Skip to main content
Equibles

8-K

Horizon Bancorp Inc /In/ (HBNC)

8-K 2022-10-26 For: 2022-10-26
View Original
Added on April 11, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 26, 2022

HORIZON BANCORP, INC.

(Exact name of registrant as specified in its charter)

Indiana 000-10792 35-1562417
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)

515 Franklin Street

Michigan City, IN 46360

(Address of principal executive offices, including zip code)

(219) 879-0211

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of Each Class Trading Symbol(s) Name of each exchange on which registered
Common stock, no par value HBNC The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

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

Item 2.02 Results of Operations and Financial Condition

On October 26, 2022, Horizon Bancorp, Inc. (the “Company”) issued a press release announcing earnings and other financial results for the three month period ended September 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated here by reference.

Item 7.01 Regulation FD Disclosure

Investor Presentation

The Company has prepared presentation materials (the “Investor Presentation”) that management intends to use during its previously announced Earnings Conference Call on Thursday, October 27, 2022 at 7:30 a.m. Central Time, and from time to time thereafter in presentations about the Company’s operations and performance. The Investor Presentation also contains information relating to the Company’s COVID–19 response and planning efforts to date. The Company may use the Investor Presentation, possibly with modifications, in presentations to current and potential investors, analysts, lenders, business partners, acquisition candidates, customers, employees and others with an interest in the Company and its business.

A copy of the Investor Presentation is furnished as Exhibit 99.2 to this report and incorporated here by reference. The Investor Presentation is also available on the Company’s investor website at www.horizonbank.com. Materials on the Company’s investor website are not part of or incorporated by reference into this report.

In accordance with General Instruction B.2 of Form 8–K, the information in this Current Report on Form 8–K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits
EXHIBIT INDEX
Exhibit No. Description Location
99.1 Press release issued on October 26, 2022 Attached
99.2 Horizon Bancorp, Inc. Investor Presentation dated October 26, 2022 Attached
104 Cover Page Interactive Data File (Embedded within the Inline XBRL document) Within the Inline XBRL document

SIGNATURES

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

Date: October 26, 2022 HORIZON BANCORP, INC.
By: /s/ Mark E. Secor
Mark E. Secor,
Executive Vice President & Chief Financial Officer

3

Document

horizonbancorpinc876_sm-10a.jpg

Contact: Mark E. Secor
Chief Financial Officer
Phone: (219) 873–2611
Fax: (219) 874–9280
Date: October 26, 2022

FOR IMMEDIATE RELEASE

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Strong Loan Growth Continues to Offset Non–interest Income and Expense Headwinds

Michigan City, Indiana, October 26, 2022 (GLOBE NEWSWIRE) – (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”) announced its unaudited financial results for the three– and nine–months ending September 30, 2022.

“We are proud of the performance achieved by our business banking and consumer lending teams who delivered annualized loan growth of 7.8% in the third quarter, excluding PPP loans and sold commercial participation loans,” Chairman and CEO Craig M. Dwight said. “This continued strong loan growth led to the increase in net interest income and substantially offset headwinds from lower residential mortgage lending activity and lower wealth management fees, as well as the increase in cost of funds related to rapidly rising interest rates. While the current economic environment remains challenged by rising inflation and supply chain disruption, we remain focused on positioning ourselves to continue to meet the evolving needs of our customers. We believe our investments in talent to enhance our capabilities and prepare for the future support our disciplined growth trajectory, and with the benefit of our balance sheet strength and solid asset quality metrics, will continue to elevate our performance through the end of 2022 and into 2023.”

Third Quarter 2022 Highlights

•Return on average assets (“ROAA”) was 1.29% year–to–date and 1.24% for the third quarter.

•Return on average tangible equity was 18.73% year–to–date and 18.71% for the third quarter.

•Total loans, excluding Federal Paycheck Protection Program (“PPP”) loans and sold commercial participation loans, grew by an annualized rate of 14.5% year–to–date and an annualized rate of 7.8% quarter over quarter.

•Commercial loans, excluding PPP loans and sold commercial participation loans, grew by an annualized rate of 13.8% year–to–date and an annualized rate of 7.2% quarter over quarter to a record $2.35 billion.

•Consumer loans grew by an annualized rate of 31.7% year–to–date and an annualized rate of 23.9% quarter over quarter to a record $899.9 million at period end.

•Asset quality remains solid with total loan delinquency at 0.12% of total loans, net charge–offs to average loans of 0.00% and a reversal of credit loss expense during the quarter.

•Net interest income increased by $387,000 to $53.4 million during the third quarter compared to $53.0 million for the previous quarter.

•Reported net interest margin (“NIM”) was 3.13% and adjusted NIM was 3.08%, with reported NIM decreasing by six basis points and adjusted NIM decreasing by four basis points from the second quarter of 2022. (See the “Non–GAAP Reconciliation of Net Interest Margin” table below for the definition of this non–GAAP calculation of adjusted NIM.)

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

•Non–interest income is down $2.2 million for the quarter due to lower residential mortgage loan volume, resulting in lower gain on sale income and from lower wealth management fees related to year–to–date declines in equity and bond markets.

•Non-interest expense was $38.4 million in the quarter, or 1.99% of average assets on an annualized basis, compared to $36.4 million, or 1.95%, in the second quarter of 2022. Year–to–date non–interest expense continues to be well managed at $111.3 million, or 1.99% of average assets on an annualized basis which is below our target of 2.00% of average assets.

•The effective tax rate for the third quarter dropped to 7.8% due to the recognition of solar tax credits as projects were put into service during the quarter.

•Net income totaled $23.8 million, down 4.2% from the linked quarter and up 3.3% from the prior year period. Diluted earnings per share (“EPS”) of $0.55 was down from $0.57 for the second quarter of 2022 and up from $0.52 for the third quarter of 2021.

•Asset sensitivity decreased in the quarter compared to the previous quarter end, as deposit betas increased with rising rates. Deposit beta is defined as the change in deposit costs as a percentage of the change in Fed Funds over a particular period. Current estimates for parallel rate shocks to the balance sheet, at 100 basis points and 200 basis points, decrease net interest income by approximately $3.3 million and $6.7 million, respectively.

•Deposit betas increased to 23% on total interest bearing deposits in the third quarter compared to a 3% beta during the previous quarter.

•During the third quarter of 2022, the continued steepening of the yield curve resulted in unrealized losses on available for sale investments of $161.8 million compared to unrealized losses of $122.0 million at June 30, 2022. The impact to the tangible capital ratio was a decrease of 3.55% from 6.48% at June 30, 2022 to 6.25% at September 30, 2022.

•The Bank’s capital position is still robust with leverage and risk based capital ratios of 8.84% and 13.65%, respectively. The annualized dividend yield was 3.56% as of September 30, 2022.

Summary

For the Three Months Ended
September 30, June 30, September 30,
Net Interest Income and Net Interest Margin 2022 2022 2021
Net interest income $ 53,395 $ 53,008 $ 46,544
Net interest margin 3.13 % 3.19 % 3.17 %
Adjusted net interest margin 3.08 % 3.12 % 3.12 %

Mr. Dwight continued, “Net interest income increased by $387,000 for the quarter as a result of Horizon’s solid loan growth. To support this level of growth, we were required to increase borrowings and that impacted the adjusted net interest margin by four basis points during the quarter. Overall cost of funds was contained at 0.69% providing a strong spread for new loans coming on the books. Competitive pressure on deposit pricing is starting to accelerate as we see several smaller banks and credit unions aggressively seeking lower cost deposit funding. Horizon’s deposit betas were 23% for the third quarter and in line with our expectations of approximately 35%; however additional pressure is expected as the Board of Governors of the Federal Reserve System will likely continue to rapidly increase rates over the next several months.”

For the Three Months Ended
September 30, June 30, September 30,
Asset Yields and Funding Costs 2022 2022 2021
Interest earning assets 3.68 % 3.46 % 3.46 %
Interest bearing liabilities 0.69 % 0.34 % 0.38 %

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

For the Three Months Ended
Non-interest Income and September 30, June 30, September 30,
Mortgage Banking Income 2022 2022 2021
Total non–interest income $ 10,188 $ 12,434 $ 16,044
Gain on sale of mortgage loans 1,441 2,501 4,088
Mortgage servicing income net of impairment 355 319 336 For the Three Months Ended
--- --- --- --- --- --- --- --- --- ---
September 30, June 30, September 30,
Non-interest Expense 2022 2022 2021
Total non–interest expense $ 38,350 $ 36,368 $ 34,349
Annualized non–interest expense to average assets 1.99 % 1.95 % 2.09 % For the Three Months Ended
--- --- --- --- --- --- ---
September 30, June 30, September 30,
Credit Quality 2022 2022 2021
Allowance for credit losses to total loans 1.28 % 1.33 % 1.55 %
Non–performing loans to total loans 0.48 % 0.51 % 0.80 %
Percent of net charge–offs to average loans outstanding for the period 0.00 % 0.01 % 0.00 % September 30, Net Reserve December 31,
--- --- --- --- --- --- --- --- --- --- --- --- ---
Allowance for Credit Losses 2022 3Q22 2Q22 1Q22 2021
Commercial $ 33,806 $ (996) $ (2,987) $ (2,986) $ 40,775
Retail Mortgage 5,137 715 71 495 3,856
Warehouse 1,024 (43) 12 (4) 1,059
Consumer 11,402 (657) 2,746 717 8,596
Allowance for Credit Losses (“ACL”) $ 51,369 $ (981) $ (158) $ (1,778) $ 54,286
ACL / Total Loans 1.28 % 1.51 %
Acquired Loan Discount (“ALD”) $ 6,587 $ (619) $ (1,122) $ (769) $ 9,097

“Our results this quarter were positively impacted by the significant progress towards achieving our goal of an annualized non–interest expense to average assets ratio of less than 2.00%, at 1.99% for the period ended September 30, 2022," Mr. Dwight continued. “We remain disciplined and focused on expense management, a critical component of our strategy given the economic uncertainty and rise in inflation. However, we are confident in our ability to continue to reduce our annualized target to be less than 2.00%. We expect the higher expense run rate we incurred during the third quarter to be greatly reduced starting in Q1 2023. In addition, in 2023 we expect to see the benefit from a full year of seven additional branch closings and their related cost savings.”

Income Statement Highlights

Net income for the third quarter of 2022 was $23.8 million, or $0.55 diluted earnings per share, compared to $24.9 million, or $0.57, for the linked quarter and $23.1 million, or $0.52, for the prior year period.

Adjusted net income for the third quarter of 2022 was $23.8 million, or $0.55 diluted earnings per share, compared to $24.2 million, or $0.56, for the linked quarter and $23.0 million, or $0.52, for the prior year period. Adjusted net income, which is not calculated according to generally accepted accounting principles (“GAAP”), is a measure that Horizon uses to provide a greater understanding of operating profitability. (See the “Non–GAAP Reconciliation of Net Income” table below.)

The improvement in net income for the third quarter of 2022 compared to the same prior year period reflects an increase in net interest income of $6.9 million, a decrease in credit loss expense of $1.7 million and a decrease in income tax expense of $2.0 million. These results are offset by a decrease in non–interest income of $5.9 million and an increase in non–interest expense of $4.0 million.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Net income for the third quarter of 2022 compared to the second quarter of 2022 reflects expansion of net interest income of $387,000, improvement in credit loss expense of $841,000 and a decrease of income tax expense of $2.0 million. These items were offset by lower non–interest income of $2.2 million and an increase in non–interest expense of $2.0 million.

Third quarter 2022 income from the gain on sale of mortgage loans totaled $1.4 million, down from $2.5 million in the linked quarter and down from $4.1 million in the prior year period.

Certain revenue streams that generated higher income in the prior year quarter were replaced in the most recent quarter with earning assets that have higher margins. Income from PPP lending, gain on sale of mortgage loans and mortgage servicing income net of impairment totaled $7.9 million during the prior year quarter. For the quarter ending September 30, 2022, the income from those same revenue streams totaled $1.8 million. The ability to replace this income and increase overall gross income in the third quarter was attributed to the strategies management implemented to focus on higher earning assets.

Non–interest expense of $38.4 million in the third quarter of 2022 reflected a $656,000 increase in salaries and employee benefits, a $429,000 increase in loan expense, a $370,000 increase in outside services and consultants, a $292,000 increase in other expense and a $269,000 increase in professional fees from the linked quarter.

Pre–tax, pre–provision net income totaled $25.2 million, down 13.2% from the linked quarter and 10.6% from the prior year period. This non–GAAP financial measure is utilized by many banks to provide a greater understanding of pre–tax profitability before the impact of credit loss expense. (See the “Non–GAAP Reconciliation of Pre–Tax, Pre–Provision Net Income” table below.) Horizon recorded a provision release of $601,000 in the quarter, a provision expense of $240,000 in the linked quarter, and a provision expense of $1.1 million in the prior year period.

Net Interest Margin

Horizon’s net interest margin decreased to 3.13% for the third quarter of 2022 compared to 3.19% for the second quarter of 2022. The decrease in net interest margin reflects the impact of the increase in the cost of interest bearing liabilities of 35 basis points which was partially offset by the increase in the yield on interest earning assets of 22 basis points. Interest income from acquisition–related purchase accounting adjustments was $317,000 lower during the third quarter of 2022 when compared to the second quarter of 2022.

Net interest margin decreased to 3.13% for the third quarter of 2022 compared to 3.17% for the third quarter of 2021. The decrease in net interest margin reflects the impact of the increased cost of interest bearing liabilities of 31 basis points which was partially offset by the increase in the yield on interest earning assets of 22 basis points.

Adjusted net interest margin, which excludes acquisition–related purchase accounting adjustments, was 3.08% for the third quarter of 2021, compared to 3.12% for the linked quarter and 3.12% for the third quarter of 2021. Interest income from acquisition–related purchase accounting adjustments was $906,000, $1.2 million and $875,000 for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, respectively.

Lending Activity

Total loan balances increased to $4.01 billion, or $3.96 billion excluding PPP loans and sold commercial participation loans, on September 30, 2022 when compared to $3.94 billion, or $3.89 billion excluding PPP loans and sold commercial participation loans, on June 30, 2022. During the three months ended September 30, 2022, commercial loans, excluding PPP loans and sold commercial participation loans, increased $41.8 million, consumer loans increased $51.1 million, and residential mortgage loans increased $26.3 million, offset by decreases in mortgage warehouse loans of $42.8 million, PPP loans of $2.0 million and loans held for sale of $1.1 million. PPP loan income was $26,000, $198,000 and $3.5 million for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, respectively.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)
September 30, June 30, QTD QTD Annualized
2022 2022 Change % Change % Change
Commercial, excluding PPP loans and <br>sold commercial participation loans $ 2,352,446 $ 2,310,605 1.8% 7.2%
PPP loans 315 2,343 (2,028) (86.6)% (343.4)%
Sold commercial participation loans 50,982 51,043 (61) (0.1)% (0.5)%
Residential mortgage 634,901 608,582 26,319 4.3% 17.2%
Consumer 899,881 848,749 51,132 6.0% 23.9%
Subtotal 3,938,525 3,821,322 117,203 3.1% 12.2%
Loans held for sale 1,852 2,943 (1,091) (37.1)% (147.1)%
Mortgage warehouse 73,690 116,488 (42,798) (36.7)% (145.8)%
Total loans $ 4,014,067 $ 3,940,753 1.9% 7.4%
Total loans, excluding PPP loans and<br>sold commercial participation loans $ 3,962,770 $ 3,887,367 1.9% 7.7%

All values are in US Dollars.

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)
September 30, December 31, YTD YTD Annualized
2022 2021 Change % Change % Change
Commercial, excluding PPP loans and <br>sold commercial participation loans $ 2,352,446 $ 2,131,644 10.4% 13.8%
PPP loans 315 25,844 (25,529) (98.8)% (132.1)%
Sold commercial participation loans 50,982 56,457 (5,475) (9.7)% (13.0)%
Residential mortgage 634,901 594,382 40,519 6.8% 9.1%
Consumer 899,881 727,259 172,622 23.7% 31.7%
Subtotal 3,938,525 3,535,586 402,939 11.4% 15.2%
Loans held for sale 1,852 12,579 (10,727) (85.3)% (114.0)%
Mortgage warehouse 73,690 109,031 (35,341) (32.4)% (43.3)%
Total loans $ 4,014,067 $ 3,657,196 9.8% 13.0%
Total loans, excluding PPP loans and<br>sold commercial participation loans $ 3,962,770 $ 3,574,895 10.8% 14.5%

All values are in US Dollars.

Residential mortgage lending activity for the three months ended September 30, 2022 generated $1.4 million in income from the gain on sale of mortgage loans, decreasing $1.1 million from the second quarter of 2022 and $2.6 million from the third quarter of 2021. Total mortgage origination volume for the third quarter of 2022, including loans placed into the portfolio, totaled $110.9 million, representing a decrease of 3.7% from second quarter 2022 levels, and a decrease of 23.2% from the third quarter of 2021. As a percentage of total mortgage loan originations, 6% of the volume was from refinancings and 94% was from loans for new home purchases during the third quarter of 2022. Total origination volume of mortgage loans sold to the secondary market totaled $50.2 million, representing a decrease of 25.4% from the second quarter of 2022 and a decrease of 51.3% from the third quarter of 2021.

Gain on sale of mortgage loans and mortgage warehousing income was 3.8% of total revenue for the three months ended September 30, 2022, compared to 5.6% for the linked quarter and 9.0% for the three months ended September 30, 2021.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Deposit Activity

Total deposit balances of $5.83 billion on September 30, 2022 declined 0.25% compared to $5.85 billion on June 30, 2022.

Deposit Growth by Type, Excluding Acquired Deposits
(Dollars in Thousands, Unaudited)
September 30, June 30, QTD QTD Annualized
2022 2022 Change % Change % Change
Non–interest bearing $ 1,315,155 $ 1,328,213 (1.0)% (4.0)%
Interest bearing 3,736,798 3,760,890 (24,092) (0.6)% (2.6)%
Time deposits 778,885 756,482 22,403 3.0% 12.0%
Total deposits $ 5,830,838 $ 5,845,585 (0.3)% (1.0)%

All values are in US Dollars.

Expense Management

Three Months Ended
September 30, June 30, QTD QTD
2022 2022 Change % Change
Non–interest Expense
Salaries and employee benefits $ 20,613 19,957 $ 656 3.3%
Net occupancy expenses 3,293 103 3.2%
Data processing 2,539 (68) (2.6)%
Professional fees 552 269 95.1%
Outside services and consultants 2,855 370 14.9%
Loan expense 2,926 429 17.2%
FDIC insurance expense 670 (105) (13.5)%
Other losses 398 36 9.9%
Other expense 4,504 292 6.9%
Total non–interest expense $ 38,350 36,368 $ 1,982 5.4%
Annualized non–interest expense to average assets 1.99 % %

All values are in US Dollars.

Total non–interest expense was $2.0 million higher in the third quarter of 2022 when compared to the second quarter of 2022. The increase was primarily due to an increase in salaries and employee benefits of $656,000 from increased health care costs, an increase in loan expense of $429,000 due to amortization of the dealer reserve asset, an increase in outside services and consultants of $370,000, an increase in professional fees of $269,000 and an increase in other expenses of $292,000 due to the amortization of the intangible assets from the solar tax credits.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Three Months Ended
September 30, September 30,
2022 2021 Adjusted
Non–interest Expense Actual Acquisition<br>Expenses Adjusted Actual Acquisition<br>Expenses Adjusted Change % Change
Salaries and employee benefits $ 20,613 $ — $ 20,613 $ 18,901 $ (25) $ 18,876 9.2%
Net occupancy expenses 3,293 — 3,293 2,935 (13) 2,922 371 12.7%
Data processing 2,539 — 2,539 2,526 (7) 2,519 20 0.8%
Professional fees 552 — 552 522 (53) 469 83 17.7%
Outside services and consultants 2,855 — 2,855 2,330 (401) 1,929 926 48.0%
Loan expense 2,926 — 2,926 2,645 — 2,645 281 10.6%
FDIC insurance expense 670 — 670 279 — 279 391 140.1%
Other losses 398 — 398 69 (1) 68 330 485.3%
Other expense 4,504 — 4,504 4,142 (289) 3,853 651 16.9%
Total non–interest expense $ 38,350 $ — $ 38,350 $ 34,349 $ (789) $ 33,560 14.3%
Annualized non–interest expense to average assets 1.99 % 1.99 % 2.09 % 2.05 %

All values are in US Dollars.

Total non–interest expense was $4.0 million higher in the third quarter of 2022 when compared to the third quarter of 2021 primarily due to an increase in salaries and employee benefits of $1.7 million and an increase in outside services and consultants expense of $525,000, as well as increases in net occupancy expenses due to additional employees hired and branch locations acquired as a result of the 2021 branch acquisition, FDIC insurance expense, other expense due to the amortization of the intangible assets from the solar tax credits and other losses.

Annualized non–interest expense as a percent of average assets was 1.99%, 1.95% and 2.09% for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, respectively. Annualized non–interest expense, excluding acquisition expenses, as a percent of average assets was 1.99%, 1.95% and 2.05% for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, respectively. (See the “Non–GAAP Calculation and Reconciliation of Efficiency Ratio and Adjusted Efficiency Ratio” table below for these non–GAAP calculations.)

Nine Months Ended
September 30, September 30,
2022 2021 Adjusted
Non–interest Expense Actual Acquisition<br>Expenses Adjusted Actual Acquisition<br>Expenses Adjusted Change % Change
Salaries and employee benefits $ 60,305 $ — $ 60,305 $ 53,502 $ (25) $ 53,477 12.8%
Net occupancy expenses 10,044 — 10,044 9,337 (13) 9,324 720 7.7%
Data processing 7,683 — 7,683 7,290 (17) 7,273 410 5.6%
Professional fees 1,149 — 1,149 1,654 (104) 1,550 (401) (25.9)%
Outside services and consultants 7,865 — 7,865 6,252 (588) 5,664 2,201 38.9%
Loan expense 7,968 — 7,968 8,574 — 8,574 (606) (7.1)%
FDIC insurance expense 2,170 — 2,170 1,579 — 1,579 591 37.4%
Other losses 928 — 928 358 (1) 357 571 159.9%
Other expense 13,216 — 13,216 11,363 (293) 11,070 2,146 19.4%
Total non–interest expense $ 111,328 $ — $ 111,328 $ 99,909 $ (1,041) $ 98,868 12.6%
Annualized non–interest expense to average assets 1.99 % 1.99 % 2.16 % 2.14 %

All values are in US Dollars.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Total non–interest expense was $11.4 million higher in the first nine months of 2022 when compared to the first nine months of 2021. The increase was primarily due to higher salaries and employee benefits of $6.8 million due to additional employees hired as a result of the 2021 branch acquisition, higher other expense of $1.9 million, higher outside services and consultants expense of $1.6 million, and was partially offset by a decrease of $606,000 in loan expense and a decrease of $505,000 in professional fees.

Annualized non–interest expense as a percent of average assets was 1.99% for the first nine months of 2022 compared to 2.16% for the first nine months of 2021. Annualized non–interest expense, excluding acquisition expenses, as a percent of average assets was 1.99% and 2.14% for the nine months ended September 30, 2022 and September 30, 2021, respectively. (See the “Non–GAAP Calculation and Reconciliation of Efficiency Ratio and Adjusted Efficiency Ratio” table below for these non–GAAP calculations.)

Income tax expense totaled $2.0 million for the third quarter of 2022, a decrease of $2.0 million when compared to the second quarter of 2022 and a decrease of $2.0 million when compared to the third quarter of 2021 due to the recognition of solar tax credits as projects were put into service during the quarter, which reduced the effective tax rate to 7.8%.

Income tax expense totaled $9.5 million for the nine months ended September 30, 2022, a decrease of $1.7 million when compared to the nine months ended September 30, 2021.

Capital

The capital resources of the Company and the Bank exceeded regulatory capital ratios for “well capitalized” banks at September 30, 2022. Stockholders’ equity totaled $645.0 million at September 30, 2022 and the ratio of average stockholders’ equity to average assets was 9.25% for the nine months ended September 30, 2022.

Tangible book value per common share (“TBVPS”) declined $1.76 during the nine months ended September 30, 2022 to $10.82, as unrealized net losses on securities available for sale (“AFS”) of $3.10 per common share, reduced accumulated other comprehensive income (“AOCI”) by $135.0 million in the first nine months of this year.

The following table presents the actual regulatory capital dollar amounts and ratios of the Company and the Bank as of September 30, 2022.

Actual Required for Capital Adequacy Purposes Required for Capital Adequacy Purposes with Capital Buffer Well Capitalized Under Prompt Corrective Action Provisions
Ratio Ratio Ratio Ratio
Total capital (to risk–weighted assets)
Consolidated 14.46 % 8.00 % 10.50 % N/A N/A
Bank 711,478 13.65 % 416,859 8.00 % 547,127 10.50 % 10.00 %
Tier 1 capital (to risk–weighted assets)
Consolidated 713,301 13.56 % 315,701 6.00 % 447,242 8.50 % N/A N/A
Bank 664,018 12.74 % 312,644 6.00 % 442,912 8.50 % 416,859 8.00 %
Common equity tier 1 capital (to risk–weighted assets)
Consolidated 590,933 11.23 % 236,775 4.50 % 368,317 7.00 % N/A N/A
Bank 664,018 12.74 % 234,483 4.50 % 364,751 7.00 % 338,698 6.50 %
Tier 1 capital (to average assets)
Consolidated 713,301 9.55 % 298,740 4.00 % 298,740 4.00 % N/A N/A
Bank 664,018 8.84 % 300,512 4.00 % 300,512 4.00 % 375,641 5.00 %

All values are in US Dollars.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Liquidity

The Bank maintains a stable base of core deposits provided by long–standing and new relationships with individuals and local businesses. These deposits are the principal source of liquidity for Horizon. Other sources of liquidity for Horizon include earnings, loan repayment, investment security cash flows, proceeds from the sale of residential mortgage loans, unpledged investment securities and borrowing relationships with correspondent banks, including the Federal Home Loan Bank of Indianapolis (the “FHLB”). On September 30, 2022, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $639.7 million in unused credit lines with various money center banks, including the FHLB and the Federal Reserve Discount Window. The Bank had approximately $2.1 billion of unpledged investment securities on September 30, 2022.

Forward Looking Statements

This press release may contain forward–looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon Bancorp, Inc. and its affiliates (collectively, “Horizon”). For these statements, Horizon claims the protection of the safe harbor for forward–looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission (the “SEC”). Forward–looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward–looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance.

Although management believes that the expectations reflected in such forward–looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; continuing increases in inflation; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon’s assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; continuing risks and uncertainties relating to the COVID–19 pandemic and government responses thereto; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the U.S. federal government to manage federal debt limits; climate change and social justice initiatives; material changes outside the U.S. or in overseas relations, including changes in U.S. trade relations related to imposition of tariffs, Brexit, and the phase out of the London Interbank Offered Rate (“LIBOR”); the inability to realize cost savings or revenues or to effectively implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; acts of terrorism, war and global conflicts, such as the Russia and Ukraine conflict; and supply chain disruptions and delays. These and additional factors that could cause actual results to differ materially from those expressed in the forward–looking statements are discussed in Horizon’s reports (such as the Annual Report on Form 10–K, Quarterly Reports on Form 10–Q, and Current Reports on Form 8–K) filed with the SEC and available at the SEC’s Internet website (www.sec.gov). Undue reliance should not be placed on the forward–looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward–looking statement to reflect the events or circumstances after the date on which the forward–looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Financial Highlights
(Dollars in Thousands, Unaudited)
September 30, June 30, March 31, December 31, September 30,
2022 2022 2022 2021 2021
Balance sheet:
Total assets $ 7,718,695 $ 7,640,936 $ 7,420,328 $ 7,374,903 $ 7,534,240
Interest earning deposits & federal funds sold 7,302 5,646 20,827 502,364 872,540
Interest earning time deposits 2,814 3,799 4,046 4,782 5,767
Investment securities 3,017,191 3,093,792 3,118,641 2,713,255 2,438,874
Commercial loans 2,403,743 2,363,991 2,259,327 2,213,945 2,173,200
Mortgage warehouse loans 73,690 116,488 105,118 109,031 169,909
Residential mortgage loans 634,901 608,582 593,372 594,382 603,540
Consumer loans 899,881 848,749 753,900 727,259 713,432
Total loans 4,012,215 3,937,810 3,711,717 3,644,617 3,660,081
Earning assets 7,068,051 7,070,667 6,883,254 6,865,051 7,006,513
Non–interest bearing deposit accounts 1,315,155 1,328,213 1,325,570 1,360,338 1,324,757
Interest bearing transaction accounts 3,736,798 3,760,890 3,782,644 3,711,767 3,875,882
Time deposits 778,885 756,482 743,283 730,886 779,260
Total deposits 5,830,838 5,845,585 5,851,497 5,802,991 5,979,899
Borrowings 1,048,091 959,222 728,664 712,739 670,753
Subordinated notes 58,860 58,823 58,786 58,750 58,713
Junior subordinated debentures issued to capital trusts 56,966 56,907 56,850 56,785 56,722
Total stockholders’ equity 644,993 657,865 677,450 723,209 708,542

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Financial Highlights
(Dollars in Thousands Except Share and Per Share Data and Ratios, Unaudited)
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2022 2022 2022 2021 2021
Income statement:
Net interest income $ 53,395 $ 53,008 $ 48,171 $ 49,976 $ 46,544
Credit loss expense (recovery) (601) 240 (1,386) (2,071) 1,112
Non–interest income 10,188 12,434 14,155 12,828 16,044
Non–interest expense 38,350 36,368 36,610 39,370 34,349
Income tax expense 2,013 3,975 3,539 4,080 4,056
Net income $ 23,821 $ 24,859 $ 23,563 $ 21,425 $ 23,071
Per share data:
Basic earnings per share $ 0.55 $ 0.57 $ 0.54 $ 0.49 $ 0.53
Diluted earnings per share 0.55 0.57 0.54 0.49 0.52
Cash dividends declared per common share 0.16 0.16 0.15 0.15 0.15
Book value per common share 14.80 15.10 15.55 16.61 16.28
Tangible book value per common share 10.82 11.11 11.54 12.58 12.05
Market value – high 20.59 19.21 23.45 21.14 18.47
Market value – low $ 16.74 $ 16.72 $ 18.67 $ 18.01 $ 15.83
Weighted average shares outstanding – Basis 43,573,370 43,572,796 43,554,713 43,534,298 43,810,729
Weighted average shares outstanding – Diluted 43,703,793 43,684,691 43,734,556 43,733,416 43,958,870
Key ratios:
Return on average assets 1.24 % 1.33 % 1.31 % 1.14 % 1.41 %
Return on average common stockholders’ equity 13.89 14.72 13.34 11.81 12.64
Net interest margin 3.13 3.19 2.99 2.97 3.17
Allowance for credit losses to total loans 1.28 1.33 1.41 1.51 1.55
Average equity to average assets 8.91 9.06 9.79 9.64 11.13
Efficiency ratio 60.31 55.57 58.74 62.69 54.88
Annualized non–interest expense to average assets 1.99 1.95 2.03 2.09 2.09
Bank only capital ratios:
Tier 1 capital to average assets 8.84 8.85 8.83 8.50 8.38
Tier 1 capital to risk weighted assets 12.74 12.87 13.23 13.69 11.86
Total capital to risk weighted assets 13.65 13.83 14.25 14.72 12.97

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Financial Highlights
(Dollars in Thousands Except Share and Per Share Data and Ratios, Unaudited)
Nine Months Ended
September 30, September 30,
2022 2021
Income statement:
Net interest income $ 154,574 $ 131,714
Credit loss (recovery) (1,747) (13)
Non–interest income 36,777 45,124
Non–interest expense 111,328 99,909
Income tax expense 9,527 11,276
Net income $ 72,243 $ 65,666
Per share data:
Basic earnings per share $ 1.66 $ 1.50
Diluted earnings per share 1.65 1.49
Cash dividends declared per common share 0.47 0.41
Book value per common share 14.80 16.28
Tangible book value per common share 10.82 12.05
Market value – high 23.45 19.94
Market value – low $ 16.72 $ 15.43
Weighted average shares outstanding – Basis 43,567,028 43,893,194
Weighted average shares outstanding – Diluted 43,699,035 44,047,043
Key ratios:
Return on average assets 1.29 % 1.42 %
Return on average common stockholders’ equity 13.97 12.37
Net interest margin 3.03 3.20
Allowance for credit losses to total loans 1.28 1.55
Average equity to average assets 9.25 11.45
Efficiency ratio 58.18 56.50
Annualized non–interest expense to average assets 1.99 2.16
Bank only capital ratios:
Tier 1 capital to average assets 8.84 8.38
Tier 1 capital to risk weighted assets 12.74 11.86
Total capital to risk weighted assets 13.65 12.97

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Financial Highlights
(Dollars in Thousands Except Ratios, Unaudited)
September 30, June 30, March 31, December 31, September 30,
2022 2022 2022 2021 2021
Loan data:
Substandard loans $ 57,932 $ 59,377 $ 57,928 $ 56,968 $ 91,317
30 to 89 days delinquent 6,970 6,739 6,358 8,536 3,997
Non–performing loans:
90 days and greater delinquent – accruing interest 193 210 107 145 200
Trouble debt restructures – accruing interest 2,529 2,535 2,372 2,391 2,433
Trouble debt restructures – non–accrual 1,665 1,345 1,501 1,521 1,604
Non–accrual loans 14,771 16,116 16,133 14,962 25,137
Total non–performing loans $ 19,158 $ 20,206 $ 20,113 $ 19,019 $ 29,374
Non–performing loans to total loans 0.48 % 0.51 % 0.54 % 0.53 % 0.80 %
Allocation of the Allowance for Credit Losses
--- --- --- --- --- --- --- --- --- --- ---
(Dollars in Thousands, Unaudited)
September 30, June 30, March 31, December 31, September 30,
2022 2022 2022 2021 2021
Commercial $ 33,806 $ 34,802 $ 37,789 $ 40,775 $ 43,121
Residential mortgage 5,137 4,422 4,351 3,856 3,737
Mortgage warehouse 1,024 1,067 1,055 1,059 1,054
Consumer 11,402 12,059 9,313 8,596 8,867
Total $ 51,369 $ 52,350 $ 52,508 $ 54,286 $ 56,779 Net Charge–offs (Recoveries)
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in Thousands Except Ratios, Unaudited)
September 30, June 30, March 31, December 31, September 30,
2022 2022 2022 2021 2021
Commercial $ 51 $ (75) $ 38 $ 926 $ (25)
Residential mortgage (75) 40 (10) 126 (29)
Mortgage warehouse — — — — —
Consumer 162 319 108 360 36
Total $ 138 $ 284 $ 136 $ 1,412 $ (18)
Percent of net charge–offs (recoveries) to average loans outstanding for the period 0.00 % 0.01 % 0.00 % 0.04 % 0.00 %

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Total Non–performing Loans
(Dollars in Thousands Except Ratios, Unaudited)
September 30, June 30, March 31, December 31, September 30,
2022 2022 2022 2021 2021
Commercial $ 7,199 $ 8,008 $ 7,844 $ 7,509 $ 16,121
Residential mortgage 8,047 8,469 8,584 8,005 8,641
Mortgage warehouse — — — — —
Consumer 3,912 3,729 3,685 3,505 4,612
Total $ 19,158 $ 20,206 $ 20,113 $ 19,019 $ 29,374
Non–performing loans to total loans 0.48 % 0.51 % 0.54 % 0.53 % 0.80 % Other Real Estate Owned and Repossessed Assets
--- --- --- --- --- --- --- --- --- --- ---
(Dollars in Thousands, Unaudited)
September 30, June 30, March 31, December 31, September 30,
2022 2022 2022 2021 2021
Commercial $ 3,206 $ 1,414 $ 2,245 $ 2,861 $ 2,861
Residential mortgage 22 — 170 695 117
Mortgage warehouse — — — — —
Consumer 14 58 5 5 29
Total $ 3,242 $ 1,472 $ 2,420 $ 3,561 $ 3,007

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Average Balance Sheets
(Dollars in Thousands, Unaudited)
Three Months Ended Three Months Ended
September 30, 2022 September 30, 2021
Average<br>Balance Interest Average<br>Rate Average<br>Balance Interest Average<br>Rate
Assets
Interest earning assets
Federal funds sold $ 4,201 $ 24 2.27 % $ 310,180 $ 119 0.15 %
Interest earning deposits 9,994 41 1.63 % 26,352 39 0.59 %
Investment securities – taxable 1,728,197 8,436 1.94 % 1,063,177 4,407 1.64 %
Investment securities – non–taxable (1) 1,384,249 7,478 2.71 % 1,108,503 5,911 2.68 %
Loans receivable (2) (3) 3,910,889 47,051 4.79 % 3,524,876 40,392 4.56 %
Total interest earning assets 7,037,530 63,030 3.68 % 6,033,088 50,868 3.46 %
Non–interest earning assets
Cash and due from banks 99,221 87,799
Allowance for credit losses (52,303) (55,703)
Other assets 550,654 442,489
Total average assets $ 7,635,102 $ 6,507,673
Liabilities and Stockholders’ Equity
Interest bearing liabilities
Interest bearing deposits $ 4,478,741 $ 4,116 0.36 % $ 3,831,632 $ 1,808 0.19 %
Borrowings 813,873 3,756 1.83 % 472,551 1,035 0.87 %
Repurchase agreements 141,283 139 0.39 % 125,776 40 0.13 %
Subordinated notes 58,836 880 5.93 % 58,689 880 5.95 %
Junior subordinated debentures issued to capital trusts 56,928 744 5.19 % 56,684 561 3.93 %
Total interest bearing liabilities 5,549,661 9,635 0.69 % 4,545,332 4,324 0.38 %
Non–interest bearing liabilities
Demand deposits 1,351,857 1,180,890
Accrued interest payable and other liabilities 53,208 57,039
Stockholders’ equity 680,376 724,412
Total average liabilities and stockholders’ equity $ 7,635,102 $ 6,507,673
Net interest income / spread $ 53,395 2.99 % $ 46,544 3.08 %
Net interest income as a percent of average interest earning assets (1) 3.13 % 3.17 %
(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. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. 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. The average rate is presented on a tax equivalent basis.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Average Balance Sheets
(Dollars in Thousands, Unaudited)
Nine Months Ended Nine Months Ended
September 30, 2022 September 30, 2021
Average<br>Balance Interest Average<br>Rate Average<br>Balance Interest Average<br>Rate
Assets
Interest earning assets
Federal funds sold $ 82,667 $ 131 0.21 % $ 312,359 $ 284 0.12 %
Interest earning deposits 15,404 93 0.81 % 27,157 128 0.63 %
Investment securities – taxable 1,715,478 24,499 1.91 % 708,519 8,229 1.55 %
Investment securities – non–taxable (1) 1,346,173 21,482 2.70 % 1,040,447 16,790 2.73 %
Loans receivable (2) (3) 3,763,502 126,479 4.51 % 3,624,393 120,446 4.46 %
Total interest earning assets 6,923,224 172,684 3.45 % 5,712,875 145,877 3.53 %
Non–interest earning assets
Cash and due from banks 100,067 85,855
Allowance for credit losses (53,038) (56,885)
Other assets 503,281 455,181
Total average assets $ 7,473,534 $ 6,197,026
Liabilities and Stockholders’ Equity
Interest bearing liabilities
Interest bearing deposits $ 4,499,441 $ 7,289 0.22 % $ 3,679,970 $ 6,204 0.23 %
Borrowings 644,803 6,209 1.29 % 391,373 3,522 1.20 %
Repurchase agreements 140,837 216 0.21 % 118,891 118 0.13 %
Subordinated notes 58,800 2,641 6.01 % 58,653 2,641 6.02 %
Junior subordinated debentures issued to capital trusts 56,869 1,755 4.13 % 56,628 1,678 3.96 %
Total interest bearing liabilities 5,400,750 18,110 0.45 % 4,305,515 14,163 0.44 %
Non–interest bearing liabilities
Demand deposits 1,336,912 1,128,173
Accrued interest payable and other liabilities 44,343 53,751
Stockholders’ equity 691,529 709,587
Total average liabilities and stockholders’ equity $ 7,473,534 $ 6,197,026
Net interest income / spread $ 154,574 3.00 % $ 131,714 3.09 %
Net interest income as a percent of average interest earning assets (1) 3.03 % 3.20 %
(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. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. 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. The average rate is presented on a tax equivalent basis.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Condensed Consolidated Balance Sheets
(Dollars in Thousands)
September 30,<br>2022 December 31,<br>2021
(Unaudited)
Assets
Cash and due from banks $ 109,659 $ 593,508
Interest earning time deposits 2,814 4,782
Investment securities, available for sale 985,655 1,160,812
Investment securities, held to maturity (fair value $1,640,589 and $1,559,991) 2,031,536 1,552,443
Loans held for sale 1,852 12,579
Loans, net of allowance for credit losses of $51,369 and $54,286 3,960,846 3,590,331
Premises and equipment, net 92,356 93,441
Federal Home Loan Bank stock 26,677 24,440
Goodwill 155,211 154,572
Other intangible assets 18,164 20,941
Interest receivable 30,096 26,137
Cash value of life insurance 145,439 97,150
Other assets 158,390 80,753
Total assets $ 7,718,695 $ 7,411,889
Liabilities
Deposits
Non–interest bearing $ 1,315,155 $ 1,360,338
Interest bearing 4,515,683 4,442,653
Total deposits 5,830,838 5,802,991
Borrowings 1,048,091 712,739
Subordinated notes 58,860 58,750
Junior subordinated debentures issued to capital trusts 56,966 56,785
Interest payable 1,961 2,235
Other liabilities 76,986 55,180
Total liabilities 7,073,702 6,688,680
Commitments and contingent liabilities
Stockholders’ equity
Preferred stock, Authorized, 1,000,000 shares, Issued 0 shares — —
Common stock, no par value, Authorized 99,000,000 shares<br><br>Issued 43,932,389 and 43,766,931 shares,<br><br>Outstanding 43,574,151 and 43,547,942 shares — —
Additional paid–in capital 352,837 352,122
Retained earnings 415,277 363,742
Accumulated other comprehensive income (loss) (123,121) 7,345
Total stockholders’ equity 644,993 723,209
Total liabilities and stockholders’ equity $ 7,718,695 $ 7,411,889

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Condensed Consolidated Statements of Income
(Dollars in Thousands Except Per Share Data, Unaudited)
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2022 2022 2022 2021 2021
Interest income
Loans receivable $ 47,051 $ 41,549 $ 37,879 $ 41,171 $ 40,392
Investment securities – taxable 8,501 8,716 7,506 6,491 4,565
Investment securities – non–taxable 7,478 7,307 6,697 6,456 5,911
Total interest income 63,030 57,572 52,082 54,118 50,868
Interest expense
Deposits 4,116 1,677 1,496 1,663 1,808
Borrowed funds 3,895 1,450 1,080 1,061 1,075
Subordinated notes 880 881 880 881 880
Junior subordinated debentures issued to capital trusts 744 556 455 537 561
Total interest expense 9,635 4,564 3,911 4,142 4,324
Net interest income 53,395 53,008 48,171 49,976 46,544
Credit loss expense (recovery) (601) 240 (1,386) (2,071) 1,112
Net interest income after credit loss expense (recovery) 53,996 52,768 49,557 52,047 45,432
Non–interest Income
Service charges on deposit accounts 3,023 2,833 2,795 2,510 2,291
Wire transfer fees 148 170 159 205 210
Interchange fees 3,089 3,582 2,780 3,082 2,587
Fiduciary activities 1,203 1,405 1,503 1,591 2,124
Gain on sale of mortgage loans 1,441 2,501 2,027 4,167 4,088
Mortgage servicing income net of impairment 355 319 3,489 300 336
Increase in cash value of bank owned life insurance 814 519 510 547 534
Death benefit on bank owned life insurance — 644 — — 517
Other income 115 461 892 426 3,357
Total non–interest income 10,188 12,434 14,155 12,828 16,044
Non–interest expense
Salaries and employee benefits 20,613 19,957 19,735 20,549 18,901
Net occupancy expenses 3,293 3,190 3,561 3,204 2,935
Data processing 2,539 2,607 2,537 2,672 2,526
Professional fees 552 283 314 562 522
Outside services and consultants 2,855 2,485 2,525 2,197 2,330
Loan expense 2,926 2,497 2,545 2,803 2,645
FDIC insurance expense 670 775 725 798 279
Other losses 398 362 168 1,925 69
Other expenses 4,504 4,212 4,500 4,660 4,142
Total non–interest expense 38,350 36,368 36,610 39,370 34,349
Income before income taxes 25,834 28,834 27,102 25,505 27,127
Income tax expense 2,013 3,975 3,539 4,080 4,056
Net income $ 23,821 $ 24,859 $ 23,563 $ 21,425 $ 23,071
Basic earnings per share $ 0.55 $ 0.57 $ 0.54 $ 0.49 $ 0.53
Diluted earnings per share 0.55 0.57 0.54 0.49 0.52

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Condensed Consolidated Statements of Income
(Dollars in Thousands Except Per Share Data, Unaudited)
Nine Months Ended
September 30, September 30,
2022 2021
Interest income
Loans receivable $ 126,479 $ 120,446
Investment securities – taxable 24,723 8,641
Investment securities – non–taxable 21,482 16,790
Total interest income 172,684 145,877
Interest expense
Deposits 7,289 6,204
Borrowed funds 6,425 3,640
Subordinated notes 2,641 2,641
Junior subordinated debentures issued to capital trusts 1,755 1,678
Total interest expense 18,110 14,163
Net interest income 154,574 131,714
Credit loss (recovery) (1,747) (13)
Net interest income after credit loss (recovery) 156,321 131,727
Non–interest Income
Service charges on deposit accounts 8,651 6,682
Wire transfer fees 477 687
Interchange fees 9,451 7,819
Fiduciary activities 4,111 5,828
Gains on sale of investment securities — 914
Gain on sale of mortgage loans 5,969 14,996
Mortgage servicing income net of impairment 4,163 2,052
Increase in cash value of bank owned life insurance 1,843 1,547
Death benefit on bank owned life insurance 644 783
Other income 1,468 3,816
Total non–interest income 36,777 45,124
Non–interest expense
Salaries and employee benefits 60,305 53,502
Net occupancy expenses 10,044 9,337
Data processing 7,683 7,290
Professional fees 1,149 1,654
Outside services and consultants 7,865 6,252
Loan expense 7,968 8,574
FDIC insurance expense 2,170 1,579
Other losses 928 358
Other expenses 13,216 11,363
Total non–interest expense 111,328 99,909
Income before income taxes 81,770 76,942
Income tax expense 9,527 11,276
Net income $ 72,243 $ 65,666
Basic earnings per share $ 1.66 $ 1.50
Diluted earnings per share 1.65 1.49

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Use of Non–GAAP Financial Measures

Certain information set forth in this press release refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non–GAAP financial measures relating to net income, diluted earnings per share, net interest margin, tangible stockholders’ equity and tangible book value per share, efficiency ratio, the return on average assets, the return on average common equity, return on average tangible equity, and pre–tax, pre–provision net income. In each case, we have identified special circumstances that we consider to be non–recurring and have excluded them. We believe that this shows the impact of such events as acquisition–related purchase accounting adjustments, among others we have identified in our reconciliations. Horizon believes these non–GAAP financial measures are helpful to investors and provide a greater understanding of our business and financial results without giving effect to the purchase accounting impacts and one–time costs of acquisitions and non–recurring items. 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 press release for reconciliations of the non–GAAP information identified herein and its most comparable GAAP measures.

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Non–GAAP Reconciliation of Net Income
(Dollars in Thousands, Unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2022 2022 2022 2021 2021 2022 2021
Net income as reported $ 23,821 $ 24,859 $ 23,563 $ 21,425 $ 23,071 $ 72,243 $ 65,666
Acquisition expenses — — — 884 799 — 1,041
Tax effect — — — (184) (166) — (217)
Net income excluding acquisition expenses 23,821 24,859 23,563 22,125 23,704 72,243 66,490
Credit loss expense acquired loans — — — — 2,034 — 2,034
Tax effect — — — — (427) — (427)
Net income excluding credit loss expense acquired loans 23,821 24,859 23,563 22,125 25,311 72,243 68,097
Gain on sale of ESOP trustee accounts — — — — (2,329) — (2,329)
Tax effect — — — — 489 — 489
Net income excluding gain on sale of ESOP trustee accounts 23,821 24,859 23,563 22,125 23,471 72,243 66,257
DOL ESOP settlement expenses — — — 1,900 — — —
Tax effect — — — (315) — — —
Net income excluding DOL ESOP settlement expenses 23,821 24,859 23,563 23,710 23,471 72,243 66,257
(Gain) / loss on sale of investment securities — — — — — — (914)
Tax effect — — — — — — 192
Net income excluding (gain) / loss on sale of investment securities 23,821 24,859 23,563 23,710 23,471 72,243 65,535
Death benefit on bank owned life insurance (“BOLI”) — (644) — — (517) (644) (783)
Net income excluding death benefit on BOLI 23,821 24,215 23,563 23,710 22,954 71,599 64,752
Prepayment penalties on borrowings — — — — — — 125
Tax effect — — — — — — (26)
Net income excluding prepayment penalties on borrowings 23,821 24,215 23,563 23,710 22,954 71,599 64,851
Adjusted net income $ 23,821 $ 24,215 $ 23,563 $ 23,710 $ 22,954 $ 71,599 $ 64,851

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Non–GAAP Reconciliation of Diluted Earnings per Share
(Dollars in Thousands, Unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2022 2022 2022 2021 2021 2022 2021
Diluted earnings per share (“EPS”) as reported $ 0.55 $ 0.57 $ 0.54 $ 0.49 $ 0.52 $ 1.65 $ 1.49
Acquisition expenses — — — 0.02 0.02 — 0.02
Tax effect — — — — — — —
Diluted EPS excluding acquisition expenses 0.55 0.57 0.54 0.51 0.54 1.65 1.51
Credit loss expense acquired loans — — — — 0.05 — 0.05
Tax effect — — — — (0.01) — (0.01)
Diluted EPS excluding credit loss expense acquired loans 0.55 0.57 0.54 0.51 0.58 1.65 1.55
Gain on sale of ESOP trustee accounts — — — — (0.05) — (0.05)
Tax effect — — — — 0.01 — 0.01
Diluted EPS excluding gain on sale of ESOP trustee accounts 0.55 0.57 0.54 0.51 0.54 1.65 1.51
DOL ESOP settlement expenses — — — 0.04 — — —
Tax effect — — — (0.01) — — —
Diluted EPS excluding DOL ESOP settlement expenses 0.55 0.57 0.54 0.54 0.54 1.65 1.51
(Gain) / loss on sale of investment securities — — — — — — (0.02)
Tax effect — — — — — — —
Diluted EPS excluding (gain) / loss on sale of investment securities 0.55 0.57 0.54 0.54 0.54 1.65 1.49
Death benefit on bank owned life insurance (“BOLI”) — (0.01) — — (0.02) (0.01) (0.03)
Diluted EPS excluding death benefit on BOLI 0.55 0.56 0.54 0.54 0.52 1.64 1.46
Prepayment penalties on borrowings — — — — — — —
Tax effect — — — — — — —
Diluted EPS excluding prepayment penalties on borrowings 0.55 0.56 0.54 0.54 0.52 1.64 1.46
Adjusted diluted EPS $ 0.55 $ 0.56 $ 0.54 $ 0.54 $ 0.52 $ 1.64 $ 1.46

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Non–GAAP Reconciliation of Pre–Tax, Pre–Provision Net Income
(Dollars in Thousands, Unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2022 2022 2022 2021 2021 2022 2021
Pre–tax income $ 25,834 $ 28,834 $ 27,102 $ 25,505 $ 27,127 $ 81,770 $ 76,942
Credit loss expense (recovery) (601) 240 (1,386) (2,071) 1,112 (1,747) (13)
Pre–tax, pre–provision net income $ 25,233 $ 29,074 $ 25,716 $ 23,434 $ 28,239 $ 80,023 $ 76,929
Pre–tax, pre–provision net income $ 25,233 $ 29,074 $ 25,716 $ 23,434 $ 28,239 $ 80,023 $ 76,929
Acquisition expenses — — — 884 799 — 1,041
Gain on sale of ESOP trustee accounts — — — — (2,329) — (2,329)
DOL ESOP settlement expenses — — — 1,900 — — —
(Gain) / loss on sale of investment securities — — — — — — (914)
Death benefit on BOLI — (644) — — (517) (644) (783)
Prepayment penalties on borrowings — — — — — — 125
Adjusted pre–tax, pre–provision net income $ 25,233 $ 28,430 $ 25,716 $ 26,218 $ 26,192 $ 79,379 $ 73,944
Non–GAAP Reconciliation of Net Interest Margin
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in Thousands, Unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2022 2022 2022 2021 2021 2022 2021
Net interest income as reported $ 53,395 $ 53,008 $ 48,171 $ 49,976 $ 46,544 $ 154,574 $ 131,714
Average interest earning assets 7,037,530 6,927,310 6,800,549 6,938,258 6,033,088 6,923,224 5,712,875
Net interest income as a percentage of average interest earning assets (“Net Interest Margin”) 3.13 % 3.19 % 2.99 % 2.97 % 3.17 % 3.03 % 3.20 %
Net interest income as reported $ 53,395 $ 53,008 $ 48,171 $ 49,976 $ 46,544 $ 154,574 $ 131,714
Acquisition–related purchase accounting adjustments (“PAUs”) (906) (1,223) (916) (1,819) (875) (3,045) (2,684)
Prepayment penalties on borrowings — — — — — — 125
Adjusted net interest income $ 52,489 $ 51,785 $ 47,255 $ 48,157 $ 45,669 $ 151,529 $ 129,030
Adjusted net interest margin 3.08 % 3.12 % 2.93 % 2.86 % 3.12 % 2.97 % 3.14 %

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Non–GAAP Reconciliation of Tangible Stockholders’ Equity and Tangible Book Value per Share
(Dollars in Thousands, Unaudited)
September 30, June 30, March 31, December 31, September 30,
2022 2022 2022 2021 2021
Total stockholders’ equity $ 644,993 $ 657,865 $ 677,450 $ 723,209 $ 708,542
Less: Intangible assets 173,375 173,662 174,588 175,513 183,938
Total tangible stockholders’ equity $ 471,618 $ 484,203 $ 502,862 $ 547,696 $ 524,604
Common shares outstanding 43,574,151 43,572,796 43,572,796 43,547,942 43,520,694
Book value per common share $ 14.80 $ 15.10 $ 15.55 $ 16.61 $ 16.28
Tangible book value per common share $ 10.82 $ 11.11 $ 11.54 $ 12.58 $ 12.05

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Non–GAAP Calculation and Reconciliation of Efficiency Ratio and Adjusted Efficiency Ratio
(Dollars in Thousands, Unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2022 2022 2022 2021 2021 2022 2021
Non–interest expense as reported $ 38,350 $ 36,368 $ 36,610 $ 39,370 $ 34,349 $ 111,328 $ 99,909
Net interest income as reported 53,395 53,008 48,171 49,976 46,544 154,574 131,714
Non–interest income as reported $ 10,188 $ 12,434 $ 14,155 $ 12,828 $ 16,044 $ 36,777 $ 45,124
Non–interest expense / (Net interest income + Non–interest income)<br>(“Efficiency Ratio”) 60.31 % 55.57 % 58.74 % 62.69 % 54.88 % 58.18 % 56.50 %
Non–interest expense as reported $ 38,350 $ 36,368 $ 36,610 $ 39,370 $ 34,349 $ 111,328 $ 99,909
Acquisition expenses — — — (884) (799) — (1,041)
DOL ESOP settlement expenses — — — (1,900) — — —
Non–interest expense excluding acquisition and DOL ESOP settlement expenses 38,350 36,368 36,610 36,586 33,550 111,328 98,868
Net interest income as reported 53,395 53,008 48,171 49,976 46,544 154,574 131,714
Prepayment penalties on borrowings — — — — — — 125
Net interest income excluding prepayment penalties on borrowings 53,395 53,008 48,171 49,976 46,544 154,574 131,839
Non–interest income as reported 10,188 12,434 14,155 12,828 16,044 36,777 45,124
Gain on sale of ESOP trustee accounts — — — — (2,329) — (2,329)
(Gain) / loss on sale of investment securities — — — — — — (914)
Death benefit on BOLI — (644) — — (517) (644) (783)
Non–interest income excluding (gain) / loss on sale of investment securities and death benefit on BOLI $ 10,188 $ 11,790 $ 14,155 $ 12,828 $ 13,198 $ 36,133 $ 41,098
Adjusted efficiency ratio 60.31 % 56.13 % 58.74 % 58.25 % 56.16 % 58.38 % 57.17 %

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Non–GAAP Reconciliation of Return on Average Assets
(Dollars in Thousands, Unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2022 2022 2022 2021 2021 2022 2021
Average assets $ 7,635,102 $ 7,476,238 $ 7,319,675 $ 7,461,343 $ 6,507,673 $ 7,473,534 $ 6,197,026
Return on average assets (“ROAA”) as reported 1.24 % 1.33 % 1.31 % 1.14 % 1.41 % 1.29 % 1.42 %
Acquisition expenses — — — 0.05 0.05 — 0.02
Tax effect — — — (0.01) (0.01) — —
ROAA excluding acquisition expenses 1.24 1.33 1.31 1.18 1.45 1.29 1.44
Credit loss expense acquired loans — — — — 0.12 — 0.04
Tax effect — — — — (0.03) — (0.01)
ROAA excluding credit loss expense on acquired loans 1.24 1.33 1.31 1.18 1.54 1.29 1.47
Gain on sale of ESOP trustee accounts — — — — (0.14) — (0.05)
Tax effect — — — — 0.03 — 0.01
ROAA excluding gain on sale of ESOP trustee accounts 1.24 1.33 1.31 1.18 1.43 1.29 1.43
DOL ESOP settlement expenses — — — 0.10 — — —
Tax effect — — — (0.02) — — —
ROAA excluding DOL ESOP settlement expenses 1.24 1.33 1.31 1.26 1.43 1.29 1.43
(Gain) / loss on sale of investment securities — — — — — — (0.02)
Tax effect — — — — — — —
ROAA excluding (gain) / loss on sale of investment securities 1.24 1.33 1.31 1.26 1.43 1.29 1.41
Death benefit on BOLI — (0.03) — — (0.03) (0.01) (0.02)
ROAA excluding death benefit on BOLI 1.24 1.30 1.31 1.26 1.40 1.28 1.39
Prepayment penalties on borrowings — — — — — — —
Tax effect — — — — — — —
ROAA excluding prepayment penalties on borrowings 1.24 1.30 1.31 1.26 1.40 1.28 1.39
Adjusted ROAA 1.24 % 1.30 % 1.31 % 1.26 % 1.40 % 1.28 % 1.39 %

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Non–GAAP Reconciliation of Return on Average Common Equity
(Dollars in Thousands, Unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2022 2022 2022 2021 2021 2022 2021
Average common equity $ 680,376 $ 677,299 $ 716,341 $ 719,643 $ 724,412 $ 691,529 $ 709,587
Return on average common equity (“ROACE”) as reported 13.89 % 14.72 % 13.34 % 11.81 % 12.64 % 13.97 % 12.37 %
Acquisition expenses — — — 0.49 0.44 — 0.20
Tax effect — — — (0.10) (0.09) — (0.04)
ROACE excluding acquisition expenses 13.89 14.72 13.34 12.20 12.99 13.97 12.53
Credit loss expense acquired loans — — — — 1.11 — 0.38
Tax effect — — — — (0.23) — (0.08)
ROACE excluding credit loss expense acquired loans 13.89 14.72 13.34 12.20 13.87 13.97 12.83
Gain on sale of ESOP trustee accounts — — — — (1.28) — (0.44)
Tax effect — — — — 0.27 — 0.09
ROACE excluding gain on sale of ESOP trustee accounts 13.89 14.72 13.34 12.20 12.86 13.97 12.48
DOL ESOP settlement expenses — — — 1.05 — — —
Tax effect — — — (0.17) — — —
ROACE excluding DOL ESOP settlement expenses 13.89 14.72 13.34 13.08 12.86 13.97 12.48
(Gain) / loss on sale of investment securities — — — — — — (0.17)
Tax effect — — — — — — 0.04
ROACE excluding (gain) / loss on sale of investment securities 13.89 14.72 13.34 13.08 12.86 13.97 12.35
Death benefit on BOLI — (0.38) — — (0.28) (0.12) (0.15)
ROACE excluding death benefit on BOLI 13.89 14.34 13.34 13.08 12.58 13.85 12.20
Prepayment penalties on borrowings — — — — — — 0.02
Tax effect — — — — — — —
ROACE excluding prepayment penalties on borrowings 13.89 % 14.34 % 13.34 % 13.08 % 12.58 % 13.85 % 12.22 %
Adjusted ROACE 13.89 % 14.34 % 13.34 % 13.08 % 12.58 % 13.85 % 12.22 %

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Non–GAAP Reconciliation of Return on Average Tangible Equity
(Dollars in Thousands, Unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2022 2022 2022 2021 2021 2022 2021
Average common equity $ 680,376 $ 677,299 $ 716,341 $ 719,643 $ 724,412 $ 691,529 $ 709,587
Less: Average intangible assets 175,321 175,321 176,356 179,594 174,920 175,836 174,537
Average tangible equity $ 505,055 $ 501,978 $ 539,985 $ 540,049 $ 549,492 $ 515,693 $ 535,050
Return on average tangible equity (“ROATE”) as reported 18.71 % 19.86 % 17.70 % 15.74 % 16.66 % 18.73 % 16.41 %
Acquisition expenses — — — 0.65 0.58 — 0.26
Tax effect — — — (0.14) (0.12) — (0.06)
ROATE excluding acquisition expenses 18.71 19.86 17.70 16.25 17.12 18.73 16.61
Credit loss expense acquired loans — — — — 1.47 — 0.51
Tax effect — — — — (0.31) — (0.11)
ROATE excluding credit loss expense acquired loans 18.71 19.86 17.70 16.25 18.28 18.73 17.01
Gain on sale of ESOP trustee accounts — — — — (1.68) — (0.58)
Tax effect — — — — 0.35 — 0.13
ROATE excluding gain on sale of ESOP trustee accounts 18.71 19.86 17.70 16.25 16.95 18.73 16.56
DOL ESOP settlement expenses — — — 1.40 — — —
Tax effect — — — (0.23) — — —
ROATE excluding DOL ESOP settlement expenses 18.71 19.86 17.70 17.42 16.95 18.73 16.56
(Gain) / loss on sale of investment securities — — — — — — (0.23)
Tax effect — — — — — — 0.05
ROATE excluding (gain) / loss on sale of investment securities 18.71 19.86 17.70 17.42 16.95 18.73 16.38
Death benefit on BOLI — (0.51) — — (0.37) (0.17) (0.20)
ROATE excluding death benefit on BOLI 18.71 19.35 17.70 17.42 16.58 18.56 16.18
Prepayment penalties on borrowings — — — — — — 0.03
Tax effect — — — — — — (0.01)
ROATE excluding prepayment penalties on borrowings 18.71 % 19.35 % 17.70 % 17.42 % 16.58 % 18.56 % 16.20 %
Adjusted ROATE 18.71 % 19.35 % 17.70 % 17.42 % 16.58 % 18.56 % 16.20 %

Horizon Bancorp, Inc. Reports Third Quarter 2022 EPS of $0.55

Earnings Conference Call

As previously announced, Horizon will host a conference call to review its third quarter financial results and operating performance.

Participants may access the live conference call on October 27, 2022 at 7:30 a.m. CT (8:30 a.m. ET) by dialing 833–974–2379 from the United States, 866–450–4696 from Canada or 412–317–5772 from international locations and requesting the “Horizon Bancorp Call.” Participants are asked to dial in approximately 10 minutes prior to the call.

A telephone replay of the call will be available approximately one hour after the end of the conference through November 3, 2022. The replay may be accessed by dialing 877–344–7529 from the United States, 855–669–9658 from Canada or 412–317–0088 from other international locations, and entering the access code 3260518.

About Horizon Bancorp, Inc.

Horizon Bancorp, Inc. (NASDAQ GS: HBNC) with $7.7 billion in assets, is the bank holding company for Horizon Bank, which serves customers across diverse and economically attractive Midwestern markets through convenient digital and virtual tools, as well as its Indiana and Michigan branches. Horizon Bank’s retail offerings include prime residential, indirect auto, and other secured consumer lending to in–market customers, as well as a range of personal banking and wealth management solutions. Horizon also provides a comprehensive array of in–market business banking and treasury management services, with commercial lending representing over half of total loans. More information on Horizon, headquartered in Northwest Indiana’s Michigan City, is available at horizonbank.com and investor.horizonbank.com.

29

hbncpresentation20223q22

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® A NASDAQ Traded Company - Symbol HBNC INVESTOR PRESENTATION | OCTOBER 26, 2022

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Forward-Looking Statements This press release may contain forward–looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon Bancorp, Inc. and its affiliates (collectively, “Horizon”). For these statements, Horizon claims the protection of the safe harbor for forward–looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission (the “SEC”). Forward–looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward– looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward–looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; continuing increases in inflation; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon’s assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; continuing risks and uncertainties relating to the COVID–19 pandemic and government responses thereto; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the U.S. federal government to manage federal debt limits; climate change and social justice initiatives; material changes outside the U.S. or in overseas relations, including changes in U.S. trade relations related to imposition of tariffs, Brexit, and the phase out of the London Interbank Offered Rate (“LIBOR”); the inability to realize cost savings or revenues or to effectively implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; acts of terrorism, war and global conflicts, such as the Russia and Ukraine conflict; and supply chain disruptions and delays. These and additional factors that could cause actual results to differ materially from those expressed in the forward–looking statements are discussed in Horizon’s reports (such as the Annual Report on Form 10–K, Quarterly Reports on Form 10–Q, and Current Reports on Form 8–K) filed with the SEC and available at the SEC’s Internet website (www.sec.gov). Undue reliance should not be placed on the forward–looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward–looking statement to reflect the events or circumstances after the date on which the forward–looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law. Non-GAAP Measures Certain non-GAAP financial measures are presented herein. Horizon believes they are useful to investors and provide a greater understanding of Horizon’s business without giving effect to non-recurring costs and non-core items. For each non-GAAP financial measure, we have presented comparable GAAP measures and reconciliations of the non-GAAP measures to those GAAP measures in the Appendix to this presentation. Please see slides 39-57. Important Information 2

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Corporate Overview 3

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 3Q22 Highlights Meeting or Exceeding Our 2022 Goals Goals 3Q22 Change % vs. Linked Quarter Year-to- date Total Loan Growth, Annualized(1) 7.8% 14.5% Commercial Loan Growth, Annualized(1) 10-14% 1.80% 13.80% Consumer Loan Growth, Annualized(1) 10-14% 6.00% 31.70% Non-interest Expense/Average Assets, Annualized <2.00% 1.99% 1.99% ROAA >1.30% 1.24% 1.29% ROAE >12.50% 13.89% 13.97% (1) Excludes PPP loans and sold commercial participation loans 4

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 5 Disciplined operating culture Compelling value supported by commitment to dividend Well-established long-term growth goals Very attractive Midwest markets Diversified mix of businesses delivers very strong operational performance Why Horizon? A High-Performing Operator in Growth Markets (1) Footnote Index included in Appendix (see slides 39-57 for non-GAAP reconciliation) 1.29% ROAA, 18.73% ROATE & 1.99% operating expenses/avg. assets YTD Closed 7 branches in 2022. Annual impact will be realized in 2023 166% P/TBV and 8.4x P/E (TTM) with a 3.6% dividend yield 30-year record of quarterly cash dividends to shareholders. 2022 annual dividend of 64¢/share (28.8% payout ratio) 17% average asset growth 2017-2021 14% annualized loan growth YTD (excluding PPP and sold commercial participation loans) Stable core deposit base funded primarily by a granular portfolio of consumer and business clients 30 minutes from downtown Chicago benefiting from Illinois exodus Attractive Midwest Markets with favorable infrastructure investment, rising household income and growing manufacturing, healthcare, and educational industries >50% of loan portfolio is commercial with growth of $51 million or 7% annualized in Q3. Portfolio well balanced across multiple segments and markets Consumer loan growth of $51 million or 24% annualized with strong growth in both indirect and consumer lending Mortgage loans increased $25 million or 17% annualized. Organic growth of high quality borrowers within local markets

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 6 Mark E. Secor EVP & Chief Financial Officer • 33 Years of Banking and Public Accounting Experience • 13 Years with Horizon as CFO and EVP of Horizon Kathie A. DeRuiter EVP & Senior Operations Officer • 32 Years of Banking and Operational Experience • 21 Years as Senior Bank Operations Officer Todd A. Etzler EVP & Corporate Secretary & General Counsel • 30 Years of Corporate Legal Experience and 11 years of General Counsel Experience • 4 Years as SVP and General Counsel Craig M. Dwight Chairman & CEO • 43 Years of Banking Experience • 23 Years as President or CEO of Bank Seasoned Management Team Lynn M. Kerber EVP & Chief Commercial Banking Officer • 31 Years of Banking Experience • 4 Years with Horizon as Senior Commercial Credit Officer Noe S. Najera EVP, Senior Retail & Mortgage Lending Officer • 20 Years of Banking Experience • 6 Years with Horizon, 3 Years as SVP Retail Lending * As of April 1, 2022 Thomas M. Prame President • 28 Years of Banking Experience • 20 Years in Executive Leadership Roles

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® A History of Profitable Growth Positioned Well for Future Organic Growth $0.72 $0.76 $0.91 $1.13 $1.22 $1.26 $1.31 $1.39 $1.40 $1.55 $1.85 $1.76 $2.08 $2.65 $3.14 $3.96 $4.25 $5.24 $5.89 $7.36 $7.72 $5 $7 $7 $7 $7 $8 $9 $9 $10 $13 $20 $20 $18 $21 $24 $33 $53 $67 $68 $87 $94 - 10 20 30 40 50 60 70 80 90 100 - 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Sept. '22 TTM Total Assets ($B) Net Income ($M) CAGRs 2002 through 2021 Total Assets – 13.0% Net Income – 20.0% 7 12 15 Organic Expansions M&A Transactions

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 8 * U.S. Bureau of Economic Analysis, retrieved from FRED, Federal Reserve Bank of St. Louis, fred.stlouisfed.org, April 18, 2022. Built to Outpace GDP & Industry Over Long-Term Assets Grew 29% ex. PPP During 2021 23% 5% 21% 23% 8% 3% 4% 6% 1% 10% 20% -5% 18% 28% 18% 26% 7% 24% 12% 25% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 HBNC Annual Asset Growth, ex. PPP PPP Contribution to HBNC Annual Asset Growth GDP Annual Growth* All Commercial Bank Annual Asset Growth* Well-Established Long-Term Goals Meaningfully outpace GDP and industry ~50/50 growth organic/acquired Organic growth of ≥3x GDP growth 2012 - 2021 2017 - 2021 20% average asset growth 4.7x GDP 3.3x banks 24% average asset growth 4.9x GDP 3.3x banks

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 9 Multiple Revenue Streams Diversifies Risk 9 Retail Banking Business Banking Mortgage Banking Wealth Management Complementary Revenue Streams that are Counter-Cyclical to Varying Economic Cycles Serving the Right Side of Chicago Headquartered in Michigan City, IN, with 73 locations in attractive markets in Indiana and Michigan Double commuter track addition to the South Shore train lines supports growth in Northwest Indiana, which offers proximity to Chicago, with lower taxes and cost of living Major colleges and universities throughout footprint, including Notre Dame University, Purdue University, University of Michigan and Michigan State University Note: Total loan figures for Indiana and Michigan are as of 9/30/22 and do not include Mortgage Warehouse. INDIANA 9/30/22 Loans: $2.2B 56% of Loans MICHIGAN 9/30/22 Loans: $1.7B 44% of Loans OHIO ILLINOIS WISCONSIN KENTUCKY $1.7B IN LOANS $2.2B IN LOANS Diversified & Attractive Footprint

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 10 Michigan City, IN / La Porte, IN (Legacy) Indianapolis, IN (Growth) Northwest Indiana (Growth) Lafayette, IN (Growth) Southwest Michigan* (Growth) $1.2B Deposits $791M Deposits $709M Deposits $344M Deposits$561M Deposits 8 Branches 8 Branches 10 Branches 5 Branches8 Branches • Similar culture and economic base to legacy markets in Northern Indiana • Grand Rapids one of the most attractive markets in the Midwest • Purdue University collaborates with contiguous cities of Lafayette and West Lafayette • Subaru expanding facilities • Double commuter track addition to the South Shore train lines • High cost of living in Chicago • Population density of Chicago • Greater Indianapolis area exhibits strong growth • Significant manufacturing, healthcare, and education industries • Over $1.5B in public and private investments since 2012 • Double commuter track addition to the South Shore train lines Source: S&P Global Market Intelligence. Note: Core market demographics reflect MSA data. Deposit data as of 6/30/22. *Southwest Michigan defined as the MSAs of Niles, Grand Rapids-Kentwood and Kalamazoo-Portage. Demographic data weighted by HBNC deposits. Attractive & Stable Midwest Markets Top 5 Markets by Deposits Michigan City, IN La Porte, IN Indianapolis, IN Northwest Indiana Southwest Michigan* Lafayette, IN Median HHI $53,255 $65,306 $74,285 $58,856 $59,404 ’20 – ’25 HHI Growth 6.8% 11.2% 11.5% 11.8% 10.9% ’20 – ’25 Pop. Growth 0.12% 3.81% 0.08% 1.02% 3.86%

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Digital Banking Excellence Sophisticated Internal Capabilities Supported by Best-in-Class Third Parties NEW IN 2022 • Online deposit accounting opening platform to include time deposit, IRA and HSA accounts • Develop real-time API automations through data and system enhancements to anticipate customer needs and expand relationships • Enhance capabilities within the mobile banking app to include account opening, in- branch appointments and more • Use data to expand customer segmentation and profitability models Growing customer base digitally and efficiently • 19% of accounts opened online on average YTD’22, up from 9% in 4Q20 • 73% of transactions performed online YTD’22 In-house CRM platform allows Horizon to remain nimble • Data warehouse combined with transaction analysis from Core allows us to better anticipate customers’ needs and develop targeted marketing Shifting Tech Spend to Strategic Customer & Employee Facing Applications 9% 5% 17% 18% 43% 25% 15% 14% 16% 38% 2018 2021 Core Data Communication Remote Delivery Infrastructure Strategic Applications In-house core and prior tech investments are true competitive advantages • Prior investments to build out internal capabilities ensures that Horizon’s technology budget is focused on enhancing the customer experience and efficiency of its team of Advisors in cost effective manner Leveraging third party relationship to surround cost effective in-house Core • Third parties like Nintex, Fox Trot and Nautilus automate workflows for historically manual tasks, reducing cost and waste while sending direct updates to our systems • Automation provides Horizon’s Advisors targeted, current information and more time with customers 11

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Community Banking at Scale Efficient Utilization of Talent, Technology & Branch Network 50 50 50 60 65 81 32 32 46 56 62 63 74 73 78 665 701 716 839 788 900 0 200 400 600 800 1000 - 50 100 150 200 250 2016 2017 2018 2019 2020 2021 Evolving Multi-Channel Delivery ATMs ITMs Branches Employees $5.4 $5.8 $6.0 $6.5 $7.3 $8.7 $- $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 - 150,000 300,000 450,000 600,000 750,000 900,000 2016 2017 2018 2019 2020 2021 M ill io n s Technology Meeting Customer Demands & Enhancing Efficiency of Team Digital Transactions Branch Transactions Total Assets / Employee Technology enhances Advisors’ ability to serve customers and enhance bottom-line • Video banking team serves multiple markets through robust network of 46 interactive teller machines (ITMs) • ITMs proved to be valuable and scalable amid the pandemic, with 14 new ITMs rolled out ahead of 2021 branch acquisition • 84% of online chats answered by bots, freeing Advisors to provide more value-added services to customers • Three bank owned and operated Communication Centers supported by branch staff as needed • Investments in technology improve efficiency as measured by growth in assets per employee from $5.4 million in 2016 to $8.7 million in 2021 12

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 13 Productive Use of Capital Deploying capital through productive acquisitions and to drive organic growth • Completed acquisition of 14 Michigan branches and associated deposits and loans in 3Q21, adding mass and scale to Horizon’s Midland market and extending its footprint into attractive markets in the northern and central regions of Michigan’s lower peninsula • Investing in commercial lenders and consumer platforms to leverage capital through organic loan growth Longstanding dividend • 30+ years of uninterrupted quarterly cash dividend • Horizon increased its quarterly dividend during the second quarter of 2022 by 6.3% to $0.16 per share, resulting in tenth dividend increase in the last 11 years • Current implied annualized dividend yield of 3.6% as of September 30, 2022 • Strong cash position at the holding company represents approximately 6 quarters of the current dividend plus fixed costs FUTURE OUTLOOK Targeted dividend payout ratio of 25-35% Current focus is on Organic Growth Opportunistic acquisitions with focus on lease models

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 14 Financial Highlights

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 15 $ M $28.2 $23.4 $25.7 $29.1 $25.2 $23.0 $23.7 $23.6 $24.2 $23.8 $0.52 $0.54 $0.54 $0.56 $0.55 3Q21 4Q21 1Q22 2Q22 3Q22 Adj. Net Income(1) Pre-tax, Pre-provision Income Adj. Net Income Adj. EPS 14.34% 14.45% 14.56% 16.84% 14.71% 3Q21 4Q21 1Q22 2Q22 3Q22 Adj. PTPP ROACE(1) Adj. PTPP ROACE $45.7 $48.2 $47.3 $51.8 $52.5 3.12% 2.86% 2.93% 3.12% 3.08% 3Q21 4Q21 1Q22 2Q22 3Q22 Adj. Net Interest Income(1) Adj. Net Interest Income Adj. NIM $ M (1) Footnote Index included in Appendix (see slides 39-57 for non-GAAP reconciliation) 16.58% 17.42% 17.70% 19.86% 18.71% 3Q21 4Q21 1Q22 2Q22 3Q22 Adj. ROATE(1) Adj. ROATE Strong Core Earnings

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 16 Balance Sheet Management As Deposit Betas are Increasing • Of the $2.0 billion of adjustable rate loans, $1.2 billion adjust with a rate change to their index • Deposit betas range from 5.0% for consumer deposits to 60.0% on money market accounts and public funds • Higher deposit betas for rate increases changed interest rate risk sensitivity in a parallel rate shock * Based on 12-month parallel rate shock as of September 30, 2022. $210 $207 $204 $200 $196 -8.00% -7.00% -6.00% -5.00% -4.00% -3.00% -2.00% -1.00% 0.00% Base 100 bp 200 bp 300 bp 400 bp M ill io n s NII Volatility* 9/30/22 NII 9/30/22 % Impact on NII 12-Month Parallel Interest Rate Shock

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 3.66% 3.71% 3.63% 3.61% 3.58% 3.60% 3.59% 3.43% 3.46% 3.61% 3.67% 3.49% 3.44% 3.35% 3.27% 3.44% 3.17% 3.13% 3.12% 2.86% 2.93% 3.12% 3.08% 0.48% 0.50% 0.55% 0.63% 0.70% 0.82% 0.93% 1.07% 1.19% 1.13% 1.10% 1.04% 0.95% 0.60% 0.53% 0.45% 0.40% 0.35% 0.30% 0.25% 0.24% 0.27% 0.55% 0.80% 1.05% 1.25% 1.29% 1.53% 1.80% 2.01% 2.28% 2.50% 2.50% 2.30% 1.83% 1.40% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.29% 0.94% 2.35% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Net Interest Margin Adj. NIM (1) Adj. Cost of Core Funds (1) Avg. Fed Funds Rate (2) • Loan growth, cash deployed to higher yielding assets and increasing interest rates to increase net interest income • Cost of core funds increased 28 basis points during the quarter, the average Fed Funds rate increased 141 basis points 17 (1) Footnote Index included in Appendix (see slides 39-57 for non-GAAP reconciliation) (2) Source: S&P Global Market Intelligence. Focus on Increasing Net Interest Income

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Fed Agy CMO, 3% State and Muni, 51% Fed Agy MBS, 18% Private labeled MBS, 1% U.S. Treasury, 19% Corp, 8% Total Investments at 9/30/22 $3.0B 18 • Investment portfolio cash flows are helping to fund higher yielding loans • Book yield of 2.28%, effective duration of 6.95 years • $48 million of cash flows expected over the next quarter and $227 million expected in 2023 • At September 30, 2022, the Company had approximately $640 million in unused lines of credit and $2.1 billion of unpledged securities Investment Portfolio Significant Contribution to Interest Income Securities Portfolio Detail Security Type ($000s) 3Q 2022 Amortized Cost 2Q 2022 Amortized Cost QoQ Change 3Q 2022 Duration (yrs) U.S. Treasury and federal agencies $589 $590 $(1) 5.05 Mortgage-backed 707 735 (28) 5.29 Corporate securities 249 248 1 5.03 State and municipal 1,634 1,643 (9) 8.73 Total Securities $3,179 $3,216 $(37) 6.95

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 19 • Accumulated Other Comprehensive Income (“AOCI”) loss reduced Tangible Common Equity (“TCE”) to 6.25%, or by 3.55%, in the third quarter • We have the intent and ability to hold the investments to maturity and no plans to sell • Cash flows can be used to fund future high single digit loan growth • Retained earnings and investments moving down the curve would earnback capital loss • No impact to regulatory capital ratios • With an additional 200bp parallel shock to the AFS investments over the next quarter, TCE is estimated to be 5.22%, or another 103bp decline from the third quarter • Bank capital ratios exceed regulatory capital ratios for “well capitalized” banks with leverage and risk based capital ratios of 8.84% and 13.65%, respectively • AOCI only considers AFS investments and derivatives, the economic value of equity (“EVE”) increased when comparing September 30, 2022 to September 30, 2021, when deposits are included in the valuations Other Comprehensive Income

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Non-interest bearing 23% Interest bearing(1) 64% CDs 13% 20 • In-market relationships and strategic pricing, contributed to total deposit cost of 0.28% • Deposit beta’s have lagged short term rate increases as we are disciplined in holding total deposit costs down, only increased 20bps since the first quarter • Account and deposit retention data very strong to date Average Cost(1) Average Deposits ($000s) 3Q 2022 Average Balances 2Q 2022 Average Balances 3Q 2022 (QTD) 2Q 2022 (QTD) Non-interest bearing $1,351,857 $1,335,779 0.00% 0.00% Interest bearing (excluding CDs) $3,708,419 $3,796,619 0.29% 0.09% Time Deposits (CDs) $770,322 $744,340 0.72% 0.47% Total Deposits $5,830,598 $5,876,738 0.28% 0.11% (1) Footnote Index included in Appendix (see slides 39-57 for non-GAAP reconciliation) Stable Low Cost Core Deposits Total Deposits at 9/30/22 $5.8B

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® • Annualized non-interest expense was 1.99% of average assets, supporting full year 2022 target of less than 2% • Planned 2022 branch rationalization payback in approximately six months after one time charges of ~ $380,000 recorded during 2Q ‘22 • Planned cost saves in 2023 in cyclical business models with continued branch rationalization review 21 3Q ’22 Highlights (1) Footnote Index included in Appendix (see slides 39-57 for non-GAAP reconciliation) Good Expense Control 2.05% 1.95% 2.03% 1.95% 1.99% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 3Q21 4Q21 1Q22 2Q22 3Q22 Other Loan Expense Outside Services & Consultants Professional Fees Data Processing Net Occupancy Expenses Salaries & Employee Benefits Annualized Non-Interest Expense to Average Assets Non-interest Expense Breakout ($M)(1)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Loan Portfolio Review 22

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Northern Indiana, 19% Central Indiana, 29%Other, 3% Michigan, 49% Geography at 9/30/22 Non-Owner Occupied Real Estate, 49.9% C&I, 23.5% Owner Occ. Real Estate, 22.7% Agriculture, 2.4% Develop./Land, 1.0% Res. Spec. Homes, 0.5% Category at 9/30/22 $2.4 billion in Total Commercial Loans Robust Commercial Loan Growth 23 • Commercial loan portfolio, excluding PPP and sold participation loans, increased approximately $41.8 million, or 7.2% annualized, during Q3 2022. • Continued positive trends with net funding of commercial loans of $117 million for Q3 compared to $142 million for Q2. New originations included construction projects which will benefit future quarters. • Q3 loan growth approximately 23% owner occupied real estate, 23% C&I, 17% retail and/or mixed use and 10% lessors 1-4 family. • Commercial pipeline positioned at $126 million entering Q4 compared to a pipeline of $160 million at the start of Q3.

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 24 • Excellent Production in 2021, Q1 2022, Q2 2022 & Q3 2022 • Strong production of $149M • Portfolio gained $51 million, representing 6.0% quarterly growth, or 23.9% annualized • Continued high quality originations YTD with 87% Loan to Value, 771 avg. credit score & 27% Debt to Income • Balanced lending growth in Q3. Indirect (+$33 million), Consumer (+$18 million). • Holding Asset Quality to Historical Norms • 99.7% secured consumer loans • 87.8% prime, with credit scores ≥700 • HELOC combined LTV limited to 89.9% • Low, single digit exception rate on approvals • Low delinquency at 0.56% and YTD net charge- offs of 0.07% Indirect Auto, 55.6% Direct Auto, 3.3% Home Equity Term, 5.1% HELOCs, 32.5% RV & Boat, 2.8% Unsecured, 0.3% Other, 0.4% Total Outstanding at 9/30/22 $900M Excellent Consumer Loan Growth

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 25 Jumbo, 47.2% Rental, 0.9% Conforming, 46.6% Construction, 5.3% Total Outstanding at 9/30/22 $635M Prime Mortgage Loan Portfolio • Gain on sale of mortgage loans (“GOS”) and mortgage warehousing income constituted only 3.8% of total 3Q22 revenue • GOS income totaled $1.4 million during 3Q22, down from $2.5 million during 2Q22, reflective of industry origination trends • Positioned well for current marketplace opportunities • Strong construction loan program to take advantage of fast growing new construction segment of market • Installed best in class construction desk software, creating a better client/builder experience with increased draw oversight and risk management practices • Adjusting cost structure to new volume norms • High Quality Portfolio • Underwriting to Fannie Mae guidelines • Full documentation of employment, income and asset verification • 43.2% of mortgages held in portfolio are ARMs • Average credit score 740

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® -$18 $1,412 $136 $284 $138 0.04% 0.01% 3Q21 4Q21 1Q22 2Q22 3Q22 Net Charge Offs NCOs NCOs/Average Loans $ 0 0 0 s $29,374 $19,019 $20,113 $20,206 $19,158 0.80% 0.53% 0.54% 0.51% 0.48% 3Q21 4Q21 1Q22 2Q22 3Q22 Non-Performing Loans NPLs (period end) NPLs/Loans (period end) $ 0 0 0 s $1,112 -$2,071 -$1,386 $240 -$601 3Q21 4Q21 1Q22 2Q22 3Q22 $ 0 0 0 s 26 CECL $56,779 $54,286 $52,508 $52,350 $51,369 1.55% 1.51% 1.41% 1.33% 1.28% 3Q21 4Q21 1Q22 2Q22 3Q22 ACL ACL/Loans Strong Asset Quality Metrics Allowance for Credit Losses (“ACL”) (CECL Implementation 1Q20) $ 0 0 0 s Credit Loss Expense (CECL Implementation 1Q20) 3Q22 ACL/Loans excluding PPP Loans = 1.28% 3Q22 ACL/Loans excluding PPP & Warehouse Loans = 1.30%

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 27 Key Franchise Highlights Positioned well for growth in 2022 and 2023, expansion of consumer dealer network, 20% increase in CLOs, 14 offices acquired and closed 10 offices in 2021 and closing 7 more offices in 2022 Granular low cost core deposits Growth oriented Midwest markets with balanced industrial bases and population inflows Low Credit Risk Profile – High quality balance sheet with strong liquidity – approximately $3.1 billion of cash and securities as of 9/30/22 Robust capital position 14.1% Tier 1 and 15.1% Total RBC as of 9/30/22 Building for loan growth, with complementary counter-cyclical revenue streams Historical run rate demonstrates strong core operating earnings 30-year unbroken quarterly cash dividend record, with strong cash position at the holding company and ability to dividend a significant amount of cash from the bank

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Annual Commercial Loan Growth 10% 10-14% 13.8% Reduction in Mortgage Originations 15-18% 15-18% 27.07% Annual Consumer Loan Growth 5-9% 10-14% 31.70% Annual Expenses to Average Assets <2.00% <2.00% 1.99% ROAA >1.20% >1.30% 1.29% ROAE >12.5% >12.5% 13.97% Exceeding Announced 2022 Goals 28 Initial Goal 4Q21 Update Goal 1Q22 Actual 3Q22 YTD

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 29 Appendix

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 30 (1) Net Reserve Build is equal to the provision for credit losses net of net charge-offs/recoveries. Stable Credit Loss Reserves ($000s, unaudited) 9/30/22 Net Reserve(1) 3Q22 Net Reserve(1) 2Q22 Net Reserve(1) 1Q22 12/31/21 Commercial $ 33,806 $ (996) $ (2,987) $ (2,986) $ 40,775 Retail Mortgage 5,137 715 71 495 3,856 Warehousing 1,024 (43) 12 (4) 1,059 Consumer 11,402 (657) 2,746 717 8,596 Allowance for Credit Losses $ 51,369 $ (981) $ (158) $ (1,778) $ 54,286 ACL/Total Loans 1.28% 1.51% Acquired Loan Discount $ 6,587 $ (619) $ (1,122) $ (769) $ 9,097

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Commercial, $2,404M, 60% Residential Mortgage, $635M, 16% Consumer, $900M, 22% Mortgage Warehouse, $74M, 2% Held For Sale, $2M, 0% 31 Gross Loans at 9/30/22 $4.0B Commercial Loans by Industry ($M) 9/30/22 Balance % of Commercial Portfolio % of Total Loan Portfolio Lessors – Residential Multi Family $220 9.1% 5.5% Health Care, Educational & Social 180 7.5% 4.5% Office (except medical) 162 6.7% 4.0% Hotel 157 6.5% 3.9% Retail 156 6.5% 3.9% Individual and Other Services 155 6.4% 3.9% Lessors – Student Housing 151 6.3% 3.8% Real Estate Rental & Leasing 132 5.5% 3.3% Warehouse/Industrial 132 5.5% 3.3% Manufacturing 105 4.4% 2.6% Finance & Insurance 98 4.1% 2.4% Construction 89 3.7% 2.2% Retail Trade 74 3.1% 1.8% Medical Office 71 2.9% 1.8% Lessors – Residential 1–4 Family 67 2.8% 1.7% Restaurants 64 2.7% 1.6% Mini Storage 52 2.2% 1.3% Leisure and Hospitality 51 2.1% 1.3% Professional & Technical Services 45 1.9% 1.1% Government 38 1.6% 0.9% Transportation & Warehousing 35 1.5% 0.9% Farm Land 34 1.4% 0.8% Wholesale Trade 32 1.3% 0.8% Agriculture 24 1.0% 0.6% Other 80 3.3% 2.0% Total $2,404 100.0% 59.9% Diversified & Granular Loan Portfolio

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 1% 2% 3% 3% 3% 6% 6% 7% 7% 7% 9% Farm Land Mini Storage All Others Lessors - Residential 1-4 Medical Office Warehouse/ Industrial Lessors Student Housing Retail Motel Office (except medical) Lessors - Residential Multi Note: Data as of 9/30/22 1% 1% 1% 1% 2% 2% 2% 2% 3% 4% 4% Wholesale Trade Construction Professional & Technical Services All Others Restaurants Leisure and Hospitality Retail Trade Manufacturing Individuals and Other Services Real Estate Rental & Leasing Health Care, Edu. Social Assist. 1% 1% 1% 1% 1% 1% 1% 2% 2% 3% 3% 3% 4% Professional & Technical Services Transportation & Warehousing Restaurants Agriculture Retail Trade All Others Government Real Estate Rental & Leasing Manufacturing Construction Health Care, Educational Social Assist. Individuals and Other Services Finance & Insurance 32 Non-Owner Occupied CRE – % of Total Commercial Loans Owner Occupied CRE – % of Total Commercial Loans 53% of Total Commercial Loans $1.3 billion 23% of Total Commercial Loans $0.5 billion C&I Loans – % of Total Commercial Loans 24% of Total Commercial Loans $0.6 billion Low Levels of Concentrated Exposure Commercial Portfolio By Industry Type

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® Commercial loans: • 64% fixed / 36% variable • 24% of variable rate commercial loans have floors, 16% of which are at their floor Retained mortgage loans: • 57% fixed / 43% variable • 94% of variable rate mortgage loans have floors, 11% of which are at their floor Consumer loans: • 67% fixed / 33% variable • 72% of variable rate consumer loans have floors, 11% of which are at their floor 33 Stable Loan Yields $4.0 $4.0 $3.8 $3.6 $3.5 $3.6 $3.6 $3.8 $3.9 4.39% 4.72% 4.39% 4.43% 4.56% 4.52% 4.26% 4.45% 4.79% 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Yield on Loans (%) / Total Average Loans ($B) Total Average Loans Yield on Loans (%)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 11.1% 11.6% 12.0% 11.3% 12.0% 11.2% 11.2% 11.8% 12.2% 12.0% 12.1% 11.3% 2017 2018 2019 2020 2021 3Q22 9.9% 10.1% 10.5% 10.7% 9.1% 9.6% 9.7% 10.0% 10.2% 9.1% 8.9% 9.1% 2017 2018 2019 2020 2021 3Q22 12.9% 13.4% 14.0% 14.9% 15.7% 14.5%13.1% 13.5% 13.6% 14.3% 14.2% 13.7% 2017 2018 2019 2020 2021 3Q22 Source: S&P Global Market Intelligence. Note: Company closed the acquisition of Salin Bancshares, Inc. in March 2019. 34 TCE / TA (%) Leverage Ratio (%) Total RBC Ratio (%) 4.0% Adequate + Buffer 7.0% KBW Regional Bank Index Median - MRQ Robust Capital Foundation 10.5% HBNC Ratio 8.5% 8.8% 9.3% 9.1% 7.6% 6.3% 9.1% 9.2% 9.6% 8.6% 8.3% 7.0% 2017 2018 2019 2020 2021 3Q22 CET1 Ratio (%)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 35 (1) Footnote Index included in Appendix (see slide 54 for non-GAAP reconciliation) (2) As calculated by S&P Global Market Intelligence. Historical Financials ($M except per share data) 2016 2017 2018 2019 2020 2021 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 Balance Sheet: Total Assets $3,141 $3,964 $4,247 $5,247 $5,887 $7,375 $7,534 $7,375 $7,420 $7,641 $7,719 Gross Loans $2,144 $2,838 $3,014 $3,641 $3,881 $3,657 $3,665 $3,657 $3,715 $3,941 $4,014 Deposits $2,471 $2,881 $3,139 $3,931 $4,531 $5,803 $5,980 $5,803 $5,851 $5,846 $5,831 Tangible Common Equity $255 $325 $362 $478 $517 $548 $525 $548 $503 $484 $472 Profitability: Net Income $23.9 $33.1 $53.1 $66.5 $68.5 $87.1 $23.1 $21.4 $23.6 $24.9 $23.8 Return on Average Assets 0.81% 0.97% 1.31% 1.35% 1.22% 1.34% 1.41% 1.14% 1.31% 1.33% 1.24% Return on Average Equity 7.9% 8.7% 11.2% 11.0% 10.3% 12.2% 12.6% 11.8% 13.3% 14.7% 13.9% Net Interest Margin 3.29% 3.75% 3.71% 3.69% 3.44% 3.13% 3.17% 2.97% 2.99% 3.19% 3.13% Efficiency Ratio(1) 71.5% 65.3% 60.7% 59.9% 57.0% 58.1% 54.9% 62.7% 58.7% 55.6% 60.3% Asset Quality(2): NPAs & 90+ PD / Assets 0.44% 0.44% 0.41% 0.47% 0.49% 0.00% 0.43% 0.31% 0.30% 0.28% 0.29% NPAs & 90+ PD / Loans + OREO 0.65% 0.61% 0.57% 0.68% 0.74% 0.00% 0.88% 0.62% 0.61% 0.55% 0.56% Reserves / Total Loans 0.69% 0.58% 0.59% 0.49% 1.47% 1.51% 1.55% 1.51% 1.41% 1.33% 1.28% NCOs / Avg. Loans 0.08% 0.04% 0.05% 0.06% 0.05% 0.05% 0.00% 0.04% 0.00% 0.01% 0.00% Bancorp Capital Ratios: TCE Ratio 8.3% 8.5% 8.8% 9.4% 9.1% 7.6% 7.1% 7.6% 6.9% 6.5% 6.3% Leverage Ratio 10.4% 9.9% 10.1% 10.5% 10.7% 9.2% 10.0% 9.2% 9.7% 9.6% 9.6% Tier 1 Capital Ratio 13.2% 12.4% 12.8% 13.5% 14.0% 14.1% 14.3% 14.1% 14.1% 13.7% 13.6% Total Capital Ratio 13.9% 12.9% 13.4% 14.0% 14.9% 15.4% 15.3% 15.4% 15.2% 14.6% 14.5% Year Ended December 31, Quarter Ended,

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 36 Leader In Our Core Markets Source: S&P Global Market Intelligence. Deposit data as of 6/30/22, estimated pro forma for recent or pending transactions per S&P Global Market Intelligence MSA HBNC Rank HBNC Branches HBNC Market Share Deposits in Market ($M) Michigan City-La Porte, IN 1 8 55.3% $1,184 Indianapolis-Carmel-Anderson, IN 16 8 1.0% 791 Chicago-Naperville-Elgin, IL-IN-WI 47 10 0.1% 709 Lafayette-West Lafayette, IN 4 5 7.1% 344 Lansing-East Lansing, MI 12 4 2.4% 278 Niles, MI 4 5 12.0% 275 Detroit-Warren-Dearborn, MI 22 1 0.1% 224 Midland, MI 2 2 19.0% 219 Cadillac, MI 2 3 29.0% 219 Grand Rapids-Kentwood, MI 18 2 0.6% 192 Logansport, IN 3 1 17.5% 163 Columbus, IN 6 1 6.4% 118 Fort Wayne, IN 13 3 1.2% 114 Auburn, IN 3 2 11.9% 114 Warsaw, IN 5 2 5.1% 101 Kalamazoo-Portage, MI 9 1 2.0% 94 Big Rapids, MI 4 1 11.5% 80 Marion, IN 6 1 7.0% 68 Sturgis, MI 5 1 5.9% 62 Kokomo, IN 7 1 3.0% 47 Elkhart-Goshen, IN 10 1 0.9% 44 Kendallville, IN 5 1 4.8% 39 Saginaw, MI 12 1 0.8% 21 South Bend-Mishawaka, IN-MI 15 1 0.3% 17 Total Franchise 76 $5,900

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 37 Slide 5 • Return on average tangible equity excludes average intangible assets from average equity. (See further in the Appendix for a reconciliation of these non-GAAP amounts to their GAAP counterparts.) Slide 15 • Adjusted net income and adjusted diluted EPS excludes one-time acquisition expenses, credit loss expense on acquired loans, gain on sale of ESOP trustee accounts, Department of Labor (“DOL”) ESOP settlement expenses, (gain)/loss on sale of securities, prepayment penalties on borrowings, net of tax and death benefit on bank owned life insurance. (See further in the Appendix for a reconciliation of these non- GAAP amounts to their GAAP counterparts.) • Pre-tax, pre-provision income excludes income tax expense and credit loss expense. (See further in the Appendix for a reconciliation of these non-GAAP amounts to their GAAP counterparts.) • Adjusted net interest income and adjusted net interest margin exclude acquisition-related purchase accounting adjustments and prepayment penalties on borrowings. (See further in the Appendix for a reconciliation of these non-GAAP amounts to their GAAP counterparts.) • Adjusted ROATE and Adjusted pre-tax, pre-provision ROACE exclude one-time acquisition expenses, credit loss expense on acquired loans, gain on sale of ESOP trustee accounts, DOL ESOP settlement expenses, (gain)/loss on sale of securities, prepayment penalties on borrowings, net of tax and death benefit on bank owned life insurance. (See further in the Appendix for a reconciliation of these non-GAAP amounts to their GAAP counterparts.) Slide 17 • Adjusted net interest income and adjusted net interest margin excludes prepayment penalties on borrowings and acquisition-related purchase accounting adjustments. Adjusted cost of core funds includes average balances of non-interest bearing deposits and excludes prepayment penalties on borrowings. (See further in the Appendix for a reconciliation of these non-GAAP amounts to their GAAP counterparts.) Slide 20 • Average cost of average total deposits includes average balances of non-interest bearing deposits. (See further in the Appendix for a reconciliation of these non-GAAP amounts to their GAAP counterparts.) Slide 21 • Adjusted non-interest expense excludes one-time acquisition expenses and DOL ESOP settlement expenses. Adjusted efficiency ratio excludes one-time acquisition expenses, gain on sale of ESOP trustee accounts, DOL ESOP settlement expense, (gain)/loss on sale of securities and death benefit on bank owned life insurance. (See further in the Appendix for a reconciliation of these non-GAAP amounts to their GAAP counterparts.) Footnote Index

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 38 Slides 39-57 Use of Non-GAAP Financial Measures • Certain information set forth in the presentation materials refers to financial measures determined by methods other than in accordance with GAAP. Horizon believes these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to purchase accounting impacts, one-time acquisition and other non-recurring costs and non-core items. 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. Footnote Index

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 39 Footnote Index September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Net income as reported 23,821$ 24,859$ 23,563$ 21,425$ 23,071$ Acquisition expenses - - - 884 799 Tax effect - - - (184) (166) Net income excluding acquisition expenses 23,821 24,859 23,563 22,125 23,704 Credit loss expense acquired loans - - - - 2,034 Tax effect - - - - (427) Net income excluding credit loss expense acquired loans 23,821 24,859 23,563 22,125 25,311 Gain on sale of ESOP trustee accounts - - - - (2,329) Tax effect - - - - 489 Net income excluding gain on sale of ESOP business line 23,821 24,859 23,563 22,125 23,471 ESOP settlement expense - - - 1,900 - Tax effect - - - (315) - Net income excluding ESOP settlement expense 23,821 24,859 23,563 23,710 23,471 (Gain)/loss on sale of investment securities - - - - - Tax effect - - - - - Net income excluding (gain)/loss on sale of investment securities 23,821 24,859 23,563 23,710 23,471 Death benefit on bank owned life insurance ("BOLI") - (644) - - (517) Net income excluding death benefit on BOLI 23,821 24,215 23,563 23,710 22,954 Prepayment penalties on borrowings - - - - - Tax effect - - - - - Net income excluding prepayment penalties on borrowings 23,821 24,215 23,563 23,710 22,954 Adjusted net income 23,821$ 24,215$ 23,563$ 23,710$ 22,954$ Three Months Ended Non-GAAP Reconciliation of Net Income (Dollars in Thousands, Unaudited)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 40 Footnote Index September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Diluted EPS as reported 0.55$ 0.57$ 0.54$ 0.49$ 0.52$ Acquisition expenses - - - 0.02 0.02 Tax effect - - - - - Diluted EPS excluding acquisition expenses 0.55 0.57 0.54 0.51 0.54 Credit loss expense acquired loans - - - - 0.05 Tax effect - - - - (0.01) Diluted EPS excluding credit loss expense acquired loans 0.55 0.57 0.54 0.51 0.58 Gain on sale of ESOP trustee accounts - - - - (0.05) Tax effect - - - - 0.01 Diluted EPS excluding gain on sale of ESOP business line 0.55 0.57 0.54 0.51 0.54 ESOP settlement expense - - - 0.04 - Tax effect - - - (0.01) - Diluted EPS excluding ESOP settlement expense 0.55 0.57 0.54 0.54 0.54 (Gain)/loss on sale of investment securities - - - - - Tax effect - - - - - Diluted EPS excluding (gain)/loss on sale of investment securities 0.55 0.57 0.54 0.54 0.54 Death benefit on bank owned life insurance ("BOLI") - (0.01) - - (0.02) Diluted EPS excluding death benefit on BOLI 0.55 0.56 0.54 0.54 0.52 Prepayment penalties on borrowings - - - - - Tax effect - - - - - Diluted EPS excluding prepayment penalties on borrowings 0.55 0.56 0.54 0.54 0.52 Adjusted diluted EPS 0.55$ 0.56$ 0.54$ 0.54$ 0.52$ Three Months Ended Non-GAAP Reconciliation of Diluted Earnings per Share (Dollars in Thousands, Unaudited)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 41 Footnote Index September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Average assets 7,635,102$ 7,476,238$ 7,319,675$ 7,461,343$ 6,507,673$ Return on average assets ("ROAA") as reported 1.24% 1.33% 1.31% 1.14% 1.41% Acquisition expenses - - - 0.05 0.05 Tax effect - - - (0.01) (0.01) ROAA excluding acquisition expenses 1.24 1.33 1.31 1.18 1.45 Credit loss expense acquired loans - - - - 0.12 Tax effect - - - - (0.03) ROAA excluding credit loss expense acquired loans 1.24 1.33 1.31 1.18 1.54 Gain on sale of ESOP trustee accounts - - - - (0.14) Tax effect - - - - 0.03 ROAA excluding gain on sale of ESOP business line 1.24 1.33 1.31 1.18 1.43 ESOP settlement expense - - - 0.10 - Tax effect - - - (0.02) - ROAA excluding ESOP settlement expense 1.24 1.33 1.31 1.26 1.43 (Gain)/loss on sale of investment securities - - - - - Tax effect - - - - - ROAA excluding (gain)/loss on sale of investment securities 1.24 1.33 1.31 1.26 1.43 Death benefit on bank owned life insurance ("BOLI") - (0.03) - - (0.03) ROAA excluding death benefit on BOLI 1.24 1.30 1.31 1.26 1.40 Prepayment penalty on borrowings - - - - - Tax effect - - - - - ROAA excluding prepayment penalties on borrowings 1.24 1.30 1.31 1.26 1.40 Adjusted ROAA 1.24% 1.30% 1.31% 1.26% 1.40% Three Months Ended Non-GAAP Reconciliation of Return on Average Assets (Dollars in Thousands, Unaudited)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 42 Footnote Index September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Average common equity 680,376$ 677,299$ 716,341$ 719,643$ 724,412$ Return on average common equity ("ROACE") as reported 13.89% 14.72% 13.34% 11.81% 12.64% Acquisition expenses - - - 0.49 0.44 Tax effect - - - (0.10) (0.09) ROACE excluding acquisition expenses 13.89 14.72 13.34 12.20 12.99 Credit loss expense acquired loans - - - - 1.11 Tax effect - - - - (0.23) ROACE excluding credit loss expense acquired loans 13.89 14.72 13.34 12.20 13.87 Gain on sale of ESOP trustee accounts - - - - (1.28) Tax effect - - - - 0.27 ROACE excluding gain on sale of ESOP business line 13.89 14.72 13.34 12.20 12.86 ESOP settlement expense - - - 1.05 - Tax effect - - - (0.17) - ROACE excluding ESOP settlement expense 13.89 14.72 13.34 13.08 12.86 (Gain)/loss on sale of investment securities - - - - - Tax effect - - - - - ROACE excluding (gain)/loss on sale of investment securities 13.89 14.72 13.34 13.08 12.86 Death benefit on bank owned life insurance ("BOLI") - (0.38) - - (0.28) ROACE excluding death benefit on BOLI 13.89 14.34 13.34 13.08 12.58 Prepayment penalty on borrowings - - - - - Tax effect - - - - - ROACE excluding prepayment penalties on borrowings 13.89 14.34 13.34 13.08 12.58 Adjusted ROACE 13.89% 14.34% 13.34% 13.08% 12.58% Three Months Ended Non-GAAP Reconciliation of Return on Average Common Equity (Dollars in Thousands, Unaudited)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 43 Footnote Index September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Average common equity 680,376$ 677,299$ 716,341$ 719,643$ 724,412$ Less: Average intangible assets 173,546 175,321 176,356 179,594 174,920 Average tangible equity 506,830$ 501,978$ 539,985$ 540,049$ 549,492$ Return on average tangible equity ("ROATE") as reported 18.65% 19.86% 17.70% 15.74% 16.66% Acquisition expenses - - - 0.65 0.58 Tax effect - - - (0.14) (0.12) ROATE excluding acquisition expenses 18.65 19.86 17.70 16.25 17.12 Credit loss expense acquired loans - - - - 1.47 Tax effect - - - - (0.31) ROATE excluding credit loss expense acquired loans 18.65 19.86 17.70 16.25 18.28 Gain on sale of ESOP trustee accounts - - - - (1.68) Tax effect - - - - 0.35 ROATE excluding gain on sale of ESOP business line 18.65 19.86 17.70 16.25 16.95 ESOP settlement expense - - - 1.40 - Tax effect - - - (0.23) - ROATE excluding ESOP settlement expense 18.65 19.86 17.70 17.42 16.95 (Gain)/loss on sale of investment securities - - - - - Tax effect - - - - - ROATE excluding (gain)/loss on sale of investment securities 18.65 19.86 17.70 17.42 16.95 Death benefit on bank owned life insurance ("BOLI") - (0.51) - - (0.37) ROATE excluding death benefit on BOLI 18.65 19.35 17.70 17.42 16.58 Prepayment penalty on borrowings - - - - - Tax effect - - - - - ROATE excluding prepayment penalties on borrowings 18.65 19.35 17.70 17.42 16.58 Adjusted ROATE 18.65% 19.35% 17.70% 17.42% 16.58% Non-GAAP Reconciliation of Return on Average Tangible Equity (Dollars in Thousands, Unaudited) Three Months Ended

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 44 Footnote Index September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Pre-tax income 25,834$ 28,834$ 27,102$ 25,505$ 27,127$ Provision for credit losses (601) 240 (1,386) (2,071) 1,112 Pre-tax, pre-provision net income 25,233$ 29,074$ 25,716$ 23,434$ 28,239$ Pre-tax, pre-provision net income 25,233$ 29,074$ 25,716$ 23,434$ 28,239$ Acquisition expenses - - - 884 799 Gain on sale of ESOP trustee accounts - - - - (2,329) ESOP one-time expense - - - 1,900 - (Gain)/loss on sale of investment securities - - - - - Death benefit on bank owned life insurance - (644) - - (517) Prepayment penalties on borrowings - - - - - Adjusted pre-tax, pre-provision net income 25,233$ 28,430$ 25,716$ 26,218$ 26,192$ Average common equity 680,376$ 677,299$ 716,341$ 719,643$ 724,412$ Unadjusted pre-tax, pre-provision ROACE 14.71% 17.22% 14.56% 12.92% 15.47% Adjusted pre-tax, pre-provision ROACE 14.71% 16.84% 14.56% 14.45% 14.34% Non-GAAP Reconciliation of Pre-Tax, Pre-Provision Net Income (Dollars in Thousands, Unaudited) Three Months Ended

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 45 Footnote Index September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2022 2022 2022 2021 2021 2021 2021 Net interest income as reported 53,395$ 53,008$ 48,171$ 49,976$ 46,544$ 42,632$ 42,538$ Average interest earning assets 7,037,530 6,927,310 6,800,549 6,938,258 6,033,088 5,659,384 5,439,634 Net interest income as a percentage of average interest earning assets ("Net Interest Margin") 3.13% 3.19% 2.99% 2.97% 3.17% 3.14% 3.29% Net interest income as reported 53,395$ 53,008$ 48,171$ 49,976$ 46,544$ 42,632$ 42,538$ Prepayment penalties on borrowings - - - - - 125 - Acquisition-related purchase accounting adjustments ("PAU") (906) (1,223) (916) (1,819) (875) (230) (1,579) Adjusted net interest income 52,489$ 51,785$ 47,255$ 48,157$ 45,669$ 42,527$ 40,959$ Adjusted net interest margin 3.08% 3.12% 2.93% 2.86% 3.12% 3.13% 3.17% Non-GAAP Reconciliation of Net Interest Margin (Dollars in Thousands, Unaudited) Three Months Ended

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 46 Footnote Index December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2020 2020 2020 2020 2019 2019 2019 2019 Net interest income as reported 43,622$ 43,397$ 42,996$ 40,925$ 41,519$ 43,463$ 41,529$ 34,280$ Average interest earning assets 5,365,888 5,251,611 5,112,636 4,746,202 4,748,217 4,623,985 4,566,674 3,929,296 Net interest income as a percentage of average interest earning assets ("Net Interest Margin") 3.34% 3.39% 3.47% 3.56% 3.58% 3.82% 3.73% 3.62% Net interest income as reported 43,622$ 43,397$ 42,996$ 40,925$ 41,519$ 43,463$ 41,529$ 34,280$ Prepayment penalties on borrowings 3,804 - - - - - - - Acquisition-related purchase accounting adjustments ("PAU") (2,461) (1,488) (1,553) (1,434) (1,042) (1,739) (1,299) (1,510) Adjusted net interest income 44,965$ 41,909$ 41,443$ 39,491$ 40,477$ 41,724$ 40,230$ 32,770$ Adjusted net interest margin 3.44% 3.27% 3.35% 3.44% 3.49% 3.67% 3.61% 3.46% Non-GAAP Reconciliation of Net Interest Margin (Dollars in Thousands, Unaudited) Three Months Ended

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 47 Footnote Index December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2018 2018 2018 2018 2017 2017 2017 2017 Net interest income as reported 33,836$ 33,772$ 33,550$ 33,411$ 31,455$ 27,879$ 27,198$ 25,568$ Average interest earning assets 3,808,822 3,717,139 3,638,801 3,580,143 3,471,169 3,078,611 2,943,627 2,797,429 Net interest income as a percentage of average interest earning assets ("Net Interest Margin") 3.60% 3.67% 3.78% 3.81% 3.71% 3.71% 3.84% 3.80% Net interest income as reported 33,836$ 33,772$ 33,550$ 33,411$ 31,455$ 27,879$ 27,198$ 25,568$ Prepayment penalties on borrowings - - - - - - - - Acquisition-related purchase accounting adjustments ("PAU") (1,629) (789) (1,634) (2,037) (868) (661) (939) (1,016) Adjusted net interest income 32,207$ 32,983$ 31,916$ 31,374$ 30,587$ 27,218$ 26,259$ 24,552$ Adjusted net interest margin 3.43% 3.59% 3.60% 3.58% 3.61% 3.63% 3.71% 3.66% Three Months Ended Non-GAAP Reconciliation of Net Interest Margin (Dollars in Thousands, Unaudited)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 48 Footnote Index December 31, September 30, June 30, March 31, 2016 2016 2016 2016 Net interest income as reported 20,939$ 24,410$ 20,869$ 19,774$ Average interest earning assets 2,932,145 2,957,944 2,471,354 2,367,250 Net interest income as a percentage of average interest earning assets ("Net Interest Margin") 2.92% 3.37% 3.48% 3.45% Net interest income as reported 20,939$ 24,410$ 20,869$ 19,774$ Prepayment penalties on borrowings 4,839 - - - Acquisition-related purchase accounting adjustments ("PAU") (900) (459) (397) (547) Adjusted net interest income 24,878$ 23,951$ 20,472$ 19,227$ Adjusted net interest margin 3.45% 3.31% 3.42% 3.36% Three Months Ended Non-GAAP Reconciliation of Net Interest Margin (Dollars in Thousands, Unaudited)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 49 Footnote Index September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2022 2022 2022 2021 2021 2021 2021 Total interest expense as reported 9,635$ 4,564$ 3,911$ 4,142$ 4,324$ 4,788$ 5,051$ Average interest bearing liabilities 5,549,661 5,411,381 5,237,779 5,322,968 4,545,332 4,249,932 4,116,568 Annualized total interest expense as a percentage of average interest bearing liabilities ("Cost of Interest Bearing Liabilities") 0.69% 0.34% 0.30% 0.31% 0.38% 0.45% 0.50% Total interest expense as reported 9,635$ 4,564$ 3,911$ 4,142$ 4,324$ 4,788$ 5,051$ Prepayment penalties on borrowings - - - - - (125) - Adjusted interest expense 9,635$ 4,564$ 3,911$ 4,142$ 4,324$ 4,663$ 5,051$ Average interest bearing liablities 5,549,661 5,411,381 5,237,779 5,322,968 4,545,332 4,249,932 4,116,568 Average non-interest bearing deposits 1,351,857 1,335,779 1,322,781 1,366,621 1,180,890 1,139,068 1,063,268 Average core funding 6,901,518$ 6,747,160$ 6,560,560$ 6,689,589$ 5,726,222$ 5,389,000$ 5,179,836$ Annualzied adjusted interest expense as a percentage of average core funding ("Adjusted Cost of Core Funds") 0.55% 0.27% 0.24% 0.25% 0.30% 0.35% 0.40% Non-GAAP Reconciliation of Cost of Interest Bearing Liabilities (Dollars in Thousands, Unaudited) Three Months Ended

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 50 Footnote Index December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2020 2020 2020 2020 2019 2019 2019 2019 Total interest expense as reported 9,612$ 6,749$ 7,348$ 10,729$ 11,879$ 12,248$ 12,321$ 11,093$ Average interest bearing liabilities 4,077,223 4,027,057 3,975,297 3,814,785 3,794,943 3,601,144 3,570,713 3,131,276 Annualized total interest expense as a percentage of average interest bearing liabilities ("Cost of Interest Bearing Liabilities") 0.94% 0.67% 0.74% 1.13% 1.24% 1.35% 1.38% 1.44% Total interest expense as reported 9,612$ 6,749$ 7,348$ 10,729$ 11,879$ 12,248$ 12,321$ 11,093$ Prepayment penalties on borrowings (3,804) - - - - - - - Adjusted interest expense 5,808$ 6,749$ 7,348$ 10,729$ 11,879$ 12,248$ 12,321$ 11,093$ Average interest bearing liablities 4,077,223 4,027,057 3,975,297 3,814,785 3,794,943 3,601,144 3,570,713 3,131,276 Average non-interest bearing deposits 1,037,232 996,427 924,890 717,257 747,513 818,164 818,872 643,601 Average core funding 5,114,455$ 5,023,484$ 4,900,187$ 4,532,042$ 4,542,456$ 4,419,308$ 4,389,585$ 3,774,877$ Annualzied adjusted interest expense as a percentage of average core funding ("Adjusted Cost of Core Funds") 0.45% 0.53% 0.60% 0.95% 1.04% 1.10% 1.13% 1.19% Non-GAAP Reconciliation of Cost of Interest Bearing Liabilities (Dollars in Thousands, Unaudited) Three Months Ended

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 51 Footnote Index December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2018 2018 2018 2018 2017 2017 2017 2017 Total interest expense as reported 9,894$ 8,499$ 7,191$ 6,015$ 5,319$ 4,191$ 3,607$ 3,266$ Average interest bearing liabilities 3,021,310 2,971,074 2,929,913 2,869,372 2,766,948 2,459,262 2,375,827 2,246,550 Annualized total interest expense as a percentage of average interest bearing liabilities ("Cost of Interest Bearing Liabilities") 1.30% 1.13% 0.98% 0.85% 0.76% 0.68% 0.61% 0.59% Total interest expense as reported 9,894$ 8,499$ 7,191$ 6,015$ 5,319$ 4,191$ 3,607$ 3,266$ Prepayment penalties on borrowings - - - - - - - - Adjusted interest expense 9,894$ 8,499$ 7,191$ 6,015$ 5,319$ 4,191$ 3,607$ 3,266$ Average interest bearing liablities 3,021,310 2,971,074 2,929,913 2,869,372 2,766,948 2,459,262 2,375,827 2,246,550 Average non-interest bearing deposits 656,114 640,983 605,188 595,644 603,733 540,109 499,446 491,154 Average core funding 3,677,424$ 3,612,057$ 3,535,101$ 3,465,016$ 3,370,681$ 2,999,371$ 2,875,273$ 2,737,704$ Annualzied adjusted interest expense as a percentage of average core funding ("Adjusted Cost of Core Funds") 1.07% 0.93% 0.82% 0.70% 0.63% 0.55% 0.50% 0.48% Non-GAAP Reconciliation of Cost of Interest Bearing Liabilities (Dollars in Thousands, Unaudited) Three Months Ended

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 52 Footnote Index December 31, September 30, June 30, March 31, 2016 2016 2016 2016 Total interest expense as reported 8,450$ 4,552$ 3,781$ 3,754$ Average interest bearing liabilities 2,369,810 2,443,986 2,058,463 1,974,325 Annualized total interest expense as a percentage of average interest bearing liabilities ("Cost of Interest Bearing Liabilities") 1.42% 0.74% 0.74% 0.76% Total interest expense as reported 8,450$ 4,552$ 3,781$ 3,754$ Prepayment penalties on borrowings (4,839) - - - Adjusted interest expense 3,611$ 4,552$ 3,781$ 3,754$ Average interest bearing liablities 2,369,810 2,443,986 2,058,463 1,974,325 Average non-interest bearing deposits 504,274 462,253 364,822 339,141 Average core funding 2,874,084$ 2,906,239$ 2,423,285$ 2,313,466$ Annualzied adjusted interest expense as a percentage of average core funding ("Adjusted Cost of Core Funds") 0.50% 0.62% 0.63% 0.66% Three Months Ended Non-GAAP Reconciliation of Cost of Interest Bearing Liabilities (Dollars in Thousands, Unaudited)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 53 Footnote Index June 30, June 30, 2022 2022 Total deposit interest expense as reported 4,116$ 1,677$ Average interest bearing deposits 4,478,741 4,540,959 Annualized total deposit interest expense as a percentage of average interest bearing deposits ("Cost of Interest Bearing Deposits") 0.36% 0.15% Average interest bearing deposits 4,478,741 4,540,959 Average non-interest bearing deposits 1,351,857 1,335,779 Average total deposits 5,830,598$ 5,876,738$ Annualzied deposit interest expense as a percentage of average total deposits ("Cost of Total Deposits") 0.28% 0.11% Three Months Ended Non-GAAP Reconciliation of Cost of Deposits (Dollars in Thousands, Unaudited)

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 54 Footnote Index September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Non-GAAP Calculation of Efficiency Ratio Non-interest expense as reported 38,350$ 36,368$ 36,610$ 39,370$ 34,349$ Net interest income as reported 53,395 53,008 48,171 49,976 46,544 Non-interest income as reported 10,188 12,434 14,155 12,828 16,044 Non-interest expense/ (Net interest income + Non-interest income) ("Efficiency Ratio") 60.31% 55.57% 58.74% 62.69% 54.88% Non-GAAP Reconciliation of Adjusted Efficiency Ratio Non-interest expense as reported 38,350$ 36,368$ 36,610$ 39,370$ 34,349$ Acquisition expenses - - - (884) (799) ESOP settlement expense - - - (1,900) - Non-interest expense excluding merger expenses 38,350 36,368 36,610 36,586 33,550 Net interest income as reported 53,395 53,008 48,171 49,976 46,544 Prepayment penalties on borrowings - - - - - Net interest income excluding prepayment penalties on borrowings 53,395 53,008 48,171 49,976 46,544 Non-interest income as reported 10,188 12,434 14,155 12,828 16,044 Gain on sale of ESOP trustee accounts - - - - (2,329) (Gain)/loss on sale of investment securities - - - - - Death benefit on bank owned life insurance ("BOLI") - (644) - - (517) Non-interest income excluding (gain)/loss on sale of investment securities and death benefit on BOLI 10,188$ 11,790$ 14,155$ 12,828$ 13,198$ Adjusted efficiency ratio 60.31% 56.13% 58.74% 58.25% 56.16% Non-GAAP Calculation and Reconciliation of Efficiency Ratio and Adjusted Efficiency Ratio (Dollars in Thousands, Unaudited) Three Months Ended

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 55 Footnote Index Actual Acquisition & Non- Recurring Expenses Adjusted Actual Acquisition & Non- Recurring Expenses Adjusted Actual Acquisition & Non- Recurring Expenses Adjusted Non-interest Expense Salaries and employee benefits 20,613$ -$ 20,613$ 19,957$ -$ 19,957$ 19,735$ -$ 19,735$ Net occupancy expenses 3,293 - 3,293 3,190 - 3,190 3,561 - 3,561 Data processing 2,539 - 2,539 2,607 - 2,607 2,537 - 2,537 Professional fees 552 - 552 283 - 283 314 - 314 Outside services and consultants 2,855 - 2,855 2,485 - 2,485 2,525 - 2,525 Loan expense 2,926 - 2,926 2,497 - 2,497 2,545 - 2,545 FDIC insurance expense 670 - 670 775 - 775 725 - 725 Other losses 398 - 398 362 - 362 168 - 168 Other expense 4,504 - 4,504 4,212 - 4,212 4,500 - 4,500 Total non-interest expense 38,350$ -$ 38,350$ 36,368$ -$ 36,368$ 36,610$ -$ 36,610$ Annualized non-interest expense to average assets 1.99% 1.99% 1.95% 1.95% 2.03% 2.03% 2022 Non-GAAP Reconciliation of Non-Interest Expense (Dollars in Thousands, Unaudited) Three Months Ended September 30, June 30, March 31, 20222022

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 56 Footnote Index Actual Acquisition & Non- Recurring Expenses Adjusted Actual Acquisition & Non- Recurring Expenses Adjusted Non-interest Expense Salaries and employee benefits 20,549$ (202)$ 20,347$ 18,901$ (25)$ 18,876$ Net occupancy expenses 3,204 - 3,204 2,935 (13) 2,922 Data processing 2,672 (1) 2,671 2,526 (17) 2,509 Professional fees 562 (45) 517 522 (53) 469 Outside services and consultants 2,197 (162) 2,035 2,330 (401) 1,929 Loan expense 2,803 (83) 2,720 2,645 - 2,645 FDIC insurance expense 798 (6) 792 279 - 279 Other losses 1,925 (1,904) 21 69 (1) 68 Other expense 4,660 (381) 4,279 4,142 (289) 3,853 Total non-interest expense 39,370$ (2,784)$ 36,586$ 34,349$ (799)$ 33,550$ Annualized non-interest expense to average assets 2.09% 1.95% 2.09% 2.05% Three Months Ended Non-GAAP Reconciliation of Non-Interest Expense (Dollars in Thousands, Unaudited) December 31, September 30, 2021 2021

E X C E P T I O N A L S E R V I C E • S E N S I B L E A D V I C E ® 57 Footnote Index Actual Acquisition & Non- Recurring Expenses Adjusted Actual Acquisition & Non- Recurring Expenses Adjusted Non-interest Expense Salaries and employee benefits 17,730$ -$ 17,730$ 16,871$ -$ 16,871$ Net occupancy expenses 3,084 - 3,084 3,318 - 3,318 Data processing 2,388 - 2,388 2,376 - 2,376 Professional fees 588 (51) 537 544 - 544 Outside services and consultants 2,220 (187) 2,033 1,702 - 1,702 Loan expense 3,107 - 3,107 2,822 - 2,822 FDIC insurance expense 500 - 500 800 - 800 Other losses 6 - 6 283 - 283 Other expense 3,765 (4) 3,761 3,456 - 3,456 Total non-interest expense 33,388$ (242)$ 33,146$ 32,172$ -$ 32,172$ Annualized non-interest expense to average assets 2.18% 2.16% 2.20% 2.20% March 31, 2021 Three Months Ended Non-GAAP Reconciliation of Non-Interest Expense (Dollars in Thousands, Unaudited) June 30, 2021

Report a Problem

Category
Description
Email (optional, for follow-up)