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What changed in HORIZON BANCORP INC /IN/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HORIZON BANCORP INC /IN/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+227 added−240 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-14)

Top changes in HORIZON BANCORP INC /IN/'s 2025 10-K

227 paragraphs added · 240 removed · 167 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

39 edited+23 added−12 removed143 unchanged
Biggest changeLegislation enacted in recent years, together with additional actions announced by the U.S. Treasury and other regulatory agencies, continue to develop. It is not clear at this time what impact legislation and liquidity and funding initiatives of the U.S.
Biggest changeWe have a captive insurance company and it is not certain at this point how the Notice may impact us on our operation of the captive insurance company as a risk management tool. Legislation enacted in recent years, together with additional actions announced by the U.S. Treasury and other regulatory agencies, continue to develop.
Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
Further cyber–attacks or other breaches in the future, whether affecting us or others, could intensify consumer concern and regulatory focus and result in reduced use of payment cards and increased costs, all of which could have a material adverse effect on our business. 23 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K To the extent we are involved in any future cyber–attacks or other breaches, we may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance we maintain.
Further cyber–attacks or other breaches in the future, whether affecting us or others, could intensify consumer concern and regulatory focus and result in reduced use of payment cards and increased costs, all of which could have a material adverse effect on our business. 23 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K To the extent we are involved in any future cyber–attacks or other breaches, we may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance we maintain.
Residential mortgage loans and consumer loans may present increase during periods of unemployment rates and increasing interest rates, which may adversely affect the underlying real estate and other collateral values and the ability of our borrowers to repay their loans on scheduled terms.
Residential mortgage loans and consumer loans may present increase risk during periods of unemployment rates and increasing interest rates, which may adversely affect the underlying real estate and other collateral values and the ability of our borrowers to repay their loans on scheduled terms.
Liquidity risk is the possibility of being unable to meet obligations as they come due, pay deposits when withdrawn, capitalized on growth opportunities as they arise, or pay dividends because of an inability to 21 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K liquidate assets or obtain adequate funding on a timely basis, at a reasonable cost and within acceptable risk tolerances.
Liquidity risk is the possibility of being unable to meet obligations as they come due, pay deposits when withdrawn, capitalized on growth opportunities as they arise, or pay dividends because of an inability to 21 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K liquidate assets or obtain adequate funding on a timely basis, at a reasonable cost and within acceptable risk tolerances.
As a result, before making an investment 17 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K decision, you should carefully consider these risks as well as information we include or incorporate by reference in this report and other filings we make with the SEC. Some statements in the following risk factors constitute forward–looking statements.
As a result, before making an investment 17 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K decision, you should carefully consider these risks as well as information we include or incorporate by reference in this report and other filings we make with the SEC. Some statements in the following risk factors constitute forward–looking statements.
Any occurrence that may limit our access to the capital markets, such as a decline in the confidence of debt purchasers, our depositors or counterparties participating in the capital markets, may adversely affect our capital costs and 22 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K our ability to raise capital and, in turn, our liquidity.
Any occurrence that may limit our access to the capital markets, such as a decline in the confidence of debt purchasers, our depositors or counterparties participating in the capital markets, may adversely affect our capital costs and 22 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K our ability to raise capital and, in turn, our liquidity.
Negative developments affecting the banking industry, and resulting media coverage, may erode customer confidence in the banking system and could have a material effect on our operations and/or stock price. High–profile 2023 bank failures can generate significant market volatility among publicly traded bank holding companies and, in particular, regional banks.
Negative developments affecting the banking industry, and resulting media coverage, may erode customer confidence in the banking system and could have a material effect on our operations and/or stock price. Recent high–profile bank failures can generate significant market volatility among publicly traded bank holding companies and, in particular, regional banks.
Due to the inherent nature of these estimates, we cannot provide absolute assurance that we will not have to increase 24 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K the allowance for loan losses and/or sustain loan losses that are significantly higher than the provided allowance.
Due to the inherent nature of these estimates, we cannot provide absolute assurance that we will not have to increase 24 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K the allowance for loan losses and/or sustain loan losses that are significantly higher than the provided allowance.
Any future changes in laws that significantly affect the activity of such government–sponsored enterprises could, in turn, adversely affect our operations. 20 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K Any significant impairment of our eligibility with any of the Agencies could materially and adversely affect our operations.
Any future changes in laws that significantly affect the activity of such government–sponsored enterprises could, in turn, adversely affect our operations. 20 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K Any significant impairment of our eligibility with any of the Agencies could materially and adversely affect our operations.
For further discussion, see Notes 1 and 8, “Nature of Operations and Summary of Significant Accounting Policies” and “Goodwill and Intangible Assets,” to the Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10–K for the year ended December 31, 2024.
For further discussion, see Notes 1 and 8, “Nature of Operations and Summary of Significant Accounting Policies” and “Goodwill and Intangible Assets,” to the Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10–K for the year ended December 31, 2025.
In addition, as market interest rates rise, the value of the Company's investment 19 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K securities, particularly those that have fixed rates or longer maturities, could decrease.
In addition, as market interest rates rise, the value of the Company's investment 19 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K securities, particularly those that have fixed rates or longer maturities, could decrease.
As of December 31, 2024, we had $165.4 million of goodwill and other intangible assets. A significant and sustained decline in our stock price and market capitalization, a significant decline in our expected future cash flows, a significant adverse change in the business climate, or slower growth rates could result in impairment of goodwill.
As of December 31, 2025, we had $162.4 million of goodwill and other intangible assets. A significant and sustained decline in our stock price and market capitalization, a significant decline in our expected future cash flows, a significant adverse change in the business climate, or slower growth rates could result in impairment of goodwill.
At December 31, 2024, nonperforming commercial loans, commercial real estate loans, and consumer loans totaled $26,958 and 0.6%, respectively. 18 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K Our holdings of construction, land and home equity loans may pose more credit risk than other types of mortgage loans.
At December 31, 2025, nonperforming commercial loans, commercial real estate loans, and consumer loans totaled $34,946 and 0.7%, respectively. 18 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K Our holdings of construction, land and home equity loans may pose more credit risk than other types of mortgage loans.
In order to guard against this increased risk, we perform investigations on third parties who originate loans we purchase, and we review the loan files and loan documents we purchase to attempt to detect any irregularities or legal noncompliance. However, there is no guarantee that our procedures will detect all cases of fraud or legal noncompliance.
In order to guard against this increased risk, we performed investigations on third parties who originated loans we purchase, and we reviewed the loan files and loan documents we purchased to attempt to detect any irregularities or legal noncompliance. However, there is no guarantee that our procedures detected all cases of fraud or legal noncompliance.
Our competitors include large banks, local community banks, savings and loan associations, securities and brokerage 30 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K companies, mortgage companies, insurance companies, finance companies, money market mutual funds, credit unions, neo–banks (a digital or mobile–only bank that exists without any physical bank branches), and other non–bank financial and digital service providers, many of which have greater financial, marketing and technological resources than we do.
Our competitors include large banks, local community banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market mutual funds, credit unions, neo–banks (a digital or mobile–only bank that exists without any physical bank branches), and other non–bank financial and digital service providers, many of which have greater financial, marketing and technological resources than we do.
An economic slowdown could hurt our business and the possible consequences of such a downturn could include the following: • increases in loan delinquencies and foreclosures; • declines in the value of real estate and other collateral securing loans; • an increase in loans charged off; • an increase in expense to fund loan loss reserves; • an increase in collection costs; • a decline in the demand for our products and services; and • an increase in non–accrual loans and other real estate owned.
An economic slowdown could hurt our business and the possible consequences of such a downturn could include the following: • increases in loan delinquencies and foreclosures; • declines in the value of real estate and other collateral securing loans; • an increase in loans charged off; • an increase in expense to fund loan loss reserves; • an increase in collection costs; 27 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K • a decline in the demand for our products and services; and • an increase in non–accrual loans and other real estate owned.
Credit Risk Our commercial, residential mortgage and consumer loans expose us to increased credit risks. We have a large percentage of commercial, residential mortgage and consumer loans. At December 31, 2024 $3.08 billion or 63.5% of our loan portfolio consisted of commercial loans.
Credit Risk Our commercial, residential mortgage and consumer loans expose us to increased credit risks. We have a large percentage of commercial, residential mortgage and consumer loans. At December 31, 2025 $3.43 billion or 70.4% of our loan portfolio consisted of commercial loans.
Commercial loans generally have greater credit risk than residential mortgage and consumer loans because repayment of these loans often depends on the successful business operations of the borrowers. At December 31, 2024 $802.9 million or 16.6% of our loan portfolio consisted of commercial real estate loans.
Commercial loans generally have greater credit risk than residential mortgage and consumer loans because repayment of these loans often depends on the successful business operations of the borrowers. At December 31, 2025 $772.4 million or 15.8% of our loan portfolio consisted of commercial real estate loans.
The likelihood of any major changes in the future and their effects are impossible to predict. As an example, the Bank could experience higher credit losses because of federal or state legislation or by regulatory or bankruptcy court action that reduces the amount the Bank's borrowers are otherwise contractually required to pay under existing loan contracts.
As an example, the Bank could experience higher credit losses because of federal or state legislation or by regulatory or bankruptcy court action that reduces the amount the Bank's borrowers are otherwise contractually required to pay under existing loan contracts.
Furthermore, failure to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from an acquisition could have a material adverse effect on our financial condition and results of operations.
Furthermore, failure to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from an acquisition could have a material adverse effect on our financial condition and results of operations. In addition, merger and acquisition costs incurred by Horizon may temporarily increase operating expenses.
At December 31, 2024 $966.0 million or19.9% of our loan portfolio consisted of consumer loans Consumer loans generally involve greater risk than residential mortgage loans because they are unsecured or secured by assets that depreciate in value.
At December 31, 2025 $671.7 million or 13.8% of our loan portfolio consisted of consumer loans. Consumer loans generally involve greater risk than residential mortgage loans because they are unsecured or secured by assets that depreciate in value.
Consumers can also complete transactions such as paying bills and/or transferring funds directly without the assistance of banks. Use of emerging alternative payment platforms, such as Apple Pay, Google Pay, and PayPal can alter consumer credit card behavior and consequently impact our interchange fee income.
Consumers can also complete transactions such as paying bills and/or transferring funds directly without 31 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K the assistance of banks. Use of emerging alternative payment platforms, such as Apple Pay, Google Pay, and PayPal can alter consumer credit card behavior and consequently impact our interchange fee income.
Operational risk resulting from inadequate or failed internal processes, people and systems includes the risk of fraud by persons inside or outside Horizon, the execution of unauthorized transactions by employees, errors relating to transaction processing and systems, and breaches of the internal control system and compliance requirements.
Operational risk resulting from inadequate or failed internal processes, people and systems includes the risk of fraud by persons inside or outside Horizon, the execution of unauthorized transactions 26 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K by employees, errors relating to transaction processing and systems, and breaches of the internal control system and compliance requirements.
These and other provisions of our governing documents and Indiana law are intended to provide the board of directors with the negotiating leverage to achieve a more favorable outcome for our shareholders in the event of an offer for the Company.
These and other provisions of our governing documents and Indiana law are intended to provide the board of directors with the negotiating leverage to achieve a more favorable outcome for our shareholders in the 30 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K event of an offer for the Company.
Also, the Bank could experience higher credit losses because of federal or state legislation or regulatory action that limits its ability to foreclose on property or other collateral or makes foreclosure less economically feasible. We face other risks from recent actions of the U.S. Treasury and the Internal Revenue Service.
Also, the Bank could experience higher credit losses because of federal or state legislation or regulatory action that limits its ability to foreclose on property or other collateral or makes foreclosure less economically feasible. 29 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K We face other risks from recent actions of the U.S.
In the course of our business, we may own or foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties (including liabilities for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination), or may be required to investigate or clean up hazardous or toxic substances, or chemical releases at a property. 28 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K We are subject to extensive regulation and changes in laws and regulatory policies could adversely affect our business.
In the course of our business, we may own or foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties (including liabilities for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination), or may be required to investigate or clean up hazardous or toxic substances, or chemical releases at a property.
Our articles of incorporation provide for a staggered board, which means that only one–third of our board can be replaced by shareholders at any annual meeting.
Our articles of incorporation provide for a staggered board, which means that only one–third of our board can be replaced by shareholders at any annual meeting. Our articles also provide that our directors may only be removed without cause by shareholders owning 70% or more of our outstanding common stock.
Our indirect lending operations are subject to a higher fraud risk than our other lending operations. We originate auto loans through automobile dealers. Because we must rely on automobile dealers in making and documenting these loans, there is an increased risk of fraud to us on the part of the third–party originators and the underlying borrowers.
Because we relied on automobile dealers in making and documenting these loans, there is an increased risk of fraud to us on the part of the third–party originators and the underlying borrowers.
Many of these regulations are intended to protect depositors, the public or the FDIC insurance funds, not shareholders. Regulatory requirements affect our lending practices, capital structure, investment practices, dividend policy and many other aspects of our business. Changes in applicable laws, regulations or regulator policies can materially affect our business.
Regulatory requirements affect our lending practices, capital structure, investment practices, dividend policy and many other aspects of our business. Changes in applicable laws, regulations or regulator policies can materially affect our business. The likelihood of any major changes in the future and their effects are impossible to predict.
Our articles also provide that our directors may only be removed without cause by shareholders owning 70% or more of our outstanding common stock. 29 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K Our articles also preempt Indiana law with respect to business combinations with a person who acquires 10% or more of our common stock and provide that such transactions are subject to independent and super–majority shareholder approval requirements unless certain pricing and board pre–approval requirements are satisfied.
Our articles also preempt Indiana law with respect to business combinations with a person who acquires 10% or more of our common stock and provide that such transactions are subject to independent and super–majority shareholder approval requirements unless certain pricing and board pre–approval requirements are satisfied.
In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices 27 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K not sufficient to recover the full amount of the loan or derivative exposure due us.
Many of these transactions expose us to credit risk in the event of default by our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the loan or derivative exposure due us.
Our operations are subject to extensive regulation by federal and state agencies. See “Regulation and Supervision” in the description of our Business in Item 1 of Part I of this report for detailed information on the laws and regulations to which we are subject.
See “Regulation and Supervision” in the description of our Business in Item 1 of Part I of this report for detailed information on the laws and regulations to which we are subject. Many of these regulations are intended to protect depositors, the public or the FDIC insurance funds, not shareholders.
Treasury and other bank regulatory agencies, and additional programs that may be initiated in the future, will have on the financial markets and the financial services industry.
It is not clear at this time what impact legislation and liquidity and funding initiatives of the U.S. Treasury and other bank regulatory agencies, and additional programs that may be initiated in the future, will have on the financial markets and the financial services industry.
In addition to the importance of retaining our lending team, we will also need to continue to attract and retain qualified 25 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K banking personnel at all levels. Competition for such personnel is intense in our geographic market areas.
In addition to the importance of retaining our lending team, we will also need to continue to attract and retain qualified banking personnel at all levels. Competition for such personnel is intense in our geographic market areas. If we are unable to attract and retain an effective lending team and other talented people, our business could suffer.
In November 2016, these agencies issued a Notice making captive insurance company activities “transactions of interest” due to the potential for tax avoidance or evasion. We have a captive insurance company and it is not certain at this point how the Notice may impact us on our operation of the captive insurance company as a risk management tool.
Treasury and the Internal Revenue Service. In November 2016, these agencies issued a Notice making captive insurance company activities “transactions of interest” due to the potential for tax avoidance or evasion.
In addition, merger and acquisition costs incurred by Horizon may temporarily increase operating expenses. 26 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K Economic Risk An economic slowdown in our primary market areas could affect our business. Our primary market area for deposit and loans consists of northern and central Indiana and southern and central Michigan.
Economic Risk An economic slowdown in our primary market areas could affect our business. Our primary market area for deposit and loans consists of northern and central Indiana and southern and central Michigan.
The adoption of artificial intelligence tools by us and our third-party vendors and service providers may increase the risk of errors, omissions, unfair treatment, or fraudulent behavior by our employees, clients, or counterparties, or other third parties.
The loss of these revenue streams and the lower cost of deposits as a source of funds could have a material adverse effect on our financial condition and results of operations. 25 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K The adoption of artificial intelligence tools by us and our third-party vendors and service providers may increase the risk of errors, omissions, unfair treatment, or fraudulent behavior by our employees, clients, or counterparties, or other third parties.
Based on our initial review of these actions, management believes that the Company has strong defenses to the claims and intends to vigorously defend against them. Any regulatory examination scrutiny or new regulatory requirements in the banking industry could increase the Company's expenses and affect the Company's operations.
Any regulatory examination scrutiny or new regulatory requirements in the banking industry could increase the Company's expenses and affect the Company's operations.
Removed
If we are unable to attract and retain an effective lending team and other talented people, our business could suffer.
Added
Our remaining indirect lending exposures are subject to higher fraud risk than our other lending operations. We no longer originate auto loans through automobile dealers, but a small amount dealer-originated auto loans remain on our books.
Removed
The financial services industry and broader economy may be subject to new or changing legislation, regulation, and government policy. At this time, it is difficult to predict the legislative and regulatory changes that will result from both houses of Congress having majority memberships from the Republican Party and President Trump’s election.
Added
Due to the development of new technologies and regulatory actions encouraging the use of these technologies, consumers may decide not to use banks to complete their financial transactions. Technology and other changes are allowing parties to complete financial transactions through alternative methods that historically have involved banks.
Removed
President Trump and certain members of Congress have advocated for the reduction of regulation of the financial services industry. The new Congress and administration may also cause broader economic changes due to their governing ideology, which differs from that of the previous Congress and administration. New appointments to the FRB could affect monetary policy and interest rates.
Added
For example, consumers can now maintain funds that would have historically been held as bank deposits in brokerage accounts, mutual funds, or general-purpose reloadable prepaid cards. Consumers can complete transactions, such as paying bills and/or transferring funds directly without the assistance of banks.
Removed
Additionally, changes in trade and fiscal policy could affect the economy and banking industry, including our business and results of operations, in ways that are difficult to predict. Our results of operations could be adversely affected by changes in laws and regulations and in the way existing statutes and regulations are interpreted or applied by courts and government agencies.
Added
Transactions utilizing digital assets, including cryptocurrencies, stablecoins, and other similar assets, have increased substantially over the course of the last several years. For example, the enactment of the Guiding and Establishing National Innovation for U.S.
Removed
Many of these transactions expose us to credit risk in the event of default by our counterparty or client.
Added
Stablecoins Act of 2025 (GENIUS Act) provides a legal framework for stablecoins to be issued in the United States, which may allow new and existing competitors to compete for funds that may have otherwise been deposited with banks, such as Horizon Bank.
Removed
Legal/Regulatory/Compliance Risk As a public company, we face the risk of shareholder lawsuits and other related or unrelated litigation, particularly if we experience declines in the price of our common stock.
Added
Certain characteristics of digital asset transactions, such as the speed with which such transactions can be conducted, the ability to transact without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, and the anonymous nature of the transactions, are appealing to certain consumers notwithstanding the various risks posed by such transactions as illustrated by the current and ongoing market volatility.
Removed
We have been named as a party to purported class action and derivative lawsuits, and we may be named in additional litigation, all of which could require significant management time and attention and result in significant legal expenses.
Added
Accordingly, digital asset service providers, which at present are not subject to supervision and regulation comparable to that which is faced by banking organizations and other financial institutions, have become active competitors for our customers’ banking business.
Removed
As described in detail below in “Item 3 - Legal Proceedings,” on April 20, 2023, a putative class action lawsuit was filed against the Company and two of its officers in the U.S.
Added
The Trump Administration, through executive actions and public announcements, has established a more relaxed regulatory framework for cryptocurrencies, digital assets, and financial technology firms, and created a more favorable environment for those asset classes and firms.
Removed
District Court for the Eastern District of New York, which asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 alleging, among other things, the Company made materially false and misleading statements and failed to disclose material adverse facts which allegedly resulted in harm to a putative class of purchasers of our securities from March 9, 2022 and March 10, 2023.
Added
The process of eliminating banks as intermediaries, known as disintermediation, could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits.
Removed
Derivative lawsuits have also been filed against the Company, as nominal defendant, and two of our officers and ten of our directors arising from the same events, alleging, among other things, breach of the officers and directors' fiduciary duties.
Added
On October 22, 2024, the CFPB adopted a final rule regarding personal financial data rights that is designed to promote “open banking.” The final rule requires, among other things, that data providers, including any financial institution, make available to consumers and certain authorized third parties upon request certain covered transaction, account, and payment information.
Removed
Regardless of the merits, the expense of defending such litigation may have a substantial impact if our insurance carriers fail to cover the full cost of the litigation, and the time required to defend the actions could divert management’s attention from the day-to-day operations of our business, which could adversely affect our business, results of operations and cash flows.
Added
However, in August 2025, the CFPB issued an advanced notice of proposed rulemaking to reconsider its final rule and, in October 2025, a district court issued a preliminary injunction preventing the CFPB from enforcing the final rule until the CFPB has completed its reconsideration of the rule.
Removed
An unfavorable outcome in such litigation could have a material adverse effect on our business, financial condition, results of operations and cash flows. The derivative lawsuits have been consolidated and stayed pending resolution of any motion to dismiss in the putative class action.
Added
A final rule, if implemented, could lead to greater competition for products and services among banks and nonbanks alike.
Added
Legal/Regulatory/Compliance Risk We are subject to litigation, regulatory examinations, supervisory actions, and other legal proceedings that could result in significant costs, restrict our operations, and adversely affect our financial condition and results of operations.
Added
As a financial services company, we and our subsidiaries are regularly involved in a variety of legal and regulatory proceedings arising in the ordinary course of business.
Added
These matters may include claims and disputes related to lending practices, mortgage servicing, deposit account operations, fiduciary duties, employment matters, contractual obligations, shareholder actions, consumer protection statutes, fair lending laws, intellectual property rights, and other commercial issues.
Added
We may also face litigation or regulatory scrutiny associated with our role in originating, underwriting, or servicing loans; our use of third‑party vendors; and our offering of investment advisory or wealth management services. 28 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K In addition, we operate in a highly regulated industry.
Added
As a bank holding company and financial institution, we are subject to extensive oversight by federal and state regulators, whose examinations may result in supervisory actions, enforcement proceedings, fines, penalties, or other remedial requirements.
Added
Areas of focus may include capital adequacy, anti‑money laundering and Bank Secrecy Act compliance, consumer compliance, cybersecurity and data privacy, fair lending, and overall risk management practices. Changes in regulatory priorities or interpretations can increase the likelihood of governmental actions or private litigation.
Added
Defending against claims, responding to regulatory inquiries, or complying with enforcement actions can be expensive and time‑consuming and may divert management’s attention from our operations. Even when claims are without merit, the cost of defense, reputational impact, and potential operational restrictions may be significant.
Added
We also may not have insurance coverage for certain types of claims, coverage limits may be insufficient, or insurers may dispute coverage.
Added
Adverse outcomes—whether through court judgments, settlements, consent orders, civil money penalties, or mandated operational changes—could harm our reputation, restrict our ability to grow or pursue strategic initiatives, and materially and adversely affect our business, financial condition, and results of operations.
Added
Adverse outcomes—whether through court judgments, settlements, consent orders, civil money penalties, or mandated operational changes—could harm our reputation, restrict our ability to grow or pursue strategic initiatives, and materially and adversely affect our business, financial condition, and results of operations.
Added
We are subject to extensive regulation and changes in laws and regulatory policies could adversely affect our business. Our operations are subject to extensive regulation by federal and state agencies.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

14 edited+0 added−1 removed7 unchanged
Biggest changeHe attends numerous industry training sessions including those put on by the SANS Institute, PaloAlto, Cisco, Microsoft, the Cybersecurity and Infrastructure Security Agency (CISA), and FS–ISAC. The Vice President, Information Security and Audit Information Security Officer has 28 years as an IT Professional, with the last 9 as the cybersecurity leader for Horizon Bank with an education background in Technology.
Biggest changeThe Vice President, Information Security and Audit Information Security Officer has 29 years as an IT Professional, with the last 9 as the cybersecurity leader for Horizon Bank with an education background in Technology. He has achieved numerous certifications throughout his career including the Microsoft Certified Systems Engineer (MCSE) and Certified Novell Engineering (CNE 5/6).
It also maintains a third–party risk management program designed to identify, assess, and manage risk, including cybersecurity risks, associated with external service providers and our supply chain. The Executive Vice President, Senior Operations Officer has 35 years of experience in operations and technology with an educational background in Business Administration.
It also maintains a third–party risk management program designed to identify, assess, and manage risk, including cybersecurity risks, associated with external service providers and our supply chain. The Executive Vice President, Senior Operations Officer has 36 years of experience in operations and technology with an educational background in Business Administration.
For independence, the Information Security Officer reports to Horizon's Senior Vice President, Senior Auditor and Compliance Officer. Horizon's risk escalation framework requires progressive escalation of cyber security risks to Management and its Committees, then to Board Committees and, ultimately, to the Board. Management's Operations Committee meets quarterly and provides oversight and governance of the technology and cyber security programs.
For independence, the Information Security Officer reports to Horizon's Senior Vice President, Senior Auditor and Compliance Officer. Horizon's risk escalation framework requires progressive escalation of cyber security risks to management and its committees, then to Board Committees and, ultimately, to the Board. Management's Operations Committee meets monthly and provides oversight and governance of the technology and cyber security programs.
In the role of Senior Bank Operations Officer and Executive for the past 24 years, she oversees and works closely with Horizon's technology and security teams to develop and implement robust security measures to protect the Bank's systems, networks, and customer data.
In the role of Senior Bank Operations Officer and Executive for the past 25 years, she oversees and works closely with Horizon's technology and security teams to develop and implement robust security measures to protect the Bank's systems, networks, and customer data.
Pursuant to the Cyber Security Committee Charter, the Cyber Security Committee is required to meet at least three times per year and report to the Board annually. The Cyber Security Committee met three times in 2024.
Pursuant to the Cyber Security Committee Charter, the Cyber Security Committee is required to meet at least three times per year and report to the Board annually. The Cyber Security Committee met three times in 2025.
The Senior Vice President, Senior Technology Officer has 28 years of experience in information technology, with the last 13 as the information technology leader for the Bank. He holds a Bachelor's Degree in Computer Science.
The Senior Vice President, Senior Technology Officer has 29 years of experience in information technology, with the last 14 as the information technology leader for the Bank. He holds a bachelor’s degree in computer science.
Horizon's senior management briefs the Cyber Security Committee at each Cyber Security Committee meeting (see below for detailed discussion). In 2024, Horizon's information technology/cyber security program was audited by RSM and internal audit.
Horizon's senior management briefs the Cyber Security Committee at each Cyber Security Committee meeting (see below for detailed discussion). In 2025, Horizon's information technology/cyber security program was audited by Horizon's internal auditors.
Our internal systems, processes, and controls are designed to mitigate loss from cyberattacks and, while we have experienced cybersecurity incidents in the past, to date, risks from cybersecurity threats have not materially affected our Company. See Item 1A.
Notwithstanding our defensive measures and processes, the threat posed by cyber attacks is severe. Our internal systems, processes, and controls are designed to mitigate loss from cyberattacks and, while we have experienced cybersecurity incidents in the past, to date, risks from cybersecurity threats have not materially affected our Company. See Item 1A.
Horizon's Vice President, Information Security and Audit Information Security officer (“Information Security Officer”) provides an annual Information Security Program report to the Board and as needed when cybersecurity risk is elevated.
Horizon's Vice President, Information Security and Audit Information Security officer (“Information Security Officer”) provides an annual Information Security Program report to the Board and as needed when 32 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K cybersecurity risk is elevated.
In addition, the Cyber Security Committee Charter provides that a majority of the Cyber Security Committee's voting members 31 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K must qualify as independent directors under SEC rules and NASDAQ listing standards. During 2024, 3 of the Cyber Security Committee's members qualified as independent.
In addition, the Cyber Security Committee Charter provides that a majority of the Cyber Security Committee's voting members must qualify as independent directors under SEC rules and NASDAQ listing standards. During 2025, 100% of the Cyber Security Committee's members qualified as independent.
Risk Factors for further discussion of risks related to cyber security. 33 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K
Risk Factors for further discussion of risks related to cyber security in Horizon's 2025 Annual Report on Form 10–K filed with the Securities and Exchange See Item 1A. Risk Factors for further discussion of risks related to cyber security. 33 Table of Contents HORIZON BANCORP, INC. 2025 Annual Report on Form 10–K
He has achieved numerous certifications throughout his career including the Microsoft Certified Systems Engineer (MCSE) and Certified Novell Engineering (CNE 5/6) and has demonstrated a continued commitment to excellence and has attained certification as a Certified Information Systems Security Professional (CISSP) issued by ISC2 in 2022.
He has demonstrated a continued commitment to excellence and attained certification as a Certified Information Systems Security Professional (CISSP) issued by ISC2 in 2022 and renewed in 2025. In addition, he attained the Certified Information Security Manager (CISM) from ISACA in 2024.
Through continuous learning and professional development, the Information Security Officer has honed his expertise in cybersecurity frameworks, threat detection, incident response, and risk management.
Through continuous learning and professional development, the Information Security Officer has honed his expertise in cybersecurity frameworks, threat detection, incident response, and risk management. He also serves as a member of the Indiana Bankers Association (IBA) Cyber Security Committee and attends numerous industry training sessions including those put on by Microsoft, FS–ISAC, SANS Institute.
He is an active member of FS–ISAC's Mergers an Acquisition Working Group, and a named author of their 2023 “Cybersecurity Best Practices in Mergers, Acquisitions and Divestiture Deals” publication. He also serves as an advisory member of the Indiana Governor's Executive Council on Cybersecurity.
He is an active member of FS–ISAC's Mergers an Acquisition Working Group, is a member of InfraGard, and serves as the chairperson for the finance committee on the Indiana Governor's Executive Council on Cybersecurity. He attends numerous industry training sessions including those put on by the SANS Institute, PaloAlto, Cisco, Microsoft, the Cybersecurity, and Infrastructure Security Agency (CISA), and FS–ISAC.
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He also serves as a member of the Indiana Bankers Association (IBA) Cyber Security Committee and attends numerous industry training sessions including those put on by Microsoft, FS–ISAC, SANS Institute. 32 Table of Contents HORIZON BANCORP, INC. 2024 Annual Report on Form 10–K Notwithstanding our defensive measures and processes, the threat posed by cyber–attacks is severe.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−2 removed1 unchanged
Biggest changeThe return represented in the graph assumes the investment of $100 on December 31, 2019, and further assumes reinvestment of all dividends. The Company’s common stock began trading on the NASDAQ Global Market on February 1, 2007, and on the NASDAQ Global Select Market on January 2, 2014.
Biggest changeThe return represented in the graph assumes the investment of $100 on December 31, 2020, and further assumes reinvestment of all dividends. The Company’s common stock is traded on the NASDAQ Global Select Market under the ticker symbol HBNC.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock and Related Stockholder Matters Horizon common stock is traded on the NASDAQ Global Select Market under the symbol “HBNC.” The approximate number of holders of record of Horizon’s outstanding common stock as of March 12, 2025 was 1,272.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock and Related Stockholder Matters Horizon common stock is traded on the NASDAQ Global Select Market under the symbol “HBNC.” The approximate number of holders of record of Horizon’s outstanding common stock as of March 11, 2026 was 1,224.
The Equity Compensation Plan Information table appears under the caption “Equity Compensation Plan Information” in Item 12 below and is incorporated herein by reference. Repurchases of Securities There were no purchases by the Company of its common stock during the fourth quarter of 2024.
The Equity Compensation Plan Information table appears under the caption “Equity Compensation Plan Information” in Item 12 below and is incorporated herein by reference. Repurchases of Securities There were no purchases by the Company of its common stock during the fourth quarter of 2025. 34 Table of Contents HORIZON BANCORP, INC.
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Prior to that date, the common stock was traded on the NASDAQ Capital Market. 34 Table of Contents HORIZON BANCORP, INC. December 31 December 31 December 31 December 31 December 31 December 31 Index 2019 2020 2021 2022 2023 2024 Horizon Bancorp, Inc. 100.00 87.14 118.01 88.20 88.57 104.69 Russell 2000 Index 100.00 119.96 137.74 109.59 128.14 142.93 S&P U.S.
Added
December 31 December 31 December 31 December 31 December 31 December 31 Index 2020 2021 2022 2023 2024 2025 Horizon Bancorp, Inc. 100.00 135.43 101.22 101.65 120.14 131.87 Russell 2000 Index 100.00 114.82 91.35 106.82 119.14 134.40 S&P U.S. SmallCap Banks Index 100.00 139.21 122.74 123.35 145.82 160.37 Source: S&P Global Market Intelligence © 2025
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SmallCap Banks Index 100.00 90.82 126.43 111.47 112.03 132.44 Source: S&P Global Market Intelligence © 2024

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

109 edited+33 added−54 removed43 unchanged
Biggest changeYears Ended December 31, 2024 December 31, 2023 December 31, 2022 Average Balance Interest Avg Rate Average Balance Interest Avg Rate Average Balance Interest Avg Rate Assets Interest earning assets Interest-bearing deposits in banks $ 187,262 $ 9,680 5.17 % $ 95,795 $ 4,967 5.19 % $ 75,807 $ 306 0.40 % Federal Home Loan Bank stock 49,879 5,430 10.89 % 33,312 2,250 6.75 % 25,899 1,034 3.99 % Investment securities – taxable 1,290,190 24,865 1.93 % 1,658,160 32,160 1.94 % 1,700,418 32,168 1.89 % Investment securities – non–taxable (1) 1,134,198 32,201 2.84 % 1,236,607 35,929 2.91 % 1,356,045 36,741 2.71 % Loans receivable (2)(3)(4) 4,682,978 292,485 6.25 % 4,244,893 245,594 5.79 % 3,845,137 174,184 4.53 % Total interest earning assets (1) 7,344,507 364,661 4.97 % 7,268,767 320,900 4.41 % 7,003,306 244,433 3.49 % Non–interest earning assets Cash and due from banks 102,581 102,535 99,885 Allowance for loan losses (51,282) (49,774) (52,606) Other assets 433,752 548,100 483,330 Total average assets $ 7,829,558 $ 7,869,628 $ 7,533,915 Liabilities and Stockholders’ Equity Interest bearing liabilities Interest-bearing demand deposits $ 1,672,181 $ 27,504 1.64 % $ 1,749,674 $ 22,083 1.26 % $ 1,971,567 $ 5,460 0.28 % Savings and money market deposits 1,693,394 39,581 2.34 % 1,597,732 24,230 1.52 % 1,750,544 4,868 0.28 % Time deposits 1,165,349 47,957 4.12 % 1,151,182 39,544 3.44 % 791,557 7,481 0.95 % Borrowings 1,166,145 42,059 3.61 % 1,154,714 39,514 3.42 % 696,584 11,938 1.71 % Repurchase agreements 119,605 2,871 2.40 % 137,153 2,964 2.16 % 141,048 527 0.37 % Subordinated notes 55,651 3,319 5.96 % 58,764 3,511 5.97 % 58,819 3,522 5.99 % Junior subordinated debentures issued to capital trusts 57,362 4,588 8.00 % 57,137 4,715 8.25 % 56,899 2,719 4.78 % Total interest bearing liabilities 5,929,687 167,879 2.83 % 5,906,356 136,561 2.31 % 5,467,018 36,515 0.67 % Non–interest bearing liabilities Demand deposits 1,085,195 1,181,233 1,332,937 Accrued interest payable and other liabilities 76,883 75,765 50,330 Stockholders’ equity 737,793 706,274 683,630 Total average liabilities and stockholders’ equity $ 7,829,558 $ 7,869,628 $ 7,533,915 Net FTE interest income (Non-GAAP) and spread (5) $ 196,782 2.13 % $ 184,339 2.10 % $ 207,918 2.81 % Less FTE adjustments (4) $ 8,178 $ 8,595 $ 8,400 Net Interest Income $ 188,604 $ 175,744 $ 199,518 Net FTE interest margin (Non-GAAP) (4)(5) 2.68 % 2.54 % 2.97 % (1) Securities balances represent daily average balances for the fair value of securities.
Biggest changeAND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Years Ended December 31, 2025 December 31, 2024 December 31, 2023 Average Balance Interest Avg Rate Average Balance Interest Avg Rate Average Balance Interest Avg Rate Assets Interest earning assets Interest-bearing deposits in banks $ 165,900 $ 7,243 4.37 % $ 187,262 $ 9,680 5.17 % $ 95,795 $ 4,967 5.19 % Federal Home Loan Bank stock 47,090 3,564 7.57 % 49,879 5,430 10.89 % 33,312 2,250 6.75 % Investment securities – taxable 823,049 26,299 3.20 % 1,290,190 24,865 1.93 % 1,658,160 32,160 1.94 % Investment securities – non–taxable (1) 821,985 20,941 2.55 % 1,134,198 32,201 2.84 % 1,236,607 35,929 2.91 % Total investment securities 1,645,034 47,240 2.87 % 2,424,388 57,066 2.39 % 2,894,767 68,089 2.35 % Loans receivable (2)(3) 4,909,506 311,409 6.34 % 4,682,978 292,485 6.25 % 4,244,893 245,594 5.79 % Total interest earning assets 6,767,530 369,456 5.46 % 7,344,507 364,661 4.97 % 7,268,767 320,900 4.41 % Non-interest earning assets Cash and due from banks 83,116 102,581 102,535 Allowance for credit losses (52,077) (51,282) (49,774) Other assets 500,948 433,752 548,100 Total average assets $ 7,299,517 $ 7,829,558 $ 7,869,628 Liabilities and Stockholders’ Equity Interest bearing liabilities Interest bearing deposits $ 1,718,060 $ 25,016 1.46 % $ 1,672,181 $ 27,504 1.64 % $ 1,749,674 $ 22,083 1.26 % Saving and money market deposits 1,601,473 30,253 1.89 % 1,693,394 39,581 2.34 % 1,597,732 24,230 1.52 % Time deposits 1,194,462 43,338 3.63 % 1,165,349 47,957 4.12 % 1,151,182 39,544 3.44 % Borrowings 637,980 23,539 3.69 % 1,166,145 42,059 3.61 % 1,154,714 39,514 3.42 % Repurchase agreements 88,100 1,493 1.69 % 119,605 2,871 2.40 % 137,153 2,964 2.16 % Subordinated notes 75,348 5,201 6.90 % 55,651 3,319 5.96 % 58,764 3,511 5.97 % Junior subordinated debentures to capital trusts 57,576 4,452 7.73 % 57,362 4,588 8.00 % 57,137 4,715 8.25 % Total interest bearing liabilities 5,372,999 133,292 2.48 % 5,929,687 167,879 2.83 % 5,906,356 136,561 2.31 % Non-interest bearing liabilities Demand deposits 1,114,940 1,085,195 1,181,233 Accrued interest payable and other liabilities 66,563 76,883 75,765 Stockholders' equity 745,015 737,793 706,274 Total average liabilities and stockholders' equity $ 7,299,517 $ 7,829,558 $ 7,869,628 Net FTE interest income (Non-GAAP) and spread (5) 236,164 $ 196,782 $ 184,339 Less FTE adjustments (4) $ 6,680 $ 8,178 $ 8,595 Net Interest Income $ 229,484 3.24 % $ 188,604 2.13 % $ 175,744 2.10 % Net FTE interest margin (Non-GAAP) (4)(5) 3.49 % 2.68 % 2.54 % (1) Securities balances represent daily average balances for the fair value of securities.
The term “off–balance sheet arrangement” generally means any transaction, agreement, or other contractual arrangement to which an entity unconsolidated with the Company is a party and under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets. 59 Table of Contents HORIZON BANCORP, INC.
The term “off–balance sheet arrangement” generally means any transaction, agreement, or other contractual arrangement to which an entity unconsolidated with the Company is a party and under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets. 56 Table of Contents HORIZON BANCORP, INC.
Management has identified as critical accounting estimates as the allowance for credit losses, income taxes, and valuation measurements. Allowance for Credit Losses The allowance for credit losses represents management’s best estimate of current expected credit losses over the life of the portfolio of loans and leases.
Management has identified as critical accounting estimates as the allowance for credit losses, income taxes, and valuation measurements. Allowance for Credit Losses on Loans The allowance for credit losses represents management’s best estimate of current expected credit losses over the life of the portfolio of loans and leases.
The Bank has established underwriting standards including a policy that monitors the lending function through strict administrative and reporting requirements as well as an internal loan review of commercial, residential real estate and consumer loans. The Bank also uses an independent third–party loan review function that regularly reviews asset quality. 49 Table of Contents HORIZON BANCORP, INC.
The Bank has established underwriting standards including a policy that monitors the lending function through strict administrative and reporting requirements as well as an internal loan review of commercial, residential real estate and consumer loans. The Bank also uses an independent third–party loan review function that regularly reviews asset quality. 47 Table of Contents HORIZON BANCORP, INC.
Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value. For purposes of measuring impairment, risk characteristics including loan term, rate type and investor type, were used to stratify the originated mortgage servicing rights. 52 Table of Contents HORIZON BANCORP, INC.
Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value. For purposes of measuring impairment, risk characteristics including loan term, rate type and investor type, were used to stratify the originated mortgage servicing rights. 50 Table of Contents HORIZON BANCORP, INC.
As of December 31, 2024 and 2023, the Company had capital levels that, in all cases, exceeded the guidelines to be deemed “well-capitalized.” For additional information regarding our capital levels, see “Notes to Consolidated Financial Statements—Regulatory Capital,” included in Part IV, Item 15 of this report.
As of December 31, 2025 and 2024, the Company had capital levels that, in all cases, exceeded the guidelines to be deemed “well-capitalized.” For additional information regarding our capital levels, see “Notes to Consolidated Financial Statements—Regulatory Capital,” included in Part IV, Item 15 of this report.
Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the time deposits due on or before December 31, 2024. We believe, however, based on past experience that a significant portion of our time deposits will remain with us.
Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the time deposits due on or before December 31, 2025. We believe, however, based on past experience that a significant portion of our time deposits will remain with us.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2025.
Financial difficulties at the FHLB could reduce or eliminate Horizon’s additional borrowing capacity with the FHLB or the FHLB could change collateral requirements, which could lower the Company’s borrowing availability. ◦ Horizon had a total of $190.0 million of unused Federal Fund lines from various money center banks.
Financial difficulties at the FHLB could reduce or eliminate Horizon’s additional borrowing capacity with the FHLB or the FHLB could change collateral requirements, which could lower the Company’s borrowing availability. ◦ Horizon had a total of $170.0 million of unused Federal Fund lines from various money center banks.
Critical Accounting Estimates The Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10–K for 2024 contain a summary of the Company’s significant accounting policies.
Critical Accounting Estimates The Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10–K for 2025 contain a summary of the Company’s significant accounting policies.
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. 61 Table of Contents HORIZON BANCORP, INC.
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. 58 Table of Contents HORIZON BANCORP, INC.
The officer responsible for the loan, Executive Vice President and Chief Commercial Banking Officer, Senior Vice President Commercial Credit Officer and the Vice President Senior Commercial Workout Manager review all loans placed on 53 Table of Contents HORIZON BANCORP, INC.
The officer responsible for the loan, Executive Vice President and Chief Commercial Banking Officer, Senior Vice President Commercial Credit Officer and the Vice President Senior Commercial Workout Manager review all loans placed on 51 Table of Contents HORIZON BANCORP, INC.
For more information about securities, see Note 3 – Securities to the Consolidated Financial Statements at Item 8. 48 Table of Contents HORIZON BANCORP, INC.
For more information about securities, see Note 3 – Securities to the Consolidated Financial Statements at Item 8. 46 Table of Contents HORIZON BANCORP, INC.
The Bank also utilizes external data sources to monitor commercial real estate segment and market trends. 51 Table of Contents HORIZON BANCORP, INC.
The Bank also utilizes external data sources to monitor commercial real estate segment and market trends. 49 Table of Contents HORIZON BANCORP, INC.
As indicated above, 17.3% of the investment portfolio consists of U.S. government agency mortgage backed securities. These instruments are secured by residential mortgages of varying maturities. Principal and interest payments are received monthly as the underlying mortgages are repaid. These payments also include prepayments of mortgage balances as borrowers either sell their homes or refinance their mortgages.
As indicated above, 56.5% of the investment portfolio consists of U.S. government agency mortgage backed securities. These instruments are secured by residential mortgages of varying maturities. Principal and interest payments are received monthly as the underlying mortgages are repaid. These payments also include prepayments of mortgage balances as borrowers either sell their homes or refinance their mortgages.
On December 17, 2024, the Company approved a dividend of $0.16 per share, payable on January 17, 2025 to stockholders of record on January 3, 2025. 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.
On December 16, 2025, the Company approved a dividend of $0.16 per share, payable on January 16, 2026 to stockholders of record on January 2, 2026. 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.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Total Loans, HFI Total loans held for investment, net of deferred fees/costs, the principal earning asset of the Bank, were $4.8 billion at December 31, 2024.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Total Loans, HFI Total loans held for investment, net of deferred fees/costs, the principal earning asset of the Bank, were $4.9 billion at December 31, 2025.
As of December 31, 2024, Horizon had repurchased a total of 803,349 shares at an average price per share of $16.89. The Company did not repurchase outstanding common shares during 2024.
As of December 31, 2025, Horizon had repurchased a total of 803,349 shares at an average price per share of $16.89. The Company did not repurchase common shares during 2025.
The top five segments with the commercial and industrial portfolio as of December 31, 2024 as a percentage of total commercial loans were finance and insurance; construction; manufacturing; health care and education; and individuals and other services, with the highest concentration in health care and education at approximately 15% of total commercial loans.
The top five segments with the commercial and industrial portfolio as of December 31, 2025 as a percentage of total commercial loans were finance and insurance; construction; manufacturing; health care and education; and individuals and other services, with the highest concentration in health care and education at approximately 3% of total commercial loans.
In addition to the customary real estate loans described above, the Bank also had outstanding on December 31, 2024, $470.8 million in revolving home equity lines of credit compared to $478.7 million at December 31, 2023. Credit lines normally limit the loan to collateral value to no more than 89%.
In addition to the customary real estate loans described above, the Bank also had outstanding on December 31, 2025, $470.5 million in revolving home equity lines of credit compared to $470.8 million at December 31, 2024. Credit lines normally limit the loan to collateral value to no more than 89%.
At December 31, 2024, the Bank had $1.0 billion in commitments to extend credit outstanding, excluding interest rate lock commitments for residential mortgage loans intended for sale in the secondary market that meet the definition of a derivative. Time dep osits due within one year of December 31, 2024 totaled $1.0 billion, or 94.0% of time deposits.
At December 31, 2025, the Bank had $1.1 billion in commitments to extend credit outstanding, excluding interest rate lock commitments for residential mortgage loans intended for sale in the secondary market that meet the definition of a derivative. Time dep osits due within one year of December 31, 2025 totaled $0.9 billion, or 82.6% of time deposits.
Allowance and Provision for Credit Losses The table below provides an allocation of the year–end allowance for credit losses on loans by loan portfolio segment; however, allocation of a portion of the allowance to one segment does not preclude its availability to absorb losses in other segments. 55 Table of Contents HORIZON BANCORP, INC.
Allowance and Provision for Credit Losses The table below provides an allocation of the year–end allowance for credit losses on loans by loan portfolio segment; however, allocation of a portion of the allowance to one segment does not preclude its availability to absorb losses in other segments.
Included in amounts as of December 31, 2024 were $1.0 billion of public deposits insured through the State of Indiana’s Public Deposit Insurance Fund. Deposits that were not insured by the FDIC or State of Indiana's Public Deposit Insurance Fund represented 28% of total deposits as of December 31, 2024.
Included in amounts as of December 31, 2025 were $1.0 billion of public deposits insured through the State of Indiana’s Public Deposit Insurance Fund. Deposits that were not insured by the FDIC or State of Indiana's Public Deposit Insurance Fund represented 22% of total deposits as of December 31, 2025.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Deferred Tax Horizon had a net deferred tax asset totaling $49.9 million as of December 31, 2024 and a net deferred tax asset of $33.5 million as of December 31, 2023.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Deferred Tax Horizon had a net deferred tax asset totaling $129.9 million as of December 31, 2025 and a net deferred tax asset of $49.9 million as of December 31, 2024.
Company’s effective income tax rate could be materially affected when the Company prevails in matters for which reserves have been established or when the Company is required to pay amounts in excess of reserves. See Note 16 - Income Taxes to the Consolidated Financial Statements for a further discussion of income taxes.
Company’s effective income tax rate could be materially affected when the Company prevails in matters for which reserves have been established or when the Company is required to pay amounts in excess of reserves. See Note 16 - Income Taxes to the Consolidated Financial Statements for a further discussion of income taxes. 38 Table of Contents HORIZON BANCORP, INC.
The increase during 2024 was due to growth in all types of commercial loans.
The increase during 2025 was due to growth in all types of commercial loans.
These are uncommitted lines and could be withdrawn at any time by the correspondent banks. ◦ Horizon had a total of $800.8 million of available collateral at the FRB secured by securities.
These are uncommitted lines and could be withdrawn at any time by the correspondent banks. ◦ Horizon had a total of $106.3 million of available collateral at the FRB secured by securities.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Residential Real Estate Loans Residential real estate loans totaled $802.9 million, or 16.6% of total loans as of December 31, 2024, compared to $681.1 million, or 15.4% of total loans as of December 31, 2023.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Residential Real Estate Loans Residential real estate loans totaled $772.4 million, or 15.8% of total loans as of December 31, 2025, compared to $802.9 million, or 16.6% of total loans as of December 31, 2024.
At December 31, 2024, Horizon had available approximately $1.7 billion in available credit from the FHLB, FRB Discount Window and various money center banks. The following factors could impact Horizon’s funding needs in the future: ◦ Horizon had outstanding borrowings of approximately $1.1 billion with the FHLB and total borrowing capacity with the FHLB of $1.6 billion.
At December 31, 2025, Horizon had available approximately $1.7 billion in available credit from the FHLB, FRB Discount Window and various money center banks. The following factors could impact Horizon’s funding needs in the future: ◦ Horizon had outstanding borrowings of approximately $150.1 million with the FHLB and total borrowing capacity with the FHLB of $1.4 billion.
The top five segments within the non–owner occupied real estate portfolio as of December 31, 2024 as a percentage of total commercial loans were lessor's of multi–family; warehouse and industrial; retail; hospitality; and non–medical offices with the highest concentration in lessor's of multi–family at approximately 19% of total commercial loans.
The top five segments within the non–owner occupied real estate portfolio as of December 31, 2025 as a percentage of total commercial loans were lessor's of multi–family; warehouse and industrial; retail; motel; and non–medical offices with the highest concentration in lessor's of multi–family at approximately 9% of total commercial loans.
For the year ended, the allowance for credit losses included net charge offs of $1.9 million, or 0.04% of average loans outstanding, compared to net charge-offs of $2.5 million, or 0.05% of average loans outstanding for the year ended December 31, 2023.
For the year ended, the allowance for credit losses included net charge offs of $2.9 million, or 0.06% of average loans outstanding, compared to net charge-offs of $1.9 million, or 0.04% of average loans outstanding for the year ended December 31, 2024.
Net unrealized losses on these securities totaled $48.3 million, which resulted in a balance of $38.2 million, net of tax, included in stockholders’ equity at December 31, 2024. This compared to net unrealized loss on securities which totaled $69.0 million, net of tax, included in stockholders’ equity at December 31, 2023.
Net unrealized losses on these securities totaled $33.3 million, which resulted in a balance of $26.0 million, net of tax, included in stockholders’ equity at December 31, 2025. This compared to net unrealized loss on securities which totaled $38.2 million, net of tax, included in stockholders’ equity at December 31, 2024.
The current level of total loans increased 9.7% from the December 31, 2023, level of $4.4 billion primarily due to an increase in commercial and residential mortgage loans, offset by a decrease in consumer, residential construction and mortgage warehouse loans during the year. The table below provides comparative detail on the loan categories.
The current level of total loans increased 0.6% from the December 31, 2024, level of $4.8 billion primarily due to an increase in commercial and residential construction loans, offset by a decrease in consumer and residential mortgage loans during the year. The table below provides comparative detail on the loan categories.
The unpaid principal balances of loans serviced for others totaled approximately $1.4 billion and $1.5 billion at December 31, 2024 and 2023. The aggregate fair value of capitalized mortgage servicing rights at December 31, 2024, totaled approximately $19.8 million compared to the carrying value of $18.2 million.
The unpaid principal balances of loans serviced for others totaled approximately $1.4 billion and $1.4 billion at December 31, 2025 and 2024. The aggregate fair value of capitalized mortgage servicing rights at December 31, 2025, totaled approximately $17.5 million compared to the carrying value of $17.5 million.
The top five segments within the owner occupied real estate portfolio as of December 31, 2024 as a percentage of total commercial loans were health care and education; individuals and other services; real estate rental and leasing; retail trade; and manufacturing with the highest concentration in health care and education at approximately 22% of total commercial loans.
The top five segments within the owner occupied real estate portfolio as of December 31, 2025 as a percentage of total commercial loans were health care and education; restaurants; real estate rental and leasing; retail trade; and manufacturing with the highest concentration in health care and education at approximately 4% of total commercial loans.
As of December 31, 2024 and 2023, approximately $2.5 billion and $2.6 billion, respectively, of our deposit portfolio was uninsured. The uninsured amounts are estimates based on the methodologies and assumptions used for Horizon Bank's regulatory reporting requirements.
As of December 31, 2025 and 2024, approximatel y $2.1 billion and $2.5 billion, respectively, of our deposit portfolio was uninsured. The uninsured amounts are estimates based on the methodologies and assumptions used for Horizon Bank's regulatory reporting requirements.
Further, it is management's policy to place a commercial loan on non–accrual status when delinquent in excess of 90 days or management has determined that the borrower's ability to continue to make payments is in doubt.
In recognition of such, it is management's policy to convert the loan from an “earning asset” to a non–accruing loan. Further, it is management's policy to place a commercial loan on non–accrual status when delinquent in excess of 90 days or management has determined that the borrower's ability to continue to make payments is in doubt.
Additionally, in the process of preparing tax returns, the Company’s management makes reasonable interpretations of the tax laws. Management’s interpretations are subject to review during examination by taxing authorities and disputes may arise over the respective tax positions. Management reviews income tax expense and the carrying value of deferred tax assets quarterly; and as if business events or circumstances warrant.
Management’s interpretations are subject to review during examination by taxing authorities and disputes may arise over the respective tax positions. Management reviews income tax expense and the carrying value of deferred tax assets quarterly; and as if business events or circumstances warrant.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non–GAAP Reconciliation of Net Fully-Taxable Equivalent ("FTE") Interest Margin (Dollars in Thousands, Unaudited) December 31, December 31, December 31, 2024 2023 2022 Interest income (GAAP) (A) $ 356,483 $ 312,305 $ 236,033 Taxable-equivalent adjustment: Investment securities - tax exempt (1) $ 6,762 $ 7,545 $ 7,716 Loan receivable (2) $ 1,416 $ 1,050 $ 684 FTE Interest income (non-GAAP) (B) $ 364,661 $ 320,900 $ 244,433 Interest expense (GAAP) (C) $ 167,879 $ 136,561 $ 36,515 Net interest income (GAAP) (D) =(A) - (C) $ 188,604 $ 175,744 $ 199,518 Net FTE interest income (non-GAAP) (E) = (B) - (C) $ 196,782 $ 184,339 $ 207,918 Average interest earning assets (F) 7,344,507 7,268,767 7,003,306 Net FTE interest margin (non-GAAP) (G) = (E) / (F) 2.68 % 2.54 % 2.97 % (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.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non–GAAP Reconciliation of Net Fully-Taxable Equivalent ("FTE") Interest Margin (Dollars in Thousands, Unaudited) December 31, December 31, December 31, 2025 2024 2023 Interest income (GAAP) (A) $ 362,777 $ 356,483 $ 312,305 Taxable-equivalent adjustment: Investment securities - tax exempt (1) $ 5,146 $ 6,762 $ 7,545 Loan receivable (2) $ 1,534 $ 1,416 $ 1,050 FTE Interest income (non-GAAP) (B) $ 369,457 $ 364,661 $ 320,900 Interest expense (GAAP) (C) $ 133,293 $ 167,879 $ 136,561 Net interest income (GAAP) (D) =(A) - (C) $ 229,484 $ 188,604 $ 175,744 Net FTE interest income (non-GAAP) (E) = (B) - (C) $ 236,164 $ 196,782 $ 184,339 Average interest earning assets (F) 6,767,530 7,344,507 7,268,767 Net FTE interest margin (non-GAAP) (G) = (E) / (F) 3.49 % 2.68 % 2.54 % (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.
See Note 1 for more details In addition to the real estate loan portfolio, the Bank originates and sells real estate loans and retains the servicing rights. During 2024 and 2023, approximately $129.7 million and $142.8 million, respectively, of residential mortgages were sold into the secondary market. Loans serviced for others are not included in the consolidated balance sheets.
In addition to the real estate loan portfolio, the Bank originates and sells real estate loans and retains the servicing rights. During 2025 and 2024, approximately $164.5 million and $129.7 million, respectively, of residential mortgages were sold into the secondary market. Loans serviced for others are not included in the consolidated balance sheets.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Commercial Loans HFI Commercial loans totaled $3.08 billion, or 63.5% of total loans as of December 31, 2024, compared to $2.67 billion, or 60.6% as of December 31, 2023.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Commercial Loans HFI Commercial loans totaled $3.4 billion, or 70.4% of total loans as of December 31, 2025, compared to $3.1 billion, or 63.5% as of December 31, 2024.
At December 31, 2024 and 2023, 11% and 22%, respectively, of investment securities were classified as available for sale. Securities classified as available for sale are carried at their fair value, with both unrealized gains and losses recorded, net of tax, in accumulated other comprehensive income or loss, a component of stockholders’ equity.
Securities classified as available for sale are carried at their fair market value, with both unrealized gains and losses recorded, net of tax, in accumulated other comprehensive income or loss, a component of stockholders’ equity.
Based on current market conditions, the Company intends to hold its available-for-sale securities in unrealized loss positions through the anticipated recovery period.
Based on current market conditions, the Company intends to hold its available-for-sale securities in unrealized loss positions through the anticipated recovery period. 45 Table of Contents HORIZON BANCORP, INC.
The Company adjusts interest income for tax-exempt loans and securities to an FTE basis utilizing a 21% tax rate Non–GAAP Reconciliation of Return on Average Tangible Common Equity (Dollars in Thousands, Unaudited) Year Ended December 31, December 31, December 31, 2024 2023 2022 Net income (loss) (GAAP) (A) $ 35,429 $ 27,981 $ 93,408 Average stockholders' equity (B) $ 737,793 $ 706,274 $ 683,630 Average intangible assets (C) 167,238 170,745 174,003 Average tangible equity (Non-GAAP) (D) = (B) - (C) $ 570,555 $ 535,529 $ 509,627 Return on average tangible common equity ("ROACE") (non-GAAP) (E) = (A) / (D) 6.21 % 5.22 % 18.33 % 62 Table of Contents HORIZON BANCORP, INC.
The Company adjusts interest income for tax-exempt loans and securities to an FTE basis utilizing a 21% tax rate Non–GAAP Reconciliation of Return on Average Tangible Common Equity (Dollars in Thousands, Unaudited) Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Net income (loss) (GAAP) (A) $ (150,482) $ 35,429 $ 27,981 Average stockholders' equity (B) $ 745,015 $ 737,793 $ 706,274 Average intangible assets (C) 163,955 167,238 170,745 Average tangible equity (Non-GAAP) (D) = (B) - (C) $ 581,060 $ 570,555 $ 535,529 Return on average tangible common equity ("ROACE") (non-GAAP) (E) = (A) / (D) (25.90) % 6.21 % 5.22 % 59 Table of Contents HORIZON BANCORP, INC.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non–performing loans as a percentage of total loans was 0.56% as of December 31, 2024, an increase from 0.46% as of December 31, 2023.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non–accrual loans as a percentage of HFI loans was 0.67% as of December 31, 2025, an increase from 0.53% as of December 31, 2024.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Financial Condition Horizon’s total assets were $7.8 billion as of December 31, 2024, a decrease of $139.3 million from December 31, 2023.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Financial Condition Horizon’s total assets were $6.4 billion as of December 31, 2025, a decrease of $1.4 billion from December 31, 2024.
Total deposits were $5.6 billion at December 31, 2024, compared to $5.7 billion at December 31, 2023.
Total deposits were $5.3 billion at December 31, 2025, compared to $5.6 billion at December 31, 2024.
These securities may mature, call, or be sold, which would reduce the available collateral. ◦ Horizon had approximately $38.4 million of unpledged investment securities at December 31, 2024. 60 Table of Contents HORIZON BANCORP, INC.
These securities may mature, call, or be sold, which would reduce the available collateral. ◦ Horizon had approximately $667.6 million of unpledged available for sale investment securities at December 31, 2025. 57 Table of Contents HORIZON BANCORP, INC.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Results of Operations Net Income Consolidated net income was $35.4 million, or $0.80 per diluted share, in 2024, $28.0 million or $0.64 per diluted share in 2023, and $93.4 million or $2.14 per diluted share in 2022.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Results of Operations Net Income Consolidated net loss was $150.5 million, or $(3.24) per diluted share, in 2025, compared to net income of $35.4 million or $0.80 per diluted share in 2024, and $28.0 million or $0.64 per diluted share in 2023.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non–GAAP Reconciliation of Tangible Common Equity to Tangible Assets (Dollars in Thousands, Unaudited) Year Ended December 31, December 31, December 31, 2024 2023 2022 Total stockholders' equity (GAAP) (A) $ 763,582 $ 718,812 $ 677,375 Intangible assets (end of period) (B) 165,434 168,837 172,450 Total tangible common equity (non-GAAP) (C) = (A) - (B) $ 598,148 $ 549,975 $ 504,925 Total assets (GAAP) (D) 7,801,146 7,940,485 7,872,518 Intangible assets (end of period) (B) 165,434 168,837 172,450 Total tangible assets (non-GAAP) (E) = (D) - (B) $ 7,635,712 $ 7,771,648 $ 7,700,068 Tangible common equity to tangible assets (Non-GAAP) (G) = (C) / (E) 7.83 % 7.08 % 6.56 % Non–GAAP Reconciliation of Tangible Book Value Per Share (Dollars in Thousands, Unaudited) Year Ended December 31, December 31, December 31, 2024 2023 2022 Total stockholders' equity (GAAP) (A) $ 763,582 $ 718,812 $ 677,375 Intangible assets (end of period) (B) 165,434 168,837 172,450 Total tangible common equity (non-GAAP) (C) = (A) - (B) $ 598,148 $ 549,975 $ 504,925 Common shares outstanding (D) 43,722,086 43,652,063 43,574,151 Tangible book value per common share (non-GAAP) (E) = (C) / (D) $ 13.68 $ 12.60 $ 11.59 63 Table of Contents HORIZON BANCORP, INC.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non–GAAP Reconciliation of Tangible Common Equity to Tangible Assets (Dollars in Thousands, Unaudited) Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Total stockholders' equity (GAAP) (A) $ 688,251 $ 763,582 $ 718,812 Intangible assets (end of period) (B) 162,391 165,434 168,837 Total tangible common equity (non-GAAP) (C) = (A) - (B) $ 525,860 $ 598,148 $ 549,975 Total assets (GAAP) (D) 6,436,611 7,801,146 7,940,485 Intangible assets (end of period) (B) 162,391 165,434 168,837 Total tangible assets (non-GAAP) (E) = (D) - (B) $ 6,274,220 $ 7,635,712 $ 7,771,648 Tangible common equity to tangible assets (Non-GAAP) (G) = (C) / (E) 8.38 % 7.83 % 7.08 % Non–GAAP Reconciliation of Tangible Book Value Per Share (Dollars in Thousands, Unaudited) Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Total stockholders' equity (GAAP) (A) $ 688,251 $ 763,582 $ 718,812 Intangible assets (end of period) (B) 162,391 165,434 168,837 Total tangible common equity (non-GAAP) (C) = (A) - (B) $ 525,860 $ 598,148 $ 549,975 Common shares outstanding (D) 50,978,030 43,722,086 43,652,063 Tangible book value per common share (non-GAAP) (E) = (C) / (D) $ 10.32 $ 13.68 $ 12.60 60 Table of Contents HORIZON BANCORP, INC.
December 31, December 31, 2024 2023 Commercial $ 2,811,689 $ 2,498,453 Real estate 784,043 675,520 Mortgage warehouse 61,219 54,798 Consumer 1,022,619 1,011,166 Total average loans HFI $ 4,679,570 $ 4,239,937 Maturities and Sensitivities of Loans HFI to Changes in Interest Rates The following table presents the maturity distribution based on payment due dates of our loan portfolio as December 31, 2024.
December 31, December 31, 2025 2024 Commercial $ 3,257,819 $ 2,811,689 Real estate 795,318 784,043 Mortgage warehouse — 61,219 Consumer 834,312 1,022,619 Total average loans HFI $ 4,887,449 $ 4,679,570 Maturities and Sensitivities of Loans HFI to Changes in Interest Rates The following table presents the maturity distribution based on payment due dates of our loan portfolio as of December 31, 2025.
The following table shows the major components of deferred tax: December 31, December 31, 2024 2023 Assets Allowance for credit losses $ 12,590 $ 12,546 Net operating loss and tax credits 10,805 9,592 Director and employee benefits 3,334 2,471 Unrealized loss on AFS securities and cash flow hedge 29,355 17,706 Basis in partnership equity investments 1,940 1,322 Capital loss carryover — 5,201 Fair value adjustment on acquisitions 883 — Other 2,938 2,856 Total assets 61,845 51,694 Liabilities Depreciation (4,061) (4,512) State tax — (253) Federal Home Loan Bank stock dividends (353) (365) Difference in basis of intangible assets (6,553) (4,545) Fair value adjustment on acquisitions — (2,142) Other (1,003) (1,131) Total liabilities (11,970) (12,948) Valuation allowance — (5,201) Net deferred tax asset/(liability) $ 49,875 $ 33,545 Deposits The primary source of funds for the Bank comes from the acceptance of demand and time deposits.
The following table shows the major components of deferred tax: December 31, December 31, 2025 2024 Assets Allowance for credit losses $ 12,578 $ 12,590 Net operating loss and tax credits 461 10,805 Director and employee benefits 5,342 3,334 Unrealized loss on AFS securities and fair value hedge 20,482 29,355 Basis in partnership equity investments 2,649 1,940 Net capitalized expenses 96,561 — Capital loss carryover — — Fair value adjustment on acquisitions 789 883 Other 2,613 2,938 Total assets 141,475 61,845 Liabilities Depreciation (4,213) (4,061) State tax — — Federal Home Loan Bank stock dividends (297) (353) Difference in basis of intangible assets (5,821) (6,553) Fair value adjustment on acquisitions — — Other (1,291) (1,003) Total liabilities (11,622) (11,970) Valuation allowance — — Net deferred tax asset/(liability) $ 129,853 $ 49,875 Deposits The primary source of funds for the Bank comes from the acceptance of demand and time deposits.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) One Year or Less After One Year Through Five Years After Five Years Through Ten Years After Ten Years (dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Available for sale U.S.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) The following is a schedule of maturities of each categories of available for sale securities and the related weighted–average yield of such securities as of December 31, 2025: One Year or Less After One Year Through Five Years After Five Years Through Ten Years After Ten Years (dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Available for sale U.S.
Therefore, mortgage–backed securities have maturities that are stated in terms of average life. The average life is the average amount of time that each dollar of principal is expected to be outstanding. As of December 31, 2024, the mortgage–backed securities in the investment portfolio had an average duration of just over 8 years.
Therefore, mortgage–backed securities have maturities that are stated in terms of average life. The average life is the average amount of time that each dollar of principal is expected to be outstanding.
Income Taxes The Company’s income tax expense for the year ended December 31, 2024 was $(8.08) million compared to an expense of $11.02 million for the year ended December 31, 2023, resulting in effective tax rates of (29.5)% and 28.3%, respectively.
Income Taxes The Company’s income tax benefit for the year ended December 31, 2025 was $50.7 million compared to a benefit of $8.08 million for the year ended December 31, 2024, resulting in effective tax rates of 25.2% and (29.5)%, respectively.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non-Interest Income December 31, 2024 - 2023 2023 - 2022 Change Change (Dollars in Thousands) 2024 2023 2022 $ % $ % Service charges on deposit accounts $ 12,940 $ 12,227 $ 11,598 $ 713 5.8 % $ 629 5.4 % Wire transfer fees 461 448 595 13 2.9 % (147) (24.7) % Interchange fees 13,799 12,861 12,402 938 7.3 % 459 3.7 % Fiduciary activities 5,394 5,080 5,381 314 6.2 % (301) (5.6) % Gains (losses) on sale of investment securities (39,140) (32,052) — (7,088) 22.1 % (32,052) 100.0 % Gain on sale of mortgage loans 4,215 4,323 7,165 (108) (2.5) % (2,842) (39.7) % Mortgage servicing income net of impairment 1,677 2,708 4,800 (1,031) (38.1) % (2,092) (43.6) % Increase in cash value of bank owned life insurance 1,300 3,709 2,594 (2,409) (65.0) % 1,115 43.0 % Death benefit on bank owned life insurance — — 644 — — % (644) (100.0) % Other income 2,325 2,694 2,272 (369) (13.7) % 422 18.6 % Total non-interest income $ 2,971 $ 11,998 $ 47,451 $ (9,027) (75.2) % $ (35,453) (74.7) % Total non-interest income decreased $9.0 million for the year ended December 31, 2024 compared to the same period in 2023.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non-Interest Income December, 2025 - 2024 2024 - 2023 Change Change (Dollars in Thousands) 2025 2024 2023 $ % $ % Service charges on deposit accounts $ 13,231 $ 12,940 $ 12,227 $ 291 2.3 % $ 713 5.8 % Wire transfer fees 277 461 448 (184) (39.9) % 13 2.9 % Interchange fees 13,599 13,799 12,861 (200) (1.5) % 938 7.3 % Fiduciary activities 5,501 5,394 5,080 107 2.0 % 314 6.2 % Loss on sale of investment securities (299,538) (39,140) (32,052) (260,398) 665.3 % (7,088) 22.1 % Gain on sale of mortgage loans 4,799 4,215 4,323 584 13.8 % (108) (2.5) % Mortgage servicing income net of impairment 1,463 1,677 2,708 (214) (12.7) % (1,031) (38.1) % Increase in cash value of bank owned life insurance 1,420 1,300 3,709 120 9.2 % (2,409) (65.0) % Other income 2,798 2,325 2,694 473 20.3 % (369) (13.7) % Total non-interest (loss) income $ (256,450) $ 2,971 $ 11,998 $ (259,421) (8731.8) % $ (9,027) (75.2) % Total non-interest income decreased $259.4 million, to a net pre-tax loss of $256.5 million for the year ended December 31, 2025 compared to the same period in 2024.
Outside services and consultant expense increased by $4.6 million for the year ended December 31, 2024 when compared to the same period in 2023, primarily related to strategic initiatives undertaken during the year. FDIC insurance expense increased by $1.2 million in the year ended December 31, 2024 compared to the year ago period.
Outside services and consultant expense decreased by $1.1 million for the year ended December 31, 2025 when compared to the same period in 2024, primarily related to strategic initiatives undertaken during the year to reduce reliance on third-party services.
The Company experienced an increase in its overall average loan balances of $438.1 million or 10.3%, from $4.2 billion for the year ended December 31, 2023 to $4.7 billion for the year ended December 31, 2024, while average balances of investment securities declined by $470.4 million, or 16.2%, $2.4 billion billion from $2.9 billion in the same period a year ago. • As discussed above, the Company repositioned the available for sale securities during Q4 2024.
The asset mix shift was a result of an increase in its overall average loan balances of $226.5 million or 4.8%, from $4.7 billion for the year ended December 31, 2024 to $4.9 billion for the year ended December 31, 2025, while average balances of investment securities declined by $779.4 million, or 32.1%, to $1.6 billion from $2.4 billion in the same period a year ago. • As discussed above, the Company repositioned the investment securities portfolio during Q3 2025.
As of December 31, 2024, the real estate loan portfolio reflected a wide range of interest rates and repayment patterns, but could generally be categorized as follows: December 31, 2024 December 31, 2023 Amount Percent of Portfolio Yield Amount Percent of Portfolio Yield Fixed rate Monthly payment $ 525,682 65.7 % 4.94 % $ 402,038 59.0 % 4.06 % Biweekly payment 2 — % — % — — % — % Adjustable rate Monthly payment 274,453 34.3 % 5.40 % 279,098 41.0 % 4.98 % Subtotal 800,137 100.0 % 5.10 % 681,136 100.0 % 4.44 % Loans held for sale (1) 2,772 1,418 Total real estate loans $ 802,909 $ 682,554 (1) Loans held for sale excludes mortgage warehouse loans reclassified during Q4 2024.
As of December 31, 2025, the real estate loan portfolio reflected a wide range of interest rates and repayment patterns, but could generally be categorized as follows: December 31, 2025 December 31, 2024 Amount Percent of Portfolio Yield Amount Percent of Portfolio Yield Fixed rate Monthly payment $ 528,599 68.4 % 5.20 % $ 528,454 65.8 % 4.92 % Biweekly payment — — % — % 2 — % — % Adjustable rate Monthly payment 243,828 31.6 % 5.45 % 274,453 34.2 % 5.40 % Subtotal 772,427 100.0 % 5.28 % 802,909 100.0 % 5.08 % Loans held for sale (1) 3,688 2,772 Total real estate loans $ 776,115 $ 805,681 (1) Loans held for sale excludes mortgage warehouse loans reclassified during Q4 2024.
The tax laws are subject to potentially different interpretations by the taxpayer and the applicable taxing authorities. In determining the provision for income taxes, the Company makes judgments about the application of tax laws as well as estimates related to timing of when certain items when affect taxable income .
In determining the provision for income taxes, the Company makes judgments about the application of tax laws as well as estimates related to timing of when certain items when affect taxable income . Additionally, in the process of preparing tax returns, the Company’s management makes reasonable interpretations of the tax laws.
See non-GAAP reconciliation included herein for the most directly comparable GAAP measure. (6) Includes dividend income on Federal Home Loan Bank stock 41 Table of Contents HORIZON BANCORP, INC.
See non-GAAP reconciliation included herein for the most directly comparable GAAP measure. 36 Table of Contents HORIZON BANCORP, INC.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non-Interest Expense December 31, 2024 - 2023 2023 - 2022 Change Change (Dollars in Thousands) 2024 2023 2022 $ % $ % Non–interest Expense Salaries and employee benefits $ 88,244 $ 80,809 $ 80,283 $ 7,435 9.2 % $ 526 0.7 % Net occupancy expenses 13,376 13,355 13,323 21 0.2 % 32 0.2 % Data processing 10,861 11,626 10,567 (765) (6.6) % 1,059 10.0 % Professional fees 2,733 2,645 1,843 88 3.3 % 802 43.5 % Outside services and consultants 14,564 9,942 10,850 4,622 46.5 % (908) (8.4) % Loan expense 4,076 4,980 5,411 (904) (18.2) % (431) (8.0) % FDIC insurance expense 5,032 3,880 2,558 1,152 29.7 % 1,322 51.7 % Core deposit intangible amortization 3,403 3,612 3,702 (209) (5.8) % (90) (2.4) % Other losses 1,199 1,051 1,046 148 14.1 % 5 0.5 % Other expense 15,348 14,384 13,618 964 6.7 % 766 5.6 % Total non–interest expense $ 158,836 $ 146,284 $ 143,201 $ 12,552 8.6 % $ 3,083 2.2 % Non-interest expense increased $12.6 million for the year ended December 31, 2024 compared to the same period in 2023, primarily the result of higher expenses related to salaries and employee benefits, outside services and consultants, and FDIC insurance expense, which was partially mitigated by lower loan and data processing expenses.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Non-Interest Expense December, 2025 - 2024 2024 - 2023 Change Change (Dollars in Thousands) 2025 2024 2023 $ % $ % Non–interest Expense Salaries and employee benefits $ 89,737 $ 88,244 $ 80,809 $ 1,493 1.7 % $ 7,435 9.2 % Net occupancy expenses 13,867 13,376 13,355 491 3.7 % 21 0.2 % Data processing 11,884 10,861 11,626 1,023 9.4 % (765) (6.6) % Professional fees 3,452 2,733 2,645 719 26.3 % 88 3.3 % Outside services and consultants 13,422 14,564 9,942 (1,142) (7.8) % 4,622 46.5 % Loan expense 4,340 4,076 4,980 264 6.5 % (904) (18.2) % FDIC insurance expense 5,100 5,032 3,880 68 1.3 % 1,152 29.7 % Core deposit intangible amortization 3,044 3,403 3,612 (359) (10.6) % (209) (5.8) % Merger related expense 305 — — 305 100.0 % — — % Prepayment penalties 12,680 — — 12,680 100.0 % — — % Other losses 1,336 1,199 1,051 137 11.4 % 148 14.1 % Other expense 13,124 15,348 14,384 (2,224) (14.5) % 964 6.7 % Total non–interest expense $ 172,291 $ 158,836 $ 146,284 $ 13,455 8.5 % $ 12,552 8.6 % Non-interest expense increased $13.5 million for the year ended December 31, 2025 compared to the same period in 2024, the primary components of the change were as follows: Salaries and employee benefits expense increased by $1.5 million for the year ended December 31, 2025 when compared to the same period in 2024, partially attributable to ongoing hiring efforts in revenue generating roles and higher incentive compensation accruals.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) December 31, December 31, December 31, 2024 2023 2022 Mortgage servicing rights Balances, January 1 $ 18,807 $ 18,619 $ 17,780 Servicing rights capitalized 1,359 1,220 3,184 Amortization of servicing rights (1,971) (1,032) (2,345) Balances, December 31 18,195 18,807 18,619 Impairment allowance Balances, January 1 — — (2,594) Additions — — — Reductions — — 2,594 Balances, December 31 — — — Mortgage servicing rights, net $ 18,195 $ 18,807 $ 18,619 Mortgage Warehouse Loans Horizon’s mortgage warehousing lending has specific mortgage companies as customers of Horizon Bank.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) December 31, December 31, December 31, 2025 2024 2023 Mortgage servicing rights Balances, Balances, January 1 $ 18,195 $ 18,807 $ 18,619 Servicing rights capitalized 1,434 1,359 1,220 Amortization of servicing rights (2,095) (1,971) (1,032) Balances, Balances, December 31 17,534 18,195 18,807 Impairment allowance Balances, Balances, January 1 — — — Additions — — — Reductions — — — Balances, Balances, December 31 — — — Mortgage servicing rights, net $ 17,534 $ 18,195 $ 18,807 Mortgage Warehouse Loans On January 17, 2025, the Company completed the sale of its mortgage warehouse loan portfolio to an unrelated third party.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Provision and Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments December 31, December 31, 2024 2023 Allowance for Credit Losses on Loans Balance at beginning of period $ 50,029 $ 50,464 Provision for credit losses on loans 3,854 2,090 Net loan (charge-offs) recoveries: Commercial 199 (944) Residential Real estate 28 33 Mortgage warehouse — — Consumer (2,130) (1,614) Total net loan charge-offs (1,903) (2,525) Balance at end of period $ 51,980 $ 50,029 Liability for Unfunded Lending Commitments Balance at beginning of period 615 403 Provision (reversal) for credit losses on unfunded lending commitments 1,534 212 Balance at end of period $ 2,149 $ 615 Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments $ 54,129 $ 50,644 For the year ended December 31, 2024, the Company recorded credit loss expense of $5.4 million.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Provision and Allowance for Credit Losses and Liability for Unfunded Lending Commitments December 31, December 31, 2025 2024 Allowance for Credit Losses on Loans Balance at beginning of period $ 51,980 $ 50,029 Provision for credit losses on loans 2,243 3,854 Net loan (charge-offs) recoveries: Commercial (766) 199 Residential Real estate — 28 Consumer (2,158) (2,130) Total net loan (charge-offs) recoveries (2,924) (1,903) Balance at end of period $ 51,299 $ 51,980 Liability for Unfunded Lending Commitments Balance at beginning of period 2,149 615 Provision (reversal) for credit losses on unfunded lending commitments (309) 1,534 Balance at end of period $ 1,840 $ 2,149 Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments $ 53,139 $ 54,129 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.
The changes in net income due to changes in both average volume and average interest rate have been allocated to the average volume change or the average interest rate change in proportion to the absolute amounts of the change in each. 2024 - 2023 2023 - 2022 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 $ 4,713 $ 4,729 $ (16) $ 4,661 $ 102 $ 4,559 Federal Home Loan Bank stock 3,180 1,426 1,754 1,216 356 860 Investment securities - taxable (7,295) (7,093) (202) (8) (809) 801 Investment securities - non-taxable (3,728) (2,922) (806) (812) (3,364) 2,552 Loans receivable 46,891 26,485 20,406 71,410 19,478 51,932 Total interest income 43,761 22,625 21,136 76,467 15,763 60,704 Interest Expense Interest-bearing demand deposits 5,421 (1,016) 6,437 16,623 (682) 17,305 Savings and money market savings deposits 15,351 1,529 13,822 19,362 (461) 19,823 Time deposits 8,413 493 7,920 32,063 4,716 27,347 Borrowings 2,545 394 2,151 27,576 10,962 16,614 Repurchase agreements (93) (402) 309 2,437 (15) 2,452 Subordinated notes (192) (186) (6) (11) (3) (8) Junior subordinated debentures issued to capital trusts (127) 19 (146) 1,996 11 1,985 Total interest expense 31,318 831 30,487 100,046 14,528 85,518 Net FTE interest income (Non-GAAP) 12,443 21,794 (9,351) (23,579) 1,235 (24,814) Less change in FTE adjustments (417) 195 Net Interest Income $ 12,860 $ (23,774) 42 Table of Contents HORIZON BANCORP, INC.
The changes in net income due to changes in both average volume and average interest rate have been allocated to the average volume change or the average interest rate change in proportion to the absolute amounts of the change in each. 2025 - 2024 2024 - 2023 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 (2,437) (1,032) (1,405) 4,713 4,729 (16) Federal Home Loan Bank stock (1,866) (289) (1,577) 3,180 1,426 1,754 Investment securities - taxable 1,435 (11,118) 12,553 (7,295) (7,093) (202) Investment securities - non-taxable (11,260) (8,202) (3,058) (3,728) (2,922) (806) Loans receivable 18,924 14,319 4,605 46,891 26,485 20,406 Total interest income 4,796 (6,322) 11,118 43,761 22,625 21,136 Interest Expense Interest-bearing demand deposits (2,488) 736 (3,224) 5,421 (1,016) 6,437 Savings and money market savings deposits (9,328) (2,061) (7,267) 15,351 1,529 13,822 Time deposits (4,619) 1,175 (5,794) 8,413 493 7,920 Borrowings (18,519) (19,467) 948 2,545 394 2,151 Repurchase agreements (1,378) (651) (727) (93) (402) 309 Subordinated notes 1,882 1,302 580 (192) (186) (6) Junior subordinated debentures issued to capital trusts (136) 17 (153) (127) 19 (146) Total interest expense (34,586) (18,949) (15,637) 31,318 831 30,487 Net FTE interest income (Non-GAAP) 39,382 12,627 26,755 12,443 21,794 (9,351) Less change in FTE adjustments (1,498) (417) Net Interest Income $ 40,880 $ 12,860 41 Table of Contents HORIZON BANCORP, INC.
Average deposits and rates by category for the three years ended December 31 are as follows: Average Balance Outstanding for the Average Rate Paid for the Years Ended December 31 Years Ended December 31 2024 2023 2022 2024 2023 2022 Non–interest bearing demand deposits $ 1,085,195 $ 1,181,233 $ 1,332,937 Interest bearing demand deposits 1,672,181 1,749,674 1,971,567 1.64 % 1.26 % 0.28 % Savings deposits 755,856 841,644 940,499 0.91 % 0.61 % 0.13 % Money market 937,538 756,092 810,083 3.49 % 2.52 % 0.45 % Time deposits 1,165,349 1,151,178 791,519 4.12 % 3.44 % 0.95 % Total deposits $ 5,616,119 $ 5,679,821 $ 5,846,605 Th e $63.7 million d ecrease in average deposits during 2024 was primarily due to the increase in rates during 2023 creating a competitive deposit environment and management's decision to strategically exit some higher-cost non- 58 Table of Contents HORIZON BANCORP, INC.
Average deposits and rates by category for the three years ended December 31 are as follows: Average Balance Outstanding for the Average Rate Paid for the Years Ended December 31 Years Ended December 31 2025 2024 2023 2025 2024 2023 Non-interest bearing demand deposits $ 1,114,940 $ 1,085,195 $ 1,181,233 Interest bearing demand deposits 1,718,060 1,672,181 1,749,674 1.46 % 1.64 % 1.26 % Savings deposits 688,773 755,856 841,644 0.61 % 0.91 % 0.61 % Money market 912,700 937,538 756,092 2.85 % 3.49 % 2.52 % Time deposits 1,194,462 1,165,349 1,151,178 3.63 % 4.12 % 3.44 % Total deposits $ 5,628,935 $ 5,616,119 $ 5,679,821 55 Table of Contents HORIZON BANCORP, INC.
At December 31, 2024 and 2023, Horizon had investments in the common stock of the Federal Home Loan Bank totaling $53.8 million and $34.5 million, respectively. At December 31, 2024, Horizon did not maintain a trading account.
At December 31, 2025 and 2024, Horizon had investments in the common stock of the Federal Home Loan Bank totaling $45.7 million and $53.8 million, respectively. At December 31, 2025, Horizon maintained held for trading securities of $3.9 million.
The transactional accounts average balances, as the lower cost funding sources, decreased $77.9 million and the average balances for higher cost time deposits increased $14.2 million. Horizon continually enhances its interest bearing consumer and commercial demand deposit products based on local market conditions and its need for funding to support various types of assets.
Nonetheless, a verage balances for non-interest bearing demand deposits, interest bearing demand balances, a nd time deposits increased by $29.7 million, $45.9 million and $29.1 million, respectively. Horizon continually enhances its interest bearing consumer and commercial demand deposit products based on local market conditions and its need for funding to support various types of assets.
Consumer Loans Consumer loans totaled $1.0 billion, or 19.9% of total loans as of December 31, 2024, compared to $1.0 billion, or 23.0% as of December 31, 2023. The decrease during 2024 was due to portfolio runoff within the Company's indirect auto portfolio that more than offset new originations.
Consumer Loans Consumer loans totaled $0.7 billion, or 13.8% of total loans as of December 31, 2025, compared to $1.0 billion, or 19.9% as of December 31, 2024. The decrease was due to the sale of the Company's indirect auto portfolio of $284.2 million during the third quarter of 2025.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Net (Charge-offs)/Recoveries Average Loans Outstanding Net (Charge-offs)/ Recoveries to Average Loans Outstanding December 31, 2024 Commercial $ 199 2,811,689 0.01 % Real estate 28 784,043 0.00 % Mortgage warehouse — 61,219 0.00 % Consumer (2,130) 1,022,619 (0.21) % Total $ (1,903) $ 4,679,570 (0.04) % December 31, 2023 Commercial $ (944) 2,498,453 (0.04) % Real estate 33 675,520 0.00 % Mortgage warehouse — 54,798 0.00 % Consumer (1,614) 1,011,166 (0.16) % Total $ (2,525) $ 4,239,937 (0.06) % December 31, 2022 Commercial $ (680) 2,280,553 (0.03) % Real estate 53 621,163 0.01 % Mortgage warehouse — 89,409 0.00 % Consumer (976) 850,667 (0.11) % Total $ (1,603) $ 3,841,792 (0.04) % 57 Table of Contents HORIZON BANCORP, INC.
The following table presents information regarding the net charge-offs to average amount of loans outstanding by portfolio segment (dollars in thousands): Net (Charge-offs) Recoveries Average Loans Outstanding Net (Charge-offs) Recoveries to Average Loans Outstanding December 31, 2025 Commercial $ (766) 3,257,819 (0.02) % Real estate — 795,318 0.00 % Consumer (2,158) 834,312 (0.26) % Total $ (2,924) $ 4,887,449 (0.06) % December 31, 2024 Commercial $ 199 2,811,689 0.01 % Real estate 28 784,043 0.00 % Mortgage warehouse — 61,219 0.00 % Consumer (2,130) 1,022,619 (0.21) % Total $ (1,903) $ 4,679,570 (0.04) % December 31, 2023 Commercial $ (944) 2,498,453 (0.04) % Real estate 33 675,520 0.00 % Mortgage warehouse — 54,798 0.00 % Consumer (1,614) 1,011,166 (0.16) % Total $ (2,525) $ 4,239,937 (0.06) % 54 Table of Contents HORIZON BANCORP, INC.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) The following table presents the average balances of our assets, liabilities, and stockholders' equity, and the related weighted average yields and rates on our interest earning assets and interest bearing liabilities for the periods indicated.
The following table presents the average balances of our assets, liabilities, and stockholders' equity, and the related weighted average yields and rates on our interest earning assets and interest bearing liabilities for the periods indicated. 39 Table of Contents HORIZON BANCORP, INC.
Net interest margin refers to net interest income divided by average interest earning assets and is influenced by the level and relative mix of interest earning assets and interest bearing liabilities.
Net interest margin refers to net interest income divided by average interest earning assets and is influenced by the level and relative mix of interest earning assets and interest bearing liabilities. Net interest income increased $40.9 million during the year ended December 31, 2025 , to $229.5 million when compared to the same period in 2024.
Of the commercial loans with interest rate floors, loans totaling $39.3 million were at their floor at December 31, 2024. The Bank's commercial loan portfolio consists generally of approximately 28% commercial and industrial loans and approximately 72% commercial real estate loans. Commercial loans are originated in the primary geographic markets of Indiana and Michigan.
Of the commercial loans with interest rate floors, loans totaling $55.3 million were at their floor at December 31, 2025. The Bank's commercial loan portfolio consists generally of approximately 29% commercial and industrial loans and approximately 71% commercial real estate loans. Commercial and industrial loans typically are comprised of loans to finance working capital, equipment and titled vehicles.
The yield of the Company's investment portfolio remained consistent at 2.35% compared to year ended December 31, 2023. • Total loans were $4.91 billion at December 31, 2024, up $495.6 million from December 31, 2023 balances, or 11% year over year.
As a result, the yield of the Company's investment portfolio increased 52 bps to 2.87% for the year ended December 31, 2025, compared to 2.35% for the year ended December 31, 2024. • Total loans, including loans held-for-sale, were $4.89 billion at December 31, 2025, down $28.3 million from December 31, 2024 balances, or (0.6)% year over year.
The primary components of the change were as follows: Loss on sale of investment securities increased by $7.1 million for the year ended December 31, 2024 compared to the same period in 2023. The Company elected to sell certain lower yielding investment securities during Q4 2024.
The primary components of the change were as follows: Loss on sale of investment securities increased by $260.4 million for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to the sale of investment securities during the third quarter of 2025 related to the Company's balance sheet repositioning efforts.
Off–Balance Sheet Arrangements As of December 31, 2024, Horizon did not have any off–balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, change in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Certificates of deposit of $250,000 or more, which are considered to be rate sensitive and are not considered a part of core deposits, mature as follows as of December 31, 2025: Due in three months or less $ 232,253 Due after three months through six months 118,735 Due after six months through one year 39,277 Due after one year 172,373 $ 562,638 Off–Balance Sheet Arrangements As of December 31, 2025, Horizon did not have any off–balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, change in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Mortgage servicing income decreased $1.0 million for the year ended December 31, 2024, as compared to the same periods in 2023. The decrease was primarily driven by higher levels of amortization expense of mortgage servicing rights in the current period.
The decrease was a result of lower gross servicing revenue and higher amortization expense of mortgage servicing rights in the current period. Service charges on deposit accounts increased by $0.3 million for the year ended December 31, 2025, as compared to the same period in 2024, primarily as a result of higher transaction-based fee activity in the current period.
The net interest margin , on a fully taxable equivalent ("FTE") 1 basis, also expan ded to 2.68% compared with 2.54% for the year ended December 31, 2023. • The increase in FTE net interest margin is mainly a result of the Company's mix shift towards higher yielding commercial loans and away from lower-yielding investment securities, which resulted in the expansion of the yield on interest-earning assets outpacing the increase in the cost of interest-bearing liabilities.
The net interest margin , on a fully taxable equivalent ("FTE") 1 basis, expan ded to 3.49% compared with 2.68% for the year ended December 31, 2024. • The increase in FTE net interest margin was also driven by the Company's balance sheet repositioning in Q3 2025, which resulted in a shift of the Company's earning asset mix towards higher yielding commercial loans and funding mix toward relationship-based deposit funding, in addition to favorable trends loan yields and interest-bearing deposit costs.
The following table represents credit quality within the portfolio for 2024 and 2023: (Dollars in Thousands, except Ratios) December 31, 2024 2023 Non-accrual loans Commercial 5,658 $ 7,362 Residential Real estate 11,215 8,058 Mortgage warehouse — — Consumer 8,919 4,290 Total non-accrual loans $ 25,792 $ 19,710 90 days and greater delinquent - accruing interest 1,166 559 Total non-performing loans $ 26,958 $ 20,269 Other real estate owned Commercial 407 $ 1,124 Residential Real estate — 182 Mortgage warehouse — — Consumer 17 205 Total other real estate owned $ 424 $ 1,511 Total non-performing assets $ 27,382 $ 21,780 Net charge-offs (recoveries) Commercial (199) 944 Residential Real estate (28) (33) Mortgage warehouse — — Consumer 2,130 1,614 Total net charge-offs $ 1,903 $ 2,525 Allowance for credit losses Commercial 30,953 29,736 Residential Real estate 2,715 2,503 Mortgage warehouse — 481 Consumer 18,312 17,309 Total allowance for credit losses $ 51,980 $ 50,029 Credit quality ratios Non-accrual loans to HFI loans 0.53 % 0.45 % Non-performing assets to total assets 0.35 % 0.27 % Net charge-offs of average total loans 0.04 % 0.07 % Allowance for credit losses to non-accrual loans 192.82 % 246.83 % Non–performing loans totaled 51.9% and 40.5% of the allowance for credit losses at December 31, 2024 and 2023. respectively.
The following table represents credit quality within the portfolio for 2025 and 2024: (Dollars in Thousands, except Ratios) December 31, 2025 2024 Non-accrual loans Commercial 14,549 $ 5,658 Residential Real estate 10,087 11,215 Consumer 7,821 8,919 Total non-accrual loans $ 32,457 $ 25,792 90 days and greater delinquent - accruing interest 2,489 1,166 Total non-performing loans $ 34,946 $ 26,958 Other real estate owned Commercial 539 $ 407 Residential Real estate 672 — Consumer 480 17 Total other real estate owned $ 1,691 $ 424 Other non-performing assets (1) $ 3,991 $ — Total non-performing assets $ 40,628 $ 27,382 Net charge-offs (recoveries) Commercial 766 (199) Residential Real estate — (28) Consumer 2,158 2,130 Total net charge-offs $ 2,924 $ 1,903 Allowance for credit losses Commercial 35,473 30,953 Residential Real estate 3,183 2,715 Consumer 12,643 18,312 Total allowance for credit losses $ 51,299 $ 51,980 Credit quality ratios Non-accrual loans to HFI loans 0.67 % 0.53 % Non-performing assets to total assets 0.63 % 0.35 % Annualized net charge-offs of average total loans 0.06 % 0.04 % Allowance for credit losses to non-performing loans 146.80 % 192.82 % (1) Other non-performing assets consist of a single available for sale security placed on non-accrual status in the second quarter of 2025.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) Amount of Allowance Allocated Percent of Loans in Each Category to Total Loans Total Loans Ratio of Allowance Allocated to Loans in Each Category December 31, 2024 Commercial $ 30,953 63.5 % $ 3,078,156 1.01 % Real estate 2,715 16.6 % 802,909 0.34 % Mortgage warehouse — — % — — % Consumer 18,312 19.9 % 965,975 1.90 % Total $ 51,980 100.0 % $ 4,847,040 1.07 % December 31, 2023 Commercial $ 29,736 60.6 % $ 2,674,960 1.11 % Real estate 2,503 15.4 % 681,136 0.37 % Mortgage warehouse 481 1.0 % 45,078 1.07 % Consumer 17,309 23.0 % 1,016,456 1.70 % Total $ 50,029 100.0 % $ 4,417,630 1.13 % At December 31, 2024, the allowance for credit losses was $52.0 million, or 1.07% of total loans outstanding, compared to $50.0 million, or 1.13%, at December 31, 2023.
Amount of Allowance Allocated Percent of Loans in Each Category to Total Loans HFI Total Loans HFI Ratio of Allowance Allocated to Loans in Each Category December 31, 2025 Commercial $ 35,473 70.4 % $ 3,432,408 1.03 % Real estate 3,183 15.8 % 772,427 0.41 % Consumer 12,643 13.8 % 671,707 1.88 % Total $ 51,299 100.0 % $ 4,876,542 1.05 % December 31, 2024 Commercial $ 30,953 63.5 % $ 3,078,156 1.01 % Real estate 2,715 16.6 % 802,909 0.34 % Consumer 18,312 19.9 % 965,975 1.90 % Total $ 51,980 100.0 % $ 4,847,040 1.07 % At December 31, 2025, the allowance for credit losses was $51.3 million, or 1.05% of total loans outstanding, compared to $52.0 million, or 1.07%, at December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+3 added−4 removed13 unchanged
Biggest changeAND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) deposit pricing may vary significantly from this assumption due to management actions, customer behavior, and market forces, which may have significant impacts to our net interest income.
Biggest changeAND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Table dollars in thousands except per share data) 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.
December 31, 2024 $ Change in Net Interest Income % Change in Net Interest Income 200 basis points rising $ (18,859) (8.0) % 100 basis points rising $ (9,274) (3.9) % 100 basis points falling $ 5,779 2.5 % 200 basis points falling (1,424) (0.6) % The preceding interest rate sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results. 65
December 31, 2025 $ Change in Net Interest Income % Change in Net Interest Income 200 basis points rising $ 7,198 2.8 % 100 basis points rising $ 6,030 2.3 % 100 basis points falling $ 2,104 0.8 % 200 basis points falling 2,165 0.8 % The preceding interest rate sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results. 62
Removed
The following table presents the net interest income simulation model’s projected change in net interest income over a one-year horizon due to a change in interest rates. The net interest income simulation assumes parallel shifts in the yield curve and a static balance sheet.
Added
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.
Removed
The net interest income simulation also uses a “deposit beta” modeling assumption which is an estimate of the change in interest-bearing deposit pricing for a given change in market interest rates. In up-rate scenarios, the deposit beta assumption is 15% with the pricing change occurring in the first month of the net interest income simulation horizon.
Added
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 1% to 85% 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.
Removed
In down-rate scenarios, the deposit beta assumption is 80% with the pricing change occurring in the first month of the net interest income simulation horizon. Actual changes to 64 Table of Contents HORIZON BANCORP, INC.
Added
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 61 Table of Contents HORIZON BANCORP, INC.
Removed
As shown below, the model output would indicate that as of December 31, 2024, 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.

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