10-Q

HORIZON BANCORP

FORM 10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

Commission file number 0-10792

HORIZON BANCORP

(Exact name of registrant as specified in its charter)

Indiana	35-1562417
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
515 Franklin Square, Michigan City, Indiana	46360
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (219) 879-0211

Former name, former address and former fiscal year, if changed since last report: N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large Accelerated Filer	¨	Accelerated Filer	x
Non-accelerated Filer	¨  Do not check if smaller reporting company	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 9,232,163 shares of Common Stock, no par value, at May 1, 2015.

HORIZON BANCORP

FORM 10-Q

INDEX

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statement of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	53
Item 4.	Controls and Procedures	53
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	55
Signatures
Index To Exhibits

2

PART 1 — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

	March 31		December 31
	2015		2014
	(Unaudited)
Assets
Cash and due from banks	$	38,676	$	43,476
Investment securities, available for sale		331,033		323,764
Investment securities, held to maturity (fair value of $171,405 and $169,904)		164,282		165,767
Loans held for sale		6,229		6,143
Loans, net of allowance for loan losses of $16,634 and $16,501		1,444,725		1,362,053
Premises and equipment, net		53,989		52,461
Federal Reserve and Federal Home Loan Bank stock		11,348		11,348
Goodwill		28,176		28,176
Other intangible assets		3,738		3,965
Interest receivable		8,431		8,246
Cash value of life insurance		39,640		39,382
Other assets		23,698		32,141
Total assets	$	2,153,965	$	2,076,922
Liabilities
Deposits
Non-interest bearing	$	285,181	$	267,667
Interest bearing		1,179,915		1,214,652
Total deposits		1,465,096		1,482,319
Borrowings		440,415		351,198
Subordinated debentures		32,680		32,642
Interest payable		504		497
Other liabilities		15,779		15,852
Total liabilities		1,954,474		1,882,508
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, Authorized, 1,000,000 shares Series B shares $.01 par value, $1,000 liquidation value Issued 12,500 shares		12,500		12,500
Common stock, no par value Authorized, 22,500,000 shares Issued, 9,289,916 and 9,278,916 shares Outstanding, 9,232,163 and 9,213,036 shares		—		—
Additional paid-in capital		46,064		45,916
Retained earnings		138,500		134,477
Accumulated other comprehensive income		2,427		1,521
Total stockholders’ equity		199,491		194,414
Total liabilities and stockholders’ equity	$	2,153,965	$	2,076,922

See notes to condensed consolidated financial statements

3

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Per Share Data)

	Three Months Ended
	March 31
	2015			2014
	(Unaudited)			(Unaudited)
Interest Income
Loans receivable	$	16,862		$	12,954
Investment securities
Taxable		2,154			2,390
Tax exempt		1,077			1,123
Total interest income		20,093			16,467
Interest Expense
Deposits		1,232			1,277
Borrowed funds		1,479			1,422
Subordinated debentures		496			496
Total interest expense		3,207			3,195
Net Interest Income		16,886			13,272
Provision for loan losses		614			—
Net Interest Income after Provision for Loan Losses		16,272			13,272
Non-interest Income
Service charges on deposit accounts		999			923
Wire transfer fees		151			112
Interchange fees		1,102			959
Fiduciary activities		1,297			1,048
Gain on sale of investment securities (includes $124 and $0 for the three months ended March 31, 2015 and 2014, respectively, related to accumulated other comprehensive earnings reclassifications)		124			—
Gain on sale of mortgage loans		2,379			1,411
Mortgage servicing income net of impairment		179			207
Increase in cash value of bank owned life insurance		258			233
Death benefit on bank owned life insurance		145			—
Other income		432			629
Total non-interest income		7,066			5,522
Non-interest Expense
Salaries and employee benefits		8,504			7,483
Net occupancy expenses		1,551			1,424
Data processing		923			870
Professional fees		527			608
Outside services and consultants		626			661
Loan expense		1,257			1,015
FDIC insurance expense		337			256
Other losses		(45	)		38
Other expense		2,388			2,159
Total non-interest expense		16,068			14,514
Income Before Income Tax		7,270			4,280
Income tax expense (includes $43 and $0 for the three months ended March 31, 2015 and 2014, respectively, related to income tax expense from reclassification items)		1,912			863
Net Income		5,358			3,417
Preferred stock dividend		(31	)		(31	)
Net Income Available to Common Shareholders	$	5,327		$	3,386
Basic Earnings Per Share	$	0.58		$	0.39
Diluted Earnings Per Share		0.55			0.38

See notes to condensed consolidated financial statements

4

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Dollar Amounts in Thousands)

	Three Months Ended March 31
	2015			2014
	(Unaudited)			(Unaudited)
Net Income	$	5,358		$	3,417
Other Comprehensive Income
Change in fair value of derivative instruments:
Change in fair value of derivative instruments for the period		(329	)		(225	)
Income tax effect		115			79
Changes from derivative instruments		(214	)		(146	)
Change in securities available-for-sale:
Unrealized appreciation for the period on available-for-sale securities		1,962			4,426
Unrealized appreciation for the period on held-to-maturity		(114	)		—
Reclassification adjustment for securities gains realized in income		(124	)		—
Income tax effect		(604	)		(1,550	)
Unrealized gains on available-for-sale securities		1,120			2,876
Other Comprehensive Income, Net of Tax		906			2,730
Comprehensive Income	$	6,264		$	6,147

See notes to condensed consolidated financial statements

5

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

(Dollar Amounts in Thousands, Except Per Share Data)

	Preferred Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income		Total
Balances, January 1, 2015	$	12,500	$	45,916	$	134,477		$	1,521	$	194,414
Net income						5,358					5,358
Other comprehensive income, net of tax									906		906
Amortization of unearned compensation				89							89
Stock option expense				59							59
Cash dividends on preferred stock (1.00%)						(31	)				(31	)
Cash dividends on common stock ($.14 per share)						(1,304	)				(1,304	)
Balances, March 31, 2015	$	12,500	$	46,064	$	138,500		$	2,427	$	199,491

See notes to condensed consolidated financial statements

6

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Dollar Amounts in Thousands)

	Three Months Ended March 31
	2015			2014
	(Unaudited)			(Unaudited)
Operating Activities
Net income	$	5,358		$	3,417
Items not requiring (providing) cash
Provision for loan losses		614			—
Depreciation and amortization		956			844
Share based compensation		59			27
Mortgage servicing rights net (recovery) impairment		414			(5	)
Premium amortization on securities available for sale, net		476			549
Gain on sale of investment securities		(124	)		—
Gain on sale of mortgage loans		(2,379	)		(1,411	)
Proceeds from sales of loans		71,211			35,348
Loans originated for sale		(68,918	)		(35,991	)
Change in cash value of life insurance		(258	)		(233	)
Gain on sale of other real estate owned		(263	)		(218	)
Net change in
Interest receivable		(185	)		(35	)
Interest payable		7			(8	)
Other assets		5,503			675
Other liabilities		(1,287	)		(1,138	)
Net cash provided by operating activities		11,184			1,821
Investing Activities
Purchases of securities available for sale		(30,406	)		(27,290	)
Proceeds from sales, maturities, calls, and principal repayments of securities available for sale		25,260			20,327
Proceeds from maturities of securities held to maturity		735			—
Net change in loans		(81,515	)		(32,259	)
Proceeds on the sale of OREO and repossessed assets		1,414			784
Purchases of premises and equipment		(2,168	)		(1,394	)
Purchase of Mortgage Company		—			(735	)
Net cash used in investing activities		(86,680	)		(40,567	)
Financing Activities
Net change in
Deposits		(17,224	)		64,051
Borrowings		89,255			(20,214	)
Dividends paid on common shares		(1,304	)		(961	)
Dividends paid on preferred shares		(31	)		(31	)
Net cash provided by financing activities		70,696			42,845
Net Change in Cash and Cash Equivalents		(4,800	)		4,099
Cash and Cash Equivalents, Beginning of Period		43,476			31,721
Cash and Cash Equivalents, End of Period	$	38,676		$	35,820
Additional Supplemental Information
Interest paid	$	3,199		$	3,203
Income taxes paid		—			—
Transfer of loans to other real estate owned		(772	)		610

See notes to condensed consolidated financial statements

7

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Note 1 – Accounting Policies

The accompanying unaudited condensed consolidated financial statements include the accounts of Horizon Bancorp (“Horizon” or the “Company”) and its wholly-owned subsidiaries, including Horizon Bank, N.A. (“Bank”). All inter-company balances and transactions have been eliminated. The results of operations for the periods ended March 31, 2015 and March 31, 2014 are not necessarily indicative of the operating results for the full year of 2015 or 2014. The accompanying unaudited condensed consolidated financial statements reflect all adjustments that are, in the opinion of Horizon’s management, necessary to fairly present the financial position, results of operations and cash flows of Horizon for the periods presented. Those adjustments consist only of normal recurring adjustments.

Certain information and note disclosures normally included in Horizon’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Horizon’s Annual Report on Form 10-K for 2014 filed with the Securities and Exchange Commission on March 13, 2015. The condensed consolidated balance sheet of Horizon as of December 31, 2014 has been derived from the audited balance sheet as of that date.

Basic earnings per share is computed by dividing net income available to common shareholders (net income less dividend requirements for preferred stock and accretion of preferred stock discount) by the weighted-average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The following table shows computation of basic and diluted earnings per share.

	Three Months Ended
	March 31
	2015		2014
	(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	5,358	$	3,417
Less: Preferred stock dividends		31		31
Net income available to common shareholders	$	5,327	$	3,386
Weighted average common shares outstanding		9,216,011		8,630,966
Basic earnings per share	$	0.58	$	0.39
Diluted earnings per share
Net income available to common shareholders	$	5,327	$	3,386
Weighted average common shares outstanding		9,216,011		8,630,966
Effect of dilutive securities:
Warrants		321,652		311,278
Restricted stock		30,510		39,519
Stock options		41,333		40,023
Weighted average shares outstanding		9,609,506		9,021,786
Diluted earnings per share	$	0.55	$	0.38

At March 31, 2015 and 2014, there were 62,445 and no shares, respectively, which were not included in the computation of diluted earnings per share because they were non-dilutive.

8

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Horizon has share-based employee compensation plans, which are described in the notes to the financial statements included in the December 31, 2014 Annual Report on Form 10-K.

Reclassifications

Certain reclassifications have been made to the 2014 condensed consolidated financial statements to be comparable to 2015. These reclassifications had no effect on net income.

Note 2 – Acquisition

On April 3, 2014 Horizon closed its acquisition of SCB Bancorp, Inc. (“Summit”) and Horizon Bank N.A.’s acquisition of Summit Community Bank, through mergers effective as of that date. Under the final terms of the acquisition, the exchange ratio was 0.4904 shares of Horizon’s common stock and $5.15 in cash for each share of Summit common stock outstanding. Summit shares outstanding at the closing were 1,164,442, and the shares of Horizon common stock issued to Summit shareholders totaled 570,820. Horizon’s stock price was $22.23 per share at the close of business on April 3, 2014. Based upon these numbers, the total value of the consideration for the acquisition was $18.9 million (not including the retirement of Summit debt). The Company had approximately $1.3 million in costs related to the acquisition. These expenses are classified in the other expense section of the income statement and primarily located in the salaries and employee benefits, professional services and other expense line items. As a result of the acquisition, the Company will have an opportunity to increase its deposit base and reduce transaction costs. The Company also expects to reduce cost through economies of scale.

Under the purchase method of accounting, the total estimated purchase price is allocated to Summit’s net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on management’s preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on estimates and assumptions that are subject to change, the preliminary purchase price for the Summit acquisition is allocated as follows:

ASSETS
Cash and due from banks	$	15,161
Commercial		70,441
Residential mortgage		43,448
Consumer		10,192
Total loans		124,081
Premises and equipment, net		2,548
FRB and FHLB stock		2,136
Goodwill		8,428
Core deposit intangible		822
Interest receivable		347
Cash value of life insurance		2,185
Other assets		2,877
Total assets purchased	$	158,585
Common shares issued	$	12,689
Cash paid		6,207
Retirement of Holding Company Debt		1,029
Total estimated purchase price	$	19,925

LIABILITIES
Deposits
Non-interest bearing	$	27,274
NOW accounts		16,332
Savings and money market		35,045
Certificates of deposits		42,368
Total deposits		121,019
Borrowings		16,990
Interest payable		52
Other liabilities		599
Total liabilities assumed	$	138,660

9

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Of the total estimated purchase price of $19.9 million, $822,000 has been allocated to core deposit intangible. Additionally, $8.4 million has been allocated to goodwill and $4.4 million of the purchase price is deductible and was assigned to the business assets. The core deposit intangible will be amortized over seven years on a straight line basis.

The Company acquired loans in the acquisition and the transferred loans had evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include information such as past-due and non-accrual status, borrower credit scores and recent loan-to-value percentages. Purchased credit-impaired loans are accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310-30) and initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporate the estimate of current key assumptions, such as default rates, severity and prepayment speeds.

The Company acquired the $130.5 million loan portfolio at a fair value discount of $6.4 million. The performing portion of the portfolio, $106.2 million, had an estimated fair value of $104.6 million. The excess of expected cash flows above the fair value of the performing portion of loans will be accreted to interest income over the remaining lives of the loans in accordance with ASC 310-20.

Final estimates of certain loans, those for which specific credit-related deterioration, since origination, are recorded at fair value, reflecting the present value of the amounts expected to be collected. Income recognition of these loans is based on reasonable expectation about the timing and amount of cash flows to be collected.

The following table details the acquired loans that are accounted for in accordance with ASC 310-30 as of April 3, 2014.

Contractually required principal and interest at acquisition	$	14,460
Contractual cash flows not expected to be collected (nonaccretable differences)		3,146
Expected cash flows at acquisition		11,314
Interest component of expected cash flows (accretable discount)		1,688
Fair value of acquired loans accounted for under ASC 310-30	$	9,626

Pro-forma statements were not presented due to the materiality of the transaction.

10

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Note 3 – Securities

The fair value of securities is as follows:

			Gross		Gross
March 31, 2015	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	28,400	$	69	$	(48	)	$	28,421
State and municipal		50,036		1,577		(37	)		51,576
Federal agency collateralized mortgage obligations		120,785		1,471		(537	)		121,719
Federal agency mortgage-backed pools		125,923		3,590		(246	)		129,267
Corporate notes		32		18		—			50
Total available for sale investment securities	$	325,176	$	6,725	$	(868	)	$	331,033
Held to maturity
U.S. Treasury and federal agencies	$	9,824	$	157	$	—		$	9,981
State and municipal		128,558		6,179		(143	)		134,594
Federal agency collateralized mortgage obligations		3,873		45		—			3,918
Federal agency mortgage-backed pools		22,027		961		(76	)		22,912
Total held to maturity investment securities	$	164,282	$	7,342	$	(219	)	$	171,405
December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	26,996	$	56	$	(229	)	$	26,823
State and municipal		46,535		1,462		(45	)		47,952
Federal agency collateralized mortgage obligations		122,930		975		(1,045	)		122,860
Federal agency mortgage-backed pools		122,583		3,172		(360	)		125,395
Private labeled mortgage-backed pools		670		19		—			689
Corporate notes		32		13		—			45
Total available for sale investment securities	$	319,746	$	5,697	$	(1,679	)	$	323,764
Held to maturity
U.S. Treasury and federal agencies	$	9,804	$	82	$	—		$	9,886
State and municipal		129,595		3,398		(106	)		132,887
Federal agency collateralized mortgage obligations		4,039		35		(1	)		4,073
Federal agency mortgage-backed pools		22,329		729		—			23,058
Total held to maturity investment securities	$	165,767	$	4,244	$	(107	)	$	169,904

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information, and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary. While these securities are held in the available for sale portfolio and held-to-maturity, Horizon intends, and has the ability, to hold them until the earlier of a recovery in fair value or maturity.

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified. At March 31, 2015, no individual investment security had an unrealized loss that was determined to be other-than-temporary.

The unrealized losses on the Company’s investments in securities of state and municipal governmental agencies, U.S. Treasury and federal agencies, federal agency collateralized mortgage obligations, and federal agency mortgage-backed pools were caused by interest rate volatility and not a decline in credit quality. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company expects to recover the amortized cost basis over the

11

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

term of the securities. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company did not consider those investments to be other-than-temporarily impaired at March 31, 2015.

The Company elected to transfer 319 available-for-sale (“AFS”) securities with an aggregate fair value of $167.1 million to a classification of held-to-maturity (“HTM”) on April 1, 2014. In accordance with FASB ASC 320-10-55-24, the transfer from AFS to HTM must be recorded at the fair value of the AFS securities at the time of transfer. The net unrealized holding gain of $1.3 million, net of tax, at the date of transfer was retained in accumulated other comprehensive income, with the associated pre-tax amount retained in the carrying value of the HTM securities. Such amounts will be amortized to comprehensive income over the remaining life of the securities. The fair value of the transferred AFS securities became the book value of the HTM securities at April 1, 2014, with no unrealized gain or loss at this date. Future reporting periods, with potential changes in market value for these securities, would likely record an unrealized gain or loss for disclosure purposes.

The amortized cost and fair value of securities available for sale and held to maturity at March 31, 2015 and December 31, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2015				December 31, 2014
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
Within one year	$	6,170	$	6,220	$	6,098	$	6,169
One to five years		49,096		49,902		44,720		45,093
Five to ten years		16,830		17,373		16,147		16,768
After ten years		6,372		6,552		6,598		6,790
		78,468		80,047		73,563		74,820
Federal agency collateralized mortgage obligations		120,785		121,719		122,930		122,860
Federal agency mortgage-backed pools		125,923		129,267		122,583		125,395
Private labeled mortgage-backed pools		—		—		670		689
Total available for sale investment securities	$	325,176	$	331,033	$	319,746	$	323,764
Held to maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		1,223		1,243		592		593
Five to ten years		104,305		109,391		99,225		101,323
After ten years		32,854		33,941		39,582		40,857
		138,382		144,575		139,399		142,773
Federal agency collateralized mortgage obligations		3,873		3,918		4,039		4,073
Federal agency mortgage-backed pools		22,027		22,912		22,329		23,058
Total held to maturity investment securities	$	164,282	$	171,405	$	165,767	$	169,904

The following table shows the gross unrealized losses and the fair value of the Company’s investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

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HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
March 31, 2015	Value		Losses			Value		Losses			Value		Losses
U.S. Treasury and federal agencies	$	—	$	—		$	16,937	$	(48	)	$	16,937	$	(48	)
State and municipal		15,766		(173	)		1,259		(7	)		17,025		(180	)
Federal agency collateralized mortgage obligations		9,233		(21	)		29,821		(516	)		39,054		(537	)
Federal agency mortgage-backed pools		6,847		(84	)		27,253		(238	)		34,100		(322	)
Total temporarily impaired securities	$	31,846	$	(278	)	$	75,270	$	(809	)	$	107,116	$	(1,087	)
	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and federal agencies	$	2,993	$	(7	)	$	20,762	$	(222	)	$	23,755	$	(229	)
State and municipal		10,287		(121	)		2,050		(30	)		12,337		(151	)
Federal agency collateralized mortgage obligations		15,013		(88	)		39,801		(957	)		54,814		(1,045	)
Federal agency mortgage-backed pools		5,993		(9	)		28,044		(351	)		34,037		(360	)
Total temporarily impaired securities	$	34,286	$	(225	)	$	90,657	$	(1,560	)	$	124,943	$	(1,785	)

	Three Months Ended March 31
	2015			2014
Sales of securities available for sale (Unaudited)
Proceeds	$	13,332		$	—
Gross gains		147			—
Gross losses		(23	)		—

Note 4 – Loans

	March 31			December 31
	2015			2014
Commercial
Working capital and equipment	$	311,789		$	300,940
Real estate, including agriculture		354,356			343,455
Tax exempt		8,890			8,595
Other		20,701			21,324
Total		695,736			674,314
Real estate
1–4 family		256,809			250,799
Other		3,581			3,826
Total		260,390			254,625
Consumer
Auto		160,668			154,538
Recreation		5,645			5,673
Real estate/home improvement		38,371			38,288
Home equity		112,180			112,426
Unsecured		3,437			3,613
Other		6,033			5,921
Total		326,334			320,459
Mortgage warehouse		178,899			129,156
Total loans		1,461,359			1,378,554
Allowance for loan losses		(16,634	)		(16,501	)
Loans, net	$	1,444,725		$	1,362,053

13

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Commercial

Commercial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves larger loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of property type, and are monitored for concentrations of credit. Management monitors and evaluates commercial real estate loans based on collateral, cash flow and risk grade criteria. As a general rule, the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans.

Real Estate and Consumer

With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences, and consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans are unsecured such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Mortgage Warehousing

Horizon’s mortgage warehouse lending has specific mortgage companies as customers of Horizon Bank. Individual mortgage loans originated by these mortgage companies are funded as a secured borrowing with a pledge of collateral under Horizon’s agreement with the mortgage company. Each individual mortgage is assigned to Horizon until the loan is sold to the secondary market by the mortgage company. In addition, Horizon takes possession of each original note and forwards such note to the end investor once the mortgage company has sold the loan. At the time a loan is transferred to the secondary market, the mortgage company repurchases the loan under its option within the agreement. Due to the repurchase feature contained in the agreement, the transaction does not qualify as a sale and therefore is accounted for as a secured borrowing with a pledge of collateral pursuant to the agreement with the mortgage company. When the individual loan is sold to the end investor by the mortgage company, the proceeds from the sale of the loan are received by Horizon and used to pay off the loan balance with Horizon along with any accrued interest and any related fees. The remaining balance from the sale is forwarded to the mortgage company. These individual loans typically are sold by the mortgage company within 30 days and are seldom held more than 90 days. Interest income is accrued during this period and collected at the time each loan is sold. Fee income for each loan sold is collected when the loan is sold, and no costs are deferred due to the term between each loan funding and related payoff, which is typically less than 30 days.

Based on the agreements with each mortgage company, at any time a mortgage company can repurchase from Horizon its outstanding loan balance on an individual mortgage and regain possession of the original note. Horizon also has the option to request that the mortgage company repurchase an individual mortgage. Should this occur, Horizon would return the original note and reassign the assignment of the mortgage to the

14

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

mortgage company. Also, in the event that the end investor would not be able to honor the purchase commitment and the mortgage company would not be able to repurchase its loan on an individual mortgage, Horizon would be able to exercise its rights under the agreement.

The following table shows the recorded investment of individual loan categories.

	Loan					Deferred			Recorded
March 31, 2015	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	240,027		$	426	$	658		$	241,111
Non owner occupied real estate		308,420			345		515			309,280
Residential spec homes		3,409			5		3			3,417
Development & spec land loans		11,229			28		25			11,282
Commercial and industrial		131,422			828		28			132,278
Total commercial		694,507			1,632		1,229			697,368
Residential mortgage		244,081			743		546			245,370
Residential construction		15,763			22		—			15,785
Mortgage warehouse		178,899			480		—			179,379
Total real estate		438,743			1,245		546			440,534
Direct installment		41,476			135		(380	)		41,231
Direct installment purchased		195			—		—			195
Indirect installment		146,938			302		—			147,240
Home equity		138,458			557		(353	)		138,662
Total consumer		327,067			994		(733	)		327,328
Total loans		1,460,317			3,871		1,042			1,465,230
Allowance for loan losses		(16,634	)		—		—			(16,634	)
Net loans	$	1,443,683		$	3,871	$	1,042		$	1,448,596

	Loan					Deferred			Recorded
December 31, 2014	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	228,380		$	385	$	680		$	229,445
Non owner occupied real estate		297,299			309		506			298,114
Residential spec homes		2,027			2		—			2,029
Development & spec land loans		12,097			28		30			12,155
Commercial and industrial		133,256			859		39			134,154
Total commercial		673,059			1,583		1,255			675,897
Residential mortgage		242,521			737		599			243,857
Residential construction		11,505			21		—			11,526
Mortgage warehouse		129,156			480		—			129,636
Total real estate		383,182			1,238		599			385,019
Direct installment		40,137			129		(375	)		39,891
Direct installment purchased		219			—		—			219
Indirect installment		141,868			314		(163	)		142,019
Home equity		139,007			568		(234	)		139,341
Total consumer		321,231			1,011		(772	)		321,470
Total loans		1,377,472			3,832		1,082			1,382,386
Allowance for loan losses		(16,501	)		—		—			(16,501	)
Net loans	$	1,360,971		$	3,832	$	1,082		$	1,365,885

15

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Note 5 – Accounting for Certain Loans Acquired in a Transfer

The Company acquired loans in acquisitions and the transferred loans had evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include information such as past-due and non-accrual status, borrower credit scores and recent loan-to-value percentages. Purchased credit-impaired loans are accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310-30) and initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporate the estimate of current key assumptions, such as default rates, severity and prepayment speeds.

The carrying amounts of those loans included in the balance sheet amounts of loans receivable are as follows:

	March 31		March 31		March 31
	2015		2015		2015
	Heartland		Summit		Total
Commercial		15,378		59,398	$	74,776
Real estate		8,460		22,379		30,839
Consumer		6,954		7,749		14,703
Outstanding balance	$	30,792	$	89,526	$	120,318
Carrying amount, net of allowance of $254					$	120,064
	December 31 2014 Heartland		December 31 2014 Summit		December 31 2014 Total
Commercial	$	18,307	$	66,371	$	84,678
Real estate		9,734		24,653		34,387
Consumer		8,447		8,975		17,422
Outstanding balance	$	36,488	$	99,999	$	136,487
Carrying amount, net of allowance of $359					$	136,128

Accretable yield, or income expected to be collected for the three months ended March 31, is as follows:

	Three Months Ended March 31, 2015
	Heartland			Summit			Total
Balance at January 1	$	2,400		$	1,268		$	3,668
Additions		—			—			—
Accretion		(107	)		(99	)		(206	)
Reclassification from nonaccretable difference		—			—			—
Disposals		(88	)		(49	)		(137	)
Balance at December 31	$	2,205		$	1,120		$	3,325
	Three Months Ended March 31, 2014
	Heartland			Summit			Total
Balance at January 1	$	3,185		$	—		$	3,185
Additions		—			—			—
Accretion		(138	)		—			(138	)
Reclassification from nonaccretable difference		—			—			—
Disposals		(18	)		—			(18	)
Balance at December 31	$	3,029		$	—		$	3,029

During the three months ended March 31, 2015 and 2014, the Company decreased the allowance for loan losses by a recovery to the income statement of $105,000 and $0, respectively.

16

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Note 6 – Allowance for Loan Losses

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the prior one to five years. Management believes the five-year historical loss experience methodology is appropriate in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed. The actual allowance for loan loss activity is provided below.

	Three Months Ended
	March 31
	2015			2014
	(Unaudited)			(Unaudited)
Balance at beginning of the period	$	16,501		$	15,992
Loans charged-off:
Commercial
Owner occupied real estate		—			—
Non owner occupied real estate		16			22
Residential development		—			—
Development & Spec Land Loans		—			7
Commercial and industrial		—			—
Total commercial		16			29
Real estate
Residential mortgage		22			22
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		22			22
Consumer
Direct Installment		59			33
Direct Installment Purchased		—			—
Indirect Installment		369			227
Home Equity		200			184
Total consumer		628			444
Total loans charged-off		666			495
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		8			4
Non owner occupied real estate		—			1
Residential development		—			—
Development & Spec Land Loans		—			—
Commercial and industrial		19			385
Total commercial		27			390
Real estate
Residential mortgage		2			4
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		2			4
Consumer
Direct Installment		29			18
Direct Installment Purchased		—			—
Indirect Installment		101			119
Home Equity		26			74
Total consumer		156			211
Total loan recoveries		185			605
Net loans charged-off (recovered)		481			(110	)
Provision charged to operating expense
Commercial		(45	)		212
Real estate		933			(604	)
Consumer		(274	)		392
Total provision charged to operating expense		614			—
Balance at the end of the period	$	16,634		$	16,102

17

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Certain loans are individually evaluated for impairment, and the Company’s general practice is to proactively charge down impaired loans to the fair value of the underlying collateral.

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down or specific allocation of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the value is known but no later than when a loan is 180 days past due. Pursuant to such guidelines, the Company also charges-off unsecured open-end loans when the loan is 90 days past due, and charges down to the net realizable value other secured loans when they are 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection in full will occur regardless of delinquency status, are not charged off.

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment analysis:

March 31, 2015	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,029	$	—	$	—	$	—	$	1,029
Collectively evaluated for impairment		6,593		3,281		1,272		4,205		15,351
Loans acquired with deteriorated credit quality		254		—		—		—		254
Total ending allowance balance	$	7,876	$	3,281	$	1,272	$	4,205	$	16,634
Loans:
Individually evaluated for impairment	$	8,547	$	—	$	—	$	—	$	8,547
Collectively evaluated for impairment		687,092		261,155		179,379		327,328		1,454,954
Loans acquired with deteriorated credit quality		1,729		—		—		—		1,729
Total ending loans balance	$	697,368	$	261,155	$	179,379	$	327,328	$	1,465,230
December 31, 2014	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,589	$	—	$	—	$	—	$	1,589
Collectively evaluated for impairment		5,827		2,508		1,132		4,951		14,418
Loans acquired with deteriorated credit quality		494		—		—		—		494
Total ending allowance balance	$	7,910	$	2,508	$	1,132	$	4,951	$	16,501
Loans:
Individually evaluated for impairment	$	11,055	$	—	$	—	$	—	$	11,055
Collectively evaluated for impairment		664,251		255,383		129,636		321,470		1,370,740
Loans acquired with deteriorated credit quality		591		—		—		—		591
Total ending loans balance	$	675,897	$	255,383	$	129,636	$	321,470	$	1,382,386

18

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Note 7 – Non-performing Loans and Impaired Loans

The following table presents the non-accrual, loans past due over 90 days still on accrual, and troubled debt restructured (“TDRs”) by class of loans:

March 31, 2015	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,452	$	—	$	—	$	41	$	1,493
Non owner occupied real estate		5,558		—		2,378		560		8,496
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		566		—		985		—		1,551
Total commercial		7,576		—		3,363		601		11,540
Real estate
Residential mortgage		2,547		—		748		2,506		5,801
Residential construction		—		—		261		—		261
Mortgage warehouse		—		—		—		—		—
Total real estate		2,547		—		1,009		2,506		6,062
Consumer
Direct Installment		334		—		—		—		334
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		506		19		—		—		525
Home Equity		2,319		—		339		1,261		3,919
Total Consumer		3,159		19		339		1,261		4,778
Total	$	13,282	$	19	$	4,711	$	4,368	$	22,380
December 31, 2014	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,773	$	—	$	—	$	44	$	1,817
Non owner occupied real estate		7,439		—		217		566		8,222
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		812		—		1,004		—		1,816
Total commercial		10,024		—		1,221		610		11,855
Real estate
Residential mortgage		2,297		40		765		2,526		5,628
Residential construction		—		—		266		—		266
Mortgage warehouse		—		—		—		—		—
Total real estate		2,297		40		1,031		2,526		5,894
Consumer
Direct Installment		227		10		—		—		237
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		557		47		—		—		604
Home Equity		2,207		18		391		1,236		3,852
Total Consumer		2,991		75		391		1,236		4,693
Total	$	15,312	$	115	$	2,643	$	4,372	$	22,442

19

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Included in the $13.3 million of non-accrual loans and the $4.7 million of non-performing TDRs at March 31, 2015 were $3.0 million and $417,000, respectively, of loans acquired for which accretable yield was recognized.

From time to time, the Bank obtains information that may lead management to believe that the collection of payments may be doubtful on a particular loan. In recognition of this, it is management’s policy to convert the loan from an “earning asset” to a non-accruing loan. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Further, it is management’s policy to place a loan on a non-accrual status when the payment is delinquent in excess of 90 days or the loan has had the accrual of interest discontinued by management. The officer responsible for the loan and the Chief Credit Officer or the senior collection officer must review all loans placed on non-accrual status. Subsequent payments on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal in accordance with the loan terms. The Company requires a period of satisfactory performance of not less than six months before returning a non-accrual loan to accrual status.

A loan becomes impaired when, based on current information, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. When a loan is classified as impaired, the degree of impairment must be recognized by estimating future cash flows from the debtor. The present value of these cash flows is computed at a discount rate based on the interest rate contained in the loan agreement. However, if a particular loan has a determinable market value for its collateral, the creditor may use that value. Also, if the loan is secured and considered collateral dependent, the creditor may use the fair value of the collateral. Interest income on loans individually classified as impaired is recognized on a cash basis after all past due and current principal payments have been made.

Smaller-balance, homogeneous loans are evaluated for impairment in total. Such loans include residential first mortgage loans secured by 1–4 family residences, residential construction loans, automobile, home equity, second mortgage loans and mortgage warehouse loans. Commercial loans and mortgage loans secured by other properties are evaluated individually for impairment. When analysis of borrower operating results and financial condition indicate that underlying cash flows of a borrower’s business are not adequate to meet its debt service requirements, the loan is evaluated for impairment. Often this is associated with a delay or shortfall in payments of 30 days or more. Loans are generally moved to non-accrual status when they are 90 days or more past due. These loans are often considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms, including TDRs, are measured for impairment. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral-dependent loans.

The Company’s TDRs are considered impaired loans and included in the allowance methodology using the guidance for impaired loans. At March 31, 2015, the type of concessions the Company has made on restructured loans has been temporary rate reductions and/or reductions in monthly payments and there have been no restructured loans with modified recorded balances. Any modification to a loan that is a concession and is not in the normal course of lending is considered a restructured loan. A restructured loan is returned to accruing status after six consecutive payments but is still reported as TDR unless the loan bears interest at a market rate. As of March 31, 2015, the Company had $9.1 million in TDRs and $4.4 million were performing according to the restructured terms and one TDR was returned to accrual status during the first three months of 2015. There was $994,000 of specific reserves allocated to TDRs at March 31, 2015 based on the discounted cash flows.

20

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Loans transferred and classified as troubled debt restructuring during the three months ended March 31, 2015 and 2014, segregated by class, are shown in the table below.

	March 31, 2015				March 31, 2014
Commercial	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Owner occupied real estate		1	$	2		—	$	—
Non owner occupied real estate		—		—		—		—
Residential development		—		—		—		—
Development & Spec Land Loans		—		—		—		—
Commercial and industrial		—		—		2		398
Total commercial		1		2		2		398
Real estate
Residential mortgage		—		—		—		—
Residential construction		—		—		—		—
Mortgage warehouse		—		—		—		—
Total real estate		—		—		—		—
Consumer
Direct Installment		—		—		—		—
Direct Installment Purchased		—		—		—		—
Indirect Installment		—		—		—		—
Home Equity		1		32		1		146
Total Consumer		1		32		1		146
		—		—
Total		2	$	34		3	$	544

Troubled debt restructured loans which had payment defaults during the three months ended March 31, 2015 and 2014, segregated by class, are shown in the table below. Default occurs when a loan is 90 days or more past due or has been transferred to non-accrual.

	March 31, 2015				March 31, 2014
Commercial	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Owner occupied real estate		1	$	2		—	$	—
Non owner occupied real estate		—		—		—		—
Residential development		—		—		—		—
Development & Spec Land Loans		—		—		—		—
Commercial and industrial		—		—		2		398
Total commercial		1		2		2		398
Real estate
Residential mortgage		—		—		1		154
Residential construction		—		—		—		—
Mortgage warehouse		—		—		—		—
Total real estate		—		—		1		154
Consumer
Direct Installment		—		—		—		—
Direct Installment Purchased		—		—		—		—
Indirect Installment		—		—		—		—
Home Equity		—		—		1		146
Total Consumer		—		—		1		146
		—		—
Total		1	$	2		4	$	698

21

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

The following table presents commercial loans individually evaluated for impairment by class of loan:

							Three Months Ending
March 31, 2015	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	1,076	$	1,077	$	—	$	1,329	$	2
Non owner occupied real estate		3,907		3,912		—		4,534		6
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		609		609		—		649		—
Total commercial		5,592		5,598		—		6,512		8
With an allowance recorded
Commercial
Owner occupied real estate		417		417		165		419		—
Non owner occupied real estate		1,590		1,590		184		1,590		—
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		942		942		680		949		—
Total commercial		2,949		2,949		1,029		2,958		—
Total	$	8,541	$	8,547	$	1,029	$	9,470	$	8

							Three Months Ending
March 31, 2014	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans			Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	1,145	$	1,148	$	—	$	1,759		$	12
Non owner occupied real estate		3,443		3,446		—		3,514			5
Residential development		—		—		—		—			—
Development & Spec Land Loans		24		24		—		24			—
Commercial and industrial		333		349		—		608			—
Total commercial		4,945		4,967		—		5,905			17
With an allowance recorded
Commercial
Owner occupied real estate		—		—		—		(1	)		—
Non owner occupied real estate		347		347		170		353			—
Residential development		—		—		—		—			—
Development & Spec Land Loans		138		138		40		142			—
Commercial and industrial		1,883		1,883		1,080		1,727			2
Total commercial		2,368		2,368		1,290		2,221			2
Total	$	7,313	$	7,335	$	1,290	$	8,126		$	19

22

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

The following table presents the payment status by class of loan:

March 31, 2015	30 - 59 Days Past Due			60 - 89 Days Past Due			Greater than 90 Days Past Due			Total Past Due			Loans Not Past Due			Total
Commercial
Owner occupied real estate	$	266		$	138		$	—		$	404		$	239,623		$	240,027
Non owner occupied real estate		—			84			—			84			308,336			308,420
Residential development		—			—			—			—			3,409			3,409
Development & Spec Land Loans		—			—			—			—			11,229			11,229
Commercial and industrial		320			—			—			320			131,102			131,422
Total commercial		586			222			—			808			693,699			694,507
Real estate
Residential mortgage		357			435			—			792			243,289			244,081
Residential construction		—			—			—			—			15,763			15,763
Mortgage warehouse		—			—			—			—			178,899			178,899
Total real estate		357			435			—			792			437,951			438,743
Consumer
Direct Installment		142			7			—			149			41,327			41,476
Direct Installment Purchased		—			—			—			—			195			195
Indirect Installment		559			80			19			658			146,280			146,938
Home Equity		1,038			519			—			1,557			136,901			138,458
Total consumer		1,739			606			19			2,364			324,703			327,067
Total	$	2,682		$	1,263		$	19		$	3,964		$	1,456,353		$	1,460,317
Percentage of total loans		0.18	%		0.09	%		0.00	%		0.27	%		99.73	%
December 31, 2014	30 - 59 Days Past Due			60 - 89 Days Past Due			Greater than 90 Days Past Due			Total Past Due			Loans Not Past Due			Total
Commercial
Owner occupied real estate	$	103		$	645		$	—		$	748		$	227,632		$	228,380
Non owner occupied real estate		413			—			—			413			296,886			297,299
Residential development		—			—			—			—			2,027			2,027
Development & Spec Land Loans		—			—			—			—			12,097			12,097
Commercial and industrial		19			1			—			20			133,236			133,256
Total commercial		535			646			—			1,181			671,878			673,059
Real estate
Residential mortgage		1,033			193			40			1,266			241,255			242,521
Residential construction		—			—			—			—			11,505			11,505
Mortgage warehouse		—			—			—			—			129,156			129,156
Total real estate		1,033			193			40			1,266			381,916			383,182
Consumer
Direct Installment		113			4			10			127			40,010			40,137
Direct Installment Purchased		—			—			—			—			219			219
Indirect Installment		1,042			243			47			1,332			140,536			141,868
Home Equity		1,084			189			18			1,291			137,716			139,007
Total consumer		2,239			436			75			2,750			318,481			321,231
Total	$	3,807		$	1,275		$	115		$	5,197		$	1,372,275		$	1,377,472
Percentage of total loans		0.28	%		0.09	%		0.01	%		0.38	%		99.62	%

The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date.

Horizon Bank’s processes for determining credit quality differ slightly depending on whether a new loan or a renewed loan is being underwritten, or whether an existing loan is being re-evaluated for credit quality. The latter usually occurs upon receipt of current financial information or other pertinent data that would trigger a change in the loan grade.

• For new and renewed commercial loans, the Bank’s Credit Department, which acts independently of the loan officer, assigns the credit quality grade to the loan. Loan grades for loans with an aggregate credit exposure that exceeds the authorities in the respective markets (ranging from $1,000,000 to $2,500,000) are validated by the Loan Committee, which is chaired by the Chief Credit Officer (CCO).

23

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

• Commercial loan officers are responsible for reviewing their loan portfolios and report any adverse material change to the CCO or Loan Committee. When circumstances warrant a change in the credit quality grade, loan officers are required to notify the CCO and the Credit Department of the change in the loan grade. Downgrades are accepted immediately by the CCO however, lenders must present their factual information to either the Loan Committee or the CCO when recommending an upgrade.

• The CCO, or his designee, meets weekly with loan officers to discuss the status of past-due loans and classified loans. These meetings are also designed to give the loan officers an opportunity to identify an existing loan that should be downgraded to a classified grade.

• Monthly, senior management meets with the Watch Committee, which reviews all of the past due, classified, and impaired loans and the relative trends of these assets. This committee also reviews the actions taken by management regarding foreclosure mitigation, loan extensions, troubled debt restructures, other real estate owned and personal property repossessions. The information reviewed in this meeting acts as a precursor for developing management’s analysis of the adequacy of the Allowance for Loan and Lease Losses.

For residential real estate and consumer loans, Horizon uses a grading system based on delinquency. Loans that are 90 days or more past due, on non-accrual, or are classified as a TDR are graded “Substandard.” After being 90 days delinquent a loan is charged off unless it is well secured and in the process of collection. If the latter case exists, the loan is placed on non-accrual. Occasionally a mortgage loan may be graded as “Special Mention.” When this situation arises, it is because the characteristics of the loan and the borrower fit the definition of a Risk Grade 5 described below, which is normally used for grading commercial loans. Loans not graded Substandard are considered Pass.

Horizon Bank employs a nine-grade rating system to determine the credit quality of commercial loans. The first five grades represent acceptable quality, and the last four grades mirror the criticized and classified grades used by the bank regulatory agencies (special mention, substandard, doubtful, and loss). The loan grade definitions are detailed below.

Risk Grade 1: Excellent (Pass)

Loans secured by liquid collateral, such as certificates of deposit, reputable bank letters of credit, or other cash equivalents; loans that are guaranteed or otherwise backed by the full faith and credit of the United States government or an agency thereof, such as the Small Business Administration; or loans to any publicly held company with a current long-term debt rating of A or better.

Risk Grade 2: Good (Pass)

Loans to businesses that have strong financial statements containing an unqualified opinion from a CPA firm and at least three consecutive years of profits; loans supported by unaudited financial statements containing strong balance sheets, five consecutive years of profits, a five-year satisfactory relationship with the Bank, and key balance sheet and income statement trends that are either stable or positive; loans secured by publicly traded marketable securities where there is no impediment to liquidation; loans to individuals backed by liquid personal assets and unblemished credit history; or loans to publicly held companies with current long-term debt ratings of Baa or better.

Risk Grade 3: Satisfactory (Pass)

Loans supported by financial statements (audited or unaudited) that indicate average or slightly below average risk and having some deficiency or vulnerability to changing economic conditions; loans with some weakness but offsetting features of other support are readily available; loans that are meeting the terms of repayment, but which may be susceptible to deterioration if adverse factors are encountered. Loans may be graded Satisfactory when there is no recent information on which to base a current risk evaluation and the following conditions apply:

24

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

• At inception, the loan was properly underwritten, did not possess an unwarranted level of credit risk, and the loan met the above criteria for a risk grade of Excellent, Good, or Satisfactory;

• At inception, the loan was secured with collateral possessing a loan value adequate to protect the Bank from loss.

• The loan has exhibited two or more years of satisfactory repayment with a reasonable reduction of the principal balance.

• During the period that the loan has been outstanding, there has been no evidence of any credit weakness. Some examples of weakness include slow payment, lack of cooperation by the borrower, breach of loan covenants, or the borrower is in an industry known to be experiencing problems. If any of these credit weaknesses is observed, a lower risk grade may be warranted.

Risk Grade 4 Satisfactory/Monitored:

Loans in this category are considered to be of acceptable credit quality, but contain greater credit risk than Satisfactory loans. Borrower displays acceptable liquidity, leverage, and earnings performance within the Bank’s minimum underwriting guidelines. The level of risk is acceptable but conditioned on the proper level of loan officer supervision. Loans that normally fall into this grade include acquisition, construction and development loans and income producing properties that have not reached stabilization.

Risk Grade 4W Management Watch:

Loans in this category are considered to be of acceptable quality, but with above normal risk. Borrower displays potential indicators of weakness in the primary source of repayment resulting in a higher reliance on secondary sources of repayment. Balance sheet may exhibit weak liquidity and/or high leverage. There is inconsistent earnings performance without the ability to sustain adverse economic conditions. Borrower may be operating in a declining industry or the property type, as for a commercial real estate loan, may be high risk or in decline. These loans require an increased level of loan officer supervision and monitoring to assure that any deterioration is addressed in a timely fashion.

Risk Grade 5: Special Mention

Loans which possess some credit deficiency or potential weakness which deserves close attention. Such loans pose an unwarranted financial risk that, if not corrected, could weaken the loan by adversely impacting the future repayment ability of the borrower. The key distinctions of a Special Mention classification are that (1) it is indicative of an unwarranted level of risk and (2) weaknesses are considered “potential,” not “defined,” impairments to the primary source of repayment. These loans may be to borrowers with adverse trends in financial performance, collateral value and/or marketability, or balance sheet strength.

Risk Grade 6: Substandard

One or more of the following characteristics may be exhibited in loans classified Substandard:

• Loans which possess a defined credit weakness. The likelihood that a loan will be paid from the primary source of repayment is uncertain. Financial deterioration is under way and very close attention is warranted to ensure that the loan is collected without loss.

• Loans are inadequately protected by the current net worth and paying capacity of the obligor.

• The primary source of repayment is gone, and the Bank is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees.

• Loans have a distinct possibility that the Bank will sustain some loss if deficiencies are not corrected.

25

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

• Unusual courses of action are needed to maintain a high probability of repayment.

• The borrower is not generating enough cash flow to repay loan principal; however, it continues to make interest payments.

• The lender is forced into a subordinated or unsecured position due to flaws in documentation.

• Loans have been restructured so that payment schedules, terms, and collateral represent concessions to the borrower when compared to the normal loan terms.

• The lender is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan.

• There is a significant deterioration in market conditions to which the borrower is highly vulnerable.

Risk Grade 7: Doubtful

One or more of the following characteristics may be present in loans classified Doubtful:

• Loans have all of the weaknesses of those classified as Substandard. However, based on existing conditions, these weaknesses make full collection of principal highly improbable.

• The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment.

• The possibility of loss is high but because of certain important pending factors which may strengthen the loan, loss classification is deferred until the exact status of repayment is known.

Risk Grade 8: Loss

Loans are considered uncollectible and of such little value that continuing to carry them as assets is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

26

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

The following table presents loans by credit grades.

March 31, 2015	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	227,083		$	7,728		$	5,216		$	—		$	240,027
Non owner occupied real estate		296,948			2,330			9,142			—			308,420
Residential development		3,409			—			—			—			3,409
Development & Spec Land Loans		11,153			76			—			—			11,229
Commercial and industrial		128,280			985			2,157			—			131,422
Total commercial		666,873			11,119			16,515			—			694,507
Real estate
Residential mortgage		238,280			—			5,801			—			244,081
Residential construction		15,502			—			261			—			15,763
Mortgage warehouse		178,899			—			—			—			178,899
Total real estate		432,681			—			6,062			—			438,743
Consumer
Direct Installment		41,142			—			334			—			41,476
Direct Installment Purchased		195			—			—			—			195
Indirect Installment		146,413			—			525			—			146,938
Home Equity		134,539			—			3,919			—			138,458
Total Consumer		322,289			—			4,778			—			327,067
Total	$	1,421,843		$	11,119		$	27,355		$	—		$	1,460,317
Percentage of total loans		97.37	%		0.76	%		1.87	%		0.00	%
December 31, 2014	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	215,875		$	7,623		$	4,883		$	—		$	228,381
Non owner occupied real estate		283,518			4,458			9,323			—			297,299
Residential development		2,027			—			—			—			2,027
Development & Spec Land Loans		12,018			79			—			—			12,097
Commercial and industrial		128,589			1,799			2,868			—			133,256
Total commercial		642,027			13,959			17,074			—			673,060
Real estate
Residential mortgage		236,893			—			5,628			—			242,521
Residential construction		11,239			—			266			—			11,505
Mortgage warehouse		129,156			—			—			—			129,156
Total real estate		377,288			—			5,894			—			383,182
Consumer
Direct Installment		39,900			—			237			—			40,137
Direct Installment Purchased		219			—			—			—			219
Indirect Installment		141,264			—			604			—			141,868
Home Equity		135,155			—			3,852			—			139,007
Total Consumer		316,538			—			4,693			—			321,231
Total	$	1,335,854		$	13,959		$	27,661		$	—		$	1,377,473
Percentage of total loans		96.98	%		1.01	%		2.01	%		0.00	%

27

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Note 8 – Derivative Financial Instruments

Cash Flow Hedges

As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flow due to interest rate fluctuations, the Company entered into interest rate swap agreements for a portion of its floating rate debt. The agreements provide for the Company to receive interest from the counterparty at three month LIBOR and to pay interest to the counterparty at a weighted average fixed rate of 6.14% on a notional amount of $30.5 million at March 31, 2015 and December 31, 2014. Under the agreements, the Company pays or receives the net interest amount monthly, with the monthly settlements included in interest expense.

Management has designated the interest rate swap agreement as a cash flow hedging instrument. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. At March 31, 2015, the Company’s cash flow hedge was effective and is not expected to have a significant impact on the Company’s net income over the next 12 months.

Fair Value Hedges

Fair value hedges are intended to reduce the interest rate risk associated with the underlying hedged item. The Company enters into fixed rate loan agreements as part of its lending policy. To mitigate the risk of changes in fair value based on fluctuations in interest rates, the Company has entered into interest rate swap agreements on individual loans, converting the fixed rate loans to a variable rate. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings. At March 31, 2015, the Company’s fair value hedges were effective and are not expected to have a significant impact on the Company’s net income over the next 12 months.

The change in fair value of both the hedge instruments and the underlying loan agreements are recorded as gains or losses in interest income. The fair value hedges are considered to be highly effective and any hedge ineffectiveness was deemed not material. The notional amounts of the loan agreements being hedged were $106.6 million at March 31, 2015 and $102.7 million at December 31, 2014.

Other Derivative Instruments

The Company enters into non-hedging derivatives in the form of mortgage loan forward sale commitments with investors and commitments to originate mortgage loans as part of its mortgage banking business. At March 31, 2015, the Company’s fair value of these derivatives were recorded and over the next 12 months are not expected to have a significant impact on the Company’s net income.

The change in fair value of both the forward sale commitments and commitments to originate mortgage loans were recorded and the net gains or losses included in the Company’s gain on sale of loans.

28

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

The following tables summarize the fair value of derivative financial instruments utilized by Horizon:

	Asset Derivative			Liability Derivatives
	March 31, 2015			March 31, 2015
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location	Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts	Loans	$	—		Other liabilities	$	2,208
Interest rate contracts	Other Assets		2,208		Other liabilities		3,666
Total derivatives designated as hedging instruments			2,208				5,874
Derivatives not designated as hedging instruments
Mortgage loan contracts	Other assets		636		Other liabilities		—
Total derivatives not designated as hedging instruments			636				—
Total derivatives		$	2,844			$	5,874
	Asset Derivative			Liability Derivatives
	December 31, 2014			December 31, 2014
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location	Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts	Loans	$	—		Other liabilities	$	1,208
Interest rate contracts	Other Assets		1,208		Other liabilities		3,339
Total derivatives designated as hedging instruments			1,208				4,547
Derivatives not designated as hedging instruments
Mortgage loan contracts	Other assets		447		Other liabilities		—
Total derivatives not designated as hedging instruments			447				—
Total derivatives		$	1,655			$	4,547

The effect of the derivative instruments on the condensed consolidated statement of income for the three month periods ending is as follows:

	Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended March 31
Derivative in cash flow	2015			2014
hedging relationship	(Unaudited)			(Unaudited)
Interest rate contracts	$	(214	)	$	(146	)

FASB Accounting Standards Codification (“ASC”) Topic 820-10-20 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820-10-55 establishes a fair value hierarchy that emphasizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

29

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

		Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended March 31
Derivative in fair value	Location of gain (loss)	2015			2014
hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)
Interest rate contracts	Interest income - loans	$	719		$	207
Interest rate contracts	Interest income - loans		(719	)		(207	)
Total		$	—		$	—
		Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended March 31
Derivative not designated	Location of gain (loss)	2015			2014
as hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)
Mortgage contracts	Other income - gain on sale of loans	$	189		$	240

Note 9 – Disclosures about Fair Value of Assets and Liabilities

The Fair Value Measurements topic of the FASB ASC defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. There are three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices in active markets for identical assets or liabilities
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated financial statements, as well as the general classification of such instruments pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended March 31, 2015. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Available for sale securities

When quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. Treasury and federal agency securities, state and municipal securities, federal agency mortgage obligations and mortgage-backed pools, private-label mortgage-backed pools and corporate notes. Level 2 securities are valued by a first party pricing service commonly used in the banking industry utilizing observable inputs. Observable inputs include dealer quotes, market spreads, cash flow analysis, the U.S. Treasury yield curve, trade execution data, market consensus prepayment spreads and available credit information and the bond’s terms and conditions. The pricing provider utilizes evaluated pricing models that vary based on asset class. These models incorporate available market information including quoted prices of securities with similar characteristics and, because many fixed-income securities do not trade on a daily basis, apply available information through processes such as benchmark curves, benchmarking of like securities, sector grouping, and matrix pricing. In addition, model processes, such as an option adjusted spread model, is used to develop prepayment and interest rate scenarios for securities with prepayment features.

30

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Hedged loans

Certain fixed rate loans have been converted to variable rate loans by entering into interest rate swap agreements. The fair value of those fixed rate loans is based on discounting the estimated cash flows using interest rates determined by the respective interest rate swap agreement. Loans are classified within Level 2 of the valuation hierarchy based on the unobservable inputs used.

Interest rate swap agreements

The fair value of the Company’s interest rate swap agreements is estimated by a first party using inputs that are primarily unobservable including a yield curve, adjusted for liquidity and credit risk, contracted terms and discounted cash flow analysis, and therefore, are classified within Level 2 of the valuation hierarchy.

The following table presents the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated financial statements measured at fair value on a recurring basis and the level within the FASB ASC fair value hierarchy in which the fair value measurements fall at the following:

				Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
	Fair Value			(Level 1)		(Level 2)			(Level 3)
March 31, 2015
Available-for-sale securities
U.S. Treasury and federal agencies	$	28,421		$	—	$	28,421		$	—
State and municipal		51,576			—		51,576			—
Federal agency collateralized mortgage obligations		121,719			—		121,719			—
Federal agency mortgage-backed pools		129,267			—		129,267			—
Private labeled mortgage-backed pools		—			—		—			—
Corporate notes		50			—		50			—
Total available-for-sale securities		331,033			—		331,033			—
Hedged loans		104,383			—		104,383			—
Forward sale commitments		636			—		636			—
Interest rate swap agreements		(5,874	)		—		(5,874	)		—
Commitments to originate loans		—			—		—			—
December 31, 2014
Available-for-sale securities
U.S. Treasury and federal agencies	$	26,823		$	—	$	26,823		$	—
State and municipal		47,952			—		47,952			—
Federal agency collateralized mortgage obligations		122,860			—		122,860			—
Federal agency mortgage-backed pools		125,395			—		125,395			—
Private labeled mortgage-backed pools		689			—		689			—
Corporate notes		45			—		45			—
Total available-for-sale securities		323,764			—		323,764			—
Hedged loans		101,445			—		101,445			—
Forward sale commitments		447			—		447			—
Interest rate swap agreements		(4,546	)		—		(4,546	)		—
Commitments to originate loans		—			—		—			—

31

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

Realized gains and losses included in net income for the periods are reported in the condensed consolidated statements of income as follows:

	Three Months Ended March 31
	2015			2014
	(Unaudited)			(Unaudited)
Non Interest Income
Total gains and losses from:
Hedged loans	$	719		$	207
Fair value interest rate swap agreements		(719	)		(207	)
Derivative loan commitments		189			240
	$	189		$	240

Certain other assets are measured at fair value on a nonrecurring basis in the ordinary course of business and are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment):

			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2015
Impaired loans	$	7,512	$	—	$	—	$	7,512
Mortgage servicing rights		7,854		—		—		7,854
December 31, 2014
Impaired loans	$	9,464	$	—	$	—	$	9,464
Mortgage servicing rights		7,642		—		—		7,642

Impaired (collateral dependent): Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral-dependent loans.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value.

Impaired loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method.

Mortgage Servicing Rights (MSRs): MSRs do not trade in an active market with readily observable prices. Accordingly, the fair value of these assets is classified as Level 3. The Company determines the fair value of MSRs using an income approach model based upon the Company’s month-end interest rate curve and prepayment assumptions. The model utilizes assumptions to estimate future net servicing income cash flows, including estimates of time decay, payoffs and changes in valuation inputs and assumptions. The Company reviews the valuation assumptions against this market data for reasonableness and adjusts the assumptions if deemed appropriate. The carrying amount of the MSRs’ fair value decreased by $76,000 during the first three months of 2015 and increased by $5,000 during the first three months of 2014.

The following table presents qualitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements, other than goodwill.

32

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

	Fair Value at		Valuation		Range (Weighted
	March 31, 2015		Technique	Unobservable Inputs	Average)
Impaired loans	$	7,512	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability		10% - 15% (12%)
Mortgage servicing rights	$	7,854	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default		10% - 15% (12%), 4% - 7% (4.6%), 1% - 10%  (4.5%)
	Fair Value at		Valuation		Range (Weighted
	December 31, 2014		Technique	Unobservable Inputs	Average)
Impaired loans	$	9,464	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability		10% - 15% (12%)
Mortgage servicing rights	$	7,642	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default		10% - 15% (12%), 4% - 7% (4.6%), 1% - 10% (4.5%)

Note 10 – Fair Value of Financial Instruments

The estimated fair value amounts of the Company’s financial instruments were determined using available market information, current pricing information applicable to Horizon and various valuation methodologies. Where market quotations were not available, considerable management judgment was involved in the determination of estimated fair values. Therefore, the estimated fair value of financial instruments shown below may not be representative of the amounts at which they could be exchanged in a current or future transaction. Due to the inherent uncertainties of expected cash flows of financial instruments, the use of alternate valuation assumptions and methods could have a significant effect on the estimated fair value amounts.

The estimated fair values of financial instruments, as shown below, are not intended to reflect the estimated liquidation or market value of Horizon taken as a whole. The disclosed fair value estimates are limited to Horizon’s significant financial instruments at March 31, 2015 and December 31, 2014. These include financial instruments recognized as assets and liabilities on the condensed consolidated balance sheet as well as certain off-balance sheet financial instruments. The estimated fair values shown below do not include any valuation of assets and liabilities, which are not financial instruments as defined by the FASB ASC fair value hierarchy.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and Due from Banks - The carrying amounts approximate fair value.

Held-to-Maturity Securities - For debt securities held to maturity, fair values are based on quoted market prices or dealer quotes. For those securities where a quoted market price is not available, carrying amount is a reasonable estimate of fair value based upon comparison with similar securities.

Loans Held for Sale - The carrying amounts approximate fair value.

Net Loans - The fair value of portfolio loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying amounts of loans held for sale approximate fair value.

33

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

FHLB and FRB Stock — Fair value of FHLB and FRB stock is based on the price at which it may be resold to the FHLB and FRB.

Interest Receivable/Payable — The carrying amounts approximate fair value.

Deposits — The fair value of demand deposits, savings accounts, interest-bearing checking accounts and money market deposits is the amount payable on demand at the reporting date. The fair value of fixed maturity certificates of deposit is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturity.

Borrowings — Rates currently available to Horizon for debt with similar terms and remaining maturities are used to estimate fair values of existing borrowings.

Subordinated Debentures — Rates currently available for debentures with similar terms and remaining maturities are used to estimate fair values of existing debentures.

Commitments to Extend Credit and Standby Letters of Credit — The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. Due to the short-term nature of these agreements, carrying amounts approximate fair value.

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall (unaudited).

	March 31, 2015
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	38,676	$	38,676	$	—	$	—
Investment securities, held to maturity		164,282		—		171,405		—
Loans held for sale		6,229		—		—		6,229
Loans excluding loan level hedges, net		1,340,342		—		—		1,379,815
Stock in FHLB and FRB		11,348		—		11,348		—
Interest receivable		8,431		—		8,431		—
Liabilities
Non-interest bearing deposits	$	285,181	$	285,181	$	—	$	—
Interest-bearing deposits		1,179,915		—		1,134,694		—
Borrowings		440,415		—		438,547		—
Subordinated debentures		32,680		—		32,674		—
Interest payable		504		—		504		—

34

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

	December 31, 2014
			Quoted Prices
			in Active
			Markets for		Significant Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	43,476	$	43,476	$	—	$	—
Investment securities, held to maturity		165,767		—		169,904		—
Loans held for sale		6,143		—		—		6,143
Loans excluding loan level hedges, net		1,260,608		—		—		1,295,133
Stock in FHLB and FRB		11,348		—		11,348		—
Interest receivable		8,246		—		8,246		—
Liabilities
Non-interest bearing deposits	$	267,667	$	267,667	$	—	$	—
Interest-bearing deposits		1,214,652		—		1,158,912		—
Borrowings		351,198		—		348,597		—
Subordinated debentures		32,642		—		32,669		—
Interest payable		497		—		497		—

Note 11 – Accumulated Other Comprehensive Income

	March 31			December 31
	2015			2014
Unrealized gain on securities available for sale	$	5,856		$	4,018
Unamortized gain on securities held to maturity, previously transferred from AFS		1,544			1,658
Unrealized loss on derivative instruments		(3,666	)		(3,337	)
Tax effect		(1,307	)		(818	)
Total accumulated other comprehensive income	$	2,427		$	1,521

Note 12 – Regulatory Capital

Horizon and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies and are assigned to a capital category. Failure to meet the minimum regulatory capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators, which if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective actions, the Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined), or leverage ratio. For March 31, 2015, Interim Final Basel III rules require the Bank to maintain minimum amounts and ratios of common equity Tier I capital (as defined in the regulation) to risk-weighted assets (as defined). Additionally under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. For December 31, 2014, regulatory capital ratios were calculated under Basel I rules.

35

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

To be categorized as well capitalized, the Bank must maintain minimum Total risk-based, Tier I risk-based, common equity Tier I risk-based (March 31, 2015) and Tier I leverage ratios as set forth in the table below. As of March 31, 2015 and December 31, 2014, the Bank met all capital adequacy requirements to be considered well capitalized. There were no conditions or events since the end of the first quarter of 2015 that management believes have changed the Bank’s classification as well capitalized. There is no threshold for well-capitalized status for bank holding companies.

Horizon and the Bank’s actual and required capital ratios as of March 31, 2015 and December 31, 2014 were as follows:

						Required For Capital1					Well Capitalized Under Prompt1
	Actual					Adequacy Purposes					Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2015
Total capital1 (to risk-weighted assets)
Consolidated	$	218,613		13.74	%	$	127,286		8.00	%		N/A		N/A
Bank		195,409		12.35	%		126,581		8.00	%	$	158,226		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		201,979		12.69	%		95,498		6.00	%		N/A		N/A
Bank		178,775		11.30	%		94,925		6.00	%		126,566		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		156,411		9.83	%		71,602		4.50	%		N/A		N/A
Bank		178,775		11.30	%		71,194		4.50	%		102,835		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		201,979		9.97	%		81,035		4.00	%		N/A		N/A
Bank		178,775		8.77	%		81,539		4.00	%		101,924		5.00	%
As of December 31, 2014
Total capital1 (to risk-weighted assets)
Consolidated	$	212,276		14.48	%	$	117,280		8.00	%		N/A		N/A
Bank		192,604		13.08	%		117,801		8.00	%	$	147,251		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		195,775		13.35	%		58,659		4.00	%		N/A		N/A
Bank		176,103		11.96	%		58,897		4.00	%		88,346		6.00	%
Tier 1 capital1 (to average assets)
Consolidated		195,775		9.76	%		80,236		4.00	%		N/A		N/A
Bank		176,103		8.80	%		80,047		4.00	%		100,059		5.00	%

¹  As defined by regulatory agencies

Note 13 – Business Combination

On February 18, 2015, Horizon entered into an Agreement and Plan of Merger (the “Merger Agreement”) providing for Horizon’s acquisition of Peoples Bancorp, an Indiana corporation (“Peoples”). Pursuant to the Merger Agreement, Peoples would merge with and into Horizon, with Horizon surviving the merger (the “Merger”), and Peoples Federal Savings Bank of DeKalb County, a federally chartered stock savings bank and wholly-owned subsidiary of Peoples, would merge with and into a wholly-owned subsidiary of Horizon, Horizon Bank, N.A. (“Horizon Bank”), with Horizon Bank as the surviving bank.

The boards of directors of each of Horizon and Peoples have approved the Merger and the Merger Agreement. Subject to the approval of the issuance of shares related to the Merger by Horizon shareholders, the Merger by Peoples shareholders, regulatory approvals and other closing conditions, the parties anticipate completing the Merger during the third quarter of 2015.

36

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

In connection with the Merger, each Peoples shareholder will receive 0.95 shares of Horizon common stock (the “Exchange Ratio”) and $9.75 in cash for each share of Peoples common stock owned by them. Based on Horizon’s February 18, 2015 closing price of $23.02 per share as reported on the NASDAQ Global Select Market, the implied transaction value is estimated at $73.1 million.

Subject to certain terms and conditions, the board of directors of Peoples has agreed to recommend the approval and adoption of the Merger Agreement to the Peoples shareholders and will solicit proxies voting in favor of the Merger from Peoples’ shareholders.

The Merger Agreement also provides for certain termination rights for both Horizon and Peoples, and further provides that upon termination of the Merger Agreement under certain circumstances, Peoples will be obligated to pay Horizon a termination fee.

As of December 31, 2014, Peoples reported total assets of approximately $486.6 million, total deposits of approximately $368.7 million and total loans of approximately $235.1 million.

Note 14 – Future Accounting Matters

The FASB has issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.

Existing GAAP does not include explicit guidance about a customer’s accounting for fees paid in a cloud computing arrangement. Examples of cloud computing arrangements include: (a) software as a service; (b) platform as a service; (c) infrastructure as a service; and (d) other similar hosting arrangements.

The amendments add guidance to Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software, which will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The guidance already exists in the FASB Accounting Standards Codification™ in paragraphs 985-605-55-121 through 55-123, but it is included in a Subtopic applied by cloud service providers to determine whether an arrangement includes the sale or license of software.

For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015.

The FASB has issued an Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810):

Amendments to the Consolidation Analysis, which is intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions).

The ASU focuses on the consolidation evaluation for reporting organizations (public and private companies and not-for-profit organizations) that are required to evaluate whether they should consolidate certain legal entities.

In addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards Codification™ (Codification) and improves current GAAP by:

• Placing more emphasis on risk of loss when determining a controlling financial interest. A reporting organization may no longer have to consolidate a legal entity in certain circumstances based solely on its fee arrangement, when certain criteria are met.

37

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Table Dollar Amounts in Thousands, Except Per Share Data)

• Reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity (VIE).

• Changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or VIEs.

The ASU will be effective for periods beginning after December 15, 2015, for public companies. Early adoption is permitted, including adoption in an interim period.

38

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward–Looking Statements

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to Horizon Bancorp (“Horizon” or the “Company”) and Horizon Bank, N.A. (the “Bank”). Horizon intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995, and is including this statement for the purposes of these safe harbor provisions. Statements in this report should be considered in conjunction with the other information available about Horizon, including the information in the other filings we make with the Securities and Exchange Commission. 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,” “expect,” “estimate,” “project,” “intend,” “plan,” “believe,” “could,” “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.

Actual results may differ materially, adversely or positively, from the expectations of the Company that are expressed or implied by any forward-looking statement. Risks, uncertainties, and factors that could cause the Company’s actual results to vary materially from those expressed or implied by any forward-looking statement include but are not limited to:

• economic conditions and their impact on Horizon and its customers;

• changes in the level and volatility of interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity;

• rising interest rates and their impact on mortgage loan volumes;

• estimates of fair value of certain of Horizon’s assets and liabilities;

• volatility and disruption in financial markets;

• prepayment speeds, loan originations, credit losses and market values, collateral securing loans and other assets;

• sources of liquidity;

• potential risk of environmental liability related to lending activities;

• changes in the competitive environment in Horizon’s market areas and among other financial service providers;

• legislation and/or regulation affecting the financial services industry as a whole, and Horizon and its subsidiaries in particular, including the effects resulting from the reforms enacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the adoption of regulations by regulatory bodies under the Dodd-Frank Act;

• the impact of the new Basel III capital rules;

• changes in regulatory supervision and oversight, including monetary policy and capital requirements;

• changes in accounting policies or procedures as may be adopted and required by regulatory agencies;

• rapid technological developments and changes;

• the risks presented by cyber terrorism and data security breaches;

• containing costs and expenses;

39

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

• the slowing or failure of economic recovery;

• the ability of the U.S. federal government to manage federal debt limits; and

• the risks of expansion through mergers and acquisitions, including unexpected credit quality problems with acquired loans, difficulty integrating acquired operations and material differences in the actual financial results of such transactions compared with Horizon’s initial expectations, including the full realization of anticipated cost savings.

The foregoing list of important factors is not exclusive, and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document or, in the case of documents incorporated by reference, the dates of those documents. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of us. For a detailed discussion of the risks and uncertainties that may cause our actual results or performance to differ materially from the results or performance expressed or implied by forward-looking statements, see “Risk Factors” in Item 1A of Part I of our 2014 Annual Report on Form 10-K and in the subsequent reports we file with the SEC.

Overview

Horizon is a registered bank holding company incorporated in Indiana and headquartered in Michigan City, Indiana. Horizon provides a broad range of banking services in Northwestern and Central Indiana and Southwestern and South Central Michigan through its bank subsidiary. Horizon operates as a single segment, which is commercial banking. Horizon’s common stock is traded on the NASDAQ Global Select Market under the symbol HBNC. The Bank was chartered as a national banking association in 1873 and has operated continuously since that time. The Bank is a full-service commercial bank offering commercial and retail banking services, corporate and individual trust and agency services, and other services incident to banking.

On November 12, 2013, Horizon entered into an Agreement and Plan of Merger (the “Merger Agreement”) providing for Horizon’s acquisition of SCB Bancorp, Inc., a Michigan corporation (“Summit”). Pursuant to the Merger Agreement, Summit would merge with and into Horizon, with Horizon surviving the merger (the “Merger”), and Summit Community Bank, a Michigan-chartered commercial bank and wholly owned subsidiary of SCB Bancorp, Inc., would merge with and into a wholly owned subsidiary of Horizon, Horizon Bank, N.A. (“Horizon Bank”), with Horizon Bank as the surviving bank.

On April 3, 2014, Horizon completed the acquisition of Summit and Horizon Bank’s acquisition of Summit Community Bank, through mergers effective April 3, 2014. Under the terms of the acquisition, the exchange ratio was 0.4904 shares of Horizon common stock and $5.15 in cash for each outstanding share of Summit common stock. Summit shares outstanding at the closing were 1,164,442, and the shares of Horizon’s common stock issued to Summit shareholders totaled 570,820. Horizon’s stock price was $22.23 per share at the close of business on April 3, 2014. Based upon these numbers, the total value of the consideration for the acquisition was $18.9 million (not including the retirement of Summit debt).

Following are some highlights of Horizon’s financial performance through the first quarter of 2015:

• Net income for the first quarter of 2015 increased 56.8% or $1.9 million compared to the same period in 2014 to $5.4 million or $.55 diluted earnings per share.

• Total loans increased 24.3% on an annualized basis during the first quarter of 2015.

• Excluding mortgage warehouse loans, total loans increased 10.7% on an annualized basis during the first quarter of 2015.

• Commercial loans increased 12.9% on an annualized basis during the first quarter of 2015.

40

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

• Net interest income for the first quarter of 2015 increased 27.2% or $3.6 million compared to the same period in 2014.

• Non-interest income for the first quarter of 2015 increased 28.0% or $1.5 million compared to the same period in 2014.

• Net interest margin, excluding the impact of acquisitions (“core net interest margin”), was 3.47% for the first quarter of 2015 compared to 3.38% for the same period in 2014.

• Return on average assets was 1.05% for the first quarter of 2015.

• Return on average common equity was 11.66% for the first quarter of 2015.

• Horizon’s tangible book value per share rose to $16.80 at March 31, 2015, compared to $16.26 at December 31, 2014 and $15.52 at March 31, 2014. $16.80 is the highest tangible book value per share in the company’s history.

• On February 19, 2015, Horizon announced a planned merger agreement with Peoples Bancorp and its wholly-owned subsidiary, Peoples Federal Savings Bank of DeKalb County, headquartered in Auburn, Indiana.

• Horizon’s full-service Carmel, Indiana office opened on February 23, 2015.

Critical Accounting Policies

The notes to the consolidated financial statements included in Item 8 of the Company’s Annual Report on Form 10-K for 2014 contain a summary of the Company’s significant accounting policies. Certain of these policies are important to the portrayal of the Company’s financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Management has identified as critical accounting policies the allowance for loan losses, intangible assets, mortgage servicing rights, hedge accounting and valuation measurements.

Allowance for Loan Losses

An allowance for loan losses is maintained to absorb probable incurred loan losses inherent in the loan portfolio. The determination of the allowance for loan losses is a critical accounting policy that involves management’s ongoing quarterly assessments of the probable incurred losses inherent in the loan portfolio. The identification of loans that have probable incurred losses is subjective; therefore, a general reserve is maintained to cover all probable losses within the entire loan portfolio. Horizon utilizes a loan grading system that helps identify, monitor and address asset quality problems in an adequate and timely manner. Each quarter, various factors affecting the quality of the loan portfolio are reviewed. Large credits are reviewed on an individual basis for loss potential. Other loans are reviewed as a group based upon previous trends of loss experience. Horizon also reviews the current and anticipated economic conditions of its lending market as well as transaction risk to determine the effect they may have on the loss experience of the loan portfolio.

Goodwill and Intangible Assets

Management believes that the accounting for goodwill and other intangible assets also involves a higher degree of judgment than most other significant accounting policies. FASB ASC 350-10 establishes standards for the amortization of acquired intangible assets and impairment assessment of goodwill. At March 31, 2015, Horizon had core deposit intangibles of $3.7 million subject to amortization and $28.2 million of goodwill, which is not subject to amortization. Goodwill arising from business combinations represents the value attributable to unidentifiable intangible assets in the business acquired. Horizon’s goodwill relates to the value inherent in the banking industry and that value is dependent upon the ability of Horizon to provide quality, cost effective banking services in a competitive marketplace. The goodwill value is supported by revenue that is in part driven by the volume of business transacted. A decrease in earnings resulting from a decline in the customer base or the inability to deliver cost effective services over sustained periods can lead to impairment of goodwill that could adversely affect earnings in future periods. FASB ASC 350-10 requires

41

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

an annual evaluation of goodwill for impairment. The evaluation of goodwill for impairment requires the use of estimates and assumptions. Market price at the close of business on March 31, 2015 was $23.39 per share compared to a book value of $20.25 per common share.

Horizon has concluded that, based on its own internal evaluation, the recorded value of goodwill is not impaired.

Mortgage Servicing Rights

Servicing assets are recognized as separate assets when rights are acquired through purchase or through the sale of financial assets on a servicing-retained basis. Capitalized servicing rights are amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing assets are evaluated regularly for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying servicing rights by predominant characteristics, such as interest rates, original loan terms and whether the loans are fixed or adjustable rate mortgages. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. When the book value of an individual stratum exceeds its fair value, an impairment reserve is recognized so that each individual stratum is carried at the lower of its amortized book value or fair value. In periods of falling market interest rates, accelerated loan prepayment can adversely affect the fair value of these mortgage-servicing rights relative to their book value. In the event that the fair value of these assets was to increase in the future, Horizon can recognize the increased fair value to the extent of the impairment allowance but cannot recognize an asset in excess of its amortized book value. Future changes in management’s assessment of the impairment of these servicing assets, as a result of changes in observable market data relating to market interest rates, loan prepayment speeds, and other factors, could impact Horizon’s financial condition and results of operations either positively or negatively.

Generally, when market interest rates decline and other factors favorable to prepayments occur, there is a corresponding increase in prepayments as customers refinance existing mortgages under more favorable interest rate terms. When a mortgage loan is prepaid, the anticipated cash flows associated with servicing that loan are terminated, resulting in a reduction of the fair value of the capitalized mortgage servicing rights. To the extent that actual borrower prepayments do not react as anticipated by the prepayment model (i.e., the historical data observed in the model does not correspond to actual market activity), it is possible that the prepayment model could fail to accurately predict mortgage prepayments and could result in significant earnings volatility. To estimate prepayment speeds, Horizon utilizes a first-party prepayment model, which is based upon statistically derived data linked to certain key principal indicators involving historical borrower prepayment activity associated with mortgage loans in the secondary market, current market interest rates and other factors, including Horizon’s own historical prepayment experience. For purposes of model valuation, estimates are made for each product type within the mortgage servicing rights portfolio on a monthly basis. In addition, on a quarterly basis Horizon engages a first party to independently test the value of its servicing asset.

Derivative Instruments

As part of the Company’s asset/liability management program, Horizon utilizes, from time-to-time, interest rate floors, caps or swaps to reduce the Company’s sensitivity to interest rate fluctuations. These are derivative instruments, which are recorded as assets or liabilities in the consolidated balance sheets at fair value. Changes in the fair values of derivatives are reported in the consolidated income statements or other comprehensive income (“OCI”) depending on the use of the derivative and whether the instrument qualifies for hedge accounting. The key criterion for the hedge accounting is that the hedged relationship must be highly effective in achieving offsetting changes in those cash flows that are attributable to the hedged risk, both at inception of the hedge and on an ongoing basis.

42

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

Horizon’s accounting policies related to derivatives reflect the guidance in FASB ASC 815-10. Derivatives that qualify for the hedge accounting treatment are designated as either: a hedge of the fair value of the recognized asset or liability or of an unrecognized firm commitment (a fair value hedge) or a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (a cash flow hedge). For fair value hedges, the cumulative change in fair value of both the hedge instruments and the underlying loans is recorded in non-interest income. For cash flow hedges, changes in the fair values of the derivative instruments are reported in OCI to the extent the hedge is effective. The gains and losses on derivative instruments that are reported in OCI are reflected in the consolidated income statement in the periods in which the results of operations are impacted by the variability of the cash flows of the hedged item. Generally, net interest income is increased or decreased by amounts receivable or payable with respect to the derivatives, which qualify for hedge accounting. At inception of the hedge, Horizon establishes the method it uses for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge. The ineffective portion of the hedge, if any, is recognized currently in the consolidated statements of income. Horizon excludes the time value expiration of the hedge when measuring ineffectiveness.

Valuation Measurements

Valuation methodologies often involve a significant degree of judgment, particularly when there are no observable active markets for the items being valued. Investment securities, residential mortgage loans held for sale and derivatives are carried at fair value, as defined in FASB ASC 820, which requires key judgments affecting how fair value for such assets and liabilities is determined. In addition, the outcomes of valuations have a direct bearing on the carrying amounts of goodwill, mortgage servicing rights, and pension and other post-retirement benefit obligations. To determine the values of these assets and liabilities, as well as the extent, to which related assets may be impaired, management makes assumptions and estimates related to discount rates, asset returns, prepayment speeds and other factors. The use of different discount rates or other valuation assumptions could produce significantly different results, which could affect Horizon’s results of operations.

43

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

Financial Condition

On March 31, 2015, Horizon’s total assets were $2.2 billion, an increase of approximately $77.0 million compared to December 31, 2014. The increase was primarily due to the growth in net loans of $82.7 million.

Investment securities were comprised of the following as of (dollars in thousands):

	March 31, 2015				December 31, 2014
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
U.S. Treasury and federal agencies	$	28,400	$	28,421	$	26,996	$	26,823
State and municipal		50,036		51,576		46,535		47,952
Federal agency collateralized mortgage obligations		120,785		121,719		122,930		122,860
Federal agency mortgage-backed pools		125,923		129,267		122,583		125,395
Private labeled mortgage-backed pools		—		—		670		689
Corporate notes		32		50		32		45
Total available for sale investment securities	$	325,176	$	331,033	$	319,746	$	323,764
Held to maturity
U.S. Treasury and federal agencies	$	9,824	$	9,981	$	9,804	$	9,886
State and municipal		128,558		134,594		129,595		132,887
Federal agency collateralized mortgage obligations		3,873		3,918		4,039		4,073
Federal agency mortgage-backed pools		22,027		22,912		22,329		23,058
Total held to maturity investment securities	$	164,282	$	171,405	$	165,767	$	169,904

Total investment securities increased by approximately $5.8 million at March 31, 2015 compared to December 31, 2014 due to the reinvestment of investment security cash flows held at December 31, 2014 during the first quarter.

Total loans increased $82.8 million since December 31, 2014 to $1.5 billion as of March 31, 2015. This increase was the result of an increase in commercial loans of $21.4 million, mortgage warehouse loans of $49.7 million, residential mortgage loans of $5.8 million and consumer loans of $5.9 million. The growth in total loans during the three months ended March 31, 2015 is the direct result of increased calling efforts to increase Horizon’s market share within the Company’s footprint and market expansion.

The following table presents the amount and growth rate of loans by product type for the three months ended March 31, 2015.

Loan Growth by Type

Three Months Ended March 31, 2015

(Dollars in Thousands)

										Annualized
	March 31		December 31		Amount		Percent			Percent
	2015		2014		Change		Change			Change
	(Unaudited)
Commercial loans	$	695,736	$	674,314	$	21,422		3.2	%		12.9	%
Residential mortgage loans		260,390		254,625		5,765		2.3	%		9.2	%
Consumer loans		326,334		320,459		5,875		1.8	%		7.4	%
Held for sale loans		6,229		6,143		86		1.4	%		5.7	%
Subtotal		1,288,689		1,255,541		33,148		2.6	%		10.7	%
Mortgage warehouse loans		178,899		129,156		49,743		38.5	%		156.2	%
Total loans	$	1,467,588	$	1,384,697	$	82,891		6.0	%		24.3	%

44

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

Total deposits decreased $17.2 million since December 31, 2014. This decrease was primarily the result of a decrease in municipal deposits and time deposits, partially offset by an increase in non-interest bearing deposits. The decrease in municipal deposits is seasonal and is impacted by the timing of property tax payment collection and disbursement. Non-interest bearing deposit accounts increased by $17.5 million, interest-bearing transaction accounts decreased by $25.4 million and time deposits decreased by $9.4 million during the three months ended March 31, 2015.

The Company’s borrowings increased $89.2 million from December 31, 2014 as total loan growth of $82.8 million outpaced the decrease in deposits of $17.2 million during the three months ended March 31, 2015, thereby increasing the Company’s reliance on borrowings to fund loan growth during the period. At March 31, 2015, the Company had $166.0 million in short-term funds borrowed compared to $95.0 million at December 31, 2014. The Company’s current balance sheet strategy is to utilize a reasonable level of short-term borrowings during extended low rate environments in addition to what is needed for the fluctuations in municipal deposits and mortgage warehouse lending.

Stockholders’ equity totaled $199.5 million at March 31, 2015 compared to $194.4 million at December 31, 2014. The increase in stockholders’ equity during the period was the result of the generation of net income and an increase in accumulated other comprehensive income, net of dividends declared. At March 31, 2015, the ratio of average stockholders’ equity to average assets was 9.56% compared to 9.56% for December 31, 2014. Book value per common share at March 31, 2015 increased to $20.25 compared to $19.75 at December 31, 2014.

Results of Operations

Overview

Consolidated net income for the three-month period ended March 31, 2015 was $5.4 million, an increase of 56.8% from the $3.4 million for the same period in 2014. Earnings per common share for the three months ended March 31, 2015 were $0.58 basic and $0.55 diluted, compared to $0.39 basic and $0.38 diluted for the same three-month period in 2014. Diluted earnings per share increased by $.17 compared to the same three-month period in 2014 due to an increase in interest income due to loan growth and an increase in accretion income from acquisition-related purchase accounting adjustments and an increase in non-interest income primarily due to an increase in gain in sale of loans and fiduciary activities, partially offset by an increase in non-interest expense primarily due to an increase in salaries and employee benefits from company growth and an increase in loan volume and an increase in the amount of shares outstanding as a result of the Summit acquisition.

Net Interest Income

The largest component of net income is net interest income. Net interest income is the difference between interest income, principally from loans and investment securities, and interest expense, principally on deposits and borrowings. Changes in the net interest income are the result of changes in volume and the net interest spread, which affects the net interest margin. Volume refers to the average dollar levels of interest-earning assets and interest-bearing liabilities. Net interest spread refers to the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. Net interest margin refers to net interest income divided by average interest-earning assets and is influenced by the level and relative mix of interest-earning assets and interest-bearing liabilities.

Net interest income during the three months ended March 31, 2015 was $16.9 million, an increase of $3.6 million from the $13.3 million earned during the same period in 2014. Yields on the Company’s interest-earning assets increased by 10 basis points to 4.39% for the three months ending March 31, 2015 from 4.29% for the three months ended March 31, 2014. Interest income increased $3.6 million from $16.5 million for the three months ended March 31, 2014 to $20.1 million for the same period in 2014. This increase was due

45

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

to an increase in interest-earning assets offset by lower yields on loans and investment securities and an increase in interest income from acquisition-related purchase accounting adjustments from $389,000 for the first quarter of 2014 to $1.1 million for the same period of 2015.

Rates paid on interest-bearing liabilities decreased by 15 basis points for the three months ended March 31, 2015 compared to the same period in 2014 due to the continued low interest rate environment. Interest expense increased $12,000 compared to the three months ended March 31, 2014 to $3.2 million for the same period in 2015. This increase was due to higher balances of both interest-bearing deposits and borrowings. The net interest margin increased 22 basis points from 3.48% for the three months ended March 31, 2014 to 3.70% for the same period in 2015. The increase in the margin for the three months ended March 31, 2015 compared to the same period in 2014 was due to loan growth resulting in a higher ratio of loans to average earning assets, lower funding costs and an increase of $694,000 of interest income from acquisition-related purchase accounting adjustments, partially offset by a decrease in yield on loans and investment securities. Excluding the interest income recognized from the acquisition-related purchase accounting adjustments, the margin would have been 3.47% for the three-month period ending March 31, 2015 compared to 3.38% for the same period in 2014.

46

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

The following are the average balance sheets for the three months ending (dollars in thousands):

	Three Months Ended								Three Months Ended
	March 31, 2015								March 31, 2014
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
ASSETS
Interest-earning assets
Federal funds sold	$	4,804		$	2		0.17	%	$	7,439		$	4		0.22	%
Interest-earning deposits		10,772			3		0.11	%		5,722			3		0.21	%
Investment securities—taxable		360,554			2,149		2.42	%		386,793			2,383		2.50	%
Investment securities—non-taxable (1)		140,748			1,077		4.31	%		147,840			1,123		4.28	%
Loans receivable (2)(3)		1,382,992			16,862		4.96	%		1,050,491			12,954		5.00	%
Total interest-earning assets (1)		1,899,870			20,093		4.39	%		1,598,285			16,467		4.29	%
Non-interest-earning assets
Cash and due from banks		28,994								24,890
Allowance for loan losses		(16,489	)							(16,166	)
Other assets		157,553								138,322
	$	2,069,928							$	1,745,331
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities
Interest-bearing deposits	$	1,215,862		$	1,232		0.41	%	$	1,079,514		$	1,277		0.48	%
Borrowings		337,430			1,479		1.78	%		228,138			1,422		2.53	%
Subordinated debentures		32,657			496		6.16	%		32,502			496		6.19	%
Total interest-bearing liabilities		1,585,949			3,207		0.82	%		1,340,154			3,195		0.97	%
Non-interest-bearing liabilities
Demand deposits		271,158								223,974
Accrued interest payable and other liabilities		14,989								12,807
Shareholders’ equity		197,832								168,396
	$	2,069,928							$	1,745,331
Net interest income/spread				$	16,886		3.57	%				$	13,272		3.32	%
Net interest income as a percent of average interest earning assets (1)							3.70	%							3.48	%

(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. Interest rate is presented on a tax equivalent basis.

(2) Includes loan fees and late fees. The inclusion of these fees does not have a material effect on the average interest rate.

(3) Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loans fees.

Provision for Loan Losses

Horizon assesses the adequacy of its Allowance for Loan and Lease Losses (“ALLL”) by regularly reviewing the performance of its loan portfolios. During the three-month period ended March 31, 2015, a provision of $614,000 was required to adequately fund the ALLL compared to no provision for the same period of 2014. Commercial loan net charge-offs during the three months ended March 31, 2015 were negative $11,000, residential mortgage loan net charge-offs were $20,000 and consumer loan net charge-offs were $472,000. The higher provision for loan losses in the first quarter of 2015 compared to the same period of 2014 was primarily due to continued loan growth. The ALLL balance at March 31, 2015 was $16.6 million or 1.13% of

47

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

total loans. This compares to an ALLL balance of $16.5 million at December 31, 2014 or 1.19% of total loans. The decrease in the ratio at March 31, 2015 compared to December 31, 2014 was due to an increase in total loans of $82.8 million and improving trends in classified and non-performing loans.

Horizon’s loan loss reserve ratio, excluding loans with credit-related purchase accounting adjustments, stood at 1.22% as of March 31, 2015. The table below details Horizon’s loan loss reserve ratio composition as of March 31, 2015.

Allowance for Loan and Lease Loss Detail

As of March 31, 2015

(Dollars in Thousands, Unaudited)

	Horizon
	Legacy			Heartland			Summit			Total
Pre-discount loan balance	$	1,341,040		$	32,854		$	93,760		$	1,467,654
Allowance for loan losses (ALLL)		16,380			254			—			16,634
Loan discount		N/A			2,061			4,234			6,295
Total ALLL+loan discount		16,380			2,315			4,234			22,929
Loans, net	$	1,324,660		$	30,539		$	89,526		$	1,444,725
ALLL/ pre-discount loan balance		1.22	%		0.77	%		0.00	%		1.13	%
Loan discount/ pre-discount loan balance		N/A			6.27	%		4.52	%		0.43	%
Total ALLL+loan discount/ pre-discount loan balance		1.22	%		7.05	%		4.52	%		1.56	%

No assurance can be given that Horizon will not, in any particular period, sustain loan losses that are significant in relation to the amount reserved, or that subsequent evaluations of the loan portfolio, in light of factors then prevailing, including economic conditions and management’s ongoing quarterly assessments of the portfolio, will not require increases in the allowance for loan losses. Horizon considers the allowance for loan losses to be appropriate to cover probable incurred losses in the loan portfolio as of March 31, 2015.

Non-performing loans totaled $22.4 million on March 31, 2015 and December 31, 2014. Compared to December 31, 2014, non-performing real estate loans and consumer loans increased by $168,000 and $85,000, respectively, offset by a decrease of $315,000 in non-performing commercial loans.

At March 31, 2015, loans acquired represented $3.6 million in non-performing, $4.7 million in substandard and $242,000 in delinquent loans.

Other Real Estate Owned (OREO) totaled $749,000 on March 31, 2015, down from $1.2 million on December 31, 2014 and $1.7 million on March 31, 2014.

48

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

Non-interest Income

The following is a summary of changes in non-interest income (table dollar amounts in thousands):

	Three Months Ended
	March 31		March 31		Amount			Percent
	2015		2014		Change			Change
Non-interest Income
Service charges on deposit accounts	$	999	$	923	$	76			8.2	%
Wire transfer fees		151		112		39			34.8	%
Interchange fees		1,102		959		143			14.9	%
Fiduciary activities		1,297		1,048		249			23.8	%
Gain on sale of securities		124		—		124			100.0	%
Gain on sale of mortgage loans		2,379		1,411		968			68.6	%
Mortgage servicing net of impairment		179		207		(28	)		-13.5	%
Increase in cash surrender value of bank owned life insurance		258		233		25			10.7	%
Death benefit on officer life insurance		145		—		145			100.0	%
Other income		432		629		(197	)		-31.3	%
Total non-interest income	$	7,066	$	5,522	$	1,544			28.0	%

Total non-interest income was $1.5 million higher in the first quarter of 2015 compared to the same period of 2014. Interchange fees increased by $143,000, primarily due to an increase in volume. Fiduciary activity fees increased $249,000, primarily due to customer and market value growth. Gain on sale of securities increased $124,000 during the first quarter of 2015. This gain was the result of an analysis that determined market conditions provided the opportunity to add gains to capital without negatively impacting long-term earnings. The sale of securities was also used to fund loan growth. Residential mortgage loan activity during the first quarter of 2015 generated $2.4 million of income from the gain on sale of mortgage loans, up $968,000 from the same period in 2014. The increase in the gain on sale of mortgage loans was due to an increase in total loans sold of $32.9 million from $36.0 million in the first quarter of 2014 to $68.9 million in the same period of 2015, partially offset by a decrease in the percentage earned on the sale of these loans. The Company also recognized a $145,000 death benefit on officer life insurance during the first quarter of 2015. Other income decreased by $197,000 compared to the previous year due to a nonrecurring gain recognized in the first quarter of 2014.

Non-interest Expense

The following is a summary of changes in non-interest expense (table dollar amounts in thousands):

	Three Months Ended
	March 31			March 31		Amount			Percent
	2015			2014		Change			Change
Non-interest expense
Salaries	$	5,633		$	5,356	$	277			5.2	%
Commission and bonuses		1,167			480		687			143.1	%
Employee benefits		1,704			1,647		57			3.5	%
Net occupancy expenses		1,551			1,424		127			8.9	%
Data processing		923			870		53			6.1	%
Professional fees		527			608		(81	)		-13.3	%
Outside services and consultants		626			661		(35	)		-5.3	%
Loan expense		1,257			1,015		242			23.8	%
FDIC deposit insurance		337			256		81			31.6	%
Other losses		(45	)		38		(83	)		-218.4	%
Other expense		2,388			2,159		229			10.6	%
Total non-interest expense	$	16,068		$	14,514	$	1,554			10.7	%

49

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

Total non-interest expenses were $1.6 million higher in the first quarter of 2015 compared to the same period of 2014. Salaries increased $277,000 compared to the same period of 2014 primarily due to changes in annual merit pay and larger employee base. Commission and bonuses increased by $687,000 due to an increase in loan volume, larger employee base and first quarter performance in 2015. Net occupancy expenses increased $127,000 primarily due to market expansion. Loan expense increased $242,000 primarily due to an increase in loan origination volume. Other expenses increased $229,000 in the first quarter of 2015 compared to the same period in 2014 primarily due to the Company’s growth and expansion efforts. In addition, expenses were impacted in the first quarter of 2015 due to one-time transaction related costs of approximately $146,000.

Liquidity

The Bank maintains a stable base of core deposits provided by long-standing 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 sales and maturities, proceeds from the sale of residential mortgage loans, and borrowing relationships with correspondent banks, including the FHLB. During the three months ended March 31, 2015, cash and cash equivalents decreased by approximately $4.8 million. At March 31, 2015, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $252.9 million in unused credit lines with various money center banks, including the FHLB and the FRB Discount Window compared to $301.4 million at December 31, 2014 and $317.1 million at March 31, 2014.

Capital Resources

The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at March 31, 2015. Stockholders’ equity totaled $199.5 million as of March 31, 2015, compared to $194.4 million as of December 31, 2014. For the three months ended March 31, 2015 and the year ended December 31, 2014, the ratio of average stockholders’ equity to average assets was 9.56%. The increase in stockholders’ equity during the period was the result of the generation of net income, an increase in accumulated other comprehensive income, net of dividends declared.

The Company currently intends to continue its participation in the Small Business Lending Fund, pursuant to which it issued preferred stock to the US Treasury, since the growth in the Company’s small business lending has reduced the dividend cost. For the three months ending March 31, 2015, the dividend cost was approximately $31,000, or 1.0% annualized. Quarterly dividend payments for the year ending December 31, 2015 will be approximately $31,000, or 1.0% annualized. The Company plans to reserve cash so that it has the ability to redeem this preferred stock if and when the cost of this capital exceeds the cost of other forms of capital, subject to regulatory approval.

Horizon declared common stock dividends in the amount of $0.14 per share during the first three months of 2015 compared to $0.11 per share for the same period of 2014. The dividend payout ratio (dividends as a percent of basic earnings per share) was 24.2% and 28.0% for the first three months of 2015 and 2014, respectively. For additional information regarding dividends, see Horizon’s Annual Report on Form 10-K for 2014.

Basel III

In July 2013, the federal banking agencies approved final rules to be phased in from 2015 to 2019 implementing the U.S. Basel Committee on Banking Supervision’s capital framework (“Basel III”) for all U.S. banks and for bank holding companies. Under these final rules, minimum requirements have increased for

50

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

both the quantity and quality of capital held by Horizon and the Bank. The rules include a new common equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6.0% (increased from 4.0%), a total capital ratio of 8 % (unchanged from prior rules) and a minimum leverage ratio of 4.0%. The final rules also require a Tier 1 capital conservation buffer above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital. Institutions that do not maintain the required capital conservation buffer will become subject to progressively more stringent limitations on the percentage of earnings that can be paid out in dividends or used for stock repurchases and on the payment of certain bonuses to senior executive management. The capital conservation buffer requirement will be phased in over three years beginning in 2016 at 0.625% of risk-weighted assets and ending at 2.5% of risk-weighted assets for 2019 and thereafter, effectively raising each minimum capital ratio by 2.5%.

The final rules also introduce other changes, including an increase in the capital required for certain categories of assets, including higher-risk construction real estate loans and certain exposures related to securitizations. Contrary to the proposed rule changes, the final rules allow banking organizations with less than $15 billion in assets as of December 31, 2010, to retain non-qualifying Tier 1 capital trust preferred securities issued prior to May 19, 2010, subject generally to a limit of 25% of Tier 1 capital.

These new minimum capital ratios became effective for Horizon on January 1, 2015, and will be fully phased-in on January 1, 2019. Horizon’s management believes that, as of March 31, 2015, Horizon and the Bank would meet all capital adequacy requirements under the Basel III capital rules on a fully phased-in basis, as if such requirements were currently in effect.

Use of Non-GAAP Financial Measures

Certain information set forth in this quarterly report on Form 10-Q refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non-GAAP financial measures of the net interest margin and the allowance for loan and lease losses excluding the impact of acquisition-related purchase accounting adjustments and net income and diluted earnings per share excluding the impact of one-time costs related to acquisitions, acquisition-related purchase accounting adjustments and other events that are considered to be non-recurring. Horizon believes that these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to the purchase accounting impacts and one-time costs of acquisitions and non-core items, although 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.

51

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months Ended March 31, 2015

Non-GAAP Reconciliation of Net Interest Margin

(Dollar Amounts in Thousands)

	Three Months Ended
	March 31			December 31			March 31
	2015			2014			2014
	(Unaudited)						(Unaudited)
Net Interest Margin As Reported
Net interest income	$	16,886		$	16,523		$	13,272
Average interest-earning assets		1,899,870			1,865,750			1,598,285
Net interest income as a percent of average interest-earning assets		3.70	%		3.64	%		3.48	%
Impact of Acquisitions
Interest income from acquisition-related purchase accounting adjustments	$	(1,083	)	$	(719	)	$	(389	)
Net Interest Margin Excluding Impact of Acquisitions
Net interest income	$	15,803		$	15,804		$	12,883
Average interest-earning assets		1,899,870			1,865,750			1,598,285
Net interest income as a percent of average interest-earning assets		3.47	%		3.49	%		3.38	%

52

HORIZON BANCORP AND SUBSIDIARIES

Quantitative and Qualitative Disclosures About Market Risk

For the Three Months Ended March 31, 2015

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We refer you to Horizon’s 2014 Annual Report on Form 10-K for analysis of its interest rate sensitivity. Horizon believes there have been no significant changes in its interest rate sensitivity since it was reported in its 2014 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation Of Disclosure Controls And Procedures

Based on an evaluation of disclosure controls and procedures as of March 31, 2015, Horizon’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of Horizon’s disclosure controls (as defined in Exchange Act Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on such evaluation, such officers have concluded that, as of the evaluation date, Horizon’s disclosure controls and procedures are effective to ensure that the information required to be disclosed by Horizon in the reports it files under the Exchange Act is recorded, processed, summarized and reported within the time specified in Securities and Exchange Commission rules and forms and are designed to ensure that information required to be disclosed in those reports is accumulated and communicated to management as appropriate to allow timely decisions regarding disclosure.

Changes In Internal Control Over Financial Reporting

Horizon’s management, including its Chief Executive Officer and Chief Financial Officer, also have concluded that during the fiscal quarter ended March 31, 2015, there have been no changes in Horizon’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, Horizon’s internal control over financial reporting.

53

HORIZON BANCORP AND SUBSIDIARIES

Part II – Other Information

For the Three Months Ended March 31, 2015

ITEM 1. LEGAL PROCEEDINGS

Horizon and its subsidiaries are involved in various legal proceedings incidental to the conduct of their business. Management does not expect that the outcome of any such proceedings will have a material adverse effect on our consolidated financial position or results of operations.

ITEM 1A. RISK FACTORS

There have been no material changes from the factors previously disclosed under Item 1A of Horizon’s Annual Report on Form 10-K for 2014.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

Not Applicable

54

HORIZON BANCORP AND SUBSIDIARIES

Part II – Other Information

For the Three Months Ended March 31, 2015

ITEM 6. EXHIBITS

(a) Exhibits

Exhibit No.	Description
31.1	Certification of Craig M. Dwight
31.2	Certification of Mark E. Secor
32	Certification of Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
10.1*	Form of 2013 Omnibus Equity Incentive Plan Performance Share Award Agreement (with restrictions)
10.2*	Form of 2013 Omnibus Equity Incentive Plan Performance Share Award Agreement (without restrictions)
10.3*	Form of 2013 Omnibus Equity Incentive Plan Stock Option Agreement (with restrictions)
10.4*	Form of 2013 Omnibus Equity Incentive Plan Stock Option Agreement (without restrictions)
101	Interactive Data Files

* Indicates exhibits that describe or evidence management contracts or compensatory plans or arrangements.

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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 thereunto duly authorized.

	HORIZON BANCORP
Dated: May 4, 2015	/s/ Craig M. Dwight
	Craig M. Dwight
	Chief Executive Officer
Dated: May 4, 2015	/s/ Mark E. Secor
	Mark E. Secor
	Chief Financial Officer

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INDEX TO EXHIBITS

Exhibit No.	Description	Location
Exhibit 31.1	Certification of Craig M. Dwight		Attached
Exhibit 31.2	Certification of Mark E. Secor		Attached
Exhibit 32	Certification of Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		Attached
Exhibit 10.1*	Form of 2013 Omnibus Equity Incentive Plan Performance Share Award Agreement (with restrictions)		Attached
Exhibit 10.2*	Form of 2013 Omnibus Equity Incentive Plan Performance Share Award Agreement (without restrictions)		Attached
Exhibit 10.3*	Form of 2013 Omnibus Equity Incentive Plan Stock Option Agreement (with restrictions)		Attached
Exhibit 10.4*	Form of 2013 Omnibus Equity Incentive Plan Stock Option Agreement (without restrictions)		Attached
Exhibit 101	Interactive Data Files		Attached

* Indicates exhibits that describe or evidence management contracts or compensatory plans or arrangements.

57

EX-10.1

Exhibit 10.1

HORIZON BANCORP

2013 OMNIBUS EQUITY INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

THIS AGREEMENT (the “Agreement”), made and executed as of the      day of                 , 201  , between Horizon Bancorp, an Indiana corporation (the “Company”), and             , an officer or employee of the Company or one of its Affiliates, including but not limited to Horizon Bank, N.A., (the “Participant”).

WITNESSETH:

WHEREAS, the Company has adopted the Horizon Bancorp 2013 Omnibus Equity Incentive Plan (the “Plan”) to further the growth and financial success of the Company and its Affiliates by aligning the interests of Participants, through the ownership of Shares and through other incentives, with the interests of the Company’s shareholders; to provide Participants with an incentive for excellence in individual performance; to promote teamwork among Participants; to provide flexibility to the Company in its ability to motivate, attract and retain the services of Participants who make significant contributions to the Company’s success; and to allow Participants to share in the success of the Company; and

WHEREAS, it is the view of the Company that this goal can be achieved by granting Performance Shares to eligible employees; and

WHEREAS, the Participant has been designated by the Committee as an individual to whom Performance Shares should be granted as determined from the duties performed, the initiative and industry of the Participant, and his or her potential contribution to the future development, growth and prosperity of the Company;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Participant agree as follows:

1.    Award of Performance Shares. The Company hereby awards to the Participant, effective as of the date the Committee formally approves the award by resolution,              (            ) Performance Shares, subject to the terms and conditions of this Agreement and the provisions of the Plan. All provisions of the Plan, including defined terms, are incorporated herein and expressly made a part of this Agreement by reference. The Participant hereby acknowledges that he or she has received a copy of the Plan.

2.    Performance Periods. The Performance Period to which the award of Performance Shares relates is the three-year period beginning on              201   and ending on              201  .

3.    Performance Goals. The Performance Goals for the Performance Period are specified in Schedule A based on a comparison of the Company’s average performance over the Performance Period (i.e., the summation of performance for calendar years one, two and three divided by three) for (a) return on common equity (“ROCE”), (b) compounded annual growth rate of total assets (“CAGR”), and (c) return on average assets (“ROAA”) relative to the average

1

performance for publicly-traded banks with total assets between $1 billion and $5 billion on the SNL Bank Index (the “SNL Index”) for ROCE, CAGR and ROAA over the Performance Period. Only banks which have reported year-end results by March 1^st will be considered for comparison purposes. In the event SNL Financial LC ceases to publish the SNL Index, the Committee will engage an independent compensation consultant to assist the Committee in selecting a new bank index or bank peer group for purposes of determining if a Performance Goal has been met.

4.    Earning and Vesting of Performance Shares. The Performance Shares will become earned and vested for the Performance Period to the extent (a) the Performance Goals are satisfied in accordance with the earnings provision of Schedule A, and (b) the Participant is actively employed on the last day of the Performance Period (unless, during the Performance Period, he terminates employment due to death, Permanent and Total Disability, Retirement or there is a Change in Control). If the Performance Goals are not satisfied, those Performance Shares eligible to be earned and vested during such Performance Period will be forfeited effective as of the last day of the Performance Period.

5.    Termination of Service. Except as otherwise provided in Section 6 below in the case of a Change in Control, all unvested Performance Shares will be forfeited effective as of the date of the Participant’s Termination of Service; provided, however, if the Participant incurs a Termination of Service due to death, Permanent and Total Disability or Retirement, the Performance Shares for such Performance Period will be treated as earned and vested to the extent the Performance Goals for such Performance Periods are satisfied, as contemplated under Schedule A, effective as of the last day of such Performance Period, in a pro rata manner based on the number of days in the Performance Period in which the Participant was an employee prior to Termination of Service.

6.    Change in Control. Notwithstanding any other provision of this Agreement, the Performance Shares shall be vested upon a Change in Control of the Company as provided in Section 11.1 of the Plan.

7.    Form and Timing of Payment of Performance Shares. Payment of earned and vested Performance Shares will be made as soon as practicable in the calendar year after the end of the applicable Performance Period. The Committee, in its sole discretion, may pay earned and vested Performance Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned and vested Performance Shares, determined as of the last day of the Performance Period) or a combination thereof.

8.    Pass-Through of Dividends. Unless otherwise determined by the Committee in its sole discretion, the Participant shall be entitled to receive all cash dividends which would have been paid with respect to the Performance Shares if they had been actual Shares, regardless of whether the Period of Restriction has lapsed.

9.    Participant’s Representations. The Participant represents to the Company that:

(a)    The terms and arrangements relating to the grant of Performance Shares and the offer thereof have been arrived at or made through direct communication with the Company or a person acting in its behalf and the Participant;

2

(b)    The Participant has received a balance sheet and income statement of the Company and as an employee of the Company or one of its Affiliates:

(i)    is thoroughly familiar with the Company’s business affairs and financial condition; and

(ii)    has been provided with or has access to such information (and has such knowledge and experience in financial and business matters that the Participant is capable of utilizing such information) as is necessary to evaluate the risks, and make an informed investment decision with respect to, the grant of Performance Shares.

10.    Nontransferability. Performance Shares cannot be (a) sold, transferred, assigned, margined, encumbered, bequeathed, gifted, alienated, hypothecated, pledged or otherwise disposed of, whether by operation of law, whether voluntarily or involuntarily or otherwise, or (b) subject to execution, attachment or similar process. Any attempted or purported transfer of Performance Shares in contravention of this Section or the Plan shall be null and void and of no force or effect whatsoever.

11.    Issuance of Shares. Within a reasonable period of time following the end of the Period of Restriction, the Company shall issue to the Participant or his beneficiary the number of Performance Shares specified in Section 1 of this Agreement, less any withholding required by Section 13 of this Agreement.

12.    Restrictive Legend. In the event the Participant is an “affiliate” of the Company (as defined by Rule 144 promulgated under the Securities Act of 1933, as amended), the Company may require that the shares to be issued to such Participant contain a legend in substantially the following form:

“THE HOLDER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS AN “AFFILIATE” OF THE COMPANY (AS DEFINED BY RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED), AND THEREFORE, THE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS.”

The Company shall issue such additional certificates as may be required to give effect to Section 14 of this Agreement.

Notwithstanding the foregoing provisions of this Section, the Company shall not be required to deliver any certificates for shares prior to: (a) the end of the Period of Restriction; (b) completing any registration or other qualification of the Shares, which the Company deems necessary or advisable under any federal or state law or under the rulings or regulations of the

3

Securities and Exchange Commission or any other governmental regulatory body; and (c) obtaining any approval or other clearance from any federal or state governmental agency or body, which the Company determines to be necessary or advisable. The Company has no obligation to obtain the fulfillment of the conditions specified in the preceding sentence. As a further condition to the issuance of certificates for shares, the Company may require the making of any representation or warranty which the Company deems necessary or advisable under any applicable law or regulation.

13.    Income and Employment Tax Withholding. The Participant shall be solely responsible for paying to the Company all required federal, state, city and local income and employment taxes which arise on the vesting of the Performance Shares. The Committee, in its sole discretion and subject to such rules as it may adopt, shall require the Participant to satisfy any withholding tax obligation by having the Company retain Performance Shares which have a Fair Market Value, determined as of the date of payment for such Performance Shares to the Participant, equal to the amount of the minimum withholding tax to be satisfied by that retention.

14.    Mitigation of Excise Tax. The Participant acknowledges that the Performance Shares issued hereunder is subject to reduction by the Committee for the reasons specified in Section 13.9 of the Plan.

15.    Indemnity. The Participant hereby agrees to indemnify and hold harmless the Company and its Affiliates (and their respective directors, officers and employees), and the Committee, from and against any and all losses, claims, damages, liabilities and expenses based upon or arising out of the incorrectness or alleged incorrectness of any representation made by Participant to the Company or any failure on the part of the Participant to perform any agreements contained herein. The Participant hereby further agrees to release and hold harmless the Company and its Affiliates (and their respective directors, officers and employees) from and against any tax liability, including without limitation, interest and penalties, incurred by the Participant in connection with the Participant’s participation in the Plan.

16.    Financial Information. The Participant understands he or she is able to access the Company’s most recent quarterly balance sheet and quarterly income statement by visiting the following internet address: http://www.snl.com/Irweblinkx/finl.aspx?iid=100750.

17.    Changes in Shares. In the event of any change in the Shares, as described in Section 3.6 of the Plan, the Committee shall make appropriate adjustment or substitution in the number of Performance Shares, all as provided in the Plan. The Committee’s determination in this respect shall be final and binding upon all parties.

18.    Non-Disclosure; Return of Confidential Information and Other Property.

(a)    Access to Confidential Information. The Participant understands, acknowledges and agrees that during the course of his employment with the Company he has gained or shall gain information regarding, knowledge of and familiarity with the Confidential Information (as defined in subsection 18(c)) of the Company and any Affiliates and that if the Confidential Information was disclosed by the Participant, the Company or Affiliate would suffer irreparable damage and harm. The Participant

4

understands, acknowledges and agrees that the Confidential Information derives substantial economic value from, among other reasons, not being known or readily ascertainable by proper means by others who could obtain economic value therefrom upon disclosure. The Participant acknowledges and agrees that the Company and all Affiliates use reasonable means to maintain the secrecy and confidentiality of the Confidential Information.

(b)    Non-Disclosure. At all times while the Participant is employed by the Company or any Affiliate, and at all times thereafter, the Participant shall not (i) directly or indirectly disclose, provide or discuss any Confidential Information with or to any Person (as defined in subsection 18(d) other than those directors, officers, employees, representatives and agents of the Company and any Affiliates who need to know such Confidential Information for a proper corporate purpose, and (ii) directly or indirectly use any Confidential Information (A) to compete against the Company or any Affiliates, or (B) for the Participant’s own benefit or for the benefit of any Person other than the Company or any Affiliate.

(c)    Confidential Information Defined. For purposes of this Agreement, the term “Confidential Information” means any and all:

(i)    materials, records, data, documents, lists, writings and information (whether in writing, printed, verbal, electronic, computerized, on disk or otherwise) (A) relating or referring in any manner to the business, operations, affairs, financial condition, results of operation, cash flow, assets, liabilities, sales, revenues, income, estimates, projections, policies, strategies, techniques, methods, products, developments, suppliers, relationships and/or customers of the Company or any Affiliate that are confidential, proprietary or not otherwise publicly available, in any event not without a breach of this Agreement, or (B) that the Company or any Affiliate has deemed confidential, proprietary or nonpublic;

(ii)    trade secrets of the Company or any Affiliate, as defined in Indiana Code Section 24-2-3-2, as amended, or any successor statute; and

(iii)    any and all copies, summaries, analyses and extracts which relate or refer to or reflect any of the items set forth in (i) or (ii) above. The Participant agrees that all Confidential Information is confidential and is and at all times shall remain the property of, as applicable, the Company or any of the Affiliates.

(d)    Definition of Person. For purposes of this Agreement, the term “Person” shall mean any natural person, proprietorship, partnership, corporation, limited liability corporation, bank, organization, firm, business, joint venture, association, trust or other entity and any government agency, body or authority.

(e)    Return of Confidential Information and Other Property. The Participant covenants and agrees:

5

(i)    to keep all Confidential Information subject to the Company’s or any Affiliate’s custody and control and to promptly return to the Company or the appropriate Affiliate all Confidential Information that is still in the Participant’s possession or control at the termination of the Participant’s employment with the Company; and

(ii)    promptly upon termination of the Participant’s employment with the Company, to return to the Company, at the Company’s principal office, all vehicles, equipment, computers, credit cards and other property of the Company and to cease using any of the foregoing.

19.    Non-Solicitation of Employees and Other Representatives. During the term of Participant’s employment with Horizon Bank, N.A. (the “Bank”) and for twelve (12) months thereafter, (a) Participant will not directly or indirectly encourage, solicit, induce, or attempt to encourage, solicit, or induce any employee, agent, contractor, or representative of the Bank to terminate his/her employment or contractual relationship with the Bank (or devote less than full time and efforts to the Bank’s business), and (b) Participant will not directly or indirectly hire or attempt to hire: (i) for any competitive position with any competitor any person who is an employee, agent, contactor, or representative to the Bank at such time (or who has been an employee, agent, contractor, or representative of the Bank at any time within the preceding 180 days) or (ii) for any position with any business any person who is an employee, agent, contractor, or representative of the Bank at such time (or who has been an employee, agent, contractor, or representative of the Bank at any time within the preceding 180 days).

20.    Non-Solicitation of Customers. During the term of Participant’s employment with the Bank and for twelve (12) months thereafter, Participant will not, in a competitive capacity, on behalf of any person or entity other than the Bank, directly or indirectly:

(a)    solicit, divert (or attempt to solicit or divert) or accept competitive business from any customer of the Bank with whom the Participant had contact (either directly or indirectly) or over which Participant had responsibility at any time in the one (1) year preceding Participant’s separation;

(b)    solicit, divert (or attempt to solicit or divert) or accept any competitive business from any customer of the Bank about whom Participant has obtained Confidential Information while employed by the Bank;

(c)    solicit, divert (or attempt to solicit or divert) or accept competitive business from any identified prospective customer of the Bank with whom Participant had contact (either directly or indirectly) or over which Participant had responsibility at any time in the one (1) year preceding Participant’s separation; or

(d)    solicit, divert (or attempt to solicit or divert) or accept competitive business from any identified prospective customer of the Bank about whom Participant has obtained Confidential Information.

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21.    Limited Covenant Not to Compete.

(a)    During Participant’s employment by the Bank, Participant shall not, directly or indirectly, have any ownership interest in, work for, advise, manage, act as an agent or consultant for, or have any business connection, or business or employment relationship, with any entity or person which competes with the Bank.

(b)    Moreover, for a period of              months after Participant’s separation from the Bank for any reason, Participant shall not:

(i)    Within the Indiana counties of              and the Michigan counties of             ;

(ii)    Within forty (40) miles of any Bank branch in, or for which Participant performed services or has been assigned responsibility, at any time within one (1) year preceding Participant’s separation; or

(iii)    in the Indiana and/or Michigan cities or towns for which Participant has been assigned responsibility, in writing, at any time within one (1) year preceding Participant’s separation;

directly or indirectly and in a competitive capacity own, manage, finance, operate, control, or participate in ownership, management, or operation of, act as an agent, consultant, or be employed with, any business engaged in the marketing, sale, or servicing of any service or product:

(1)    with which Participant was involved during Participant’s last year of employment with the Bank; or

(2)    which the Bank is developing, marketing, selling, or servicing (or plans to develop, market, sell, or service) and about which Participant gained any Confidential Information in the course of Participant’s employment with the Bank.

(c)    For purposes of this Agreement, the term “competitive capacity” shall mean (i) performing tasks or duties similar to those Participant performed in Participant’s last year of employment at the Bank for a competitor of the Bank; (ii) managing/supervising those who, for a competitor of the Bank, perform tasks or duties similar to those which Participant performed in Participant’s last year of employment with the Bank; or (iii) performing, on behalf of a competitor of the Bank, tasks or duties in which Participant utilizes any Confidential Information that Participant learned in the course of Participant’s employment with the Bank.

22.    Periods of Noncompliance and Reasonableness of Periods. The restrictions and covenants contained in Sections 19, 20, and 21 shall be deemed not to run during all periods of noncompliance, the intention of the parties hereto being to have such restrictions and covenants apply during the Term of this Agreement and for the full periods specified in Sections 19, 20 and 21. The Company and the Participant understand, acknowledge and agree that the restrictions

7

and covenants contained in Sections 18, 19, 20 and 21 are reasonable in view of the nature of the business in which the Company and the Affiliates are engaged, the Participant’s positions with the Company and/or the Bank and the Participant’s advantageous knowledge of and familiarity with the business, operations, affairs and customers of the Company and the Affiliates, including but not limited to the Bank.

The Company’s obligation to pay the amounts otherwise payable to the Participant pursuant to this Agreement shall immediately terminate in the event that the Participant breaches any of the provisions of Sections 18, 19, 20 or 21. Notwithstanding the foregoing:

(a)    the covenants of the Participant set forth in Sections 18, 19, 20 or 21 shall continue in full force and effect and be binding upon the Participant;

(b)    the Company shall be entitled to the remedies specified in Section 24; and

(c)    the Company shall be entitled to its damages, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) resulting from or relating to the Participant’s breach of any of the provisions of Sections 18, 19, 20 or 21.

23.    Survival of Certain Provisions. Upon any termination of the Participant’s employment with the Bank, the Participant and the Company hereby expressly agree that the provisions of Sections 18, 19, 20, 21, 22, 23 and 24 shall continue to be in full force and effect and binding upon the Participant and the Company in accordance with the applicable respective provisions of such Sections.

24.    Remedies. The Participant agrees that the Company or the Bank shall suffer irreparable damage and injury and shall not have an adequate remedy at law in the event of any actual, threatened or attempted breach by the Participant of any provision of Sections 18, 19, 20 or 21. Accordingly, in the event of a breach or a threatened or attempted breach by the Participant of any provision of Sections 18, 19, 20 or 21, in addition to all other remedies to which the Company and the Bank are entitled at law, in equity or otherwise, the Company and the Bank may be entitled to a temporary restraining order and a permanent injunction or a decree of specific performance of any provision of Sections 18, 19, 20 or 21. The foregoing remedies shall not be deemed to be the exclusive rights or remedies of the Company or the Bank for any breach of or noncompliance with this Agreement by the Participant but shall be in addition to all other rights and remedies available to the Company or the Bank at law, in equity or otherwise.

25.    Severability. In case any one or more of the provisions (or any portion thereof) contained herein will, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions (or portion thereof) had never been contained herein. If any provision of this Agreement shall be determined by a court of competent jurisdiction to be unenforceable because of the provision’s scope, duration or other factor, then such provision shall be considered divisible and the court making such determination shall have the power to reduce or limit (but not increase or make greater) such scope, duration or other factor or to reform (but not increase or make greater) such provision to make it enforceable to the maximum extent permitted

8

by law, and such provision shall then be enforceable against the appropriate party hereto in its reformed, reduced or limited form; provided, however, that a provision shall be enforceable in its reformed, reduced or limited form only in the particular jurisdiction in which a court of competent jurisdiction makes such determination.

26.    Effect of Headings. The descriptive headings of the Sections and, where applicable, subsections, of this Agreement are inserted for convenience and identification only and do not constitute a part of this Agreement for purposes of interpretation.

27.    Controlling Laws. Except to the extent superseded by the laws of the United States, the laws of the State of Indiana, without reference to the choice of law principles thereof, shall be controlling in all matters relating to this Agreement.

28.    Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which collectively shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Company, by its officer thereunder duly authorized, and the Participant, have caused this Performance Share Award Agreement to be executed as of the day and year first above written.

HORIZON BANCORP	PARTICIPANT
By:

ATTEST

By:

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SCHEDULE A

PERFORMANCE GOALS AND EARNINGS LEVELS FOR PERFORMANCE PERIOD

Performance Goal	Weight	Threshold 50% Payout	Target 100% Payout	Maximum 125% Payout
Return on Common Equity: The ROCE of the Company compared with the ROCE of the banks included in the SNL Bank Index.	34%	50th to 74th Percentile	75th to 84th Percentile	Greater than 84th Percentile
Compounded Annual Growth Rate of Total Assets: The CAGR of total assets for the Company compared with the CAGR of total assets for the banks included SNL Bank Index.	33%	50th to 74th Percentile	75th to 84th Percentile	Greater than 84th Percentile
Return on Average Assets: The ROAA for the Company compared with the ROAA for the banks included in the SNL Bank Index.	33%	50th to 74th Percentile	75th to 84th Percentile	Greater than 84th Percentile

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EX-10.2

Exhibit 10.2

HORIZON BANCORP

2013 OMNIBUS EQUITY INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

THIS AGREEMENT (the “Agreement”), made and executed as of the      day of             , 201  , between Horizon Bancorp, an Indiana corporation (the “Company”), and             , an officer or employee of the Company or one of its Affiliates, including but not limited to Horizon Bank, N.A. (the “Participant”).

WITNESSETH:

WHEREAS, the Company has adopted the Horizon Bancorp 2013 Omnibus Equity Incentive Plan (the “Plan”) to further the growth and financial success of the Company and its Affiliates by aligning the interests of Participants, through the ownership of Shares and through other incentives, with the interests of the Company’s shareholders; to provide Participants with an incentive for excellence in individual performance; to promote teamwork among Participants; to provide flexibility to the Company in its ability to motivate, attract and retain the services of Participants who make significant contributions to the Company’s success; and to allow Participants to share in the success of the Company; and

WHEREAS, it is the view of the Company that this goal can be achieved by granting Performance Shares to eligible employees; and

WHEREAS, the Participant has been designated by the Committee as an individual to whom Performance Shares should be granted as determined from the duties performed, the initiative and industry of the Participant, and his or her potential contribution to the future development, growth and prosperity of the Company;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Participant agree as follows:

1.    Award of Performance Shares. The Company hereby awards to the Participant, effective as of the date the Committee formally approves the award by resolution,              (            ) Performance Shares, subject to the terms and conditions of this Agreement and the provisions of the Plan. All provisions of the Plan, including defined terms, are incorporated herein and expressly made a part of this Agreement by reference. The Participant hereby acknowledges that he or she has received a copy of the Plan.

2.    Performance Periods. The Performance Period to which the award of Performance Shares relates is the three-year period beginning on             , 201_ and ending on             , 201  .

3.    Performance Goals. The Performance Goals for the Performance Period are specified in Schedule A based on a comparison of the Company’s average performance over the Performance Period (i.e., the summation of performance for calendar years one, two and three divided by three) for (a) return on common equity (“ROCE”), (b) compounded annual growth rate of total assets (“CAGR”), and (c) return on average assets (“ROAA”) relative to the average

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performance for publicly-traded banks with total assets between $1 billion and $5 billion on the SNL Bank Index (the “SNL Index”) for ROCE, CAGR and ROAA over the Performance Period. Only banks which have reported year-end results by March 1st will be considered for comparison purposes. In the event SNL Financial LC ceases to publish the SNL Index, the Committee will engage an independent compensation consultant to assist the Committee in selecting a new bank index or bank peer group for purposes of determining if a Performance Goal has been met.

4.    Earning and Vesting of Performance Shares. The Performance Shares will become earned and vested for the Performance Period to the extent (a) the Performance Goals are satisfied in accordance with the earnings provision of Schedule A, and (b) the Participant is actively employed on the last day of the Performance Period (unless, during the Performance Period, he terminates employment due to death, Permanent and Total Disability, Retirement or there is a Change in Control). If the Performance Goals are not satisfied, those Performance Shares eligible to be earned and vested during such Performance Period will be forfeited effective as of the last day of the Performance Period.

5.    Termination of Service. Except as otherwise provided in Section 6 below in the case of a Change in Control, all unvested Performance Shares will be forfeited effective as of the date of the Participant’s Termination of Service; provided, however, if the Participant incurs a Termination of Service due to death, Permanent and Total Disability or Retirement, the Performance Shares for such Performance Period will be treated as earned and vested to the extent the Performance Goals for such Performance Periods are satisfied, as contemplated under Schedule A, effective as of the last day of such Performance Period, in a pro rata manner based on the number of days in the Performance Period in which the Participant was an employee prior to Termination of Service.

6.    Change in Control. Notwithstanding any other provision of this Agreement, the Performance Shares shall be vested upon a Change in Control of the Company as provided in Section 11.1 of the Plan.

7.    Form and Timing of Payment of Performance Shares. Payment of earned and vested Performance Shares will be made as soon as practicable in the calendar year after the end of the applicable Performance Period. The Committee, in its sole discretion, may pay earned and vested Performance Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned and vested Performance Shares, determined as of the last day of the Performance Period) or a combination thereof.

8.    Pass-Through of Dividends. Unless otherwise determined by the Committee in its sole discretion, the Participant shall be entitled to receive all cash dividends which would have been paid with respect to the Performance Shares if they had been actual Shares, regardless of whether the Period of Restriction has lapsed.

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9.    Participant’s Representations. The Participant represents to the Company that:

(a) The terms and arrangements relating to the grant of Performance Shares and the offer thereof have been arrived at or made through direct communication with the Company or a person acting in its behalf and the Participant;

(b) The Participant has received a balance sheet and income statement of the Company and as an employee of the Company or one of its Affiliates:

(i) is thoroughly familiar with the Company’s business affairs and financial condition; and

(ii) has been provided with or has access to such information (and has such knowledge and experience in financial and business matters that the Participant is capable of utilizing such information) as is necessary to evaluate the risks, and make an informed investment decision with respect to, the grant of Performance Shares.

10.    Nontransferability. Performance Shares cannot be (a) sold, transferred, assigned, margined, encumbered, bequeathed, gifted, alienated, hypothecated, pledged or otherwise disposed of, whether by operation of law, whether voluntarily or involuntarily or otherwise, or (b) subject to execution, attachment or similar process. Any attempted or purported transfer of Performance Shares in contravention of this Section or the Plan shall be null and void and of no force or effect whatsoever.

11.    Issuance of Shares. Within a reasonable period of time following the end of the Period of Restriction, the Company shall issue to the Participant or his beneficiary the number of Performance Shares specified in Section 1 of this Agreement, less any withholding required by Section 13 of this Agreement.

12.    Restrictive Legend. In the event the Participant is an “affiliate” of the Company (as defined by Rule 144 promulgated under the Securities Act of 1933, as amended), the Company may require that the shares to be issued to such Participant contain a legend in substantially the following form:

“THE HOLDER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS AN “AFFILIATE” OF THE COMPANY (AS DEFINED BY RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED), AND THEREFORE, THE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS.”

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The Company shall issue such additional certificates as may be required to give effect to Section 14 of this Agreement.

Notwithstanding the foregoing provisions of this Section, the Company shall not be required to deliver any certificates for shares prior to: (a) the end of the Period of Restriction; (b) completing any registration or other qualification of the Shares, which the Company deems necessary or advisable under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body; and (c) obtaining any approval or other clearance from any federal or state governmental agency or body, which the Company determines to be necessary or advisable. The Company has no obligation to obtain the fulfillment of the conditions specified in the preceding sentence. As a further condition to the issuance of certificates for shares, the Company may require the making of any representation or warranty which the Company deems necessary or advisable under any applicable law or regulation.

13.    Income and Employment Tax Withholding. The Participant shall be solely responsible for paying to the Company all required federal, state, city and local income and employment taxes which arise on the vesting of the Performance Shares. The Committee, in its sole discretion and subject to such rules as it may adopt, shall require the Participant to satisfy any withholding tax obligation by having the Company retain Performance Shares which have a Fair Market Value, determined as of the date of payment for such Performance Shares to the Participant, equal to the amount of the minimum withholding tax to be satisfied by that retention.

14.    Mitigation of Excise Tax. The Participant acknowledges that the Performance Shares issued hereunder is subject to reduction by the Committee for the reasons specified in Section 13.9 of the Plan.

15.    Indemnity. The Participant hereby agrees to indemnify and hold harmless the Company and its Affiliates (and their respective directors, officers and employees), and the Committee, from and against any and all losses, claims, damages, liabilities and expenses based upon or arising out of the incorrectness or alleged incorrectness of any representation made by Participant to the Company or any failure on the part of the Participant to perform any agreements contained herein. The Participant hereby further agrees to release and hold harmless the Company and its Affiliates (and their respective directors, officers and employees) from and against any tax liability, including without limitation, interest and penalties, incurred by the Participant in connection with the Participant’s participation in the Plan.

16.    Financial Information. The Participant understands he or she is able to access the Company’s most recent quarterly balance sheet and quarterly income statement by visiting the following internet address: http://www.snl.com/Irweblinkx/finl.aspx?iid=100750.

17.    Changes in Shares. In the event of any change in the Shares, as described in Section 3.6 of the Plan, the Committee shall make appropriate adjustment or substitution in the number of Performance Shares, all as provided in the Plan. The Committee’s determination in this respect shall be final and binding upon all parties.

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18.    Severability. In case any one or more of the provisions (or any portion thereof) contained herein will, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions (or portion thereof) had never been contained herein. If any provision of this Agreement shall be determined by a court of competent jurisdiction to be unenforceable because of the provision’s scope, duration or other factor, then such provision shall be considered divisible and the court making such determination shall have the power to reduce or limit (but not increase or make greater) such scope, duration or other factor or to reform (but not increase or make greater) such provision to make it enforceable to the maximum extent permitted by law, and such provision shall then be enforceable against the appropriate party hereto in its reformed, reduced or limited form; provided, however, that a provision shall be enforceable in its reformed, reduced or limited form only in the particular jurisdiction in which a court of competent jurisdiction makes such determination.

19.    Effect of Headings. The descriptive headings of the Sections and, where applicable, subsections, of this Agreement are inserted for convenience and identification only and do not constitute a part of this Agreement for purposes of interpretation.

20.    Controlling Laws. Except to the extent superseded by the laws of the United States, the laws of the State of Indiana, without reference to the choice of law principles thereof, shall be controlling in all matters relating to this Agreement.

21.    Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which collectively shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Company, by its officer thereunder duly authorized, and the Participant, have caused this Performance Share Award Agreement to be executed as of the day and year first above written.

HORIZON BANCORP	PARTICIPANT
By:

ATTEST

By:

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SCHEDULE A

PERFORMANCE GOALS AND EARNINGS LEVELS FOR PERFORMANCE PERIOD

Performance Goal	Weight	Threshold 50% Payout	Target 100% Payout	Maximum 125% Payout
Return on Common Equity: The ROCE of the Company compared with the ROCE of the banks included in the SNL Bank Index.	34%	50th to 74th Percentile	75th to 84th Percentile	Greater than 84th Percentile
Compounded Annual Growth Rate of Total Assets: The CAGR of total assets for the Company compared with the CAGR of total assets for the banks included SNL Bank Index.	33%	50th to 74th Percentile	75th to 84th Percentile	Greater than 84th Percentile
Return on Average Assets: The ROAA for the Company compared with the ROAA for the banks included in the SNL Bank Index.	33%	50th to 74th Percentile	75th to 84th Percentile	Greater than 84th Percentile

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EX-10.3

Exhibit 10.3

HORIZON BANCORP

2013 OMNIBUS EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

THIS AGREEMENT (the “Agreement”), made and executed as of the      day of             , 201  , between Horizon Bancorp, an Indiana corporation (the “Company”), and             , an officer or employee of the Company or one of its Affiliates, including but not limited to Horizon Bank, N.A. (the “Optionee”);

WITNESSETH:

WHEREAS, the Company has adopted the Horizon Bancorp 2013 Omnibus Equity Incentive Plan (the “Plan”), to further the growth and financial success of the Company and its Affiliates by aligning the interests of Optionees, through the ownership of Shares and through other incentives, with the interests of the Company’s shareholders; to provide Optionees with an incentive for excellence in individual performance; to promote teamwork among Optionees; to provide flexibility to the Company in its ability to motivate, attract and retain the services of Optionees who make significant contributions to the Company’s success; and to allow Optionees to share in the success of the Company; and

WHEREAS, it is the view of the Company that this goal can be achieved by granting incentive and nonqualified stock options to eligible officers and other key employees from time to time; and

WHEREAS, the Optionee has been designated by the Committee as an individual to whom stock options should be granted under the Plan as determined from the duties performed, the initiative and industry of the Optionee, and the Optionee’s potential contribution to the future development, growth and prosperity of the Company;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Optionee agree as follows:

1.    Grant of Option.

(a)    Aggregate Number of Shares. Subject to the provisions of Sections 5 and 7 of this Agreement, the Company hereby grants to the Optionee the right and option (“Option”) to purchase all or any part of an aggregate of              (            ) shares of common stock of the Company subject to the terms and conditions of this Agreement and the provisions of the Plan. All provisions of the Plan, including defined terms, are incorporated herein and expressly made a part of this Agreement by reference. The Optionee hereby acknowledges that he has received a copy of the Plan.

(b)    Designation of Character of Options. Pursuant to the authority of the Committee to determine the character of the options granted as incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”), of the total options granted under subsection (a), zero shares shall be ISOs and              shares shall be NSOs.

(c)    Tax Advice. The Optionee acknowledges and agrees that he shall be solely responsible for obtaining tax advice in connection with the grant and exercise of the Option and any disposition of the shares acquired in connection with the Option.

2.    Option Price.

(a)    Purchase Price. The purchase price of the shares of common stock represented by the Option granted under Section 1 shall be              and     /100 Dollars ($            ) (which is the Fair Market Value per share on the date the Option is granted).

(b)    Payment of Purchase Price. The exercise price for the stock covered by the Option granted under this Agreement shall be paid in cash by the Optionee at the time the Option is exercised; provided, however, with the approval of the Committee, and to the extent not prohibited under the Code or regulations issued thereunder, the Optionee may exercise part or all of this Option by tendering whole shares of common stock of the Company owned by the Optionee and which have been owned by the Optionee for more than six months, or by a combination of whole shares of Company common stock and cash, which have a Fair Market Value equal to the cash exercise price for the stock with respect to which the Option is exercised. For this purpose, any shares of the Company’s common stock so tendered shall be valued by the Committee at their Fair Market Value according to valuation criteria set forth in the Plan. The exercise of this Option shall be subject to such rules and procedures as shall be adopted from time to time by the Committee.

(c)    Cashless Exercise. Notwithstanding the provisions of Section 2(b) of this Agreement, the payment of the exercise price for the stock covered by the Option may be made, (a) through a “same day sale” commitment from the Optionee and an NASD dealer whereby the Optionee irrevocably elects to exercise the Option and to sell a portion of the shares so purchased in order to pay the exercise price, and whereby the NASD dealer irrevocably commits upon receipt of such stock to forward the exercise price directly to the Company, or (b) through a “margin” commitment from the Optionee and an NASD dealer whereby the Optionee irrevocably elects to exercise the Option and to pledge the shares so purchased to the NASD dealer in a margin account as security for a loan from the NASD dealer in the amount of the exercise price and whereby the NASD dealer irrevocably commits upon receipt of such shares to forward the exercise price directly to the Company.

(d)    Net Exercise. Notwithstanding the provisions of Section 2(b) of this Agreement, the payment of the exercise price for the stock covered by the Option may be made by reducing the number of shares of common stock issued upon the exercise by the largest number of whole shares of common stock that has a Fair Market Value that does not exceed the aggregate exercise price for the shares of common stock exercised under this method.

(e)    Issuance of Certificates. Certificates evidencing the shares of stock purchased under this Option will not be delivered to the Optionee until full payment has been made for them and the Optionee shall have none of the rights of a shareholder with respect to such shares until those shares are issued to the Optionee. The Company shall not be required to issue or deliver any certificate(s) for shares of the stock purchased upon exercise of the Option prior to (i) completing any registration or other qualification of the shares, which the Company

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deems necessary or advisable under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body; and (ii) obtaining any approval or other clearance from any federal or state governmental agency or body, which the Company determines to be necessary or advisable. The Company shall have no obligation to obtain the fulfillment of the conditions specified in the preceding sentence.

3.    Income and Employment Tax Withholding.

(a)    The Optionee shall be solely responsible for paying to the Company all required federal, state, city and local income and employment taxes applicable to the exercise of an NSO under the Plan.

(b)    Notwithstanding the provisions of subsection (a), with respect to stock to be issued pursuant to the exercise of an NSO, the Committee, in its sole discretion and subject to such rules as it may adopt from time to time, shall require the Optionee to satisfy any withholding tax obligation which may arise in connection with the exercise of the NSO by having the Company retain shares of stock which would otherwise be issued in connection with the exercise of the NSO or by accepting delivery from the Optionee of shares of Company stock which have a Fair Market Value, determined as of the date of the delivery of such shares, equal to the amount of the minimum withholding tax to be satisfied by that retention or delivery.

4.    Nontransferability. The Option granted hereunder shall not be assignable or transferable by the Optionee, except by will or by the laws of descent and distribution. The Option shall not be pledged or hypothecated in any way, nor shall it be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge or other disposition of the Option in violation of this provision or the levy of execution, attachment or similar process upon the Option shall be null and void and without effect and shall cause the Option to be terminated.

5.    Exercise of Option.

(a)    Maximum Term and Vesting. The Option may not be exercised after the expiration of ten (10 ) years from the date of this Agreement, subject to earlier termination as provided in the Plan and this Agreement. Subject to the provisions of this Section 5 and Section 6, the Option shares shall vest and be exercisable by the Optionee in accordance with the following schedule:

	Percentage of Option Shares Vested and Exercisable
Date of Vesting	Percent Vested	Cumulative Vesting
/      /	33 percent	33 percent
/      /	33 percent	66 percent
/      /	34 percent	100 percent

Notwithstanding the foregoing, the Option shares shall also vest and be exercisable upon the Optionee’s death, Permanent and Total Disability or Retirement. In addition, the Option shares shall vest and be exercisable upon a Change in Control of the Company.

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(b)    Limitations on Exercise. The Option may be exercised during the lifetime of the Optionee only by the Optionee or his guardian or attorney-in-fact in the event the Optionee becomes Permanently and Totally Disabled. In the case of the Optionee’s death, the Option may be exercised by the Optionee’s personal representative or administrator.

(c)    Legal Requirements. Notwithstanding any other provision of this Agreement, the Option may not be exercised in whole or in part if the issuance of the shares would constitute a violation of any applicable federal or state securities law or other applicable laws, rules or regulations. As a condition to the exercise of the Option, the Company may require the person exercising the Option to make any representation or warranty to the Company as may be required by any applicable law or regulation or as may be advised to the Company.

6.    Restrictive Legend. In the event the Optionee is an “affiliate” of the Company (as defined by Rule 144 promulgated under the Securities Act of 1933, as amended), the Company may require that the shares to be issued to such Optionee contain a legend in substantially the following form:

“THE HOLDER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS AN “AFFILIATE” OF THE COMPANY (AS DEFINED BY RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED), AND THEREFORE, THE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS.”

7.    Early Termination of Option.

(a)    In General. All rights to exercise this Option shall terminate 30 days after the effective date of the Optionee’s termination of employment with the Company and its Affiliates, but not later than the date the Option expires pursuant to its terms, unless the termination is For Cause or on account of the Permanent and Total Disability, death or Retirement of the Optionee. The transfer of the Optionee from the Company to an Affiliate or vice versa, or from one Affiliate to another, shall not be deemed a termination of employment.

(b)    For Cause Termination. If the Optionee’s employment is terminated For Cause, no previously unexercised Option granted under the Plan and this Agreement may be exercised. Rather, any unexercised Options, or part thereof, shall terminate effective on the date the Optionee receives notice of his termination For Cause.

(c)    Exercise on Disability or Death. If the Optionee becomes Permanently and Totally Disabled or dies while employed by the Company or any of its Affiliates, the Option shall be exercisable in full within one year after the date of his termination of employment due to Permanent and Total Disability or death (but not later than the date the Option expires pursuant to its terms) at which time the Option or any portion thereof remaining unexercised shall terminate. During such one year period immediately following the termination of employment

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due to Permanent and Total Disability or death of the Optionee, the Option may be exercised in full, subject to the limitations of this Option, by the Optionee, by the Optionee’s guardian or attorney-in-fact, or by the Optionee’s personal representative or administrator, as the case may be; provided, however, the Option shall not be exercised after the expiration of ten (10) years from the date of this Agreement.

(d)    Exercise on Retirement. If the Optionee’s employment is terminated on or after satisfying the requirements for Retirement, the Option shall be exercisable in full within five years after the date of the Optionee’s termination of employment due to Retirement (but not later than the date on which the Option expires pursuant to its terms) at which time the Option, or any portion thereof remaining unexercised, shall terminate.

8.    Optionee’s Representations. The Optionee represents to the Company that:

(a)    The terms and arrangements relating to the grant of this Option and the stock to which it relates, and the offer thereof, have been arrived at or made through direct communication with the Company or a person acting in its behalf and such Optionee;

(b)    The Optionee has received a balance sheet and income statement of the Company and as an officer or key employee of the Company or its Affiliates:

(i) is thoroughly familiar with the Company’s business affairs and financial condition;

(ii) has been provided with or has access to such information (and has such knowledge and experience in financial and business matters that he is capable of utilizing such information) as is necessary to evaluate the risks, and make an informed investment decision with respect to, the grant of this Option and the stock to which it relates; and

(iii) has sufficient financial resources so that he is able to bear the economic risks of his investment in this Option and such stock; and

(c)    This Option and the stock to which it relates is being acquired in good faith for investment purposes and not with a view to, or for sale in connection with, any distribution thereof.

9.    Indemnity. The Optionee hereby agrees to indemnify and hold harmless the Company and its Affiliates (and their respective directors, officers and employees), and the Committee, from and against any and all losses, claims, damages, liabilities and expenses based upon or arising out of the incorrectness or alleged incorrectness of any representation made by him to the Company or any failure on the part of him to perform any agreements contained herein. The Optionee hereby further agrees to release and hold harmless the Company and its Affiliates (and their respective directors, officers and employees) from and against any tax liability, including without limitation, interest and penalties, incurred by the Optionee in connection with his participation in the Plan.

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10.    Financial Information. The Company hereby undertakes to deliver to the Optionee, at such time as they become available and so long as this Option is in effect and is unexercised in whole or in part, a balance sheet and income statement of the Company with respect to any fiscal year of the Company ending on or after the date of this Agreement.

11.    Conditions Precedent. In no event shall the Company be obligated to issue stock pursuant to this Option until it is satisfied that all conditions precedent to the issuance of the stock, as provided in the Plan and this Agreement, have been performed and completed, including the approval and adoption of the Plan by the shareholders and the Board of Directors of the Company.

12.    Changes in Stock. In the event of any change in the common stock of the Company, as described in Section 3.6 of the Plan, the Committee shall make the appropriate adjustment or substitution in the number, kind and price of shares under this Option, all as provided in the Plan. The Committee’s determination in this respect shall be final and binding upon all parties.

13.    Non-Disclosure; Return of Confidential Information and Other Property.

(a)    Access to Confidential Information. The Optionee understands, acknowledges and agrees that during the course of employment with the Company he has gained or shall gain information regarding, knowledge of and familiarity with the Confidential Information (as defined in subsection 13(c)) of the Company and any Affiliates and that if the Confidential Information was disclosed by the Optionee, the Company or Affiliate would suffer irreparable damage and harm. The Optionee understands, acknowledges and agrees that the Confidential Information derives substantial economic value from, among other reasons, not being known or readily ascertainable by proper means by others who could obtain economic value therefrom upon disclosure. The Optionee acknowledges and agrees that the Company and all Affiliates use reasonable means to maintain the secrecy and confidentiality of the Confidential Information.

(b)    Non-Disclosure. At all times while the Optionee is employed by the Company or any Affiliate, and at all times thereafter, the Optionee shall not (i) directly or indirectly disclose, provide or discuss any Confidential Information with or to any Person (as defined in subsection 13(d)) other than those directors, officers, employees, representatives and agents of the Company and any Affiliates who need to know such Confidential Information for a proper corporate purpose, and (ii) directly or indirectly use any Confidential Information (A) to compete against the Company or any Affiliates, or (B) for the Optionee’s own benefit or for the benefit of any Person other than the Company or any Affiliate.

(c)    Confidential Information Defined. For purposes of this Agreement, the term “Confidential Information” means any and all:

(i) materials, records, data, documents, lists, writings and information (whether in writing, printed, verbal, electronic, computerized, on disk or otherwise) (A) relating or referring in any manner to the business, operations, affairs, financial condition, results of

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operation, cash flow, assets, liabilities, sales, revenues, income, estimates, projections, policies, strategies, techniques, methods, products, developments, suppliers, relationships and/or customers of the Company or any Affiliate that are confidential, proprietary or not otherwise publicly available, in any event not without a breach of this Agreement, or (B) that the Company or any Affiliate has deemed confidential, proprietary or nonpublic;

(ii) trade secrets of the Company or any Affiliate, as defined in Indiana Code Section 24-2-3-2, as amended, or any successor statute; and

(iii) any and all copies, summaries, analyses and extracts which relate or refer to or reflect any of the items set forth in (i) or (ii) above. The Optionee agrees that all Confidential Information is confidential and is and at all times shall remain the property of, as applicable, the Company or any of the Affiliates.

(d)    Definition of Person. For purposes of this Agreement, the term “Person” shall mean any natural person, proprietorship, partnership, corporation, limited liability corporation, bank, organization, firm, business, joint venture, association, trust or other entity and any government agency, body or authority.

(e)    Return of Confidential Information and Other Property. The Optionee covenants and agrees:

(i) to keep all Confidential Information subject to the Company’s or any Affiliate’s custody and control and to promptly return to the Company or the appropriate Affiliate all Confidential Information that is still in the Optionee’s possession or control at the termination of the Optionee’s employment with the Company; and

(ii) promptly upon termination of the Optionee’s employment with the Company, to return to the Company, at the Company’s principal office, all vehicles, equipment, computers, credit cards and other property of the Company and to cease using any of the foregoing.

14.    Non-Solicitation of Employees and Other Representatives. During the term of the Optionee’s employment with Horizon Bank, N.A. (the “Bank”) and for twelve (12) months thereafter, (a) the Optionee will not directly or indirectly encourage, solicit, induce, or attempt to encourage, solicit, or induce any employee, agent, contractor, or representative of the Bank to terminate his/her employment or contractual relationship with the Bank (or devote less than full time and efforts to the Bank’s business), and (b) the Optionee will not directly or indirectly hire or attempt to hire: (i) for any competitive position with any competitor any person who is an employee, agent, contactor, or representative to the Bank at such time (or who has been an employee, agent, contractor, or representative of the Bank at any time within the preceding 180 days) or (ii) for any position with any business any person who is an employee, agent, contractor, or representative of the Bank at such time (or who has been an employee, agent, contractor, or representative of the Bank at any time within the preceding 180 days).

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15.    Non-Solicitation of Customers During the term of the Optionee’s employment with the Bank and for twelve (12) months thereafter, the Optionee will not, in a competitive capacity, on behalf of any person or entity other than the Bank, directly or indirectly:

(a)    solicit, divert (or attempt to solicit or divert) or accept competitive business from any customer of the Bank with whom the Optionee had contact (either directly or indirectly) or over which the Optionee had responsibility at any time in the one (1) year preceding the Optionee’s separation;

(b)    solicit, divert (or attempt to solicit or divert) or accept any competitive business from any customer of the Bank about whom the Optionee has obtained Confidential Information while employed by the Bank;

(c)    solicit, divert (or attempt to solicit or divert) or accept competitive business from any identified prospective customer of the Bank with whom the Optionee had contact (either directly or indirectly) or over which the Optionee had responsibility at any time in the one (1) year preceding the Optionee’s separation; or

(d)    solicit, divert (or attempt to solicit or divert) or accept competitive business from any identified prospective customer of the Bank about whom the Optionee has obtained Confidential Information.

16.    Limited Covenant Not to Compete.

(a)    During the Optionee’s employment by the Bank, the Optionee shall not, directly or indirectly, have any ownership interest in, work for, advise, manage, act as an agent or consultant for, or have any business connection, or business or employment relationship, with any entity or person which competes with the Bank.

(b)    Moreover, for a period of              months after the Optionee’s separation from the Bank for any reason, the Optionee shall not:

(i) Within the Indiana counties of              and the Michigan counties of             ;

(ii) Within forty (40) miles of any Bank branch in, or for which the Optionee performed services or has been assigned responsibility, at any time within one (1) year preceding the Optionee’s separation; or

(iii) in the Indiana and/or Michigan cities or towns for which the Optionee has been assigned responsibility, in writing, at any time within one (1) year preceding the Optionee’s separation;

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directly or indirectly and in a competitive capacity own, manage, finance, operate, control, or participate in ownership, management, or operation of, act as an agent, consultant, or be employed with, any business engaged in the marketing, sale, or servicing of any service or product:

1) with which the Optionee was involved during the Optionee’s last year of employment with the Bank; or

2) which the Bank is developing, marketing, selling, or servicing (or plans to develop, market, sell, or service) and about which the Optionee gained any Confidential Information in the course of the Optionee s employment with the Bank.

(c)    For purposes of this Agreement, the term “competitive capacity” shall mean (i) performing tasks or duties similar to those the Optionee performed in the Optionee’s last year of employment at the Bank for a competitor of the Bank; (ii) managing/supervising those who, for a competitor of the Bank, perform tasks or duties similar to those which the Optionee performed in the Optionee’s last year of employment with the Bank; or (iii) performing, on behalf of a competitor of the Bank, tasks or duties in which the Optionee utilizes any Confidential Information that the Optionee learned in the course of the Optionee’s employment with the Bank.

17.    Periods of Noncompliance and Reasonableness of Periods. The restrictions and covenants contained in Sections 14, 15 and 16 shall be deemed not to run during all periods of noncompliance, the intention of the parties hereto being to have such restrictions and covenants apply during the Term of this Agreement and for the full periods specified in Sections 14, 15 and 16. The Company and the Optionee understand, acknowledge and agree that the restrictions and covenants contained in Sections 13, 14, 15 and 16 are reasonable in view of the nature of the business in which the Company and the Affiliates are engaged, the Optionee’s positions with the Company and/or the Bank and the Optionee’s advantageous knowledge of and familiarity with the business, operations, affairs and customers of the Company and the Affiliates, including but not limited to the Bank.

The Company’s obligation to pay the amounts otherwise payable to the Optionee pursuant to this Agreement shall immediately terminate in the event that the Optionee breaches any of the provisions of Sections 13, 14, 15 or 16. Notwithstanding the foregoing:

(a)    the covenants of the Optionee set forth in Sections 13, 14, 15 or 16 shall continue in full force and effect and be binding upon the Optionee;

(b)    the Company shall be entitled to the remedies specified in Section 19; and

(c)    the Company shall be entitled to its damages, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) resulting from or relating to the Optionee’s breach of any of the provisions of Sections 13, 14, 15 or 16.

18.    Survival of Certain Provisions. Upon any termination of the Optionee’s employment with the Bank, the Optionee and the Company hereby expressly agree that the provisions of Sections 13, 14, 15, 16, 17, 18 and 19 shall continue to be in full force and effect and binding upon the Optionee and the Company in accordance with the applicable respective provisions of such Sections.

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19.    Remedies. The Optionee agrees that the Company or the Bank shall suffer irreparable damage and injury and shall not have an adequate remedy at law in the event of any actual, threatened or attempted breach by the Optionee of any provision of Sections 13, 14, 15 or 16. Accordingly, in the event of a breach or a threatened or attempted breach by the Optionee of any provision of Sections 13, 14, 15 or 16, in addition to all other remedies to which the Company and the Bank are entitled at law, in equity or otherwise, the Company and the Bank may be entitled to a temporary restraining order and a permanent injunction or a decree of specific performance of any provision of Sections 13, 14, 15 or 16. The foregoing remedies shall not be deemed to be the exclusive rights or remedies of the Company or the Bank for any breach of or noncompliance with this Agreement by the Optionee but shall be in addition to all other rights and remedies available to the Company or the Bank at law, in equity or otherwise.

20.    Severability. In case any one or more of the provisions (or any portion thereof) contained herein will, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions (or portion thereof) had never been contained herein. If any provision of this Agreement shall be determined by a court of competent jurisdiction to be unenforceable because of the provision’s scope, duration or other factor, then such provision shall be considered divisible and the court making such determination shall have the power to reduce or limit (but not increase or make greater) such scope, duration or other factor or to reform (but not increase or make greater) such provision to make it enforceable to the maximum extent permitted by law, and such provision shall then be enforceable against the appropriate party hereto in its reformed, reduced or limited form; provided, however, that a provision shall be enforceable in its reformed, reduced or limited form only in the particular jurisdiction in which a court of competent jurisdiction makes such determination.

21.    Effect of Headings. The descriptive headings of the Sections and, where applicable, subsections of this Agreement are inserted for convenience and identification only and do not constitute a part of this Agreement for purposes of interpretation.

22.    Gender and Number. Where the context admits, words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.

23.    Controlling Laws. Except to the extent superseded by the laws of the United States, the laws of the State of Indiana, without reference to the choice of law principles thereof, shall be controlling in all matters relating to this Agreement.

24.    Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which collectively shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the Company, by its officer thereunder duly authorized, and the Optionee, have caused this Horizon Bancorp Stock Option Agreement to be executed as of the day and year first above written, which is the date on which the Option is granted.

HORIZON BANCORP	OPTIONEE
By:

ATTEST

By:

11

EX-10.4

Exhibit 10.4

HORIZON BANCORP

2013 OMNIBUS EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

THIS AGREEMENT (the “Agreement”), made and executed as of the      day of             , 201  , between Horizon Bancorp, an Indiana corporation (the “Company”), and             , an officer or employee of the Company or one of its Affiliates, including but not limited to Horizon Bank, N.A. (the “Optionee”);

WITNESSETH:

WHEREAS, the Company has adopted the Horizon Bancorp 2013 Omnibus Equity Incentive Plan (the “Plan”), to further the growth and financial success of the Company and its Affiliates by aligning the interests of Participants, through the ownership of Shares and through other incentives, with the interests of the Company’s shareholders; to provide Participants with an incentive for excellence in individual performance; to promote teamwork among Participants; to provide flexibility to the Company in its ability to motivate, attract and retain the services of Participants who make significant contributions to the Company’s success; and to allow Participants to share in the success of the Company; and

WHEREAS, it is the view of the Company that this goal can be achieved by granting incentive and nonqualified stock options to eligible officers and other key employees from time to time; and

WHEREAS, the Optionee has been designated by the Committee as an individual to whom stock options should be granted under the Plan as determined from the duties performed, the initiative and industry of the Optionee, and the Optionee’s potential contribution to the future development, growth and prosperity of the Company;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Optionee agree as follows:

1.    Grant of Option.

(a)    Aggregate Number of Shares. Subject to the provisions of Sections 5 and 7 of this Agreement, the Company hereby grants to the Optionee the right and option (“Option”) to purchase all or any part of an aggregate of              (            ) shares of common stock of the Company subject to the terms and conditions of this Agreement and the provisions of the Plan. All provisions of the Plan, including defined terms, are incorporated herein and expressly made a part of this Agreement by reference. The Optionee hereby acknowledges that he has received a copy of the Plan.

(b)    Designation of Character of Options. Pursuant to the authority of the Committee to determine the character of the options granted as incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”), of the total options granted under subsection (a), zero shares shall be ISOs and              shares shall be NSOs.

(c)    Tax Advice. The Optionee acknowledges and agrees that he shall be solely responsible for obtaining tax advice in connection with the grant and exercise of the Option and any disposition of the shares acquired in connection with the Option.

2.    Option Price.

(a)    Purchase Price. The purchase price of the shares of common stock represented by the Option granted under Section 1 shall be              and     /100 Dollars ($            ) (which is the Fair Market Value per share on the date the Option is granted).

(b)    Payment of Purchase Price. The exercise price for the stock covered by the Option granted under this Agreement shall be paid in cash by the Optionee at the time the Option is exercised; provided, however, with the approval of the Committee, and to the extent not prohibited under the Code or regulations issued thereunder, the Optionee may exercise part or all of this Option by tendering whole shares of common stock of the Company owned by the Optionee and which have been owned by the Optionee for more than six months, or by a combination of whole shares of Company common stock and cash, which have a Fair Market Value equal to the cash exercise price for the stock with respect to which the Option is exercised. For this purpose, any shares of the Company’s common stock so tendered shall be valued by the Committee at their Fair Market Value according to valuation criteria set forth in the Plan. The exercise of this Option shall be subject to such rules and procedures as shall be adopted from time to time by the Committee.

(c)    Cashless Exercise. Notwithstanding the provisions of Section 2(b) of this Agreement, the payment of the exercise price for the stock covered by the Option may be made, (a) through a “same day sale” commitment from the Optionee and an NASD dealer whereby the Optionee irrevocably elects to exercise the Option and to sell a portion of the shares so purchased in order to pay the exercise price, and whereby the NASD dealer irrevocably commits upon receipt of such stock to forward the exercise price directly to the Company, or (b) through a “margin” commitment from the Optionee and an NASD dealer whereby the Optionee irrevocably elects to exercise the Option and to pledge the shares so purchased to the NASD dealer in a margin account as security for a loan from the NASD dealer in the amount of the exercise price and whereby the NASD dealer irrevocably commits upon receipt of such shares to forward the exercise price directly to the Company.

(d)    Net Exercise. Notwithstanding the provisions of Section 2(b) of this Agreement, the payment of the exercise price for the stock covered by the Option may be made by reducing the number of shares of common stock issued upon the exercise by the largest number of whole shares of common stock that has a Fair Market Value that does not exceed the aggregate exercise price for the shares of common stock exercised under this method.

(e)    Issuance of Certificates. Certificates evidencing the shares of stock purchased under this Option will not be delivered to the Optionee until full payment has been made for them and the Optionee shall have none of the rights of a shareholder with respect to such shares until those shares are issued to the Optionee. The Company shall not be required to issue or deliver any certificate(s) for shares of the stock purchased upon exercise of the Option prior to (i) completing any registration or other qualification of the shares, which the Company

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deems necessary or advisable under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body; and (ii) obtaining any approval or other clearance from any federal or state governmental agency or body, which the Company determines to be necessary or advisable. The Company shall have no obligation to obtain the fulfillment of the conditions specified in the preceding sentence.

3.    Income and Employment Tax Withholding.

(a)    The Optionee shall be solely responsible for paying to the Company all required federal, state, city and local income and employment taxes applicable to the exercise of an NSO under the Plan.

(b)    Notwithstanding the provisions of subsection (a), with respect to stock to be issued pursuant to the exercise of an NSO, the Committee, in its sole discretion and subject to such rules as it may adopt from time to time, shall require the Optionee to satisfy any withholding tax obligation which may arise in connection with the exercise of the NSO by having the Company retain shares of stock which would otherwise be issued in connection with the exercise of the NSO or by accepting delivery from the Optionee of shares of Company stock which have a Fair Market Value, determined as of the date of the delivery of such shares, equal to the amount of the minimum withholding tax to be satisfied by that retention or delivery.

4.    Nontransferability. The Option granted hereunder shall not be assignable or transferable by the Optionee, except by will or by the laws of descent and distribution. The Option shall not be pledged or hypothecated in any way, nor shall it be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge or other disposition of the Option in violation of this provision or the levy of execution, attachment or similar process upon the Option shall be null and void and without effect and shall cause the Option to be terminated.

5.    Exercise of Option.

(a)    Maximum Term and Vesting. The Option may not be exercised after the expiration of ten (10) years from the date of this Agreement, subject to earlier termination as provided in the Plan and this Agreement. Subject to the provisions of this Section 5 and Section 6, the Option shares shall vest and be exercisable by the Optionee in accordance with the following schedule:

	Percentage of Option Shares Vested and Exercisable
Date of Vesting	Percent Vested	Cumulative Vesting
/      /	33 percent	33 percent
/      /	33 percent	66 percent
/      /	34 percent	100 percent

Notwithstanding the foregoing, the Option shares shall also vest and be exercisable upon the Optionee’s death, Permanent and Total Disability or Retirement. In addition, the Option shares shall vest and be exercisable upon a Change in Control of the Company.

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(b)    Limitations on Exercise. The Option may be exercised during the lifetime of the Optionee only by the Optionee or his guardian or attorney-in-fact in the event the Optionee becomes Permanently and Totally Disabled. In the case of the Optionee’s death, the Option may be exercised by the Optionee’s personal representative or administrator.

(c)    Legal Requirements. Notwithstanding any other provision of this Agreement, the Option may not be exercised in whole or in part if the issuance of the shares would constitute a violation of any applicable federal or state securities law or other applicable laws, rules or regulations. As a condition to the exercise of the Option, the Company may require the person exercising the Option to make any representation or warranty to the Company as may be required by any applicable law or regulation or as may be advised to the Company.

6.    Restrictive Legend. In the event the Optionee is an “affiliate” of the Company (as defined by Rule 144 promulgated under the Securities Act of 1933, as amended), the Company may require that the shares to be issued to such Optionee contain a legend in substantially the following form:

“THE HOLDER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS AN “AFFILIATE” OF THE COMPANY (AS DEFINED BY RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED), AND THEREFORE, THE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS.”

7.    Early Termination of Option.

(a)    In General. All rights to exercise this Option shall terminate 30 days after the effective date of the Optionee’s termination of employment with the Company and its Affiliates, but not later than the date the Option expires pursuant to its terms, unless the termination is For Cause or on account of the Permanent and Total Disability, death or Retirement of the Optionee. The transfer of the Optionee from the Company to an Affiliate or vice versa, or from one Affiliate to another, shall not be deemed a termination of employment.

(b)    For Cause Termination. If the Optionee’s employment is terminated For Cause, no previously unexercised Option granted under the Plan and this Agreement may be exercised. Rather, any unexercised Options, or part thereof, shall terminate effective on the date the Optionee receives notice of his termination For Cause.

(c)    Exercise on Disability or Death. If the Optionee becomes Permanently and Totally Disabled or dies while employed by the Company or any of its Affiliates, the Option shall be exercisable in full within one year after the date of his termination of employment due to Permanent and Total Disability or death (but not later than the date the Option expires pursuant to its terms) at which time the Option or any portion thereof remaining unexercised shall terminate. During such one year period immediately following the termination of employment

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due to Permanent and Total Disability or death of the Optionee, the Option may be exercised in full, subject to the limitations of this Option, by the Optionee, by the Optionee’s guardian or attorney-in-fact, or by the Optionee’s personal representative or administrator, as the case may be; provided, however, the Option shall not be exercised after the expiration of ten (10) years from the date of this Agreement.

(d)    Exercise on Retirement. If the Optionee’s employment is terminated on or after satisfying the requirements for Retirement, the Option shall be exercisable in full within five years after the date of the Optionee’s termination of employment due to Retirement (but not later than the date on which the Option expires pursuant to its terms) at which time the Option, or any portion thereof remaining unexercised, shall terminate.

8.    Optionee’s Representations. The Optionee represents to the Company that:

(a)    The terms and arrangements relating to the grant of this Option and the stock to which it relates, and the offer thereof, have been arrived at or made through direct communication with the Company or a person acting in its behalf and such Optionee;

(b)    The Optionee has received a balance sheet and income statement of the Company and as an officer or key employee of the Company or its Affiliates:

(i) is thoroughly familiar with the Company’s business affairs and financial condition;

(ii) has been provided with or has access to such information (and has such knowledge and experience in financial and business matters that he is capable of utilizing such information) as is necessary to evaluate the risks, and make an informed investment decision with respect to, the grant of this Option and the stock to which it relates; and

(iii) has sufficient financial resources so that he is able to bear the economic risks of his investment in this Option and such stock; and

(c)    This Option and the stock to which it relates is being acquired in good faith for investment purposes and not with a view to, or for sale in connection with, any distribution thereof.

9.    Indemnity. The Optionee hereby agrees to indemnify and hold harmless the Company and its Affiliates (and their respective directors, officers and employees), and the Committee, from and against any and all losses, claims, damages, liabilities and expenses based upon or arising out of the incorrectness or alleged incorrectness of any representation made by him to the Company or any failure on the part of him to perform any agreements contained herein. The Optionee hereby further agrees to release and hold harmless the Company and its Affiliates (and their respective directors, officers and employees) from and against any tax liability, including without limitation, interest and penalties, incurred by the Optionee in connection with his participation in the Plan.

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10.    Financial Information. The Company hereby undertakes to deliver to the Optionee, at such time as they become available and so long as this Option is in effect and is unexercised in whole or in part, a balance sheet and income statement of the Company with respect to any fiscal year of the Company ending on or after the date of this Agreement.

11.    Conditions Precedent. In no event shall the Company be obligated to issue stock pursuant to this Option until it is satisfied that all conditions precedent to the issuance of the stock, as provided in the Plan and this Agreement, have been performed and completed, including the approval and adoption of the Plan by the shareholders and the Board of Directors of the Company.

12.    Changes in Stock. In the event of any change in the common stock of the Company, as described in Section 3.6 of the Plan, the Committee shall make the appropriate adjustment or substitution in the number, kind and price of shares under this Option, all as provided in the Plan. The Committee’s determination in this respect shall be final and binding upon all parties.

13.    Effect of Headings. The descriptive headings of the Sections and, where applicable, subsections of this Agreement are inserted for convenience and identification only and do not constitute a part of this Agreement for purposes of interpretation.

14.    Gender and Number. Where the context admits, words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.

15.    Controlling Laws. Except to the extent superseded by the laws of the United States, the laws of the State of Indiana, without reference to the choice of law principles thereof, shall be controlling in all matters relating to this Agreement.

16.    Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which collectively shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the Company, by its officer thereunder duly authorized, and the Optionee, have caused this Horizon Bancorp Stock Option Agreement to be executed as of the day and year first above written, which is the date on which the Option is granted.

HORIZON BANCORP	OPTIONEE
By:

ATTEST

By:

7

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CRAIG M. DWIGHT

I, Craig M. Dwight, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Horizon Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 4, 2015	/s/ Craig M. Dwight
	Craig M. Dwight
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF MARK E. SECOR

I, Mark E. Secor, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Horizon Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 4, 2015	/s/ Mark E. Secor
	Mark E. Secor
	Chief Financial Officer

EX-32

EXHIBIT 32

HORIZON BANCORP

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Horizon Bancorp (the “Company”) certifies that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2015 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 4, 2015	/s/ Craig M. Dwight
	Craig M. Dwight
	Chief Executive Officer
Dated: May 4, 2015
	/s/ Mark E. Secor
	Mark E. Secor
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Horizon Bancorp and will be retained by Horizon Bancorp and furnished to the Securities Exchange Commission or its staff upon request.

XML

Acquisition - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Apr. 03, 2014
Business Acquisition [Line Items]
Common stock outstanding	9,232,163	9,213,036
Net intangible assets acquired			$ 822,000
Acquisition of goodwill	28,176,000	28,176,000	8,428,000
Purchase price of the business assets			2,548,000
Summit [Member]
Business Acquisition [Line Items]
Date of acquisition agreement	Apr. 03, 2014
Exchange ratio per share			49.04%
Share of common stock outstanding per share			$ 5.15
Common stock outstanding			1,164,442
Common stock issued	570,820
Market closing price per share			$ 22.23
Transaction value is estimated			18,900,000
Costs related to the acquisition	1,300,000
Net tangible assets acquired			19,900,000
Net intangible assets acquired			822,000
Acquisition of goodwill			8,400,000
Purchase price of the business assets			4,400,000
Core deposit intangible amortization period	7 years
Loan portfolio acquired			130,500,000
Discount on loan portfolio acquired			6,400,000
Performing portion of the loan portfolio acquired			106,200,000
Estimated fair value of performing portion of the loan portfolio			$ 104,600,000

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Allowance for Loan Losses - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2015
Scenario, Actual [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Actual loss history experienced by the Company	5 years
Minimum [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Actual loss history experienced by the Company	1 year
Maximum [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Actual loss history experienced by the Company	5 years
Allowance for loan losses charge down family first and junior lien mortgages past due period	180 days
Allowance for loan losses charge down unsecured open end loans past due period	90 days
Allowance for loan losses charge down other secured loans past due period	90 days

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Loans - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2015
Receivables [Abstract]
Period of loan sold	30 days
Minimum period seldom held	90 days
Mortgage warehousing maximum pay off period	30 days

XML

Disclosures about Fair Value of Assets and Liabilities - Other Assets Measured at Fair Value on Nonrecurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	$ 7,512	$ 9,464
Fair Value, Measurements, Nonrecurring [Member] | Mortgage Servicing Rights [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	7,854	7,642
Significant Unobservable Inputs (Level 3) [Member] | Impaired Loans [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	7,512	9,464
Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	7,854	7,642
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	7,512	9,464
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Nonrecurring [Member] | Mortgage Servicing Rights [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	$ 7,854	$ 7,642

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Allowance for Loan Losses - Allowance for Loan Losses (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of the period	$ 16,501	$ 15,992
Total loans charged-off	666	495
Total loan recoveries	185	605
Net loans charged-off (recovered)	481	(110)
Total provision charged to operating expense	614
Balance at the end of the period	16,634	16,102
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	16	29
Total loan recoveries	27	390
Total provision charged to operating expense	(45)	212
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loan recoveries	8	4
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	16	22
Total loan recoveries		1
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off		7
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loan recoveries	19	385
Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	22	22
Total loan recoveries	2	4
Total provision charged to operating expense	933	(604)
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	22	22
Total loan recoveries	2	4
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	628	444
Total loan recoveries	156	211
Total provision charged to operating expense	(274)	392
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	59	33
Total loan recoveries	29	18
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	369	227
Total loan recoveries	101	119
Consumer [Member] | Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	200	184
Total loan recoveries	$ 26	$ 74

XML

Securities - Sales of Securities Available for Sale (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Proceeds	$ 13,332
Gross gains	147
Gross losses	$ (23)

XML

Disclosures about Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2015

Text Block [Abstract]

Fair Value Measurements of Assets and Liabilities Recognized on a Recurring Basis

The following table presents the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated financial statements measured at fair value on a recurring basis and the level within the FASB ASC fair value hierarchy in which the fair value measurements fall at the following:

				Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
	Fair Value			(Level 1)		(Level 2)			(Level 3)
March 31, 2015
Available-for-sale securities
U.S. Treasury and federal agencies	$	28,421		$	—	$	28,421		$	—
State and municipal		51,576			—		51,576			—
Federal agency collateralized mortgage obligations		121,719			—		121,719			—
Federal agency mortgage-backed pools		129,267			—		129,267			—
Private labeled mortgage-backed pools		—			—		—			—
Corporate notes		50			—		50			—
Total available-for-sale securities		331,033			—		331,033			—
Hedged loans		104,383			—		104,383			—
Forward sale commitments		636			—		636			—
Interest rate swap agreements		(5,874	)		—		(5,874	)		—
Commitments to originate loans		—			—		—			—
December 31, 2014
Available-for-sale securities
U.S. Treasury and federal agencies	$	26,823		$	—	$	26,823		$	—
State and municipal		47,952			—		47,952			—
Federal agency collateralized mortgage obligations		122,860			—		122,860			—
Federal agency mortgage-backed pools		125,395			—		125,395			—
Private labeled mortgage-backed pools		689			—		689			—
Corporate notes		45			—		45			—
Total available-for-sale securities		323,764			—		323,764			—
Hedged loans		101,445			—		101,445			—
Forward sale commitments		447			—		447			—
Interest rate swap agreements		(4,546	)		—		(4,546	)		—
Commitments to originate loans		—			—		—			—

Realized Gains and Losses Included in Net Income for Periods in Consolidated Statements of Income

Realized gains and losses included in net income for the periods are reported in the condensed consolidated statements of income as follows:

	Three Months Ended March 31
	2015			2014
	(Unaudited)			(Unaudited)
Non Interest Income
Total gains and losses from:
Hedged loans	$	719		$	207
Fair value interest rate swap agreements		(719	)		(207	)
Derivative loan commitments		189			240
	$	189		$	240

Other Assets Measured at Fair Value on Nonrecurring Basis

Certain other assets are measured at fair value on a nonrecurring basis in the ordinary course of business and are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment):

			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2015
Impaired loans	$	7,512	$	—	$	—	$	7,512
Mortgage servicing rights		7,854		—		—		7,854
December 31, 2014
Impaired loans	$	9,464	$	—	$	—	$	9,464
Mortgage servicing rights		7,642		—		—		7,642

Qualitative Information About Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements, Other than Goodwill

The following table presents qualitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements, other than goodwill.

	Fair Value at		Valuation		Range (Weighted
	March 31, 2015		Technique	Unobservable Inputs	Average)
Impaired loans	$	7,512	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability		10% - 15% (12%)
Mortgage servicing rights	$	7,854	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default		10% - 15% (12%), 4% - 7% (4.6%), 1% - 10%  (4.5%)
	Fair Value at		Valuation		Range (Weighted
	December 31, 2014		Technique	Unobservable Inputs	Average)
Impaired loans	$	9,464	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability		10% - 15% (12%)
Mortgage servicing rights	$	7,642	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default		10% - 15% (12%), 4% - 7% (4.6%), 1% - 10% (4.5%)

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Fair Value of Financial Instruments - Summary of Estimated Fair Values of Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 38,676	$ 43,476
Investment securities, held to maturity	164,282	165,767
Loans held for sale	6,229	6,143
Loans excluding loan level hedges, net	1,448,596	1,365,885
Stock in FHLB and FRB	11,348	11,348
Interest receivable	8,431	8,246
Liabilities
Non-interest bearing deposits	285,181	267,667
Subordinated debentures	32,680	32,642
Interest payable	504	497
Carrying Amount [Member]
Assets
Cash and due from banks	38,676	43,476
Investment securities, held to maturity	164,282	165,767
Loans held for sale	6,229	6,143
Loans excluding loan level hedges, net	1,340,342	1,260,608
Stock in FHLB and FRB	11,348	11,348
Interest receivable	8,431	8,246
Liabilities
Non-interest bearing deposits	285,181	267,667
Interest-bearing deposits	1,179,915	1,214,652
Borrowings	440,415	351,198
Subordinated debentures	32,680	32,642
Interest payable	504	497
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets
Cash and due from banks	38,676	43,476
Liabilities
Non-interest bearing deposits	285,181	267,667
Significant Other Observable Inputs (Level 2) [Member]
Assets
Investment securities, held to maturity	171,405	169,904
Stock in FHLB and FRB	11,348	11,348
Interest receivable	8,431	8,246
Liabilities
Interest-bearing deposits	1,134,694	1,158,912
Borrowings	438,547	348,597
Subordinated debentures	32,674	32,669
Interest payable	504	497
Significant Unobservable Inputs (Level 3) [Member]
Assets
Loans held for sale	6,229	6,143
Loans excluding loan level hedges, net	$ 1,379,815	$ 1,295,133

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Non-performing Loans and Impaired Loans - Non-accrual, Loans Past Due Over 90 Days Still on Accrual, and Troubled Debt Restructured ("TDRs") by Class of Loans (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	$ 13,282	$ 15,312
Loans Past Due Over 90 Days Still Accruing	19	115
Non-Performing TDRs	4,711	2,643
Performing TDRs	4,368	4,372
Total Non-Performing Loans	22,380	22,442
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	7,576	10,024
Non-Performing TDRs	3,363	1,221
Performing TDRs	601	610
Total Non-Performing Loans	11,540	11,855
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	1,452	1,773
Performing TDRs	41	44
Total Non-Performing Loans	1,493	1,817
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	5,558	7,439
Non-Performing TDRs	2,378	217
Performing TDRs	560	566
Total Non-Performing Loans	8,496	8,222
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	566	812
Non-Performing TDRs	985	1,004
Total Non-Performing Loans	1,551	1,816
Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,547	2,297
Loans Past Due Over 90 Days Still Accruing		40
Non-Performing TDRs	1,009	1,031
Performing TDRs	2,506	2,526
Total Non-Performing Loans	6,062	5,894
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,547	2,297
Loans Past Due Over 90 Days Still Accruing		40
Non-Performing TDRs	748	765
Performing TDRs	2,506	2,526
Total Non-Performing Loans	5,801	5,628
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Performing TDRs	261	266
Total Non-Performing Loans	261	266
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	3,159	2,991
Loans Past Due Over 90 Days Still Accruing	19	75
Non-Performing TDRs	339	391
Performing TDRs	1,261	1,236
Total Non-Performing Loans	4,778	4,693
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	334	227
Loans Past Due Over 90 Days Still Accruing		10
Total Non-Performing Loans	334	237
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	506	557
Loans Past Due Over 90 Days Still Accruing	19	47
Total Non-Performing Loans	525	604
Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,319	2,207
Loans Past Due Over 90 Days Still Accruing		18
Non-Performing TDRs	339	391
Performing TDRs	1,261	1,236
Total Non-Performing Loans	$ 3,919	$ 3,852

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Business Combination - Additional Information (Detail) (USD $)	0 Months Ended
	Feb. 18, 2015	Apr. 03, 2014	Dec. 31, 2014
Business Combination Transactions [Line Items]
Reported total assets of acquiree		$ 158,585,000
Total deposits held by acquiree		138,660,000
Peoples Bancorp Inc [Member]
Business Combination Transactions [Line Items]
Exchange ratio per share to Peoples shareholder	95.00%
Cash paid for each share to Peoples shareholder	$ 9.75
Market closing price per share	$ 23.02
Estimated transaction value	73,100,000
Reported total assets of acquiree			486,600,000
Total deposits held by acquiree			368,700,000
Total loans of acquiree			$ 235,100,000

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Disclosures about Fair Value of Assets and Liabilities - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Fair Value Disclosures [Abstract]
Reduced in carrying amount of mortgage servicing rights	$ 76,000	$ 5,000

XML

Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Summary of Computation of Basic and Diluted Earnings Per Share

The following table shows computation of basic and diluted earnings per share.

	Three Months Ended
	March 31
	2015		2014
	(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	5,358	$	3,417
Less: Preferred stock dividends		31		31
Net income available to common shareholders	$	5,327	$	3,386
Weighted average common shares outstanding		9,216,011		8,630,966
Basic earnings per share	$	0.58	$	0.39
Diluted earnings per share
Net income available to common shareholders	$	5,327	$	3,386
Weighted average common shares outstanding		9,216,011		8,630,966
Effect of dilutive securities:
Warrants		321,652		311,278
Restricted stock		30,510		39,519
Stock options		41,333		40,023
Weighted average shares outstanding		9,609,506		9,021,786
Diluted earnings per share	$	0.55	$	0.38

XML

Accounting for Certain Loans Acquired in a Transfer - Amounts of Loans (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	$ 1,461,359	$ 1,378,554
Carrying amount, net of allowance	1,443,683	1,360,971
Loans Purchased With Evidence Of Credit Deterioration [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	120,318	136,487
Carrying amount, net of allowance	120,064	136,128
Loans Purchased With Evidence Of Credit Deterioration [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	74,776	84,678
Loans Purchased With Evidence Of Credit Deterioration [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	30,839	34,387
Loans Purchased With Evidence Of Credit Deterioration [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	14,703	17,422
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	30,792	36,488
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	15,378	18,307
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	8,460	9,734
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	6,954	8,447
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	89,526	99,999
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	59,398	66,371
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	22,379	24,653
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	$ 7,749	$ 8,975

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Securities - Fair Value of Securities (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	$ 325,176	$ 319,746
Held-to-maturity, Amortized Cost	164,282	165,767
Gross Unrealized Gains	6,725	5,697
Held-to-maturity, Gross Unrealized Gains	7,342	4,244
Gross Unrealized Losses	(868)	(1,679)
Held-to-maturity, Gross Unrealized Losses	(219)	(107)
Available-for-sale Securities, Fair Value	331,033	323,764
Held-to-maturity, Fair Value	171,405	169,904
U.S. Treasury and Federal Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	28,400	26,996
Held-to-maturity, Amortized Cost	9,824	9,804
Gross Unrealized Gains	69	56
Held-to-maturity, Gross Unrealized Gains	157	82
Gross Unrealized Losses	(48)	(229)
Available-for-sale Securities, Fair Value	28,421	26,823
Held-to-maturity, Fair Value	9,981	9,886
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	50,036	46,535
Held-to-maturity, Amortized Cost	128,558	129,595
Gross Unrealized Gains	1,577	1,462
Held-to-maturity, Gross Unrealized Gains	6,179	3,398
Gross Unrealized Losses	(37)	(45)
Held-to-maturity, Gross Unrealized Losses	(143)	(106)
Available-for-sale Securities, Fair Value	51,576	47,952
Held-to-maturity, Fair Value	134,594	132,887
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	120,785	122,930
Held-to-maturity, Amortized Cost	3,873	4,039
Gross Unrealized Gains	1,471	975
Held-to-maturity, Gross Unrealized Gains	45	35
Gross Unrealized Losses	(537)	(1,045)
Held-to-maturity, Gross Unrealized Losses		(1)
Available-for-sale Securities, Fair Value	121,719	122,860
Held-to-maturity, Fair Value	3,918	4,073
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	125,923	122,583
Held-to-maturity, Amortized Cost	22,027	22,329
Gross Unrealized Gains	3,590	3,172
Held-to-maturity, Gross Unrealized Gains	961	729
Gross Unrealized Losses	(246)	(360)
Held-to-maturity, Gross Unrealized Losses	(76)
Available-for-sale Securities, Fair Value	129,267	125,395
Held-to-maturity, Fair Value	22,912	23,058
Private Labeled Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost		670
Gross Unrealized Gains		19
Available-for-sale Securities, Fair Value		689
Corporate Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	32	32
Gross Unrealized Gains	18	13
Available-for-sale Securities, Fair Value	$ 50	$ 45

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Regulatory Capital - Summary of Regulatory Capital Requirement (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule Of Regulatory Assets And Liabilities [Line Items]
Total capital (to risk-weighted assets), Actual, Amount	$ 195,409	$ 192,604
Total capital (to risk-weighted assets), Actual, Ratio	12.35%	13.08%
Total capital (to risk-weighted assets), For capital adequacy purposes, Amount	126,581	117,801
Total capital (to risk-weighted assets), For capital adequacy purposes, Ratio	8.00%	8.00%
Total capital (to risk-weighted assets), For well capitalized purpose, Amount	158,226	147,251
Total capital (to risk-weighted assets), For well capitalized purpose, Ratio	10.00%	10.00%
Tier 1 capital (to average assets), Actual, Amount	178,775	176,103
Tier 1 capital (to average assets), Actual, Ratio	11.30%	11.96%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	94,925	58,897
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	6.00%	4.00%
Tier 1 capital (to average assets), For well capitalized purpose, Amount	126,566	88,346
Tier 1 capital (to average assets), For well capitalized purposes, Ratio	8.00%	6.00%
Common equity tier 1 capital, Actual Amount	178,775
Common equity tier 1 capital, Actual Ratio	11.30%
Common equity tier 1 capital,For capital adequacy purposes, Amount	71,194
Common equity tier 1 capital, For capital adequacy purpose, Ratio	4.50%
Common equity tier 1 capital, For well capitalized purpose, Amount	102,835
Common equity tier 1 capital, For well capitalized purposes, Ratio	6.50%
Tier 1 capital (to average assets), Actual, Amount	178,775	176,103
Tier 1 capital (to average assets), Actual, Ratio	8.77%	8.80%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	81,539	80,047
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	4.00%	4.00%
Tier 1 capital (to average assets), For well capitalized purpose, Amount	101,924	100,059
Tier 1 capital (to average assets), For well capitalized purposes, Ratio	5.00%	5.00%
Consolidated [Member]
Schedule Of Regulatory Assets And Liabilities [Line Items]
Total capital (to risk-weighted assets), Actual, Amount	218,613	212,276
Total capital (to risk-weighted assets), Actual, Ratio	13.74%	14.48%
Total capital (to risk-weighted assets), For capital adequacy purposes, Amount	127,286	117,280
Total capital (to risk-weighted assets), For capital adequacy purposes, Ratio	8.00%	8.00%
Tier 1 capital (to average assets), Actual, Amount	201,979	195,775
Tier 1 capital (to average assets), Actual, Ratio	12.69%	13.35%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	95,498	58,659
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	6.00%	4.00%
Common equity tier 1 capital, Actual Amount	156,411
Common equity tier 1 capital, Actual Ratio	9.83%
Common equity tier 1 capital,For capital adequacy purposes, Amount	71,602
Common equity tier 1 capital, For capital adequacy purpose, Ratio	4.50%
Tier 1 capital (to average assets), Actual, Amount	201,979	195,775
Tier 1 capital (to average assets), Actual, Ratio	9.97%	9.76%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 81,035	$ 80,236
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	4.00%	4.00%

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Accounting Policies - Summary of Computation of Basic and Diluted Earnings Per Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Basic earnings per share
Net income	$ 5,358	$ 3,417
Less: Preferred stock dividends	31	31
Net income available to common shareholders	5,327	3,386
Weighted average common shares outstanding	9,216,011	8,630,966
Basic Earnings Per Share	$ 0.58	$ 0.39
Diluted earnings per share
Net income available to common shareholders	$ 5,327	$ 3,386
Weighted average common shares outstanding	9,216,011	8,630,966
Effect of dilutive securities:
Warrants	321,652	311,278
Weighted average shares outstanding	9,609,506	9,021,786
Diluted Earnings Per Share	$ 0.55	$ 0.38
Restricted Stock [Member]
Effect of dilutive securities:
Effect of dilutive securities	30,510	39,519
Stock Options [Member]
Effect of dilutive securities:
Effect of dilutive securities	41,333	40,023

XML

Accounting for Certain Loans Acquired in a Transfer - Accretable Yield or Income Expected to be Collected (Detail) (Loans Purchased With Evidence Of Credit Deterioration [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	$ 3,668	$ 3,185
Additions	0	0
Accretion	(206)	(138)
Reclassification from nonaccretable difference	0	0
Disposals	(137)	(18)
Balance at December 31	3,325	3,029
Heartland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	2,400	3,185
Additions	0	0
Accretion	(107)	(138)
Reclassification from nonaccretable difference	0	0
Disposals	(88)	(18)
Balance at December 31	2,205	3,029
Summit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	1,268
Additions	0	0
Accretion	(99)
Reclassification from nonaccretable difference	0	0
Disposals	(49)
Balance at December 31	$ 1,120

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Derivative Financial Instruments - Effect of Derivative Instruments on Consolidated Statement of Income Derivative in Fair Value Hedging Relationship (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Interest Income - Loans [Member] | Derivative in Fair Value Hedging Relationship [Member] | Interest Rate Contracts One [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivative	$ 719	$ 207
Interest Income - Loans [Member] | Derivative in Fair Value Hedging Relationship [Member] | Interest Rate Contracts Two [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivative	(719)	(207)
Derivatives Not Designated as Hedging Instruments [Member] | Other income - Gain on Sale of Loans [Member] | Mortgage Loan Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivative	$ 189	$ 240

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Non-performing Loans and Impaired Loans - Commercial Loans Individually Evaluated for Impairment by Class of Loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance total	$ 8,541	$ 7,313
Total ending loans balance	8,547	7,335
Allowance For Loan Loss Allocated	1,029	1,290
Average Balance in Impaired Loans total	9,470	8,126
Cash/Accrual Interest Income Recognized, Total	8	19
Commercial [Member]
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance With no recorded allowance	5,592	4,945
Recorded Investment With no recorded allowance	5,598	4,967
Allowance For Loan Loss Allocated With no recorded allowance	0	0
Average Balance in Impaired Loans With no recorded allowance	6,512	5,905
Cash/Accrual Interest Income Recognized, With no recorded allowance	8	17
Unpaid Principal Balance With an allowance recorded	2,949	2,368
Recorded Investment With an allowance recorded	2,949	2,368
Allowance For Loan Loss Allocated	1,029	1,290
Average Balance in Impaired Loans With an allowance recorded	2,958	2,221
Cash/Accrual Interest Income Recognized, With an allowance recorded		2
Commercial [Member] | Owner Occupied Real Estate [Member]
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance With no recorded allowance	1,076	1,145
Recorded Investment With no recorded allowance	1,077	1,148
Allowance For Loan Loss Allocated With no recorded allowance	0	0
Average Balance in Impaired Loans With no recorded allowance	1,329	1,759
Cash/Accrual Interest Income Recognized, With no recorded allowance	2	12
Unpaid Principal Balance With an allowance recorded	417
Recorded Investment With an allowance recorded	417
Allowance For Loan Loss Allocated	165
Average Balance in Impaired Loans With an allowance recorded	419	(1)
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance With no recorded allowance	3,907	3,443
Recorded Investment With no recorded allowance	3,912	3,446
Allowance For Loan Loss Allocated With no recorded allowance	0	0
Average Balance in Impaired Loans With no recorded allowance	4,534	3,514
Cash/Accrual Interest Income Recognized, With no recorded allowance	6	5
Unpaid Principal Balance With an allowance recorded	1,590	347
Recorded Investment With an allowance recorded	1,590	347
Allowance For Loan Loss Allocated	184	170
Average Balance in Impaired Loans With an allowance recorded	1,590	353
Commercial [Member] | Residential Development [Member]
Schedule Of Financial Receivables [Line Items]
Allowance For Loan Loss Allocated With no recorded allowance	0	0
Commercial [Member] | Development & Spec Land Loans [Member]
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance With no recorded allowance		24
Recorded Investment With no recorded allowance		24
Allowance For Loan Loss Allocated With no recorded allowance	0	0
Average Balance in Impaired Loans With no recorded allowance		24
Unpaid Principal Balance With an allowance recorded		138
Recorded Investment With an allowance recorded		138
Allowance For Loan Loss Allocated		40
Average Balance in Impaired Loans With an allowance recorded		142
Commercial [Member] | Commercial and Industrial [Member]
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance With no recorded allowance	609	333
Recorded Investment With no recorded allowance	609	349
Allowance For Loan Loss Allocated With no recorded allowance	0	0
Average Balance in Impaired Loans With no recorded allowance	649	608
Unpaid Principal Balance With an allowance recorded	942	1,883
Recorded Investment With an allowance recorded	942	1,883
Allowance For Loan Loss Allocated	680	1,080
Average Balance in Impaired Loans With an allowance recorded	949	1,727
Cash/Accrual Interest Income Recognized, With an allowance recorded		$ 2

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Loans - Amounts of Loans (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	$ 695,736	$ 674,314
Real Estate, Total	260,390	254,625
Consumer, Total	326,334	320,459
Mortgage warehouse	178,899	129,156
Total loans	1,461,359	1,378,554
Allowance for loan losses	(16,634)	(16,501)	(16,102)	(15,992)
Loans, net	1,444,725	1,362,053
Working Capital and Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	311,789	300,940
Real Estate Including Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	354,356	343,455
Tax Exempt Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	8,890	8,595
Other Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	20,701	21,324
1-4 Family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	256,809	250,799
Other Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	3,581	3,826
Recreation Consumer Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	5,645	5,673
Real Estate Home Improvement Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	38,371	38,288
Home Equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	112,180	112,426
Other Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	6,033	5,921
Consumer Loans Auto Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	160,668	154,538
Unsecured Debt [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	$ 3,437	$ 3,613

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating Activities
Net income	$ 5,358	$ 3,417
Items not requiring (providing) cash
Provision for loan losses	614
Depreciation and amortization	956	844
Share based compensation	59	27
Mortgage servicing rights net (recovery) impairment	414	(5)
Premium amortization on securities available for sale, net	476	549
Gain on sale of investment securities	(124)
Gain on sale of mortgage loans	(2,379)	(1,411)
Proceeds from sales of loans	71,211	35,348
Loans originated for sale	(68,918)	(35,991)
Change in cash value of life insurance	(258)	(233)
Gain on sale of other real estate owned	(263)	(218)
Net change in
Interest receivable	(185)	(35)
Interest payable	7	(8)
Other assets	5,503	675
Other liabilities	(1,287)	(1,138)
Net cash provided by operating activities	11,184	1,821
Investing Activities
Purchases of securities available for sale	(30,406)	(27,290)
Proceeds from sales, maturities, calls, and principal repayments of securities available for sale	25,260	20,327
Proceeds from maturities of securities held to maturity	735
Net change in loans	(81,515)	(32,259)
Proceeds on the sale of OREO and repossessed assets	1,414	784
Purchases of premises and equipment	(2,168)	(1,394)
Purchase of Mortgage Company		(735)
Net cash used in investing activities	(86,680)	(40,567)
Net change in
Deposits	(17,224)	64,051
Borrowings	89,255	(20,214)
Dividends paid on common shares	(1,304)	(961)
Dividends paid on preferred shares	(31)	(31)
Net cash provided by financing activities	70,696	42,845
Net Change in Cash and Cash Equivalents	(4,800)	4,099
Cash and Cash Equivalents, Beginning of Period	43,476	31,721
Cash and Cash Equivalents, End of Period	38,676	35,820
Additional Supplemental Information
Interest paid	3,199	3,203
Income taxes paid	0	0
Transfer of loans to other real estate owned	$ (772)	$ 610

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Non-performing Loans and Impaired Loans - Payment Status by Class of Loan (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	$ 2,682	$ 3,807
60 - 89 Days Past Due	1,263	1,275
Greater than 90 Days Past Due	19	115
Total Past Due	3,964	5,197
Loans Not Past Due	1,456,353	1,372,275
Total	1,460,317	1,377,472
30 - 59 Days Past Due, Percentage of Total Loans	0.18%	0.28%
60 - 89 Days Past Due, Percentage of Total Loans	0.09%	0.09%
Greater than 90 Days Past Due, Percentage of Total Loans	0.00%	0.01%
Total Past Due, Percentage of Total Loans	0.27%	0.38%
Loans Not Past Due, Percentage of Total Loans	99.73%	99.62%
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	586	535
60 - 89 Days Past Due	222	646
Total Past Due	808	1,181
Loans Not Past Due	693,699	671,878
Total	694,507	673,059
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	266	103
60 - 89 Days Past Due	138	645
Total Past Due	404	748
Loans Not Past Due	239,623	227,632
Total	240,027	228,380
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due		413
60 - 89 Days Past Due	84
Total Past Due	84	413
Loans Not Past Due	308,336	296,886
Total	308,420	297,299
Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	3,409	2,027
Total	3,409	2,027
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	11,229	12,097
Total	11,229	12,097
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	320	19
60 - 89 Days Past Due		1
Total Past Due	320	20
Loans Not Past Due	131,102	133,236
Total	131,422	133,256
Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	357	1,033
60 - 89 Days Past Due	435	193
Greater than 90 Days Past Due		40
Total Past Due	792	1,266
Loans Not Past Due	437,951	381,916
Total	438,743	383,182
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	357	1,033
60 - 89 Days Past Due	435	193
Greater than 90 Days Past Due		40
Total Past Due	792	1,266
Loans Not Past Due	243,289	241,255
Total	244,081	242,521
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	15,763	11,505
Total	15,763	11,505
Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	178,899	129,156
Total	178,899	129,156
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	1,739	2,239
60 - 89 Days Past Due	606	436
Greater than 90 Days Past Due	19	75
Total Past Due	2,364	2,750
Loans Not Past Due	324,703	318,481
Total	327,067	321,231
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	142	113
60 - 89 Days Past Due	7	4
Greater than 90 Days Past Due		10
Total Past Due	149	127
Loans Not Past Due	41,327	40,010
Total	41,476	40,137
Consumer [Member] | Direct Installment Purchased [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	195	219
Total	195	219
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	559	1,042
60 - 89 Days Past Due	80	243
Greater than 90 Days Past Due	19	47
Total Past Due	658	1,332
Loans Not Past Due	146,280	140,536
Total	146,938	141,868
Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	1,038	1,084
60 - 89 Days Past Due	519	189
Greater than 90 Days Past Due		18
Total Past Due	1,557	1,291
Loans Not Past Due	136,901	137,716
Total	$ 138,458	$ 139,007

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Securities - Additional Information (Detail) (USD $)	0 Months Ended
	Apr. 01, 2014	Mar. 31, 2015	Apr. 01, 2014 Security
Amortized Cost and Fair Value Debt Securities [Abstract]
Unrealized loss, other than temporary securities		$ 0
Number of securities			319
Aggregate fair value of securities			167,100,000
Gain/Loss from net unrealized holdings, Net of tax	1,300,000
Unrealized gain or loss, Held to maturity	$ 0

XML

Loans (Tables)

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Recorded Investment of Individual Loan Categories

The following table shows the recorded investment of individual loan categories.

	Loan					Deferred			Recorded
March 31, 2015	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	240,027		$	426	$	658		$	241,111
Non owner occupied real estate		308,420			345		515			309,280
Residential spec homes		3,409			5		3			3,417
Development & spec land loans		11,229			28		25			11,282
Commercial and industrial		131,422			828		28			132,278
Total commercial		694,507			1,632		1,229			697,368
Residential mortgage		244,081			743		546			245,370
Residential construction		15,763			22		—			15,785
Mortgage warehouse		178,899			480		—			179,379
Total real estate		438,743			1,245		546			440,534
Direct installment		41,476			135		(380	)		41,231
Direct installment purchased		195			—		—			195
Indirect installment		146,938			302		—			147,240
Home equity		138,458			557		(353	)		138,662
Total consumer		327,067			994		(733	)		327,328
Total loans		1,460,317			3,871		1,042			1,465,230
Allowance for loan losses		(16,634	)		—		—			(16,634	)
Net loans	$	1,443,683		$	3,871	$	1,042		$	1,448,596

	Loan					Deferred			Recorded
December 31, 2014	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	228,380		$	385	$	680		$	229,445
Non owner occupied real estate		297,299			309		506			298,114
Residential spec homes		2,027			2		—			2,029
Development & spec land loans		12,097			28		30			12,155
Commercial and industrial		133,256			859		39			134,154
Total commercial		673,059			1,583		1,255			675,897
Residential mortgage		242,521			737		599			243,857
Residential construction		11,505			21		—			11,526
Mortgage warehouse		129,156			480		—			129,636
Total real estate		383,182			1,238		599			385,019
Direct installment		40,137			129		(375	)		39,891
Direct installment purchased		219			—		—			219
Indirect installment		141,868			314		(163	)		142,019
Home equity		139,007			568		(234	)		139,341
Total consumer		321,231			1,011		(772	)		321,470
Total loans		1,377,472			3,832		1,082			1,382,386
Allowance for loan losses		(16,501	)		—		—			(16,501	)
Net loans	$	1,360,971		$	3,832	$	1,082		$	1,365,885

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Accounting for Certain Loans Acquired in a Transfer (Tables)

3 Months Ended

Mar. 31, 2015

Amounts of Loans

	March 31			December 31
	2015			2014
Commercial
Working capital and equipment	$	311,789		$	300,940
Real estate, including agriculture		354,356			343,455
Tax exempt		8,890			8,595
Other		20,701			21,324
Total		695,736			674,314
Real estate
1–4 family		256,809			250,799
Other		3,581			3,826
Total		260,390			254,625
Consumer
Auto		160,668			154,538
Recreation		5,645			5,673
Real estate/home improvement		38,371			38,288
Home equity		112,180			112,426
Unsecured		3,437			3,613
Other		6,033			5,921
Total		326,334			320,459
Mortgage warehouse		178,899			129,156
Total loans		1,461,359			1,378,554
Allowance for loan losses		(16,634	)		(16,501	)
Loans, net	$	1,444,725		$	1,362,053

Loans Purchased With Evidence Of Credit Deterioration [Member]

Amounts of Loans

The carrying amounts of those loans included in the balance sheet amounts of loans receivable are as follows:

	March 31		March 31		March 31
	2015		2015		2015
	Heartland		Summit		Total
Commercial		15,378		59,398	$	74,776
Real estate		8,460		22,379		30,839
Consumer		6,954		7,749		14,703
Outstanding balance	$	30,792	$	89,526	$	120,318
Carrying amount, net of allowance of $254					$	120,064
	December 31 2014 Heartland		December 31 2014 Summit		December 31 2014 Total
Commercial	$	18,307	$	66,371	$	84,678
Real estate		9,734		24,653		34,387
Consumer		8,447		8,975		17,422
Outstanding balance	$	36,488	$	99,999	$	136,487
Carrying amount, net of allowance of $359					$	136,128

Accretable Yield or Income Expected to be Collected

Accretable yield, or income expected to be collected for the three months ended March 31, is as follows:

	Three Months Ended March 31, 2015
	Heartland			Summit			Total
Balance at January 1	$	2,400		$	1,268		$	3,668
Additions		—			—			—
Accretion		(107	)		(99	)		(206	)
Reclassification from nonaccretable difference		—			—			—
Disposals		(88	)		(49	)		(137	)
Balance at December 31	$	2,205		$	1,120		$	3,325
	Three Months Ended March 31, 2014
	Heartland			Summit			Total
Balance at January 1	$	3,185		$	—		$	3,185
Additions		—			—			—
Accretion		(138	)		—			(138	)
Reclassification from nonaccretable difference		—			—			—
Disposals		(18	)		—			(18	)
Balance at December 31	$	3,029		$	—		$	3,029

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Allowance for Loan Losses - Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Total ending allowance balance	$ 16,634	$ 16,501	$ 16,102	$ 15,992
Total ending loans balance	8,547		7,335
Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Individually evaluated for impairment	1,029	1,589
Allowance For Loan Losses, Collectively evaluated for impairment	15,351	14,418
Allowance For Loan Losses, Loans acquired with deteriorated credit quality	254	494
Total ending allowance balance	16,634	16,501
Commercial [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Individually evaluated for impairment	1,029	1,589
Allowance For Loan Losses, Collectively evaluated for impairment	6,593	5,827
Allowance For Loan Losses, Loans acquired with deteriorated credit quality	254	494
Total ending allowance balance	7,876	7,910
Real Estate [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	3,281	2,508
Total ending allowance balance	3,281	2,508
Consumer [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	4,205	4,951
Total ending allowance balance	4,205	4,951
Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Individually evaluated for impairment	8,547	11,055
Loans: Collectively evaluated for impairment	1,454,954	1,370,740
Loans acquired with deteriorated credit quality	1,729	591
Total ending loans balance	1,465,230	1,382,386
Loans [Member] | Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Individually evaluated for impairment	8,547	11,055
Loans: Collectively evaluated for impairment	687,092	664,251
Loans acquired with deteriorated credit quality	1,729	591
Total ending loans balance	697,368	675,897
Loans [Member] | Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	261,155	255,383
Total ending loans balance	261,155	255,383
Loans [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	327,328	321,470
Total ending loans balance	327,328	321,470
Mortgage Warehousing [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	1,272	1,132
Total ending allowance balance	1,272	1,132
Mortgage Warehousing [Member] | Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	179,379	129,636
Total ending loans balance	$ 179,379	$ 129,636

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Securities - Amortized Cost and Fair Value of Securities Available for Sale and Held to Maturity (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Amortized cost within one year	$ 6,170	$ 6,098
Amortized cost one to five years	49,096	44,720
Amortized cost for five to ten years	16,830	16,147
Amortized cost for after ten years	6,372	6,598
Total amortized cost	78,468	73,563
Total available for sale investment securities, Amortized Cost	325,176	319,746
Within one year, amortized cost	0	0
One to five years, amortized cost	1,223	592
Five to ten years, amortized cost	104,305	99,225
After ten years, amortized cost	32,854	39,582
Total amortized cost	138,382	139,399
Total held to maturity investment securities, amortized cost	164,282	165,767
Fair value within one year	6,220	6,169
Fair value for one to five years	49,902	45,093
Fair value for five to ten years	17,373	16,768
Fair value for after ten years	6,552	6,790
Total fair value	80,047	74,820
Investment securities, available for sale	331,033	323,764
Within one year, fair value	0	0
One to five years, fair value	1,243	593
five to ten years, fair value	109,391	101,323
After ten years, fair value	33,941	40,857
Total fair value	144,575	142,773
Held-to-maturity, Fair Value	171,405	169,904
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	120,785	122,930
Total held to maturity investment securities, amortized cost	3,873	4,039
Investment securities, available for sale	121,719	122,860
Held-to-maturity, Fair Value	3,918	4,073
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	125,923	122,583
Total held to maturity investment securities, amortized cost	22,027	22,329
Investment securities, available for sale	129,267	125,395
Held-to-maturity, Fair Value	22,912	23,058
Private Labeled Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost		670
Investment securities, available for sale		$ 689

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Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Allowance for Loan Losses

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the prior one to five years. Management believes the five-year historical loss experience methodology is appropriate in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed. The actual allowance for loan loss activity is provided below.

	Three Months Ended
	March 31
	2015			2014
	(Unaudited)			(Unaudited)
Balance at beginning of the period	$	16,501		$	15,992
Loans charged-off:
Commercial
Owner occupied real estate		—			—
Non owner occupied real estate		16			22
Residential development		—			—
Development & Spec Land Loans		—			7
Commercial and industrial		—			—
Total commercial		16			29
Real estate
Residential mortgage		22			22
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		22			22
Consumer
Direct Installment		59			33
Direct Installment Purchased		—			—
Indirect Installment		369			227
Home Equity		200			184
Total consumer		628			444
Total loans charged-off		666			495
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		8			4
Non owner occupied real estate		—			1
Residential development		—			—
Development & Spec Land Loans		—			—
Commercial and industrial		19			385
Total commercial		27			390
Real estate
Residential mortgage		2			4
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		2			4
Consumer
Direct Installment		29			18
Direct Installment Purchased		—			—
Indirect Installment		101			119
Home Equity		26			74
Total consumer		156			211
Total loan recoveries		185			605
Net loans charged-off (recovered)		481			(110	)
Provision charged to operating expense
Commercial		(45	)		212
Real estate		933			(604	)
Consumer		(274	)		392
Total provision charged to operating expense		614			—
Balance at the end of the period	$	16,634		$	16,102

Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment analysis:

March 31, 2015	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,029	$	—	$	—	$	—	$	1,029
Collectively evaluated for impairment		6,593		3,281		1,272		4,205		15,351
Loans acquired with deteriorated credit quality		254		—		—		—		254
Total ending allowance balance	$	7,876	$	3,281	$	1,272	$	4,205	$	16,634
Loans:
Individually evaluated for impairment	$	8,547	$	—	$	—	$	—	$	8,547
Collectively evaluated for impairment		687,092		261,155		179,379		327,328		1,454,954
Loans acquired with deteriorated credit quality		1,729		—		—		—		1,729
Total ending loans balance	$	697,368	$	261,155	$	179,379	$	327,328	$	1,465,230
December 31, 2014	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,589	$	—	$	—	$	—	$	1,589
Collectively evaluated for impairment		5,827		2,508		1,132		4,951		14,418
Loans acquired with deteriorated credit quality		494		—		—		—		494
Total ending allowance balance	$	7,910	$	2,508	$	1,132	$	4,951	$	16,501
Loans:
Individually evaluated for impairment	$	11,055	$	—	$	—	$	—	$	11,055
Collectively evaluated for impairment		664,251		255,383		129,636		321,470		1,370,740
Loans acquired with deteriorated credit quality		591		—		—		—		591
Total ending loans balance	$	675,897	$	255,383	$	129,636	$	321,470	$	1,382,386

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Non-performing Loans and Impaired Loans (Tables)

3 Months Ended

Mar. 31, 2015

Text Block [Abstract]

Non-accrual, Loans Past Due Over 90 Days Still on Accrual, and Troubled Debt Restructured ("TDRs") by Class of Loans

The following table presents the non-accrual, loans past due over 90 days still on accrual, and troubled debt restructured (“TDRs”) by class of loans:

March 31, 2015	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,452	$	—	$	—	$	41	$	1,493
Non owner occupied real estate		5,558		—		2,378		560		8,496
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		566		—		985		—		1,551
Total commercial		7,576		—		3,363		601		11,540
Real estate
Residential mortgage		2,547		—		748		2,506		5,801
Residential construction		—		—		261		—		261
Mortgage warehouse		—		—		—		—		—
Total real estate		2,547		—		1,009		2,506		6,062
Consumer
Direct Installment		334		—		—		—		334
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		506		19		—		—		525
Home Equity		2,319		—		339		1,261		3,919
Total Consumer		3,159		19		339		1,261		4,778
Total	$	13,282	$	19	$	4,711	$	4,368	$	22,380
December 31, 2014	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,773	$	—	$	—	$	44	$	1,817
Non owner occupied real estate		7,439		—		217		566		8,222
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		812		—		1,004		—		1,816
Total commercial		10,024		—		1,221		610		11,855
Real estate
Residential mortgage		2,297		40		765		2,526		5,628
Residential construction		—		—		266		—		266
Mortgage warehouse		—		—		—		—		—
Total real estate		2,297		40		1,031		2,526		5,894
Consumer
Direct Installment		227		10		—		—		237
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		557		47		—		—		604
Home Equity		2,207		18		391		1,236		3,852
Total Consumer		2,991		75		391		1,236		4,693
Total	$	15,312	$	115	$	2,643	$	4,372	$	22,442

Loans Transferred and Classified as Troubled Debt Restructured Loans

Loans transferred and classified as troubled debt restructuring during the three months ended March 31, 2015 and 2014, segregated by class, are shown in the table below.

	March 31, 2015				March 31, 2014
Commercial	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Owner occupied real estate		1	$	2		—	$	—
Non owner occupied real estate		—		—		—		—
Residential development		—		—		—		—
Development & Spec Land Loans		—		—		—		—
Commercial and industrial		—		—		2		398
Total commercial		1		2		2		398
Real estate
Residential mortgage		—		—		—		—
Residential construction		—		—		—		—
Mortgage warehouse		—		—		—		—
Total real estate		—		—		—		—
Consumer
Direct Installment		—		—		—		—
Direct Installment Purchased		—		—		—		—
Indirect Installment		—		—		—		—
Home Equity		1		32		1		146
Total Consumer		1		32		1		146
		—		—
Total		2	$	34		3	$	544

Troubled debt restructured loans which had payment defaults during the three months ended March 31, 2015 and 2014, segregated by class, are shown in the table below. Default occurs when a loan is 90 days or more past due or has been transferred to non-accrual.

	March 31, 2015				March 31, 2014
Commercial	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Owner occupied real estate		1	$	2		—	$	—
Non owner occupied real estate		—		—		—		—
Residential development		—		—		—		—
Development & Spec Land Loans		—		—		—		—
Commercial and industrial		—		—		2		398
Total commercial		1		2		2		398
Real estate
Residential mortgage		—		—		1		154
Residential construction		—		—		—		—
Mortgage warehouse		—		—		—		—
Total real estate		—		—		1		154
Consumer
Direct Installment		—		—		—		—
Direct Installment Purchased		—		—		—		—
Indirect Installment		—		—		—		—
Home Equity		—		—		1		146
Total Consumer		—		—		1		146
		—		—
Total		1	$	2		4	$	698

Commercial Loans Individually Evaluated for Impairment by Class of Loans

The following table presents commercial loans individually evaluated for impairment by class of loan:

							Three Months Ending
March 31, 2015	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	1,076	$	1,077	$	—	$	1,329	$	2
Non owner occupied real estate		3,907		3,912		—		4,534		6
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		609		609		—		649		—
Total commercial		5,592		5,598		—		6,512		8
With an allowance recorded
Commercial
Owner occupied real estate		417		417		165		419		—
Non owner occupied real estate		1,590		1,590		184		1,590		—
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		942		942		680		949		—
Total commercial		2,949		2,949		1,029		2,958		—
Total	$	8,541	$	8,547	$	1,029	$	9,470	$	8

							Three Months Ending
March 31, 2014	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans			Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	1,145	$	1,148	$	—	$	1,759		$	12
Non owner occupied real estate		3,443		3,446		—		3,514			5
Residential development		—		—		—		—			—
Development & Spec Land Loans		24		24		—		24			—
Commercial and industrial		333		349		—		608			—
Total commercial		4,945		4,967		—		5,905			17
With an allowance recorded
Commercial
Owner occupied real estate		—		—		—		(1	)		—
Non owner occupied real estate		347		347		170		353			—
Residential development		—		—		—		—			—
Development & Spec Land Loans		138		138		40		142			—
Commercial and industrial		1,883		1,883		1,080		1,727			2
Total commercial		2,368		2,368		1,290		2,221			2
Total	$	7,313	$	7,335	$	1,290	$	8,126		$	19

Payment Status by Class of Loan

The following table presents the payment status by class of loan:

March 31, 2015	30 - 59 Days Past Due			60 - 89 Days Past Due			Greater than 90 Days Past Due			Total Past Due			Loans Not Past Due			Total
Commercial
Owner occupied real estate	$	266		$	138		$	—		$	404		$	239,623		$	240,027
Non owner occupied real estate		—			84			—			84			308,336			308,420
Residential development		—			—			—			—			3,409			3,409
Development & Spec Land Loans		—			—			—			—			11,229			11,229
Commercial and industrial		320			—			—			320			131,102			131,422
Total commercial		586			222			—			808			693,699			694,507
Real estate
Residential mortgage		357			435			—			792			243,289			244,081
Residential construction		—			—			—			—			15,763			15,763
Mortgage warehouse		—			—			—			—			178,899			178,899
Total real estate		357			435			—			792			437,951			438,743
Consumer
Direct Installment		142			7			—			149			41,327			41,476
Direct Installment Purchased		—			—			—			—			195			195
Indirect Installment		559			80			19			658			146,280			146,938
Home Equity		1,038			519			—			1,557			136,901			138,458
Total consumer		1,739			606			19			2,364			324,703			327,067
Total	$	2,682		$	1,263		$	19		$	3,964		$	1,456,353		$	1,460,317
Percentage of total loans		0.18	%		0.09	%		0.00	%		0.27	%		99.73	%
December 31, 2014	30 - 59 Days Past Due			60 - 89 Days Past Due			Greater than 90 Days Past Due			Total Past Due			Loans Not Past Due			Total
Commercial
Owner occupied real estate	$	103		$	645		$	—		$	748		$	227,632		$	228,380
Non owner occupied real estate		413			—			—			413			296,886			297,299
Residential development		—			—			—			—			2,027			2,027
Development & Spec Land Loans		—			—			—			—			12,097			12,097
Commercial and industrial		19			1			—			20			133,236			133,256
Total commercial		535			646			—			1,181			671,878			673,059
Real estate
Residential mortgage		1,033			193			40			1,266			241,255			242,521
Residential construction		—			—			—			—			11,505			11,505
Mortgage warehouse		—			—			—			—			129,156			129,156
Total real estate		1,033			193			40			1,266			381,916			383,182
Consumer
Direct Installment		113			4			10			127			40,010			40,137
Direct Installment Purchased		—			—			—			—			219			219
Indirect Installment		1,042			243			47			1,332			140,536			141,868
Home Equity		1,084			189			18			1,291			137,716			139,007
Total consumer		2,239			436			75			2,750			318,481			321,231
Total	$	3,807		$	1,275		$	115		$	5,197		$	1,372,275		$	1,377,472
Percentage of total loans		0.28	%		0.09	%		0.01	%		0.38	%		99.62	%

Loans by Credit Grades

The following table presents loans by credit grades.

March 31, 2015	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	227,083		$	7,728		$	5,216		$	—		$	240,027
Non owner occupied real estate		296,948			2,330			9,142			—			308,420
Residential development		3,409			—			—			—			3,409
Development & Spec Land Loans		11,153			76			—			—			11,229
Commercial and industrial		128,280			985			2,157			—			131,422
Total commercial		666,873			11,119			16,515			—			694,507
Real estate
Residential mortgage		238,280			—			5,801			—			244,081
Residential construction		15,502			—			261			—			15,763
Mortgage warehouse		178,899			—			—			—			178,899
Total real estate		432,681			—			6,062			—			438,743
Consumer
Direct Installment		41,142			—			334			—			41,476
Direct Installment Purchased		195			—			—			—			195
Indirect Installment		146,413			—			525			—			146,938
Home Equity		134,539			—			3,919			—			138,458
Total Consumer		322,289			—			4,778			—			327,067
Total	$	1,421,843		$	11,119		$	27,355		$	—		$	1,460,317
Percentage of total loans		97.37	%		0.76	%		1.87	%		0.00	%
December 31, 2014	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	215,875		$	7,623		$	4,883		$	—		$	228,381
Non owner occupied real estate		283,518			4,458			9,323			—			297,299
Residential development		2,027			—			—			—			2,027
Development & Spec Land Loans		12,018			79			—			—			12,097
Commercial and industrial		128,589			1,799			2,868			—			133,256
Total commercial		642,027			13,959			17,074			—			673,060
Real estate
Residential mortgage		236,893			—			5,628			—			242,521
Residential construction		11,239			—			266			—			11,505
Mortgage warehouse		129,156			—			—			—			129,156
Total real estate		377,288			—			5,894			—			383,182
Consumer
Direct Installment		39,900			—			237			—			40,137
Direct Installment Purchased		219			—			—			—			219
Indirect Installment		141,264			—			604			—			141,868
Home Equity		135,155			—			3,852			—			139,007
Total Consumer		316,538			—			4,693			—			321,231
Total	$	1,335,854		$	13,959		$	27,661		$	—		$	1,377,473
Percentage of total loans		96.98	%		1.01	%		2.01	%		0.00	%

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) (USD $)	3 Months Ended
	Mar. 31, 2015
Cash dividends on preferred stock, rate	1.00%
Cash dividends on common stock, per share	$ 0.14
Retained Earnings [Member]
Cash dividends on preferred stock, rate	1.00%
Cash dividends on common stock, per share	$ 0.14

XML

Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Financial Instruments

The following tables summarize the fair value of derivative financial instruments utilized by Horizon:

	Asset Derivative			Liability Derivatives
	March 31, 2015			March 31, 2015
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location	Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts	Loans	$	—		Other liabilities	$	2,208
Interest rate contracts	Other Assets		2,208		Other liabilities		3,666
Total derivatives designated as hedging instruments			2,208				5,874
Derivatives not designated as hedging instruments
Mortgage loan contracts	Other assets		636		Other liabilities		—
Total derivatives not designated as hedging instruments			636				—
Total derivatives		$	2,844			$	5,874
	Asset Derivative			Liability Derivatives
	December 31, 2014			December 31, 2014
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location	Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts	Loans	$	—		Other liabilities	$	1,208
Interest rate contracts	Other Assets		1,208		Other liabilities		3,339
Total derivatives designated as hedging instruments			1,208				4,547
Derivatives not designated as hedging instruments
Mortgage loan contracts	Other assets		447		Other liabilities		—
Total derivatives not designated as hedging instruments			447				—
Total derivatives		$	1,655			$	4,547

Effect of Derivative Instruments on Condensed Consolidated Statement of Income Derivative in Cash Flow Hedging Relationship

The effect of the derivative instruments on the condensed consolidated statement of income for the three month periods ending is as follows:

	Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended March 31
Derivative in cash flow	2015			2014
hedging relationship	(Unaudited)			(Unaudited)
Interest rate contracts	$	(214	)	$	(146	)

Effect of Derivative Instruments on Consolidated Statement of Income Derivative in Fair Value Hedging Relationship

		Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended March 31
Derivative in fair value	Location of gain (loss)	2015			2014
hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)
Interest rate contracts	Interest income - loans	$	719		$	207
Interest rate contracts	Interest income - loans		(719	)		(207	)
Total		$	—		$	—
		Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended March 31
Derivative not designated	Location of gain (loss)	2015			2014
as hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)
Mortgage contracts	Other income - gain on sale of loans	$	189		$	240

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Acquisition - Schedule of Preliminary Purchase Price of Assets Acquired and Liabilities Assumed (Detail) (USD $)	Mar. 31, 2015	Dec. 31, 2014	Apr. 03, 2014
ASSETS
Cash and due from banks			$ 15,161,000
Total loans			124,081,000
Premises and equipment, net			2,548,000
FRB and FHLB stock			2,136,000
Goodwill	28,176,000	28,176,000	8,428,000
Core deposit intangible			822,000
Interest receivable			347,000
Cash value of life insurance			2,185,000
Other assets			2,877,000
Total assets purchased			158,585,000
Common shares issued			12,689,000
Cash paid			6,207,000
Retirement of Holding Company Debt			1,029,000
Total estimated purchase price			19,925,000
Deposits
Non-interest bearing			27,274,000
NOW accounts			16,332,000
Savings and money market			35,045,000
Certificates of deposits			42,368,000
Total deposits			121,019,000
Borrowings			16,990,000
Interest payable			52,000
Other liabilities			599,000
Total liabilities assumed			138,660,000
Residential Mortgage [Member]
ASSETS
Total loans			43,448,000
Commercial [Member]
ASSETS
Total loans			70,441,000
Consumer [Member]
ASSETS
Total loans			$ 10,192,000

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Accounting for Certain Loans Acquired in a Transfer - Additional Information (Detail) (Loans Purchased With Evidence Of Credit Deterioration [Member], USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Loans Purchased With Evidence Of Credit Deterioration [Member]
Business Acquisition [Line Items]
Allowances for loan losses	$ 105,000	$ 0

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Disclosures about Fair Value of Assets and Liabilities - Qualitative Information about Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements, Other than Goodwill (Detail) (Significant Unobservable Inputs (Level 3) [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	7,512	9,464
Valuation Technique	Collateral based measurement
Unobservable Inputs	Discount to reflect current market conditions and ultimate collectability
Mortgage Servicing Rights [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	7,854	7,642
Valuation Technique	Discounted cashflows
Unobservable Inputs	Discount rate, Constant prepayment rate, Probability of default
Minimum [Member] | Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount to reflect current market conditions and ultimate collectability	10.00%	10.00%
Minimum [Member] | Mortgage Servicing Rights [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount rate	10.00%	10.00%
Constant prepayment rate	4.00%	4.00%
Probably of default	1.00%	1.00%
Maximum [Member] | Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount to reflect current market conditions and ultimate collectability	15.00%	15.00%
Maximum [Member] | Mortgage Servicing Rights [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount rate	15.00%	15.00%
Constant prepayment rate	7.00%	7.00%
Probably of default	10.00%	10.00%
Weighted Average [Member] | Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount to reflect current market conditions and ultimate collectability	12.00%	12.00%
Weighted Average [Member] | Mortgage Servicing Rights [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount rate	12.00%	12.00%
Constant prepayment rate	4.60%	4.60%
Probably of default	4.50%	4.50%

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 38,676	$ 43,476
Investment securities, available for sale	331,033	323,764
Investment securities, held to maturity (fair value of $171,405 and $169,904)	164,282	165,767
Loans held for sale	6,229	6,143
Loans, net of allowance for loan losses of $16,634 and $16,501	1,444,725	1,362,053
Premises and equipment, net	53,989	52,461
Federal Reserve and Federal Home Loan Bank stock	11,348	11,348
Goodwill	28,176	28,176
Other intangible assets	3,738	3,965
Interest receivable	8,431	8,246
Cash value of life insurance	39,640	39,382
Other assets	23,698	32,141
Total assets	2,153,965	2,076,922
Liabilities
Non-interest bearing	285,181	267,667
Interest bearing	1,179,915	1,214,652
Total deposits	1,465,096	1,482,319
Borrowings	440,415	351,198
Subordinated debentures	32,680	32,642
Interest payable	504	497
Other liabilities	15,779	15,852
Total liabilities	1,954,474	1,882,508
Commitments and contingent liabilities
Stockholders' Equity
Common stock, no par value Authorized, 22,500,000 shares Issued, 9,289,916 and 9,278,916 shares Outstanding, 9,232,163 and 9,213,036 shares	0	0
Additional paid-in capital	46,064	45,916
Retained earnings	138,500	134,477
Accumulated other comprehensive income	2,427	1,521
Total stockholders' equity	199,491	194,414
Total liabilities and stockholders' equity	2,153,965	2,076,922
Series B Preferred Stock [Member]
Stockholders' Equity
Preferred stock, Authorized, 1,000,000 shares Series B shares $.01 par value, $1,000 liquidation value Issued 12,500 shares	$ 12,500	$ 12,500

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Securities - Gross Unrealized Losses and Fair Value of Company's Investments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	$ 31,846	$ 34,286
Fair value more than 12 months	75,270	90,657
Total fair value	107,116	124,943
Unrealized losses less than 12 months	(278)	(225)
Unrealized losses more than 12 months	(809)	(1,560)
Total unrealized losses	(1,087)	(1,785)
U.S. Treasury and Federal Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months		2,993
Fair value more than 12 months	16,937	20,762
Total fair value	16,937	23,755
Unrealized losses less than 12 months		(7)
Unrealized losses more than 12 months	(48)	(222)
Total unrealized losses	(48)	(229)
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	15,766	10,287
Fair value more than 12 months	1,259	2,050
Total fair value	17,025	12,337
Unrealized losses less than 12 months	(173)	(121)
Unrealized losses more than 12 months	(7)	(30)
Total unrealized losses	(180)	(151)
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	9,233	15,013
Fair value more than 12 months	29,821	39,801
Total fair value	39,054	54,814
Unrealized losses less than 12 months	(21)	(88)
Unrealized losses more than 12 months	(516)	(957)
Total unrealized losses	(537)	(1,045)
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	6,847	5,993
Fair value more than 12 months	27,253	28,044
Total fair value	34,100	34,037
Unrealized losses less than 12 months	(84)	(9)
Unrealized losses more than 12 months	(238)	(351)
Total unrealized losses	$ (322)	$ (360)

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 5,358	$ 3,417
Change in fair value of derivative instruments:
Change in fair value of derivative instruments for the period	(329)	(225)
Income tax effect	115	79
Changes from derivative instruments	(214)	(146)
Change in securities available-for-sale:
Unrealized appreciation for the period on available-for-sale securities	1,962	4,426
Unrealized appreciation for the period on held-to-maturity	(114)
Reclassification adjustment for securities gains realized in income	(124)	0
Income tax effect	(604)	(1,550)
Unrealized gains on available-for-sale securities	1,120	2,876
Other Comprehensive Income, Net of Tax	906	2,730
Comprehensive Income	$ 6,264	$ 6,147

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Non-performing Loans and Impaired Loans - Loans Transferred and Classified as Troubled Debt Restructured Loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 Defaults	Mar. 31, 2014 Defaults
Financing Receivable, Modifications [Line Items]
Number of Defaults	2	3
Unpaid Principal Balance	$ 34	$ 544
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	2
Unpaid Principal Balance	2	398
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1
Unpaid Principal Balance	2
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults		2
Unpaid Principal Balance		398
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	1
Unpaid Principal Balance	32	146
Consumer [Member] | Home Equity [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	1
Unpaid Principal Balance	$ 32	$ 146

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Components of Accumulated Other Comprehensive Income

	March 31			December 31
	2015			2014
Unrealized gain on securities available for sale	$	5,856		$	4,018
Unamortized gain on securities held to maturity, previously transferred from AFS		1,544			1,658
Unrealized loss on derivative instruments		(3,666	)		(3,337	)
Tax effect		(1,307	)		(818	)
Total accumulated other comprehensive income	$	2,427		$	1,521

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Derivative Financial Instruments - Fair Value of Derivative Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	$ 2,844	$ 1,655
Total Liability Derivatives	5,874	4,547
Derivatives Designated as Hedging Instruments [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	2,208	1,208
Total Liability Derivatives	5,874	4,547
Derivatives Designated as Hedging Instruments [Member] | Interest Rate Contracts One [Member] | Other Liabilities [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Liability Derivatives	2,208	1,208
Derivatives Designated as Hedging Instruments [Member] | Interest Rate Contracts Two [Member] | Other Liabilities [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Liability Derivatives	3,666	3,339
Derivatives Designated as Hedging Instruments [Member] | Interest Rate Contracts Two [Member] | Other Assets [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	2,208	1,208
Derivatives Not Designated as Hedging Instruments [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	636	447
Derivatives Not Designated as Hedging Instruments [Member] | Mortgage Loan Contracts [Member] | Other Assets [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	$ 636	$ 447

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Business Combination

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Business Combination

Note 13 – Business Combination

On February 18, 2015, Horizon entered into an Agreement and Plan of Merger (the “Merger Agreement”) providing for Horizon’s acquisition of Peoples Bancorp, an Indiana corporation (“Peoples”). Pursuant to the Merger Agreement, Peoples would merge with and into Horizon, with Horizon surviving the merger (the “Merger”), and Peoples Federal Savings Bank of DeKalb County, a federally chartered stock savings bank and wholly-owned subsidiary of Peoples, would merge with and into a wholly-owned subsidiary of Horizon, Horizon Bank, N.A. (“Horizon Bank”), with Horizon Bank as the surviving bank.

The boards of directors of each of Horizon and Peoples have approved the Merger and the Merger Agreement. Subject to the approval of the issuance of shares related to the Merger by Horizon shareholders, the Merger by Peoples shareholders, regulatory approvals and other closing conditions, the parties anticipate completing the Merger during the third quarter of 2015.

In connection with the Merger, each Peoples shareholder will receive 0.95 shares of Horizon common stock (the “Exchange Ratio”) and $9.75 in cash for each share of Peoples common stock owned by them. Based on Horizon’s February 18, 2015 closing price of $23.02 per share as reported on the NASDAQ Global Select Market, the implied transaction value is estimated at $73.1 million.

Subject to certain terms and conditions, the board of directors of Peoples has agreed to recommend the approval and adoption of the Merger Agreement to the Peoples shareholders and will solicit proxies voting in favor of the Merger from Peoples’ shareholders.

The Merger Agreement also provides for certain termination rights for both Horizon and Peoples, and further provides that upon termination of the Merger Agreement under certain circumstances, Peoples will be obligated to pay Horizon a termination fee.

As of December 31, 2014, Peoples reported total assets of approximately $486.6 million, total deposits of approximately $368.7 million and total loans of approximately $235.1 million.

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Regulatory Capital (Tables)

3 Months Ended

Mar. 31, 2015

Banking and Thrift [Abstract]

Summary of Regulatory Capital Requirement

Horizon and the Bank’s actual and required capital ratios as of March 31, 2015 and December 31, 2014 were as follows:

						Required For Capital1					Well Capitalized Under Prompt1
	Actual					Adequacy Purposes					Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2015
Total capital1 (to risk-weighted assets)
Consolidated	$	218,613		13.74	%	$	127,286		8.00	%		N/A		N/A
Bank		195,409		12.35	%		126,581		8.00	%	$	158,226		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		201,979		12.69	%		95,498		6.00	%		N/A		N/A
Bank		178,775		11.30	%		94,925		6.00	%		126,566		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		156,411		9.83	%		71,602		4.50	%		N/A		N/A
Bank		178,775		11.30	%		71,194		4.50	%		102,835		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		201,979		9.97	%		81,035		4.00	%		N/A		N/A
Bank		178,775		8.77	%		81,539		4.00	%		101,924		5.00	%
As of December 31, 2014
Total capital1 (to risk-weighted assets)
Consolidated	$	212,276		14.48	%	$	117,280		8.00	%		N/A		N/A
Bank		192,604		13.08	%		117,801		8.00	%	$	147,251		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		195,775		13.35	%		58,659		4.00	%		N/A		N/A
Bank		176,103		11.96	%		58,897		4.00	%		88,346		6.00	%
Tier 1 capital1 (to average assets)
Consolidated		195,775		9.76	%		80,236		4.00	%		N/A		N/A
Bank		176,103		8.80	%		80,047		4.00	%		100,059		5.00	%

¹  As defined by regulatory agencies

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Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Earnings Per Share

Basic earnings per share is computed by dividing net income available to common shareholders (net income less dividend requirements for preferred stock and accretion of preferred stock discount) by the weighted-average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The following table shows computation of basic and diluted earnings per share.

	Three Months Ended
	March 31
	2015		2014
	(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	5,358	$	3,417
Less: Preferred stock dividends		31		31
Net income available to common shareholders	$	5,327	$	3,386
Weighted average common shares outstanding		9,216,011		8,630,966
Basic earnings per share	$	0.58	$	0.39
Diluted earnings per share
Net income available to common shareholders	$	5,327	$	3,386
Weighted average common shares outstanding		9,216,011		8,630,966
Effect of dilutive securities:
Warrants		321,652		311,278
Restricted stock		30,510		39,519
Stock options		41,333		40,023
Weighted average shares outstanding		9,609,506		9,021,786
Diluted earnings per share	$	0.55	$	0.38

At March 31, 2015 and 2014, there were 62,445 and no shares, respectively, which were not included in the computation of diluted earnings per share because they were non-dilutive.

Reclassifications

Reclassifications

Certain reclassifications have been made to the 2014 condensed consolidated financial statements to be comparable to 2015. These reclassifications had no effect on net income.

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Disclosures about Fair Value of Assets and Liabilities - Fair Value Measurements of Assets and Liabilities Recognized on a Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	$ 331,033	$ 323,764
U.S. Treasury and Federal Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	28,421	26,823
State and Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	51,576	47,952
Federal Agency Collateralized Mortgage Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	121,719	122,860
Federal Agency Mortgage-backed Pools [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	129,267	125,395
Private Labeled Mortgage-backed Pools [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value		689
Corporate Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	50	45
Recurring Basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	331,033	323,764
Recurring Basis [Member] | U.S. Treasury and Federal Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	28,421	26,823
Recurring Basis [Member] | State and Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	51,576	47,952
Recurring Basis [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	121,719	122,860
Recurring Basis [Member] | Federal Agency Mortgage-backed Pools [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	129,267	125,395
Recurring Basis [Member] | Private Labeled Mortgage-backed Pools [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value		689
Recurring Basis [Member] | Corporate Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	50	45
Recurring Basis [Member] | Hedged Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	104,383	101,445
Recurring Basis [Member] | Forward Sale Commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	636	447
Recurring Basis [Member] | Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	(5,874)	(4,546)
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	331,033	323,764
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Treasury and Federal Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	28,421	26,823
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | State and Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	51,576	47,952
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	121,719	122,860
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Federal Agency Mortgage-backed Pools [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	129,267	125,395
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Private Labeled Mortgage-backed Pools [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value		689
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	50	45
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Hedged Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	104,383	101,445
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Forward Sale Commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	636	447
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	$ (5,874)	$ (4,546)

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Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (USD $) In Thousands	Total	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]
Beginning Balance at Dec. 31, 2014	$ 194,414	$ 12,500	$ 45,916	$ 134,477	$ 1,521
Net income	5,358			5,358
Other comprehensive income, net of tax	906				906
Amortization of unearned compensation	89		89
Stock option expense	59		59
Cash dividends on preferred stock	(31)			(31)
Cash dividends on common stock	(1,304)			(1,304)
Ending Balances at Mar. 31, 2015	$ 199,491	$ 12,500	$ 46,064	$ 138,500	$ 2,427

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Investment securities, held to maturity fair value	$ 171,405	$ 169,904
Allowances for loan losses	$ 16,634	$ 16,501
Common stock, par value
Common stock, shares authorized	22,500,000	22,500,000
Common stock, shares issued	9,289,916	9,278,916
Common stock, shares outstanding	9,232,163	9,213,036
Series B Preferred Stock [Member]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, liquidation value	$ 1,000	$ 1,000
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	12,500	12,500

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 8 – Derivative Financial Instruments

Cash Flow Hedges

As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flow due to interest rate fluctuations, the Company entered into interest rate swap agreements for a portion of its floating rate debt. The agreements provide for the Company to receive interest from the counterparty at three month LIBOR and to pay interest to the counterparty at a weighted average fixed rate of 6.14% on a notional amount of $30.5 million at March 31, 2015 and December 31, 2014. Under the agreements, the Company pays or receives the net interest amount monthly, with the monthly settlements included in interest expense.

Management has designated the interest rate swap agreement as a cash flow hedging instrument. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. At March 31, 2015, the Company’s cash flow hedge was effective and is not expected to have a significant impact on the Company’s net income over the next 12 months.

Fair Value Hedges

Fair value hedges are intended to reduce the interest rate risk associated with the underlying hedged item. The Company enters into fixed rate loan agreements as part of its lending policy. To mitigate the risk of changes in fair value based on fluctuations in interest rates, the Company has entered into interest rate swap agreements on individual loans, converting the fixed rate loans to a variable rate. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings. At March 31, 2015, the Company’s fair value hedges were effective and are not expected to have a significant impact on the Company’s net income over the next 12 months.

The change in fair value of both the hedge instruments and the underlying loan agreements are recorded as gains or losses in interest income. The fair value hedges are considered to be highly effective and any hedge ineffectiveness was deemed not material. The notional amounts of the loan agreements being hedged were $106.6 million at March 31, 2015 and $102.7 million at December 31, 2014.

Other Derivative Instruments

The Company enters into non-hedging derivatives in the form of mortgage loan forward sale commitments with investors and commitments to originate mortgage loans as part of its mortgage banking business. At March 31, 2015, the Company’s fair value of these derivatives were recorded and over the next 12 months are not expected to have a significant impact on the Company’s net income.

The change in fair value of both the forward sale commitments and commitments to originate mortgage loans were recorded and the net gains or losses included in the Company’s gain on sale of loans.

The following tables summarize the fair value of derivative financial instruments utilized by Horizon:

	Asset Derivative			Liability Derivatives
	March 31, 2015			March 31, 2015
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location	Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts	Loans	$	—		Other liabilities	$	2,208
Interest rate contracts	Other Assets		2,208		Other liabilities		3,666
Total derivatives designated as hedging instruments			2,208				5,874
Derivatives not designated as hedging instruments
Mortgage loan contracts	Other assets		636		Other liabilities		—
Total derivatives not designated as hedging instruments			636				—
Total derivatives		$	2,844			$	5,874
	Asset Derivative			Liability Derivatives
	December 31, 2014			December 31, 2014
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location	Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts	Loans	$	—		Other liabilities	$	1,208
Interest rate contracts	Other Assets		1,208		Other liabilities		3,339
Total derivatives designated as hedging instruments			1,208				4,547
Derivatives not designated as hedging instruments
Mortgage loan contracts	Other assets		447		Other liabilities		—
Total derivatives not designated as hedging instruments			447				—
Total derivatives		$	1,655			$	4,547

The effect of the derivative instruments on the condensed consolidated statement of income for the three month periods ending is as follows:

	Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended March 31
Derivative in cash flow	2015			2014
hedging relationship	(Unaudited)			(Unaudited)
Interest rate contracts	$	(214	)	$	(146	)

FASB Accounting Standards Codification (“ASC”) Topic 820-10-20 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820-10-55 establishes a fair value hierarchy that emphasizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

		Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended March 31
Derivative in fair value	Location of gain (loss)	2015			2014
hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)
Interest rate contracts	Interest income - loans	$	719		$	207
Interest rate contracts	Interest income - loans		(719	)		(207	)
Total		$	—		$	—
		Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended March 31
Derivative not designated	Location of gain (loss)	2015			2014
as hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)
Mortgage contracts	Other income - gain on sale of loans	$	189		$	240

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 01, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	HBNC
Entity Registrant Name	HORIZON BANCORP /IN/
Entity Central Index Key	0000706129
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		9,232,163

XML

Disclosures about Fair Value of Assets and Liabilities

3 Months Ended

Mar. 31, 2015

Text Block [Abstract]

Disclosures about Fair Value of Assets and Liabilities

Note 9 – Disclosures about Fair Value of Assets and Liabilities

The Fair Value Measurements topic of the FASB ASC defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. There are three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices in active markets for identical assets or liabilities
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated financial statements, as well as the general classification of such instruments pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended March 31, 2015. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Available for sale securities

When quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. Treasury and federal agency securities, state and municipal securities, federal agency mortgage obligations and mortgage-backed pools, private-label mortgage-backed pools and corporate notes. Level 2 securities are valued by a first party pricing service commonly used in the banking industry utilizing observable inputs. Observable inputs include dealer quotes, market spreads, cash flow analysis, the U.S. Treasury yield curve, trade execution data, market consensus prepayment spreads and available credit information and the bond’s terms and conditions. The pricing provider utilizes evaluated pricing models that vary based on asset class. These models incorporate available market information including quoted prices of securities with similar characteristics and, because many fixed-income securities do not trade on a daily basis, apply available information through processes such as benchmark curves, benchmarking of like securities, sector grouping, and matrix pricing. In addition, model processes, such as an option adjusted spread model, is used to develop prepayment and interest rate scenarios for securities with prepayment features.

Hedged loans

Certain fixed rate loans have been converted to variable rate loans by entering into interest rate swap agreements. The fair value of those fixed rate loans is based on discounting the estimated cash flows using interest rates determined by the respective interest rate swap agreement. Loans are classified within Level 2 of the valuation hierarchy based on the unobservable inputs used.

Interest rate swap agreements

The fair value of the Company’s interest rate swap agreements is estimated by a first party using inputs that are primarily unobservable including a yield curve, adjusted for liquidity and credit risk, contracted terms and discounted cash flow analysis, and therefore, are classified within Level 2 of the valuation hierarchy.

The following table presents the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated financial statements measured at fair value on a recurring basis and the level within the FASB ASC fair value hierarchy in which the fair value measurements fall at the following:

				Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
	Fair Value			(Level 1)		(Level 2)			(Level 3)
March 31, 2015
Available-for-sale securities
U.S. Treasury and federal agencies	$	28,421		$	—	$	28,421		$	—
State and municipal		51,576			—		51,576			—
Federal agency collateralized mortgage obligations		121,719			—		121,719			—
Federal agency mortgage-backed pools		129,267			—		129,267			—
Private labeled mortgage-backed pools		—			—		—			—
Corporate notes		50			—		50			—
Total available-for-sale securities		331,033			—		331,033			—
Hedged loans		104,383			—		104,383			—
Forward sale commitments		636			—		636			—
Interest rate swap agreements		(5,874	)		—		(5,874	)		—
Commitments to originate loans		—			—		—			—
December 31, 2014
Available-for-sale securities
U.S. Treasury and federal agencies	$	26,823		$	—	$	26,823		$	—
State and municipal		47,952			—		47,952			—
Federal agency collateralized mortgage obligations		122,860			—		122,860			—
Federal agency mortgage-backed pools		125,395			—		125,395			—
Private labeled mortgage-backed pools		689			—		689			—
Corporate notes		45			—		45			—
Total available-for-sale securities		323,764			—		323,764			—
Hedged loans		101,445			—		101,445			—
Forward sale commitments		447			—		447			—
Interest rate swap agreements		(4,546	)		—		(4,546	)		—
Commitments to originate loans		—			—		—			—

Realized gains and losses included in net income for the periods are reported in the condensed consolidated statements of income as follows:

	Three Months Ended March 31
	2015			2014
	(Unaudited)			(Unaudited)
Non Interest Income
Total gains and losses from:
Hedged loans	$	719		$	207
Fair value interest rate swap agreements		(719	)		(207	)
Derivative loan commitments		189			240
	$	189		$	240

Certain other assets are measured at fair value on a nonrecurring basis in the ordinary course of business and are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment):

			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2015
Impaired loans	$	7,512	$	—	$	—	$	7,512
Mortgage servicing rights		7,854		—		—		7,854
December 31, 2014
Impaired loans	$	9,464	$	—	$	—	$	9,464
Mortgage servicing rights		7,642		—		—		7,642

Impaired (collateral dependent): Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral-dependent loans.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value.

Impaired loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method.

Mortgage Servicing Rights (MSRs): MSRs do not trade in an active market with readily observable prices. Accordingly, the fair value of these assets is classified as Level 3. The Company determines the fair value of MSRs using an income approach model based upon the Company’s month-end interest rate curve and prepayment assumptions. The model utilizes assumptions to estimate future net servicing income cash flows, including estimates of time decay, payoffs and changes in valuation inputs and assumptions. The Company reviews the valuation assumptions against this market data for reasonableness and adjusts the assumptions if deemed appropriate. The carrying amount of the MSRs’ fair value decreased by $76,000 during the first three months of 2015 and increased by $5,000 during the first three months of 2014.

The following table presents qualitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements, other than goodwill.

	Fair Value at		Valuation		Range (Weighted
	March 31, 2015		Technique	Unobservable Inputs	Average)
Impaired loans	$	7,512	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability		10% - 15% (12%)
Mortgage servicing rights	$	7,854	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default		10% - 15% (12%), 4% - 7% (4.6%), 1% - 10%  (4.5%)
	Fair Value at		Valuation		Range (Weighted
	December 31, 2014		Technique	Unobservable Inputs	Average)
Impaired loans	$	9,464	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability		10% - 15% (12%)
Mortgage servicing rights	$	7,642	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default		10% - 15% (12%), 4% - 7% (4.6%), 1% - 10% (4.5%)

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Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Interest Income
Loans receivable	$ 16,862	$ 12,954
Investment securities
Taxable	2,154	2,390
Tax exempt	1,077	1,123
Total interest income	20,093	16,467
Interest Expense
Deposits	1,232	1,277
Borrowed funds	1,479	1,422
Subordinated debentures	496	496
Total interest expense	3,207	3,195
Net Interest Income	16,886	13,272
Provision for loan losses	614
Net Interest Income after Provision for Loan Losses	16,272	13,272
Non-interest Income
Service charges on deposit accounts	999	923
Wire transfer fees	151	112
Interchange fees	1,102	959
Fiduciary activities	1,297	1,048
Gain on sale of investment securities (includes $124 and $0 for the three months ended March 31, 2015 and 2014, respectively, related to accumulated other comprehensive earnings reclassifications)	124
Gain on sale of mortgage loans	2,379	1,411
Mortgage servicing income net of impairment	179	207
Increase in cash value of bank owned life insurance	258	233
Death benefit on bank owned life insurance	145
Other income	432	629
Total non-interest income	7,066	5,522
Non-interest Expense
Salaries and employee benefits	8,504	7,483
Net occupancy expenses	1,551	1,424
Data processing	923	870
Professional fees	527	608
Outside services and consultants	626	661
Loan expense	1,257	1,015
FDIC insurance expense	337	256
Other losses	(45)	38
Other expense	2,388	2,159
Total non-interest expense	16,068	14,514
Income Before Income Tax	7,270	4,280
Income tax expense (includes $43 and $0 for the three months ended March 31, 2015 and 2014, respectively, related to income tax expense from reclassification items)	1,912	863
Net Income	5,358	3,417
Preferred stock dividend	(31)	(31)
Net Income Available to Common Shareholders	$ 5,327	$ 3,386
Basic Earnings Per Share	$ 0.58	$ 0.39
Diluted Earnings Per Share	$ 0.55	$ 0.38

XML

Securities

3 Months Ended

Mar. 31, 2015

Investments, Debt and Equity Securities [Abstract]

Securities

Note 3 – Securities

The fair value of securities is as follows:

			Gross		Gross
March 31, 2015	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	28,400	$	69	$	(48	)	$	28,421
State and municipal		50,036		1,577		(37	)		51,576
Federal agency collateralized mortgage obligations		120,785		1,471		(537	)		121,719
Federal agency mortgage-backed pools		125,923		3,590		(246	)		129,267
Corporate notes		32		18		—			50
Total available for sale investment securities	$	325,176	$	6,725	$	(868	)	$	331,033
Held to maturity
U.S. Treasury and federal agencies	$	9,824	$	157	$	—		$	9,981
State and municipal		128,558		6,179		(143	)		134,594
Federal agency collateralized mortgage obligations		3,873		45		—			3,918
Federal agency mortgage-backed pools		22,027		961		(76	)		22,912
Total held to maturity investment securities	$	164,282	$	7,342	$	(219	)	$	171,405
December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	26,996	$	56	$	(229	)	$	26,823
State and municipal		46,535		1,462		(45	)		47,952
Federal agency collateralized mortgage obligations		122,930		975		(1,045	)		122,860
Federal agency mortgage-backed pools		122,583		3,172		(360	)		125,395
Private labeled mortgage-backed pools		670		19		—			689
Corporate notes		32		13		—			45
Total available for sale investment securities	$	319,746	$	5,697	$	(1,679	)	$	323,764
Held to maturity
U.S. Treasury and federal agencies	$	9,804	$	82	$	—		$	9,886
State and municipal		129,595		3,398		(106	)		132,887
Federal agency collateralized mortgage obligations		4,039		35		(1	)		4,073
Federal agency mortgage-backed pools		22,329		729		—			23,058
Total held to maturity investment securities	$	165,767	$	4,244	$	(107	)	$	169,904

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information, and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary. While these securities are held in the available for sale portfolio and held-to-maturity, Horizon intends, and has the ability, to hold them until the earlier of a recovery in fair value or maturity.

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified. At March 31, 2015, no individual investment security had an unrealized loss that was determined to be other-than-temporary.

The unrealized losses on the Company’s investments in securities of state and municipal governmental agencies, U.S. Treasury and federal agencies, federal agency collateralized mortgage obligations, and federal agency mortgage-backed pools were caused by interest rate volatility and not a decline in credit quality. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company expects to recover the amortized cost basis over the term of the securities. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company did not consider those investments to be other-than-temporarily impaired at March 31, 2015.

The Company elected to transfer 319 available-for-sale (“AFS”) securities with an aggregate fair value of $167.1 million to a classification of held-to-maturity (“HTM”) on April 1, 2014. In accordance with FASB ASC 320-10-55-24, the transfer from AFS to HTM must be recorded at the fair value of the AFS securities at the time of transfer. The net unrealized holding gain of $1.3 million, net of tax, at the date of transfer was retained in accumulated other comprehensive income, with the associated pre-tax amount retained in the carrying value of the HTM securities. Such amounts will be amortized to comprehensive income over the remaining life of the securities. The fair value of the transferred AFS securities became the book value of the HTM securities at April 1, 2014, with no unrealized gain or loss at this date. Future reporting periods, with potential changes in market value for these securities, would likely record an unrealized gain or loss for disclosure purposes.

The amortized cost and fair value of securities available for sale and held to maturity at March 31, 2015 and December 31, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2015				December 31, 2014
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
Within one year	$	6,170	$	6,220	$	6,098	$	6,169
One to five years		49,096		49,902		44,720		45,093
Five to ten years		16,830		17,373		16,147		16,768
After ten years		6,372		6,552		6,598		6,790
		78,468		80,047		73,563		74,820
Federal agency collateralized mortgage obligations		120,785		121,719		122,930		122,860
Federal agency mortgage-backed pools		125,923		129,267		122,583		125,395
Private labeled mortgage-backed pools		—		—		670		689
Total available for sale investment securities	$	325,176	$	331,033	$	319,746	$	323,764
Held to maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		1,223		1,243		592		593
Five to ten years		104,305		109,391		99,225		101,323
After ten years		32,854		33,941		39,582		40,857
		138,382		144,575		139,399		142,773
Federal agency collateralized mortgage obligations		3,873		3,918		4,039		4,073
Federal agency mortgage-backed pools		22,027		22,912		22,329		23,058
Total held to maturity investment securities	$	164,282	$	171,405	$	165,767	$	169,904

The following table shows the gross unrealized losses and the fair value of the Company’s investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
March 31, 2015	Value		Losses			Value		Losses			Value		Losses
U.S. Treasury and federal agencies	$	—	$	—		$	16,937	$	(48	)	$	16,937	$	(48	)
State and municipal		15,766		(173	)		1,259		(7	)		17,025		(180	)
Federal agency collateralized mortgage obligations		9,233		(21	)		29,821		(516	)		39,054		(537	)
Federal agency mortgage-backed pools		6,847		(84	)		27,253		(238	)		34,100		(322	)
Total temporarily impaired securities	$	31,846	$	(278	)	$	75,270	$	(809	)	$	107,116	$	(1,087	)
	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and federal agencies	$	2,993	$	(7	)	$	20,762	$	(222	)	$	23,755	$	(229	)
State and municipal		10,287		(121	)		2,050		(30	)		12,337		(151	)
Federal agency collateralized mortgage obligations		15,013		(88	)		39,801		(957	)		54,814		(1,045	)
Federal agency mortgage-backed pools		5,993		(9	)		28,044		(351	)		34,037		(360	)
Total temporarily impaired securities	$	34,286	$	(225	)	$	90,657	$	(1,560	)	$	124,943	$	(1,785	)

	Three Months Ended March 31
	2015			2014
Sales of securities available for sale (Unaudited)
Proceeds	$	13,332		$	—
Gross gains		147			—
Gross losses		(23	)		—

XML

Acquisition

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Acquisition

Note 2 – Acquisition

On April 3, 2014 Horizon closed its acquisition of SCB Bancorp, Inc. (“Summit”) and Horizon Bank N.A.’s acquisition of Summit Community Bank, through mergers effective as of that date. Under the final terms of the acquisition, the exchange ratio was 0.4904 shares of Horizon’s common stock and $5.15 in cash for each share of Summit common stock outstanding. Summit shares outstanding at the closing were 1,164,442, and the shares of Horizon common stock issued to Summit shareholders totaled 570,820. Horizon’s stock price was $22.23 per share at the close of business on April 3, 2014. Based upon these numbers, the total value of the consideration for the acquisition was $18.9 million (not including the retirement of Summit debt). The Company had approximately $1.3 million in costs related to the acquisition. These expenses are classified in the other expense section of the income statement and primarily located in the salaries and employee benefits, professional services and other expense line items. As a result of the acquisition, the Company will have an opportunity to increase its deposit base and reduce transaction costs. The Company also expects to reduce cost through economies of scale.

Under the purchase method of accounting, the total estimated purchase price is allocated to Summit’s net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on management’s preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on estimates and assumptions that are subject to change, the preliminary purchase price for the Summit acquisition is allocated as follows:

ASSETS
Cash and due from banks	$	15,161
Commercial		70,441
Residential mortgage		43,448
Consumer		10,192
Total loans		124,081
Premises and equipment, net		2,548
FRB and FHLB stock		2,136
Goodwill		8,428
Core deposit intangible		822
Interest receivable		347
Cash value of life insurance		2,185
Other assets		2,877
Total assets purchased	$	158,585
Common shares issued	$	12,689
Cash paid		6,207
Retirement of Holding Company Debt		1,029
Total estimated purchase price	$	19,925
LIABILITIES
Deposits
Non-interest bearing	$	27,274
NOW accounts		16,332
Savings and money market		35,045
Certificates of deposits		42,368
Total deposits		121,019
Borrowings		16,990
Interest payable		52
Other liabilities		599
Total liabilities assumed	$	138,660

Of the total estimated purchase price of $19.9 million, $822,000 has been allocated to core deposit intangible. Additionally, $8.4 million has been allocated to goodwill and $4.4 million of the purchase price is deductible and was assigned to the business assets. The core deposit intangible will be amortized over seven years on a straight line basis.

The Company acquired loans in the acquisition and the transferred loans had evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include information such as past-due and non-accrual status, borrower credit scores and recent loan-to-value percentages. Purchased credit-impaired loans are accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310-30) and initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporate the estimate of current key assumptions, such as default rates, severity and prepayment speeds.

The Company acquired the $130.5 million loan portfolio at a fair value discount of $6.4 million. The performing portion of the portfolio, $106.2 million, had an estimated fair value of $104.6 million. The excess of expected cash flows above the fair value of the performing portion of loans will be accreted to interest income over the remaining lives of the loans in accordance with ASC 310-20.

Final estimates of certain loans, those for which specific credit-related deterioration, since origination, are recorded at fair value, reflecting the present value of the amounts expected to be collected. Income recognition of these loans is based on reasonable expectation about the timing and amount of cash flows to be collected.

The following table details the acquired loans that are accounted for in accordance with ASC 310-30 as of April 3, 2014.

Contractually required principal and interest at acquisition	$	14,460
Contractual cash flows not expected to be collected (nonaccretable differences)		3,146
Expected cash flows at acquisition		11,314
Interest component of expected cash flows (accretable discount)		1,688
Fair value of acquired loans accounted for under ASC 310-30	$	9,626

Pro-forma statements were not presented due to the materiality of the transaction.

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Future Accounting Matters

3 Months Ended

Mar. 31, 2015

Accounting Changes and Error Corrections [Abstract]

Future Accounting Matters

Note 14 – Future Accounting Matters

The FASB has issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.

Existing GAAP does not include explicit guidance about a customer’s accounting for fees paid in a cloud computing arrangement. Examples of cloud computing arrangements include: (a) software as a service; (b) platform as a service; (c) infrastructure as a service; and (d) other similar hosting arrangements.

The amendments add guidance to Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software, which will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The guidance already exists in the FASB Accounting Standards Codification™ in paragraphs 985-605-55-121 through 55-123, but it is included in a Subtopic applied by cloud service providers to determine whether an arrangement includes the sale or license of software.

For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015.

The FASB has issued an Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810):

Amendments to the Consolidation Analysis, which is intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions).

The ASU focuses on the consolidation evaluation for reporting organizations (public and private companies and not-for-profit organizations) that are required to evaluate whether they should consolidate certain legal entities.

In addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards Codification™ (Codification) and improves current GAAP by:

• Placing more emphasis on risk of loss when determining a controlling financial interest. A reporting organization may no longer have to consolidate a legal entity in certain circumstances based solely on its fee arrangement, when certain criteria are met.

• Reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity (VIE).

• Changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or VIEs.

The ASU will be effective for periods beginning after December 15, 2015, for public companies. Early adoption is permitted, including adoption in an interim period.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 10 – Fair Value of Financial Instruments

The estimated fair value amounts of the Company’s financial instruments were determined using available market information, current pricing information applicable to Horizon and various valuation methodologies. Where market quotations were not available, considerable management judgment was involved in the determination of estimated fair values. Therefore, the estimated fair value of financial instruments shown below may not be representative of the amounts at which they could be exchanged in a current or future transaction. Due to the inherent uncertainties of expected cash flows of financial instruments, the use of alternate valuation assumptions and methods could have a significant effect on the estimated fair value amounts.

The estimated fair values of financial instruments, as shown below, are not intended to reflect the estimated liquidation or market value of Horizon taken as a whole. The disclosed fair value estimates are limited to Horizon’s significant financial instruments at March 31, 2015 and December 31, 2014. These include financial instruments recognized as assets and liabilities on the condensed consolidated balance sheet as well as certain off-balance sheet financial instruments. The estimated fair values shown below do not include any valuation of assets and liabilities, which are not financial instruments as defined by the FASB ASC fair value hierarchy.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and Due from Banks - The carrying amounts approximate fair value.

Held-to-Maturity Securities - For debt securities held to maturity, fair values are based on quoted market prices or dealer quotes. For those securities where a quoted market price is not available, carrying amount is a reasonable estimate of fair value based upon comparison with similar securities.

Loans Held for Sale - The carrying amounts approximate fair value.

Net Loans - The fair value of portfolio loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying amounts of loans held for sale approximate fair value.

FHLB and FRB Stock — Fair value of FHLB and FRB stock is based on the price at which it may be resold to the FHLB and FRB.

Interest Receivable/Payable — The carrying amounts approximate fair value.

Deposits — The fair value of demand deposits, savings accounts, interest-bearing checking accounts and money market deposits is the amount payable on demand at the reporting date. The fair value of fixed maturity certificates of deposit is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturity.

Borrowings — Rates currently available to Horizon for debt with similar terms and remaining maturities are used to estimate fair values of existing borrowings.

Subordinated Debentures — Rates currently available for debentures with similar terms and remaining maturities are used to estimate fair values of existing debentures.

Commitments to Extend Credit and Standby Letters of Credit — The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. Due to the short-term nature of these agreements, carrying amounts approximate fair value.

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall (unaudited).

	March 31, 2015
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	38,676	$	38,676	$	—	$	—
Investment securities, held to maturity		164,282		—		171,405		—
Loans held for sale		6,229		—		—		6,229
Loans excluding loan level hedges, net		1,340,342		—		—		1,379,815
Stock in FHLB and FRB		11,348		—		11,348		—
Interest receivable		8,431		—		8,431		—
Liabilities
Non-interest bearing deposits	$	285,181	$	285,181	$	—	$	—
Interest-bearing deposits		1,179,915		—		1,134,694		—
Borrowings		440,415		—		438,547		—
Subordinated debentures		32,680		—		32,674		—
Interest payable		504		—		504		—

	December 31, 2014
			Quoted Prices
			in Active
			Markets for		Significant Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	43,476	$	43,476	$	—	$	—
Investment securities, held to maturity		165,767		—		169,904		—
Loans held for sale		6,143		—		—		6,143
Loans excluding loan level hedges, net		1,260,608		—		—		1,295,133
Stock in FHLB and FRB		11,348		—		11,348		—
Interest receivable		8,246		—		8,246		—
Liabilities
Non-interest bearing deposits	$	267,667	$	267,667	$	—	$	—
Interest-bearing deposits		1,214,652		—		1,158,912		—
Borrowings		351,198		—		348,597		—
Subordinated debentures		32,642		—		32,669		—
Interest payable		497		—		497		—

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Allowance for Loan Losses

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Allowance for Loan Losses

Note 6 – Allowance for Loan Losses

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the prior one to five years. Management believes the five-year historical loss experience methodology is appropriate in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed. The actual allowance for loan loss activity is provided below.

	Three Months Ended
	March 31
	2015			2014
	(Unaudited)			(Unaudited)
Balance at beginning of the period	$	16,501		$	15,992
Loans charged-off:
Commercial
Owner occupied real estate		—			—
Non owner occupied real estate		16			22
Residential development		—			—
Development & Spec Land Loans		—			7
Commercial and industrial		—			—
Total commercial		16			29
Real estate
Residential mortgage		22			22
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		22			22
Consumer
Direct Installment		59			33
Direct Installment Purchased		—			—
Indirect Installment		369			227
Home Equity		200			184
Total consumer		628			444
Total loans charged-off		666			495
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		8			4
Non owner occupied real estate		—			1
Residential development		—			—
Development & Spec Land Loans		—			—
Commercial and industrial		19			385
Total commercial		27			390
Real estate
Residential mortgage		2			4
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		2			4
Consumer
Direct Installment		29			18
Direct Installment Purchased		—			—
Indirect Installment		101			119
Home Equity		26			74
Total consumer		156			211
Total loan recoveries		185			605
Net loans charged-off (recovered)		481			(110	)
Provision charged to operating expense
Commercial		(45	)		212
Real estate		933			(604	)
Consumer		(274	)		392
Total provision charged to operating expense		614			—
Balance at the end of the period	$	16,634		$	16,102

Certain loans are individually evaluated for impairment, and the Company’s general practice is to proactively charge down impaired loans to the fair value of the underlying collateral.

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down or specific allocation of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the value is known but no later than when a loan is 180 days past due. Pursuant to such guidelines, the Company also charges-off unsecured open-end loans when the loan is 90 days past due, and charges down to the net realizable value other secured loans when they are 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection in full will occur regardless of delinquency status, are not charged off.

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment analysis:

March 31, 2015	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,029	$	—	$	—	$	—	$	1,029
Collectively evaluated for impairment		6,593		3,281		1,272		4,205		15,351
Loans acquired with deteriorated credit quality		254		—		—		—		254
Total ending allowance balance	$	7,876	$	3,281	$	1,272	$	4,205	$	16,634
Loans:
Individually evaluated for impairment	$	8,547	$	—	$	—	$	—	$	8,547
Collectively evaluated for impairment		687,092		261,155		179,379		327,328		1,454,954
Loans acquired with deteriorated credit quality		1,729		—		—		—		1,729
Total ending loans balance	$	697,368	$	261,155	$	179,379	$	327,328	$	1,465,230
December 31, 2014	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,589	$	—	$	—	$	—	$	1,589
Collectively evaluated for impairment		5,827		2,508		1,132		4,951		14,418
Loans acquired with deteriorated credit quality		494		—		—		—		494
Total ending allowance balance	$	7,910	$	2,508	$	1,132	$	4,951	$	16,501
Loans:
Individually evaluated for impairment	$	11,055	$	—	$	—	$	—	$	11,055
Collectively evaluated for impairment		664,251		255,383		129,636		321,470		1,370,740
Loans acquired with deteriorated credit quality		591		—		—		—		591
Total ending loans balance	$	675,897	$	255,383	$	129,636	$	321,470	$	1,382,386

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Non-performing Loans and Impaired Loans - Loans Transferred and Classified as Troubled Debt Restructured Loans Non-accrual (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 Defaults	Mar. 31, 2014 Defaults
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	4
Unpaid Principal Balance	$ 2	$ 698
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	2
Unpaid Principal Balance	2	398
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1
Unpaid Principal Balance	2
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults		2
Unpaid Principal Balance		398
Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults		1
Unpaid Principal Balance		154
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults		1
Unpaid Principal Balance		154
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults		1
Unpaid Principal Balance		146
Consumer [Member] | Home Equity [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults		1
Unpaid Principal Balance		$ 146

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Loans

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Loans

Note 4 – Loans

	March 31			December 31
	2015			2014
Commercial
Working capital and equipment	$	311,789		$	300,940
Real estate, including agriculture		354,356			343,455
Tax exempt		8,890			8,595
Other		20,701			21,324
Total		695,736			674,314
Real estate
1–4 family		256,809			250,799
Other		3,581			3,826
Total		260,390			254,625
Consumer
Auto		160,668			154,538
Recreation		5,645			5,673
Real estate/home improvement		38,371			38,288
Home equity		112,180			112,426
Unsecured		3,437			3,613
Other		6,033			5,921
Total		326,334			320,459
Mortgage warehouse		178,899			129,156
Total loans		1,461,359			1,378,554
Allowance for loan losses		(16,634	)		(16,501	)
Loans, net	$	1,444,725		$	1,362,053

Commercial

Commercial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves larger loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of property type, and are monitored for concentrations of credit. Management monitors and evaluates commercial real estate loans based on collateral, cash flow and risk grade criteria. As a general rule, the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans.

Real Estate and Consumer

With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences, and consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans are unsecured such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Mortgage Warehousing

Horizon’s mortgage warehouse lending has specific mortgage companies as customers of Horizon Bank. Individual mortgage loans originated by these mortgage companies are funded as a secured borrowing with a pledge of collateral under Horizon’s agreement with the mortgage company. Each individual mortgage is assigned to Horizon until the loan is sold to the secondary market by the mortgage company. In addition, Horizon takes possession of each original note and forwards such note to the end investor once the mortgage company has sold the loan. At the time a loan is transferred to the secondary market, the mortgage company repurchases the loan under its option within the agreement. Due to the repurchase feature contained in the agreement, the transaction does not qualify as a sale and therefore is accounted for as a secured borrowing with a pledge of collateral pursuant to the agreement with the mortgage company. When the individual loan is sold to the end investor by the mortgage company, the proceeds from the sale of the loan are received by Horizon and used to pay off the loan balance with Horizon along with any accrued interest and any related fees. The remaining balance from the sale is forwarded to the mortgage company. These individual loans typically are sold by the mortgage company within 30 days and are seldom held more than 90 days. Interest income is accrued during this period and collected at the time each loan is sold. Fee income for each loan sold is collected when the loan is sold, and no costs are deferred due to the term between each loan funding and related payoff, which is typically less than 30 days.

Based on the agreements with each mortgage company, at any time a mortgage company can repurchase from Horizon its outstanding loan balance on an individual mortgage and regain possession of the original note. Horizon also has the option to request that the mortgage company repurchase an individual mortgage. Should this occur, Horizon would return the original note and reassign the assignment of the mortgage to the mortgage company. Also, in the event that the end investor would not be able to honor the purchase commitment and the mortgage company would not be able to repurchase its loan on an individual mortgage, Horizon would be able to exercise its rights under the agreement.

The following table shows the recorded investment of individual loan categories.

	Loan					Deferred			Recorded
March 31, 2015	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	240,027		$	426	$	658		$	241,111
Non owner occupied real estate		308,420			345		515			309,280
Residential spec homes		3,409			5		3			3,417
Development & spec land loans		11,229			28		25			11,282
Commercial and industrial		131,422			828		28			132,278
Total commercial		694,507			1,632		1,229			697,368
Residential mortgage		244,081			743		546			245,370
Residential construction		15,763			22		—			15,785
Mortgage warehouse		178,899			480		—			179,379
Total real estate		438,743			1,245		546			440,534
Direct installment		41,476			135		(380	)		41,231
Direct installment purchased		195			—		—			195
Indirect installment		146,938			302		—			147,240
Home equity		138,458			557		(353	)		138,662
Total consumer		327,067			994		(733	)		327,328
Total loans		1,460,317			3,871		1,042			1,465,230
Allowance for loan losses		(16,634	)		—		—			(16,634	)
Net loans	$	1,443,683		$	3,871	$	1,042		$	1,448,596

	Loan					Deferred			Recorded
December 31, 2014	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	228,380		$	385	$	680		$	229,445
Non owner occupied real estate		297,299			309		506			298,114
Residential spec homes		2,027			2		—			2,029
Development & spec land loans		12,097			28		30			12,155
Commercial and industrial		133,256			859		39			134,154
Total commercial		673,059			1,583		1,255			675,897
Residential mortgage		242,521			737		599			243,857
Residential construction		11,505			21		—			11,526
Mortgage warehouse		129,156			480		—			129,636
Total real estate		383,182			1,238		599			385,019
Direct installment		40,137			129		(375	)		39,891
Direct installment purchased		219			—		—			219
Indirect installment		141,868			314		(163	)		142,019
Home equity		139,007			568		(234	)		139,341
Total consumer		321,231			1,011		(772	)		321,470
Total loans		1,377,472			3,832		1,082			1,382,386
Allowance for loan losses		(16,501	)		—		—			(16,501	)
Net loans	$	1,360,971		$	3,832	$	1,082		$	1,365,885

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Accounting for Certain Loans Acquired in a Transfer

3 Months Ended

Mar. 31, 2015

Transfers and Servicing [Abstract]

Accounting for Certain Loans Acquired in a Transfer

Note 5 – Accounting for Certain Loans Acquired in a Transfer

The Company acquired loans in acquisitions and the transferred loans had evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include information such as past-due and non-accrual status, borrower credit scores and recent loan-to-value percentages. Purchased credit-impaired loans are accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310-30) and initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporate the estimate of current key assumptions, such as default rates, severity and prepayment speeds.

The carrying amounts of those loans included in the balance sheet amounts of loans receivable are as follows:

	March 31		March 31		March 31
	2015		2015		2015
	Heartland		Summit		Total
Commercial		15,378		59,398	$	74,776
Real estate		8,460		22,379		30,839
Consumer		6,954		7,749		14,703
Outstanding balance	$	30,792	$	89,526	$	120,318
Carrying amount, net of allowance of $254					$	120,064
	December 31 2014 Heartland		December 31 2014 Summit		December 31 2014 Total
Commercial	$	18,307	$	66,371	$	84,678
Real estate		9,734		24,653		34,387
Consumer		8,447		8,975		17,422
Outstanding balance	$	36,488	$	99,999	$	136,487
Carrying amount, net of allowance of $359					$	136,128

Accretable yield, or income expected to be collected for the three months ended March 31, is as follows:

	Three Months Ended March 31, 2015
	Heartland			Summit			Total
Balance at January 1	$	2,400		$	1,268		$	3,668
Additions		—			—			—
Accretion		(107	)		(99	)		(206	)
Reclassification from nonaccretable difference		—			—			—
Disposals		(88	)		(49	)		(137	)
Balance at December 31	$	2,205		$	1,120		$	3,325
	Three Months Ended March 31, 2014
	Heartland			Summit			Total
Balance at January 1	$	3,185		$	—		$	3,185
Additions		—			—			—
Accretion		(138	)		—			(138	)
Reclassification from nonaccretable difference		—			—			—
Disposals		(18	)		—			(18	)
Balance at December 31	$	3,029		$	—		$	3,029

During the three months ended March 31, 2015 and 2014, the Company decreased the allowance for loan losses by a recovery to the income statement of $105,000 and $0, respectively.

XML

Non-performing Loans and Impaired Loans

3 Months Ended

Mar. 31, 2015

Text Block [Abstract]

Non-performing Loans and Impaired Loans

Note 7 – Non-performing Loans and Impaired Loans

The following table presents the non-accrual, loans past due over 90 days still on accrual, and troubled debt restructured (“TDRs”) by class of loans:

March 31, 2015	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,452	$	—	$	—	$	41	$	1,493
Non owner occupied real estate		5,558		—		2,378		560		8,496
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		566		—		985		—		1,551
Total commercial		7,576		—		3,363		601		11,540
Real estate
Residential mortgage		2,547		—		748		2,506		5,801
Residential construction		—		—		261		—		261
Mortgage warehouse		—		—		—		—		—
Total real estate		2,547		—		1,009		2,506		6,062
Consumer
Direct Installment		334		—		—		—		334
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		506		19		—		—		525
Home Equity		2,319		—		339		1,261		3,919
Total Consumer		3,159		19		339		1,261		4,778
Total	$	13,282	$	19	$	4,711	$	4,368	$	22,380
December 31, 2014	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,773	$	—	$	—	$	44	$	1,817
Non owner occupied real estate		7,439		—		217		566		8,222
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		812		—		1,004		—		1,816
Total commercial		10,024		—		1,221		610		11,855
Real estate
Residential mortgage		2,297		40		765		2,526		5,628
Residential construction		—		—		266		—		266
Mortgage warehouse		—		—		—		—		—
Total real estate		2,297		40		1,031		2,526		5,894
Consumer
Direct Installment		227		10		—		—		237
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		557		47		—		—		604
Home Equity		2,207		18		391		1,236		3,852
Total Consumer		2,991		75		391		1,236		4,693
Total	$	15,312	$	115	$	2,643	$	4,372	$	22,442

Included in the $13.3 million of non-accrual loans and the $4.7 million of non-performing TDRs at March 31, 2015 were $3.0 million and $417,000, respectively, of loans acquired for which accretable yield was recognized.

From time to time, the Bank obtains information that may lead management to believe that the collection of payments may be doubtful on a particular loan. In recognition of this, it is management’s policy to convert the loan from an “earning asset” to a non-accruing loan. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Further, it is management’s policy to place a loan on a non-accrual status when the payment is delinquent in excess of 90 days or the loan has had the accrual of interest discontinued by management. The officer responsible for the loan and the Chief Credit Officer or the senior collection officer must review all loans placed on non-accrual status. Subsequent payments on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal in accordance with the loan terms. The Company requires a period of satisfactory performance of not less than six months before returning a non-accrual loan to accrual status.

A loan becomes impaired when, based on current information, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. When a loan is classified as impaired, the degree of impairment must be recognized by estimating future cash flows from the debtor. The present value of these cash flows is computed at a discount rate based on the interest rate contained in the loan agreement. However, if a particular loan has a determinable market value for its collateral, the creditor may use that value. Also, if the loan is secured and considered collateral dependent, the creditor may use the fair value of the collateral. Interest income on loans individually classified as impaired is recognized on a cash basis after all past due and current principal payments have been made.

Smaller-balance, homogeneous loans are evaluated for impairment in total. Such loans include residential first mortgage loans secured by 1–4 family residences, residential construction loans, automobile, home equity, second mortgage loans and mortgage warehouse loans. Commercial loans and mortgage loans secured by other properties are evaluated individually for impairment. When analysis of borrower operating results and financial condition indicate that underlying cash flows of a borrower’s business are not adequate to meet its debt service requirements, the loan is evaluated for impairment. Often this is associated with a delay or shortfall in payments of 30 days or more. Loans are generally moved to non-accrual status when they are 90 days or more past due. These loans are often considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms, including TDRs, are measured for impairment. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral-dependent loans.

The Company’s TDRs are considered impaired loans and included in the allowance methodology using the guidance for impaired loans. At March 31, 2015, the type of concessions the Company has made on restructured loans has been temporary rate reductions and/or reductions in monthly payments and there have been no restructured loans with modified recorded balances. Any modification to a loan that is a concession and is not in the normal course of lending is considered a restructured loan. A restructured loan is returned to accruing status after six consecutive payments but is still reported as TDR unless the loan bears interest at a market rate. As of March 31, 2015, the Company had $9.1 million in TDRs and $4.4 million were performing according to the restructured terms and one TDR was returned to accrual status during the first three months of 2015. There was $994,000 of specific reserves allocated to TDRs at March 31, 2015 based on the discounted cash flows.

Loans transferred and classified as troubled debt restructuring during the three months ended March 31, 2015 and 2014, segregated by class, are shown in the table below.

	March 31, 2015				March 31, 2014
Commercial	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Owner occupied real estate		1	$	2		—	$	—
Non owner occupied real estate		—		—		—		—
Residential development		—		—		—		—
Development & Spec Land Loans		—		—		—		—
Commercial and industrial		—		—		2		398
Total commercial		1		2		2		398
Real estate
Residential mortgage		—		—		—		—
Residential construction		—		—		—		—
Mortgage warehouse		—		—		—		—
Total real estate		—		—		—		—
Consumer
Direct Installment		—		—		—		—
Direct Installment Purchased		—		—		—		—
Indirect Installment		—		—		—		—
Home Equity		1		32		1		146
Total Consumer		1		32		1		146
		—		—
Total		2	$	34		3	$	544

Troubled debt restructured loans which had payment defaults during the three months ended March 31, 2015 and 2014, segregated by class, are shown in the table below. Default occurs when a loan is 90 days or more past due or has been transferred to non-accrual.

	March 31, 2015				March 31, 2014
Commercial	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Owner occupied real estate		1	$	2		—	$	—
Non owner occupied real estate		—		—		—		—
Residential development		—		—		—		—
Development & Spec Land Loans		—		—		—		—
Commercial and industrial		—		—		2		398
Total commercial		1		2		2		398
Real estate
Residential mortgage		—		—		1		154
Residential construction		—		—		—		—
Mortgage warehouse		—		—		—		—
Total real estate		—		—		1		154
Consumer
Direct Installment		—		—		—		—
Direct Installment Purchased		—		—		—		—
Indirect Installment		—		—		—		—
Home Equity		—		—		1		146
Total Consumer		—		—		1		146
		—		—
Total		1	$	2		4	$	698

The following table presents commercial loans individually evaluated for impairment by class of loan:

							Three Months Ending
March 31, 2015	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	1,076	$	1,077	$	—	$	1,329	$	2
Non owner occupied real estate		3,907		3,912		—		4,534		6
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		609		609		—		649		—
Total commercial		5,592		5,598		—		6,512		8
With an allowance recorded
Commercial
Owner occupied real estate		417		417		165		419		—
Non owner occupied real estate		1,590		1,590		184		1,590		—
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		942		942		680		949		—
Total commercial		2,949		2,949		1,029		2,958		—
Total	$	8,541	$	8,547	$	1,029	$	9,470	$	8

							Three Months Ending
March 31, 2014	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans			Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	1,145	$	1,148	$	—	$	1,759		$	12
Non owner occupied real estate		3,443		3,446		—		3,514			5
Residential development		—		—		—		—			—
Development & Spec Land Loans		24		24		—		24			—
Commercial and industrial		333		349		—		608			—
Total commercial		4,945		4,967		—		5,905			17
With an allowance recorded
Commercial
Owner occupied real estate		—		—		—		(1	)		—
Non owner occupied real estate		347		347		170		353			—
Residential development		—		—		—		—			—
Development & Spec Land Loans		138		138		40		142			—
Commercial and industrial		1,883		1,883		1,080		1,727			2
Total commercial		2,368		2,368		1,290		2,221			2
Total	$	7,313	$	7,335	$	1,290	$	8,126		$	19

The following table presents the payment status by class of loan:

March 31, 2015	30 - 59 Days Past Due			60 - 89 Days Past Due			Greater than 90 Days Past Due			Total Past Due			Loans Not Past Due			Total
Commercial
Owner occupied real estate	$	266		$	138		$	—		$	404		$	239,623		$	240,027
Non owner occupied real estate		—			84			—			84			308,336			308,420
Residential development		—			—			—			—			3,409			3,409
Development & Spec Land Loans		—			—			—			—			11,229			11,229
Commercial and industrial		320			—			—			320			131,102			131,422
Total commercial		586			222			—			808			693,699			694,507
Real estate
Residential mortgage		357			435			—			792			243,289			244,081
Residential construction		—			—			—			—			15,763			15,763
Mortgage warehouse		—			—			—			—			178,899			178,899
Total real estate		357			435			—			792			437,951			438,743
Consumer
Direct Installment		142			7			—			149			41,327			41,476
Direct Installment Purchased		—			—			—			—			195			195
Indirect Installment		559			80			19			658			146,280			146,938
Home Equity		1,038			519			—			1,557			136,901			138,458
Total consumer		1,739			606			19			2,364			324,703			327,067
Total	$	2,682		$	1,263		$	19		$	3,964		$	1,456,353		$	1,460,317
Percentage of total loans		0.18	%		0.09	%		0.00	%		0.27	%		99.73	%
December 31, 2014	30 - 59 Days Past Due			60 - 89 Days Past Due			Greater than 90 Days Past Due			Total Past Due			Loans Not Past Due			Total
Commercial
Owner occupied real estate	$	103		$	645		$	—		$	748		$	227,632		$	228,380
Non owner occupied real estate		413			—			—			413			296,886			297,299
Residential development		—			—			—			—			2,027			2,027
Development & Spec Land Loans		—			—			—			—			12,097			12,097
Commercial and industrial		19			1			—			20			133,236			133,256
Total commercial		535			646			—			1,181			671,878			673,059
Real estate
Residential mortgage		1,033			193			40			1,266			241,255			242,521
Residential construction		—			—			—			—			11,505			11,505
Mortgage warehouse		—			—			—			—			129,156			129,156
Total real estate		1,033			193			40			1,266			381,916			383,182
Consumer
Direct Installment		113			4			10			127			40,010			40,137
Direct Installment Purchased		—			—			—			—			219			219
Indirect Installment		1,042			243			47			1,332			140,536			141,868
Home Equity		1,084			189			18			1,291			137,716			139,007
Total consumer		2,239			436			75			2,750			318,481			321,231
Total	$	3,807		$	1,275		$	115		$	5,197		$	1,372,275		$	1,377,472
Percentage of total loans		0.28	%		0.09	%		0.01	%		0.38	%		99.62	%

The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date.

Horizon Bank’s processes for determining credit quality differ slightly depending on whether a new loan or a renewed loan is being underwritten, or whether an existing loan is being re-evaluated for credit quality. The latter usually occurs upon receipt of current financial information or other pertinent data that would trigger a change in the loan grade.

• For new and renewed commercial loans, the Bank’s Credit Department, which acts independently of the loan officer, assigns the credit quality grade to the loan. Loan grades for loans with an aggregate credit exposure that exceeds the authorities in the respective markets (ranging from $1,000,000 to $2,500,000) are validated by the Loan Committee, which is chaired by the Chief Credit Officer (CCO).

• Commercial loan officers are responsible for reviewing their loan portfolios and report any adverse material change to the CCO or Loan Committee. When circumstances warrant a change in the credit quality grade, loan officers are required to notify the CCO and the Credit Department of the change in the loan grade. Downgrades are accepted immediately by the CCO however, lenders must present their factual information to either the Loan Committee or the CCO when recommending an upgrade.

• The CCO, or his designee, meets weekly with loan officers to discuss the status of past-due loans and classified loans. These meetings are also designed to give the loan officers an opportunity to identify an existing loan that should be downgraded to a classified grade.

• Monthly, senior management meets with the Watch Committee, which reviews all of the past due, classified, and impaired loans and the relative trends of these assets. This committee also reviews the actions taken by management regarding foreclosure mitigation, loan extensions, troubled debt restructures, other real estate owned and personal property repossessions. The information reviewed in this meeting acts as a precursor for developing management’s analysis of the adequacy of the Allowance for Loan and Lease Losses.

For residential real estate and consumer loans, Horizon uses a grading system based on delinquency. Loans that are 90 days or more past due, on non-accrual, or are classified as a TDR are graded “Substandard.” After being 90 days delinquent a loan is charged off unless it is well secured and in the process of collection. If the latter case exists, the loan is placed on non-accrual. Occasionally a mortgage loan may be graded as “Special Mention.” When this situation arises, it is because the characteristics of the loan and the borrower fit the definition of a Risk Grade 5 described below, which is normally used for grading commercial loans. Loans not graded Substandard are considered Pass.

Horizon Bank employs a nine-grade rating system to determine the credit quality of commercial loans. The first five grades represent acceptable quality, and the last four grades mirror the criticized and classified grades used by the bank regulatory agencies (special mention, substandard, doubtful, and loss). The loan grade definitions are detailed below.

Risk Grade 1: Excellent (Pass)

Loans secured by liquid collateral, such as certificates of deposit, reputable bank letters of credit, or other cash equivalents; loans that are guaranteed or otherwise backed by the full faith and credit of the United States government or an agency thereof, such as the Small Business Administration; or loans to any publicly held company with a current long-term debt rating of A or better.

Risk Grade 2: Good (Pass)

Loans to businesses that have strong financial statements containing an unqualified opinion from a CPA firm and at least three consecutive years of profits; loans supported by unaudited financial statements containing strong balance sheets, five consecutive years of profits, a five-year satisfactory relationship with the Bank, and key balance sheet and income statement trends that are either stable or positive; loans secured by publicly traded marketable securities where there is no impediment to liquidation; loans to individuals backed by liquid personal assets and unblemished credit history; or loans to publicly held companies with current long-term debt ratings of Baa or better.

Risk Grade 3: Satisfactory (Pass)

Loans supported by financial statements (audited or unaudited) that indicate average or slightly below average risk and having some deficiency or vulnerability to changing economic conditions; loans with some weakness but offsetting features of other support are readily available; loans that are meeting the terms of repayment, but which may be susceptible to deterioration if adverse factors are encountered. Loans may be graded Satisfactory when there is no recent information on which to base a current risk evaluation and the following conditions apply:

• At inception, the loan was properly underwritten, did not possess an unwarranted level of credit risk, and the loan met the above criteria for a risk grade of Excellent, Good, or Satisfactory;

• At inception, the loan was secured with collateral possessing a loan value adequate to protect the Bank from loss.

• The loan has exhibited two or more years of satisfactory repayment with a reasonable reduction of the principal balance.

• During the period that the loan has been outstanding, there has been no evidence of any credit weakness. Some examples of weakness include slow payment, lack of cooperation by the borrower, breach of loan covenants, or the borrower is in an industry known to be experiencing problems. If any of these credit weaknesses is observed, a lower risk grade may be warranted.

Risk Grade 4 Satisfactory/Monitored:

Loans in this category are considered to be of acceptable credit quality, but contain greater credit risk than Satisfactory loans. Borrower displays acceptable liquidity, leverage, and earnings performance within the Bank’s minimum underwriting guidelines. The level of risk is acceptable but conditioned on the proper level of loan officer supervision. Loans that normally fall into this grade include acquisition, construction and development loans and income producing properties that have not reached stabilization.

Risk Grade 4W Management Watch:

Loans in this category are considered to be of acceptable quality, but with above normal risk. Borrower displays potential indicators of weakness in the primary source of repayment resulting in a higher reliance on secondary sources of repayment. Balance sheet may exhibit weak liquidity and/or high leverage. There is inconsistent earnings performance without the ability to sustain adverse economic conditions. Borrower may be operating in a declining industry or the property type, as for a commercial real estate loan, may be high risk or in decline. These loans require an increased level of loan officer supervision and monitoring to assure that any deterioration is addressed in a timely fashion.

Risk Grade 5: Special Mention

Loans which possess some credit deficiency or potential weakness which deserves close attention. Such loans pose an unwarranted financial risk that, if not corrected, could weaken the loan by adversely impacting the future repayment ability of the borrower. The key distinctions of a Special Mention classification are that (1) it is indicative of an unwarranted level of risk and (2) weaknesses are considered “potential,” not “defined,” impairments to the primary source of repayment. These loans may be to borrowers with adverse trends in financial performance, collateral value and/or marketability, or balance sheet strength.

Risk Grade 6: Substandard

One or more of the following characteristics may be exhibited in loans classified Substandard:

• Loans which possess a defined credit weakness. The likelihood that a loan will be paid from the primary source of repayment is uncertain. Financial deterioration is under way and very close attention is warranted to ensure that the loan is collected without loss.

• Loans are inadequately protected by the current net worth and paying capacity of the obligor.

• The primary source of repayment is gone, and the Bank is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees.

• Loans have a distinct possibility that the Bank will sustain some loss if deficiencies are not corrected.

• Unusual courses of action are needed to maintain a high probability of repayment.

• The borrower is not generating enough cash flow to repay loan principal; however, it continues to make interest payments.

• The lender is forced into a subordinated or unsecured position due to flaws in documentation.

• Loans have been restructured so that payment schedules, terms, and collateral represent concessions to the borrower when compared to the normal loan terms.

• The lender is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan.

• There is a significant deterioration in market conditions to which the borrower is highly vulnerable.

Risk Grade 7: Doubtful

One or more of the following characteristics may be present in loans classified Doubtful:

• Loans have all of the weaknesses of those classified as Substandard. However, based on existing conditions, these weaknesses make full collection of principal highly improbable.

• The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment.

• The possibility of loss is high but because of certain important pending factors which may strengthen the loan, loss classification is deferred until the exact status of repayment is known.

Risk Grade 8: Loss

Loans are considered uncollectible and of such little value that continuing to carry them as assets is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

The following table presents loans by credit grades.

March 31, 2015	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	227,083		$	7,728		$	5,216		$	—		$	240,027
Non owner occupied real estate		296,948			2,330			9,142			—			308,420
Residential development		3,409			—			—			—			3,409
Development & Spec Land Loans		11,153			76			—			—			11,229
Commercial and industrial		128,280			985			2,157			—			131,422
Total commercial		666,873			11,119			16,515			—			694,507
Real estate
Residential mortgage		238,280			—			5,801			—			244,081
Residential construction		15,502			—			261			—			15,763
Mortgage warehouse		178,899			—			—			—			178,899
Total real estate		432,681			—			6,062			—			438,743
Consumer
Direct Installment		41,142			—			334			—			41,476
Direct Installment Purchased		195			—			—			—			195
Indirect Installment		146,413			—			525			—			146,938
Home Equity		134,539			—			3,919			—			138,458
Total Consumer		322,289			—			4,778			—			327,067
Total	$	1,421,843		$	11,119		$	27,355		$	—		$	1,460,317
Percentage of total loans		97.37	%		0.76	%		1.87	%		0.00	%
December 31, 2014	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	215,875		$	7,623		$	4,883		$	—		$	228,381
Non owner occupied real estate		283,518			4,458			9,323			—			297,299
Residential development		2,027			—			—			—			2,027
Development & Spec Land Loans		12,018			79			—			—			12,097
Commercial and industrial		128,589			1,799			2,868			—			133,256
Total commercial		642,027			13,959			17,074			—			673,060
Real estate
Residential mortgage		236,893			—			5,628			—			242,521
Residential construction		11,239			—			266			—			11,505
Mortgage warehouse		129,156			—			—			—			129,156
Total real estate		377,288			—			5,894			—			383,182
Consumer
Direct Installment		39,900			—			237			—			40,137
Direct Installment Purchased		219			—			—			—			219
Indirect Installment		141,264			—			604			—			141,868
Home Equity		135,155			—			3,852			—			139,007
Total Consumer		316,538			—			4,693			—			321,231
Total	$	1,335,854		$	13,959		$	27,661		$	—		$	1,377,473
Percentage of total loans		96.98	%		1.01	%		2.01	%		0.00	%

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Derivative Financial Instruments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Derivative [Line Items]
LIBOR period	3 months
Weighted average fixed rate	6.14%
Recorded period of effectiveness of cash flow hedges on net income	12 months
Recorded period of effectiveness of fair value hedges on net income	12 months
Recorded period of effectiveness of fair value of derivatives on net income	12 months
Cash Flow Hedging [Member]
Derivative [Line Items]
Notional amount of interest	30.5	$ 30.5
Derivative in Fair Value Hedging Relationship [Member]
Derivative [Line Items]
Notional amount of interest	106.6	$ 102.7

XML

Derivative Financial Instruments - Effect of Derivative Instruments on Condensed Consolidated Statement of Income Derivative in Cash Flow Hedging Relationship (Detail) (Cash Flow Hedging [Member], Interest Rate Contracts One [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flow Hedging [Member] | Interest Rate Contracts One [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Comprehensive Income on Derivative (Effective Portion)	$ (214)	$ (146)

XML

Non-performing Loans and Impaired Loans - Loans by Credit Grades (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Total	$ 1,460,317	$ 1,377,472
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	694,507	673,059
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	240,027	228,380
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	308,420	297,299
Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,409	2,027
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	11,229	12,097
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	131,422	133,256
Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	438,743	383,182
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	244,081	242,521
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	15,763	11,505
Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	178,899	129,156
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	327,067	321,231
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	41,476	40,137
Consumer [Member] | Direct Installment Purchased [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	195	219
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	146,938	141,868
Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	138,458	139,007
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,421,843	1,335,854
Percentage of total loans	97.37%	96.98%
Pass [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	666,873	642,027
Pass [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	227,083	215,875
Pass [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	296,948	283,518
Pass [Member] | Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,409	2,027
Pass [Member] | Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	11,153	12,018
Pass [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	128,280	128,589
Pass [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	432,681	377,288
Pass [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	238,280	236,893
Pass [Member] | Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	15,502	11,239
Pass [Member] | Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	178,899	129,156
Pass [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	322,289	316,538
Pass [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	41,142	39,900
Pass [Member] | Consumer [Member] | Direct Installment Purchased [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	195	219
Pass [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	146,413	141,264
Pass [Member] | Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	134,539	135,155
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	11,119	13,959
Percentage of total loans	0.76%	1.01%
Special Mention [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	11,119	13,959
Special Mention [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	7,728	7,623
Special Mention [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	2,330	4,458
Special Mention [Member] | Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	76	79
Special Mention [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	985	1,799
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	27,355	27,661
Percentage of total loans	1.87%	2.01%
Substandard [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	16,515	17,074
Substandard [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,216	4,883
Substandard [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	9,142	9,323
Substandard [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	2,157	2,868
Substandard [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	6,062	5,894
Substandard [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,801	5,628
Substandard [Member] | Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	261	266
Substandard [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	4,778	4,693
Substandard [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	334	237
Substandard [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	525	604
Substandard [Member] | Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 3,919	$ 3,852
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Percentage of total loans	0.00%	0.00%

XML

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Summary of Estimated Fair Values of Financial Instruments

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall (unaudited).

	March 31, 2015
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	38,676	$	38,676	$	—	$	—
Investment securities, held to maturity		164,282		—		171,405		—
Loans held for sale		6,229		—		—		6,229
Loans excluding loan level hedges, net		1,340,342		—		—		1,379,815
Stock in FHLB and FRB		11,348		—		11,348		—
Interest receivable		8,431		—		8,431		—
Liabilities
Non-interest bearing deposits	$	285,181	$	285,181	$	—	$	—
Interest-bearing deposits		1,179,915		—		1,134,694		—
Borrowings		440,415		—		438,547		—
Subordinated debentures		32,680		—		32,674		—
Interest payable		504		—		504		—

	December 31, 2014
			Quoted Prices
			in Active
			Markets for		Significant Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	43,476	$	43,476	$	—	$	—
Investment securities, held to maturity		165,767		—		169,904		—
Loans held for sale		6,143		—		—		6,143
Loans excluding loan level hedges, net		1,260,608		—		—		1,295,133
Stock in FHLB and FRB		11,348		—		11,348		—
Interest receivable		8,246		—		8,246		—
Liabilities
Non-interest bearing deposits	$	267,667	$	267,667	$	—	$	—
Interest-bearing deposits		1,214,652		—		1,158,912		—
Borrowings		351,198		—		348,597		—
Subordinated debentures		32,642		—		32,669		—
Interest payable		497		—		497		—

XML

Accounting for Certain Loans Acquired in a Transfer - Amounts of Loans (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for loan losses	$ 16,634	$ 16,501	$ 16,102	$ 15,992
Loans Purchased With Evidence Of Credit Deterioration [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for loan losses	$ 254	$ 359

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Regulatory Capital

3 Months Ended

Mar. 31, 2015

Banking and Thrift [Abstract]

Regulatory Capital

Note 12 – Regulatory Capital

Horizon and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies and are assigned to a capital category. Failure to meet the minimum regulatory capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators, which if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective actions, the Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined), or leverage ratio. For March 31, 2015, Interim Final Basel III rules require the Bank to maintain minimum amounts and ratios of common equity Tier I capital (as defined in the regulation) to risk-weighted assets (as defined). Additionally under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. For December 31, 2014, regulatory capital ratios were calculated under Basel I rules.

To be categorized as well capitalized, the Bank must maintain minimum Total risk-based, Tier I risk-based, common equity Tier I risk-based (March 31, 2015) and Tier I leverage ratios as set forth in the table below. As of March 31, 2015 and December 31, 2014, the Bank met all capital adequacy requirements to be considered well capitalized. There were no conditions or events since the end of the first quarter of 2015 that management believes have changed the Bank’s classification as well capitalized. There is no threshold for well-capitalized status for bank holding companies.

Horizon and the Bank’s actual and required capital ratios as of March 31, 2015 and December 31, 2014 were as follows:

						Required For Capital1					Well Capitalized Under Prompt1
	Actual					Adequacy Purposes					Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2015
Total capital1 (to risk-weighted assets)
Consolidated	$	218,613		13.74	%	$	127,286		8.00	%		N/A		N/A
Bank		195,409		12.35	%		126,581		8.00	%	$	158,226		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		201,979		12.69	%		95,498		6.00	%		N/A		N/A
Bank		178,775		11.30	%		94,925		6.00	%		126,566		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		156,411		9.83	%		71,602		4.50	%		N/A		N/A
Bank		178,775		11.30	%		71,194		4.50	%		102,835		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		201,979		9.97	%		81,035		4.00	%		N/A		N/A
Bank		178,775		8.77	%		81,539		4.00	%		101,924		5.00	%
As of December 31, 2014
Total capital1 (to risk-weighted assets)
Consolidated	$	212,276		14.48	%	$	117,280		8.00	%		N/A		N/A
Bank		192,604		13.08	%		117,801		8.00	%	$	147,251		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		195,775		13.35	%		58,659		4.00	%		N/A		N/A
Bank		176,103		11.96	%		58,897		4.00	%		88,346		6.00	%
Tier 1 capital1 (to average assets)
Consolidated		195,775		9.76	%		80,236		4.00	%		N/A		N/A
Bank		176,103		8.80	%		80,047		4.00	%		100,059		5.00	%

¹  As defined by regulatory agencies

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Acquisition (Tables) (Summit [Member])

3 Months Ended

Mar. 31, 2015

Summit [Member]

Schedule of Preliminary Purchase Price of Assets Acquired and Liabilities Assumed

the preliminary purchase price for the Summit acquisition is allocated as follows:

ASSETS
Cash and due from banks	$	15,161
Commercial		70,441
Residential mortgage		43,448
Consumer		10,192
Total loans		124,081
Premises and equipment, net		2,548
FRB and FHLB stock		2,136
Goodwill		8,428
Core deposit intangible		822
Interest receivable		347
Cash value of life insurance		2,185
Other assets		2,877
Total assets purchased	$	158,585
Common shares issued	$	12,689
Cash paid		6,207
Retirement of Holding Company Debt		1,029
Total estimated purchase price	$	19,925
LIABILITIES
Deposits
Non-interest bearing	$	27,274
NOW accounts		16,332
Savings and money market		35,045
Certificates of deposits		42,368
Total deposits		121,019
Borrowings		16,990
Interest payable		52
Other liabilities		599
Total liabilities assumed	$	138,660

Schedule of Acquired Loans Accounted for in Accordance with ASC 310-30

The following table details the acquired loans that are accounted for in accordance with ASC 310-30 as of April 3, 2014.

Contractually required principal and interest at acquisition	$	14,460
Contractual cash flows not expected to be collected (nonaccretable differences)		3,146
Expected cash flows at acquisition		11,314
Interest component of expected cash flows (accretable discount)		1,688
Fair value of acquired loans accounted for under ASC 310-30	$	9,626

XML

Loans - Recorded Investment of Individual Loan Categories (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	$ 1,460,317	$ 1,377,472
Net loans	1,443,683	1,360,971
Interest Due	3,871	3,832
Deferred Fees / (Costs)	1,042	1,082
Recorded Investment	1,465,230	1,382,386
Recorded Investment	1,448,596	1,365,885
Allowance for loan losses	(16,634)	(16,501)	(16,102)	(15,992)
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	694,507	673,059
Interest Due	1,632	1,583
Deferred Fees / (Costs)	1,229	1,255
Recorded Investment	697,368	675,897
Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	438,743	383,182
Interest Due	1,245	1,238
Deferred Fees / (Costs)	546	599
Recorded Investment	440,534	385,019
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	327,067	321,231
Interest Due	994	1,011
Deferred Fees / (Costs)	(733)	(772)
Recorded Investment	327,328	321,470
Owner Occupied Real Estate [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	240,027	228,380
Interest Due	426	385
Deferred Fees / (Costs)	658	680
Recorded Investment	241,111	229,445
Non Owner Occupied Real Estate [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	308,420	297,299
Interest Due	345	309
Deferred Fees / (Costs)	515	506
Recorded Investment	309,280	298,114
Residential Spec Homes [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	3,409	2,027
Interest Due	5	2
Deferred Fees / (Costs)	3
Recorded Investment	3,417	2,029
Development & Spec Land Loans [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	11,229	12,097
Interest Due	28	28
Deferred Fees / (Costs)	25	30
Recorded Investment	11,282	12,155
Commercial and Industrial [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	131,422	133,256
Interest Due	828	859
Deferred Fees / (Costs)	28	39
Recorded Investment	132,278	134,154
Residential Mortgage [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	244,081	242,521
Interest Due	743	737
Deferred Fees / (Costs)	546	599
Recorded Investment	245,370	243,857
Residential Construction [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	15,763	11,505
Interest Due	22	21
Recorded Investment	15,785	11,526
Mortgage Warehousing [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	178,899	129,156
Interest Due	480	480
Recorded Investment	179,379	129,636
Direct Installment [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	41,476	40,137
Interest Due	135	129
Deferred Fees / (Costs)	(380)	(375)
Recorded Investment	41,231	39,891
Direct Installment Purchased [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	195	219
Recorded Investment	195	219
Indirect Installment [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	146,938	141,868
Interest Due	302	314
Deferred Fees / (Costs)		(163)
Recorded Investment	147,240	142,019
Home Equity [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	138,458	139,007
Interest Due	557	568
Deferred Fees / (Costs)	(353)	(234)
Recorded Investment	$ 138,662	$ 139,341

XML

Acquisition - Schedule of Acquired Loans Accounted for in Accordance with ASC 310-30 (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 03, 2014
Receivables [Abstract]
Contractually required principal and interest at acquisition	$ 14,460
Contractual cash flows not expected to be collected (nonaccretable differences)	3,146
Expected cash flows at acquisition	11,314
Interest component of expected cash flows (accretable discount)	1,688
Fair value of acquired loans accounted for under ASC 310-30	$ 9,626

XML

Condensed Consolidated Statements of Income (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Accumulated other comprehensive earnings reclassifications	$ 124	$ 0
Income tax expense from reclassification	$ 43	$ 0

XML

Accounting Policies

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Accounting Policies

Note 1 – Accounting Policies

The accompanying unaudited condensed consolidated financial statements include the accounts of Horizon Bancorp (“Horizon” or the “Company”) and its wholly-owned subsidiaries, including Horizon Bank, N.A. (“Bank”). All inter-company balances and transactions have been eliminated. The results of operations for the periods ended March 31, 2015 and March 31, 2014 are not necessarily indicative of the operating results for the full year of 2015 or 2014. The accompanying unaudited condensed consolidated financial statements reflect all adjustments that are, in the opinion of Horizon’s management, necessary to fairly present the financial position, results of operations and cash flows of Horizon for the periods presented. Those adjustments consist only of normal recurring adjustments.

Certain information and note disclosures normally included in Horizon’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Horizon’s Annual Report on Form 10-K for 2014 filed with the Securities and Exchange Commission on March 13, 2015. The condensed consolidated balance sheet of Horizon as of December 31, 2014 has been derived from the audited balance sheet as of that date.

Basic earnings per share is computed by dividing net income available to common shareholders (net income less dividend requirements for preferred stock and accretion of preferred stock discount) by the weighted-average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The following table shows computation of basic and diluted earnings per share.

	Three Months Ended
	March 31
	2015		2014
	(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	5,358	$	3,417
Less: Preferred stock dividends		31		31
Net income available to common shareholders	$	5,327	$	3,386
Weighted average common shares outstanding		9,216,011		8,630,966
Basic earnings per share	$	0.58	$	0.39
Diluted earnings per share
Net income available to common shareholders	$	5,327	$	3,386
Weighted average common shares outstanding		9,216,011		8,630,966
Effect of dilutive securities:
Warrants		321,652		311,278
Restricted stock		30,510		39,519
Stock options		41,333		40,023
Weighted average shares outstanding		9,609,506		9,021,786
Diluted earnings per share	$	0.55	$	0.38

At March 31, 2015 and 2014, there were 62,445 and no shares, respectively, which were not included in the computation of diluted earnings per share because they were non-dilutive.

Horizon has share-based employee compensation plans, which are described in the notes to the financial statements included in the December 31, 2014 Annual Report on Form 10-K.

Reclassifications

Certain reclassifications have been made to the 2014 condensed consolidated financial statements to be comparable to 2015. These reclassifications had no effect on net income.

XML

Non-performing Loans and Impaired Loans - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015 Contract ConsecutivePayment	Dec. 31, 2014
Financing Receivable, Modifications [Line Items]
Non-accrual loans	$ 13,282,000	$ 15,312,000
Non-performing TDRs	4,700,000
Loans acquired included in non-accrual loans	3,000,000
Loans acquired included in non-performing TDRs	417,000
Loan delinquency period	90 days
Minimum period required for satisfactory performance to return loan from non-accrual to accrual status	6 months
Restructured loans with modified recorded balances	0
Restructured loan returned to accruing status number of Consecutive Payments of loan	6
Restructured loan reported in TDRs	9,100,000
Specific reserves allocated to troubled debt restructuring	994,000
Number TDRs returned to accrual status	1
Loans classified as TDR after a period	90 days
Good Pass [Member]
Financing Receivable, Modifications [Line Items]
Number of consecutive years of profit Unaudited Financial Information for Good Pass Rating	5 years
Number of years of Satisfactory Relationship with bank for Good Pass Rating	5 years
Performing Financing Receivable [Member]
Financing Receivable, Modifications [Line Items]
Restructured loan	4,400,000
Minimum [Member]
Financing Receivable, Modifications [Line Items]
Loan delinquency period	90 days
Delay or shortfall in payments of loan	30 days
Loans with an aggregate credit exposure	1,000,000
Minimum [Member] | Good Pass [Member]
Financing Receivable, Modifications [Line Items]
Number of consecutive years of profit for Good Pass Rating	3 years
Minimum [Member] | Satisfactory Pass [Member]
Financing Receivable, Modifications [Line Items]
Minimum number of years of Satisfactory Repayment required for Satisfactory Pass Rating	2 years
Maximum [Member]
Financing Receivable, Modifications [Line Items]
Loans with an aggregate credit exposure	$ 2,500,000

XML

Disclosures about Fair Value of Assets and Liabilities - Realized Gains and Losses included in Net Income for Periods in Consolidated Statements of Income (Detail) (Non Interest Income Total Gains and Losses [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	$ 189	$ 240
Hedged Loans [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	719	207
Interest Rate Swap [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	(719)	(207)
Derivative Loan Commitments [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	$ 189	$ 240

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Securities (Tables)

3 Months Ended

Mar. 31, 2015

Investments, Debt and Equity Securities [Abstract]

Fair Value of Securities

The fair value of securities is as follows:

			Gross		Gross
March 31, 2015	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	28,400	$	69	$	(48	)	$	28,421
State and municipal		50,036		1,577		(37	)		51,576
Federal agency collateralized mortgage obligations		120,785		1,471		(537	)		121,719
Federal agency mortgage-backed pools		125,923		3,590		(246	)		129,267
Corporate notes		32		18		—			50
Total available for sale investment securities	$	325,176	$	6,725	$	(868	)	$	331,033
Held to maturity
U.S. Treasury and federal agencies	$	9,824	$	157	$	—		$	9,981
State and municipal		128,558		6,179		(143	)		134,594
Federal agency collateralized mortgage obligations		3,873		45		—			3,918
Federal agency mortgage-backed pools		22,027		961		(76	)		22,912
Total held to maturity investment securities	$	164,282	$	7,342	$	(219	)	$	171,405
December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	26,996	$	56	$	(229	)	$	26,823
State and municipal		46,535		1,462		(45	)		47,952
Federal agency collateralized mortgage obligations		122,930		975		(1,045	)		122,860
Federal agency mortgage-backed pools		122,583		3,172		(360	)		125,395
Private labeled mortgage-backed pools		670		19		—			689
Corporate notes		32		13		—			45
Total available for sale investment securities	$	319,746	$	5,697	$	(1,679	)	$	323,764
Held to maturity
U.S. Treasury and federal agencies	$	9,804	$	82	$	—		$	9,886
State and municipal		129,595		3,398		(106	)		132,887
Federal agency collateralized mortgage obligations		4,039		35		(1	)		4,073
Federal agency mortgage-backed pools		22,329		729		—			23,058
Total held to maturity investment securities	$	165,767	$	4,244	$	(107	)	$	169,904

Amortized Cost and Fair Value of Securities Available for Sale and Held to Maturity

The amortized cost and fair value of securities available for sale and held to maturity at March 31, 2015 and December 31, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2015				December 31, 2014
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
Within one year	$	6,170	$	6,220	$	6,098	$	6,169
One to five years		49,096		49,902		44,720		45,093
Five to ten years		16,830		17,373		16,147		16,768
After ten years		6,372		6,552		6,598		6,790
		78,468		80,047		73,563		74,820
Federal agency collateralized mortgage obligations		120,785		121,719		122,930		122,860
Federal agency mortgage-backed pools		125,923		129,267		122,583		125,395
Private labeled mortgage-backed pools		—		—		670		689
Total available for sale investment securities	$	325,176	$	331,033	$	319,746	$	323,764
Held to maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		1,223		1,243		592		593
Five to ten years		104,305		109,391		99,225		101,323
After ten years		32,854		33,941		39,582		40,857
		138,382		144,575		139,399		142,773
Federal agency collateralized mortgage obligations		3,873		3,918		4,039		4,073
Federal agency mortgage-backed pools		22,027		22,912		22,329		23,058
Total held to maturity investment securities	$	164,282	$	171,405	$	165,767	$	169,904

Gross Unrealized Losses and Fair Value of Company's Investments

The following table shows the gross unrealized losses and the fair value of the Company’s investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
March 31, 2015	Value		Losses			Value		Losses			Value		Losses
U.S. Treasury and federal agencies	$	—	$	—		$	16,937	$	(48	)	$	16,937	$	(48	)
State and municipal		15,766		(173	)		1,259		(7	)		17,025		(180	)
Federal agency collateralized mortgage obligations		9,233		(21	)		29,821		(516	)		39,054		(537	)
Federal agency mortgage-backed pools		6,847		(84	)		27,253		(238	)		34,100		(322	)
Total temporarily impaired securities	$	31,846	$	(278	)	$	75,270	$	(809	)	$	107,116	$	(1,087	)
	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and federal agencies	$	2,993	$	(7	)	$	20,762	$	(222	)	$	23,755	$	(229	)
State and municipal		10,287		(121	)		2,050		(30	)		12,337		(151	)
Federal agency collateralized mortgage obligations		15,013		(88	)		39,801		(957	)		54,814		(1,045	)
Federal agency mortgage-backed pools		5,993		(9	)		28,044		(351	)		34,037		(360	)
Total temporarily impaired securities	$	34,286	$	(225	)	$	90,657	$	(1,560	)	$	124,943	$	(1,785	)

Sales of Securities Available for Sale

	Three Months Ended March 31
	2015			2014
Sales of securities available for sale (Unaudited)
Proceeds	$	13,332		$	—
Gross gains		147			—
Gross losses		(23	)		—

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Accumulated Other Comprehensive Income - Components of Accumulated Other Comprehensive Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Unrealized gain on securities available for sale	$ 5,856	$ 4,018
Unamortized gain on securities held to maturity, previously transferred from AFS	1,544	1,658
Unrealized loss on derivative instruments	(3,666)	(3,337)
Tax effect	(1,307)	(818)
Total accumulated other comprehensive income	$ 2,427	$ 1,521

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Accounting Policies - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Accounting Policies [Abstract]
Shares, non-dilutive	62,445	0
Reclassifications effect on net income	$ 0

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Accumulated Other Comprehensive Income

Note 11 – Accumulated Other Comprehensive Income

	March 31			December 31
	2015			2014
Unrealized gain on securities available for sale	$	5,856		$	4,018
Unamortized gain on securities held to maturity, previously transferred from AFS		1,544			1,658
Unrealized loss on derivative instruments		(3,666	)		(3,337	)
Tax effect		(1,307	)		(818	)
Total accumulated other comprehensive income	$	2,427		$	1,521