HORIZON BANCORP INC /IN/
For the period ended Dec 31, 2025. Filed Mar 13, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 13, 2026
HBNC$20.81-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-14.
0000706129-25-000036
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-13.
0000706129-26-000024
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 154 previous paragraphs and 147 current paragraphs.
67 unchanged; 55 reworded; 21 added; 32 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 25 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
•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.
Current report
•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.
Current report
•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.
Current report
•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.
Current report
1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Current report
•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.
Current report
1 Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
Current report
Net interest income increased$40.9 million duringthe 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 theyear 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.
Current report
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.
Current report
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.
Current report
The remaining changes were nominal amongst the remaining individual non-interest income accounts.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
The liability for unfunded lending commitments was $1.8 million at December 31, 2025, a decrease from $2.1 million at December 31, 2024.
Current report
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 theyear 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.
Current report
At December 31, 2025, Horizon maintained held for trading securities of $3.9 million.
Current report
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.
Current report
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.
Current report
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.
Removed paragraphs (32)
Previous report
•As previously disclosed, the Company completed the repositioning of $332.2 million of available-for-sale securities during the fourth quarter. While the sale resulted in a pre-tax loss of $39.1 million, the Company redeployed the proceeds received into higher-yielding loans and continued to manage down higher cost funding sources.
Previous report
•Total loans were $4.91 billion at December 31, 2024, up $108.6 million from September 30, 2024 balances. Consistent with the Company's stated growth strategy, the commercial portfolio showed continued organic growth momentum during the quarter, which was offset with planned run-off of lower-yielding indirect auto loans in the consumer loan portfolio. Loans held for sale (“HFS”) increased $65.5 million as a result of the Company’s transfer of its mortgage warehouse loan balances of $64.8 million at December 31, 2024.
Previous report
•Total deposits declined by $126.4 million during the quarter, to $5.60 billion at period end, with the majority of the decline in time deposits, which declined by $131.5 million. The Company's non-maturity deposit base continued to display strength, growing for the third consecutive quarter, including another quarter of relatively stable non-interest bearing deposit balances and growth in core relationship consumer and commercial portfolios.
Previous report
•Continued the process for the sale of the mortgage warehouse division during the quarter. Sold the business for a gain, effective January 17th, which will be recognized in Q1 2025 results.
Previous report
•Total loans were $4.91 billion at December 31, 2024, up $495.6 million from December 31, 2023 balances, or 11% year over year. Growth was led by commercial loans, which grew by $403.2 million during the year, 15%, and residential mortgage, which grew by $129.7 million, or 20%. Consistent with it's previously stated strategic objectives, the indirect auto portfolio declined by $96.0 million, or 24% during the year.
Previous report
Allowance for Credit Losses
Previous report
Allowance for Credit Losses on Off–Balance Sheet Credit Exposures
Previous report
The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The Company determines the estimated amount of expected credit extensions based on historical usage to calculate the amount of exposure for a loss estimate and has recorded an allowance.
Previous report
Allowance for Credit Losses on Available for Sale Securities
Previous report
For available for sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For debt securities available for sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recorded in other comprehensive income.
Previous report
Changes in the ACL are recorded as provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management believes the available for sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met.
Previous report
Allowance for Credit Losses on Held to Maturity Securities
Previous report
For held to maturity securities, the Company conducts an assessment of its held to maturity securities at the time of purchase and on at least an annual basis to ensure such investment securities remain within appropriate levels of risk and continue to perform satisfactorily in fulfilling its obligations. The Company considers, among other factors, the nature of the securities and credit ratings or financial condition of the issuer. If available, the Company obtains a credit rating for issuers from the Nationally Recognized Statistical Rating Organization (“NRSRO”) for consideration. If this assessment indicates that a material credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss.
Previous report
Valuation Measurements
Previous report
Valuation methodologies often involve a significant degree of judgment, particularly when there are no observable active markets for the items being valued. Investment securities, mortgage derivatives, and deferred compensation plan assets and associated liabilities are carried at fair value, as defined in FASB ASC 820, which requires key judgments affecting how fair value for such assets and liabilities is determined.
Previous report
Additionally, from time to time, other assets and liabilities may be recorded at fair value on a nonrecurring basis, such as impaired loans that have been measured based on the fair value of the underlying collateral, loans held-for-sale recorded at the lower of cost or market, other real estate (primarily foreclosed property), and certain other assets and liabilities. Nonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.
Previous report
In addition, the outcomes of valuations have a direct bearing on the carrying amounts of other critical audit estimate, such as the allowance for credit losses and income tax valuation. To determine the values of these assets and liabilities, as well as the extent to which related assets may be impaired, management makes assumptions and estimates related to discount rates, asset returns, prepayment speeds and other factors. The use of different discount rates or other valuation assumptions could produce significantly different results, which could affect Horizon’s results of operations.
Previous report
Net interest income was $188.6 million in the year ended December 31, 2024, compared to $175.7 million in the year ended December 31, 2023, driven by strong expansion of the Company's net FTE interest margin 1, while average interest earning assets increased by $75.7 million, or 1.04% from the prior year. Horizon’snet FTE interest marginwas 2.68% for the year ended December 31, 2024, compared to 2.54% for the year ended December 31, 2023, attributable to the favorable volume and mix shift in average interest earning assets toward higher-yielding loans outpacing the increase in rates on average deposits driven by disciplined pricing strategies on both sides of the balance sheet.
Previous report
Cash value of bank owned life insurance decreased $2.4 million for the year ended December 31, 2024, as compared to the same period in 2023. The declines were due to the surrender of several policies during the fourth quarter of 2023.
Previous report
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.
Previous report
FDIC insurance expense increased by $1.2 million in the year ended December 31, 2024 compared to the year ago period. The increase in the period related to higher incurred assessment rates.
Previous report
Loan expense decreased by $904 thousand for the year ended December 31, 2024 when compared to the same
Previous report
period in 2023. This is primarily due to decreases in credit monitoring expenses. This is partially offset by increases in expenses related to repossessed assets.
Previous report
For the year ended December 31, 2024, the Company recorded credit loss expense of $5.4 million. This compares to a provision for credit losses of $2.5 million for the year ended December 31, 2023. The increase in the provision is primary attributable to the increase in the provision for unfunded commitments and net loan growth experienced in the commercial and real estate portfolio segment.
Previous report
The liability for unfunded lending commitments was $2.1 million at December 31, 2024, an increase from $1.5 million. This is primarily attributable to net increases in the volume of unfunded commitments during 2024, and is consistent with the loan growth experienced during the period.
Previous report
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. The decrease in the effective tax rate during the year was primarily attributable to the reduction of the Company's pre-tax income and release of the previously established valuation allowance in 2024, which resulted in a tax benefit of $5.2 million in the current period, compared with the establishment of the tax valuation allowance and tax expenses related to the termination of bank owned life insurance policies in 2023 that did not recur in 2024. During the fourth quarter of 2024, the Company completed an analysis and determined they qualified to make a specific tax election related to one of their subsidiaries. Pursuant to the election, a method change was filed for income tax purposes with the completion of the 2023 tax returns that resulted in a release of the valuation allowance previously recorded at December 31, 2023 as part of the current year evaluation of the realizability of the deferred tax assets.
Previous report
At December 31, 2024, Horizon did not maintain a trading account.
Previous report
Horizon’s mortgage warehousing lending has specific mortgage companies as customers of Horizon Bank. Individual mortgage loans originated by these mortgage companies are funded as a secured borrowing with a pledge of collateral under Horizon’s agreement with the mortgage company. Each mortgage loan funded by Horizon undergoes an underwriting review by Horizon to the end investor guidelines and is assigned to Horizon until the loan is sold to the secondary market by the mortgage company.
Previous report
No mortgage warehouse loans were non–performing or OREO as of December 31, 2024 and 2023.
Previous report
Interest expense on time certificates of $250,000 or more was approximately $22.7 million, $16.7 million and $4.2 million for 2024, 2023 and 2022.
Previous report
Stockholders’ equity increased $44.8 million, or 6.2%, to $763.6 million as of December 31, 2024 from $718.8 million as of December 31, 2023, due to changes in accumulated other comprehensive loss related to unrealized gains on available-for-sale securities and retention of earnings, which is primarily offset by cash dividend payments on outstanding common stock.
Previous report
During 2024, cash flows were generated primarily from the proceeds from borrowings totaling $512.8 million, the sales, maturities, and principal repayments of investment securities of $88.4 million. Cash flows were primarily used to purchase investments totaling $0.3 million, to purchase loans totaling $240.0 million, an increase in net loans of $217.1 million, a decrease in deposits of $64.2 million and the repayment of borrowings totaling $563.5 million. The net cash and cash equivalent position decreased by $233.1 million during 2024.
Reworded paragraphs (55)
Previous wording
•Net interest income increased for the fifth consecutive quarter to $53.1 million for the three months ended December 31, 2024, compared to $46.9 million for the three months ended September 30, 2024. The net interest margin, on a fully taxable equivalent ("FTE") basis 1, also expanded for the fifth consecutive quarter, to 2.97% compared with 2.66% for the three months ended September 30, 2024.
Current wording
•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.
Previous wording
•Credit quality remained strong, with annualized net charge offs of 0.05% of average loans during the fourth quarter. Non-performing assets to total assets of 0.35% remains well within expected ranges, with no material change from the prior quarter. Provision for loan losses of $1.2 million reflects increased provision for unfunded commitments and net growth in commercial loans held for investment ("HFI"), partially offset by the elimination of the reserve associated with mortgage warehouse and the reduction of reserve related to the planned runoff of indirect auto in the current quarter, when compared with the prior quarter.
Current wording
•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.
Previous wording
•Net interest income increased to $188.6 million for the year ended December 31, 2024, compared to $175.7 million for the year ended December 31, 2023. The net interest margin, on afully taxable equivalent ("FTE")1 basis, also expanded to 2.68% compared with 2.54% for the year ended December 31, 2023.
Current wording
•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 afully taxable equivalent ("FTE")1 basis, expanded to 3.49% compared with 2.68% for the year ended December 31, 2024.
Previous wording
•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 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.
Current wording
•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.
Previous wording
•As discussed above, the Company repositioned the available for sale securities during Q4 2024. The yield of the Company's investment portfolio remained consistent at 2.35% compared to year ended December 31, 2023.
Current wording
•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.
Previous wording
•Credit quality remains strong, with net charge offs of 0.04% of average loans for the year ended December 31, 2024. Non-performing assets to total assets of 0.35% remains well within expected ranges, with no material change from the prior year. The provision for credit losses increased by $2.9 million from prior year. This was mainly due to the 9.7% loan growth experienced during the quarter. Allowance to total loans decreased from 1.13% to 1.07% during the period.
Current wording
•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.
Previous wording
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 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.
Current wording
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.
Previous wording
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. The increase in net income from the previous year reflects an increase of total interest income of $44.2 million and a decrease in income tax expense of $19.1 million, offset by increases in interest expense of $31.3 million, increases in non-interest expense of $12.6 million, and increase in credit loss expense of $2.9 million.
Current wording
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 incomeand a net tax benefit of $42.6 million.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
These decreases were partially offset by increases in service charges on deposit accounts of $713 thousand for the year ended December 31, 2024, as compared to the same period in 2023, primarily as a result of higher transaction-based fee activity in the current period, as well as an increase in interchange fees of $938 thousand for the year ended December 31, 2024 compared to same period in 2023, primarily as a result of increased volumes in debit card activity and reduced merchant processing expenses.
Current wording
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.
Previous wording
Total non-interest income decreased $9.0 million for the year ended December 31, 2024 compared to the same period in 2023. The primary components of the change were as follows:
Current wording
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:
Previous wording
Salaries and employee benefits expense increased by $7.4 million for the year ended December 31, 2024 when compared to the same period in 2023, partially attributable to ongoing hiring efforts in revenue generating roles in commercial lending, equipment finance and treasury management. In addition, the current period was unfavorably impacted by an expenses related to the termination of legacy benefits and compensation programs and additional performance based compensation expense relative to the prior periods.
Current wording
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.
Previous wording
Data processing expense decreased by $765 thousand for the year ended December 31, 2024 when compared to the same period in 2023. This is primarily a result of reduction in 3rd party vendor expenses, consistent with strategic initiatives undertaken by the Company.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
Other expenses, which includes corporate and other service expenses, increased by $1.0 million for the year ended December 31, 2024 when compared to the same period in 2023.
Current wording
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.
Previous wording
Provision and Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments
Current wording
Provision and Allowance for Credit Losses and Liability for Unfunded Lending Commitments
Previous wording
For the year ended December 31, 2024, the loan portfolio excluding loans held for sale increased by $429.4 million, or 9.7%. The loan growth experienced was mainly attributable to increased focus on the commercial and real estate portfolio segment. The commercial and real estate loan portfolio segments grew by $403.2 million, or 15.1% and $76.7 million, or 10.6%, respectively. The growth is partially offset by the transfer of the mortgage warehouse portfolio to held-for-sale and the runoff of the consumer indirect auto portfolio.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.07% at December 31, 2024, compared to 1.13% at December 31, 2023. 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.
Current wording
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.
Previous wording
Horizon’s total assets were $7.8 billion as of December 31, 2024, a decrease of $139.3 million from December 31, 2023. The decrease in total assets was primarily due to a decrease in investment securities of $391.5 million, due to the repositioning of about $325 million of available-for-sale securities in the fourth quarter of 2024, and interest-bearing deposits of $212.4 million, partially offset by an increase in loans, net of allowance for credit losses, of $427.5 million and in loans held for sale of $66.2 million.
Current wording
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.
Previous wording
Investment securities carrying values totaled $2.1 billion at December 31, 2024, and consisted of Treasury and federal agency securities of $280.2 million (13.3%); state and municipal securities of $1.3 billion (59.5%); U.S. government agency mortgage backed securities of $364.3 million (17.3%); private labeled mortgage–backed pools of $29.3 million (1.4%); and corporate securities of $177.1 million (8.4%).
Current wording
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%.
Previous wording
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. 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. Securities that have interest rates above current market rates are purchased at a premium.
Current wording
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.
Previous wording
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. 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. Based on current market conditions, the Company intends to hold its available-for-sale securities in unrealized loss positions through the anticipated recovery period.
Current wording
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.
Previous wording
The following is a schedule of maturities of each categories of available for sale and held to maturity debt securities and the related weighted–average yield of such securities as of December 31, 2024:
Current wording
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:
Previous wording
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, 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.
Current wording
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.
Previous wording
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. 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.
Current wording
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.
Previous wording
The following table presents the maturity distribution based on payment due dates of our loan portfolio as December 31, 2024. 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.
Current wording
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.
Previous wording
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. The increase during 2024 was due to growth in all types of commercial loans.
Current wording
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.
Previous wording
At December 31, 2024, the commercial loan portfolio held $355.6 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 $39.3 million were at their floor at December 31, 2024.
Current wording
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.
Previous wording
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.
Current wording
The Bank's commercial loan portfolio consists generally of approximately 29% commercial and industrial loans and approximately 71% commercial real estate loans.
Previous wording
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, 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.
Current wording
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.
Previous wording
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, 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.
Current wording
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.
Previous wording
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, 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.
Current wording
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.
Previous wording
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. 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. The increase during 2024 was primarily due to jumbo fixed rate loan growth that are held on the balance sheet, as variable rate loans remained flat during the year.
Current wording
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.
Previous wording
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%. 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.
Current wording
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.
Previous wording
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. The unpaid principal balances of loans serviced for others totaled approximately$1.4 billion and $1.5 billion at December 31, 2024 and 2023.
Current wording
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.
Previous wording
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. 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.
Current wording
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.
Previous wording
At December 31, 2024, the mortgage warehouse loan balance was $64.8 million compared to $45.1 million as of December 31, 2023. During the three months ended December 31, 2024, the Company elected to transfer its mortgage warehouse loan portfolio at the lower of unamortized cost or fair market value to loans held for sale from the held for investment loan portfolio. On January 17, 2025, the Company completed the sale of its mortgage warehouse loan portfolio to an unrelated third party.
Current wording
On January 17, 2025, the Company completed the sale of its mortgage warehouse loan portfolio to an unrelated third party.
Previous wording
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. This decrease was partially offset by increases in the Company's installment portfolio.
Current wording
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.
Showing the first 40 of 55 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Allowance for Credit Losses on Loans
Current report — wording carried from elsewhere
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
Current report — wording carried from elsewhere
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:
Current report — wording carried from elsewhere
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.