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. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. All of such forward-looking statements are expressly qualified by reference to the cautionary statements provided under the caption “Forward-Looking Statements” included on page 3 of this report. Furthermore, a number of known and unknown factors may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. Therefore, you are encouraged to read in its entirety the information provided under the caption “Risk Factors” included under Item 1A in Part I of this report for a discussion of risk factors that may negatively impact our expected results, performance, or achievements discussed below.
Overview
Horizon is a registered bank holding company incorporated in Indiana and headquartered in Michigan City, Indiana. Horizon provides a broad range of banking services in northern and central Indiana and southern and central Michigan through its bank subsidiary, Horizon Bank. Horizon operates as a single segment, which is commercial banking. Horizon’s common stock is traded on the NASDAQ Global Select Market under the symbol HBNC. The Bank was founded in 1873 as a national association, and it remained a national association until its conversion to an Indiana commercial bank effective June 23, 2017. The Bank is a full–service commercial bank offering commercial and retail banking services, corporate and individual trust and agency services, and other services incident to banking.
Fourth Quarter and Full Year 2025 Highlights
Fourth Quarter Highlights
• Strong performance of the core community banking model, combined with the successful completion of the balance sheet repositioning efforts, resulted in significant performance improvement for the quarter. The Company's return on average assets and return on average equity improved to 1.63% and 15.71%, respectively.
• Net interest income of $63.5 million for the three months ended December 31, 2025 increased 8.7% compared with $58.4 million for the three months ended September 30, 2025, and 19.5% compared with $53.1 million in the year ago period. The net interest margin, on a fully taxable equivalent ("FTE") basis 1 , expanded for the ninth consecutive quarter, to 4.29% for the three months ended December 31, 2025, compared with 3.52% for the three months ended September 30, 2025 and 2.97% for the three months ended December 31, 2024.
• Total loans held for investment ("HFI") increased 4.4% as of December 31, 2025 compared to the linked quarter annualized, with strong organic commercial loan growth of $75.8 million, or 9.1% annualized.
• Funding costs continued to trend favorably. Non-interest bearing deposits balances remained relatively flat, while declines in interest-bearing balances largely reflected the communicated planned exit of high-cost, transactional deposits. Total interest-bearing liability costs decreased by another 34 bps during the quarter.
• Credit quality remained strong, with annualized net charge offs of 0.08% of average loans during the fourth quarter. Non-performing assets remain well within expected ranges, with non-performing assets to total assets of 63 bps for the fourth quarter.
• Expenses were comparable to the third quarter when considering a select few items related to the balance sheet activities, displaying management's continued commitment to generate positive operating leverage through a more efficient expense base.
1 N on-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
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HORIZON BANCORP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
(Table dollars in thousands except per share data)
Full Year Highlights
• Net interest income increased to $229.5 million for the year ended December 31, 2025, compared to $188.6 million for the year ended December 31, 2024, driven by net interest margin expansion, as average earning asset balances declined year-over-year as a result of the balance sheet repositioning efforts during Q3 2025. 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 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. The Company reclassified its held-to-maturity investment portfolio, with a carrying value of $1.8 billion and unrealized loss of $282.6 million, to the available-for-sale portfolio as part of the Company's balance sheet repositioning. Following the reclassification, the Company sold securities with a fair value of $1.4 billion, recognizing a pre-tax loss of $299.5 million, with a portion of the net proceeds reallocated back into the securities portfolio. 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. Strong commercial loan growth of $354.3 million, or 11.5%, was offset by the sale of the mortgage warehouse portfolio in Q1 2025 and the indirect auto portfolio of $284.2 million during the Q3 2025.
• Credit quality remains strong, with net charge offs of 0.06% of average loans for the year ended December 31, 2025. The provision for credit losses decreased by $3.5 million from prior year. This was mainly due to the release of the allowance related to the indirect auto portfolio, which was sold in Q3 2025. Allowance to total loans decreased from 1.07% to 1.05% during the period.
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. Certain of these policies are important to the portrayal of the Company’s financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. The Company considers these policies to be its critical accounting estimates. Management has identified as critical accounting 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. Estimating credit losses requires judgment in determining loan specific attributes impacting the borrower’s ability to repay contractual obligations. Other factors such as economic forecasts used to determine a reasonable and supportable forecast, prepayment assumptions, the value of underlying collateral, and changes in size composition and risks within the portfolio are also considered.
The allowance for credit losses is assessed at each balance sheet date and adjustments are recorded in the provision for credit losses. The allowance is estimated based on loan level characteristics using historical loss rates, a reasonable and supportable economic forecast. Loan losses are estimated using the fair value of collateral for collateral–dependent loans, or when the borrower is experiencing financial difficulty such that repayment of the loan
1 N on-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
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HORIZON BANCORP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
(Table dollars in thousands except per share data)
is expected to be made through the operation or sale of the collateral. Loan balances considered uncollectible are charged–off against the ACL. Assets purchased with credit deterioration (“PCD”) represent assets that are acquired with evidence of more than insignificant credit quality deterioration since origination at the acquisition date. At acquisition, the allowance for credit losses on PCD assets is booked directly to the ACL. Any subsequent changes in the ACL on PCD assets is recorded through the provision for credit losses. Management believes that the ACL is adequate to absorb the expected life of loan credit losses on the portfolio of loans and leases as of the balance sheet date. Actual losses incurred may differ materially from our estimates.
Income Taxes
The Company is subject to the income tax laws of the U.S. its states and municipalities in which the Company operates. 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 . 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. US GAAP prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements.
Although the Company believes that its tax judgments, estimates, and interpretations are reasonable, actual results could differ and the Company may be exposed to losses or gains that could be material. For example. 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.
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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 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. The decrease in net income when compared with the prior year period reflects a decrease in non-interest income of $259.4 million, of which $299.5 million related to a realized loss on sale of investment securities, and an increase in non-interest expense of $13.5 million, primarily owed to prepayment penalties on the redemption of borrowings, which was partially offset by a $40.9 million increase in net interest income and a net tax benefit of $42.6 million.
Net Interest Income
The largest component of income is net interest income. Net interest income is the difference between interest income, principally from loans and investment securities, and interest expense, principally on deposits and borrowings. Changes in the net interest income are the result of changes in volume and the net interest spread which affects the net interest margin. Volume refers to the average dollar levels of interest earning assets and interest bearing liabilities. Net interest spread refers to the difference between the average yield on interest earning assets and the average cost of 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. While average earning asset balances declined, the reported net FTE interest margin 1 increased by 81 basis points, to 3.49% for the year ended December 31, 2025 when compared to the prior year period. The primary driver of the increase in net interest income compared with the prior year period is attributable to the favorable mix shift in both average interest earning assets toward higher-yielding loans, and the funding mix toward lower cost deposit liabilities. Additionally, loan and securities yields have increased while deposit costs have declined when compared with the comparable year ago period.
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.
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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)
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
Federal Home Loan Bank stock
Investment securities – taxable
Investment securities – non–taxable (1)
Total investment securities
Loans receivable (2)(3)
Total interest earning assets
Non-interest earning assets
Cash and due from banks
Allowance for credit losses
Other assets
Total average assets
Liabilities and Stockholders’ Equity
Interest bearing liabilities
Interest bearing deposits
Saving and money market deposits
Time deposits
Borrowings
Repurchase agreements
Subordinated notes
Junior subordinated debentures to capital trusts
Total interest bearing liabilities
Non-interest bearing liabilities
Demand deposits
Accrued interest payable and other liabilities
Stockholders' equity
Total average liabilities and stockholders' equity
Net FTE interest income (Non-GAAP) and spread (5)
Less FTE adjustments (4)
Net Interest Income
Net FTE interest margin (Non-GAAP) (4)(5)
(1) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities.
(2) Includes fees on loans held for sale and held for investment. The inclusion of loan fees does not have a material effect on the average interest rate.
(3) Non-accruing loans for the purpose of the computation above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees.
(4) Management believes fully taxable equivalent, or FTE, interest income is useful to investors in evaluating the Company's performance as a comparison of the returns between a tax-free investment and a taxable alternative. The Company adjusts interest income and average rates for tax-exempt loans and securities to an FTE basis utilizing a 21% tax rate.
(5) N on-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
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HORIZON BANCORP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
(Table dollars in thousands except per share data)
The following table illustrates the impact of changes in the volume of interest earning assets and interest bearing liabilities and interest rates on net interest income for the periods indicated. 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.
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
Federal Home Loan Bank stock
Investment securities - taxable
Investment securities - non-taxable
Loans receivable
Total interest income
Interest Expense
Interest-bearing demand deposits
Savings and money market savings deposits
Time deposits
Borrowings
Repurchase agreements
Subordinated notes
Junior subordinated debentures issued to capital trusts
Total interest expense
Net FTE interest income (Non-GAAP)
Less change in FTE adjustments
Net Interest Income
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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 Income
December,
Change
Change
(Dollars in Thousands)
Service charges on deposit accounts
Wire transfer fees
Interchange fees
Fiduciary activities
Loss on sale of investment securities
Gain on sale of mortgage loans
Mortgage servicing income net of impairment
Increase in cash value of bank owned life insurance
Other income
Total non-interest (loss) income
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. 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.
Gain on sale of mortgage loans increased by $0.6 million for the year ended December 31, 2025, as compared to the same periods in 2024, driven by the increased volume of sold loans.
Mortgage servicing income decreased $0.2 million for the year ended December 31, 2025, as compared to the same periods in 2024. 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.
Interchange fees decreased by $0.2 million for the year ended December 31, 2025 compared to same period in 2024, primarily as a result of decreased volumes in debit card activity.
Other income, which includes various miscellaneous income items as well as fair market value adjustments to certain other assets, increased by $0.5 million, compared to the same period in 2024. Other income for the year included the pre-tax gain of $7.0 million on the sale of the Company's mortgage warehouse business, a BOLI death benefit of $0.6 million and the pre-tax loss of $7.7 million on the sale of the Company's indirect auto portfolio.
The remaining changes were nominal amongst the remaining individual non-interest income accounts.
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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,
Change
Change
(Dollars in Thousands)
Non–interest Expense
Salaries and employee benefits
Net occupancy expenses
Data processing
Professional fees
Outside services and consultants
Loan expense
FDIC insurance expense
Core deposit intangible amortization
Merger related expense
Prepayment penalties
Other losses
Other expense
Total non–interest expense
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.
Data processing expense increased by $1.0 million for the year ended December 31, 2025 when compared to the same period in 2024. This is primarily a result of increases in debit card processing activity and software maintenance.
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.
Other expenses, which includes corporate and other service expenses, decreased by $2.2 million for the year ended December 31, 2025 when compared to the same period in 2024. This decrease was partially due to decreases in marketing and advertising expenses.
Professional fees increased by $0.7 million for the year ended December 31, 2025 when compared to the same period in 2024, largely a result of episodic legal fees related to certain legacy items that have been concluded.
Other losses for the year ended December 31, 2025 included the $0.7 million of one-time expense related to the write-off of the remaining unamortized issuance expense for the subordinated notes maturing in 2030 that were called on October 1, 2025.
Prepayment penalties increased $12.7 million for the year ended December 31, 2025 when compared to the same period in 2024. The increase was driven by a $12.7 million prepayment penalty related to the payoff of $700 million in FHLB advances during the third quarter as part of the Company's balance sheet repositioning.
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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)
Provision and Allowance for Credit Losses and Liability for Unfunded Lending Commitments
December 31,
December 31,
Allowance for Credit Losses on Loans
Balance at beginning of period
Provision for credit losses on loans
Net loan (charge-offs) recoveries:
Commercial
Residential Real estate
Consumer
Total net loan (charge-offs) recoveries
Balance at end of period
Liability for Unfunded Lending Commitments
Balance at beginning of period
Provision (reversal) for credit losses on unfunded lending commitments
Balance at end of period
Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments
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. For the year ended December 31, 2025, the Company recorded credit loss expense of $1.9 million. This compares to a provision for credit losses of $5.4 million for the year ended December 31, 2024. The decrease in the provision for credit losses on loans when compared to the year ago period was primarily attributable to the release of approximately $3.1 million in total allowance against the sold portion of the indirect auto portfolio, and well as the continued improvement in the Company's historical loss metrics. The total provision, other than on loans and unfunded lending commitments, benefitted from the release of the $0.2 million reserve against the previous held-to-maturity investment portfolio.
For the year ended December 31, 2025, the loan portfolio excluding loans held for sale increased by $29.5 million, or 0.6%. The loan growth experienced was mainly attributable to increased focus on the commercial portfolio segment. The commercial loan portfolio segment grew by $354.3 million, or 11.5%. The growth is partially offset by a decrease in the consumer loan portfolio of $294.3 million, or (30.5)%, primarily related to the sale of the consumer indirect auto portfolio as part of the balance sheet repositioning efforts in the third quarter of 2025.
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.
The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.05% at December 31, 2025, compared to 1.07% at December 31, 2024.
The liability for unfunded lending commitments was $1.8 million at December 31, 2025, a decrease from $2.1 million at December 31, 2024.
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. The net credit position for the year ended December 31, 2025 is attributable to the pre-tax loss generated from the Company's balance sheet repositioning efforts in the third quarter of 2025 . For a reconciliation of the statutory rate to the actual rate, please refer to Note 16- Income Tax.
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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)
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. The decrease in total assets was primarily driven by the Company's balance sheet repositioning efforts, which resulted in a reduction of investment securities of $1.2 billion, interest-bearing deposits in banks of $128.5 million, and loans held for sale of $57.8 million following the sale of the Company's mortgage warehouse business in the first quarter of 2025. These decreases was partially offset by modest growth in loans, net of allowance for credit losses, of $30.2 million and an increase in other assets of $62.8 million, primarily attributable to a higher deferred tax asset generated through the Company's balance sheet repositioning initiatives.
Investment Securities
Investment securities, classified as available for sale, carrying values totaled $875.4 million at December 31, 2025, and consisted of Treasury and federal agency securities of $16.9 million, 1.9%; state and municipal securities of $319.7 million, 36.5%; U.S. government agency mortgage backed securities of $494.2 million, 56.5%; and corporate securities of $44.7 million, 5.1%.
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. 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, 2025, the mortgage–backed securities in the investment portfolio had an average duration, net of fair value swaps against the portfolio, of just over 4 years.
Municipal securities are priced by a third party using a pricing grid which estimates prices based on recent sales of similar securities. All municipal securities are investment grade or local non–rated issuers. A credit review is performed annually on the municipal securities portfolio.
At December 31, 2025 and 2024, 100% and 11%, respectively, of investment securities were classified as available for sale. During the third quarter of 2025, the Company transferred it's entire held to maturity portfolio to available for sale. 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. 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. Based on current market conditions, the Company intends to hold its available-for-sale securities in unrealized loss positions through the anticipated recovery period.
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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 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. Treasury, federal agencies, and government sponsored agencies (1)
State and municipal
U.S. government agency mortgage-backed securities
Corporate notes
Total available for sale
Total investment securities
(1) Fair value is based on contractual maturity or call date where a call option exists
(2) Maturity based upon final maturity date
The weighted–average interest rates are based on coupon rates for securities purchased at par value an on effective interest rates considering amortization or accretion if the securities were purchased at a premium or discount. Yields on tax-exempt securities have been computed on a tax-equivalent basis using the federal statutory tax rate of 21%.
As a member of the Federal Home Loan Bank system, Horizon is required to maintain an investment in the common stock of the Federal Home Loan Bank. The investment in common stock is based on a predetermined formula. 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.
For more information about securities, see Note 3 – Securities to the Consolidated Financial Statements at Item 8.
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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)
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. 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.
December 31,
December 31,
Dollar
Percent
Change
Change
Commercial
Owner occupied real estate
Non–owner occupied real estate
Residential spec homes
Development & spec land
Commercial and industrial
Total commercial
Real estate
Residential mortgage
Residential construction
Total real estate
Consumer
Installment
Indirect auto
Home equity
Total consumer
Total loans HFI
Allowance for loan losses
Loans HFI, net
The acceptance and management of credit risk is an integral part of the Bank’s business as a financial intermediary. 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.
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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)
Changes in the mix of the loans HFI portfolio averages are shown in the following table.
December 31,
December 31,
Commercial
Real estate
Mortgage warehouse
Consumer
Total average loans HFI
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 table also presents the portion of loans that have fixed interest rates or variable interest rates that fluctuate over the life of the loans in accordance with changes in an interest rate index as well as a breakdown of floating rate loans.
Due in One Year or Less
After One, but Within Five Years
After Five, but Within Fifteen Years
After Fifteen Years
Total
Commercial
Real estate
Consumer
Total
Loans with fixed interest rates:
Commercial
Real estate
Consumer
Total
Loans with variable interest rates:
Commercial
Real estate
Consumer
Total
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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)
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. The increase during 2025 was due to growth in all types of commercial loans.
Commercial loans consisted of the following types of loans at December 31:
December 31, 2025
December 31, 2024
Number
Amount
Percent of
Portfolio
Number
Amount
Percent of
Portfolio
SBA guaranteed
Municipal government
Lines of credit
Real estate and equipment
Total
At December 31, 2025, the commercial loan portfolio held $435.1 million of adjustable rate loans that had interest rate floors in the terms of the note. 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 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.
Owner occupied real estate loans are comprised of loans secured by the real estate for the business operator's facilities such as their office, warehouse, manufacturing facility or medical offices. 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.
Non–owner occupied real estate loans are categorized as loans reliant on the leasing and/or operation of the underlying real estate for repayment. 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.
Management actively monitors commercial and industrial loans and commercial real estate loans by NAICS code, geography and real estate sector. Commercial real estate loans are managed to internal portfolio limits for certain real estate categories, as well as regulatory concentration limits based on Tier 1 capital plus allowance for credit losses, percent of portfolio and comparison to peer data. The Bank also utilizes external data sources to monitor commercial real estate segment and market trends.
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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)
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. This category consists of home mortgages that generally require a loan to value of no more than 80%. Some special guaranteed or insured real estate loan programs do permit a higher loan to collateral value ratio.
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%. Home equity credit lines are primarily not combined with a first mortgage and are therefore evaluated in the allowance for loan losses as a separate pool. These loans are classified as consumer loans in the Loans table above and in Note 4 of the Consolidated Financial Statements at Item 8.
Residential real estate lending is a highly competitive business. 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
Biweekly payment
Adjustable rate
Monthly payment
Subtotal
Loans held for sale (1)
Total real estate loans
(1) Loans held for sale excludes mortgage warehouse loans reclassified during Q4 2024.
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. 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. 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.
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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)
December 31,
December 31,
December 31,
Mortgage servicing rights
Balances, Balances, January 1
Servicing rights capitalized
Amortization of servicing rights
Balances, Balances, December 31
Impairment allowance
Balances, Balances, January 1
Additions
Reductions
Balances, Balances, December 31
Mortgage servicing rights, net
Mortgage Warehouse Loans
On January 17, 2025, the Company completed the sale of its mortgage warehouse loan portfolio to an unrelated third party.
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.
Credit Quality
Non-Performing Assets
Non–performing loans are defined as loans that are greater than 90 days delinquent or have had the accrual of interest discontinued by management. From time to time, the Bank obtains information which may lead management to believe that the collection of payments may be doubtful on a particular loan. 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. 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
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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–accrual status. Management continues to work diligently toward returning non–performing loans to an earning asset basis. The following table represents credit quality within the portfolio for 2025 and 2024:
(Dollars in Thousands, except Ratios)
December 31,
Non-accrual loans
Commercial
Residential Real estate
Consumer
Total non-accrual loans
90 days and greater delinquent - accruing interest
Total non-performing loans
Other real estate owned
Commercial
Residential Real estate
Consumer
Total other real estate owned
Other non-performing assets (1)
Total non-performing assets
Net charge-offs (recoveries)
Commercial
Residential Real estate
Consumer
Total net charge-offs
Allowance for credit losses
Commercial
Residential Real estate
Consumer
Total allowance for credit losses
Credit quality ratios
Non-accrual loans to HFI loans
Non-performing assets to total assets
Annualized net charge-offs of average total loans
Allowance for credit losses to non-performing loans
(1) Other non-performing assets consist of a single available for sale security placed on non-accrual status in the second quarter of 2025.
Non–performing loans totaled 68.1% and 51.9% of the allowance for credit losses at December 31, 2025 and 2024. respectively. Non–performing loans at December 31, 2025 totaled $34.9 million, an increase from $27.0 million as of December 31, 2024. The increase in non-performing loans was primarily related to an increase in the commercial loan portfolio of $8.9 million.
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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–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.
Non-Accrual Loans
Percent of Non-Accrual Loans in Each Category to Total Loans
Total Loans HFI
December 31, 2025
Commercial
Real estate
Consumer
Total
Allowance for credit losses on loans
Ratio of allowance for credit losses on loans to non-accrual loans
December 31, 2024
Commercial
Real estate
Consumer
Total
Allowance for credit losses on loans
Ratio of allowance for credit losses on loans to non-accrual loans
Other Real Estate Owned (“OREO”) totaled $1.7 million on December 31, 2025, an increase of $1.3 million from December 31, 2024. On December 31, 2025, OREO was comprised of seven properties, all of which properties were bank owned.
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.
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
Real estate
Consumer
Total
December 31, 2024
Commercial
Real estate
Consumer
Total
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. During 2025, a provision for credit losses on loans was recorded totaling $2.2 million compared to $3.9 million in 2024.
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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)
Horizon assesses the adequacy of its Allowance for Credit Losses (“ACL”) by regularly reviewing the performance of all of its loan portfolios. As a result of its quarterly reviews, a provision for credit losses is determined to bring the total ACL to a level called for by the analysis. Horizon's reserve includes allocations for potential future loan losses related to economic factors and the nature and characteristics of its loan portfolios.
No assurance can be given that Horizon will not, in any particular period, sustain loan losses that are significant in relation to the amount reserved, or that subsequent evaluations of the loan portfolio, in light of factors then prevailing, including economic conditions and management’s ongoing quarterly assessments of the portfolio, will not require increases in the allowance for credit losses. Horizon considers the allowance for credit losses to be adequate to cover losses inherent in the loan portfolio as of December 31, 2025.
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
Real estate
Consumer
Total
December 31, 2024
Commercial
Real estate
Mortgage warehouse
Consumer
Total
December 31, 2023
Commercial
Real estate
Mortgage warehouse
Consumer
Total
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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)
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. The following table shows the major components of deferred tax:
December 31,
December 31,
Assets
Allowance for credit losses
Net operating loss and tax credits
Director and employee benefits
Unrealized loss on AFS securities and fair value hedge
Basis in partnership equity investments
Net capitalized expenses
Capital loss carryover
Fair value adjustment on acquisitions
Other
Total assets
Liabilities
Depreciation
State tax
Federal Home Loan Bank stock dividends
Difference in basis of intangible assets
Fair value adjustment on acquisitions
Other
Total liabilities
Valuation allowance
Net deferred tax asset/(liability)
Deposits
The primary source of funds for the Bank comes from the acceptance of demand and time deposits. However, at times the Bank will use its ability to borrow funds from the Federal Home Loan Bank and other sources when it can do so at interest rates and terms that are more favorable than those required for deposited funds or loan demand is greater than the ability to grow deposits. Total deposits were $5.3 billion at December 31, 2025, compared to $5.6 billion at December 31, 2024.
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
Non-interest bearing demand deposits
Interest bearing demand deposits
Savings deposits
Money market
Time deposits
Total deposits
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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)
Th e $12.8 million increase in average deposits during 2025 was relatively muted due to management's decision to strategically exit some higher-cost non-relationship accounts as part of the Q3 2025 balance sheet repositioning . 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.
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. 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.
Wholesale money market, certificates and other time deposits for both retail and brokered maturing in years ending December 31, 2025 are as follows:
Retail
Brokered
Total
Thereafter
Of the brokered balances as of December 31, 2025, $170.0 million are callable at the Company's discretion. Tranches become callable at various dates between January 24, 2026 and June 3, 2026, and every month thereafter.
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
Due after three months through six months
Due after six months through one year
Due after one year
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. 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.
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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)
Liquidity & Capital Resources
Capital Resources
Stockholders’ equity is influenced primarily by earnings, dividends, and changes in the unrealized holding gains or losses, net of taxes, on available-for-sale investment securities.
Stockholders’ equity decreased $75.3 million, or 9.9%, to $688.3 million as of December 31, 2025 from $763.6 million as of December 31, 2024. The decrease is primarily due to a decrease in retained earnings related to the net loss of $150.5 million, which includes the realization of the $299.5 million loss on the sale of on available-for-sale securities, and declared cash dividends on common stock of $30.6 million. The decrease was partially offset by an increase in additional paid in capital related to the net proceeds from the common stock issuance of $98.0 million during the third quarter of 2025. Additionally, the accumulated other comprehensive loss was reduced by $10.3 million, net of tax.
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. 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.
As a bank holding company, the Company must comply with the capital requirements established by the Federal Reserve, and our subsidiary Bank must comply with the capital requirements established by the FDIC. The current risk-based guidelines applicable to us and our Bank are based on the Basel III framework, as implemented by the federal bank regulators. 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.
Liquidity
The Bank maintains a stable base of core deposits provided by long standing relationships with consumers and local businesses. These deposits are the principal source of liquidity for Horizon. Other sources of liquidity for Horizon include earnings, loan repayments, investment security sales, cash flows and maturities, sale of real estate loans and borrowing relationships with correspondent banks, including the FHLB and the Federal Reserve Bank (“FRB”). 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. Generally, the loan terms from the FHLB are better than the terms Horizon can receive from other sources, making it less expensive to borrow money from the FHLB. 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. 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. 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.
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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)
◦ A downgrade in Horizon’s ability to obtain credit due to factors such as deterioration in asset quality, a large charge to earnings, a decline in profitability or other financial measures, or a significant merger or acquisition could impact the availability of funding sources.
◦ An act of terrorism or war, natural disasters, political events, or the default or bankruptcy of a major corporation, mutual fund, hedge fund or a government agency could affect the cost and availability of funding sources.
◦ Market speculation or rumors about Horizon or the banking industry in general may adversely affect the cost and availability of normal funding sources.
If any of these events occur, they could force Horizon to borrow money from other sources including negotiable certificates of deposit. Such other monies may only be available at higher interest rates and on less advantageous terms, which will impact our net income and could impact our ability to grow. Management believes Horizon has adequate funding sources to meet short and long term needs.
Horizon maintains a liquidity contingency plan that outlines the process for addressing a liquidity crisis. The plan provides for an evaluation of funding sources under various market conditions. It also assigns specific roles and responsibilities for effectively managing liquidity through a problem period.
The cash flows from the operating, investing and financing activities of the Company resulted in a net decrease in cash, cash equivalents and restricted cash of $154.0 million during the year ended December 31, 2025 , as reported in the consolidated statements of cash flows in this report. Operating activities, consisting mainly of net loss adjusted for certain non-cash items, provided cash flow of $79.2 million and have historically been a stable source of funds. Investing activities, which occur mainly in the loan and investment securities portfolios, provided cash of $979.5 million mainly due to the balance sheet repositioning of the securities portfolio, which provided proceeds from sales of AFS securities of $1.4 billion, partially offset by purchases of AFS securities of $591.8 million. Financing activities used cash of $1.2 billion, largely resulting from the repayment of long-term borrowings of $1.1 billion and $29.5 million in dividends paid on common stock, partially offset by proceeds from issuance of common stock of $98.0 million and net proceeds from issuance of subordinated debt of $98.2 million and repayment of subordinated debt of $56.5 million during the year ended December 31, 2025 .
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. If thes e maturing time deposits do not remain with us, we will be requi red to seek other sources of funds, including other certificates of deposit and borrowings. 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. We have the ability to attract and retain deposits by adjusting the interest rates offered.
Use of Non-GAAP Financial Measures
In addition to financial measures presented in accordance with GAAP, this document refers to non-GAAP financial measures, which Horizon believes are helpful to investors and provide a greater understanding of our business and financial results without the impact of items or events that may obscure trends in the Company’s underlying performance. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this document for reconciliations of the non-GAAP information identified herein and its most comparable GAAP measures.
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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 Net Fully-Taxable Equivalent ("FTE") Interest Margin
(Dollars in Thousands, Unaudited)
December 31,
December 31,
December 31,
Interest income (GAAP)
Taxable-equivalent adjustment:
Investment securities - tax exempt (1)
Loan receivable (2)
FTE Interest income (non-GAAP)
Interest expense (GAAP)
Net interest income (GAAP)
Net FTE interest income (non-GAAP)
Average interest earning assets
Net FTE interest margin (non-GAAP)
(1) The following represents municipal securities interest income for investment securities classified as available-for-sale and held-to-maturity
(2) The following represents municipal loan interest income for loan receivables classified as held for sale and held for investment
(3) Management believes fully taxable equivalent, or FTE, interest income is useful to investors in evaluating the Company's performance as a comparison of the returns between a tax-free investment and a taxable alternative. The Company adjusts interest income for tax-exempt loans and securities to an FTE basis utilizing a 21% tax rate
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)
Average stockholders' equity
Average intangible assets
Average tangible equity (Non-GAAP)
Return on average tangible common equity ("ROACE") (non-GAAP)
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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)
Intangible assets (end of period)
Total tangible common equity (non-GAAP)
Total assets (GAAP)
Intangible assets (end of period)
Total tangible assets (non-GAAP)
Tangible common equity to tangible assets (Non-GAAP)
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)
Intangible assets (end of period)
Total tangible common equity (non-GAAP)
Common shares outstanding
Tangible book value per common share (non-GAAP)
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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)
