, 2025 and December 31, 2024, the accrued interest on our loan portfolio was $ 26.3 million and $ 25.6 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”).

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. The loss rate method then divides the loan losses recognized on loans outstanding as of the pool date by the outstanding loan balance as of the pool date.

The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look–back period includes January 2009 through the current period, on a monthly basis. When historical credit loss experience is not sufficient for a specific portfolio, the Company may supplement its own portfolio data with external models or data. The Company supplemented data for 2009 and 2010 with the use of adjusted Uniform Bank Performance Report peer group data.

Qualitative reserves reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration other analytics performed within the organization, such as enterprise and concentration management, along with other credit–related analytics as deemed appropriate. Management attempts to quantify qualitative reserves whenever possible.

The Company’s CECL estimate applies to a forecast that incorporates macroeconomic trends and other environmental factors. Management utilized Moody's economic forecast scenarios including both National and Regional econometrics, as well as management judgment, as the basis for the forecast period. The historical loss rate was utilized as the base rate, and qualitative adjustments were utilized to reflect the forecast and other relevant factors.

The Company segments the loan portfolio into pools based on the following risk characteristics: 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.

Liability for Commitments to Extend Credit and Standby Letters of Credit

The following tables represent, by loan portfolio segment, a summary of changes in the activity in the liability for commitments to extend credit and standby letters of credit (please see note 14):


	Three Months Ended
	June 30, 2025							45382	June 30, 2024
		Balance, beginning of period		Credit loss expense (reversal)		Ending balance			Balance, beginning of period		Credit loss expense (reversal)		Ending balance
Commercial		$	1,132	$	411	$	1,543		$	—	$	—	$	—
Real Estate		72		27		99			46		( 5 )		41
Mortgage Warehouse		—		—		—			—		—		—
Consumer		796		( 127 )		669			704		( 40 )		664
Total		$	2,000	$	311	$	2,311		$	750	$	( 45 )	$	705

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


	Six Months Ended
	June 30, 2025						June 30, 2024
	Balance, beginning of period		Credit loss expense (reversal)		Ending balance		Balance, beginning of period		Credit loss expense (reversal)		Ending balance
Commercial	$	1,385	158		1,543		$	—	—		—
Real Estate	61		38		99		64		( 23 )		41
Mortgage Warehouse	—		—		—		—		—		—
Consumer	703		( 34 )		669		551		113		664
Total	$	2,149	$	162	$	2,311	$	615	$	90	$	705

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 $ 1.41 billion and $ 1.44 billion at June 30, 2025 and December 31, 2024.

Activity for mortgage servicing rights and the related impairment allowance were as follows:


	Three Months Ended				Six Months Ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Mortgage servicing rights
Balances, January 1	$	17,933	$	18,538	$	18,195	$	18,807
Servicing rights capitalized	337		359		582		567
Amortization of servicing rights	( 518 )		( 465 )		( 1,025 )		( 942 )
Ending balance	17,752		18,432		17,752		18,432
Impairment allowance
Beginning balance	—		—		—		—
Additions	—		—		—		—
Reductions	—		—		—		—
Ending balance	—		—		—		—
Mortgage servicing rights, net	$	17,752	$	18,432	$	17,752	$	18,432

Fair value, beginning of period	$	18,811	$	19,149	19,766		19,891
Fair value, end of period	18,251		19,091		18,251		19,091

Fair value at June 30, 2025 was determined using a discounted cash flow analysis with the discount rates ranging from 8.5 % to 11.0 % and prepayment speeds ranging from 5.8 % to 12.5 %, depending on the stratification of the specific type. Fair value at June 30, 2024 was determined using a discounted cash flow analysis with a discount rate of 11.0 % and prepayment speeds ranging from 6.0 % to 12.0 %, depending on the stratification of the specific type.

Note 6 – Goodwill

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

The carrying amount of goodwill was $ 155.2 million as of June 30, 2025 and December 31, 2024, respectively. There were no changes in the carrying amount of goodwill for the three months ended June 30, 2025 and 2024. Goodwill is assessed for impairment annually, or more frequently if events occur or circumstances change that indicate an impairment may exist. When assessing goodwill for impairment, first, a qualitative assessment can be made to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its estimated carrying value. If the results of the qualitative assessment are not conclusive, a quantitative goodwill test is performed. Alternatively, a quantitative goodwill test can be performed without performing a qualitative assessment.

No goodwill impairment charges were recorded for the six months ended June 30, 2025 and 2024.

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


	June 30, 2025
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater Than 90 Days		Total
Repurchase Agreements and repurchase-to-maturity transactions
U.S. Treasury federal agencies	$	35,058	$	—	$	—	$	—	$	35,058
U.S. government agency mortgage-backed securities	60,031		—		—		—		60,031


Private labeled mortgage-backed pools	—		—		—		—		—
Total Repurchase Agreements	$	95,089	$	—	$	—	$	—	$	95,089
Repurchase Agreements subject to offsetting arrangements									—


	December 31, 2024
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater Than 90 Days		Total
Repurchase Agreements and repurchase-to-maturity transactions
U.S. Treasury federal agencies	$	34,191	$	—	$	—	$	—	$	34,191
U.S. government agency mortgage-backed securities	55,721		—		—		—		55,721
Private labeled mortgage-backed pools	$	—	$	—	$	—	$	—	$	—
Total Repurchase Agreements	$	89,912	$	—	$	—	$	—	$	89,912
Repurchase Agreements subject to offsetting arrangements									—

Securities sold under agreements to repurchase are secured by securities with a carrying amount of $ 101.6 million and $ 96.8 million at June 30, 2025 and December 31, 2024, respectively.

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Notes to Condensed Consolidated Financial Statements

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

Note 8 – Subordinated Notes

On June 24, 2020, Horizon issued $ 60.0 million in aggregate principal amount of 5.625 % fixed–to–floating rate subordinated notes (the “Notes”). The Notes were offered in denominations of $1,000 and integral multiples of $1,000 in excess thereof. The Notes mature on July 1, 2030 (the “Maturity Date”). From and including the date of original issuance to, but excluding, July 1, 2025 or the date of earlier redemption (the “fixed rate period”), the Notes bear interest at an initial rate of 5.625 % per annum, payable semi–annually in arrears on January 1 and July 1 of each year, commencing on January 1, 2021. The last interest payment date for the fixed rate period will be July 1, 2025. From and including July 1, 2025 to, but excluding, the Maturity Date or the date of earlier redemption (the “floating rate period”), the Notes bear interest at a floating rate per annum equal to the benchmark rate, which is expected to be Three–Month Term SOFR (the “Benchmark Rate”), plus 549 basis points, payable quarterly in arrears on January 1, April 1, July 1, and October 1 of each year, commencing on October 1, 2025. 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 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. There is no sinking fund for the Notes. The Notes are obligations of Horizon only and are not obligations of, and are not guaranteed by, any of Horizon’s subsidiaries.

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 $ 55.8 million and $ 55.7 million at June 30, 2025 and December 31, 2024, respectively. Unamortized debt issuance costs were $ 0.7 million and $ 0.8 million at June 30, 2025 and December 31, 2024, respectively.

Note 9 – Derivative Financial Instruments

Our hedging policy allows the use of interest rate derivative instruments to manage our exposure to interest rate risk or hedge specified assets and liabilities. All derivative instruments are carried on the balance sheet at their estimated fair value and are recorded in other assets or other liabilities, as appropriate, and in the net change in each of these financial statement line items in the accompanying consolidated statement of cash flows.

Fair Value Hedges

Fair value hedges are intended to reduce the interest rate risk associated with the underlying hedged item. The Company enters into fixed rate loan agreements as part of its lending policy. To mitigate the risk of changes in fair value based on fluctuations in interest rates, the Company previously entered into interest rate swap agreements on individual loans, converting the fixed rate loans to a variable rate. The Company also previously entered into interest rate swap agreements on individual investment securities, converting the fixed rate security to a variable rate. During the year ended December 31, 2024, the Company terminated the fair value hedges on loans and securities, recording a deferred gain of $ 2.3 million on the loan termination that will be accreted into interest income over the remaining life of the underlying loans, and a mark-to-market adjustment of $ 0.3 million that was recorded in non-interest income on the termination of the fair value hedges against investment securities.

The change in fair value of both the hedge instruments and the underlying loan and security agreements are recorded as gains or losses in non–interest income. The fair value hedges are considered to be highly effective.

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Notes to Condensed Consolidated Financial Statements

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

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 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, 2025, 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.

The following tables summarize the fair value of our derivative financial instruments utilized by Horizon on a gross basis for the periods indicated.


	Asset Derivatives				Liability Derivatives
	June 30, 2025				June 30, 2025
	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives not designated as hedging instruments
Interest rate contracts -customer accommodation	$	510,567	$	16,637	$	510,567	$	16,637
Mortgage loan contracts	—		—		21,062		119
Commitments to originate mortgage loans	20,984		645		—		—
Total derivatives not designated as hedging instruments	531,551		17,282		531,629		16,756

Total derivatives subject to enforceable master netting arrangements, gross	$	531,551	$	17,282	$	531,629	$	16,756
Less: Gross amounts offset	—		—		—		—
Total derivatives subject to enforceable master netting arrangements, net	$	531,551	$	17,282	$	531,629	$	16,756

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Notes to Condensed Consolidated Financial Statements

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


	Asset Derivatives				Liability Derivatives
	December 31, 2024				December 31, 2024
	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives not designated as hedging instruments
Interest rate contracts - customer accommodation	$	521,520	$	28,817	$	521,520	$	28,817
Mortgage loan contracts	6,155		27		—		—
Commitments to originate mortgage loans	6,856		202		—		—
Total derivatives not designated as hedging instruments	534,531		29,046		521,520		28,817

Total derivatives subject to enforceable master netting arrangements, gross	$	534,531	$	29,046	$	521,520	$	28,817
Less: Gross amounts offset	—		—		—		—
Total derivatives subject to enforceable master netting arrangements, net	$	534,531	$	29,046	$	521,520	$	28,817

While the Company is party to master netting arrangements with most of its swap derivative counterparties, the Company has elected to not offset derivative assets and liabilities under these agreements on its consolidated balance sheets. 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, 2025, the Company pledged marketable securities as collateral with a carrying value of $ 5.5 million.

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, 2025 and June 30, 2024 is as follows:


	Location of gain (loss) recognized on derivative and Hedge item	Amount of Gain (Loss) Recognized on Derivative and Hedged Item
		Three Months Ended				Six Months Ended
		June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Derivatives designated as hedging instruments
Interest rate contracts - fair value hedge	Interest income - loans receivable	$	—	$	330	$	—	$	665
Hedged item		—		( 330 )		—		( 665 )
Interest rate contracts - fair value hedge	Interest income - investment securities	—		24		—		96
Hedged item		—		( 24 )		—		( 96 )
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, 2025 and June 30, 2024 is as follows:

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

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


	Location of gain (loss) recognized on derivative	Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended				Six Months Ended
		June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Derivative not designated as hedging relationship
Mortgage loan contracts	Non-interest income-Gain on sale of loans	$	( 66 )	$	15	$	443	$	( 39 )
Commitments to originate mortgage loans	Non-interest income-Gain on sale of loans	( 101 )		( 49 )		( 146 )		( 76 )
Total		$	( 167 )	$	( 34 )	$	297	$	( 115 )

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Note 10 – Disclosures about Fair Value of Assets and Liabilities

The Fair Value Measurements topic of the FASB ASC defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. There are three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

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, 2025. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Available for sale securities

When quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. Treasury and federal agency securities, state and municipal securities, U.S. government agency mortgage-backed securities, corporate notes. Level 2 securities are valued by a third party pricing service commonly used in the banking industry utilizing observable inputs. Observable inputs include dealer quotes, market spreads, cash flow analysis, the U.S. Treasury yield curve, trade execution data, market consensus prepayment spreads and available credit information and the bond’s terms and conditions. The pricing provider utilizes evaluated pricing models that vary based on asset class. These models incorporate available market information including quoted prices of securities with similar characteristics and, because many fixed–income securities do not trade on a daily basis, apply available information through processes such as benchmark curves, benchmarking of like securities, sector grouping, and matrix pricing. In addition, model processes, such as an option adjusted spread model, is used to develop prepayment and interest rate scenarios for securities with prepayment features. Level 3 securities use the discounted cash flow model or other market indicators to calculate the fair values.

Equity securities

The fair value of the Company's equity investments is estimated by a third party utilizing readily determinable fair values quoted on an active market.

Interest rate swap agreements

The fair value of the Company’s interest rate swap agreements is estimated by a third party using inputs that are primarily unobservable including a yield curve, adjusted for liquidity and credit risk, contracted terms and discounted cash flow analysis, and therefore, are classified within Level 2 of the valuation hierarchy.

Commitments to originate mortgage loans and mortgage loan contract assets/liabilities

The Company’s forward commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable.

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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, 2025
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Available for sale securities
U.S. Treasury and federal agencies	$	1,752	$	—	$	1,752	$	—
State and municipal	201,741		—		201,741		—
U.S. government agency mortgage-backed securities	14,095		—		14,095		—

Corporate notes	14,411		—		11,625		2,786
Total available for sale securities	231,999		—		229,213		2,786
Equity securities	570		570		—		—
Interest rate swap agreements asset	16,637		—		16,637		—
Commitments to originate mortgage loans	645		—		645		—
Liabilities:
Mortgage loans contracts	( 119 )		—		( 119 )		—

Interest rate swap agreements liability	( 16,637 )		—		( 16,637 )		—


	December 31, 2024
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Available for sale securities
U.S. Treasury and federal agencies	$	1,801	$	—	$	1,801	$	—
State and municipal	201,834		—		201,834		—
U.S. government agency mortgage-backed securities	14,543		—		14,543		—
Corporate notes	15,499		—		15,499		—
Total available for sale securities	233,677		—		233,677		—
Equity securities	595		595		—		—
Interest rate swap agreements asset	28,817		—		28,817		—
Commitments to originate mortgage loans	202		—		202		—
Mortgage loan contracts	27		—		27		—
Liabilities:
Interest rate swap agreements liability	( 28,817 )		—		( 28,817 )		—

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Certain other assets are measured at fair value on a non-recurring basis in the ordinary course of business and are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment):


	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2025
Collateral dependent loans	$	6,322	$	—	$	—	$	6,322

December 31, 2024
Collateral dependent loans	$	3,797	$	—	$	—	$	3,797

Collateral Dependent Loans: For loans identified as collateral dependent, the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value.

Loans Transferred to Held for Sale: Once a decision has been made to sell loans not previously classified as held for sale, these loans are transferred into the held for sale category and carried at the lower of cost or fair value, less estimated costs to sell. At the time of transfer into held for sale classification, any amount by which cost exceeds fair value is accounted for as a valuation allowance. This activity generally pertains to loans with observable inputs, and

therefore, are classified within Level 2 of the fair value hierarchy. However, should these loans include adjustments for changes in loan characteristics based on unobservable inputs, the loans would then be classified within Level 3 of the fair value hierarchy. As of June 30, 2025 and December 31, 2024, there were zero and $ 64.8 million loans transferred to held for sale on the accompanying Condensed Consolidated Balance Sheets, respectively.

The following table presents qualitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.

June 30, 2025

Fair
Value

Valuation
Technique

Unobservable
Inputs

Range
(Weighted Average)

Collateral dependent loans

6,322

Collateral based measurement

Discount to reflect current market conditions and ultimate collectability

16.1 %- 40.9 % ( 35.8 %)

December 31, 2024

Fair
Value

Valuation
Technique

Unobservable
Inputs

Range
(Weighted Average)

Collateral dependent loans

3,797

Collateral based measurement

Discount to reflect current market conditions and ultimate collectability

16.1 %- 40.1 %( 36.6 %)

Note 11 – Fair Value of Financial Instruments

The estimated fair value amounts of the Company’s financial instruments were determined using available market information, current pricing information applicable to Horizon and various valuation methodologies. Where market quotations were not available, considerable management judgment was involved in the determination of estimated fair values. Therefore, the estimated fair value of financial instruments shown below may not be representative of the amounts at which they could be exchanged in a current or future transaction. Due to the inherent uncertainties of expected cash flows of financial instruments, the use of alternate valuation assumptions and methods could have a significant effect on the estimated fair value amounts.

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

The following table does not include certain financial instruments that are recorded at fair value on a recurring basis, including some non-recurring financial instruments. See Note 10 for more details.

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, 2025 and December 31, 2024. These include financial instruments recognized as assets and liabilities on the condensed consolidated balance sheets as well as certain off–balance sheet financial instruments. The estimated fair values shown below do not include any valuation of assets and liabilities, which are not financial instruments as defined by the FASB ASC fair value hierarchy.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and Cash Equivalents – Cash and cash equivalents are composed of: cash and due from banks, interest bearing deposits in banks, and federal funds sold. The carrying amounts approximate fair value.

Interest-Earning Time Deposits – The carrying amounts approximate fair value.

Held–to–Maturity Securities – For debt securities held to maturity, fair values are based on quoted market prices or dealer quotes. For those securities where a quoted market price is not available, carrying amount is a reasonable estimate of fair value based upon comparison with similar securities.

Loans Held for Sale – For mortgage loans, the fair value is derived from third party pricing models, based on active quotes. For non-mortgage loans, the assets are carried at the lower of cost or fair value.

Net Loans – The fair value of net loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.

FHLB Stock – Fair value of FHLB stock is based on the price at which it may be resold to the FHLB.

Interest Payable – The carrying amounts approximate fair value.

Deposits – The fair value of demand deposits, savings accounts, interest bearing checking accounts and money market deposits is the amount payable on demand at the reporting date and are classified within Level 1. The fair value of fixed maturity certificates of deposit is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturity and are classified within Level 2.

Borrowings – Rates currently available to Horizon for debt with similar terms and remaining maturities are used to estimate fair values of existing borrowings.

Subordinated Notes – The fair value of subordinated notes is based on discounted cash flows based on current borrowing rates for similar types of instruments.

Junior Subordinated Debentures to Capital Trusts – Rates currently available for debentures with similar terms and remaining maturities are used to estimate fair values of existing debentures.

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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, 2025
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash and due from banks	$	101,719	$	101,719	$	—	$	—
Interest- bearing deposits in banks	34,174		34,174		—		—
Federal funds sold	2,024		2,024		—		—
Cash and cash equivalents	137,917		137,917		—		—

Investment securities, held to maturity	1,819,087		—		1,536,980		—
Loans held for sale	2,994		—		—		2,994
Loans, net	4,931,183		—		—		4,776,148
Stock in FHLB	45,412		—		45,412		—

Liabilities
Non-interest bearing deposits	$	1,121,163	$	1,121,163	$	—	$	—
Interest bearing deposits	4,578,594		3,385,413		1,189,542		—
Borrowings	975,425		—		992,232		—
Subordinated notes	55,807		—		56,160		—
Junior subordinated debentures issued to capital trusts	57,583		—		50,299		—
Interest payable	14,007		—		14,007		—

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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


	December 31, 2024
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash and due from banks	$	92,300	$	92,300	$	—	$	—
Interest-earning deposits	201,131		201,131		—		—
Federal funds sold	—		—		—		—
Cash and cash equivalents	293,431		293,431		—		—
Interest earnings time deposits	735		—		735		—
Investment securities, held to maturity	1,867,690		—		1,566,268		—
Loans held for sale	67,597		—		64,824		2,773
Loans (excluding loan level hedges), net	4,795,060		—		—		4,611,702
Stock in FHLB	53,826		—		53,826		—

Liabilities
Non-interest bearing deposits	$	1,064,818	$	1,064,818	$	—	$	—
Interest bearing deposits	4,535,834		3,446,680		1,084,986		—
Borrowings	1,232,252		—		1,230,860		—
Subordinated notes	55,738		—		55,284		—
Junior subordinated debentures issued to capital trusts	57,477		—		48,559		—
Interest payable	11,137		—		11,137		—

Note 12 – Stockholders' Equity

The components of accumulated other comprehensive loss, net of tax included in capital are as follows:

Accumulated Other Comprehensive Income (Loss)


	June 30, 2025		December 31, 2024
Unrealized gain (loss) on securities available for sale	$	( 37,842 )	$	( 38,193 )
Unamortized gain (loss) on securities held to maturity, previously transferred from AFS	1,439		1,892


Total accumulated other comprehensive income (loss)	$	( 36,403 )	$	( 36,301 )

Note 13 – Regulatory Capital

Horizon and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. These capital requirements implement changes arising from the Dodd–Frank Wall Street Reform and Consumer Protection Act and the U.S. Basel Committee on Banking Supervision’s capital framework (known as “Basel III”). 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. 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.

The Company and Bank are subject to minimum regulatory capital requirements as defined and calculated in accordance

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

with the Basel III–based regulations. As allowed under Basel III rules, the Company made the decision to opt–out of including accumulated other comprehensive income in regulatory capital. The minimum regulatory capital requirements are set forth in the table below.

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, 2025 and December 31, 2024, 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 2025 that management believes have changed the Bank’s classification as well capitalized. There is no threshold for well capitalized status for bank holding companies.

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(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 June 30, 2025 and December 31, 2024, 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 Adequacy Purposes (1)				Required For Capital Adequacy Purposes with Capital Buffer (1)				Well Capitalized Under Prompt Corrective Action Provisions (1)
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount	Ratio
June 30, 2025
Total capital (to risk-weighted assets) 1
Consolidated	$	832,029	14.44	%	$	461,101	8.00	%	$	605,195	10.50	%	N/A	N/A
Bank	757,998		13.21		459,057		8.00		602,513		10.50		$ 573,822	10.00 %
Tier 1 capital1(to risk-weighted assets)
Consolidated	719,369		12.48		345,826		6.00		489,920		8.50		N/A	N/A
Bank	701,145		12.22		344,293		6.00		487,748		8.50		459,057	8.00
Common equity tier 1 capital1(to risk-weighted assets)
Consolidated	661,786		11.48		259,369		4.50		403,463		7.00		N/A	N/A
Bank	701,145		12.22		258,220		4.50		401,675		7.00		372,984	6.50
Tier 1 capital (to average assets) 1
Consolidated	719,369		9.59		300,057		4.00		300,057		4.00		N/A	N/A
Bank	701,145		9.36		299,510		4.00		299,510		4.00		374,388	5.00

	Actual				Required for Capital Adequacy Purposes (1)				Required For Capital Adequacy Purposes with Capital Buffer (1)				Well Capitalized Under Prompt Corrective Action Provisions (1)
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount	Ratio
December 31, 2024
Total capital (to risk-weighted assets) (1)
Consolidated	$	800,209	13.91	%	$	460,266	8.00	%	$	604,099	10.50	%	N/A	N/A
Bank	725,383		12.64	%	459,039		8.00	%	602,489		10.50	%	573,799	10.00 %
Tier 1 capital(1)(to risk-weighted assets)
Consolidated	690,183		12.00	%	345,199		6.00	%	489,033		8.50	%	N/A	N/A
Bank	671,095		11.70	%	344,279		6.00	%	487,729		8.50	%	459,039	8.00 %
Common equity tier 1 capital(1)(to risk-weighted assets)
Consolidated	632,760		11.11	%	258,900		4.50	%	402,733		7.00	%	N/A	N/A
Bank	671,095		11.70	%	258,209		4.50	%	401,659		7.00	%	372,969	6.50 %
Tier 1 capital(to average assets) (1)
Consolidated	690,183		8.88	%	310,825		4.00	%	310,825		4.00	%	N/A	N/A
Bank	671,095		8.64	%	310,539		4.00	%	310,539		4.00	%	388,174	5.00 %
(1) As defined by regulatory agencies

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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

In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk to meet the financing needs of its clients. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of amounts recorded in the consolidated balance sheets.

Commitments to extend credit are legally binding agreements to lend to a client, so long as there is no violation of any condition established in the commitment contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third party. The credit risk involved in issuing letters of credit is essentially the same as the credit risk involved in extending loan facilities to clients. The Company’s policy for obtaining collateral, and determining the nature of such collateral, is essentially the same as in the Company’s policies for making commitments to extend credit. 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, 2025 and December 31, 2024 , respectively:


	June 30, 2025		December 31, 2024
Commitments to extend credit	$	1,069,729	$	1,018,302
Standby letters of credit	26,286		23,457
Total	$	1,096,015	$	1,041,759

Note 15 - Subsequent Events

The Company does not have any reportable subsequent events from June 30, 2025 to the reporting date.

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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, 2025 and 2024

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward–Looking Statements

This report contains certain forward–looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to Horizon Bancorp, Inc. (“Horizon” or the “Company”) and Horizon Bank (the “Bank”). Horizon intends such forward–looking statements to be covered by the safe harbor provisions for forward–looking statements contained in the Private Securities Reform Act of 1995, and is including this statement for the purposes of these safe harbor provisions. Statements in this report should be considered in conjunction with the other information available about Horizon, including the information in the other filings we make with the Securities and Exchange Commission. The forward–looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “expect,” “estimate,” “project,” “intend,” “plan,” “believe,” “could,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward–looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.

Actual results may differ materially, adversely or positively, from the expectations of the Company that are expressed or implied by any forward–looking statement. Risks, uncertainties, and factors that could cause the Company’s actual results to vary materially from those expressed or implied by any forward–looking statement include but are not limited to:

• effects on Horizon’s business resulting from new U.S. domestic or foreign governmental trade measures, including but not limited to tariffs, import and export controls, foreign exchange intervention accomplished to offset the effects of trade policy or in response to currency volatility, and other restrictions on free trade;

• uncertain conditions within the domestic and international macroeconomic environment, including trade policy, monetary and fiscal policy, and conditions in the investment, credit, interest rate, and derivatives markets, and their impact on Horizon and its customers;

• current financial conditions within the banking industry;

• 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;

• loss of key Horizon personnel;

• macroeconomic conditions and their impact on Horizon and its customers;

• the increasing use of Bitcoin and other crypto currencies and/or stable coin and the possible impact these alternative currencies may have on deposit disintermediation and income derived from payment systems;

• risks related to the development and use of artificial intelligence (AI);

• the effect of interest rates on net interest rate margin and their impact on mortgage loan volumes and the outflow of deposits;

• increases in disintermediation, as new technologies allow consumers to complete financial transactions without the assistance of banks;

• potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms (e.g., Apple Pay or Bitcoin) take a greater market share of the payment systems;

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

• volatility and disruption in financial markets;

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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, 2025 and 2024

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

• changes in sources of liquidity;

• potential risk of environmental liability related to lending and acquisition activities;

• changes in the competitive environment in Horizon’s market areas and among other financial service providers;

• legislation and/or regulation affecting the financial services industry as a whole, and Horizon and its subsidiaries in particular;

• changes in regulatory supervision and oversight, including monetary policy and capital requirements;

• changes in accounting policies or procedures as may be adopted and required by regulatory agencies;

• litigation, regulatory enforcement, tax, and legal compliance risk and costs, as applicable generally and specifically to the financial and fiduciary (generally and as an ESOP fiduciary) environment, especially if materially different from the amount we expect to incur or have accrued for, and any disruptions caused by the same;

• the effects and costs of governmental investigations or related actions by third parties;

• rapid technological developments and changes;

• the risks presented by cyber terrorism and data security breaches;

• the rising costs of effective cybersecurity;

• containing costs and expenses;

• the ability of the U.S. federal government to manage federal debt limits;

• the risks of expansion through mergers and acquisitions, including unexpected credit quality problems with acquired loans, difficulty integrating acquired operations and material differences in the actual financial results of such transactions compared with Horizon’s initial expectations, including the full realization of anticipated cost savings; and

• acts of terrorism, war and global conflicts, such as the Russia-Ukraine conflict and continued unrest in the Middle East, and the potential impact they may have on supply chains, the availability of commodities, commodity prices, and the overall U.S. and global financial markets.

The foregoing list of important factors is not exclusive, and you are cautioned not to place undue reliance on these forward–looking statements, which speak only as of the date of this document or, in the case of documents incorporated by reference, the dates of those documents. We do not undertake to update any forward–looking statements, whether written or oral, that may be made from time to time by us or on our behalf. For a detailed discussion of the risks and uncertainties that may cause our actual results or performance to differ materially from the results or performance expressed or implied by forward–looking statements, see “Risk Factors” in Item 1A of Part I of our 2024 Annual Report on Form 10–K, in Item 1A of Part II of this Quarterly Report on Form 10–Q, and in the subsequent reports we file with the SEC.

Critical Accounting Estimates

The notes to the consolidated financial statements included in Item 8 of the Company’s 2024 Annual Report on Form 10–K contain a summary of the Company’s significant accounting policies. Certain of these policies are important to the portrayal of the Company’s financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. 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 December 31, 2024. There have been no material changes in the Company’s application of critical accounting estimates since December 31, 2024.

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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, 2025 and 2024

Results of Operations

Net Income

Net income increased $6.5 million to $20.6 million, or $0.47 per diluted share, during the three months ended June 30, 2025 when compared to $14.1 million, or $0.32 per diluted share, for the s ame period in 2024. The increase in net income from the prior year period reflects an increase in interest income of $4.5 million, a decrease of in interest expense of $5.6 million and an increase in non-interest income of $0.4 million. The increase was partially offset by an increase in non-interest expense of $1.9 million and an increase in tax expense of $2.0 million.

Net income increased $16.5 million to $44.6 million, or $1.01 per diluted share, during the six months ended June 30, 2025 when compared to $28.1 million, or $0.64 per share, for the same period in 2024 . The increase from the year ago period was primarily a result of a decrease in interest expense of $10.6 million, an increase in interest income of $8.4 million and an increase in non-interest income of $7.0 million. The increase was partially offset by an increase in non-interest expense of $4.1 million.

Net Interest Income

Net interest income increased $10.1 million, or 22.3% during the three months ended June 30, 2025 , to $55.4 million, when compared to the same period in 2024. While average earning assets decreased, the reported net FTE interest margin 1 increased by 59 basis points, to 3.23% for the three months ended June 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 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 the first quarter net interest income, or net FTE interest margin 1 .

Net interest income increased $19.1 million during the six months ended June 30, 2025, to $107.6 million when compared to the same period in 2024. While average earning asset balances declined slightly, the reported net FTE interest margin 1 increased by 57 basis points, to 3.14% for the six months ended June 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. Additionally, loan yields have expanded while deposit costs have declined when compared with the comparable year ago period.

1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.

Table of Contents

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, 2025 and 2024

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


	Average Balance Sheet
	(Dollars in Thousands, Unaudited)
	Three Months Ended
	June 30, 2025						June 30, 2024
	Average Balance (6)		Interest (5)		Average Rate		Average Balance (6)		Interest (5)		Average Rate
Assets
Interest earning assets
Interest earning deposits (incl. Fed Funds Sold)	$	72,993	$	830	4.56	%	$	55,467	$	738	5.35	%
Federal Home Loan Bank stock (1)	45,412		1,075		9.49	%	53,827		1,521		11.36	%
Investment securities - taxable (2)	959,238		4,866		2.03	%	1,309,305		6,465		1.99	%
Investment securities - non-taxable (2)	1,100,731		7,707		2.81	%	1,132,065		8,072		2.87	%
Total investment securities	2,059,969		12,573		2.45	%	2,441,370		14,537		2.39	%
Loans receivable (3) (4)	4,947,093		79,000		6.41	%	4,662,124		72,208		6.23	%
Total interest earning assets	$	7,125,467	93,478		5.26	%	$	7,212,788	89,004		4.96	%
Non-interest earning assets
Cash and due from banks	86,316						108,319
Allowance for credit losses	(52,560)						(50,334)
Other assets	472,175						508,555
Total average assets	$	7,631,398					$	7,779,328

Liabilities and Stockholders' Equity
Interest bearing liabilities
Interest bearing demand deposits	$	1,727,713	$	6,803	1.58	%	$	1,656,523	$	7,081	1.72	%
Saving and money market deposits	1,651,866		8,200		1.99	%	1,677,967		9,733		2.33	%
Time deposits	1,233,582		11,049		3.59	%	1,134,590		11,633		4.12	%
Total Deposits	4,613,161		26,052		2.27	%	4,469,080		28,447		2.56	%
Borrowings	847,862		7,777		3.68	%	1,184,172		10,278		3.49	%
Repurchase agreements	88,058		394		1.79	%	125,144		935		3.00	%
Subordinated notes	55,785		829		5.96	%	55,647		829		5.99	%
Junior subordinated debentures issued to capital trusts	57,550		1,070		7.46	%	57,335		1,213		8.51	%
Total interest bearing liabilities	5,662,416		36,122		2.56	%	5,891,378		41,702		2.85	%
Non-interest bearing liabilities
Demand deposits	1,114,982						1,080,676
Accrued interest payable and other liabilities	64,465						80,942
Stockholders' equity	789,535						726,332
Total average liabilities and stockholders' equity	$	7,631,398					$	7,779,328
Net FTE interest income (Non-GAAP) (5)			$	57,356					$	47,302
Less FTE adjustments (5)			2,001						2,023
Net Interest Income			$	55,355					$	45,279
Net FTE interest margin (Non-GAAP) (5)					3.23	%					2.64	%
(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

Table of Contents

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, 2025 and 2024

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, 2025						June 30, 2024
	Average Balance (6)		Interest (5)		Average Rate		Average Balance (6)		Interest (5)		Average Rate
Assets
Interest earning assets
Interest earning deposits (incl. Fed Funds Sold)	147,656		3,317		4.53	%	193,444		5,235		5.47	%
Federal Home Loan Bank stock (1)	48,573		2,086		8.66	%	45,888		2,304		10.10	%
Investment securities - taxable (2)	966,632		9,894		2.06	%	1,317,775		13,044		1.99	%
Investment securities - non-taxable (2)	1,110,436		15,544		2.82	%	1,141,011		16,238		2.86	%
Total investment securities	2,077,068		25,438		2.47	%	2,458,786		29,282		2.39	%
Loans receivable (3) (4)	4,906,496		153,840		6.32	%	4,555,224		139,515		6.16	%
Total interest earning assets	7,179,793		184,681		5.19	%	7,253,342		176,336		4.89	%
Non-interest earning assets
Cash and due from banks	87,460						107,057
Allowance for credit losses	(52,214)						(50,147)
Other assets	477,949						497,602
Total average assets	$	7,692,988					$	7,807,854

Liabilities and Stockholders' Equity
Interest bearing liabilities
Interest bearing demand deposits	1,739,017		13,295		1.54	%	1,657,616		13,708		1.67	%
Saving and money market deposits	1,663,165		16,463		2.00	%	1,671,242		18,995		2.30	%
Time deposits	1,223,043		21,895		3.61	%	1,155,756		23,734		4.13	%
Total Deposits	4,625,225		51,653		2.25	%	4,484,614		56,437		2.54	%
Borrowings	909,338		16,550		3.67	%	1,192,450		21,182		3.57	%
Repurchase agreements	88,262		809		1.85	%	131,598		1,961		3.00	%
Subordinated notes	55,768		1,658		6.00	%	55,602		1,660		6.00	%
Junior subordinated debentures issued to capital trusts	57,524		2,360		8.27	%	57,307		2,438		8.56	%
Total interest bearing liabilities	5,736,117		73,030		2.57	%	5,921,571		83,678		2.84	%
Non-interest bearing liabilities
Demand deposits	1,100,485						1,078,929
Accrued interest payable and other liabilities	71,463						81,478
Stockholders' equity	784,923						725,876
Total average liabilities and stockholders' equity	$	7,692,988					$	7,807,854
Net FTE interest income (Non-GAAP) (5)			111,651						92,658
Less FTE adjustments (5)			4,029						4,091
Net Interest Income			$	107,622					$	88,567
Net FTE interest margin (Non-GAAP) (5)					3.14	%					2.57	%
(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

Table of Contents

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, 2025 and 2024

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 June 30, 2025 vs. Three Months Ended June 30, 2024						Six Months Ended June 30, 2025 vs. Six Months Ended June 30, 2024
	Total Change		Change Due To Volume		Change Due To Rate		Total Change		Change Due To Volume		Change Due To Rate
Interest Income
Interest-bearing deposits in banks	$	92	$	210	$	(118)	$	(1,918)	$	(1,118)	$	(800)
Federal Home Loan Bank stock	(446)		(219)		(227)		(218)		129		(347)
Investment securities - taxable	(1,599)		(1,773)		174		(3,150)		(3,578)		428
Investment securities - non-taxable	(365)		(221)		(144)		(694)		(430)		(264)
Loans receivable	6,792		4,511		2,281		14,325		10,941		3,384
Total interest income	4,474		2,508		1,966		8,345		5,944		2,401
Interest Expense
Interest-bearing demand deposits	(278)		296		(574)		(413)		654		(1,067)
Savings and money market savings deposits	(1,533)		(149)		(1,384)		(2,532)		(92)		(2,440)
Time deposits	(584)		964		(1,548)		(1,839)		1,323		(3,162)
Borrowings	(2,501)		(3,059)		558		(4,632)		(5,138)		506
Repurchase agreements	(541)		(230)		(311)		(1,152)		(530)		(622)
Subordinated notes	—		2		(2)		(2)		5		(7)
Junior subordinated debentures issued to capital trusts	(143)		5		(148)		(78)		9		(87)
Total interest expense	(5,580)		(2,171)		(3,409)		(10,648)		(3,769)		(6,879)
Net FTE interest income (Non-GAAP)	10,054		4,679		5,375		18,993		9,713		9,280
Less change in FTE adjustments	(22)						(62)
Net Interest Income	$	10,076					$	19,055

Non-Interest Income


	Three Months Ended								Six Months Ended
	June 30,		June 30,						June 30,		June 30,
(Dollars in Thousands)	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Non-interest Income
Service charges on deposit accounts	$	3,208	$	3,130	$	78	3	%	$	6,416	$	6,344	$	72	1	%
Wire transfer fees	69		113		(44)		(39)	%	140		214		(74)		(35)	%
Interchange fees	3,403		3,826		(423)		(11)	%	6,644		6,935		(291)		(4)	%
Fiduciary activities	1,251		1,372		(121)		(9)	%	2,577		2,687		(110)		(4)	%
Loss on sale of investment securities	—		—		—		—	%	(407)		—		(407)		—	%
Gain on sale of mortgage loans	1,219		896		323		36	%	2,295		1,522		773		51	%
Mortgage servicing income net of impairment	375		450		(75)		(17)	%	760		889		(129)		(15)	%
Increase in cash value of bank owned life insurance	346		318		28		9	%	681		616		65		11	%
Other income	1,049		380		669		176	%	8,313		1,207		7,106		589	%
Total non-interest income	$	10,920	$	10,485	$	435	4	%	$	27,419	$	20,414	$	7,005	34	%

Total non-interest income increased $0.4 million for the three months ended June 30, 2025 compared to the same period in 2024 and increased $7.0 million for the six months ended June 30, 2025 compared to the same period in 2024. The primary components of the change were as follows:

Table of Contents

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, 2025 and 2024

Interchange fees decreased $0.4 million, or 11.1%, for the three months ended June 30, 2025 compared to the same period in 2024, and decreased by $0.3 million, or 4.2%, for the six months ended June 30, 2025, as compared to the same periods in 2024. The decrease was primarily driven by decreases in merchant and debit card fees.

Gain on sale of mortgage loans increased by $0.3 million, or 36.1%, for the three months ended June 30, 2025 compared to the same period in 2024, and increased by $0.8 million for the six months ended June 30, 2025, as compared to the same periods in 2024. The increase was primarily driven by higher volumes of sold loans.

Mortgage servicing income net of impairment decreased by $0.1 million, or 14.5%, for the six months ended June 30, 2025, as compared to the same periods in 2024. The decrease was primarily driven by a decrease in servicing fees due lower balances of loans services for others, and modestly higher levels of amortization expense on the asset balance of mortgage servicing rights.

Other income, which includes various miscellaneous income items as well as fair market value adjustments to certain other assets, increased by $7.1 million during the six months ended June 30, 2025 primarily due to the gain on sale of the Company's mortgage warehouse business to an unrelated third party in the first quarter of 2025, which resulted in a pre-tax gain of $7.0 million .

Non-Interest Expense


	Three Months Ended								Six Months Ended
	June 30,		June 30,						June 30,		June 30,
(Dollars in Thousands)	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Non-interest Expense
Salaries and employee benefits	$	22,731	$	20,583	$	2,148	10	%	$	45,145	$	40,851	$	4,294	11	%
Net occupancy expenses	3,127		3,192		(65)		(2)	%	6,829		6,738		91		1	%
Data processing	2,951		2,579		372		14	%	5,823		5,043		780		16	%
Professional fees	735		714		21		3	%	1,561		1,321		240		18	%
Outside services and consultants	3,278		3,058		220		7	%	6,543		6,417		126		2	%
Loan expense	1,231		1,038		193		19	%	1,920		1,757		163		9	%
FDIC insurance expense	1,216		1,315		(99)		(8)	%	2,504		2,635		(131)		(5)	%
Core deposit intangible amortization	816		844		(28)		(3)	%	1,632		1,716		(84)		(5)	%
Merger related expense	—		—		—		—	%	305		—		305		100	%
Other losses	245		515		(270)		(52)	%	473		531		(58)		(11)	%
Other expense	3,087		3,684		(597)		(16)	%	5,988		7,620		(1,632)		(21)	%
Total non-interest expense	$	39,417	$	37,522	$	1,895	5	%	$	78,723	$	74,629	$	4,094	6	%

Non-interest expense increased $1.9 million for the three months ended June 30, 2025 compared to the same period in 2024. Non-interest expense increased $4.1 million for the six months ended June 30, 2025 compared to the same period in 2024, the primary components of the change were as follows:

Salaries and employee benefits expense increased by $2.1 million for the three months ended June 30, 2025 when compared to the same period a year ago. Salaries and employee benefits expense increased by $4.3 million for the six months ended June 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. 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.

Table of Contents

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, 2025 and 2024

Other expenses, which includes corporate and other service expenses, decreased by $0.6 million for the three months ended June 30, 2025 when compared to the same period a year ago and $1.6 million for the six months ended June 30, 2025 compared to the same period in 2024. This decrease was partially due to decreases in marketing and advertising expenses.

Provision and Allowance for Credit Losses


	Three Months Ended				Six Months Ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Allowance for Credit Losses on Loans
Balance at beginning of period	$	52,654	$	50,387	$	51,980	$	50,029
Provision for credit losses on loans	1,999		2,415		3,542		3,084
Net loan (charge-offs) recoveries:
Commercial	$	(84)	$	(57)	$	(37)	$	115
Residential Real estate	(52)		4		(5)		9
Mortgage warehouse	—		—		—		—
Consumer	(118)		(534)		(1,081)		(1,022)
Total net loan (charge-offs) recoveries	$	(254)	$	(587)	$	(1,123)	$	(898)
Balance at end of period	$	54,399	$	52,215	$	54,399	$	52,215

Liability for Unfunded Lending Commitments
Balance at beginning of period	$	2,000	$	750	$	2,149	$	615
Provision (reversal) for credit losses on unfunded lending commitments	311		(45)		750		90
Balance at end of period	$	2,311	$	705	$	2,899	$	705
Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments	$	56,710	$	52,920	$	57,298	$	52,920

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 June 30, 2025, the Company recorded a provision for credit losses on loans of $2.0 million. This compares to a provision for credit losses on loans of $2.4 million compared to the same period in 2024. The decrease in the provision for credit losses on loans when compared to the year ago period was primarily attributable to a decrease in specific reserves related to the sale of the mortgage warehouse portfolio and payoffs of specific loans. The provision for credit losses in total was $2.5 million for three months ended June 30, 2025 compared to $2.4 million for the same period in 2024. The increase to the total provision is driven by an increase in provision for credit losses on unfunded lending commitments of $0.4 million and an increase in provision for credit losses on AFS securities of $0.2 million for three months ended June 30, 2025 compared to the same period in 2024, respectively.

For the three months ended June 30, 2025, net loan charge-offs decreased by $0.3 million to $0.3 million, compared to $0.6 million during the same period in 2024. The decrease in charge-offs was primarily due to decreases in the consumer portfolio, and partially as a result of the run-off of the indirect auto portfolio.

The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.09% at June 30, 2025, compared to 1.08% at June 30, 2024.

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

Income Taxes

The Company’s income tax expense for the three months ended June 30, 2025 was $3.8 million compared to $1.7 million for the same period in 2024, resulting in effective tax rates of 15.4% and 10.9%, respectively. The Company’s income tax

Table of Contents

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, 2025 and 2024

expense for the six months ended June 30, 2025 was $7.9 million compared to $3.0 million for the same period in 2024, resulting in effective tax rates of 15.0% and 9.8%, respectively. The increase in the effective tax rate for the comparative periods was primarily due to expectations of higher pre-tax income in 2025 as compared to 2024 , causing tax preferential items to have a less favorable impact, and the Company's decision to discontinue further investment in certain tax credit structures.

The effective income tax rates differed from the U.S. statutory federal income tax rates of 21% during the comparable periods primarily due to the effect of tax exempt income from securities, loans, and life insurance policies, and net tax benefits from tax credit investments.

Financial Condition

Total assets decreased by $149.1 million, or 1.9%, as of June 30, 2025, from $7.8 billion as of December 31, 2024. The decrease in total assets is primarily due to decreases in cash and cash equivalents of $155.5 million, or 53.0%, to $137.9 million as of June 30, 2025, and a decrease in loans held for sale of $64.6 million, to $3.0 million as a result of the Company's sale of its mortgage warehouse business. The decrease was partially offset by increase in loans HFI of $136.1 million or 2.8% to $4.9 billion.

Total investment securities decreased $50.3 million, or 2.4%, to $2.1 billion as of June 30, 2025 when compared to balances as of December 31, 2024. The decrease is primarily a result of amortization and maturities, as well as the sale of one corporate debt security in the first quarter. There were no purchases of investment securities during the six months ended June 30, 2025.

Total loans HFI increased to $4.9 billion as of June 30, 2025 compared to $4.8 billion as of December 31, 2024, led by organic commercial loan growth of $220.5 million. 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 $99.1 million, or 1.8%, to $5.7 billion as of June 30, 2025 when compared to balances as of December 31, 2024, driven by growth in non-interest-bearing and time deposit balances, partially offset by declines in other interest-bearing balances. The Company maintains a granular and tenured deposit base, with a continued focus on core commercial and consumer deposit gathering.

Total borrowings decreased by $256.8 million, or 20.8%, to $975.4 million as of June 30, 2025 when compared to balances as of December 31, 2024, primarily related to repayment of a portion of Federal Home Loan Bank advances.

Table of Contents

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, 2025 and 2024

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


	June 30, 2025				December 31, 2024
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
U.S. Treasury, federal agencies, and government sponsored agencies	$	2,143	$	1,752	$	2,258	$	1,801
State and municipal	242,682		201,741		243,521		201,834
U.S. government agency mortgage-backed securities	16,967		14,095		17,984		14,543
Private labeled mortgage-backed pools	—		—		—		—
Corporate notes	18,257		14,411		18,259		15,499
Total available for sale investment securities	$	280,049	$	231,999	$	282,022	$	233,677

Held to maturity
U.S. Treasury, federal agencies, and government sponsored agencies	$	275,720	$	243,085	$	278,383	$	239,130
State and municipal	1,023,861		837,762		1,048,862		866,706
U.S. government agency mortgage-backed securities	335,333		291,852		349,726		294,822
Private labeled mortgage–backed pools	27,816		24,444		29,278		25,320
Corporate notes	156,499		139,837		161,599		140,290
Total held to maturity investment securities	$	1,819,229	$	1,536,980	$	1,867,848	$	1,566,268

Investment securities available for sale decreased $1.7 million since December 31, 2024 to $232.0 million and securities held to maturity, net of the allowance for credit losses, decreased $48.6 million since December 31, 2024 to $1.8 billion as of June 30, 2025. The decrease in total investments was primarily due to normal maturities and amortization of investment securities. There were no purchases of investment securities during the six months ended June 30, 2025.

Credit Quality

The ACL balance at June 30, 2025 was $54.4 million, or 1.09% 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 increase in the ACL was primarily due to the growth in commercial loans and a modestly less favorable baseline economic outlook.

As of June 30, 2025, total non-accrual loans decreased by $1.5 million, or 5.8%, from December 31, 2024, to 0.49% of total loans HFI. Total non-performing assets increased $3.1 million, or 11%, from December 31, 2024, to 0.40% of total asset s.

During the six months ended June 30, 2025, net charge-offs were $1.1 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.

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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, 2025 and 2024


	Credit Quality
	(Dollars in Thousands Except Ratios, Unaudited)
	Quarter Ended
	June 30,			December 31,
	2025			2024
Non-accrual loans
Commercial	$	7,547		$	5,658
Residential Real estate	9,525			11,215

Consumer	7,222			8,919
Total non-accrual loans	$	24,294		$	25,792
90 days and greater delinquent - accruing interest	$	2,113		$	1,166
Total non-performing loans	$	26,407		$	26,958
Other real estate owned
Commercial	$	176		$	407
Residential Real estate	463			—

Consumer	480			17
Total other real estate owned	$	1,119		$	424

Other non-performing assets (1)	$	2,937		$	—

Total non-performing assets	$	30,463		$	27,382

Net charge-offs (recoveries)
Commercial	$	84		$	(32)
Residential Real estate	52			(10)

Consumer	118			668
Total net charge-offs	$	254		$	626

Allowance for credit losses
Commercial	$	34,413		$	30,953
Residential Real estate	3,229			2,715

Consumer	16,757			18,312
Total allowance for credit losses	$	54,399		$	51,980

Credit quality ratios
Non-accrual loans to HFI loans	0.49		%	0.53		%
Non-performing assets to total assets	0.40		%	0.35		%
Annualized net charge-offs of average total loans	0.02		%	0.05		%
Allowance for credit losses to HFI loans	1.09		%	1.07		%
Allowance for credit losses to non-performing loans	206.00		%	192.82		%
(1) Other non-performing assets consist of available for sale debt security placed on non-accrual status

Liquidity

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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, 2025 and 2024

The Bank maintains a stable base of core deposits provided by long–standing relationships with individuals and local businesses. These deposits are the principal source of liquidity for Horizon. 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 June 30, 2025, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $1.75 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 decrease in cash, cash equivalents and restricted cash of $155.5 million during the six months ended June 30, 2025, as reported in the consolidated statements of cash flows in this report. Operating activities, consisting mainly of net income adjusted for certain non-cash items, provided cash flow of $34.7 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 $14.5 million mainly due to growth in the loan portfolio, which used cash of $122.9 million. Financing activities used cash of $175.8 million, largely resulting from the repayment of long-term borrowings of $632.0 million and $14.2 million in dividends paid on common stock during the first six months of 2025.

Capital Resources

The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at June 30, 2025. Stockholders’ equity totaled $790.9 million as of June 30, 2025, compared to $763.6 million as of December 31, 2024. The increase in stockholders’ equity during the period was due to an increase in retained earnings, driven by higher net income during the period, which is primarily offset by cash dividend payments on outstanding common stock.

As of June 30, 2025, the ratio of total stockholders’ equity to total assets is 10.34%. Book value per common share was $18.06, increasing $0.59 compared to December 31, 2024.

Tangible common equity 1 totaled $627.0 million at June 30, 2025, and the ratio of tangible common equity to tangible assets 1 was 8.37% at June 30, 2025. Tangible book value, which excludes intangible assets from total equity, per common share 1 was $14.32, increasing $0.64 compared to December 31, 2024.

Horizon declared common stock dividends in the amount of $0.16 per share during the three months ended June 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 31.37% and 50.00% for the six months ended June 30, 2025 and 2024, respectively. For additional information regarding dividends, see Horizon’s 2024 Annual Report on Form 10–K.

1 N on-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the six months ended June 30, 2025 and 2024

Use of Non-GAAP Financial Measures

In addition to financial measures presented in accordance with GAAP, this document refers to non-GAAP financial measures, which Horizon believes are helpful to investors and provide a greater understanding of our business and financial results without the impact of items or events that may obscure trends in the Company’s underlying performance. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this document for reconciliations of the non-GAAP information identified herein and its most comparable GAAP measures.


Non–GAAP Reconciliation of Net Fully-Taxable Equivalent ("FTE") Interest Margin
(Dollars in Thousands, Unaudited)
		Three Months Ended			Six Months Ended
		June 30, 2025				June 30, 2024			June 30, 2025			June 30, 2024

Interest income (GAAP)	(A)	$	91,477			$	86,981		$	180,652		$	172,246
Taxable-equivalent adjustment:
Investment securities - tax exempt (1)		$	1,619			$	1,695		$	3,264		$	3,410
Loan receivable (2)		382				328			765			681
Total taxable-equivalent adjustment (3)		$	2,001			$	2,023		$	4,029		$	4,091
Interest income (non-GAAP)	(B)	$	93,478			$	89,004		$	184,681		$	176,337
Interest expense (GAAP)	(C)	$	36,122			$	41,702		$	73,030		$	83,678
Net interest income (GAAP)	(D) =(A) - (C)	$	55,355			$	45,279		$	107,622		$	88,568
Net FTE interest income (non-GAAP)	(E) = (B) - (C)	$	57,356			$	47,302		$	111,651		$	92,659
Average interest earning assets	(F)	$	7,125,467			$	7,212,788		$	7,179,793		$	7,253,342
Net FTE interest margin (non-GAAP)	(G) = (E*) / (F)	3.23		%		2.64		%	3.14		%	2.57		%

(1) The following represents municipal securities interest income for investment securities classified as available-for-sale and held-to-maturity
(2) The following represents municipal loan interest income for loan receivables classified as held for sale and held for investment
(3) 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 for tax-exempt loans and securities to an FTE basis utilizing a 21% tax rate
*Annualized

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the six months ended June 30, 2025 and 2024


Non–GAAP Reconciliation of Tangible Common Equity to Tangible Assets
(Dollars in Thousands, Unaudited)
		Three Months Ended
		June 30, 2025			June 30, 2024

Total stockholders' equity (GAAP)	(A)	$	790,852		$	726,665
Intangible assets (end of period)	(B)	163,803			167,121
Total tangible common equity (non-GAAP)	(C) = (A) - (B)	$	627,049		$	559,544

Total assets (GAAP)	(D)	7,652,051			7,912,527
Intangible assets (end of period)	(B)	163,803			167,121
Total tangible assets (non-GAAP)	(E) = (D) - (B)	$	7,488,248		$	7,745,406

Tangible common equity to tangible assets (Non-GAAP)	(G) = (C) / (E)	8.37		%	7.22		%


Non–GAAP Reconciliation of Tangible Book Value Per Share
(Dollars in Thousands, Unaudited)
		Three Months Ended
		June 30, 2025		June 30, 2024

Total stockholders' equity (GAAP)	(A)	$	790,852	$	726,665
Intangible assets (end of period)	(B)	163,803		167,121
Total tangible common equity (non-GAAP)	(C) = (A) - (B)	$	627,049	$	559,544
Common shares outstanding	(D)	43,801,507		43,712,059
Tangible book value per common share (non-GAAP)	(E) = (C) / (D)	$	14.32	$	12.80

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HORIZON BANCORP, INC. AND SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk management focuses on monitoring and maintaining variances in the Company's net interest income profile due to changes in interests rates to within Board-approved policy limits. The Company primarily uses earnings simulation models to expose net interest income to 12- and 24- month sensitivities to various movements in rates. Simulations are modeled quarterly to include scenarios where market rates change instantaneously up or down in a parallel or non-parallel manner, which account for the periodic changes in the balance sheet composition. For further discussion of the Company’s market risk, see the Interest Rate Sensitivity section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s 2024 Annual Report on Form 10-K.

The table below shows the modelled effects of an immediate and parallel shift in interest rates on the Company's net interest income profile over a one-year horizon versus the base case net interest income in a flat rate scenario. The simulation model assumes a static balance sheet over that twelve month period, and utilizes various non-maturity interest bearing deposit beta assumptions, based on the underlying products, ranging from 12% to 80% in the disclosed model outputs below. Deposit beta is an estimate for how quickly interest-bearing deposit pricing will change for a given change in interest rates. Because of limitations inherent in any approach used to measure interest rate risk, simulation results are not intended as a forecast of the actual effect of a change in market interest rates on our results, but rather to provide insight into our current interest rate exposure and to assist in the execution of appropriate asset/liability management strategies. As shown below, the model output would indicate that as of June 30, 2025, the Company's interest-bearing liabilities are projected to reprice at a faster pace than interest-earning assets for the next 100 basis points of declining interest rates.


	June 30, 2025
(Dollars in thousands)	$ Change in Net Interest Income		% Change in Net Interest Income
200 basis points rising	$	(18,412.0)	(7.7)	%
100 basis points rising	(7,922.0)		(3.3)	%
100 basis points falling	$	2,199.0	0.9	%
200 basis points falling	(3,610.0)		(1.5)	%

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HORIZON BANCORP, INC. AND SUBSIDIARIES

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on an evaluation of disclosure controls and procedures as of June 30, 2025, Horizon’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of Horizon’s disclosure controls (as defined in Exchange Act Rule 13a–15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on such evaluation, such officers have concluded that, as of the evaluation date, Horizon's disclosure controls and procedures are effective to ensure that the information required to be disclosed by Horizon in the reports it files under the Exchange Act is recorded, processed, summarized and reported within the time specified in Securities and Exchange Commission's rules and forms and are designed to ensure that information required to be disclosed in those reports is accumulated and communicated to management as appropriate to allow timely decisions regarding disclosures.

Changes in Internal Control Over Financial Reporting

Horizon’s management, including its Chief Executive Officer and Chief Financial Officer, also have concluded that during the fiscal quarter ended June 30, 2025, there have been no changes in Horizon’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, Horizon’s internal control over financial reporting.

HORIZON BANCORP, INC. AND SUBSIDIARIES

Part II – Other Information

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in various claims, legal actions, and complaints which arise in the ordinary course of business. In the Company’s opinion, all such matters are adequately covered by insurance, are without merit, or are of such kind, or involve such amounts, that unfavorable disposition would not have a material adverse effect on the financial condition or results of operations of the Company.

ITEM 1A. RISK FACTORS

There have been no material changes from the factors previously disclosed under Item 1A of Horizon's Annual Report on Form 10–K for the fiscal year ended December 31, 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Unregistered Sales of Equity Securities: Not Applicable

(b) Use of Proceeds: Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

During the fiscal quarter ended June 30, 2025, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.

ITEM 6. EXHIBITS

(a) Exhibits

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HORIZON BANCORP, INC. AND SUBSIDIARIES

Part II – Other Information


Exhibit No.	Description	Location
10.1	Amended Form of Restricted Stock Award Agreement (performance-based) under 2021 Omnibus Equity Incentive Plan.	Incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on April 16, 2025
10.2	Amended Form of Restricted Stock Award Agreement (time-based) under 2021 Omnibus Equity Incentive Plan.	Incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K filed on April 16, 2025
31.1	Certification of Thomas M. Prame	Attached
31.2	Certification of John R. Stewart	Attached
32	Certification of Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Attached
101	Inline Interactive Data Files	Attached
104	The cover page from the Company’s Quarterly Report on Form 10–Q for the quarter ended June 30, 2025, has been formatted in Inline XBRL	Within the Inline XBRL document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						HORIZON BANCORP, INC.

August 11, 2025						/s/ Thomas M. Prame
Date						Thomas M. Prame
						Chief Executive Officer

August 11, 2025						/s/ John R. Stewart
Date						John R. Stewart
						Chief Financial Officer

TABLE OF CONTENTS

Part I Financial Information Item 1 Financial Statements Note 1 - Accounting Policies Note 2 Securities Note 3 Loans Note 4 Allowance For Credit and Loan Losses Note 5 Loan Servicing Note 6 Goodwill Note 7 Repurchase Agreements Note 8 Subordinated Notes Note 9 Derivative Financial Instruments Note 10 Disclosures About Fair Value Of Assets and Liabilities Note 11 Fair Value Of Financial Instruments Note 12 Stockholders' Equity Note 13 Regulatory Capital Note 14 Off-balance Sheet Arrangements, Commitments, and Contingencies Note 15 - Subsequent Events Item 2 Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

31.1 Certification of Thomas M. Prame Attached 31.2 Certification of John R. Stewart Attached 32 Certification of Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002 Attached

HBNC 10-Q Quarter ended June 30, 2025

Exhibits