Subordinated Notes

9 Months Ended

Sep. 30, 2025

Debt Disclosure [Abstract]

Subordinated Notes

Subordinated Notes

On June 24, 2020, Horizon issued $60.0 million in aggregate principal amount of 5.625% fixed–to–floating rate subordinated notes (the “ 2030 Notes”). The Notes mature on July 01, 2030 (the “Maturity Date”). The 2030 Notes had a fixed interest rate of 5.625% per annum until July 1, 2025 and a floating rate per annum equal to the Three–Month Term SOFR, plus 549 basis points, thereafter until the Maturity Date, with the floating rate interest payment period commencing on October 1, 2025. As of July 1, 2025, the floating rate was 9.781%. During the third quarter of 2025, Horizon provided a notice of redemption to the holders of the 2030 Notes that Horizon would be redeeming the 2030 Notes, in full, on October 1, 2025. Horizon redeemed the 2030 Notes, in full, on October 1, 2025 by using the net proceeds from the sale of the 2035 Notes, as described below and in Note 15 – Subsequent Events.

On August 29, 2025, Horizon completed the offering and sale of $100.0 million in aggregate principal amount of its 7.000%

Fixed-to-Floating Rate Subordinated Notes due 2035 (the “2035 Notes,” and collectively with the 2030 Notes, the “Notes”). The 2035 Notes were issued by Horizon at a price equal to 100% of their face amount. Horizon used the net proceeds from the offering for general corporate purposes, including in support of the potential repositioning of its balance sheet, and to redeem approximately $56.5 million in aggregate principal amount of the 2030 Notes, which was completed on October 1, 2025 (See Note 15 - Subsequent Events). The 2035 Notes will initially bear interest at a fixed interest rate of 7.000% per annum until September 15, 2030, after which time the interest rate will reset quarterly to a floating rate equal to a benchmark rate, which is expected to be the then current three-month term Secured Overnight Financing Rate (SOFR) plus 360 basis points until the 2035 Notes' maturity on September 15, 2035. The Notes are redeemable by Horizon, in whole or in part, on any interest payment date on or after September 15, 2030, and at any time upon the occurrence of certain events, subject to the receipt of the approval of the Board of Governors of the Federal Reserve System to the extent then required under applicable laws or regulations, including capital regulations. The 2035 Notes are intended to qualify as Tier 2 capital of the Company for regulatory capital purposes.

On December 8, 2023, Horizon cancelled $3.5 million of the $60.0 million in 2030 Notes at a price of 89.5 recording a gain of $368,000. The total balance, net of unamortized issuance costs, of the Notes was $154.0 million and $55.7 million at September 30, 2025 and December 31, 2024, respectively. Total unamortized debt issuance costs were $2.5 million and $0.8 million at September 30, 2025 and December 31, 2024, respectively.