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 June 30, 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: 9,256,026 shares of Common Stock, no par value, at August 10, 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	40
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	56
Item 4.	Controls and Procedures	56
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	57
Item 1A.	Risk Factors	57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	57
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	58
Signatures		59
Index To Exhibits		60

2

PART 1 — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

	June 30 2015		December 31 2014
	(Unaudited)
Assets
Cash and due from banks	$	43,857	$	43,476
Investment securities, available for sale		330,970		323,764
Investment securities, held to maturity (fair value of $167,581 and $169,904)		162,661		165,767
Loans held for sale		7,677		6,143
Loans, net of allowance for loan losses of $16,421 and $16,501		1,502,862		1,362,053
Premises and equipment, net		54,778		52,461
Federal Reserve and Federal Home Loan Bank stock		11,080		11,348
Goodwill		28,176		28,176
Other intangible assets		3,531		3,965
Interest receivable		8,823		8,246
Cash value of life insurance		39,897		39,382
Other assets		24,995		32,141
Total assets	$	2,219,307	$	2,076,922
Liabilities
Deposits
Non-interest bearing	$	307,215	$	267,667
Interest bearing		1,277,508		1,214,652
Total deposits		1,584,723		1,482,319
Borrowings		385,236		351,198
Subordinated debentures		32,719		32,642
Interest payable		461		497
Other liabilities		14,037		15,852
Total liabilities		2,017,176		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, 9,313,779 and 9,278,916 shares Outstanding, 9,256,026 and 9,213,036 shares		—		—
Additional paid-in capital		46,622		45,916
Retained earnings		141,889		134,477
Accumulated other comprehensive income		1,120		1,521
Total stockholders’ equity		202,131		194,414
Total liabilities and stockholders’ equity	$	2,219,307	$	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 June 30						Six Months Ended June 30
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest Income
Loans receivable	$	17,981		$	16,631		$	34,843		$	29,585
Investment securities
Taxable		2,067			2,395			4,221			4,785
Tax exempt		1,079			1,096			2,156			2,219
Total interest income		21,127			20,122			41,220			36,589
Interest Expense
Deposits		1,237			1,355			2,469			2,632
Borrowed funds		1,539			1,478			3,018			2,900
Subordinated debentures		501			501			997			997
Total interest expense		3,277			3,334			6,484			6,529
Net Interest Income		17,850			16,788			34,736			30,060
Provision for loan losses		1,906			339			2,520			339
Net Interest Income after Provision for Loan Losses		15,944			16,449			32,216			29,721
Non-interest Income
Service charges on deposit accounts		1,085			1,038			2,084			1,961
Wire transfer fees		182			145			333			257
Interchange fees		1,366			1,254			2,468			2,213
Fiduciary activities		1,216			1,199			2,513			2,247
Gain on sale of investment securities (includes $0 for the three months ended and $124 for the six months ended June 30, 2015 and $0 for the three and six months ended June 30, 2014, related to accumulated other comprehensive earnings reclassifications)		—			—			124			—
Gain on sale of mortgage loans		2,642			2,537			5,021			3,948
Mortgage servicing income net of impairment		300			233			479			440
Increase in cash value of bank owned life insurance		257			252			515			485
Death benefit on bank owned life insurance		—			—			145			—
Other income		138			(31	)		570			598
Total non-interest income		7,186			6,627			14,252			12,149
Non-interest Expense
Salaries and employee benefits		8,385			8,293			16,889			15,776
Net occupancy expenses		1,375			1,360			2,926			2,784
Data processing		966			937			1,889			1,807
Professional fees		660			419			1,187			1,027
Outside services and consultants		918			1,298			1,544			1,959
Loan expense		1,367			1,272			2,624			2,287
FDIC insurance expense		339			285			676			541
Other losses		150			95			105			133
Other expense		2,490			2,449			4,878			4,608
Total non-interest expense		16,650			16,408			32,718			30,922
Income Before Income Tax		6,480			6,668			13,750			10,948
Income tax expense (includes $0 for the three months ended and $43 for the six months ended June 30, 2015 and $0 for the three and six months ended June 30, 2014, related to income tax expense from reclassification items)		1,752			1,890			3,664			2,753
Net Income		4,728			4,778			10,086			8,195
Preferred stock dividend		(31	)		(32	)		(63	)		(63	)
Net Income Available to Common Shareholders	$	4,697		$	4,746		$	10,023		$	8,132
Basic Earnings Per Share	$	0.51		$	0.52		$	1.09		$	0.91
Diluted Earnings Per Share		0.49			0.50			1.04			0.88

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 June 30						Six Months Ended June 30
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net Income	$	4,728		$	4,778		$	10,086		$	8,195
Other Comprehensive Income
Change in fair value of derivative instruments:
Change in fair value of derivative instruments for the period		511			(317	)		182			(542	)
Income tax effect		(179	)		111			(64	)		190
Changes from derivative instruments		332			(206	)		118			(352	)
Change in securities available-for-sale:
Unrealized appreciation (depreciation) for the period on AFS securities		(2,364	)		2,336			(650	)		6,762
Unrealized depreciation for the period on held-to-maturity		(158	)		(108	)		(272	)		(108	)
Reclassification adjustment for securities gains realized in income		—			—			124			—
Income tax effect		882			(779	)		279			(2,329	)
Unrealized gains (losses) on available-for-sale securities		(1,640	)		1,449			(519	)		4,325
Other Comprehensive Income (Loss), Net of Tax		(1,308	)		1,243			(401	)		3,973
Comprehensive Income	$	3,420		$	6,021		$	9,685		$	12,168

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						10,086						10,086
Other comprehensive income, net of tax									(401	)		(401	)
Amortization of unearned compensation				179								179
Exercise of stock options				290								290
Tax benefit related to stock options				99								99
Stock option expense				138								138
Cash dividends on preferred stock (1.00%)						(63	)					(63	)
Cash dividends on common stock ($.28 per share)						(2,611	)					(2,611	)
Balances, June 30, 2015	$	12,500	$	46,622	$	141,889		$	1,120		$	202,131

See notes to condensed consolidated financial statements

6

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Dollar Amounts in Thousands)

	Six Months Ended June 30
	2015			2014
	(Unaudited)			(Unaudited)
Operating Activities
Net income	$	10,086		$	8,195
Items not requiring (providing) cash
Provision for loan losses		2,520			339
Depreciation and amortization		1,883			1,805
Share based compensation		138			87
Mortgage servicing rights net (recovery) impairment		356			(38	)
Premium amortization on securities available for sale, net		1,289			1,132
Gain on sale of investment securities		(124	)		—
Gain on sale of mortgage loans		(5,021	)		(3,948	)
Proceeds from sales of loans		155,746			93,991
Loans originated for sale		(152,259	)		(94,048	)
Change in cash value of life insurance		(515	)		(485	)
Gain on sale of other real estate owned		(206	)		(173	)
Net change in
Interest receivable		(577	)		(432	)
Interest payable		(36	)		(50	)
Other assets		4,099			702
Other liabilities		(1,511	)		(1,190	)
Net cash provided by operating activities		15,868			5,887
Investing Activities
Purchases of securities available for sale		(47,958	)		(52,484	)
Proceeds from sales, maturities, calls, and principal repayments of securities available for sale		40,359			35,828
Purchases of securities held to maturity		—			(4,839	)
Proceeds from maturities of securities held to maturity		1,535			7,900
Purchase of Federal Reserve Bank stock		—			(6	)
Proceeds from the sale of FHLB stock		268			—
Net change in loans		(142,131	)		(130,424	)
Proceeds on the sale of OREO and repossessed assets		1,793			2,095
Purchases of premises and equipment		(3,587	)		(3,326	)
Acquisition of SCB		—			7,925
Purchase of Mortgage Company		—			(736	)
Net cash used in investing activities		(149,721	)		(138,067	)
Financing Activities
Net change in
Deposits		102,404			86,564
Borrowings		34,115			66,993
Proceeds from issuance of stock		389			—
Dividends paid on common shares		(2,611	)		(2,231	)
Dividends paid on preferred shares		(63	)		(63	)
Net cash provided by financing activities		134,234			151,263
Net Change in Cash and Cash Equivalents		381			19,083
Cash and Cash Equivalents, Beginning of Period		43,476			31,721
Cash and Cash Equivalents, End of Period	$	43,857		$	50,804
Additional Supplemental Information
Interest paid	$	6,519		$	6,527
Income taxes paid		3,700			600
Transfer of loans to other real estate owned		(1,384	)		1,999
Transfer of available-for-sale securities to held-to-maturity		—			167,047
The Company purchased all of the capital stock of Summit for $18,896. In conjunction with the acquisition, liabilities were assumed as follows:		—			158,585
Fair value of assets acquired		—			6,207
Cash paid to retire Summit debt		—			1,029
Cash paid for the capital stock		—			138,660

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 June 30, 2015 and June 30, 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 June 30				Six Months Ended June 30
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	4,728	$	4,778	$	10,086	$	8,195
Less: Preferred stock dividends		31		32		63		63
Net income available to common shareholders	$	4,697	$	4,746	$	10,023	$	8,132
Weighted average common shares outstanding		9,240,005		9,182,986		9,228,075		8,908,492
Basic earnings per share	$	0.51	$	0.52	$	1.09	$	0.91
Diluted earnings per share
Net income available to common shareholders	$	4,697	$	4,746	$	10,023	$	8,132
Weighted average common shares outstanding		9,240,005		9,182,986		9,228,075		8,908,492
Effect of dilutive securities:
Warrants		324,698		303,399		323,198		308,060
Restricted stock		34,892		38,003		30,816		38,717
Stock options		37,991		36,551		33,462		38,154
Weighted average shares outstanding		9,637,586		9,560,939		9,615,551		9,293,423
Diluted earnings per share	$	0.49	$	0.50	$	1.04	$	0.88

There were 2,500 and 41,444 shares for the three and six months ended June 30, 2015, respectively, and 45,766 shares for both the three and six months ended June 30, 2014 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 – Acquisitions

On February 18, 2015, Horizon entered into an Agreement and Plan of Merger (the “Merger Agreement”) providing for Horizon’s acquisition of Peoples Bancorp, Inc., 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 (“Peoples FSB”), 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.

On July 1, 2015 Horizon completed the acquisition of Peoples and Horizon Bank N.A.’s acquisition of Peoples FSB, through mergers effective July 1, 2015. Under the terms of the acquisition, the exchange ratio was 0.95 shares of Horizon common stock (the “Exchange Ratio”) and $9.75 in cash for each outstanding share of Peoples common stock. Peoples shareholders owning fewer than 100 shares of common stock received $33.14 in cash for each common share. Peoples shares outstanding at the closing were 2,311,858, and the shares of Horizon common stock issued to Peoples shareholders totaled 2,192,202. Horizon’s stock price was $25.32 per share at the close of business on July 1, 2015. Based upon these numbers, the total value of the consideration for the acquisition was $78.1 million.

As of July 1, 2015, Peoples had total assets of approximately $462.7 million, total deposits of approximately $350.6 million and total net loans of approximately $226.6 million.

Utilizing June 30, 2015 financials for both Horizon and Peoples and an estimate of the fair market value adjustments associated with the merger, Horizon would have total assets of approximately $2.7 billion, total deposits of approximately $1.9 billion and total net loans of approximately $1.7 billion on a pro forma basis. The accounting for the business combination is not yet complete and therefore all required disclosures for a business combination have not been provided.

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.

9

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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

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.

10

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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.

Note 3 – Securities

The fair value of securities is as follows:

June 30, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	28,308	$	35	$	(104	)	$	28,239
State and municipal		49,739		1,212		(168	)		50,783
Federal agency collateralized mortgage obligations		116,674		973		(705	)		116,942
Federal agency mortgage-backed pools		132,762		2,661		(473	)		134,950
Corporate notes		32		24		—			56
Total available for sale investment securities	$	327,515	$	4,905	$	(1,450	)	$	330,970
Held to maturity
U.S. Treasury and federal agencies	$	9,845	$	102	$	—		$	9,947
State and municipal		127,452		4,416		(511	)		131,357
Federal agency collateralized mortgage obligations		3,670		33		(22	)		3,681
Federal agency mortgage-backed pools		21,694		1,064		(162	)		22,596
Total held to maturity investment securities	$	162,661	$	5,615	$	(695	)	$	167,581

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

11

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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 June 30, 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 June 30, 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 June 30, 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.

12

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Within one year	$	6,436	$	6,477	$	6,098	$	6,169
One to five years		50,332		51,057		44,720		45,093
Five to ten years		15,380		15,571		16,147		16,768
After ten years		5,931		5,973		6,598		6,790
		78,079		79,078		73,563		74,820
Federal agency collateralized mortgage obligations		116,674		116,942		122,930		122,860
Federal agency mortgage-backed pools		132,762		134,950		122,583		125,395
Private labeled mortgage-backed pools		—		—		670		689
Total available for sale investment securities	$	327,515	$	330,970	$	319,746	$	323,764
Held to maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		8,184		8,319		592		593
Five to ten years		101,504		105,071		99,225		101,323
After ten years		27,609		27,914		39,582		40,857
		137,297		141,304		139,399		142,773
Federal agency collateralized mortgage obligations		3,670		3,681		4,039		4,073
Federal agency mortgage-backed pools		21,694		22,596		22,329		23,058
Total held to maturity investment securities	$	162,661	$	167,581	$	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
June 30, 2015	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and federal agencies	$	4,469	$	(14	)	$	13,897	$	(90	)	$	18,366	$	(104	)
State and municipal		38,471		(667	)		1,249		(12	)		39,720		(679	)
Federal agency collateralized mortgage obligations		24,435		(170	)		28,098		(557	)		52,533		(727	)
Federal agency mortgage-backed pools		23,044		(208	)		26,017		(427	)		49,061		(635	)
Total temporarily impaired securities	$	90,419	$	(1,059	)	$	69,261	$	(1,086	)	$	159,680	$	(2,145	)

	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 June 30				Six Months Ended June 30
	2015		2014		2015			2014
Sales of securities available for sale (Unaudited)
Proceeds	$	—	$	—	$	13,332		$	—
Gross gains		—		—		147			—
Gross losses		—		—		(23	)		—

13

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Note 4 – Loans

	June 30 2015			December 31 2014
Commercial
Working capital and equipment	$	323,709		$	300,940
Real estate, including agriculture		353,859			343,455
Tax exempt		8,665			8,595
Other		23,713			21,324
Total		709,946			674,314
Real estate
1–4 family		273,753			250,799
Other		3,654			3,826
Total		277,407			254,625
Consumer
Auto		166,501			154,538
Recreation		5,676			5,673
Real estate/home improvement		41,309			38,288
Home equity		112,095			112,426
Unsecured		3,711			3,613
Other		6,714			5,921
Total		336,006			320,459
Mortgage warehouse		195,924			129,156
Total loans		1,519,283			1,378,554
Allowance for loan losses		(16,421	)		(16,501	)
Loans, net	$	1,502,862		$	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, the general economy or fluctuations in interest rates. 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.

14

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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.

15

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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

June 30, 2015	Loan Balance			Interest Due		Deferred Fees / (Costs)			Recorded Investment
Owner occupied real estate	$	238,883		$	471	$	611		$	239,965
Non owner occupied real estate		313,871			326		488			314,685
Residential spec homes		2,606			2		18			2,626
Development & spec land loans		13,593			32		27			13,652
Commercial and industrial		139,823			802		26			140,651
Total commercial		708,776			1,633		1,170			711,579
Residential mortgage		257,795			816		525			259,136
Residential construction		19,087			34		—			19,121
Mortgage warehouse		195,924			480		—			196,404
Total real estate		472,806			1,330		525			474,661
Direct installment		44,119			138		(398	)		43,859
Direct installment purchased		179			—		—			179
Indirect installment		152,268			313		—			152,581
Home equity		140,316			555		(478	)		140,393
Total consumer		336,882			1,006		(876	)		337,012
Total loans		1,518,464			3,969		819			1,523,252
Allowance for loan losses		(16,421	)		—		—			(16,421	)
Net loans	$	1,502,043		$	3,969	$	819		$	1,506,831

December 31, 2014	Loan Balance			Interest Due		Deferred Fees / (Costs)			Recorded 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

16

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:

	June 30 2015 Heartland		June 30 2015 Summit		June 30 2015 Total
Commercial		14,586		55,822	$	70,408
Real estate		8,284		20,617		28,901
Consumer		6,243		7,009		13,252
Outstanding balance	$	29,113	$	83,448	$	112,561
Carrying amount, net of allowance of $283					$	112,278

	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 six months ended June 30, is as follows:

	Six Months Ended June 30, 2015
	Heartland			Summit			Total
Balance at January 1	$	2,400		$	1,268		$	3,668
Additions		—			—			—
Accretion		(205	)		(180	)		(385	)
Reclassification from nonaccretable difference		—			—			—
Disposals		(117	)		(49	)		(166	)
Balance at June 30	$	2,078		$	1,039		$	3,117

	Six Months Ended June 30, 2014
	Heartland			Summit		Total
Balance at January 1	$	3,185		$	—	$	3,185
Additions		—			1,758		1,758
Accretion		(288	)		—		(288	)
Reclassification from nonaccretable difference		—			—		—
Disposals		(95	)		—		(95	)
Balance at June 30	$	2,802		$	1,758	$	4,560

During the six months ended June 30, 2015 and 2014, the Company decreased the allowance for loan losses on purchased loans by a recovery to the income statement of $76,000 and $0, respectively.

17

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 June 30						Six Months Ended June 30
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance at beginning of the period	$	16,634		$	16,102		$	16,501		$	15,992
Loans charged-off:
Commercial
Owner occupied real estate		1,422			—			1,422			—
Non owner occupied real estate		—			—			16			22
Residential development		—			—			—			—
Development & Spec Land Loans		—			166			—			173
Commercial and industrial		253			127			253			127
Total commercial		1,675			293			1,691			322
Real estate
Residential mortgage		164			172			186			194
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		164			172			186			194
Consumer
Direct Installment		96			44			155			77
Direct Installment Purchased		—			—			—			—
Indirect Installment		196			341			565			568
Home Equity		304			247			504			431
Total consumer		596			632			1,224			1,076
Total loans charged-off		2,435			1,097			3,101			1,592
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		78			2			86			6
Non owner occupied real estate		—			74			—			75
Residential development		—			—			—			—
Development & Spec Land Loans		—			—			—			—
Commercial and industrial		14			32			33			417
Total commercial		92			108			119			498
Real estate
Residential mortgage		3			3			5			7
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		3			3			5			7
Consumer
Direct Installment		47			21			76			39
Direct Installment Purchased		—			—			—			—
Indirect Installment		134			147			235			266
Home Equity		40			37			66			111
Total consumer		221			205			377			416
Total loan recoveries		316			316			501			921
Net loans charged-off (recovered)		2,119			781			2,600			671
Provision charged to operating expense
Commercial		2,093			(93	)		2,048			119
Real estate		(29	)		(383	)		904			(987	)
Consumer		(158	)		815			(432	)		1,207
Total provision charged to operating expense		1,906			339			2,520			339
Balance at the end of the period	$	16,421		$	15,660		$	16,421		$	15,660

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.

18

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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:

June 30, 2015	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,291	$	—	$	—	$	—	$	1,291
Collectively evaluated for impairment		6,841		3,044		1,319		3,672		14,876
Loans acquired with deteriorated credit quality		254		—		—		—		254
Total ending allowance balance	$	8,386	$	3,044	$	1,319	$	3,672	$	16,421
Loans:
Individually evaluated for impairment	$	10,274	$	—	$	—	$	—	$	10,274
Collectively evaluated for impairment		699,576		278,257		196,404		337,012		1,511,249
Loans acquired with deteriorated credit quality		1,729		—		—		—		1,729
Total ending loans balance	$	711,579	$	278,257	$	196,404	$	337,012	$	1,523,252

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

19

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:

June 30, 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	$	4,447	$	—	$	—	$	150	$	4,597
Non owner occupied real estate		4,898		207		2,352		68		7,525
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		477		—		785		—		1,262
Total commercial		9,822		207		3,137		218		13,384
Real estate
Residential mortgage		2,319		—		760		2,482		5,561
Residential construction		—		—		258		—		258
Mortgage warehouse		—		—		—		—		—
Total real estate		2,319		—		1,018		2,482		5,819
Consumer
Direct Installment		447		—		—		—		447
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		405		—		—		—		405
Home Equity		2,057		—		368		571		2,996
Total Consumer		2,909		—		368		571		3,848
Total	$	15,050	$	207	$	4,523	$	3,271	$	23,051

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

20

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Included in the $15.1 million of non-accrual loans and the $4.5 million of non-performing TDRs at June 30, 2015 were $679,000 and $302,000, 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, which is the appraised value less estimated selling costs. 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 June 30, 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 June 30, 2015, the Company had $7.8 million in TDRs and $3.3 million were performing according to the restructured terms and four TDR were returned to accrual status during the first six months of 2015. There was $792,000 of specific reserves allocated to TDRs at June 30, 2015 based on the discounted cash flows or when appropriate the fair value of the collateral.

21

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 and six months ended June 30, 2015 and 2014, segregated by class, are shown in the table below.

	Three Months Ending June 30, 2015				Three Months Ending June 30, 2014				Six Months Ending June 30, 2015				Six Months Ending June 30, 2014
	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Commercial
Owner occupied real estate		2	$	111		—	$	—		3	$	2,462		—	$	—
Non owner occupied real estate		—		—		—		—		—		—		—		—
Residential development		—		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		2		371
Total commercial		2		111		—		—		3		2,462		2		371
Real estate
Residential mortgage		1		81		1		226		1		81		1		226
Residential construction		—		—		—		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—		—		—		—
Total real estate		1		81		1		226		1		81		1		226
Consumer
Direct Installment		—		—		—		—		—		—		—		—
Direct Installment Purchased		—		—		—		—		—		—		—		—
Indirect Installment		—		—		—		—		—		—		—		—
Home Equity		—		—		1		51		1		32		2		196
Total Consumer		—		—		1		51		1		32		2		196
		—		—						—		—
Total		3	$	192		2	$	277		5	$	2,575		5	$	793

Troubled debt restructured loans which had payment defaults during the three and six months ended June 30, 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.

	Three Months Ending June 30, 2015				Three Months Ending June 30, 2014				Six Months Ending June 30, 2015				Six Months Ending June 30, 2014
	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Commercial
Owner occupied real estate		—	$	—		—	$	—		1	$	2,352		—	$	—
Non owner occupied real estate		—		—		—		—		—		—		—		—
Residential development		—		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		2		371
Total commercial		—		—		—		—		1		2,352		2		371
Real estate
Residential mortgage		1		81		1		223		1		81		2		377
Residential construction		—		—		—		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—		—		—		—
Total real estate		1		81		1		223		1		81		2		377
Consumer
Direct Installment		—		—		—		—		—		—		—		—
Direct Installment Purchased		—		—		—		—		—		—		—		—
Indirect Installment		—		—		—		—		—		—		—		—
Home Equity		1		32		1		51		1		32		2		196
Total Consumer		1		32		1		51		1		32		2		196
		—		—						—		—
Total		2	$	113		2	$	274		3	$	2,465		6	$	944

22

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				Six Months Ending
June 30, 2015	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	1,605	$	1,606	$	—	$	1,350	$	17	$	1,118	$	17
Non owner occupied real estate		2,820		2,824		—		3,168		7		3,270		14
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		379		379		—		639		—		599		—
Total commercial		4,804		4,809		—		5,157		24		4,987		31
With an allowance recorded
Commercial
Owner occupied real estate		2,991		2,991		593		4,366		54		1,992		54
Non owner occupied real estate		1,590		1,590		200		1,590		—		1,590		—
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		884		884		498		1,008		—		974		—
Total commercial		5,465		5,465		1,291		6,964		54		4,556		54
Total	$	10,269	$	10,274	$	1,291	$	12,121	$	78	$	9,543	$	85

							Three Months Ending				Six Months Ending
June 30, 2014	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	2,121	$	2,124	$	—	$	1,885	$	40	$	1,432	$	51
Non owner occupied real estate		3,244		3,246		—		3,270		93		3,283		98
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		283		283		—		441		—		466		—
Total commercial		5,648		5,653		—		5,596		133		5,181		149
With an allowance recorded
Commercial
Owner occupied real estate		—		—		—		—		—		—		—
Non owner occupied real estate		340		340		170		342		—		347		—
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		1,722		1,722		965		1,710		—		1,570		2
Total commercial		2,062		2,062		1,135		2,052		—		1,917		2
Total	$	7,710	$	7,715	$	1,135	$	7,648	$	133	$	7,098	$	151

23

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:

June 30, 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	$	157		$	21		$	—		$	178		$	238,705		$	238,883
Non owner occupied real estate		82			—			207			289			313,582			313,871
Residential development		—			—			—			—			2,606			2,606
Development & Spec Land Loans		—			—			—			—			13,593			13,593
Commercial and industrial		591			46			—			637			139,186			139,823
Total commercial		830			67			207			1,104			707,672			708,776
Real estate
Residential mortgage		308			147			—			455			257,340			257,795
Residential construction		—			—			—			—			19,087			19,087
Mortgage warehouse		—			—			—			—			195,924			195,924
Total real estate		308			147			—			455			472,351			472,806
Consumer
Direct Installment		138			41			—			179			43,940			44,119
Direct Installment Purchased		—			—			—			—			179			179
Indirect Installment		721			130			—			851			151,417			152,268
Home Equity		699			245			—			944			139,372			140,316
Total consumer		1,558			416			—			1,974			334,908			336,882
Total	$	2,696		$	630		$	207		$	3,533		$	1,514,931		$	1,518,464
Percentage of total loans		0.18	%		0.04	%		0.01	%		0.23	%		99.77	%

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).

24

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.

25

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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.

26

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

• 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.

27

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.

June 30, 2015	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	224,414		$	6,299		$	8,170		$	—		$	238,883
Non owner occupied real estate		303,292			2,442			8,137			—			313,871
Residential development		2,606			—			—			—			2,606
Development & Spec Land Loans		13,520			73			—			—			13,593
Commercial and industrial		136,586			991			2,246			—			139,823
Total commercial		680,416			9,805			18,553			—			708,776
Real estate
Residential mortgage		252,234			—			5,561			—			257,795
Residential construction		18,829			—			258			—			19,087
Mortgage warehouse		195,924			—			—			—			195,924
Total real estate		466,987			—			5,819			—			472,806
Consumer
Direct Installment		43,672			—			447			—			44,119
Direct Installment Purchased		179			—			—			—			179
Indirect Installment		151,863			—			405			—			152,268
Home Equity		137,320			—			2,996			—			140,316
Total Consumer		333,034			—			3,848			—			336,882
Total	$	1,480,437		$	9,805		$	28,220		$	—		$	1,518,464
Percentage of total loans		97.50	%		0.65	%		1.86	%		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	%

28

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Note 8 – Repurchase Agreements

The Company transfers various securities to customers in exchange for cash at the end of each business day and agrees to reaquire the securities at the end of the next business day for the cash exchanged plus interest. The process is repeated at the end of each business day until the agreement is terminated. The securities underlying the agreement remained under the Bank’s control.

The following table shows repurchase agreements accounted for as secured borrowings (in thousands):

	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous			Up to one year		One to three years		Three to five years		Five to ten years			Beyond ten years			Total
Repurchase Agreements and repurchase-to-maturity transactions
Repurchase Agreements - Long-term	$	57,731		$	—	$	35,000	$	50,000	$	10,000		$	—		$	152,731
Securities lending transactions
U.S. Treasury and federal agencies	$	8,468		$	—	$	—	$	—	$	—		$	—		$	8,468
Federal agency collateralized mortgage obligations		41,140			—		87		1,020		7,413			46,412			96,071
Federal agency mortgage-backed pools		10,560			—		—		541		8,574			41,476			61,151
Total		60,168			—		87		1,561		15,987			87,888			165,691
Total borrowings	$	(2,437	)	$	—	$	34,913	$	48,439	$	(5,987	)	$	(87,888	)	$	(12,960	)
Gross amount of recognized liabilities for repurchase agreements and securities lending																$	152,731

Note 9 – 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 June 30, 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 June 30, 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 June 30, 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.

29

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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 $111.7 million at June 30, 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 June 30, 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         June 30, 2015			Liability Derivatives June 30, 2015
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate contracts	Loans	$	—	Other liabilities	$	1,022
Interest rate contracts	Other Assets		1,022	Other liabilities		3,155
Total derivatives designated as hedging instruments			1,022			4,177
Derivatives not designated as hedging instruments
Mortgage loan contracts	Other assets		751	Other liabilities		32
Total derivatives not designated as hedging instruments			751			32
Total derivatives		$	1,773		$	4,209

	Asset Derivative December 31, 2014			Liability Derivatives 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

30

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

The effect of the derivative instruments on the condensed consolidated statement of income for the three and six-month periods ending June 30 is as follows:

	Comprehensive Income on Derivative (Effective Portion)					Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended June 30					Six Months Ended June 30
Derivative in cash flow hedging relationship	2015 (Unaudited)		2014 (Unaudited)			2015 (Unaudited)		2014 (Unaudited)
Interest rate contracts	$	332	$	(206	)	$	118	$	(352	)

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						Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended June 30						Six Months Ended June 30
Derivative in fair value hedging relationship	Location of gain (loss) recognized on derivative	2015 (Unaudited)			2014 (Unaudited)			2015 (Unaudited)			2014 (Unaudited)
Interest rate contracts	Interest income - loans	$	(1,186	)	$	544		$	(186	)	$	751
Interest rate contracts	Interest income - loans		1,186			(544	)		186			(751	)
Total		$	—		$	—		$	—		$	—

		Amount of Gain (Loss) Recognized on Derivative				Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended June 30				Six Months Ended June 30
Derivative not designated as hedging relationship	Location of gain (loss) recognized on derivative	2015 (Unaudited)		2014 (Unaudited)		2015 (Unaudited)		2014 (Unaudited)
Mortgage contracts	Other income - gain on sale of loans	$	83	$	210	$	272	$	450

Note 10 – 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 June 30, 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

31

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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:

	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
June 30, 2015
Available-for-sale securities
U.S. Treasury and federal agencies	$	28,239		$	—	$	28,239		$	—
State and municipal		50,783			—		50,783			—
Federal agency collateralized mortgage obligations		116,942			—		116,942			—
Federal agency mortgage-backed pools		134,950			—		134,950			—
Corporate notes		56			—		56			—
Total available-for-sale securities		330,970			—		330,970			—
Hedged loans		109,448			—		109,448			—
Forward sale commitments		751			—		751			—
Interest rate swap agreements		(4,177	)		—		(4,177	)		—
Commitments to originate loans		(32	)		—		(32	)		—
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	)		—

32

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 June 30						Six Months Ended June 30
Non Interest Income Total gains and losses from:	2015 (Unaudited)			2014 (Unaudited)			2015 (Unaudited)			2014 (Unaudited)
Hedged loans	$	(1,186	)	$	544		$	(186	)	$	751
Fair value interest rate swap agreements		1,186			(544	)		186			(751	)
Derivative loan commitments		83			210			272			450
	$	83		$	210		$	272		$	450

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):

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2015
Impaired loans	$	8,978	$	—	$	—	$	8,978
Mortgage servicing rights		8,279		—		—		8,279
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 $18,000 during the first six months of 2015 and increased by $38,000 during the first six months of 2014.

33

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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 June 30, 2015		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Impaired loans	$	8,978	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	10% - 15% (12%)
Mortgage servicing rights	$	8,279	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default	10% - 15% (12%), 4% - 7% (4.6%), 1% - 10%  (4.5%)
	Fair Value at December 31, 2014		Valuation Technique	Unobservable Inputs	Range (Weighted 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 11 – 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 June 30, 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.

34

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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.

35

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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).

	June 30, 2015
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash and due from banks	$	43,857	$	43,857	$	—	$	—
Investment securities, held to maturity		162,661		—		167,581		—
Loans held for sale		7,677		—		—		7,677
Loans excluding loan level hedges, net		1,393,414		—		—		1,426,252
Stock in FHLB and FRB		11,080		—		11,080		—
Interest receivable		8,823		—		8,823		—
Liabilities
Non-interest bearing deposits	$	307,215	$	307,215	$	—	$	—
Interest-bearing deposits		1,277,508		—		1,204,516		—
Borrowings		385,236		—		381,302		—
Subordinated debentures		32,719		—		32,698		—
Interest payable		461		—		461		—
	December 31, 2014
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (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		—

36

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Note 12 – Accumulated Other Comprehensive Income

	June 30 2015			December 31 2014
Unrealized gain on securities available for sale	$	3,455		$	4,018
Unamortized gain on securities held to maturity, previously transferred from AFS		1,423			1,658
Unrealized loss on derivative instruments		(3,155	)		(3,337	)
Tax effect		(603	)		(818	)
Total accumulated other comprehensive income	$	1,120		$	1,521

Note 13 – 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 June 30, 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 (June 30, 2015) and Tier I leverage ratios as set forth in the table below. As of June 30, 2015 and December 31, 2014, the Bank met all capital adequacy requirements to be considered well capitalized. There have been no conditions or events since the end of the second 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.

37

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Horizon and the Bank’s actual and required capital ratios as of June 30, 2015 and December 31, 2014 were as follows:

	Actual					Required For Capital1 Adequacy Purposes					Well Capitalized Under Prompt1 Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2015
Total capital1 (to risk-weighted assets)
Consolidated	$	222,223		13.53	%	$	131,396		8.00	%		N/A		N/A
Bank		192,896		11.76	%		131,222		8.00	%	$	164,027		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		205,802		12.53	%		98,548		6.00	%		N/A		N/A
Bank		176,475		10.76	%		98,406		6.00	%		131,208		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		160,234		9.75	%		73,954		4.50	%		N/A		N/A
Bank		176,475		10.76	%		73,805		4.50	%		106,607		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		205,802		9.61	%		85,662		4.00	%		N/A		N/A
Bank		176,475		8.24	%		85,667		4.00	%		107,084		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 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. Adoption of the ASU is not expected to have a significant effect on the Company’s consolidated financial statements.

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

The amendments to the Consolidation Analysis, are 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).

38

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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. Adoption of the ASU is not expected to have a significant effect on the Company’s consolidated financial statements.

Note 15 – General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results or operation and cash flows of the Company

39

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 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;

• 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;

• the slowing or failure of economic recovery;

40

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

• 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 Northern 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 February 18, 2015, Horizon entered into an Agreement and Plan of Merger (the “Merger Agreement”) providing for Horizon’s acquisition of Peoples Bancorp, Inc., 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 (“Peoples FSB”), 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.

On July 1, 2015 Horizon completed the acquisition of Peoples and Horizon Bank N.A.’s acquisition of Peoples FSB, through mergers effective July 1, 2015. Under the terms of the acquisition, the exchange ratio was 0.95 shares of Horizon common stock (the “Exchange Ratio”) and $9.75 in cash for each outstanding share of Peoples common stock. Peoples shareholders owning fewer than 100 shares of common stock received $33.14 in cash for each common share. Peoples shares outstanding at the closing were 2,311,858, and the shares of Horizon common stock issued to Peoples shareholders totaled 2,192,202. Horizon’s stock price was $25.32 per share at the close of business on July 1, 2015. Based upon these numbers, the total value of the consideration for the acquisition was $78.1 million.

On April 3, 2014, Horizon completed the acquisition of SCB Bancorp, Inc., a Michigan corporation (“Summit”) and Horizon Bank’s acquisition of Summit Community Bank, a Michigan-chartered commercial bank and wholly owned subsidiary of Summit, 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).

41

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

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

• On July 1, 2015, Horizon closed the acquisition of Peoples Bancorp and its wholly-owned subsidiary, Peoples Federal Savings Bank of DeKalb County, headquartered in Auburn, Indiana. Peoples’ results are not included in Horizon’s June 30, 2015 financial results.

• Total loans increased 16.2% on an annualized basis during the second quarter of 2015.

• Commercial loans increased 8.2% on an annualized basis during the second quarter of 2015.

• Second quarter 2015 net income was $4.7 million or $.49 diluted earnings per share.

• Excluding merger expenses, net income for the second quarter of 2015 was $5.2 million or $.54 diluted earnings per share.

• Pre-tax, pre-provision income for the second quarter of 2015 was $8.4 million, an increase of 19.7% compared to the same period of 2014 and 6.4% compared to the previous quarter.

• Net income for the first six months of 2015 increased 23.1% compared to the same period of 2014 to $10.1 million or $1.04 diluted earnings per share.

• Excluding merger expenses, gain on sale of investment securities and the death benefit on bank owned life insurance, net income for the first six months of 2015 was $10.4 million or $1.09 diluted earnings per share.

• Pre-tax, pre-provision income for the first six months of 2015 was $16.3 million, an increase of 44.1% compared to the first six months of 2014.

• Net interest income for the first six months of 2015 increased 15.6% or $4.7 million compared to the same period in 2014.

• The net interest margin, excluding the impact of acquisitions (“core net interest margin”), increased 4 basis points from the linked quarter and 5 basis points in the first six months of 2015 compared to the same period of 2014.

• Net charge-offs for the second quarter of 2015 were $2.1 million compared to $780,000 for the same period in 2014.

• Non-interest income for the first six months of 2015 increased 17.3% or $2.1 million compared to the same period in 2014.

• Horizon’s tangible book value per share rose to $17.06 at June 30, 2015, compared to $16.26 at December 31, 2014 and $15.47 at June 30, 2014.

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

42

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

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 June 30, 2015, Horizon had core deposit intangibles of $3.5 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 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 June 30, 2015 was $24.96 per share compared to a book value of $20.49 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 third-party prepayment model, which is based upon statistically derived data linked to certain key principal indicators involving historical borrower

43

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

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 third 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.

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.

44

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

Financial Condition

On June 30, 2015, Horizon’s total assets were $2.2 billion, an increase of approximately $142.4 million compared to December 31, 2014. The increase was primarily due to the growth in net loans of $140.8 million.

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

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
U.S. Treasury and federal agencies	$	28,308	$	28,239	$	26,996	$	26,823
State and municipal		49,739		50,783		46,535		47,952
Federal agency collateralized mortgage obligations		116,674		116,942		122,930		122,860
Federal agency mortgage-backed pools		132,762		134,950		122,583		125,395
Private labeled mortgage-backed pools		—		—		670		689
Corporate notes		32		56		32		45
Total available for sale investment securities	$	327,515	$	330,970	$	319,746	$	323,764
Held to maturity
U.S. Treasury and federal agencies	$	9,845	$	9,947	$	9,804	$	9,886
State and municipal		127,452		131,357		129,595		132,887
Federal agency collateralized mortgage obligations		3,670		3,681		4,039		4,073
Federal agency mortgage-backed pools		21,694		22,596		22,329		23,058
Total held to maturity investment securities	$	162,661	$	167,581	$	165,767	$	169,904

Total investment securities increased by approximately $4.1 million at June 30, 2015 compared to December 31, 2014 due to the reinvestment of investment security cash flows.

Total loans increased $142.3 million since December 31, 2014 to $1.5 billion as of June 30, 2015. This increase was the result of an increase in commercial loans of $35.6 million, mortgage warehouse loans of $66.8 million, residential mortgage loans of $22.8 million and consumer loans of $15.5 million. The growth in total loans during the six months ended June 30, 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 six months ended June 30, 2015.

Loan Growth by Type

Six Months Ended June 30, 2015

(Dollars in Thousands)

	June 30 2015		December 31 2014		Amount Change		Percent Change			Annualized Percent Change
	(Unaudited)
Commercial loans	$	709,946	$	674,314	$	35,632		5.3	%		10.7	%
Residential mortgage loans		277,407		254,625		22,782		8.9	%		18.0	%
Consumer loans		336,006		320,459		15,547		4.9	%		9.8	%
Held for sale loans		7,677		6,143		1,534		25.0	%		50.4	%
Subtotal		1,331,036		1,255,541		75,495		6.0	%		12.1	%
Mortgage warehouse loans		195,924		129,156		66,768		51.7	%		104.2	%
Total loans	$	1,526,960	$	1,384,697	$	142,263		10.3	%		20.7	%

45

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

Total deposits increased $102.4 million since December 31, 2014 to $1.6 billion as of June 30, 2015. This increase was primarily the result of increased calling and marketing efforts and market expansion. Non-interest bearing deposit accounts increased by $39.5 million, interest-bearing transaction accounts decreased by $53.3 million and time deposits decreased by $9.5 million during the six months ended June 30, 2015.

The Company’s borrowings increased $34.0 million from December 31, 2014 as total loan growth of $142.3 million outpaced the deposit growth of $102.4 million during the six months ended June 30, 2015, thereby increasing the Company’s reliance on borrowings to fund loan growth during the period. At June 30, 2015, the Company had $107.0 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 $202.1 million at June 30, 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, net of dividends declared. At June 30, 2015, the ratio of average stockholders’ equity to average assets was 9.32% compared to 9.56% for December 31, 2014. Book value per common share at June 30, 2015 increased to $20.49 compared to $19.75 at December 31, 2014.

Results of Operations

Overview

Consolidated net income for the three-month period ended June 30, 2015 was $4.7 million, a decrease of 1.0% from the $4.8 million for the same period in 2014. Earnings per common share for the three months ended June 30, 2015 were $0.51 basic and $0.49 diluted, compared to $0.52 basic and $0.50 diluted for the same three-month period in the previous year. The decrease in net income and diluted earnings per share reflects an increase in the provision for loan losses of $1.6 million primarily due to one commercial loan charge-off of $1.3 million, and an increase in non-interest expenses of $242,000 primarily due to an increase in salaries and employee benefits, professional fees and loan expense.

Consolidated net income for the six-month period ended June 30, 2015 was $10.1 million, an increase of 23.1% from the $8.2 million for the same period in 2014. Earnings per common share for the six-month period ended June 30, 2015 were $1.09 basic and $1.04 diluted, compared to $.91 basic and $0.88 diluted for the same three-month period in the previous year. The increase in net income and diluted earnings per share reflects a $4.6 million increase in interest income due to loan growth and accretion income from acquisition-related purchase accounting adjustments and a $2.1 million increase in non-interest income primarily due to an increase in gain on sale of loans, fiduciary activities and interchange fees, partially offset by a $1.8 million increase in non-interest expense primarily due to an increase in salaries and employee benefits, professional fees and loan expense from company growth and an increase in loan volume.

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.

46

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

Net interest income during the three-month period ended June 30, 2015 was $17.9 million, an increase of $1.1 million from the $16.8 million earned during the same period in 2014. Yields on the Company’s interest-earning assets decreased by 18 basis points to 4.33% for the three months ending June 30, 2015 from 4.51% for the three months ended June 30, 2014. Interest income increased $1.0 million from $20.1 million for the three months ended June 30, 2014 to $21.1 million for the same period in 2015. This increase was due to an increase in interest-earning assets, partially offset by lower yields on loans and investment securities and a decrease in interest income from acquisition-related purchase accounting adjustments from $1.2 million for the three months ending June 30, 2014 to $797,000 for the same period of 2015.

Rates paid on interest-bearing liabilities decreased by 8 basis points for the three-month period ended June 30, 2015 compared to the same period in 2014 due to the continued low interest rate environment. Interest expense decreased $57,000 compared to the three-month period ended June 30, 2014 to $3.3 million for the same period in 2015. This decrease was due to lower rates paid on interest-bearing deposits and borrowings, partially offset by higher average balances of interest-bearing deposits and borrowings. The net interest margin decreased 11 basis points from 3.78% for the three-month period ended June 30, 2014 to 3.67% for the same period in 2015. The decrease in the margin for the three-month period ended June 30, 2015 compared to the same period in 2014 was due to a reduction in the yield on interest-earning assets and a decrease of approximately $420,000 of interest income from acquisition-related purchase accounting adjustments. Excluding the interest income recognized from the acquisition-related purchase accounting adjustments, the margin would have been 3.51% for the three-month period ending June 30, 2015 compared to 3.51% for the same period in 2014.

47

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

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

	Three Months Ended June 30, 2015								Three Months Ended June 30, 2014
	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate
ASSETS
Interest-earning assets
Federal funds sold	$	3,597		$	2		0.22	%	$	9,062		$	5		0.22	%
Interest-earning deposits		8,608			5		0.23	%		7,987			4		0.20	%
Investment securities - taxable		363,919			2,060		2.27	%		403,910			2,386		2.37	%
Investment securities - non-taxable (1)		141,784			1,079		4.24	%		145,591			1,096		4.25	%
Loans receivable (2)(3)		1,490,283			17,981		4.87	%		1,266,026			16,631		5.27	%
Total interest-earning assets (1)		2,008,191			21,127		4.33	%		1,832,576			20,122		4.51	%
Non-interest-earning assets
Cash and due from banks		31,783								28,106
Allowance for loan losses		(16,756	)							(15,808	)
Other assets		157,795								129,608
	$	2,181,013							$	1,974,482
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities
Interest-bearing deposits	$	1,255,123		$	1,237		0.40	%	$	1,229,025		$	1,355		0.44	%
Borrowings		381,782			1,539		1.62	%		273,968			1,478		2.16	%
Subordinated debentures		32,699			501		6.15	%		32,541			501		6.18	%
Total interest-bearing liabilities		1,669,604			3,277		0.79	%		1,535,534			3,334		0.87	%
Non-interest-bearing liabilities
Demand deposits		294,425								253,093
Accrued interest payable and other liabilities		13,770								12,245
Stockholders’ equity		203,214								173,610
	$	2,181,013							$	1,974,482
Net interest income/spread				$	17,850		3.54	%				$	16,788		3.63	%
Net interest income as a percent of average interest earning assets (1)							3.67	%							3.78	%

(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.

Net interest income during the six months ended June 30, 2015 was $34.7 million, an increase of $4.7 million from the $30.1 million earned during the same period in 2014. Yields on the Company’s interest-earning assets decreased by 4 basis points to 4.35% for the six months ended June 30, 2015 from 4.39% for the same period in 2014. Interest income increased $4.6 million from $36.6 million for the six months ended June 30, 2014 to $41.2 million for the same period in 2015. This increase was due to an increase in loans and interest income from acquisition-related purchase accounting adjustments from $1.6 million for the three months ending June 30, 2014 to $1.9 million for the same period of 2015, partially offset by lower yields on loans.

Rates paid on interest-bearing liabilities decreased by 12 basis points for the six months ended June 30, 2015 compared to the same period in 2014 due to the continued low interest rate environment. Interest expense decreased $45,000 to $6.5 million for the six-month period ending June 30, 2015. This decrease was due to lower rates being paid on the Company’s interest-bearing liabilities partially offset with a higher volume of interest-bearing liabilities. The net interest margin increased 6 basis points from 3.62% for the six months ended June 30, 2014 to 3.68% for the same period in 2015. The increase in the margin for the six-month

48

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

period ended June 30, 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 $292,000 of interest income from acquisition-related purchase accounting adjustments, partially offset by a decrease in yield on loans. Excluding the interest income recognized from the acquisition-related purchase accounting adjustments, the margin would have been 3.49% for the six-month period ending June 30, 2015 compared to 3.44% for the same period in 2014.

The following are the average balance sheets for the six months ending:

	Six Months Ended								Six Months Ended
	June 30, 2015								June 30, 2014
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
ASSETS
Interest-earning assets
Federal funds sold	$	4,198		$	11		0.53	%	$	7,842		$	9		0.23	%
Interest-earning deposits		9,684			10		0.21	%		6,855			7		0.21	%
Investment securities - taxable		362,250			4,200		2.34	%		395,406			4,769		2.43	%
Investment securities - non-taxable (1)		141,269			2,156		4.27	%		146,709			2,219		4.07	%
Loans receivable (2)(3)		1,436,886			34,843		4.90	%		1,159,127			29,585		5.15	%
Total interest-earning assets (1)		1,954,287			41,220		4.35	%		1,715,939			36,589		4.39	%
Non-interest-earning assets
Cash and due from banks		30,396								26,507
Allowance for loan losses		(16,623	)							(15,987	)
Other assets		157,669								133,408
	$	2,125,729							$	1,859,867
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities
Interest-bearing deposits	$	1,235,601		$	2,469		0.40	%	$	1,154,682		$	2,632		0.46	%
Borrowings		359,436			3,018		1.69	%		250,761			2,900		2.33	%
Subordinated debentures		32,678			997		6.15	%		32,522			997		6.18	%
Total interest-bearing liabilities		1,627,715			6,484		0.80	%		1,437,965			6,529		0.92	%
Non-interest-bearing liabilities
Demand deposits		282,796								238,579
Accrued interest payable and other liabilities		14,374								12,191
Stockholders’ equity		200,844								171,132
	$	2,125,729							$	1,859,867
Net interest income/spread				$	34,736		3.55	%				$	30,060		3.47	%
Net interest income as a percent of average interest earning assets (1)							3.68	%							3.62	%

(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 portfolio. During the three-month period ended June 30, 2015, a provision of $1.9 million was required to adequately fund the ALLL compared to $339,000 for the same period of 2014. Commercial loan net charge-offs during the three-month period ended June 30, 2015 were $1.6 million, residential mortgage loan net charge-offs were $141,000 and consumer loan net charge-offs were negative

49

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

$97,000. The higher provision for loan losses in the second quarter of 2015 compared to the same period of 2014 was primarily due to continued loan growth as well as the charge-off of one commercial credit of $1.3 million. The $1.3 million commercial charge-off was a legacy workout loan that was recently determined to be impaired due to the borrower’s inability to make payments and a decrease in collateral value. The ALLL balance at June 30, 2015 was $16.4 million or 1.08% of 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 June 30, 2015 compared to December 31, 2014 was due to an increase in total loans of $142.3 million and improving credit trends.

For the six-month period ended June 30, 2015, the provision for loan losses totaled $2.5 million compared to $339,000 in the same period of 2014. The higher provision for loan losses in the first six months of 2015 compared to the previous year was due to continued loan growth as well as the charge-off of one commercial credit of $1.3 million.

Horizon’s loan loss reserve ratio, excluding loans with credit-related purchase accounting adjustments, stood at 1.15% as of June 30, 2015. The table below details Horizon’s loan loss reserve ratio composition as of June 30, 2015.

Allowance for Loan and Lease Loss Detail

As of June 30, 2015

(Dollars in Thousands, Unaudited)

	Horizon
	Legacy			Heartland			Summit			Total
Pre-discount loan balance	$	1,403,809		$	31,777		$	88,908		$	1,524,494
Allowance for loan losses (ALLL)		16,138			276			7			16,421
Loan discount		N/A			1,903			3,308			5,211
ALLL+loan discount		16,138			2,179			3,315			21,632
Loans, net	$	1,387,671		$	29,598		$	85,593		$	1,502,862
ALLL/ pre-discount loan balance		1.15	%		0.87	%		0.01	%		1.08	%
Loan discount/ pre-discount loan balance		N/A			5.99	%		3.72	%		0.34	%
ALLL+loan discount/ pre-discount loan balance		1.15	%		6.86	%		3.73	%		1.42	%

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 June 30, 2015.

Non-performing loans totaled $23.1 million on June 30, 2015, up from $22.4 million on December 31, 2014. Compared to December 31, 2014, non-performing commercial loans increased by $1.5 million and non-performing real estate loans and consumer loans decreased by $75,000 and $845,000, respectively.

At June 30, 2015, loans acquired represented $2.8 million in non-performing, $3.4 million in substandard and $233,000 in delinquent loans.

Other Real Estate Owned (OREO) totaled $471,000 on June 30, 2015, down from $1.2 million on December 31, 2014 and $1.2 million on June 30, 2014.

50

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

Non-interest Income

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

	Three Months Ended
	June 30		June 30			Amount		Percent
Non-interest Income	2015		2014			Change		Change
Service charges on deposit accounts	$	1,085	$	1,038		$	47		4.5	%
Wire transfer fees		182		145			37		25.5	%
Interchange fees		1,366		1,254			112		8.9	%
Fiduciary activities		1,216		1,199			17		1.4	%
Gain on sale of securities		—		—			—		0.0	%
Gain on sale of mortgage loans		2,642		2,537			105		4.1	%
Mortgage servicing net of impairment		300		233			67		28.8	%
Increase in cash surrender value of bank owned life insurance		257		252			5		2.0	%
Other income		138		(31	)		169		-545.2	%
Total non-interest income	$	7,186	$	6,627		$	559		8.4	%

Total non-interest income was $559,000 higher in the second quarter of 2015 compared to the same period of 2014. Interchange fees increased by $112,000, primarily due to an increase in volume. Residential mortgage loan activity during the second quarter of 2015 generated $2.6 million of income from the gain on sale of mortgage loans, up $105,000 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 $25.3 million from $58.1 million in the second quarter of 2014 to $83.3 million in the same period of 2015, partially offset by a decrease in the percentage earned on the sale of these loans. Other income increased by $169,000 compared to the previous year due to a liquidation of an asset in the second quarter of 2014 that resulted in a net loss.

	Six Months Ended				2014 - 2015
	June 30		June 30		Amount			Percent
Non-interest Income	2015		2014		Change			Change
Service charges on deposit accounts	$	2,084	$	1,961	$	123			6.3	%
Wire transfer fees		333		257		76			29.6	%
Interchange fees		2,468		2,213		255			11.5	%
Fiduciary activities		2,513		2,247		266			11.8	%
Gain on sale of investment securities		124		—		124			100.0	%
Gain on sale of mortgage loans		5,021		3,948		1,073			27.2	%
Mortgage servicing net of impairment		479		440		39			8.9	%
Increase in cash surrender value of bank owned life insurance		515		485		30			6.2	%
Death benefit on officer life insurance		145		—		145			100.0	%
Other income		570		598		(28	)		-4.7	%
Total non-interest income	$	14,252	$	12,149	$	2,103			17.3	%

Total non-interest income was $2.1 million higher in the first six months of 2015 compared to the same period of 2014. Service charges on deposit accounts increased $123,000, interchange fees increased by $255,000 and fiduciary activities increased $266,000, primarily due to overall company growth and increased volume. Gain on sale of securities was $124,000 higher during the first half of 2015 as the result of an analysis that determined market conditions provided the opportunity to add gains to capital without negatively impacting long-term earnings. Residential mortgage loan activity during the first six months of 2015 generated $5.0 million of income from the gain on sale of mortgage loans, up $1.1 million 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 $58.2 million from $94.0 million in the first half of 2014 to $152.3 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 half of 2015.

51

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

Non-interest Expense

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

	Three Months Ended
	June 30		June 30		Amount			Percent
Non-interest expense	2015		2014		Change			Change
Salaries	$	5,993	$	6,002	$	(9	)		-0.1	%
Commission and bonuses		1,200		1,009		191			18.9	%
Employee benefits		1,192		1,282		(90	)		-7.0	%
Net occupancy expenses		1,375		1,360		15			1.1	%
Data processing		966		937		29			3.1	%
Professional fees		660		419		241			57.5	%
Outside services and consultants		918		1,298		(380	)		-29.3	%
Loan expense		1,367		1,272		95			7.5	%
FDIC deposit insurance		339		285		54			18.9	%
Other losses		150		95		55			57.9	%
Other expense		2,490		2,449		41			1.7	%
Total non-interest expense	$	16,650	$	16,408	$	242			1.5	%

Total non-interest expenses were $242,000 higher in the second quarter of 2015 compared to the same period of 2014. Commission and bonuses increased by $191,000 due to an increase in loan volume and a larger employee base. Professional fees increased $241,000 due to company growth. Loan expense increased $95,000 primarily due to an increase in loan origination volume. These increases were partially offset by a decrease in expenses from outside services and consultants due to the expense associated with the Summit acquisition in the second quarter of 2014.

	Six Months Ended				2014 - 2015
	June 30		June 30		Amount			Percent
Non-interest expense	2015		2014		Change			Change
Salaries	$	11,626	$	11,358	$	268			2.4	%
Commission and bonuses		2,367		1,489		878			59.0	%
Employee benefits		2,896		2,929		(33	)		-1.1	%
Net occupancy expenses		2,926		2,784		142			5.1	%
Data processing		1,889		1,807		82			4.5	%
Professional fees		1,187		1,027		160			15.6	%
Outside services and consultants		1,544		1,959		(415	)		-21.2	%
Loan expense		2,624		2,287		337			14.7	%
FDIC deposit insurance		676		541		135			25.0	%
Other losses		105		133		(28	)		-21.1	%
Other expense		4,878		4,608		270			5.9	%
Total non-interest expense	$	32,718	$	30,922	$	1,796			5.8	%

Total non-interest expenses were $1.8 million higher in the first half of 2015 compared to the same period of 2014. Salaries increased $268,000 due to changes in annual merit pay and a larger employee base. Commission and bonuses increased by $878,000 due to an increase in loan volume and a larger employee base. Net occupancy expense increased $142,000 due to the Summit acquisition in the first half of 2014 and

52

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

Horizon’s investment in growth markets. Professional fees increased $160,000 due to company growth. Loan expense increased $337,000 primarily due to an increase in loan origination volume. FDIC expense increased $135,000 due to an increase in deposits. Other expenses increased $270,000 primarily due to the Company’s growth and expansion efforts. Outside services and consultants decreased by $415,000 compared to the same period of 2014 due to one-time fees associated with the Summit acquisition which occurred in the first half of 2014.

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 six months ended June 30, 2015, cash and cash equivalents decreased by approximately $381,000. At June 30, 2015, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $361.7 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 $268.9 million at June 30, 2014.

Capital Resources

The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at June 30, 2015. Stockholders’ equity totaled $202.1 million as of June 30, 2015, compared to $194.4 million as of December 31, 2014. For the three months ended June 30, 2015, the ratio of average stockholders’ equity to average assets was 9.32% compared to 9.56% for the three months ended December 31, 2014. The increase in stockholders’ equity during the period was the result of the generation of net 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 June 30, 2015, the dividend cost was approximately $31,000, or 1.0% annualized. Quarterly dividend payments for the third and fourth quarters of 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 $0.28 per share during the first six months of 2015 compared to $0.24 per share for the same period of 2014. The dividend payout ratio (dividends as a percent of basic earnings per share) was 25.8% and 26.3% for the first six months of 2015 and 2014, respectively. For additional information regarding dividends, see Horizon’s Annual Report on Form 10-K for 2014.

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

53

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

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.

Non-GAAP Reconciliation of Pre-tax, Pre-Provision Income

(Dollar in Thousands, Unaudited)

	Three Months Ended						Six Months Ended
	June 30		March 31		June 30		June 30
	2015		2015		2014		2015		2014
Net income as reported	$	4,728	$	5,358	$	4,778	$	10,086	$	8,195
Income tax expense		1,752		1,912		1,890		3,664		2,753
Provision for loan losses		1,906		614		339		2,520		339
Pre-tax, pre-provision income	$	8,386	$	7,884	$	7,007	$	16,270	$	11,287

Non-GAAP Reconciliation of Net Interest Margin

(Dollar Amounts in Thousands, Unaudited)

	Three Months Ended									Six Months Ended
	June 30			March 31			June 30			June 30
Net Interest Margin As Reported	2015			2015			2014			2015			2014
Net interest income	$	17,850		$	16,886		$	16,788		$	34,736		$	30,060
Average interest-earning assets		2,008,191			1,899,870			1,832,576			1,954,287			1,715,939
Net interest income as a percent of average interest-earning assets (“Net Interest Margin”)		3.67	%		3.70	%		3.78	%		3.68	%		3.62	%
Impact of Acquisitions
Interest income from acquisition-related purchase accounting adjustments (“PAUs”)	$	(797	)	$	(1,083	)	$	(1,199	)	$	(1,880	)	$	(1,588	)
Excluding Impact of Acquisitions
Net interest income	$	17,053		$	15,803		$	15,589		$	32,856		$	28,472
Average interest-earning assets		2,008,191			1,899,870			1,832,576			1,954,287			1,715,939
Core Net Interest Margin		3.51	%		3.47	%		3.51	%		3.49	%		3.44	%

54

HORIZON BANCORP AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three and Six Months ended June 30, 2015

Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share

(Dollar in Thousands Except per Share Data, Unaudited)

	Three Months Ended						Six Months Ended
	June 30						June 30
Non-GAAP Reconciliation of Net Income	2015			2014			2015			2014
Net income as reported	$	4,728		$	4,778		$	10,086		$	8,195
Merger expenses		570			900			716			1,211
Tax effect		(132	)		(315	)		(183	)		(424	)
Net income excluding merger expenses		5,166			5,363			10,619			8,982
Gain on sale of investment securities		—			—			(124	)		—
Tax effect		—			—			43			—
Net income excluding gain on sale of investment securities		5,166			5,363			10,538			8,982
Death benefit on bank owned life insurance (“BOLI”)		—			—			(145	)		—
Tax effect		—			—			51			—
Net income excluding death benefit on BOLI		5,166			5,363			10,444			8,982
Acquisition-related PAUs		(797	)		(1,199	)		(1,880	)		(1,588	)
Tax effect		279			420			658			556
Net income excluding PAUs	$	4,648		$	4,584		$	9,222		$	7,950
Non-GAAP Reconciliation of Diluted Earnings per Share
Diluted earnings per share as reported	$	0.49		$	0.50		$	1.04		$	0.88
Merger expenses		0.06			0.09			0.07			0.13
Tax effect		(0.01	)		(0.03	)		(0.02	)		(0.05	)
Diluted earnings per share excluding merger expenses		0.54			0.56			1.09			0.96
Gain on sale of investment securities		—			—			(0.01	)		—
Tax effect		—			—			0.00			—
Net income excluding gain on sale of investment securities		0.54			0.56			1.09			0.96
Death benefit on BOLI		—			—			(0.02	)		—
Tax effect		—			—			0.01			—
Net income excluding death benefit on BOLI		0.54			0.56			1.08			0.96
Acquisition-related PAUs		(0.08	)		(0.13	)		(0.20	)		(0.17	)
Tax effect		0.03			0.04			0.07			0.06
Diluted earnings per share excluding PAUs	$	0.49		$	0.47		$	0.95		$	0.85

55

HORIZON BANCORP AND SUBSIDIARIES

Quantitative and Qualitative Disclosures About Market Risk

For the Three and Six months ended June 30, 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 June 30, 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 June 30, 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.

56

HORIZON BANCORP AND SUBSIDIARIES

Part II – Other Information

For the Three and Six months ended June 30, 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

57

HORIZON BANCORP AND SUBSIDIARIES

Part II – Other Information

For the Three and Six months ended June 30, 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
101	Interactive Data Files

58

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: August 10, 2015	/s/ Craig M. Dwight
	Craig M. Dwight
	Chief Executive Officer
Dated: August 10, 2015	/s/ Mark E. Secor
	Mark E. Secor
	Chief Financial Officer

59

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 101	Interactive Data Files	Attached

60

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: August 10, 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: August 10, 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 June 30, 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: August 10, 2015	/s/ Craig M. Dwight
	Craig M. Dwight
	Chief Executive Officer
Dated: August 10, 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

Regulatory Capital (Tables)

6 Months Ended

Jun. 30, 2015

Banking and Thrift [Abstract]

Summary of Regulatory Capital Requirement

Horizon and the Bank’s actual and required capital ratios as of June 30, 2015 and December 31, 2014 were as follows:

	Actual					Required For Capital1 Adequacy Purposes					Well Capitalized Under Prompt1 Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2015
Total capital1 (to risk-weighted assets)
Consolidated	$	222,223		13.53	%	$	131,396		8.00	%		N/A		N/A
Bank		192,896		11.76	%		131,222		8.00	%	$	164,027		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		205,802		12.53	%		98,548		6.00	%		N/A		N/A
Bank		176,475		10.76	%		98,406		6.00	%		131,208		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		160,234		9.75	%		73,954		4.50	%		N/A		N/A
Bank		176,475		10.76	%		73,805		4.50	%		106,607		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		205,802		9.61	%		85,662		4.00	%		N/A		N/A
Bank		176,475		8.24	%		85,667		4.00	%		107,084		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

XML

Accounting for Certain Loans Acquired in a Transfer - Amounts of Loans (Parenthetical) (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for loan losses	$ 16,421	$ 16,634	$ 16,501	$ 15,660	$ 16,102	$ 15,992
Loans Purchased With Evidence Of Credit Deterioration [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for loan losses	$ 283		$ 359

XML

Securities - Gross Unrealized Losses and Fair Value of Company's Investments (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	$ 90,419	$ 34,286
Fair value more than 12 months	69,261	90,657
Total fair value	159,680	124,943
Unrealized losses less than 12 months	(1,059)	(225)
Unrealized losses more than 12 months	(1,086)	(1,560)
Total unrealized losses	(2,145)	(1,785)
U.S. Treasury and Federal Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	4,469	2,993
Fair value more than 12 months	13,897	20,762
Total fair value	18,366	23,755
Unrealized losses less than 12 months	(14)	(7)
Unrealized losses more than 12 months	(90)	(222)
Total unrealized losses	(104)	(229)
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	38,471	10,287
Fair value more than 12 months	1,249	2,050
Total fair value	39,720	12,337
Unrealized losses less than 12 months	(667)	(121)
Unrealized losses more than 12 months	(12)	(30)
Total unrealized losses	(679)	(151)
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	24,435	15,013
Fair value more than 12 months	28,098	39,801
Total fair value	52,533	54,814
Unrealized losses less than 12 months	(170)	(88)
Unrealized losses more than 12 months	(557)	(957)
Total unrealized losses	(727)	(1,045)
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	23,044	5,993
Fair value more than 12 months	26,017	28,044
Total fair value	49,061	34,037
Unrealized losses less than 12 months	(208)	(9)
Unrealized losses more than 12 months	(427)	(351)
Total unrealized losses	$ (635)	$ (360)

XML

Derivative Financial Instruments - Effect of Derivative Instruments on Condensed Consolidated Statement of Income Derivative in Cash Flow Hedging Relationship (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Cash Flow Hedging [Member] | Interest Rate Contracts One [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Comprehensive Income on Derivative (Effective Portion)	$ 332	$ (206)	$ 118	$ (352)

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	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	$ 3,668	$ 3,185
Additions		1,758
Accretion	(385)	(288)
Reclassification from nonaccretable difference	0	0
Disposals	(166)	(95)
Balance at June 30	3,117	4,560
Heartland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	2,400	3,185
Accretion	(205)	(288)
Reclassification from nonaccretable difference	0	0
Disposals	(117)	(95)
Balance at June 30	2,078	2,802
Summit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	1,268
Additions		1,758
Accretion	(180)
Reclassification from nonaccretable difference	0	0
Disposals	(49)
Balance at June 30	$ 1,039	$ 1,758

XML

Accumulated Other Comprehensive Income - Components of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Unrealized gain on securities available for sale	$ 3,455	$ 4,018
Unamortized gain on securities held to maturity, previously transferred from AFS	1,423	1,658
Unrealized loss on derivative instruments	(3,155)	(3,337)
Tax effect	(603)	(818)
Total accumulated other comprehensive income	$ 1,120	$ 1,521

XML

Securities - Additional Information (Detail)	Apr. 01, 2014 USD ($) Security	Jun. 30, 2015 USD ($)
Amortized Cost and Fair Value Debt Securities [Abstract]
Unrealized loss, other than temporary securities		$ 0
Number of securities | Security	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

Non-performing Loans and Impaired Loans (Tables)

6 Months Ended

Jun. 30, 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:

June 30, 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	$	4,447	$	—	$	—	$	150	$	4,597
Non owner occupied real estate		4,898		207		2,352		68		7,525
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		477		—		785		—		1,262
Total commercial		9,822		207		3,137		218		13,384
Real estate
Residential mortgage		2,319		—		760		2,482		5,561
Residential construction		—		—		258		—		258
Mortgage warehouse		—		—		—		—		—
Total real estate		2,319		—		1,018		2,482		5,819
Consumer
Direct Installment		447		—		—		—		447
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		405		—		—		—		405
Home Equity		2,057		—		368		571		2,996
Total Consumer		2,909		—		368		571		3,848
Total	$	15,050	$	207	$	4,523	$	3,271	$	23,051

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 and six months ended June 30, 2015 and 2014, segregated by class, are shown in the table below.

	Three Months Ending June 30, 2015				Three Months Ending June 30, 2014				Six Months Ending June 30, 2015				Six Months Ending June 30, 2014
	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Commercial
Owner occupied real estate		2	$	111		—	$	—		3	$	2,462		—	$	—
Non owner occupied real estate		—		—		—		—		—		—		—		—
Residential development		—		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		2		371
Total commercial		2		111		—		—		3		2,462		2		371
Real estate
Residential mortgage		1		81		1		226		1		81		1		226
Residential construction		—		—		—		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—		—		—		—
Total real estate		1		81		1		226		1		81		1		226
Consumer
Direct Installment		—		—		—		—		—		—		—		—
Direct Installment Purchased		—		—		—		—		—		—		—		—
Indirect Installment		—		—		—		—		—		—		—		—
Home Equity		—		—		1		51		1		32		2		196
Total Consumer		—		—		1		51		1		32		2		196
		—		—						—		—
Total		3	$	192		2	$	277		5	$	2,575		5	$	793

Troubled debt restructured loans which had payment defaults during the three and six months ended June 30, 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.

	Three Months Ending June 30, 2015				Three Months Ending June 30, 2014				Six Months Ending June 30, 2015				Six Months Ending June 30, 2014
	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Commercial
Owner occupied real estate		—	$	—		—	$	—		1	$	2,352		—	$	—
Non owner occupied real estate		—		—		—		—		—		—		—		—
Residential development		—		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		2		371
Total commercial		—		—		—		—		1		2,352		2		371
Real estate
Residential mortgage		1		81		1		223		1		81		2		377
Residential construction		—		—		—		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—		—		—		—
Total real estate		1		81		1		223		1		81		2		377
Consumer
Direct Installment		—		—		—		—		—		—		—		—
Direct Installment Purchased		—		—		—		—		—		—		—		—
Indirect Installment		—		—		—		—		—		—		—		—
Home Equity		1		32		1		51		1		32		2		196
Total Consumer		1		32		1		51		1		32		2		196
		—		—						—		—
Total		2	$	113		2	$	274		3	$	2,465		6	$	944

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				Six Months Ending
June 30, 2015	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	1,605	$	1,606	$	—	$	1,350	$	17	$	1,118	$	17
Non owner occupied real estate		2,820		2,824		—		3,168		7		3,270		14
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		379		379		—		639		—		599		—
Total commercial		4,804		4,809		—		5,157		24		4,987		31
With an allowance recorded
Commercial
Owner occupied real estate		2,991		2,991		593		4,366		54		1,992		54
Non owner occupied real estate		1,590		1,590		200		1,590		—		1,590		—
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		884		884		498		1,008		—		974		—
Total commercial		5,465		5,465		1,291		6,964		54		4,556		54
Total	$	10,269	$	10,274	$	1,291	$	12,121	$	78	$	9,543	$	85

							Three Months Ending				Six Months Ending
June 30, 2014	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	2,121	$	2,124	$	—	$	1,885	$	40	$	1,432	$	51
Non owner occupied real estate		3,244		3,246		—		3,270		93		3,283		98
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		283		283		—		441		—		466		—
Total commercial		5,648		5,653		—		5,596		133		5,181		149
With an allowance recorded
Commercial
Owner occupied real estate		—		—		—		—		—		—		—
Non owner occupied real estate		340		340		170		342		—		347		—
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		1,722		1,722		965		1,710		—		1,570		2
Total commercial		2,062		2,062		1,135		2,052		—		1,917		2
Total	$	7,710	$	7,715	$	1,135	$	7,648	$	133	$	7,098	$	151

Payment Status by Class of Loan

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

June 30, 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	$	157		$	21		$	—		$	178		$	238,705		$	238,883
Non owner occupied real estate		82			—			207			289			313,582			313,871
Residential development		—			—			—			—			2,606			2,606
Development & Spec Land Loans		—			—			—			—			13,593			13,593
Commercial and industrial		591			46			—			637			139,186			139,823
Total commercial		830			67			207			1,104			707,672			708,776
Real estate
Residential mortgage		308			147			—			455			257,340			257,795
Residential construction		—			—			—			—			19,087			19,087
Mortgage warehouse		—			—			—			—			195,924			195,924
Total real estate		308			147			—			455			472,351			472,806
Consumer
Direct Installment		138			41			—			179			43,940			44,119
Direct Installment Purchased		—			—			—			—			179			179
Indirect Installment		721			130			—			851			151,417			152,268
Home Equity		699			245			—			944			139,372			140,316
Total consumer		1,558			416			—			1,974			334,908			336,882
Total	$	2,696		$	630		$	207		$	3,533		$	1,514,931		$	1,518,464
Percentage of total loans		0.18	%		0.04	%		0.01	%		0.23	%		99.77	%

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.

June 30, 2015	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	224,414		$	6,299		$	8,170		$	—		$	238,883
Non owner occupied real estate		303,292			2,442			8,137			—			313,871
Residential development		2,606			—			—			—			2,606
Development & Spec Land Loans		13,520			73			—			—			13,593
Commercial and industrial		136,586			991			2,246			—			139,823
Total commercial		680,416			9,805			18,553			—			708,776
Real estate
Residential mortgage		252,234			—			5,561			—			257,795
Residential construction		18,829			—			258			—			19,087
Mortgage warehouse		195,924			—			—			—			195,924
Total real estate		466,987			—			5,819			—			472,806
Consumer
Direct Installment		43,672			—			447			—			44,119
Direct Installment Purchased		179			—			—			—			179
Indirect Installment		151,863			—			405			—			152,268
Home Equity		137,320			—			2,996			—			140,316
Total Consumer		333,034			—			3,848			—			336,882
Total	$	1,480,437		$	9,805		$	28,220		$	—		$	1,518,464
Percentage of total loans		97.50	%		0.65	%		1.86	%		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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Regulatory Capital - Summary of Regulatory Capital Requirement (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule Of Regulatory Assets And Liabilities [Line Items]
Total capital (to risk-weighted assets), Actual, Amount	$ 192,896	$ 192,604
Total capital (to risk-weighted assets), Actual, Ratio	11.76%	13.08%
Total capital (to risk-weighted assets), For capital adequacy purposes, Amount	$ 131,222	$ 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	$ 164,027	$ 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	$ 176,475	$ 176,103
Tier 1 capital (to average assets), Actual, Ratio	10.76%	11.96%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 98,406	$ 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	$ 131,208	$ 88,346
Tier 1 capital (to average assets), For well capitalized purposes, Ratio	8.00%	6.00%
Common equity tier 1 capital, Actual Amount	$ 176,475
Common equity tier 1 capital, Actual Ratio	10.76%
Common equity tier 1 capital,For capital adequacy purposes, Amount	$ 73,805
Common equity tier 1 capital, For capital adequacy purpose, Ratio	4.50%
Common equity tier 1 capital, For well capitalized purpose, Amount	$ 106,607
Common equity tier 1 capital, For well capitalized purposes, Ratio	6.50%
Tier 1 capital (to average assets), Actual, Amount	$ 176,475	$ 176,103
Tier 1 capital (to average assets), Actual, Ratio	8.24%	8.80%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 85,667	$ 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	$ 107,084	$ 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	$ 222,223	$ 212,276
Total capital (to risk-weighted assets), Actual, Ratio	13.53%	14.48%
Total capital (to risk-weighted assets), For capital adequacy purposes, Amount	$ 131,396	$ 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	$ 205,802	$ 195,775
Tier 1 capital (to average assets), Actual, Ratio	12.53%	13.35%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 98,548	$ 58,659
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	6.00%	4.00%
Common equity tier 1 capital, Actual Amount	$ 160,234
Common equity tier 1 capital, Actual Ratio	9.75%
Common equity tier 1 capital,For capital adequacy purposes, Amount	$ 73,954
Common equity tier 1 capital, For capital adequacy purpose, Ratio	4.50%
Tier 1 capital (to average assets), Actual, Amount	$ 205,802	$ 195,775
Tier 1 capital (to average assets), Actual, Ratio	9.61%	9.76%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 85,662	$ 80,236
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	4.00%	4.00%

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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	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	$ 83	$ 210	$ 272	$ 450
Hedged Loans [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	(1,186)	544	(186)	751
Interest Rate Swap [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	1,186	(544)	186	(751)
Derivative Loan Commitments [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	$ 83	$ 210	$ 272	$ 450

XML

Allowance for Loan Losses - Additional Information (Detail)	6 Months Ended
	Jun. 30, 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

XML

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	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	$ 8,978	$ 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	$ 8,279	$ 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%

XML

Fair Value of Financial Instruments - Summary of Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 43,857	$ 43,476
Investment securities, held to maturity	162,661	165,767
Loans held for sale	7,677	6,143
Loans excluding loan level hedges, net	1,506,831	1,365,885
Stock in FHLB and FRB	11,080	11,348
Interest receivable	8,823	8,246
Liabilities
Non-interest bearing deposits	307,215	267,667
Subordinated debentures	32,719	32,642
Interest payable	461	497
Carrying Amount [Member]
Assets
Cash and due from banks	43,857	43,476
Investment securities, held to maturity	162,661	165,767
Loans held for sale	7,677	6,143
Loans excluding loan level hedges, net	1,393,414	1,260,608
Stock in FHLB and FRB	11,080	11,348
Interest receivable	8,823	8,246
Liabilities
Non-interest bearing deposits	307,215	267,667
Interest-bearing deposits	1,277,508	1,214,652
Borrowings	385,236	351,198
Subordinated debentures	32,719	32,642
Interest payable	461	497
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets
Cash and due from banks	43,857	43,476
Liabilities
Non-interest bearing deposits	307,215	267,667
Significant Other Observable Inputs (Level 2) [Member]
Assets
Investment securities, held to maturity	167,581	169,904
Stock in FHLB and FRB	11,080	11,348
Interest receivable	8,823	8,246
Liabilities
Interest-bearing deposits	1,204,516	1,158,912
Borrowings	381,302	348,597
Subordinated debentures	32,698	32,669
Interest payable	461	497
Significant Unobservable Inputs (Level 3) [Member]
Assets
Loans held for sale	7,677	6,143
Loans excluding loan level hedges, net	$ 1,426,252	$ 1,295,133

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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	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 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	$ (1,186)	$ 544	$ (186)	$ 751
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	1,186	(544)	186	(751)
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	$ 83	$ 210	$ 272	$ 450

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General Litigation

6 Months Ended

Jun. 30, 2015

Text Block [Abstract]

General Litigation

Note 15 – General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results or operation and cash flows of the Company

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Loans - Amounts of Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	$ 709,946		$ 674,314
Real Estate, Total	277,407		254,625
Consumer, Total	336,006		320,459
Mortgage warehouse	195,924		129,156
Total loans	1,519,283		1,378,554
Allowance for loan losses	(16,421)	$ (16,634)	(16,501)	$ (15,660)	$ (16,102)	$ (15,992)
Loans, net	1,502,862		1,362,053
Working Capital and Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	323,709		300,940
Real Estate Including Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	353,859		343,455
Tax Exempt Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	8,665		8,595
Other Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial, Total	23,713		21,324
1-4 Family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	273,753		250,799
Other Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	3,654		3,826
Recreation Consumer Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	5,676		5,673
Real Estate Home Improvement Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	41,309		38,288
Home Equity [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	112,095		112,426
Other Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	6,714		5,921
Auto [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	166,501		154,538
Unsecured Debt [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer, Total	$ 3,711		$ 3,613

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Acquisitions - Additional Information (Detail) - USD ($)		6 Months Ended
	Jul. 01, 2015	Jun. 30, 2015	Dec. 31, 2014	Apr. 03, 2014
Business Acquisition [Line Items]
Common stock outstanding		9,256,026	9,213,036
Total assets		$ 2,219,307,000	$ 2,076,922,000
Total deposits		1,584,723,000	1,482,319,000
Total net loans		1,502,862,000	1,362,053,000
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]
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
Costs related to the acquisition		$ 1,300,000
Date of acquisition agreement		Apr. 03, 2014
Transaction value is estimated				$ 18,900,000
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
Peoples Bancorp Inc [Member]
Business Acquisition [Line Items]
Common stock issued		2,192,202
Costs related to the acquisition		$ 78,100,000
Peoples Bancorp Inc [Member] | Subsequent Event [Member]
Business Acquisition [Line Items]
Exchange ratio per share	95.00%
Share of common stock outstanding per share	$ 9.75
Common stock outstanding	2,311,858
Market closing price per share	$ 25.32
Total assets	$ 462,700,000
Total deposits	350,600,000
Total net loans	$ 226,600,000
Peoples Bancorp Inc [Member] | Subsequent Event [Member] | Maximum [Member]
Business Acquisition [Line Items]
Share of common stock outstanding per share	$ 33.14
Number of shares owned	100
Horizon Bank [Member] | Pro Forma [Member]
Business Acquisition [Line Items]
Total assets		2,700,000,000
Total deposits		1,900,000,000
Total net loans		$ 1,700,000,000

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Disclosures about Fair Value of Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Fair Value Disclosures [Abstract]
Increase (Decrease) in carrying amount of mortgage servicing rights	$ (18,000)	$ 38,000

XML

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 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).

	June 30, 2015
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash and due from banks	$	43,857	$	43,857	$	—	$	—
Investment securities, held to maturity		162,661		—		167,581		—
Loans held for sale		7,677		—		—		7,677
Loans excluding loan level hedges, net		1,393,414		—		—		1,426,252
Stock in FHLB and FRB		11,080		—		11,080		—
Interest receivable		8,823		—		8,823		—
Liabilities
Non-interest bearing deposits	$	307,215	$	307,215	$	—	$	—
Interest-bearing deposits		1,277,508		—		1,204,516		—
Borrowings		385,236		—		381,302		—
Subordinated debentures		32,719		—		32,698		—
Interest payable		461		—		461		—
	December 31, 2014
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (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

Loans - Recorded Investment of Individual Loan Categories (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	$ 1,518,464		$ 1,377,472
Net loans	1,502,043		1,360,971
Interest Due	3,969		3,832
Deferred Fees / (Costs)	819		1,082
Recorded Investment	1,523,252		1,382,386
Recorded Investment	1,506,831		1,365,885
Allowance for loan losses	(16,421)	$ (16,634)	(16,501)	$ (15,660)	$ (16,102)	$ (15,992)
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	708,776		673,059
Interest Due	1,633		1,583
Deferred Fees / (Costs)	1,170		1,255
Recorded Investment	711,579		675,897
Commercial [Member] | Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	139,823		133,256
Interest Due	802		859
Deferred Fees / (Costs)	26		39
Recorded Investment	140,651		134,154
Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	472,806		383,182
Interest Due	1,330		1,238
Deferred Fees / (Costs)	525		599
Recorded Investment	474,661		385,019
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	336,882		321,231
Interest Due	1,006		1,011
Deferred Fees / (Costs)	(876)		(772)
Recorded Investment	337,012		321,470
Owner Occupied Real Estate [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	238,883		228,380
Interest Due	471		385
Deferred Fees / (Costs)	611		680
Recorded Investment	239,965		229,445
Non Owner Occupied Real Estate [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	313,871		297,299
Interest Due	326		309
Deferred Fees / (Costs)	488		506
Recorded Investment	314,685		298,114
Residential Spec Homes [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	2,606		2,027
Interest Due	2		2
Deferred Fees / (Costs)	18
Recorded Investment	2,626		2,029
Development & Spec Land Loans [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	13,593		12,097
Interest Due	32		28
Deferred Fees / (Costs)	27		30
Recorded Investment	13,652		12,155
Residential Mortgage [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	257,795		242,521
Interest Due	816		737
Deferred Fees / (Costs)	525		599
Recorded Investment	259,136		243,857
Residential Construction [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	19,087		11,505
Interest Due	34		21
Recorded Investment	19,121		11,526
Mortgage Warehousing [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	195,924		129,156
Interest Due	480		480
Recorded Investment	196,404		129,636
Direct Installment [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	44,119		40,137
Interest Due	138		129
Deferred Fees / (Costs)	(398)		(375)
Recorded Investment	43,859		39,891
Direct Installment Purchased [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	179		219
Recorded Investment	179		219
Indirect Installment [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	152,268		141,868
Interest Due	313		314
Deferred Fees / (Costs)			(163)
Recorded Investment	152,581		142,019
Home Equity [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	140,316		139,007
Interest Due	555		568
Deferred Fees / (Costs)	(478)		(234)
Recorded Investment	$ 140,393		$ 139,341

XML

Repurchase Agreements - Summary of Repurchase Agreements Accounted as Secured Borrowings (Detail) $ in Thousands	Jun. 30, 2015 USD ($)
Repurchase Agreement [Line Items]
Repurchase Agreements - Long-term	$ 152,731
Securities lending transactions, Total	165,691
Total borrowings	(12,960)
Gross amount of recognized liabilities for repurchase agreements and securities lending	152,731
U.S. Treasury and Federal Agencies [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	8,468
Federal Agency Collateralized Mortgage Obligations [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	96,071
Federal Agency Mortgage Backed Pools [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	61,151
Remaining Contractual Maturity of the Agreements, Overnight and Continuous [Member]
Repurchase Agreement [Line Items]
Repurchase Agreements - Long-term	57,731
Securities lending transactions, Total	60,168
Total borrowings	(2,437)
Remaining Contractual Maturity of the Agreements, Overnight and Continuous [Member] | U.S. Treasury and Federal Agencies [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	8,468
Remaining Contractual Maturity of the Agreements, Overnight and Continuous [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	41,140
Remaining Contractual Maturity of the Agreements, Overnight and Continuous [Member] | Federal Agency Mortgage Backed Pools [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	10,560
Remaining Contractual Maturity of the Agreements, One to Three Years [Member]
Repurchase Agreement [Line Items]
Repurchase Agreements - Long-term	35,000
Securities lending transactions, Total	87
Total borrowings	34,913
Remaining Contractual Maturity of the Agreements, One to Three Years [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	87
Remaining Contractual Maturity of the Agreements, Three to Five Years [Member]
Repurchase Agreement [Line Items]
Repurchase Agreements - Long-term	50,000
Securities lending transactions, Total	1,561
Total borrowings	48,439
Remaining Contractual Maturity of the Agreements, Three to Five Years [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	1,020
Remaining Contractual Maturity of the Agreements, Three to Five Years [Member] | Federal Agency Mortgage Backed Pools [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	541
Remaining Contractual Maturity of the Agreements, Five to Ten Years [Member]
Repurchase Agreement [Line Items]
Repurchase Agreements - Long-term	10,000
Securities lending transactions, Total	15,987
Total borrowings	(5,987)
Remaining Contractual Maturity of the Agreements, Five to Ten Years [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	7,413
Remaining Contractual Maturity of the Agreements, Five to Ten Years [Member] | Federal Agency Mortgage Backed Pools [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	8,574
Remaining Contractual Maturity of the Agreements, Beyond Ten Years [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	87,888
Total borrowings	(87,888)
Remaining Contractual Maturity of the Agreements, Beyond Ten Years [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	46,412
Remaining Contractual Maturity of the Agreements, Beyond Ten Years [Member] | Federal Agency Mortgage Backed Pools [Member]
Repurchase Agreement [Line Items]
Securities lending transactions, Total	$ 41,476

XML

Non-performing Loans and Impaired Loans - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2015 USD ($) ConsecutivePayment Contract	Dec. 31, 2014 USD ($)
Financing Receivable, Modifications [Line Items]
Non-accrual loans	$ 15,050,000	$ 15,312,000
Non-performing TDRs	4,500,000
Loans acquired included in non-accrual loans	679,000
Loans acquired included in non-performing TDRs	$ 302,000
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 | ConsecutivePayment	6
Restructured loan reported in TDRs	$ 7,800,000
Specific reserves allocated to troubled debt restructuring	$ 792,000
Number TDRs returned to accrual status | Contract	4
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	$ 3,300,000
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

Securities - Amortized Cost and Fair Value of Securities Available for Sale and Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Amortized cost within one year	$ 6,436	$ 6,098
Amortized cost one to five years	50,332	44,720
Amortized cost for five to ten years	15,380	16,147
Amortized cost for after ten years	5,931	6,598
Total amortized cost	78,079	73,563
Total available for sale investment securities, Amortized Cost	327,515	319,746
Within one year, amortized cost	0	0
One to five years, amortized cost	8,184	592
Five to ten years, amortized cost	101,504	99,225
After ten years, amortized cost	27,609	39,582
Total amortized cost	137,297	139,399
Total held to maturity investment securities, amortized cost	162,661	165,767
Fair value within one year	6,477	6,169
Fair value for one to five years	51,057	45,093
Fair value for five to ten years	15,571	16,768
Fair value for after ten years	5,973	6,790
Total fair value	79,078	74,820
Investment securities, available for sale	330,970	323,764
Within one year, fair value	0	0
One to five years, fair value	8,319	593
five to ten years, fair value	105,071	101,323
After ten years, fair value	27,914	40,857
Total fair value	141,304	142,773
Held-to-maturity, Fair Value	167,581	169,904
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	116,674	122,930
Total held to maturity investment securities, amortized cost	3,670	4,039
Investment securities, available for sale	116,942	122,860
Held-to-maturity, Fair Value	3,681	4,073
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	132,762	122,583
Total held to maturity investment securities, amortized cost	21,694	22,329
Investment securities, available for sale	134,950	125,395
Held-to-maturity, Fair Value	$ 22,596	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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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating Activities
Net income	$ 10,086	$ 8,195
Items not requiring (providing) cash
Provision for loan losses	2,520	339
Depreciation and amortization	1,883	1,805
Share based compensation	138	87
Mortgage servicing rights net (recovery) impairment	356	(38)
Premium amortization on securities available for sale, net	1,289	1,132
Gain on sale of investment securities	(124)
Gain on sale of mortgage loans	(5,021)	(3,948)
Proceeds from sales of loans	155,746	93,991
Loans originated for sale	(152,259)	(94,048)
Change in cash value of life insurance	(515)	(485)
Gain on sale of other real estate owned	(206)	(173)
Net change in
Interest receivable	(577)	(432)
Interest payable	(36)	(50)
Other assets	4,099	702
Other liabilities	(1,511)	(1,190)
Net cash provided by operating activities	15,868	5,887
Investing Activities
Purchases of securities available for sale	(47,958)	(52,484)
Proceeds from sales, maturities, calls, and principal repayments of securities available for sale	40,359	35,828
Purchases of securities held to maturity		(4,839)
Proceeds from maturities of securities held to maturity	1,535	7,900
Purchase of Federal Reserve Bank stock		(6)
Proceeds from the sale of FHLB stock	268
Net change in loans	(142,131)	(130,424)
Proceeds on the sale of OREO and repossessed assets	1,793	2,095
Purchases of premises and equipment	(3,587)	(3,326)
Acquisition of SCB		7,925
Purchase of Mortgage Company		(736)
Net cash used in investing activities	(149,721)	(138,067)
Net change in
Deposits	102,404	86,564
Borrowings	34,115	66,993
Proceeds from issuance of stock	389
Dividends paid on common shares	(2,611)	(2,231)
Dividends paid on preferred shares	(63)	(63)
Net cash provided by financing activities	134,234	151,263
Net Change in Cash and Cash Equivalents	381	19,083
Cash and Cash Equivalents, Beginning of Period	43,476	31,721
Cash and Cash Equivalents, End of Period	43,857	50,804
Additional Supplemental Information
Interest paid	6,519	6,527
Income taxes paid	3,700	600
Transfer of loans to other real estate owned	$ (1,384)	1,999
Transfer of available-for-sale securities to held-to-maturity		167,047
The Company purchased all of the capital stock of Summit for $18,896. In conjunction with the acquisition, liabilities were assumed as follows:
Fair value of assets acquired		158,585
Cash paid to retire Summit debt		6,207
Cash paid for the capital stock		$ 1,029

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Non-performing Loans and Impaired Loans - Loans Transferred and Classified as Troubled Debt Restructured Loans (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) Defaults	Jun. 30, 2014 USD ($) Defaults	Jun. 30, 2015 USD ($) Defaults	Jun. 30, 2014 USD ($) Defaults
Financing Receivable, Modifications [Line Items]
Number of Defaults	3	2	5	5
Unpaid Principal Balance | $	$ 192	$ 277	$ 2,575	$ 793
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	2		3	2
Unpaid Principal Balance | $	$ 111		$ 2,462	$ 371
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults				2
Unpaid Principal Balance | $				$ 371
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	2		3
Unpaid Principal Balance | $	$ 111		$ 2,462
Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	1	1	1
Unpaid Principal Balance | $	$ 81	$ 226	$ 81	$ 226
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	1	1	1
Unpaid Principal Balance | $	$ 81	$ 226	$ 81	$ 226
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults		1	1	2
Unpaid Principal Balance | $		$ 51	$ 32	$ 196
Consumer [Member] | Home Equity [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults		1	1	2
Unpaid Principal Balance | $		$ 51	$ 32	$ 196

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Acquisitions - Schedule of Preliminary Purchase Price of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Apr. 03, 2014
ASSETS
Cash and due from banks				$ 15,161
Total loans				124,081
Premises and equipment, net				2,548
FRB and FHLB stock				2,136
Goodwill	$ 28,176	$ 28,176		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			$ 1,029	6,207
Retirement of Holding Company Debt			$ 6,207	1,029
Total estimated purchase price				19,925
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
Residential Mortgage [Member]
ASSETS
Total loans				43,448
Commercial [Member]
ASSETS
Total loans				70,441
Consumer [Member]
ASSETS
Total loans				$ 10,192

XML

Securities (Tables)

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Fair Value of Securities

The fair value of securities is as follows:

June 30, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	28,308	$	35	$	(104	)	$	28,239
State and municipal		49,739		1,212		(168	)		50,783
Federal agency collateralized mortgage obligations		116,674		973		(705	)		116,942
Federal agency mortgage-backed pools		132,762		2,661		(473	)		134,950
Corporate notes		32		24		—			56
Total available for sale investment securities	$	327,515	$	4,905	$	(1,450	)	$	330,970
Held to maturity
U.S. Treasury and federal agencies	$	9,845	$	102	$	—		$	9,947
State and municipal		127,452		4,416		(511	)		131,357
Federal agency collateralized mortgage obligations		3,670		33		(22	)		3,681
Federal agency mortgage-backed pools		21,694		1,064		(162	)		22,596
Total held to maturity investment securities	$	162,661	$	5,615	$	(695	)	$	167,581

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 June 30, 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.

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Within one year	$	6,436	$	6,477	$	6,098	$	6,169
One to five years		50,332		51,057		44,720		45,093
Five to ten years		15,380		15,571		16,147		16,768
After ten years		5,931		5,973		6,598		6,790
		78,079		79,078		73,563		74,820
Federal agency collateralized mortgage obligations		116,674		116,942		122,930		122,860
Federal agency mortgage-backed pools		132,762		134,950		122,583		125,395
Private labeled mortgage-backed pools		—		—		670		689
Total available for sale investment securities	$	327,515	$	330,970	$	319,746	$	323,764
Held to maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		8,184		8,319		592		593
Five to ten years		101,504		105,071		99,225		101,323
After ten years		27,609		27,914		39,582		40,857
		137,297		141,304		139,399		142,773
Federal agency collateralized mortgage obligations		3,670		3,681		4,039		4,073
Federal agency mortgage-backed pools		21,694		22,596		22,329		23,058
Total held to maturity investment securities	$	162,661	$	167,581	$	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
June 30, 2015	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and federal agencies	$	4,469	$	(14	)	$	13,897	$	(90	)	$	18,366	$	(104	)
State and municipal		38,471		(667	)		1,249		(12	)		39,720		(679	)
Federal agency collateralized mortgage obligations		24,435		(170	)		28,098		(557	)		52,533		(727	)
Federal agency mortgage-backed pools		23,044		(208	)		26,017		(427	)		49,061		(635	)
Total temporarily impaired securities	$	90,419	$	(1,059	)	$	69,261	$	(1,086	)	$	159,680	$	(2,145	)

	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 June 30				Six Months Ended June 30
	2015		2014		2015			2014
Sales of securities available for sale (Unaudited)
Proceeds	$	—	$	—	$	13,332		$	—
Gross gains		—		—		147			—
Gross losses		—		—		(23	)		—

XML

Acquisitions (Tables) - Summit [Member]

6 Months Ended

Jun. 30, 2015

Schedule of Preliminary Purchase Price of Assets Acquired and Liabilities Assumed

the preliminary purchase price for the Summit acquisition is allocated as follows:

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

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

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Accounting for Certain Loans Acquired in a Transfer - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Loans Purchased With Evidence Of Credit Deterioration [Member]
Business Acquisition [Line Items]
Allowances for loan losses	$ 76,000	$ 0

XML

Acquisitions - Schedule of Acquired Loans Accounted for in Accordance with ASC 310-30 (Detail) $ in Thousands	Apr. 03, 2014 USD ($)
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

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Loans (Tables)

6 Months Ended

Jun. 30, 2015

Amounts of Loans

	June 30 2015			December 31 2014
Commercial
Working capital and equipment	$	323,709		$	300,940
Real estate, including agriculture		353,859			343,455
Tax exempt		8,665			8,595
Other		23,713			21,324
Total		709,946			674,314
Real estate
1–4 family		273,753			250,799
Other		3,654			3,826
Total		277,407			254,625
Consumer
Auto		166,501			154,538
Recreation		5,676			5,673
Real estate/home improvement		41,309			38,288
Home equity		112,095			112,426
Unsecured		3,711			3,613
Other		6,714			5,921
Total		336,006			320,459
Mortgage warehouse		195,924			129,156
Total loans		1,519,283			1,378,554
Allowance for loan losses		(16,421	)		(16,501	)
Loans, net	$	1,502,862		$	1,362,053

Recorded Investment of Individual Loan Categories

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

June 30, 2015	Loan Balance			Interest Due		Deferred Fees / (Costs)			Recorded Investment
Owner occupied real estate	$	238,883		$	471	$	611		$	239,965
Non owner occupied real estate		313,871			326		488			314,685
Residential spec homes		2,606			2		18			2,626
Development & spec land loans		13,593			32		27			13,652
Commercial and industrial		139,823			802		26			140,651
Total commercial		708,776			1,633		1,170			711,579
Residential mortgage		257,795			816		525			259,136
Residential construction		19,087			34		—			19,121
Mortgage warehouse		195,924			480		—			196,404
Total real estate		472,806			1,330		525			474,661
Direct installment		44,119			138		(398	)		43,859
Direct installment purchased		179			—		—			179
Indirect installment		152,268			313		—			152,581
Home equity		140,316			555		(478	)		140,393
Total consumer		336,882			1,006		(876	)		337,012
Total loans		1,518,464			3,969		819			1,523,252
Allowance for loan losses		(16,421	)		—		—			(16,421	)
Net loans	$	1,502,043		$	3,969	$	819		$	1,506,831

December 31, 2014	Loan Balance			Interest Due		Deferred Fees / (Costs)			Recorded 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

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:

	June 30 2015 Heartland		June 30 2015 Summit		June 30 2015 Total
Commercial		14,586		55,822	$	70,408
Real estate		8,284		20,617		28,901
Consumer		6,243		7,009		13,252
Outstanding balance	$	29,113	$	83,448	$	112,561
Carrying amount, net of allowance of $283					$	112,278

	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

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Accounting for Certain Loans Acquired in a Transfer (Tables)

6 Months Ended

Jun. 30, 2015

Loans Purchased With Evidence Of Credit Deterioration [Member]

Accretable Yield or Income Expected to be Collected

Accretable yield, or income expected to be collected for the six months ended June 30, is as follows:

	Six Months Ended June 30, 2015
	Heartland			Summit			Total
Balance at January 1	$	2,400		$	1,268		$	3,668
Additions		—			—			—
Accretion		(205	)		(180	)		(385	)
Reclassification from nonaccretable difference		—			—			—
Disposals		(117	)		(49	)		(166	)
Balance at June 30	$	2,078		$	1,039		$	3,117

	Six Months Ended June 30, 2014
	Heartland			Summit		Total
Balance at January 1	$	3,185		$	—	$	3,185
Additions		—			1,758		1,758
Accretion		(288	)		—		(288	)
Reclassification from nonaccretable difference		—			—		—
Disposals		(95	)		—		(95	)
Balance at June 30	$	2,802		$	1,758	$	4,560

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Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) - 6 months ended Jun. 30, 2015 - $ / shares	Total
Cash dividends on preferred stock, rate	1.00%
Cash dividends on common stock, per share	$ 0.28
Retained Earnings [Member]
Cash dividends on preferred stock, rate	1.00%
Cash dividends on common stock, per share	$ 0.28

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Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 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 June 30						Six Months Ended June 30
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance at beginning of the period	$	16,634		$	16,102		$	16,501		$	15,992
Loans charged-off:
Commercial
Owner occupied real estate		1,422			—			1,422			—
Non owner occupied real estate		—			—			16			22
Residential development		—			—			—			—
Development & Spec Land Loans		—			166			—			173
Commercial and industrial		253			127			253			127
Total commercial		1,675			293			1,691			322
Real estate
Residential mortgage		164			172			186			194
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		164			172			186			194
Consumer
Direct Installment		96			44			155			77
Direct Installment Purchased		—			—			—			—
Indirect Installment		196			341			565			568
Home Equity		304			247			504			431
Total consumer		596			632			1,224			1,076
Total loans charged-off		2,435			1,097			3,101			1,592
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		78			2			86			6
Non owner occupied real estate		—			74			—			75
Residential development		—			—			—			—
Development & Spec Land Loans		—			—			—			—
Commercial and industrial		14			32			33			417
Total commercial		92			108			119			498
Real estate
Residential mortgage		3			3			5			7
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		3			3			5			7
Consumer
Direct Installment		47			21			76			39
Direct Installment Purchased		—			—			—			—
Indirect Installment		134			147			235			266
Home Equity		40			37			66			111
Total consumer		221			205			377			416
Total loan recoveries		316			316			501			921
Net loans charged-off (recovered)		2,119			781			2,600			671
Provision charged to operating expense
Commercial		2,093			(93	)		2,048			119
Real estate		(29	)		(383	)		904			(987	)
Consumer		(158	)		815			(432	)		1,207
Total provision charged to operating expense		1,906			339			2,520			339
Balance at the end of the period	$	16,421		$	15,660		$	16,421		$	15,660

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:

June 30, 2015	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,291	$	—	$	—	$	—	$	1,291
Collectively evaluated for impairment		6,841		3,044		1,319		3,672		14,876
Loans acquired with deteriorated credit quality		254		—		—		—		254
Total ending allowance balance	$	8,386	$	3,044	$	1,319	$	3,672	$	16,421
Loans:
Individually evaluated for impairment	$	10,274	$	—	$	—	$	—	$	10,274
Collectively evaluated for impairment		699,576		278,257		196,404		337,012		1,511,249
Loans acquired with deteriorated credit quality		1,729		—		—		—		1,729
Total ending loans balance	$	711,579	$	278,257	$	196,404	$	337,012	$	1,523,252

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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Accounting Policies - Summary of Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic earnings per share
Net income	$ 4,728	$ 4,778	$ 10,086	$ 8,195
Less: Preferred stock dividends	31	32	63	63
Net income available to common shareholders	$ 4,697	$ 4,746	$ 10,023	$ 8,132
Weighted average common shares outstanding	9,240,005	9,182,986	9,228,075	8,908,492
Basic Earnings Per Share	$ 0.51	$ 0.52	$ 1.09	$ 0.91
Diluted earnings per share
Net income available to common shareholders	$ 4,697	$ 4,746	$ 10,023	$ 8,132
Weighted average common shares outstanding	9,240,005	9,182,986	9,228,075	8,908,492
Effect of dilutive securities:
Warrants	324,698	303,399	323,198	308,060
Weighted average shares outstanding	9,637,586	9,560,939	9,615,551	9,293,423
Diluted Earnings Per Share	$ 0.49	$ 0.50	$ 1.04	$ 0.88
Restricted Stock [Member]
Effect of dilutive securities:
Effect of dilutive securities	34,892	38,003	30,816	38,717
Stock Options [Member]
Effect of dilutive securities:
Effect of dilutive securities	37,991	36,551	33,462	38,154

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Accounting for Certain Loans Acquired in a Transfer - Amounts of Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	$ 1,519,283	$ 1,378,554
Carrying amount, net of allowance	1,502,043	1,360,971
Loans Purchased With Evidence Of Credit Deterioration [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	112,561	136,487
Carrying amount, net of allowance	112,278	136,128
Loans Purchased With Evidence Of Credit Deterioration [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	70,408	84,678
Loans Purchased With Evidence Of Credit Deterioration [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	28,901	34,387
Loans Purchased With Evidence Of Credit Deterioration [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	13,252	17,422
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	29,113	36,488
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	14,586	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	8,284	9,734
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	6,243	8,447
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	83,448	99,999
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	55,822	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	20,617	24,653
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	$ 7,009	$ 8,975

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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	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	$ 330,970	$ 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	28,239	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	50,783	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	116,942	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	134,950	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	56	45
Recurring Basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	330,970	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	28,239	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	50,783	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	116,942	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	134,950	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	56	45
Recurring Basis [Member] | Hedged Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	109,448	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	751	447
Recurring Basis [Member] | Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	(4,177)	(4,546)
Recurring Basis [Member] | Commitments to Originate Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	(32)
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	330,970	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	28,239	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	50,783	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	116,942	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	134,950	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	56	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	109,448	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	751	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	(4,177)	$ (4,546)
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Commitments to Originate Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	$ (32)

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 43,857	$ 43,476
Investment securities, available for sale	330,970	323,764
Investment securities, held to maturity (fair value of $167,581 and $169,904)	162,661	165,767
Loans held for sale	7,677	6,143
Loans, net of allowance for loan losses of $16,421 and $16,501	1,502,862	1,362,053
Premises and equipment, net	54,778	52,461
Federal Reserve and Federal Home Loan Bank stock	11,080	11,348
Goodwill	28,176	28,176
Other intangible assets	3,531	3,965
Interest receivable	8,823	8,246
Cash value of life insurance	39,897	39,382
Other assets	24,995	32,141
Total assets	2,219,307	2,076,922
Liabilities
Non-interest bearing	307,215	267,667
Interest bearing	1,277,508	1,214,652
Total deposits	1,584,723	1,482,319
Borrowings	385,236	351,198
Subordinated debentures	32,719	32,642
Interest payable	461	497
Other liabilities	14,037	15,852
Total liabilities	$ 2,017,176	$ 1,882,508
Commitments and contingent liabilities
Stockholders' Equity
Common stock, no par value Authorized, 22,500,000 shares Issued, 9,313,779 and 9,278,916 shares Outstanding, 9,256,026 and 9,213,036 shares	$ 0	$ 0
Additional paid-in capital	46,622	45,916
Retained earnings	141,889	134,477
Accumulated other comprehensive income	1,120	1,521
Total stockholders' equity	202,131	194,414
Total liabilities and stockholders' equity	2,219,307	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 - Fair Value of Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	$ 327,515	$ 319,746
Held-to-maturity, Amortized Cost	162,661	165,767
Gross Unrealized Gains	4,905	5,697
Held-to-maturity, Gross Unrealized Gains	5,615	4,244
Gross Unrealized Losses	(1,450)	(1,679)
Held-to-maturity, Gross Unrealized Losses	(695)	(107)
Available-for-sale Securities, Fair Value	330,970	323,764
Held-to-maturity, Fair Value	167,581	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	28,308	26,996
Held-to-maturity, Amortized Cost	9,845	9,804
Gross Unrealized Gains	35	56
Held-to-maturity, Gross Unrealized Gains	102	82
Gross Unrealized Losses	(104)	(229)
Available-for-sale Securities, Fair Value	28,239	26,823
Held-to-maturity, Fair Value	9,947	9,886
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	49,739	46,535
Held-to-maturity, Amortized Cost	127,452	129,595
Gross Unrealized Gains	1,212	1,462
Held-to-maturity, Gross Unrealized Gains	4,416	3,398
Gross Unrealized Losses	(168)	(45)
Held-to-maturity, Gross Unrealized Losses	(511)	(106)
Available-for-sale Securities, Fair Value	50,783	47,952
Held-to-maturity, Fair Value	131,357	132,887
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	116,674	122,930
Held-to-maturity, Amortized Cost	3,670	4,039
Gross Unrealized Gains	973	975
Held-to-maturity, Gross Unrealized Gains	33	35
Gross Unrealized Losses	(705)	(1,045)
Held-to-maturity, Gross Unrealized Losses	(22)	(1)
Available-for-sale Securities, Fair Value	116,942	122,860
Held-to-maturity, Fair Value	3,681	4,073
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	132,762	122,583
Held-to-maturity, Amortized Cost	21,694	22,329
Gross Unrealized Gains	2,661	3,172
Held-to-maturity, Gross Unrealized Gains	1,064	729
Gross Unrealized Losses	(473)	(360)
Held-to-maturity, Gross Unrealized Losses	(162)
Available-for-sale Securities, Fair Value	134,950	125,395
Held-to-maturity, Fair Value	22,596	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	24	13
Available-for-sale Securities, Fair Value	$ 56	$ 45

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 4,728	$ 4,778	$ 10,086	$ 8,195
Change in fair value of derivative instruments:
Change in fair value of derivative instruments for the period	511	(317)	182	(542)
Income tax effect	(179)	111	(64)	190
Changes from derivative instruments	332	(206)	118	(352)
Change in securities available-for-sale:
Unrealized appreciation (depreciation) for the period on AFS securities	(2,364)	2,336	(650)	6,762
Unrealized depreciation for the period on held-to-maturity	(158)	(108)	(272)	(108)
Reclassification adjustment for securities gains realized in income	0	0	124	0
Income tax effect	882	(779)	279	(2,329)
Unrealized gains (losses) on available-for-sale securities	(1,640)	1,449	(519)	4,325
Other Comprehensive Income (Loss), Net of Tax	(1,308)	1,243	(401)	3,973
Comprehensive Income	$ 3,420	$ 6,021	$ 9,685	$ 12,168

XML

Allowance for Loan Losses - Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Total ending allowance balance	$ 16,421	$ 16,634	$ 16,501	$ 15,660	$ 16,102	$ 15,992
Total ending loans balance	10,274			7,715
Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Individually evaluated for impairment	1,291			1,589
Allowance For Loan Losses, Collectively evaluated for impairment	14,876			14,418
Total ending allowance balance	16,421			16,501
Allowance for Loan Losses [Member] | Loans and Allowance Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Loans acquired with deteriorated credit quality	254			494
Commercial [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Individually evaluated for impairment	1,291			1,589
Allowance For Loan Losses, Collectively evaluated for impairment	6,841			5,827
Total ending allowance balance	8,386			7,910
Commercial [Member] | Allowance for Loan Losses [Member] | Loans and Allowance Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Loans acquired with deteriorated credit quality	254			494
Real Estate [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	3,044			2,508
Total ending allowance balance	3,044			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	3,672			4,951
Total ending allowance balance	3,672			4,951
Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Individually evaluated for impairment	10,274			11,055
Loans: Collectively evaluated for impairment	1,511,249			1,370,740
Total ending loans balance	1,523,252			1,382,386
Loans [Member] | Loans and Allowance Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans acquired with deteriorated credit quality	1,729			591
Loans [Member] | Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Individually evaluated for impairment	10,274			11,055
Loans: Collectively evaluated for impairment	699,576			664,251
Total ending loans balance	711,579			675,897
Loans [Member] | Commercial [Member] | Loans and Allowance Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans acquired with deteriorated credit quality	1,729			591
Loans [Member] | Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	278,257			255,383
Total ending loans balance	278,257			255,383
Loans [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	337,012			321,470
Total ending loans balance	337,012			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	1,319			1,132
Total ending allowance balance	1,319			1,132
Mortgage Warehousing [Member] | Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	196,404			129,636
Total ending loans balance	$ 196,404			$ 129,636

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 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         June 30, 2015			Liability Derivatives June 30, 2015
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate contracts	Loans	$	—	Other liabilities	$	1,022
Interest rate contracts	Other Assets		1,022	Other liabilities		3,155
Total derivatives designated as hedging instruments			1,022			4,177
Derivatives not designated as hedging instruments
Mortgage loan contracts	Other assets		751	Other liabilities		32
Total derivatives not designated as hedging instruments			751			32
Total derivatives		$	1,773		$	4,209

	Asset Derivative December 31, 2014			Liability Derivatives 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 and six-month periods ending June 30 is as follows:

	Comprehensive Income on Derivative (Effective Portion)					Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended June 30					Six Months Ended June 30
Derivative in cash flow hedging relationship	2015 (Unaudited)		2014 (Unaudited)			2015 (Unaudited)		2014 (Unaudited)
Interest rate contracts	$	332	$	(206	)	$	118	$	(352	)

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

		Amount of Gain (Loss) Recognized on Derivative						Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended June 30						Six Months Ended June 30
Derivative in fair value hedging relationship	Location of gain (loss) recognized on derivative	2015 (Unaudited)			2014 (Unaudited)			2015 (Unaudited)			2014 (Unaudited)
Interest rate contracts	Interest income - loans	$	(1,186	)	$	544		$	(186	)	$	751
Interest rate contracts	Interest income - loans		1,186			(544	)		186			(751	)
Total		$	—		$	—		$	—		$	—

		Amount of Gain (Loss) Recognized on Derivative				Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended June 30				Six Months Ended June 30
Derivative not designated as hedging relationship	Location of gain (loss) recognized on derivative	2015 (Unaudited)		2014 (Unaudited)		2015 (Unaudited)		2014 (Unaudited)
Mortgage contracts	Other income - gain on sale of loans	$	83	$	210	$	272	$	450

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Non-performing Loans and Impaired Loans - Payment Status by Class of Loan (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 3,533	$ 5,197
Loans Not Past Due	1,514,931	1,372,275
Total	$ 1,518,464	$ 1,377,472
Total Past Due, Percentage of Total Loans	0.23%	0.38%
Loans Not Past Due, Percentage of Total Loans	99.77%	99.62%
30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 2,696	$ 3,807
Total Past Due, Percentage of Total Loans	0.18%	0.28%
60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 630	$ 1,275
Total Past Due, Percentage of Total Loans	0.04%	0.09%
Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 207	$ 115
Total Past Due, Percentage of Total Loans	0.01%	0.01%
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 1,104	$ 1,181
Loans Not Past Due	707,672	671,878
Total	708,776	673,059
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	178	748
Loans Not Past Due	238,705	227,632
Total	238,883	228,380
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	289	413
Loans Not Past Due	313,582	296,886
Total	313,871	297,299
Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	2,606	2,027
Total	2,606	2,027
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	13,593	12,097
Total	13,593	12,097
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	637	20
Loans Not Past Due	139,186	133,236
Total	139,823	133,256
Commercial [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	830	535
Commercial [Member] | 30 - 59 Days Past Due [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	157	103
Commercial [Member] | 30 - 59 Days Past Due [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	82	413
Commercial [Member] | 30 - 59 Days Past Due [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	591	19
Commercial [Member] | 60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	67	646
Commercial [Member] | 60 - 89 Days Past Due [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	21	645
Commercial [Member] | 60 - 89 Days Past Due [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	46	1
Commercial [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	207
Commercial [Member] | Greater than 90 Days Past Due [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	207
Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	455	1,266
Loans Not Past Due	472,351	381,916
Total	472,806	383,182
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	455	1,266
Loans Not Past Due	257,340	241,255
Total	257,795	242,521
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	19,087	11,505
Total	19,087	11,505
Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	195,924	129,156
Total	195,924	129,156
Real Estate [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	308	1,033
Real Estate [Member] | 30 - 59 Days Past Due [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	308	1,033
Real Estate [Member] | 60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	147	193
Real Estate [Member] | 60 - 89 Days Past Due [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	147	193
Real Estate [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		40
Real Estate [Member] | Greater than 90 Days Past Due [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		40
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,974	2,750
Loans Not Past Due	334,908	318,481
Total	336,882	321,231
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	179	127
Loans Not Past Due	43,940	40,010
Total	44,119	40,137
Consumer [Member] | Direct Installment Purchased [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	179	219
Total	179	219
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	851	1,332
Loans Not Past Due	151,417	140,536
Total	152,268	141,868
Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	944	1,291
Loans Not Past Due	139,372	137,716
Total	140,316	139,007
Consumer [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,558	2,239
Consumer [Member] | 30 - 59 Days Past Due [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	138	113
Consumer [Member] | 30 - 59 Days Past Due [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	721	1,042
Consumer [Member] | 30 - 59 Days Past Due [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	699	1,084
Consumer [Member] | 60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	416	436
Consumer [Member] | 60 - 89 Days Past Due [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	41	4
Consumer [Member] | 60 - 89 Days Past Due [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	130	243
Consumer [Member] | 60 - 89 Days Past Due [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 245	189
Consumer [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		75
Consumer [Member] | Greater than 90 Days Past Due [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		10
Consumer [Member] | Greater than 90 Days Past Due [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		47
Consumer [Member] | Greater than 90 Days Past Due [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		$ 18

XML

Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Accumulated Other Comprehensive Income

Note 12 – Accumulated Other Comprehensive Income

	June 30 2015			December 31 2014
Unrealized gain on securities available for sale	$	3,455		$	4,018
Unamortized gain on securities held to maturity, previously transferred from AFS		1,423			1,658
Unrealized loss on derivative instruments		(3,155	)		(3,337	)
Tax effect		(603	)		(818	)
Total accumulated other comprehensive income	$	1,120		$	1,521

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Disclosures about Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 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:

	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
June 30, 2015
Available-for-sale securities
U.S. Treasury and federal agencies	$	28,239		$	—	$	28,239		$	—
State and municipal		50,783			—		50,783			—
Federal agency collateralized mortgage obligations		116,942			—		116,942			—
Federal agency mortgage-backed pools		134,950			—		134,950			—
Corporate notes		56			—		56			—
Total available-for-sale securities		330,970			—		330,970			—
Hedged loans		109,448			—		109,448			—
Forward sale commitments		751			—		751			—
Interest rate swap agreements		(4,177	)		—		(4,177	)		—
Commitments to originate loans		(32	)		—		(32	)		—
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	)		—

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 June 30						Six Months Ended June 30
Non Interest Income Total gains and losses from:	2015 (Unaudited)			2014 (Unaudited)			2015 (Unaudited)			2014 (Unaudited)
Hedged loans	$	(1,186	)	$	544		$	(186	)	$	751
Fair value interest rate swap agreements		1,186			(544	)		186			(751	)
Derivative loan commitments		83			210			272			450
	$	83		$	210		$	272		$	450

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):

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2015
Impaired loans	$	8,978	$	—	$	—	$	8,978
Mortgage servicing rights		8,279		—		—		8,279
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 June 30, 2015		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Impaired loans	$	8,978	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	10% - 15% (12%)
Mortgage servicing rights	$	8,279	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default	10% - 15% (12%), 4% - 7% (4.6%), 1% - 10%  (4.5%)
	Fair Value at December 31, 2014		Valuation Technique	Unobservable Inputs	Range (Weighted 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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Future Accounting Matters

6 Months Ended

Jun. 30, 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. Adoption of the ASU is not expected to have a significant effect on the Company’s consolidated financial statements.

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

The amendments to the Consolidation Analysis, are 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. Adoption of the ASU is not expected to have a significant effect on the Company’s consolidated financial statements.

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Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 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	$ 111.7	$ 102.7

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Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2015 - 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	10,086			10,086
Other comprehensive income, net of tax	(401)				(401)
Amortization of unearned compensation	179		179
Exercise of stock options	290		290
Tax benefit related to stock options	99		99
Stock option expense	138		138
Cash dividends on preferred stock	(63)			(63)
Cash dividends on common stock	(2,611)			(2,611)
Ending Balances at Jun. 30, 2015	$ 202,131	$ 12,500	$ 46,622	$ 141,889	$ 1,120

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Investment securities, held to maturity fair value	$ 167,581	$ 169,904
Allowances for loan losses	$ 16,421	$ 16,501
Common stock, par value
Common stock, shares authorized	22,500,000	22,500,000
Common stock, shares issued	9,313,779	9,278,916
Common stock, shares outstanding	9,256,026	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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Non-performing Loans and Impaired Loans

6 Months Ended

Jun. 30, 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:

June 30, 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	$	4,447	$	—	$	—	$	150	$	4,597
Non owner occupied real estate		4,898		207		2,352		68		7,525
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		477		—		785		—		1,262
Total commercial		9,822		207		3,137		218		13,384
Real estate
Residential mortgage		2,319		—		760		2,482		5,561
Residential construction		—		—		258		—		258
Mortgage warehouse		—		—		—		—		—
Total real estate		2,319		—		1,018		2,482		5,819
Consumer
Direct Installment		447		—		—		—		447
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		405		—		—		—		405
Home Equity		2,057		—		368		571		2,996
Total Consumer		2,909		—		368		571		3,848
Total	$	15,050	$	207	$	4,523	$	3,271	$	23,051

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 $15.1 million of non-accrual loans and the $4.5 million of non-performing TDRs at June 30, 2015 were $679,000 and $302,000, 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, which is the appraised value less estimated selling costs. 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 June 30, 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 June 30, 2015, the Company had $7.8 million in TDRs and $3.3 million were performing according to the restructured terms and four TDR were returned to accrual status during the first six months of 2015. There was $792,000 of specific reserves allocated to TDRs at June 30, 2015 based on the discounted cash flows or when appropriate the fair value of the collateral.

Loans transferred and classified as troubled debt restructuring during the three and six months ended June 30, 2015 and 2014, segregated by class, are shown in the table below.

	Three Months Ending June 30, 2015				Three Months Ending June 30, 2014				Six Months Ending June 30, 2015				Six Months Ending June 30, 2014
	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Commercial
Owner occupied real estate		2	$	111		—	$	—		3	$	2,462		—	$	—
Non owner occupied real estate		—		—		—		—		—		—		—		—
Residential development		—		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		2		371
Total commercial		2		111		—		—		3		2,462		2		371
Real estate
Residential mortgage		1		81		1		226		1		81		1		226
Residential construction		—		—		—		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—		—		—		—
Total real estate		1		81		1		226		1		81		1		226
Consumer
Direct Installment		—		—		—		—		—		—		—		—
Direct Installment Purchased		—		—		—		—		—		—		—		—
Indirect Installment		—		—		—		—		—		—		—		—
Home Equity		—		—		1		51		1		32		2		196
Total Consumer		—		—		1		51		1		32		2		196
		—		—						—		—
Total		3	$	192		2	$	277		5	$	2,575		5	$	793

Troubled debt restructured loans which had payment defaults during the three and six months ended June 30, 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.

	Three Months Ending June 30, 2015				Three Months Ending June 30, 2014				Six Months Ending June 30, 2015				Six Months Ending June 30, 2014
	Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance		Number of Defaults		Unpaid Principal Balance
Commercial
Owner occupied real estate		—	$	—		—	$	—		1	$	2,352		—	$	—
Non owner occupied real estate		—		—		—		—		—		—		—		—
Residential development		—		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		2		371
Total commercial		—		—		—		—		1		2,352		2		371
Real estate
Residential mortgage		1		81		1		223		1		81		2		377
Residential construction		—		—		—		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—		—		—		—
Total real estate		1		81		1		223		1		81		2		377
Consumer
Direct Installment		—		—		—		—		—		—		—		—
Direct Installment Purchased		—		—		—		—		—		—		—		—
Indirect Installment		—		—		—		—		—		—		—		—
Home Equity		1		32		1		51		1		32		2		196
Total Consumer		1		32		1		51		1		32		2		196
		—		—						—		—
Total		2	$	113		2	$	274		3	$	2,465		6	$	944

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

							Three Months Ending				Six Months Ending
June 30, 2015	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	1,605	$	1,606	$	—	$	1,350	$	17	$	1,118	$	17
Non owner occupied real estate		2,820		2,824		—		3,168		7		3,270		14
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		379		379		—		639		—		599		—
Total commercial		4,804		4,809		—		5,157		24		4,987		31
With an allowance recorded
Commercial
Owner occupied real estate		2,991		2,991		593		4,366		54		1,992		54
Non owner occupied real estate		1,590		1,590		200		1,590		—		1,590		—
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		884		884		498		1,008		—		974		—
Total commercial		5,465		5,465		1,291		6,964		54		4,556		54
Total	$	10,269	$	10,274	$	1,291	$	12,121	$	78	$	9,543	$	85

							Three Months Ending				Six Months Ending
June 30, 2014	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	2,121	$	2,124	$	—	$	1,885	$	40	$	1,432	$	51
Non owner occupied real estate		3,244		3,246		—		3,270		93		3,283		98
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		283		283		—		441		—		466		—
Total commercial		5,648		5,653		—		5,596		133		5,181		149
With an allowance recorded
Commercial
Owner occupied real estate		—		—		—		—		—		—		—
Non owner occupied real estate		340		340		170		342		—		347		—
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		1,722		1,722		965		1,710		—		1,570		2
Total commercial		2,062		2,062		1,135		2,052		—		1,917		2
Total	$	7,710	$	7,715	$	1,135	$	7,648	$	133	$	7,098	$	151

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

June 30, 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	$	157		$	21		$	—		$	178		$	238,705		$	238,883
Non owner occupied real estate		82			—			207			289			313,582			313,871
Residential development		—			—			—			—			2,606			2,606
Development & Spec Land Loans		—			—			—			—			13,593			13,593
Commercial and industrial		591			46			—			637			139,186			139,823
Total commercial		830			67			207			1,104			707,672			708,776
Real estate
Residential mortgage		308			147			—			455			257,340			257,795
Residential construction		—			—			—			—			19,087			19,087
Mortgage warehouse		—			—			—			—			195,924			195,924
Total real estate		308			147			—			455			472,351			472,806
Consumer
Direct Installment		138			41			—			179			43,940			44,119
Direct Installment Purchased		—			—			—			—			179			179
Indirect Installment		721			130			—			851			151,417			152,268
Home Equity		699			245			—			944			139,372			140,316
Total consumer		1,558			416			—			1,974			334,908			336,882
Total	$	2,696		$	630		$	207		$	3,533		$	1,514,931		$	1,518,464
Percentage of total loans		0.18	%		0.04	%		0.01	%		0.23	%		99.77	%

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.

June 30, 2015	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	224,414		$	6,299		$	8,170		$	—		$	238,883
Non owner occupied real estate		303,292			2,442			8,137			—			313,871
Residential development		2,606			—			—			—			2,606
Development & Spec Land Loans		13,520			73			—			—			13,593
Commercial and industrial		136,586			991			2,246			—			139,823
Total commercial		680,416			9,805			18,553			—			708,776
Real estate
Residential mortgage		252,234			—			5,561			—			257,795
Residential construction		18,829			—			258			—			19,087
Mortgage warehouse		195,924			—			—			—			195,924
Total real estate		466,987			—			5,819			—			472,806
Consumer
Direct Installment		43,672			—			447			—			44,119
Direct Installment Purchased		179			—			—			—			179
Indirect Installment		151,863			—			405			—			152,268
Home Equity		137,320			—			2,996			—			140,316
Total Consumer		333,034			—			3,848			—			336,882
Total	$	1,480,437		$	9,805		$	28,220		$	—		$	1,518,464
Percentage of total loans		97.50	%		0.65	%		1.86	%		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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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 10, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
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		9,256,026

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Repurchase Agreements

6 Months Ended

Jun. 30, 2015

Text Block [Abstract]

Repurchase Agreements

Note 8 – Repurchase Agreements

The Company transfers various securities to customers in exchange for cash at the end of each business day and agrees to reaquire the securities at the end of the next business day for the cash exchanged plus interest. The process is repeated at the end of each business day until the agreement is terminated. The securities underlying the agreement remained under the Bank’s control.

The following table shows repurchase agreements accounted for as secured borrowings (in thousands):

	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous			Up to one year		One to three years		Three to five years		Five to ten years			Beyond ten years			Total
Repurchase Agreements and repurchase-to-maturity transactions
Repurchase Agreements - Long-term	$	57,731		$	—	$	35,000	$	50,000	$	10,000		$	—		$	152,731
Securities lending transactions
U.S. Treasury and federal agencies	$	8,468		$	—	$	—	$	—	$	—		$	—		$	8,468
Federal agency collateralized mortgage obligations		41,140			—		87		1,020		7,413			46,412			96,071
Federal agency mortgage-backed pools		10,560			—		—		541		8,574			41,476			61,151
Total		60,168			—		87		1,561		15,987			87,888			165,691
Total borrowings	$	(2,437	)	$	—	$	34,913	$	48,439	$	(5,987	)	$	(87,888	)	$	(12,960	)
Gross amount of recognized liabilities for repurchase agreements and securities lending																$	152,731

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Interest Income
Loans receivable	$ 17,981	$ 16,631	$ 34,843	$ 29,585
Investment securities
Taxable	2,067	2,395	4,221	4,785
Tax exempt	1,079	1,096	2,156	2,219
Total interest income	21,127	20,122	41,220	36,589
Interest Expense
Deposits	1,237	1,355	2,469	2,632
Borrowed funds	1,539	1,478	3,018	2,900
Subordinated debentures	501	501	997	997
Total interest expense	3,277	3,334	6,484	6,529
Net Interest Income	17,850	16,788	34,736	30,060
Provision for loan losses	1,906	339	2,520	339
Net Interest Income after Provision for Loan Losses	15,944	16,449	32,216	29,721
Non-interest Income
Service charges on deposit accounts	1,085	1,038	2,084	1,961
Wire transfer fees	182	145	333	257
Interchange fees	1,366	1,254	2,468	2,213
Fiduciary activities	1,216	1,199	2,513	2,247
Gain on sale of investment securities (includes $0 for the three months ended and $124 for the six months ended June 30, 2015 and $0 for the three and six months ended June 30, 2014, related to accumulated other comprehensive earnings reclassifications)			124
Gain on sale of mortgage loans	2,642	2,537	5,021	3,948
Mortgage servicing income net of impairment	300	233	479	440
Increase in cash value of bank owned life insurance	257	252	515	485
Death benefit on bank owned life insurance			145
Other income	138	(31)	570	598
Total non-interest income	7,186	6,627	14,252	12,149
Non-interest Expense
Salaries and employee benefits	8,385	8,293	16,889	15,776
Net occupancy expenses	1,375	1,360	2,926	2,784
Data processing	966	937	1,889	1,807
Professional fees	660	419	1,187	1,027
Outside services and consultants	918	1,298	1,544	1,959
Loan expense	1,367	1,272	2,624	2,287
FDIC insurance expense	339	285	676	541
Other losses	150	95	105	133
Other expense	2,490	2,449	4,878	4,608
Total non-interest expense	16,650	16,408	32,718	30,922
Income Before Income Tax	6,480	6,668	13,750	10,948
Income tax expense (includes $0 for the three months ended and $43 for the six months ended June 30, 2015 and $0 for the three and six months ended June 30, 2014, related to income tax expense from reclassification items)	1,752	1,890	3,664	2,753
Net Income	4,728	4,778	10,086	8,195
Preferred stock dividend	(31)	(32)	(63)	(63)
Net Income Available to Common Shareholders	$ 4,697	$ 4,746	$ 10,023	$ 8,132
Basic Earnings Per Share	$ 0.51	$ 0.52	$ 1.09	$ 0.91
Diluted Earnings Per Share	$ 0.49	$ 0.50	$ 1.04	$ 0.88

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Acquisitions

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Acquisitions

Note 2 – Acquisitions

On February 18, 2015, Horizon entered into an Agreement and Plan of Merger (the “Merger Agreement”) providing for Horizon’s acquisition of Peoples Bancorp, Inc., 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 (“Peoples FSB”), 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.

On July 1, 2015 Horizon completed the acquisition of Peoples and Horizon Bank N.A.’s acquisition of Peoples FSB, through mergers effective July 1, 2015. Under the terms of the acquisition, the exchange ratio was 0.95 shares of Horizon common stock (the “Exchange Ratio”) and $9.75 in cash for each outstanding share of Peoples common stock. Peoples shareholders owning fewer than 100 shares of common stock received $33.14 in cash for each common share. Peoples shares outstanding at the closing were 2,311,858, and the shares of Horizon common stock issued to Peoples shareholders totaled 2,192,202. Horizon’s stock price was $25.32 per share at the close of business on July 1, 2015. Based upon these numbers, the total value of the consideration for the acquisition was $78.1 million.

As of July 1, 2015, Peoples had total assets of approximately $462.7 million, total deposits of approximately $350.6 million and total net loans of approximately $226.6 million.

Utilizing June 30, 2015 financials for both Horizon and Peoples and an estimate of the fair market value adjustments associated with the merger, Horizon would have total assets of approximately $2.7 billion, total deposits of approximately $1.9 billion and total net loans of approximately $1.7 billion on a pro forma basis. The accounting for the business combination is not yet complete and therefore all required disclosures for a business combination have not been provided.

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

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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Accounting Policies

6 Months Ended

Jun. 30, 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 June 30, 2015 and June 30, 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 June 30				Six Months Ended June 30
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	4,728	$	4,778	$	10,086	$	8,195
Less: Preferred stock dividends		31		32		63		63
Net income available to common shareholders	$	4,697	$	4,746	$	10,023	$	8,132
Weighted average common shares outstanding		9,240,005		9,182,986		9,228,075		8,908,492
Basic earnings per share	$	0.51	$	0.52	$	1.09	$	0.91
Diluted earnings per share
Net income available to common shareholders	$	4,697	$	4,746	$	10,023	$	8,132
Weighted average common shares outstanding		9,240,005		9,182,986		9,228,075		8,908,492
Effect of dilutive securities:
Warrants		324,698		303,399		323,198		308,060
Restricted stock		34,892		38,003		30,816		38,717
Stock options		37,991		36,551		33,462		38,154
Weighted average shares outstanding		9,637,586		9,560,939		9,615,551		9,293,423
Diluted earnings per share	$	0.49	$	0.50	$	1.04	$	0.88

There were 2,500 and 41,444 shares for the three and six months ended June 30, 2015, respectively, and 45,766 shares for both the three and six months ended June 30, 2014 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.

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Regulatory Capital

6 Months Ended

Jun. 30, 2015

Banking and Thrift [Abstract]

Regulatory Capital

Note 13 – 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 June 30, 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 (June 30, 2015) and Tier I leverage ratios as set forth in the table below. As of June 30, 2015 and December 31, 2014, the Bank met all capital adequacy requirements to be considered well capitalized. There have been no conditions or events since the end of the second 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 June 30, 2015 and December 31, 2014 were as follows:

	Actual					Required For Capital1 Adequacy Purposes					Well Capitalized Under Prompt1 Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2015
Total capital1 (to risk-weighted assets)
Consolidated	$	222,223		13.53	%	$	131,396		8.00	%		N/A		N/A
Bank		192,896		11.76	%		131,222		8.00	%	$	164,027		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		205,802		12.53	%		98,548		6.00	%		N/A		N/A
Bank		176,475		10.76	%		98,406		6.00	%		131,208		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		160,234		9.75	%		73,954		4.50	%		N/A		N/A
Bank		176,475		10.76	%		73,805		4.50	%		106,607		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		205,802		9.61	%		85,662		4.00	%		N/A		N/A
Bank		176,475		8.24	%		85,667		4.00	%		107,084		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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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 9 – 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 June 30, 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 June 30, 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 June 30, 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 $111.7 million at June 30, 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 June 30, 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         June 30, 2015			Liability Derivatives June 30, 2015
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate contracts	Loans	$	—	Other liabilities	$	1,022
Interest rate contracts	Other Assets		1,022	Other liabilities		3,155
Total derivatives designated as hedging instruments			1,022			4,177
Derivatives not designated as hedging instruments
Mortgage loan contracts	Other assets		751	Other liabilities		32
Total derivatives not designated as hedging instruments			751			32
Total derivatives		$	1,773		$	4,209

	Asset Derivative December 31, 2014			Liability Derivatives 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 and six-month periods ending June 30 is as follows:

	Comprehensive Income on Derivative (Effective Portion)					Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended June 30					Six Months Ended June 30
Derivative in cash flow hedging relationship	2015 (Unaudited)		2014 (Unaudited)			2015 (Unaudited)		2014 (Unaudited)
Interest rate contracts	$	332	$	(206	)	$	118	$	(352	)

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						Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended June 30						Six Months Ended June 30
Derivative in fair value hedging relationship	Location of gain (loss) recognized on derivative	2015 (Unaudited)			2014 (Unaudited)			2015 (Unaudited)			2014 (Unaudited)
Interest rate contracts	Interest income - loans	$	(1,186	)	$	544		$	(186	)	$	751
Interest rate contracts	Interest income - loans		1,186			(544	)		186			(751	)
Total		$	—		$	—		$	—		$	—

		Amount of Gain (Loss) Recognized on Derivative				Amount of Gain (Loss) Recognized on Derivative
		Three Months Ended June 30				Six Months Ended June 30
Derivative not designated as hedging relationship	Location of gain (loss) recognized on derivative	2015 (Unaudited)		2014 (Unaudited)		2015 (Unaudited)		2014 (Unaudited)
Mortgage contracts	Other income - gain on sale of loans	$	83	$	210	$	272	$	450

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Accounting for Certain Loans Acquired in a Transfer

6 Months Ended

Jun. 30, 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:

	June 30 2015 Heartland		June 30 2015 Summit		June 30 2015 Total
Commercial		14,586		55,822	$	70,408
Real estate		8,284		20,617		28,901
Consumer		6,243		7,009		13,252
Outstanding balance	$	29,113	$	83,448	$	112,561
Carrying amount, net of allowance of $283					$	112,278

	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 six months ended June 30, is as follows:

	Six Months Ended June 30, 2015
	Heartland			Summit			Total
Balance at January 1	$	2,400		$	1,268		$	3,668
Additions		—			—			—
Accretion		(205	)		(180	)		(385	)
Reclassification from nonaccretable difference		—			—			—
Disposals		(117	)		(49	)		(166	)
Balance at June 30	$	2,078		$	1,039		$	3,117

	Six Months Ended June 30, 2014
	Heartland			Summit		Total
Balance at January 1	$	3,185		$	—	$	3,185
Additions		—			1,758		1,758
Accretion		(288	)		—		(288	)
Reclassification from nonaccretable difference		—			—		—
Disposals		(95	)		—		(95	)
Balance at June 30	$	2,802		$	1,758	$	4,560

During the six months ended June 30, 2015 and 2014, the Company decreased the allowance for loan losses on purchased loans by a recovery to the income statement of $76,000 and $0, respectively.

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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	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	$ 15,050	$ 15,312
Loans Past Due Over 90 Days Still Accruing	207	115
Non-Performing TDRs	4,523	2,643
Performing TDRs	3,271	4,372
Total Non-Performing Loans	23,051	22,442
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	9,822	10,024
Loans Past Due Over 90 Days Still Accruing	207
Non-Performing TDRs	3,137	1,221
Performing TDRs	218	610
Total Non-Performing Loans	13,384	11,855
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	477	812
Non-Performing TDRs	785	1,004
Total Non-Performing Loans	1,262	1,816
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	4,447	1,773
Performing TDRs	150	44
Total Non-Performing Loans	4,597	1,817
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	4,898	7,439
Loans Past Due Over 90 Days Still Accruing	207
Non-Performing TDRs	2,352	217
Performing TDRs	68	566
Total Non-Performing Loans	7,525	8,222
Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,319	2,297
Loans Past Due Over 90 Days Still Accruing		40
Non-Performing TDRs	1,018	1,031
Performing TDRs	2,482	2,526
Total Non-Performing Loans	5,819	5,894
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,319	2,297
Loans Past Due Over 90 Days Still Accruing		40
Non-Performing TDRs	760	765
Performing TDRs	2,482	2,526
Total Non-Performing Loans	5,561	5,628
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Performing TDRs	258	266
Total Non-Performing Loans	258	266
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,909	2,991
Loans Past Due Over 90 Days Still Accruing		75
Non-Performing TDRs	368	391
Performing TDRs	571	1,236
Total Non-Performing Loans	3,848	4,693
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	447	227
Loans Past Due Over 90 Days Still Accruing		10
Total Non-Performing Loans	447	237
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	405	557
Loans Past Due Over 90 Days Still Accruing		47
Total Non-Performing Loans	405	604
Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,057	2,207
Loans Past Due Over 90 Days Still Accruing		18
Non-Performing TDRs	368	391
Performing TDRs	571	1,236
Total Non-Performing Loans	$ 2,996	$ 3,852

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Securities

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Securities

Note 3 – Securities

The fair value of securities is as follows:

June 30, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	28,308	$	35	$	(104	)	$	28,239
State and municipal		49,739		1,212		(168	)		50,783
Federal agency collateralized mortgage obligations		116,674		973		(705	)		116,942
Federal agency mortgage-backed pools		132,762		2,661		(473	)		134,950
Corporate notes		32		24		—			56
Total available for sale investment securities	$	327,515	$	4,905	$	(1,450	)	$	330,970
Held to maturity
U.S. Treasury and federal agencies	$	9,845	$	102	$	—		$	9,947
State and municipal		127,452		4,416		(511	)		131,357
Federal agency collateralized mortgage obligations		3,670		33		(22	)		3,681
Federal agency mortgage-backed pools		21,694		1,064		(162	)		22,596
Total held to maturity investment securities	$	162,661	$	5,615	$	(695	)	$	167,581

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 June 30, 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 June 30, 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 June 30, 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.

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Within one year	$	6,436	$	6,477	$	6,098	$	6,169
One to five years		50,332		51,057		44,720		45,093
Five to ten years		15,380		15,571		16,147		16,768
After ten years		5,931		5,973		6,598		6,790
		78,079		79,078		73,563		74,820
Federal agency collateralized mortgage obligations		116,674		116,942		122,930		122,860
Federal agency mortgage-backed pools		132,762		134,950		122,583		125,395
Private labeled mortgage-backed pools		—		—		670		689
Total available for sale investment securities	$	327,515	$	330,970	$	319,746	$	323,764
Held to maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		8,184		8,319		592		593
Five to ten years		101,504		105,071		99,225		101,323
After ten years		27,609		27,914		39,582		40,857
		137,297		141,304		139,399		142,773
Federal agency collateralized mortgage obligations		3,670		3,681		4,039		4,073
Federal agency mortgage-backed pools		21,694		22,596		22,329		23,058
Total held to maturity investment securities	$	162,661	$	167,581	$	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
June 30, 2015	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and federal agencies	$	4,469	$	(14	)	$	13,897	$	(90	)	$	18,366	$	(104	)
State and municipal		38,471		(667	)		1,249		(12	)		39,720		(679	)
Federal agency collateralized mortgage obligations		24,435		(170	)		28,098		(557	)		52,533		(727	)
Federal agency mortgage-backed pools		23,044		(208	)		26,017		(427	)		49,061		(635	)
Total temporarily impaired securities	$	90,419	$	(1,059	)	$	69,261	$	(1,086	)	$	159,680	$	(2,145	)

	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 June 30				Six Months Ended June 30
	2015		2014		2015			2014
Sales of securities available for sale (Unaudited)
Proceeds	$	—	$	—	$	13,332		$	—
Gross gains		—		—		147			—
Gross losses		—		—		(23	)		—

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Loans

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Loans

Note 4 – Loans

	June 30 2015			December 31 2014
Commercial
Working capital and equipment	$	323,709		$	300,940
Real estate, including agriculture		353,859			343,455
Tax exempt		8,665			8,595
Other		23,713			21,324
Total		709,946			674,314
Real estate
1–4 family		273,753			250,799
Other		3,654			3,826
Total		277,407			254,625
Consumer
Auto		166,501			154,538
Recreation		5,676			5,673
Real estate/home improvement		41,309			38,288
Home equity		112,095			112,426
Unsecured		3,711			3,613
Other		6,714			5,921
Total		336,006			320,459
Mortgage warehouse		195,924			129,156
Total loans		1,519,283			1,378,554
Allowance for loan losses		(16,421	)		(16,501	)
Loans, net	$	1,502,862		$	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, the general economy or fluctuations in interest rates. 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.

June 30, 2015	Loan Balance			Interest Due		Deferred Fees / (Costs)			Recorded Investment
Owner occupied real estate	$	238,883		$	471	$	611		$	239,965
Non owner occupied real estate		313,871			326		488			314,685
Residential spec homes		2,606			2		18			2,626
Development & spec land loans		13,593			32		27			13,652
Commercial and industrial		139,823			802		26			140,651
Total commercial		708,776			1,633		1,170			711,579
Residential mortgage		257,795			816		525			259,136
Residential construction		19,087			34		—			19,121
Mortgage warehouse		195,924			480		—			196,404
Total real estate		472,806			1,330		525			474,661
Direct installment		44,119			138		(398	)		43,859
Direct installment purchased		179			—		—			179
Indirect installment		152,268			313		—			152,581
Home equity		140,316			555		(478	)		140,393
Total consumer		336,882			1,006		(876	)		337,012
Total loans		1,518,464			3,969		819			1,523,252
Allowance for loan losses		(16,421	)		—		—			(16,421	)
Net loans	$	1,502,043		$	3,969	$	819		$	1,506,831

December 31, 2014	Loan Balance			Interest Due		Deferred Fees / (Costs)			Recorded 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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Allowance for Loan Losses

6 Months Ended

Jun. 30, 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 June 30						Six Months Ended June 30
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance at beginning of the period	$	16,634		$	16,102		$	16,501		$	15,992
Loans charged-off:
Commercial
Owner occupied real estate		1,422			—			1,422			—
Non owner occupied real estate		—			—			16			22
Residential development		—			—			—			—
Development & Spec Land Loans		—			166			—			173
Commercial and industrial		253			127			253			127
Total commercial		1,675			293			1,691			322
Real estate
Residential mortgage		164			172			186			194
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		164			172			186			194
Consumer
Direct Installment		96			44			155			77
Direct Installment Purchased		—			—			—			—
Indirect Installment		196			341			565			568
Home Equity		304			247			504			431
Total consumer		596			632			1,224			1,076
Total loans charged-off		2,435			1,097			3,101			1,592
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		78			2			86			6
Non owner occupied real estate		—			74			—			75
Residential development		—			—			—			—
Development & Spec Land Loans		—			—			—			—
Commercial and industrial		14			32			33			417
Total commercial		92			108			119			498
Real estate
Residential mortgage		3			3			5			7
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		3			3			5			7
Consumer
Direct Installment		47			21			76			39
Direct Installment Purchased		—			—			—			—
Indirect Installment		134			147			235			266
Home Equity		40			37			66			111
Total consumer		221			205			377			416
Total loan recoveries		316			316			501			921
Net loans charged-off (recovered)		2,119			781			2,600			671
Provision charged to operating expense
Commercial		2,093			(93	)		2,048			119
Real estate		(29	)		(383	)		904			(987	)
Consumer		(158	)		815			(432	)		1,207
Total provision charged to operating expense		1,906			339			2,520			339
Balance at the end of the period	$	16,421		$	15,660		$	16,421		$	15,660

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:

June 30, 2015	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,291	$	—	$	—	$	—	$	1,291
Collectively evaluated for impairment		6,841		3,044		1,319		3,672		14,876
Loans acquired with deteriorated credit quality		254		—		—		—		254
Total ending allowance balance	$	8,386	$	3,044	$	1,319	$	3,672	$	16,421
Loans:
Individually evaluated for impairment	$	10,274	$	—	$	—	$	—	$	10,274
Collectively evaluated for impairment		699,576		278,257		196,404		337,012		1,511,249
Loans acquired with deteriorated credit quality		1,729		—		—		—		1,729
Total ending loans balance	$	711,579	$	278,257	$	196,404	$	337,012	$	1,523,252

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 - Commercial Loans Individually Evaluated for Impairment by Class of Loans (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance total	$ 10,269	$ 7,710	$ 10,269	$ 7,710
Total ending loans balance	10,274	7,715	10,274	7,715
Allowance For Loan Loss Allocated	1,291	1,135	1,291	1,135
Average Balance in Impaired Loans total	12,121	7,648	9,543	7,098
Cash/Accrual Interest Income Recognized, Total	78	133	85	151
Commercial [Member]
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance With no recorded allowance	4,804	5,648	4,804	5,648
Recorded Investment With no recorded allowance	4,809	5,653	4,809	5,653
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Average Balance in Impaired Loans With no recorded allowance	5,157	5,596	4,987	5,181
Cash/Accrual Interest Income Recognized, With no recorded allowance	24	133	31	149
Unpaid Principal Balance With an allowance recorded	5,465	2,062	5,465	2,062
Recorded Investment With an allowance recorded	5,465	2,062	5,465	2,062
Allowance For Loan Loss Allocated	1,291	1,135	1,291	1,135
Average Balance in Impaired Loans With an allowance recorded	6,964	2,052	4,556	1,917
Cash/Accrual Interest Income Recognized, With an allowance recorded	54		54	2
Commercial [Member] | Owner Occupied Real Estate [Member]
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance With no recorded allowance	1,605	2,121	1,605	2,121
Recorded Investment With no recorded allowance	1,606	2,124	1,606	2,124
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Average Balance in Impaired Loans With no recorded allowance	1,350	1,885	1,118	1,432
Cash/Accrual Interest Income Recognized, With no recorded allowance	17	40	17	51
Unpaid Principal Balance With an allowance recorded	2,991		2,991
Recorded Investment With an allowance recorded	2,991		2,991
Allowance For Loan Loss Allocated	593		593
Average Balance in Impaired Loans With an allowance recorded	4,366		1,992
Cash/Accrual Interest Income Recognized, With an allowance recorded	54		54
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance With no recorded allowance	2,820	3,244	2,820	3,244
Recorded Investment With no recorded allowance	2,824	3,246	2,824	3,246
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Average Balance in Impaired Loans With no recorded allowance	3,168	3,270	3,270	3,283
Cash/Accrual Interest Income Recognized, With no recorded allowance	7	93	14	98
Unpaid Principal Balance With an allowance recorded	1,590	340	1,590	340
Recorded Investment With an allowance recorded	1,590	340	1,590	340
Allowance For Loan Loss Allocated	200	170	200	170
Average Balance in Impaired Loans With an allowance recorded	1,590	342	1,590	347
Commercial [Member] | Residential Development [Member]
Schedule Of Financial Receivables [Line Items]
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Commercial [Member] | Development & Spec Land Loans [Member]
Schedule Of Financial Receivables [Line Items]
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Commercial [Member] | Commercial and Industrial [Member]
Schedule Of Financial Receivables [Line Items]
Unpaid Principal Balance With no recorded allowance	379	283	379	283
Recorded Investment With no recorded allowance	379	283	379	283
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Average Balance in Impaired Loans With no recorded allowance	639	441	599	466
Unpaid Principal Balance With an allowance recorded	884	1,722	884	1,722
Recorded Investment With an allowance recorded	884	1,722	884	1,722
Allowance For Loan Loss Allocated	498	965	498	965
Average Balance in Impaired Loans With an allowance recorded	$ 1,008	$ 1,710	$ 974	1,570
Cash/Accrual Interest Income Recognized, With an allowance recorded				$ 2

XML

Non-performing Loans and Impaired Loans - Loans by Credit Grades (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Total	$ 1,518,464	$ 1,377,472
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	708,776	673,059
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	238,883	228,380
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	313,871	297,299
Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	2,606	2,027
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	13,593	12,097
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	139,823	133,256
Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	472,806	383,182
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	257,795	242,521
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	19,087	11,505
Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	195,924	129,156
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	336,882	321,231
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	44,119	40,137
Consumer [Member] | Direct Installment Purchased [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	179	219
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	152,268	141,868
Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	140,316	139,007
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 1,480,437	$ 1,335,854
Percentage of total loans	97.50%	96.98%
Pass [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 680,416	$ 642,027
Pass [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	224,414	215,875
Pass [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	303,292	283,518
Pass [Member] | Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	2,606	2,027
Pass [Member] | Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	13,520	12,018
Pass [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	136,586	128,589
Pass [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	466,987	377,288
Pass [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	252,234	236,893
Pass [Member] | Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	18,829	11,239
Pass [Member] | Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	195,924	129,156
Pass [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	333,034	316,538
Pass [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	43,672	39,900
Pass [Member] | Consumer [Member] | Direct Installment Purchased [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	179	219
Pass [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	151,863	141,264
Pass [Member] | Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	137,320	135,155
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 9,805	$ 13,959
Percentage of total loans	0.65%	1.01%
Special Mention [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 9,805	$ 13,959
Special Mention [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	6,299	7,623
Special Mention [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	2,442	4,458
Special Mention [Member] | Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	73	79
Special Mention [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	991	1,799
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 28,220	$ 27,661
Percentage of total loans	1.86%	2.01%
Substandard [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 18,553	$ 17,074
Substandard [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	8,170	4,883
Substandard [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	8,137	9,323
Substandard [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	2,246	2,868
Substandard [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,819	5,894
Substandard [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,561	5,628
Substandard [Member] | Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	258	266
Substandard [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,848	4,693
Substandard [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	447	237
Substandard [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	405	604
Substandard [Member] | Consumer [Member] | Home Equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 2,996	$ 3,852
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Percentage of total loans	0.00%	0.00%

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Non-performing Loans and Impaired Loans - Loans Transferred and Classified as Troubled Debt Restructured Loans Non-accrual (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) Defaults	Jun. 30, 2014 USD ($) Defaults	Jun. 30, 2015 USD ($) Defaults	Jun. 30, 2014 USD ($) Defaults
Financing Receivable, Modifications [Line Items]
Number of Defaults	2	2	3	6
Unpaid Principal Balance | $	$ 113	$ 274	$ 2,465	$ 944
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults			1	2
Unpaid Principal Balance | $			$ 2,352	$ 371
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults				2
Unpaid Principal Balance | $				$ 371
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults			1
Unpaid Principal Balance | $			$ 2,352
Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	1	1	2
Unpaid Principal Balance | $	$ 81	$ 223	$ 81	$ 377
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	1	1	2
Unpaid Principal Balance | $	$ 81	$ 223	$ 81	$ 377
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	1	1	2
Unpaid Principal Balance | $	$ 32	$ 51	$ 32	$ 196
Consumer [Member] | Home Equity [Member]
Financing Receivable, Modifications [Line Items]
Number of Defaults	1	1	1	2
Unpaid Principal Balance | $	$ 32	$ 51	$ 32	$ 196

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Repurchase Agreements (Tables)

6 Months Ended

Jun. 30, 2015

Text Block [Abstract]

Summary of Repurchase Agreements Accounted as Secured Borrowings

The following table shows repurchase agreements accounted for as secured borrowings (in thousands):

	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous			Up to one year		One to three years		Three to five years		Five to ten years			Beyond ten years			Total
Repurchase Agreements and repurchase-to-maturity transactions
Repurchase Agreements - Long-term	$	57,731		$	—	$	35,000	$	50,000	$	10,000		$	—		$	152,731
Securities lending transactions
U.S. Treasury and federal agencies	$	8,468		$	—	$	—	$	—	$	—		$	—		$	8,468
Federal agency collateralized mortgage obligations		41,140			—		87		1,020		7,413			46,412			96,071
Federal agency mortgage-backed pools		10,560			—		—		541		8,574			41,476			61,151
Total		60,168			—		87		1,561		15,987			87,888			165,691
Total borrowings	$	(2,437	)	$	—	$	34,913	$	48,439	$	(5,987	)	$	(87,888	)	$	(12,960	)
Gross amount of recognized liabilities for repurchase agreements and securities lending																$	152,731

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Loans - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2015
Receivables [Abstract]
Period of loan sold	30 days
Minimum period seldom held	90 days
Mortgage warehousing maximum pay off period	30 days

XML

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 11 – 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 June 30, 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).

	June 30, 2015
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash and due from banks	$	43,857	$	43,857	$	—	$	—
Investment securities, held to maturity		162,661		—		167,581		—
Loans held for sale		7,677		—		—		7,677
Loans excluding loan level hedges, net		1,393,414		—		—		1,426,252
Stock in FHLB and FRB		11,080		—		11,080		—
Interest receivable		8,823		—		8,823		—
Liabilities
Non-interest bearing deposits	$	307,215	$	307,215	$	—	$	—
Interest-bearing deposits		1,277,508		—		1,204,516		—
Borrowings		385,236		—		381,302		—
Subordinated debentures		32,719		—		32,698		—
Interest payable		461		—		461		—
	December 31, 2014
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (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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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 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 June 30				Six Months Ended June 30
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	4,728	$	4,778	$	10,086	$	8,195
Less: Preferred stock dividends		31		32		63		63
Net income available to common shareholders	$	4,697	$	4,746	$	10,023	$	8,132
Weighted average common shares outstanding		9,240,005		9,182,986		9,228,075		8,908,492
Basic earnings per share	$	0.51	$	0.52	$	1.09	$	0.91
Diluted earnings per share
Net income available to common shareholders	$	4,697	$	4,746	$	10,023	$	8,132
Weighted average common shares outstanding		9,240,005		9,182,986		9,228,075		8,908,492
Effect of dilutive securities:
Warrants		324,698		303,399		323,198		308,060
Restricted stock		34,892		38,003		30,816		38,717
Stock options		37,991		36,551		33,462		38,154
Weighted average shares outstanding		9,637,586		9,560,939		9,615,551		9,293,423
Diluted earnings per share	$	0.49	$	0.50	$	1.04	$	0.88

There were 2,500 and 41,444 shares for the three and six months ended June 30, 2015, respectively, and 45,766 shares for both the three and six months ended June 30, 2014 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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Securities - Sales of Securities Available for Sale (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2015 USD ($)
Investments, Debt and Equity Securities [Abstract]
Proceeds	$ 13,332
Gross gains	147
Gross losses	$ (23)

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Accounting Policies - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accounting Policies [Abstract]
Shares, non-dilutive	2,500	45,766	41,444	45,766
Reclassifications effect on net income			$ 0

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Condensed Consolidated Statements of Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
Accumulated other comprehensive earnings reclassifications	$ 0	$ 0	$ (124)	$ 0
Income tax expense from reclassification	$ 0	$ 0	$ 43	$ 0

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) $ in Thousands	6 Months Ended
	Jun. 30, 2014 USD ($)
Statement of Cash Flows [Abstract]
Capital stock purchased	$ 18,896

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Allowance for Loan Losses - Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of the period	$ 16,634	$ 16,102	$ 16,501	$ 15,992
Total loans charged-off	2,435	1,097	3,101	1,592
Total loan recoveries	316	316	501	921
Net loans charged-off (recovered)	2,119	781	2,600	671
Total provision charged to operating expense	1,906	339	2,520	339
Balance at the end of the period	16,421	15,660	16,421	15,660
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	1,675	293	1,691	322
Total loan recoveries	92	108	119	498
Total provision charged to operating expense	2,093	(93)	2,048	119
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	253	127	253	127
Total loan recoveries	14	32	33	417
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	1,422		1,422
Total loan recoveries	78	2	86	6
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		74		75
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off		166		173
Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	164	172	186	194
Total loan recoveries	3	3	5	7
Total provision charged to operating expense	(29)	(383)	904	(987)
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	164	172	186	194
Total loan recoveries	3	3	5	7
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	596	632	1,224	1,076
Total loan recoveries	221	205	377	416
Total provision charged to operating expense	(158)	815	(432)	1,207
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	96	44	155	77
Total loan recoveries	47	21	76	39
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	196	341	565	568
Total loan recoveries	134	147	235	266
Consumer [Member] | Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	304	247	504	431
Total loan recoveries	$ 40	$ 37	$ 66	$ 111

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Derivative Financial Instruments - Fair Value of Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	$ 1,773	$ 1,655
Total Liability Derivatives	4,209	4,547
Derivatives Designated as Hedging Instruments [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	1,022	1,208
Total Liability Derivatives	4,177	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	1,022	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	3,155	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	1,022	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	751	447
Total Liability Derivatives	32
Derivatives Not Designated as Hedging Instruments [Member] | Mortgage Loan Contracts [Member] | Other Liabilities [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Liability Derivatives	32
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	$ 751	$ 447

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Accounting Policies (Tables)

6 Months Ended

Jun. 30, 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 June 30				Six Months Ended June 30
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	4,728	$	4,778	$	10,086	$	8,195
Less: Preferred stock dividends		31		32		63		63
Net income available to common shareholders	$	4,697	$	4,746	$	10,023	$	8,132
Weighted average common shares outstanding		9,240,005		9,182,986		9,228,075		8,908,492
Basic earnings per share	$	0.51	$	0.52	$	1.09	$	0.91
Diluted earnings per share
Net income available to common shareholders	$	4,697	$	4,746	$	10,023	$	8,132
Weighted average common shares outstanding		9,240,005		9,182,986		9,228,075		8,908,492
Effect of dilutive securities:
Warrants		324,698		303,399		323,198		308,060
Restricted stock		34,892		38,003		30,816		38,717
Stock options		37,991		36,551		33,462		38,154
Weighted average shares outstanding		9,637,586		9,560,939		9,615,551		9,293,423
Diluted earnings per share	$	0.49	$	0.50	$	1.04	$	0.88

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Disclosures about Fair Value of Assets and Liabilities - Other Assets Measured at Fair Value on Nonrecurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 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	$ 8,978	$ 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	8,279	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	8,978	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	8,279	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	8,978	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	$ 8,279	$ 7,642

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Label	Element	Value
Gain (Loss) on Sale of Mortgage Loans	us-gaap_GainLossOnSaleOfMortgageLoans	$ 2,537
Gain (Loss) on Sale of Mortgage Loans	us-gaap_GainLossOnSaleOfMortgageLoans	$ 2,642

XML

Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Components of Accumulated Other Comprehensive Income

	June 30 2015			December 31 2014
Unrealized gain on securities available for sale	$	3,455		$	4,018
Unamortized gain on securities held to maturity, previously transferred from AFS		1,423			1,658
Unrealized loss on derivative instruments		(3,155	)		(3,337	)
Tax effect		(603	)		(818	)
Total accumulated other comprehensive income	$	1,120		$	1,521

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Disclosures about Fair Value of Assets and Liabilities

6 Months Ended

Jun. 30, 2015

Text Block [Abstract]

Disclosures about Fair Value of Assets and Liabilities

Note 10 – 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 June 30, 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:

	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
June 30, 2015
Available-for-sale securities
U.S. Treasury and federal agencies	$	28,239		$	—	$	28,239		$	—
State and municipal		50,783			—		50,783			—
Federal agency collateralized mortgage obligations		116,942			—		116,942			—
Federal agency mortgage-backed pools		134,950			—		134,950			—
Corporate notes		56			—		56			—
Total available-for-sale securities		330,970			—		330,970			—
Hedged loans		109,448			—		109,448			—
Forward sale commitments		751			—		751			—
Interest rate swap agreements		(4,177	)		—		(4,177	)		—
Commitments to originate loans		(32	)		—		(32	)		—
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	)		—

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 June 30						Six Months Ended June 30
Non Interest Income Total gains and losses from:	2015 (Unaudited)			2014 (Unaudited)			2015 (Unaudited)			2014 (Unaudited)
Hedged loans	$	(1,186	)	$	544		$	(186	)	$	751
Fair value interest rate swap agreements		1,186			(544	)		186			(751	)
Derivative loan commitments		83			210			272			450
	$	83		$	210		$	272		$	450

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):

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2015
Impaired loans	$	8,978	$	—	$	—	$	8,978
Mortgage servicing rights		8,279		—		—		8,279
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 $18,000 during the first six months of 2015 and increased by $38,000 during the first six 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 June 30, 2015		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Impaired loans	$	8,978	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	10% - 15% (12%)
Mortgage servicing rights	$	8,279	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default	10% - 15% (12%), 4% - 7% (4.6%), 1% - 10%  (4.5%)
	Fair Value at December 31, 2014		Valuation Technique	Unobservable Inputs	Range (Weighted 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%)