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, 2016

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: 14,776,952 shares of Common Stock, no par value, at August 9, 2016.

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	41
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	57
Item 4.	Controls and Procedures	57
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	58
Item 1A.	Risk Factors	58
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 3.	Defaults Upon Senior Securities	58
Item 4.	Mine Safety Disclosures	58
Item 5.	Other Information	58
Item 6.	Exhibits	59
Signatures		60
Index To Exhibits		61

2

PART 1 — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

	June 30		December 31
	2016		2015
	(Unaudited)
Assets
Cash and due from banks	$	109,224	$	48,650
Investment securities, available for sale		455,239		444,982
Investment securities, held to maturity (fair value of $180,059 and $193,703)		173,696		187,629
Loans held for sale		7,812		7,917
Loans, net of allowance for loan losses of $14,226 and $14,534		1,923,599		1,734,597
Premises and equipment, net		61,186		60,798
Federal Reserve and Federal Home Loan Bank stock		16,636		13,823
Goodwill		56,458		49,600
Other intangible assets		8,686		7,371
Interest receivable		11,526		10,535
Cash value of life insurance		57,944		54,504
Other assets		36,074		31,995
Total assets	$	2,918,080	$	2,652,401
Liabilities
Deposits
Non-interest bearing	$	397,412	$	335,955
Interest bearing		1,684,849		1,544,198
Total deposits		2,082,261		1,880,153
Borrowings		492,883		449,347
Subordinated debentures		32,874		32,797
Interest payable		961		507
Other liabilities		28,099		22,765
Total liabilities		2,637,078		2,385,569
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, Authorized, 1,000,000 shares Series B shares $.01 par value, $1,000 liquidation value Issued 0 and 12,500 shares		—		12,500
Common stock, no par value Authorized, 44,000,000 shares Issued, 12,590,784 and 11,995,324 shares Outstanding, 12,571,534 and 11,939,887 shares		—		—
Additional paid-in capital		120,758		106,370
Retained earnings		156,651		148,685
Accumulated other comprehensive income (loss)		3,593		(723	)
Total stockholders’ equity		281,002		266,832
Total liabilities and stockholders’ equity	$	2,918,080	$	2,652,401

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					Six Months Ended
	June 30					June 30
	2016		2015			2016			2015
	(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Interest Income
Loans receivable	$	20,794	$	17,981		$	40,541		$	34,843
Investment securities
Taxable		2,661		2,067			5,205			4,221
Tax exempt		1,195		1,079			2,432			2,156
Total interest income		24,650		21,127			48,178			41,220
Interest Expense
Deposits		1,557		1,237			3,048			2,469
Borrowed funds		1,721		1,539			3,480			3,018
Subordinated debentures		503		501			1,007			997
Total interest expense		3,781		3,277			7,535			6,484
Net Interest Income		20,869		17,850			40,643			34,736
Provision for loan losses		232		1,906			764			2,520
Net Interest Income after Provision for Loan Losses		20,637		15,944			39,879			32,216
Non-interest Income
Service charges on deposit accounts		1,335		1,085			2,573			2,084
Wire transfer fees		175		182			296			333
Interchange fees		1,663		1,366			3,121			2,468
Fiduciary activities		1,465		1,216			3,100			2,513
Gain on sale of investment securities (includes $767 for the three months ended and $875 for the six months ended June 30, 2016 and $0 for the three months ended and $124 for the six months ended June 30, 2015, related to accumulated other comprehensive earnings reclassifications)		767		—			875			124
Gain on sale of mortgage loans		3,529		2,642			5,643			5,021
Mortgage servicing income net of impairment		500		300			947			479
Increase in cash value of bank owned life insurance		351		257			696			515
Death benefit on bank owned life insurance		—		—			—			145
Other income		84		138			482			570
Total non-interest income		9,869		7,186			17,733			14,252
Non-interest Expense
Salaries and employee benefits		10,317		8,385			20,382			16,889
Net occupancy expenses		1,901		1,375			3,837			2,926
Data processing		1,134		966			2,239			1,889
Professional fees		747		660			1,578			1,187
Outside services and consultants		2,198		918			3,297			1,544
Loan expense		1,409		1,367			2,604			2,624
FDIC insurance expense		409		339			814			676
Other losses		136		150			403			105
Other expense		3,304		2,490			6,148			4,878
Total non-interest expense		21,555		16,650			41,302			32,718
Income Before Income Tax		8,951		6,480			16,310			13,750
Income tax expense (includes $268 for the three months ended and $306 for the six months ended June 30, 2016 and $0 for the three months ended and $43 for the six months ended June 30, 2015, related to income tax expense from reclassification items)		2,625		1,752			4,603			3,664
Net Income		6,326		4,728			11,707			10,086
Preferred stock dividend		—		(31	)		(42	)		(63	)
Net Income Available to Common Shareholders	$	6,326	$	4,697		$	11,665		$	10,023
Basic Earnings Per Share	$	0.52	$	0.51		$	0.97		$	1.09
Diluted Earnings Per Share		0.52		0.49			0.96			1.04

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
	2016			2015			2016			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net Income	$	6,326		$	4,728		$	11,707		$	10,086
Other Comprehensive Income (Loss)
Change in fair value of derivative instruments:
Change in fair value of derivative instruments for the period		(83	)		511			(645	)		182
Income tax effect		29			(179	)		226			(64	)
Changes from derivative instruments		(54	)		332			(419	)		118
Change in securities:
Unrealized appreciation (depreciation) for the period on AFS securities		2,691			(2,364	)		8,637			(402	)
Amortization from transfer of securities from available-for-sale to held-to-maturity securities		(248	)		(158	)		(477	)		(272	)
Reclassification adjustment for securities gains realized in income		(767	)		—			(875	)		(124	)
Income tax effect		(511	)		882			(2,550	)		279
Unrealized gains (losses) on securities		949			(1,640	)		4,735			(519	)
Other Comprehensive Income (Loss), Net of Tax		895			(1,308	)		4,316			(401	)
Comprehensive Income	$	7,221		$	3,420		$	16,023		$	9,685

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)

									Accumulated
				Additional					Other
	Preferred			Paid-in		Retained			Comprehensive
	Stock			Capital		Earnings			Income (Loss)			Total
Balances, January 1, 2016	$	12,500		$	106,370	$	148,685		$	(723	)	$	266,832
Net income							11,707						11,707
Other comprehensive loss, net of tax										4,316			4,316
Redemption of preferred stock		(12,500	)										(12,500	)
Amortization of unearned compensation					150								150
Stock option expense					170								170
Stock issued in acquisition					14,068								14,068
Cash dividends on preferred stock (1.00%)							(42	)					(42	)
Cash dividends on common stock ($.30 per share)							(3,699	)					(3,699	)
Balances, June 30, 2016	$	—		$	120,758	$	156,651		$	3,593		$	281,002

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
	2016			2015
	(Unaudited)			(Unaudited)
Operating Activities
Net income	$	11,707		$	10,086
Items not requiring (providing) cash
Provision for loan losses		764			2,520
Depreciation and amortization		2,463			1,883
Share based compensation		170			138
Mortgage servicing rights net impairment		840			356
Premium amortization on securities available for sale, net		2,673			1,289
Gain on sale of investment securities		(875	)		(124	)
Gain on sale of mortgage loans		(5,643	)		(5,021	)
Proceeds from sales of loans		144,197			155,746
Loans originated for sale		(138,452	)		(152,259	)
Change in cash value of life insurance		(695	)		(515	)
Gain (Loss) on sale of other real estate owned		118			(206	)
Net change in
Interest receivable		(355	)		(577	)
Interest payable		399			(36	)
Other assets		(5,624	)		4,099
Other liabilities		316			(1,511	)
Net cash provided by operating activities		12,003			15,868
Investing Activities
Purchases of securities available for sale		(50,143	)		(47,958	)
Proceeds from sales, maturities, calls, and principal repayments of securities available for sale		65,523			40,359
Purchases of securities held to maturity		(17,960	)		—
Proceeds from maturities of securities held to maturity		12,934			1,535
Proceeds from the sale of FHLB stock		(2,231	)		268
Net change in loans		(88,250	)		(142,131	)
Proceeds on the sale of OREO and repossessed assets		1,253			1,793
Change in premises and equipment, net		(683	)		(3,587	)
Acquisition of Kosciusko, net of cash received		30,437			—
Net cash used in investing activities		(49,120	)		(149,721	)
Financing Activities
Net change in
Deposits		78,622			102,404
Borrowings		35,310			34,115
Redemption of preferred stock		(12,500	)		—
Proceeds from issuance of stock					389
Dividends paid on common shares		(3,699	)		(2,611	)
Dividends paid on preferred shares		(42	)		(63	)
Net cash provided by financing activities		97,691			134,234
Net Change in Cash and Cash Equivalents		60,574			381
Cash and Cash Equivalents, Beginning of Period		48,650			43,476
Cash and Cash Equivalents, End of Period	$	109,224		$	43,857
Additional Supplemental Information
Interest paid	$	7,081		$	6,519
Income taxes paid		4,750			3,700
Transfer of loans to other real estate owned		1,971			(1,384	)
The Company purchased all of the capital stock of Kosciusko for $22,581 on June 1, 2016. In conjunction with the acquisition, liabilities were assumed as follows:
Fair value of assets acquired		155,413			—
Less: common stock issued		14,068			—
Cash paid for the capital stock		8,513			—
Liabilities assumed		132,832			—

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, 2016 and June 30, 2015 are not necessarily indicative of the operating results for the full year of 2016 or 2015. 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 2015 filed with the Securities and Exchange Commission on February 29, 2016. The condensed consolidated balance sheet of Horizon as of December 31, 2015 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				Six Months Ended
	June 30				June 30
	2016		2015		2016		2015
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	6,326	$	4,728	$	11,707	$	10,086
Less: Preferred stock dividends		—		31		42		63
Net income available to common shareholders	$	6,326	$	4,697	$	11,665	$	10,023
Weighted average common shares outstanding		12,179,253		9,240,005		12,064,335		9,228,075
Basic earnings per share	$	0.52	$	0.51	$	0.97	$	1.09
Diluted earnings per share
Net income available to common shareholders	$	6,326	$	4,697	$	11,665	$	10,023
Weighted average common shares outstanding		12,179,253		9,240,005		12,064,335		9,228,075
Effect of dilutive securities:
Warrants		—		324,698		—		323,198
Restricted stock		20,721		34,892		21,050		30,816
Stock options		42,804		37,991		41,643		33,462
Weighted average shares outstanding		12,242,778		9,637,586		12,127,028		9,615,551
Diluted earnings per share	$	0.52	$	0.49	$	0.96	$	1.04

There were zero shares for both the three and six months ended June 30, 2016, respectively, and 2,500 and 41,444 for the three and six months ended June 30, 2015 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, 2015 Annual Report on Form 10-K.

Note 2 – Acquisitions

On July 1, 2015, Horizon completed the acquisition of Peoples Bancorp, an Indiana corporation (“Peoples”) and Horizon Bank N.A.’s acquisition of Peoples Federal Savings Bank of DeKalb County (“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. The Company had approximately $4.9 million in costs related to the acquisition as of December 31, 2015. These expenses were 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 increased its deposit base and reduced 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 Peoples 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 final purchase price for the Peoples acquisition is allocated as follows:

ASSETS
Cash and due from banks	$	205,054
Investment securities, held to maturity		2,038
Commercial		67,435
Residential mortgage		137,331
Consumer		19,593
Total loans		224,359
Premises and equipment, net		5,524
FRB and FHLB stock		2,743
Goodwill		21,424
Core deposit intangible		4,394
Interest receivable		1,279
Cash value of life insurance		13,898
Other assets		4,364
Total assets purchased	$	485,077
Common shares issued	$	55,506
Cash paid		22,641
Total estimated purchase price	$	78,147

LIABILITIES
Deposits
Non-interest bearing	$	28,251
NOW accounts		65,771
Savings and money market		125,176
Certificates of deposits		131,889
Total deposits		351,087
Borrowings		48,884
Interest payable		21
Other liabilities		6,938
Total liabilities assumed	$	406,930

Of the total purchase price of $78.1 million, $4.4 million has been allocated to core deposit intangible. Additionally, $21.0 million has been allocated to goodwill and none of the purchase price is deductible. The core deposit intangible will be amortized over seven years on a straight line basis.

The Company acquired the $228.6 million loan portfolio at a fair value discount of $4.8 million. The performing portion of the portfolio, $223.4 million, had an estimated fair value of $220.0 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.

9

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

The Company acquired certain 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.

The 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.

Loans with 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 July 1, 2015.

Contractually required principal and interest at acquisition	$	5,730
Contractual cash flows not expected to be collected (nonaccretable differences)		715
Expected cash flows at acquisition		5,015
Interest component of expected cash flows (accretable discount)		647
Fair value of acquired loans accounted for under ASC 310-30	$	4,368

The results of operations of Peoples and Peoples FSB have been included in the Company’s consolidated financial statements since the acquisition dates. The following schedule includes pro forma results for the periods ended June 30, 2016 and 2015 as if the Peoples and Peoples FSB acquisitions had occurred as of the beginning of the comparable prior reporting period.

10

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

	Three Months Ended				Six Months Ended
	June 30		June 30		June 30		June 30
	2016		2015		2016		2015
Summary of Operations:
Net Interest Income	$	20,869	$	20,829	$	40,643	$	40,690
Provision for Loan Losses		232		1,936		764		2,580
Net Interest Income after Provision for Loan Losses		20,637		18,893		39,879		38,110
Non-interest Income		9,869		8,086		17,733		16,145
Non-Interest Expense		21,555		19,852		41,302		39,014
Income before Income Taxes		8,951		7,127		16,310		15,241
Income Tax Expense		2,625		1,779		4,603		3,791
Net Income		6,326		5,348		11,707		11,450
Net Income Available to Common Shareholders	$	6,326	$	5,317	$	11,665	$	11,387
Basic Earnings Per Share	$	0.52	$	0.46	$	0.97	$	0.99
Diluted Earnings Per Share	$	0.52	$	0.45	$	0.96	$	0.96

The pro forma information includes adjustments for interest income on loans, amortization of intangibles arising from the transaction, interest expense on deposits acquired, premises expense for the banking centers acquired and the related income tax effects. The pro forma information for the three and six months ended June 30, 2015 includes $657,000, net of tax, of operating revenue from Peoples and approximately $95,000, net of tax, of non-recurring expenses directly attributable to the Peoples acquisition.

The pro forma financial information is presented for information purposes only and is not indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future results.

On June 1, 2016, Horizon completed the acquisition of Kosciusko Financial, Inc., an Indiana corporation (“Kosciusko”) and Horizon Bank’s acquisition of Farmers State Bank, a state-chartered bank and wholly owned subsidiary of Kosciusko, through mergers effective June 1, 2016. Under the terms of the Merger Agreement, shareholders of Kosciusko had the option to receive $81.75 per share in cash or 3.0122 shares of Horizon common stock for each share of Kosciusko’s common stock, subject to allocation provisions to assure that in aggregate, Kosciusko shareholders received total consideration that consists of 65% stock and 35% cash. Kosciusko shareholders owning fewer than 100 shares of common stock received $81.75 in cash for each common share. As a result of Kosciusko stockholder stock and cash elections and the related proration provisions of the Merger Agreement, Horizon issued 582,287 shares of its common stock in the merger. Based upon the June 1, 2016 closing price of $24.85 per share of Horizon common stock, the transaction has an implied valuation of approximately $23.0 million. The Company has had approximately $1.6 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 acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on preliminary valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change, the purchase price for the Kosciusko acquisition is detailed in the following table. Prior to the end of the one year measurement period for finalizing the purchase price allocation, if information becomes available which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation prospectively. If any adjustments are made to the preliminary assumptions (provisional amounts), disclosures will be made in the notes to the financial statements of the amounts recorded in the current period earnings by line item that have been recorded in previous reporting periods if the adjustments to the provisional amounts had been recognized as of the acquisition date.

11

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

ASSETS
Cash and due from banks	$	38,950
Investment securities, held to maturity		1,191
Commercial		67,310
Residential mortgage		26,244
Consumer		6,319
Total loans		99,873
Premises and equipment, net		1,466
FRB and FHLB stock		582
Goodwill		6,858
Core deposit intangible		1,867
Interest receivable		636
Cash value of life insurance		2,745
Other assets		1,245
Total assets purchased	$	155,413
Common shares issued	$	14,068
Cash paid		8,513
Total estimated purchase price	$	22,581

LIABILITIES
Deposits
Non-interest bearing	$	28,549
NOW accounts		35,213
Savings and money market		26,953
Certificates of deposits		32,771
Total deposits		123,486
Borrowings		8,303
Interest payable		55
Other liabilities		988
Total liabilities assumed	$	132,832

Of the total estimated purchase price of $22.6 million, $1.9 million has been allocated to core deposit intangible. Additionally, $6.9 million has been allocated to goodwill and none of the purchase price is deductible. 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.

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

On July 18, 2016, Horizon completed the acquisition of LaPorte Bancorp, Inc., a Maryland corporation (“LaPorte Bancorp”) and Horizon Bank’s acquisition of The LaPorte Savings Bank, a state-chartered savings bank and wholly owned subsidiary of LaPorte Bancorp, through mergers effective July 18, 2016. Under the terms of the Merger Agreement, shareholders of LaPorte Bancorp had the option to receive $17.50 per share in cash or 0.629 shares of Horizon common stock for each share of LaPorte Bancorp’s common stock, subject to allocation provisions to assure that in aggregate, LaPorte Bancorp shareholders received total consideration that consists of 65% stock and 35% cash. LaPorte Bancorp shareholders owning fewer than 100 shares of common stock received $17.50 in cash for each common share. As a result of LaPorte stockholder stock and cash elections and the related proration provisions of the Merger Agreement, Horizon issued 2,280,992 shares of its common stock in the merger. Based upon the July 18, 2016 closing price of $27.54 per share of Horizon common stock, the transaction has an implied valuation of approximately $101.7 million.

As of July 18, 2016, LaPorte Bancorp had total assets of approximately $536.0 million, total deposits of approximately $370.9 million and total net loans of approximately $316.8 million.

Utilizing July 15, 2016 financials for both Horizon and LaPorte Bancorp and an estimate of the fair market value adjustments associated with the merger, Horizon would have total assets of approximately $3.5 billion, total deposits of approximately $2.5 billion and total net loans of approximately $2.2 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.

12

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Note 3 – Securities

The fair value of securities is as follows:

			Gross		Gross
June 30, 2016	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale
U.S. Treasury and federal agencies	$	18,384	$	86	$	—		$	18,470
State and municipal		60,961		1,654		(4	)		62,611
Federal agency collateralized mortgage obligations		151,736		2,596		(69	)		154,263
Federal agency mortgage-backed pools		215,445		4,654		(276	)		219,823
Corporate notes		32		40		—			72
Total available for sale investment securities	$	446,558	$	9,030	$	(349	)	$	455,239
Held to maturity
State and municipal	$	143,093	$	7,586	$	(2,606	)	$	148,073
Federal agency collateralized mortgage obligations		8,424		199		—			8,623
Federal agency mortgage-backed pools		22,179		1,184		—			23,363
Total held to maturity investment securities	$	173,696	$	8,969	$	(2,606	)	$	180,059
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2015	Cost		Gains		Losses			Value
Available for sale
U.S. Treasury and federal agencies	$	5,940	$	3	$	(17	)	$	5,926
State and municipal		73,829		1,299		(33	)		75,095
Federal agency collateralized mortgage obligations		157,291		567		(1,655	)		156,203
Federal agency mortgage-backed pools		206,970		2,080		(1,346	)		207,704
Corporate notes		32		22		—			54
Total available for sale investment securities	$	444,062	$	3,971	$	(3,051	)	$	444,982
Held to maturity
U.S. Treasury and federal agencies	$	5,859	$	93	$	—		$	5,952
State and municipal		146,331		5,375		(253	)		151,453
Federal agency collateralized mortgage obligations		9,051		27		(124	)		8,954
Federal agency mortgage-backed pools		26,388		1,141		(185	)		27,344
Total held to maturity investment securities	$	187,629	$	6,636	$	(562	)	$	193,703

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, 2016, 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, 2016.

13

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

The amortized cost and fair value of securities available for sale and held to maturity at June 30, 2016 and December 31, 2015, 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, 2016				December 31, 2015
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
Within one year	$	7,123	$	7,153	$	7,192	$	7,232
One to five years		46,104		46,664		38,197		38,894
Five to ten years		11,351		11,804		16,807		17,152
After ten years		14,799		15,532		17,605		17,797
		79,377		81,153		79,801		81,075
Federal agency collateralized mortgage obligations		151,736		154,263		157,291		156,203
Federal agency mortgage-backed pools		215,445		219,823		206,970		207,704
Total available for sale investment securities	$	446,558	$	455,239	$	444,062	$	444,982
Held to maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		20,415		20,436		17,815		18,403
Five to ten years		88,183		92,551		106,167		110,026
After ten years		34,495		35,086		28,208		28,976
		143,093		148,073		152,190		157,405
Federal agency collateralized mortgage obligations		8,424		8,623		9,051		8,954
Federal agency mortgage-backed pools		22,179		23,363		26,388		27,344
Total held to maturity investment securities	$	173,696	$	180,059	$	187,629	$	193,703

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

	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
June 30, 2016	Value		Losses			Value		Losses			Value		Losses
State and municipal	$	1,763	$	(2,609	)	$	132	$	(1	)	$	1,895	$	(2,610	)
Federal agency collateralized mortgage obligations		4,059		(23	)		9,079		(46	)		13,138		(69	)
Federal agency mortgage-backed pools		23,361		(276	)		—		—			23,361		(276	)
Total temporarily impaired securities	$	29,183	$	(2,908	)	$	9,211	$	(47	)	$	38,394	$	(2,955	)
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2015	Value		Losses			Value		Losses			Value		Losses
U.S. Treasury and federal agencies	$	5,468	$	(17	)	$	—	$	—		$	5,468	$	(17	)
State and municipal		17,353		(280	)		446		(6	)		17,799		(286	)
Federal agency collateralized mortgage obligations		89,459		(1,124	)		25,428		(655	)		114,887		(1,779	)
Federal agency mortgage-backed pools		113,244		(1,212	)		16,506		(319	)		129,750		(1,531	)
Total temporarily impaired securities	$	225,524	$	(2,633	)	$	42,380	$	(980	)	$	267,904	$	(3,613	)

	Three Months Ended June 30					Six Months Ended June 30
	2016			2015		2016			2015
Sales of securities available for sale (Unaudited)
Proceeds	$	17,536		$	—	$	25,077		$	13,332
Gross gains		952			—		1,060			147
Gross losses		(185	)		—		(185	)		(23	)

14

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Note 4 – Loans

	June 30			December 31
	2016			2015
Commercial
Working capital and equipment	$	416,205		$	381,245
Real estate, including agriculture		424,300			391,668
Tax exempt		11,458			8,674
Other		22,617			23,408
Total		874,580			804,995
Real estate
1–4 family		489,133			433,015
Other		4,493			4,129
Total		493,626			437,144
Consumer
Auto		162,172			168,397
Recreation		5,005			5,365
Real estate/home improvement		50,121			47,015
Home equity		130,017			127,113
Unsecured		4,175			4,120
Other		12,430			10,290
Total		363,920			362,300
Mortgage warehouse		205,699			144,692
Total loans		1,937,825			1,749,131
Allowance for loan losses		(14,226	)		(14,534	)
Loans, net	$	1,923,599		$	1,734,597

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.

15

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 and the related mortgagee are underwritten by Horizon to the end investor guidelines and is assigned to Horizon until the loan is sold to the secondary market by the mortgage company. 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 reacquires the loan under its option within the agreement. Due to the reacquire 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 reacquire 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 reacquire 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 reacquire its loan on an individual mortgage, Horizon would be able to exercise its rights under the agreement.

16

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.

	Loan					Deferred			Recorded
June 30, 2016	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	298,481		$	1,068	$	1,134		$	300,683
Non owner occupied real estate		343,360			346		566			344,272
Residential spec homes		7,660			13		13			7,686
Development & spec land loans		23,171			58		16			23,245
Commercial and industrial		199,933			1,419		246			201,598
Total commercial		872,605			2,904		1,975			877,484
Residential mortgage		473,563			1,434		2,277			477,274
Residential construction		17,786			36		—			17,822
Mortgage warehouse		205,699			480		—			206,179
Total real estate		697,048			1,950		2,277			701,275
Direct installment		59,105			164		(383	)		58,886
Direct installment purchased		131			—		—			131
Indirect installment		144,935			300		—			145,235
Home equity		160,955			621		(823	)		160,753
Total consumer		365,126			1,085		(1,206	)		365,005
Total loans		1,934,779			5,939		3,046			1,943,764
Allowance for loan losses		(14,226	)		—		—			(14,226	)
Net loans	$	1,920,553		$	5,939	$	3,046		$	1,929,538
	Loan					Deferred			Recorded
December 31, 2015	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	268,281		$	613	$	1,328		$	270,222
Non owner occupied real estate		326,399			306		497			327,202
Residential spec homes		5,018			9		17			5,044
Development & spec land loans		18,183			33		26			18,242
Commercial and industrial		184,911			1,246		335			186,492
Total commercial		802,792			2,207		2,203			807,202
Residential mortgage		414,924			1,275		2,470			418,669
Residential construction		19,751			34		—			19,785
Mortgage warehouse		144,692			480		—			145,172
Total real estate		579,367			1,789		2,470			583,626
Direct installment		54,341			168		(359	)		54,150
Direct installment purchased		153			—		—			153
Indirect installment		151,523			323		—			151,846
Home equity		157,164			628		(522	)		157,270
Total consumer		363,181			1,119		(881	)		363,419
Total loans		1,745,340			5,115		3,792			1,754,247
Allowance for loan losses		(14,534	)		—		—			(14,534	)
Net loans	$	1,730,806		$	5,115	$	3,792		$	1,739,713

17

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. Amounts for Kosciusko were estimated as of June 30, 2016 as the final analysis of loans with deterioration was not completed.

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

	June 30		June 30		June 30		June 30		June 30
	2016		2016		2016		2016		2016
	Heartland		Summit		Peoples		Kosciusko		Total
Commercial	$	1,243	$	5,409	$	750	$	7,576	$	14,978
Real estate		641		1,181		281		316		2,419
Consumer		1		9		—		22		32
Outstanding balance	$	1,885	$	6,599	$	1,031	$	7,914	$	17,429
Carrying amount, net of allowance of $0									$	17,429
	December 31		December 31		December 31		December 31		December 31
	2015		2015		2015		2015		2015
	Heartland		Summit		Peoples		Kosciusko		Total
Commercial	$	1,633	$	5,567	$	1,061	$	—	$	8,261
Real estate		693		1,216		179		—		2,088
Consumer		6		35		—		—		41
Outstanding balance	$	2,332	$	6,818	$	1,240	$	—	$	10,390
Carrying amount, net of allowance of $63									$	10,327

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

	Six Months Ended June 30, 2016
	Heartland			Summit			Peoples			Kosciusko		Total
Balance at January 1	$	795		$	708		$	555		$	—	$	2,058
Additions		—			—			—			950		950
Accretion		(89	)		(103	)		(69	)		—		(261	)
Reclassification from nonaccretable difference		—			—			—			—		—
Disposals		(24	)		(4	)		(58	)		—		(86	)
Balance at June 30	$	682		$	601		$	428		$	950	$	2,661
	Six Months Ended June 30, 2015
	Heartland			Summit			Peoples			Kosciusko		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

18

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

During the six months ended June 30, 2016 and 2015, the Company decreased the allowance for loan losses on purchased loans by a recovery to the income statement of $0 and $76,000, respectively.

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						Six Months Ended
	June 30						June 30
	2016			2015			2016			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance at beginning of the period	$	14,236		$	16,634		$	14,534		$	16,501
Loans charged-off:
Commercial
Owner occupied real estate		31			1,422			178			1,422
Non owner occupied real estate		173			—			472			16
Residential development		—			—			—			—
Development & Spec Land Loans		—			—			—			—
Commercial and industrial		—			253			39			253
Total commercial		204			1,675			689			1,691
Real estate
Residential mortgage		—			164			115			186
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		—			164			115			186
Consumer
Direct Installment		46			96			104			155
Direct Installment Purchased		—			—			—			—
Indirect Installment		279			196			555			565
Home Equity		64			304			239			504
Total consumer		389			596			898			1,224
Total loans charged-off		593			2,435			1,702			3,101
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		4			78			29			86
Non owner occupied real estate		31			—			54			—
Residential development		2			—			4			—
Development & Spec Land Loans		—			—			—			—
Commercial and industrial		63			14			95			33
Total commercial		100			92			182			119
Real estate
Residential mortgage		31			3			63			5
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		31			3			63			5
Consumer
Direct Installment		28			47			44			76
Direct Installment Purchased		—			—			—			—
Indirect Installment		146			134			240			235
Home Equity		46			40			101			66
Total consumer		220			221			385			377
Total loan recoveries		351			316			630			501
Net loans charged-off (recovered)		242			2,119			1,072			2,600
Provision charged to operating expense
Commercial		(305	)		2,093			(639	)		2,048
Real estate		343			(29	)		(249	)		904
Consumer		194			(158	)		1,652			(432	)
Total provision charged to operating expense		232			1,906			764			2,520
Balance at the end of the period	$	14,226		$	16,421		$	14,226		$	16,421

19

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Certain loans are individually evaluated for impairment, and the Company’s general practice is to proactively charge down impaired loans to the fair value, which is the appraised value less estimated selling costs, 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, 2016	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	500	$	—	$	—	$	—	$	500
Collectively evaluated for impairment		5,551		2,102		1,080		4,993		13,726
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	6,051	$	2,102	$	1,080	$	4,993	$	14,226
Loans:
Individually evaluated for impairment	$	4,344	$	—	$	—	$	—	$	4,344
Collectively evaluated for impairment		873,140		495,096		206,179		365,005		1,939,420
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	877,484	$	495,096	$	206,179	$	365,005	$	1,943,764
December 31, 2015	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	202	$	—	$	—	$	—	$	202
Collectively evaluated for impairment		6,739		2,476		1,007		3,856		14,078
Loans acquired with deteriorated credit quality		254		—		—		—		254
Total ending allowance balance	$	7,195	$	2,476	$	1,007	$	3,856	$	14,534
Loans:
Individually evaluated for impairment	$	7,019	$	—	$	—	$	—	$	7,019
Collectively evaluated for impairment		798,454		438,454		145,172		363,419		1,745,499
Loans acquired with deteriorated credit quality		1,729		—		—		—		1,729
Total ending loans balance	$	807,202	$	438,454	$	145,172	$	363,419	$	1,754,247

20

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, 2016	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,054	$	—	$	—	$	—	$	1,054
Non owner occupied real estate		2,901		—		243		60		3,204
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		71		—		—		—		71
Total commercial		4,026		—		243		60		4,329
Real estate
Residential mortgage		3,664		1		803		950		5,418
Residential construction		—		—		242		—		242
Mortgage warehouse		—		—		—		—		—
Total real estate		3,664		1		1,045		950		5,660
Consumer
Direct Installment		345		—		—		—		345
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		837		23		—		—		860
Home Equity		1,554		—		178		246		1,978
Total Consumer		2,736		23		178		246		3,183
Total	$	10,426	$	24	$	1,466	$	1,256	$	13,172
December 31, 2015	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,749	$	—	$	—	$	—	$	1,749
Non owner occupied real estate		3,034		—		1,915		60		5,009
Residential development		—		—		—		—		—
Development & Spec Land Loans		71		—		—		—		71
Commercial and industrial		176		—		—		—		176
Total commercial		5,030		—		1,915		60		7,005
Real estate
Residential mortgage		4,354		1		824		808		5,987
Residential construction		—		—		250		—		250
Mortgage warehouse		—		—		—		—		—
Total real estate		4,354		1		1,074		808		6,237
Consumer
Direct Installment		541		—		—		—		541
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		601		27		—		—		628
Home Equity		1,736		—		183		350		2,269
Total Consumer		2,878		27		183		350		3,438
Total	$	12,262	$	28	$	3,172	$	1,218	$	16,680

21

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Included in the $10.4 million of non-accrual loans and the $1.5 million of non-performing TDRs at June 30, 2016 were $2.1 million and $94,000, 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 generally 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 Operations Officer or the senior collection officer must review all loans placed on non-accrual status. Subsequent payments on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal in accordance with the loan terms. The Company requires a period of satisfactory performance of not less than six months before returning a non-accrual loan to accrual status.

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

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

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

The Company’s TDRs are considered impaired loans and included in the allowance methodology using the guidance for impaired loans. At June 30, 2016, 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, 2016, the Company had $2.7 million in TDRs and $1.3 million were performing according to the restructured terms and zero TDRs were returned to accrual status during the first six months of 2016. There was $107,000 of specific reserves allocated to TDRs at June 30, 2016 based on the discounted cash flows or when appropriate the fair value of the collateral.

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, 2016	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	$	1,054	$	1,054	$	—	$	1,062	$	—	$	1,079	$	—
Non owner occupied real estate		476		480		—		600		1		1,331		2
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		71		71		—		320		—		325		—
Total commercial		1,601		1,605		—		1,982		1		2,735		2
With an allowance recorded
Commercial
Owner occupied real estate		—		—		—		—		—		—		—
Non owner occupied real estate		2,729		2,739		500		2,747		—		2,757		—
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		—
Total commercial		2,729		2,739		500		2,747		—		2,757		—
Total	$	4,330	$	4,344	$	500	$	4,729	$	1	$	5,492	$	2

							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

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, 2016	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	$	98		$	437		$	—		$	535		$	297,946		$	298,481
Non owner occupied real estate		20			—			—			20			343,340			343,360
Residential development		—			—			—			—			7,660			7,660
Development & Spec Land Loans		2			—			—			2			23,169			23,171
Commercial and industrial		—			91			—			91			199,842			199,933
Total commercial		120			528			—			648			871,957			872,605
Real estate
Residential mortgage		1,023			300			1			1,324			472,239			473,563
Residential construction		—			271			—			271			17,515			17,786
Mortgage warehouse		—			—			—			—			205,699			205,699
Total real estate		1,023			571			1			1,595			695,453			697,048
Consumer
Direct Installment		155			16			—			171			58,934			59,105
Direct Installment Purchased		—			—			—			—			131			131
Indirect Installment		493			75			23			591			144,344			144,935
Home Equity		310			134			—			444			160,511			160,955
Total consumer		958			225			23			1,206			363,920			365,126
Total	$	2,101		$	1,324		$	24		$	3,449		$	1,931,330		$	1,934,779
Percentage of total loans		0.11	%		0.07	%		0.00	%		0.18	%		99.82	%
December 31, 2015	30 - 59 Days Past Due			60 - 89 Days Past Due			Greater than 90 Days Past Due			Total Past Due			Loans Not Past Due			Total
Commercial
Owner occupied real estate	$	481		$	18		$	—		$	499		$	267,782		$	268,281
Non owner occupied real estate		49			—			—			49			326,350			326,399
Residential development		—			—			—			—			5,018			5,018
Development & Spec Land Loans		—			—			—			—			18,183			18,183
Commercial and industrial		32			—			—			32			184,879			184,911
Total commercial		562			18			—			580			802,212			802,792
Real estate
Residential mortgage		1,121			344			1			1,466			413,458			414,924
Residential construction		—			—			—			—			19,751			19,751
Mortgage warehouse		—			—			—			—			144,692			144,692
Total real estate		1,121			344			1			1,466			577,901			579,367
Consumer
Direct Installment		106			10			—			116			54,225			54,341
Direct Installment Purchased		—			—			—			—			153			153
Indirect Installment		1,186			268			27			1,481			150,042			151,523
Home Equity		1,193			203			—			1,396			155,768			157,164
Total consumer		2,485			481			27			2,993			360,188			363,181
Total	$	4,168		$	843		$	28		$	5,039		$	1,740,301		$	1,745,340
Percentage of total loans		0.24	%		0.05	%		0.00	%		0.29	%		99.71	%

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.

24

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

• 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 to 120 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, 2016	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	282,204		$	8,716		$	7,561		$	—		$	298,481
Non owner occupied real estate		336,897			3,033			3,430			—			343,360
Residential development		7,660			—			—			—			7,660
Development & Spec Land Loans		23,171			—			—			—			23,171
Commercial and industrial		188,713			2,342			8,878			—			199,933
Total commercial		838,645			14,091			19,869			—			872,605
Real estate
Residential mortgage		468,145			—			5,418			—			473,563
Residential construction		17,544			—			242			—			17,786
Mortgage warehouse		205,699			—			—			—			205,699
Total real estate		691,388			—			5,660			—			697,048
Consumer
Direct Installment		58,760			—			345			—			59,105
Direct Installment Purchased		131			—			—			—			131
Indirect Installment		144,075			—			860			—			144,935
Home Equity		158,977			—			1,978			—			160,955
Total Consumer		361,943			—			3,183			—			365,126
Total	$	1,891,976		$	14,091		$	28,712		$	—		$	1,934,779
Percentage of total loans		97.79	%		0.73	%		1.48	%		0.00	%
December 31, 2015	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	257,181		$	4,954		$	6,146		$	—		$	268,281
Non owner occupied real estate		320,216			585			5,598			—			326,399
Residential development		5,018			—			—			—			5,018
Development & Spec Land Loans		18,112			—			71			—			18,183
Commercial and industrial		180,581			693			3,637			—			184,911
Total commercial		781,108			6,232			15,452			—			802,792
Real estate
Residential mortgage		408,937			—			5,987			—			414,924
Residential construction		19,501			—			250			—			19,751
Mortgage warehouse		144,692			—			—			—			144,692
Total real estate		573,130			—			6,237			—			579,367
Consumer
Direct Installment		53,800			—			541			—			54,341
Direct Installment Purchased		153			—			—			—			153
Indirect Installment		150,895			—			628			—			151,523
Home Equity		154,895			—			2,269			—			157,164
Total Consumer		359,743			—			3,438			—			363,181
Total	$	1,713,981		$	6,232		$	25,127		$	—		$	1,745,340
Percentage of total loans		98.20	%		0.36	%		1.44	%		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 acquire 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	$	50,348		$	25,000	$	60,000	$	10,000	$	—		$	—		$	145,348
Securities lending transactions
U.S. Treasury and federal agencies	$	4,038		$	—	$	—	$	—	$	—		$	—		$	4,038
Federal agency collateralized mortgage obligations		44,521			—		388		173		21,541			30,301			96,924
Federal agency mortgage-backed pools		15,003			—		110		2,404		21,304			28,396			67,217
Total		63,562			—		498		2,577		42,845			58,697			168,179
Total borrowings	$	(13,214	)	$	25,000	$	59,502	$	7,423	$	(42,845	)	$	(58,697	)	$	(22,831	)

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, 2016 and December 31, 2015. 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, 2016, 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, 2016, 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 $121.7 million at June 30, 2016 and $117.3 million at December 31, 2015.

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, 2016, 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 Derivatives				Liability Derivatives
	June 30, 2016				June 30, 2016
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts		Loans	$	—		Other liabilities	$	5,393
Interest rate contracts		Other Assets		5,393		Other liabilities		3,786
Total derivatives designated as hedging instruments				5,393				9,179
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		1,111		Other liabilities		—
Total derivatives not designated as hedging instruments				1,111				—
Total derivatives			$	6,504			$	9,179
	Asset Derivatives				Liability Derivatives
	December 31, 2015				December 31, 2015
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts		Loans	$	—		Other liabilities	$	1,782
Interest rate contracts		Other Assets		1,782		Other liabilities		3,141
Total derivatives designated as hedging instruments				1,782				4,923
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		642		Other liabilities		—
Total derivatives not designated as hedging instruments				642				—
Total derivatives			$	2,424			$	4,923

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 statements of income for the three and six month periods ending June 30 is as follows:

	Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)					Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended June 30					Six Months Ended June 30
Derivative in cash flow	2016			2015		2016			2015
hedging relationship	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
Interest rate contracts	$	(54	)	$	332	$	(419	)	$	118

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	Location of gain (loss)	2016			2015			2016			2015
hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest rate contracts	Interest income - loans	$	1,110		$	(1,186	)	$	3,611		$	(186	)
Interest rate contracts	Interest income - loans		(1,110	)		1,186			(3,611	)		186
Total		$	—		$	—		$	—		$	—
		Amount of Gain (Loss) Recognized on Derivative Three Months Ended June 30						Amount of Gain (Loss) Recognized on Derivative Six Months Ended June 30
Derivative not designated	Location of gain (loss)	2016			2015			2016			2015
as hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Mortgage contracts	Other income - gain on sale of loans	$	468		$	83		$	471		$	272

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, 2016. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

31

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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 collateralized mortgage obligations and mortgage-backed pools and corporate notes. Level 2 securities are valued by a third 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 third 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:

32

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

				Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
	Fair Value			(Level 1)		(Level 2)			(Level 3)
June 30, 2016
Available-for-sale securities
U.S. Treasury and federal agencies	$	18,470		$	—	$	18,470		$	—
State and municipal		62,611			—		62,611			—
Federal agency collateralized mortgage obligations		154,263			—		154,263			—
Federal agency mortgage-backed pools		219,823			—		219,823			—
Corporate notes		72			—		72			—
Total available-for-sale securities		455,239			—		455,239			—
Hedged loans		116,338			—		116,338			—
Forward sale commitments		1,111			—		1,111			—
Interest rate swap agreements		(9,179	)		—		(9,179	)		—
Commitments to originate loans		—			—		—			—
December 31, 2015
Available-for-sale securities
U.S. Treasury and federal agencies	$	5,926		$	—	$	5,926		$	—
State and municipal		75,095			—		75,095			—
Federal agency collateralized mortgage obligations		156,203			—		156,203			—
Federal agency mortgage-backed pools		207,704			—		207,704			—
Corporate notes		54			—		54			—
Total available-for-sale securities		444,982			—		444,982			—
Hedged loans		115,472			—		115,472			—
Forward sale commitments		642			—		642			—
Interest rate swap agreements		(4,923	)		—		(4,923	)		—

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	2016			2015			2016			2015
Total gains and losses from:	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Hedged loans	$	1,110		$	(1,186	)	$	3,611		$	(186	)
Fair value interest rate swap agreements		(1,110	)		1,186			(3,611	)		186
Derivative loan commitments		468			83			471			272
	$	468		$	83		$	471		$	272

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

			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2016
Impaired loans	$	3,830	$	—	$	—	$	3,830
Mortgage servicing rights		9,714		—		—		9,714
December 31, 2015
Impaired loans	$	6,803	$	—	$	—	$	6,803
Mortgage servicing rights		8,874		—		—		8,874

33

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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 due to impairment decreased by $46,000 during the first six months of 2016 and decreased by $18,000 during the first six months of 2015.

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

	Fair Value at		Valuation		Range (Weighted
	June 30, 2016		Technique	Unobservable Inputs	Average)
Impaired loans	$	3,830	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	10% - 15% (12%)
Mortgage servicing rights	$	9,714	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default	10% - 15% (12%), 4% - 7% (4.6%), 1% - 10% (4.5%)
	Fair Value at		Valuation		Range (Weighted
	December 31, 2015		Technique	Unobservable Inputs	Average)
Impaired loans	$	6,803	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	10% - 15% (12%)
Mortgage servicing rights	$	8,874	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.

34

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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, 2016 and December 31, 2015. 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.

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, 2016
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	109,224	$	109,224	$	—	$	—
Investment securities, held to maturity		173,696		—		180,059		—
Loans held for sale		7,812		—		—		7,812
Loans excluding loan level hedges, net		1,807,261		—		—		1,798,943
Stock in FHLB and FRB		16,636		—		16,636		—
Interest receivable		11,526		—		11,526		—
Liabilities
Non-interest bearing deposits	$	397,412	$	397,412	$	—	$	—
Interest-bearing deposits		1,684,849		—		1,656,009		—
Borrowings		492,883		—		491,538		—
Subordinated debentures		32,874		—		33,000		—
Interest payable		961		—		961		—
	December 31, 2015
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	48,650	$	48,650	$	—	$	—
Investment securities, held to maturity		187,629		—		193,703		—
Loans held for sale		7,917		—		—		7,917
Loans excluding loan level hedges, net		1,619,125		—		—		1,703,506
Stock in FHLB and FRB		13,823		—		13,823		—
Interest receivable		10,535		—		10,535		—
Liabilities
Non-interest bearing deposits	$	335,955	$	335,955	$	—	$	—
Interest-bearing deposits		1,544,198		—		1,461,314		—
Borrowings		449,347		—		441,547		—
Subordinated debentures		32,797		—		32,996		—
Interest payable		507		—		507		—

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 2016			December 31 2015
Unrealized gain on securities available for sale	$	8,681		$	920
Unamortized gain on securities held to maturity, previously transferred from AFS		632			1,109
Unrealized loss on derivative instruments		(3,786	)		(3,141	)
Tax effect		(1,934	)		389
Total accumulated other comprehensive income (loss)	$	3,593		$	(723	)

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, 2016, 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.

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, 2016) and Tier I leverage ratios as set forth in the table below. As of June 30, 2016 and December 31, 2015, 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 2016 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, 2016 and December 31, 2015 were as follows:

37

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

						Required For Capital1					Well Capitalized Under Prompt1
	Actual					Adequacy Purposes					Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2016
Total capital1 (to risk-weighted assets)
Consolidated	$	267,414		12.56	%	$	183,703		8.63	%		N/A		N/A
Bank		257,203		12.45	%		178,286		8.63	%	$	206,589		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		253,188		11.89	%		141,130		6.63	%		N/A		N/A
Bank		242,977		11.77	%		136,868		6.63	%		165,150		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets) Consolidated		220,120		10.34	%		109,200		5.13	%		N/A		N/A
Bank		242,977		11.77	%		105,902		5.13	%		134,184		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		253,188		9.55	%		106,069		4.00	%		N/A		N/A
Bank		242,977		9.18	%		105,872		4.00	%		132,340		5.00	%
As of December 31, 2015
Total capital1 (to risk-weighted assets)
Consolidated	$	264,452		13.99	%	$	151,223		8.00	%		N/A		N/A
Bank		237,348		12.57	%		151,057		8.00	%	$	188,821		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		249,918		13.22	%		113,427		6.00	%		N/A		N/A
Bank		222,814		11.80	%		113,295		6.00	%		151,060		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets) Consolidated		204,350		10.81	%		85,067		4.50	%		N/A		N/A
Bank		222,814		11.80	%		84,971		4.50	%		122,737		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		249,918		9.82	%		101,800		4.00	%		N/A		N/A
Bank		222,814		8.77	%		101,626		4.00	%		127,032		5.00	%

¹  As defined by regulatory agencies

Note 14 – Preferred Stock Redemption

On February 1, 2016, Horizon completed the redemption (the “Redemption”) of all 12,500 outstanding shares of Senior Non-Cumulative Perpetual Preferred Stock, Series B (the “SBLF Preferred Stock”) which were held by the U.S. Department of Treasury and issued pursuant to its Small Business Lending Fund (“SBLF”). The SBLF Preferred Stock was redeemed at its liquidation value of $1,000 per share, plus accrued dividends, for a total Redemption price of $12,510,416.67. Horizon funded the Redemption using cash on hand without borrowing and without a special dividend from the Bank. Following the Redemption, Horizon does not have any shares of its Senior Non-Cumulative Perpetual Preferred Stock, Series B outstanding. The Redemption terminates Horizon’s participation in the SBLF.

Note 15 – Business Combinations

On July 12, 2016, Horizon announced the acquisition of CNB Bancorp, parent company of The Central National Bank and Trust Company (“Central National Bank & Trust”). Under the terms of the Merger Agreement, stockholders of CNB Bancorp will receive cash consideration consisting of a special dividend calculated as capital in excess of 8% of CNB Bancorp’s total assets, less certain after tax transaction costs and an amount to be paid by Horizon equal to 120% of remaining capital. These amounts will be determined as of the end of the month prior to the closing of the merger. These amounts are dependent on CNB Bancorp’s earnings and other factors, but if the cash consideration for the stockholders were calculated as of March 31, 2016, the stockholders would receive, in the aggregate, a $6.7 million special dividend and a $5.3 million payment from Horizon. As of June 30, 2016, CNB Bancorp had total assets of approximately $56.4 million.

38

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Note 16 – Future Accounting Matters

In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting. The amendments affect all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. The amendments eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required.

The amendments require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method.

The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted.

In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements. Topic 326 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. The ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.

Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. The ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.

The ASU is effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (i.e., January 1, 2020, for calendar year entities. Early application will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.

39

HORIZON BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Note 17 – 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 of operation and cash flows of the Company.

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, 2016

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 and the outflow of deposits;

• loss of key Horizon personnel;

• increases in disintermediation, as new technologies allow consumers to complete financial transactions without the assistance of banks;

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

• volatility and disruption in financial markets;

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

• sources of liquidity;

• potential risk of environmental liability related to lending activities;

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

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

• the impact of the new Basel III capital rules;

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

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

• rapid technological developments and changes;

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, 2016

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

• containing costs and expenses;

• the slowing or failure of economic recovery;

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

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

The foregoing list of important factors is not exclusive, and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document or, in the case of documents incorporated by reference, the dates of those documents. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of us. For a detailed discussion of the risks and uncertainties that may cause our actual results or performance to differ materially from the results or performance expressed or implied by forward-looking statements, see “Risk Factors” in Item 1A of Part I of our 2015 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 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 July 18, 2016, Horizon completed the acquisition of LaPorte Bancorp, Inc., a Maryland corporation (“LaPorte Bancorp”) and Horizon Bank’s acquisition of The LaPorte Savings Bank, a state-chartered savings bank and wholly owned subsidiary of LaPorte Bancorp, through mergers effective July 18, 2016. Under the terms of the Merger Agreement, shareholders of LaPorte Bancorp had the option to receive $17.50 per share in cash or 0.629 shares of Horizon common stock for each share of LaPorte Bancorp’s common stock, subject to allocation provisions to assure that in aggregate, LaPorte Bancorp shareholders received total consideration that consists of 65% stock and 35% cash. LaPorte Bancorp shareholders owning fewer than 100 shares of common stock received $17.50 in cash for each common share. As a result of LaPorte stockholder stock and cash elections and the related proration provisions of the Merger Agreement, Horizon issued 2,280,992 shares of its common stock in the merger. Based upon the July 18, 2016 closing price of $27.54 per share of Horizon common stock, the transaction has an implied valuation of approximately $101.7 million.

On June 1, 2016, Horizon completed the acquisition of Kosciusko Financial, Inc., an Indiana corporation (“Kosciusko”) and Horizon Bank’s acquisition of Farmers State Bank, a state-chartered bank and wholly owned subsidiary of Kosciusko, through mergers effective June 1, 2016. Under the terms of the Merger Agreement, shareholders of Kosciusko had the option to receive $81.75 per share in cash or 3.0122 shares of Horizon common stock, or a combination of both, for each share of Kosciusko’s common stock, subject to allocation provisions to assure that in aggregate, Kosciusko shareholders received total consideration that consists of 65% stock and 35% cash. Kosciusko shareholders owning fewer than 100 shares of common stock received $81.75 in cash for each common share. As a result of Kosciusko stockholder stock and cash elections and the related proration provisions of the Merger Agreement, Horizon issued 582,287 shares of its common stock in the merger. Based upon the June 1, 2016 closing price of $24.85 per share of Horizon common stock, the transaction has an implied valuation of approximately $23.0 million.

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, 2016

On July 1, 2015, Horizon completed the acquisition of Peoples Bancorp, an Indiana corporation (“Peoples”) and Horizon Bank’s acquisition of Peoples Federal Savings Bank of DeKalb County, a federally-chartered stock savings bank and wholly owned subsidiary of Peoples, 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.

Following are some highlights of Horizon’s financial performance through the second quarter of 2016:

• Net income for the second quarter of 2016 was $6.3 million or $.52 diluted earnings per share.

• Excluding acquisition-related expenses and gain on sale of investment securities, net income for the second quarter of 2016 increased 38.9% compared to the same period of 2015 to $7.2 million or $.59 diluted earnings per share.

• Net income for the first six months of 2016 was $11.7 million or $.96 diluted earnings per share.

• Excluding acquisition-related expenses, gain on sale of investment securities and the death benefit on bank owned life insurance, net income for the first six months of 2016 increased 24.1% compared to the same period of 2015 to $13.0 million or $1.07 diluted earnings per share.

• Total loans, excluding mortgage warehouse loans, increased 8.1% on an annualized basis during the second quarter of 2016.

• Net interest income for the first six months of 2016 increased 17.0% or $5.9 million compared to the same period in 2015.

• Net interest margin, excluding the impact of acquisitions (“core net interest margin”), was 3.42% for the second quarter of 2016 compared to 3.36% for the prior quarter and 3.51% for the same period in 2015.

• Non-interest income for the first six months of 2016 increased 24.4% or $3.5 million compared to the same period in 2015.

• Horizon’s tangible book value per share rose to $17.17 at June 30, 2016, compared to $16.53 at December 31, 2015 and $17.06 at June 30, 2015.

• Horizon entered Fort Wayne, Indiana in the second quarter of 2016 by establishing a loan production team that will focus on commercial lending in Indiana’s second largest city.

• On June 1, 2016, Horizon closed the acquisition of Kosciusko Financial, Inc. (“Kosciusko”) and its wholly-owned subsidiary, Farmers State Bank, headquartered in Mentone, Indiana.

• On July 18, 2016, Horizon closed the acquisition of LaPorte Bancorp, Inc. (“LaPorte Bancorp”) and its wholly-owned subsidiary, The LaPorte Savings Bank, headquartered in La Porte, Indiana. LaPorte Bancorp’s results are not included in Horizon’s June 30, 2016 financial results.

• On July 12, 2016, Horizon announced the pending acquisition of CNB Bancorp and its wholly-owned subsidiary, The Central National Bank and Trust Company, headquartered in Attica, Indiana.

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 2015 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.

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, 2016

Allowance for Loan Losses

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

Goodwill and Intangible Assets

Management believes that the accounting for goodwill and other intangible assets also involves a higher degree of judgment than most other significant accounting policies. FASB ASC 350-10 establishes standards for the amortization of acquired intangible assets and impairment assessment of goodwill. At June 30, 2016, Horizon had core deposit intangibles of $8.7 million subject to amortization and $56.5 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, 2016 was $25.14 per share compared to a book value of $22.35 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.

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, 2016

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 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

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, 2016

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.

Financial Condition

On June 30, 2016, Horizon’s total assets were $2.9 billion, an increase of approximately $265.7 million compared to December 31, 2015. The increase was primarily in net loans of $189.0 million and cash of $60.6 million offset partially by a decrease in investment securities of $3.7 million.

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

	June 30, 2016				December 31, 2015
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
U.S. Treasury and federal agencies	$	18,384	$	18,470	$	5,940	$	5,926
State and municipal		60,961		62,611		73,829		75,095
Federal agency collateralized mortgage obligations		151,736		154,263		157,291		156,203
Federal agency mortgage-backed pools		215,445		219,823		206,970		207,704
Corporate notes		32		72		32		54
Total available for sale investment securities	$	446,558	$	455,239	$	444,062	$	444,982
Held to maturity
U.S. Treasury and federal agencies	$	—	$	—	$	5,859	$	5,952
State and municipal		143,093		148,073		146,331		151,453
Federal agency collateralized mortgage obligations		8,424		8,623		9,051		8,954
Federal agency mortgage-backed pools		22,179		23,363		26,388		27,344
Total held to maturity investment securities	$	173,696	$	180,059	$	187,629	$	193,703

Total investment securities decreased by approximately $3.7 million at June 30, 2016 compared to December 31, 2015, primarily due to the cash in-flows from investment securities used to fund loan growth.

Total loans increased $188.7 million since December 31, 2015 to $1.9 billion as of June 30, 2016. This increase was the result of an increase in commercial loans of $69.6 million, mortgage warehouse loans of $61.0 million, residential mortgage loans of $56.5 million and consumer loans of $1.6 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 as well as the loans added through the Kosciusko acquisition.

Total deposits increased $202.1 million since December 31, 2015 to $2.1 billion as of June 30, 2016. Non-interest bearing deposit accounts increased by $61.5 million, interest-bearing transaction accounts decreased by $36.0 million and time deposits increased by $104.6 million during the six months ended June 30, 2016.

The Company’s borrowings increased $43.5 million from December 31, 2015 to $492.9 million as of June 30, 2016. At June 30, 2016, the Company had $192.0 million in short-term funds borrowed compared to $206.0 million at December 31, 2015. The Company’s current balance sheet strategy is to utilize a reasonable level of short-term borrowings during extended low rate environments along with seasonal increases in municipal deposits to fund an increase in mortgage warehouse loans.

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, 2016

Stockholders’ equity totaled $281.0 million at June 30, 2016 compared to $266.8 million at December 31, 2015. The increase in stockholders’ equity during the period was the result of the generation of net income, net of dividends declared, as well as the stock issued in the Kosciusko acquisition. At June 30, 2016, the ratio of average stockholders’ equity to average assets was 9.94% compared to 10.32% at December 31, 2015 due to the growth in earning assets. Book value per common share at June 30, 2016 increased to $22.35 compared to $21.30 at December 31, 2015.

Results of Operations

Overview

Consolidated net income for the three-month period ended June 30, 2016 was $6.3 million compared to $4.7 million for the same period in 2015. Earnings per common share for the three months ended June 30, 2016 were $0.52 basic and $0.52 diluted, compared to $0.51 basic and $0.49 diluted for the same three-month period in the previous year. The increase in net income and earnings per share from the previous year reflects an increase in net interest income and non-interest income of $3.0 million and $2.7 million, respectively, and a decrease in the provision for loan losses of $1.7 million, partially offset by increases in non-interest expense of $4.9 million, income tax expense of $873,000 and the diluted shares outstanding primarily due to the stock issued in the Peoples and Kosciusko acquisitions. Non-interest expenses increased primarily due to an increase in salaries and employee benefits and expenses related to outside services and consultants. Excluding acquisition-related expenses and purchase accounting adjustments, gain on sale of investment securities, net income for the second quarter of 2016 was $6.9 million or $.57 diluted earnings per share compared to $4.6 million or $.49 diluted earnings per share in the same period of 2015.

Consolidated net income for the six-month period ended June 30, 2016 was $11.7 million compared to $10.1 million for the same period in 2015. Earnings per common share for the six months ended June 30, 2016 were $.97 basic and $.96 diluted, compared to $1.09 basic and $1.04 diluted for the same period of 2015. The increase in net income from the previous year reflects an increase in net interest income and non-interest income of $5.9 million and $3.5 million, respectively, and a decrease in the provision for loan losses of $1.8 million, partially offset by increases in non-interest expense of $8.6 million and income tax expense of $939,000. The decrease in diluted earnings per share compared to the same period of 2015 was due to an increase in the diluted shares outstanding primarily due to the stock issued in the Peoples and Kosciusko acquisitions. Non-interest expenses increased primarily due to an increase in salaries and employee benefits and expenses related to outside services and consultants. Excluding acquisition-related expenses and purchase accounting adjustments, and gain on sale of investment securities and the death benefit on bank owned life insurance, net income for the six months ended June 30, 2016 was $12.3 million or $1.01 diluted earnings per share compared to $9.2 million or $.95 diluted earnings per share in the same period of 2015.

Net Interest Income

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

Net interest income during the three months ended June 30, 2016 was $20.9 million, an increase of $3.0 million from the $17.9 million earned during the same period in 2015. Yields on the Company’s interest-earning assets decreased by 23 basis points to 4.10% for the three months ending June 30, 2016 from 4.33% for the three months ended June 30, 2015. Interest income increased $3.5 million from $21.1 million for the

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, 2016

three months ended June 30, 2015 to $24.7 million for the same period in 2016. This increase was due to an increase in interest-earning assets, a $415,000 prepayment penalty received on an investment security during the second quarter, partially offset by lower yields on loans and investment securities and a decrease in interest income from acquisition-related purchase accounting adjustments from $797,000 for the three months ending June 30, 2015 to $397,000 for the same period of 2016.

Rates paid on interest-bearing liabilities decreased by 5 basis points for the three-month period ended June 30, 2016 compared to the same period in 2015 due to the continued low interest rate environment and shift in mix on interest-bearing liabilities. Interest expense increased $504,000 compared to the three-month period ended June 30, 2015 to $3.8 million for the same period in 2016. This increase was due to higher average balances of interest-bearing deposits and borrowings and higher rates on borrowings, partially offset by lower rates paid on interest-bearing deposits. The net interest margin decreased 19 basis points from 3.67% for the three-month period ended June 30, 2015 to 3.48% for the same period in 2016. The decrease in the margin for the three-month period ended June 30, 2016 compared to the same period in 2015 was due to a reduction in the yield on interest-earning assets and a decrease of approximately $400,000 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 3.42% for the three-month period ending June 30, 2016 compared to 3.51% for the same period in 2015.

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, 2016

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

	Three Months Ended								Three Months Ended
	June 30, 2016								June 30, 2015
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
ASSETS
Interest-earning assets
Federal funds sold	$	3,309		$	4		0.49	%	$	3,597		$	2		0.22	%
Interest-earning deposits		28,045			59		0.85	%		8,608			5		0.23	%
Investment securities - taxable		469,925			2,598		2.22	%		363,919			2,060		2.27	%
Investment securities - non-taxable (1)		182,886			1,195		3.70	%		141,784			1,079		4.24	%
Loans receivable (2)(3)		1,787,189			20,794		4.69	%		1,490,283			17,981		4.87	%
Total interest-earning assets (1)		2,471,354			24,650		4.10	%		2,008,191			21,127		4.33	%
Non-interest-earning assets
Cash and due from banks		35,435								31,783
Allowance for loan losses		(14,350	)							(16,756	)
Other assets		223,258								157,795
	$	2,715,697							$	2,181,013
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities
Interest-bearing deposits	$	1,625,024		$	1,557		0.39	%	$	1,255,123		$	1,237		0.40	%
Borrowings		400,585			1,721		1.73	%		381,782			1,539		1.62	%
Subordinated debentures		32,854			503		6.16	%		32,699			501		6.15	%
Total interest-bearing liabilities		2,058,463			3,781		0.74	%		1,669,604			3,277		0.79	%
Non-interest-bearing liabilities
Demand deposits		364,822								294,425
Accrued interest payable and other liabilities		22,574								13,770
Stockholders’ equity		269,838								203,214
	$	2,715,697							$	2,181,013
Net interest income/spread				$	20,869		3.36	%				$	17,850		3.54	%
Net interest income as a percent of average interest earning assets (1)							3.48	%							3.67	%

(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, 2016 was $40.6 million, an increase of $5.9 million from the $34.7 million earned during the same period in 2015. Yields on the Company’s interest-earning assets decreased by 25 basis points to 4.10% for the six months ending June 30, 2016 from 4.35% for the six months ended June 30, 2015. Interest income increased $7.0 million from $41.2 million for the six months ended June 30, 2015 to $48.2 million for the same period in 2016. This increase was due to an increase in interest-earning assets, a $415,000 prepayment penalty received on an investment security during the second quarter, partially offset by lower yields on loans and investment securities and a decrease in interest income from acquisition-related purchase accounting adjustments from $1.9 million for the six months ending June 30, 2015 to $944,000 for the same period of 2016.

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, 2016

Rates paid on interest-bearing liabilities decreased by 4 basis points for the six-month period ended June 30, 2016 compared to the same period in 2015 due to the continued low interest rate environment and shift in mix on interest-bearing liabilities. Interest expense increased $1.1 million compared to the six-month period ended June 30, 2015 to $7.5 million for the same period in 2016. This increase was due to higher average balances of interest-bearing deposits and borrowings and higher rates on borrowings, partially offset by lower rates paid on interest-bearing deposits. The net interest margin decreased 21 basis points from 3.68% for the six-month period ended June 30, 2015 to 3.47% for the same period in 2016. The decrease in the margin for the six-month period ended June 30, 2016 compared to the same period in 2015 was due to a reduction in the yield on interest-earning assets and a decrease of approximately $936,000 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 3.40% for the six-month period ending June 30, 2016 compared to 3.49% for the same period in 2015.

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

	Six Months Ended								Six Months Ended
	June 30, 2016								June 30, 2015
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
ASSETS
Interest-earning assets
Federal funds sold	$	2,853		$	4		0.28	%	$	4,198		$	11		0.53	%
Interest-earning deposits		24,300			109		0.90	%		9,684			10		0.21	%
Investment securities - taxable		464,209			5,092		2.21	%		362,250			4,200		2.34	%
Investment securities - non-taxable (1)		181,660			2,432		3.64	%		141,269			2,156		4.27	%
Loans receivable (2)(3)		1,733,446			40,541		4.71	%		1,436,886			34,843		4.90	%
Total interest-earning assets (1)		2,406,468			48,178		4.10	%		1,954,287			41,220		4.35	%
Non-interest-earning assets
Cash and due from banks		34,246								30,396
Allowance for loan losses		(14,350	)							(16,623	)
Other assets		217,797								157,669
	$	2,644,161							$	2,125,729
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities
Interest-bearing deposits	$	1,571,579		$	3,048		0.39	%	$	1,235,601		$	2,469		0.40	%
Borrowings		401,594			3,480		1.74	%		359,436			3,018		1.69	%
Subordinated debentures		32,653			1,007		6.20	%		32,678			997		6.15	%
Total interest-bearing liabilities		2,005,826			7,535		0.76	%		1,627,715			6,484		0.80	%
Non-interest-bearing liabilities
Demand deposits		350,157								282,796
Accrued interest payable and other liabilities		22,465								14,374
Stockholders’ equity		265,713								200,844
	$	2,644,161							$	2,125,729
Net interest income/spread				$	40,643		3.34	%				$	34,736		3.55	%
Net interest income as a percent of average interest earning assets (1)							3.47	%							3.68	%

(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.

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, 2016

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, 2016, a provision of $232,000 was required to adequately fund the ALLL compared to $1.9 million for the same period of 2015. Commercial loan net charge-offs during the three-month period ended June 30, 2016 were $104,000, residential mortgage loan net charge-offs were negative $31,000 and consumer loan net charge-offs were $169,000. The lower provision for loan losses in the second quarter of 2016 compared to the same period of 2015 was due to the improvement of non-performing loans. The ALLL balance at June 30, 2016 was $14.2 million or 0.73% of total loans. This compares to an ALLL balance of $14.5 million at December 31, 2015 or 0.83% of total loans. The decrease in the ratio at June 30, 2016 compared to December 31, 2015 was due to an increase in total loans of $188.7 million, the increase in loans from the Kosciusko merger and improving credit trends.

For the six-month period ended June 30, 2016, the provision for loan losses totaled $764,000 compared to $2.5 million in the same period of 2015. The lower provision for loan losses in the second quarter of 2016 compared to the same period of 2015 was due to the improvement of non-performing loans and the charge-off of one commercial credit of $1.3 million in the first six months of 2015.

Horizon’s loan loss reserve ratio, excluding loans with credit-related purchase accounting adjustments, stood at 0.89% as of June 30, 2016. Loan loss reserves and credit-related loan discounts on acquired loans as a percentage of total loans was 1.32% as of June 30, 2016. The table below illustrates Horizon’s loan loss reserve ratio composition as of June 30, 2016.

Non- GAAP Allowance for Loan and Lease Loss Detail

As of June 30, 2016

(Dollars in Thousands, Unaudited)

	Horizon
	Legacy			Heartland			Summit			Peoples			Kosciusko			Total
Pre-discount loan balance	$	1,591,788		$	19,346		$	69,137		$	169,224		$	99,873		$	1,949,368
Allowance for loan losses (ALLL)		14,226			—			—			—			—			14,226
Loan discount		N/A			1,222			2,801			3,694			3,826			11,543
ALLL+loan discount		14,226			1,222			2,801			3,694			3,826			25,769
Loans, net	$	1,577,562		$	18,124		$	66,336		$	165,530		$	96,047		$	1,923,599
ALLL/ pre-discount loan balance		0.89	%		0.00	%		0.00	%		0.00	%		0.00	%		0.73	%
Loan discount/ pre-discount loan balance		N/A			6.32	%		4.05	%		2.18	%		3.83	%		0.59	%
ALLL+loan discount/ pre-discount loan balance		0.89	%		6.32	%		4.05	%		2.18	%		3.83	%		1.32	%

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, 2016.

Non-performing loans totaled $13.2 million as of June 30, 2016, down from $16.7 million on December 31, 2015. Compared to December 31, 2015, non-performing commercial, real estate and consumer loans decreased by $2.7 million, $577,000 and $255,000, respectively.

Other Real Estate Owned (OREO) totaled $3.5 million at June 30, 2016 compared to $3.2 million on December 31, 2015 and $471,000 on June 30, 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, 2016

Non-interest Income

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

	Three Months Ended
	June 30		June 30		Amount			Percent
	2016		2015		Change			Change
Non-interest Income
Service charges on deposit accounts	$	1,335	$	1,085	$	250			23.0	%
Wire transfer fees		175		182		(7	)		-3.8	%
Interchange fees		1,663		1,366		297			21.7	%
Fiduciary activities		1,465		1,216		249			20.5	%
Gain on sale of securities		767		—		767			NM
Gain on sale of mortgage loans		3,529		2,642		887			33.6	%
Mortgage servicing net of impairment		500		300		200			66.7	%
Increase in cash surrender value of bank owned life insurance		351		257		94			36.6	%
Other income		84		138		(54	)		-39.1	%
Total non-interest income	$	9,869	$	7,186	$	2,683			37.3	%

Total non-interest income was $2.7 million higher in the second quarter of 2016 compared to the same period of 2015. Service charges on deposit accounts increased $250,000, interchange fees increased by $297,000 and fiduciary activities increased $249,000, primarily due to overall company growth and increased volume. Gain on sale of securities increased $767,000 due to gains realized in the second quarter of 2016 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 second quarter of 2016 generated $3.5 million of income from the gain on sale of mortgage loans, up $887,000 from the same period in 2015. The increase in the gain on sale of mortgage loans was due to an increase in the percentage earned on the sale of these loans from 3.07% in the second quarter of 2015 to 3.68% in the same period of 2016. Mortgage servicing net of impairment increased by $200,000 during the second quarter of 2016 compared to the same period of 2015 primarily due to a larger portfolio of mortgage loans serviced.

	Six Months Ended
	June 30		June 30		Amount			Percent
	2016		2015		Change			Change
Non-interest Income
Service charges on deposit accounts	$	2,573	$	2,084	$	489			23.5	%
Wire transfer fees		296		333		(37	)		-11.1	%
Interchange fees		3,121		2,468		653			26.5	%
Fiduciary activities		3,100		2,513		587			23.4	%
Gain on sale of investment securities		875		124		751			605.6	%
Gain on sale of mortgage loans		5,643		5,021		622			12.4	%
Mortgage servicing net of impairment		947		479		468			97.7	%
Increase in cash surrender value of bank owned life insurance		696		515		181			35.1	%
Death benefit on officer life insurance		—		145		(145	)		100.0	%
Other income		482		570		(88	)		-15.4	%
Total non-interest income	$	17,733	$	14,252	$	3,481			24.4	%

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, 2016

Total non-interest income was $3.5 million higher in the first six months of 2016 compared to the same period of 2015. Service charges on deposit accounts increased $489,000, interchange fees increased by $653,000 and fiduciary activities increased $587,000, primarily due to overall company growth and increased volume. Gain on sale of securities increased $751,000 due to gains realized in the first six months of 2016 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 2016 generated $5.6 million of income from the gain on sale of mortgage loans, up $622,000 from the same period in 2015. The increase in the gain on sale of mortgage loans was due to an increase in the percentage earned on the sale of these loans from 3.12% in the first half of 2015 to 3.74% in the same period of 2016, partially offset by a decrease in total loans sold of $13.8 million from $152.3 million in the first half of 2015 to $138.5 million in the same period of 2016. Mortgage servicing net of impairment increased by $468,000 during the first six months of 2016 compared to the same period of 2015 primarily due to a larger portfolio of mortgage loans serviced. The cash surrender value of bank owned life insurance increased by $181,000 in the first six months of 2016 compared to the same period in 2015 due to the addition of bank owned life insurance policies as a result of the Peoples acquisition. The death benefit on bank owned life insurance decreased by $145,000 compared to the previous year due to a $145,000 death benefit on officer life insurance realized during the first six months of 2015.

Non-interest Expense

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

	Three Months Ended
	June 30		June 30		Amount			Percent
	2016		2015		Change			Change
Non-interest expense
Salaries	$	7,250	$	5,993	$	1,257			21.0	%
Commission and bonuses		1,190		1,200		(10	)		-0.8	%
Employee benefits		1,877		1,192		685			57.5	%
Net occupancy expenses		1,901		1,375		526			38.3	%
Data processing		1,134		966		168			17.4	%
Professional fees		747		660		87			13.2	%
Outside services and consultants		2,198		918		1,280			139.4	%
Loan expense		1,409		1,367		42			3.1	%
FDIC deposit insurance		409		339		70			20.6	%
Other losses		136		150		(14	)		-9.3	%
Other expense		3,304		2,490		814			32.7	%
Total non-interest expense	$	21,555	$	16,650	$	4,905			29.5	%

Total non-interest expenses were $4.9 million higher in the first three months of 2016 compared to the same period of 2015. Salaries increased by $1.3 million and employee benefits increased by $685,000 due to a larger employee base. Net occupancy expense increased $526,000 due to Horizon’s investment in growth markets and the Peoples and Kosciusko acquisitions. Data processing expenses increased $168,000 primarily due to company growth. Other expenses increased by $814,000 primarily due to company growth and one-time merger-related expenses. Outside services and consultants expense increased by $1.3 million due to the one-time fees associated with Kosciusko and LaPorte Bancorp acquisitions. One-time non-interest expense related to the Kosciusko and LaPorte Bancorp acquisitions totaled $1.9 million in the second quarter of 2016 compared to $570,000 in one-time fees associated with the Peoples acquisition in the same period of 2015.

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, 2016

	Six Months Ended
	June 30		June 30		Amount			Percent
	2016		2015		Change			Change
Non-interest expense
Salaries	$	14,136	$	11,626	$	2,510			21.6	%
Commission and bonuses		2,265		2,367		(102	)		-4.3	%
Employee benefits		3,981		2,896		1,085			37.5	%
Net occupancy expenses		3,837		2,926		911			31.1	%
Data processing		2,239		1,889		350			18.5	%
Professional fees		1,578		1,187		391			32.9	%
Outside services and consultants		3,297		1,544		1,753			113.5	%
Loan expense		2,604		2,624		(20	)		-0.8	%
FDIC deposit insurance		814		676		138			20.4	%
Other losses		403		105		298			283.8	%
Other expense		6,148		4,878		1,270			26.0	%
Total non-interest expense	$	41,302	$	32,718	$	8,584			26.2	%

Total non-interest expenses were $8.6 million higher in the first six months of 2016 compared to the same period of 2015. Salaries increased by $2.5 million and employee benefits increased by $1.1 million due to a larger employee base. Net occupancy expense increased $911,000 due to Horizon’s investment in growth markets and the Peoples and Koscisuko acquisitions. Data processing expenses increased $350,000 and FDIC deposit insurance increase by $138,000 primarily due to company growth. Other losses increased by $298,000 primarily due to higher debit card losses and a trust settlement. Other expenses increased by $1.3 million primarily due to company growth and one-time merger-related expenses. Commission and bonuses decreased by $102,000 due to a decrease in loan volume and incentive pay. Outside services and consultants expense increased by $1.8 million due to the one-time fees associated with Kosciusko and LaPorte Bancorp acquisitions. One-time non-interest expense related to the Kosciusko and LaPorte Bancorp acquisitions totaled $2.5 million in the first six months of 2016 compared to $716,000 in one-time fees associated with the Peoples acquisition in the same period of 2015.

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, 2016, cash and cash equivalents increased by approximately $60.6 million. At June 30, 2016, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $300.6 million in unused credit lines with various money center banks, including the FHLB and the FRB Discount Window compared to $253.2 million at December 31, 2015 and $361.7 million at June 30, 2015.

Capital Resources

The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at June 30, 2016. Stockholders’ equity totaled $281.0 million as of June 30, 2016, compared to $266.8 million as of December 31, 2015. For the six months ended June 30, 2016, the ratio of average stockholders’ equity to average assets was 9.94% compared to 10.32% for the twelve months ended December 31, 2015. The increase in stockholders’ equity during the period was the result of the generation of net income, net of dividends declared, as well as the stock issued in the Kosciusko acquisition.

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, 2016

On February 1, 2016, the Company paid off the $12.5 million in funds received through the Small Business Lending Fund with cash from the holding company, thereby ending its participation in the program, pursuant to which it issued preferred stock to the US Treasury. The funds were paid off due to an increase in the dividend cost that would have gone in effect at the end of February 2016. For the six months ending June 30, 2016, the dividend cost was $42,000 or 1.0% annualized and included the acceleration of interest due to the payoff.

Horizon declared common stock dividends in the amount of $0.30 per share during the first six months of 2016 compared to $0.28 per share for the same period of 2015. The dividend payout ratio (dividends as a percent of basic earnings per share) was 31.0% and 25.8% for the first six months of 2016 and 2015, respectively. For additional information regarding dividends, see Horizon’s Annual Report on Form 10-K for 2015.

Use of Non-GAAP Financial Measures

Certain information set forth in this quarterly report on Form 10-Q refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non-GAAP financial measures of the net interest margin and the allowance for loan and lease losses excluding the impact of acquisition-related purchase accounting adjustments and net income and diluted earnings per share excluding the impact of one-time costs related to acquisitions, acquisition-related purchase accounting adjustments and other events that are considered to be non-recurring. Horizon believes that these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to the purchase accounting impacts and one-time costs of acquisitions and non-core items, although these measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure.

Non-GAAP Reconciliation of Net Interest Margin

(dollar in thousands)

	Three Months Ended									Six Months Ended
	June 30			March 31			June 30			June 30
	2016			2016			2015			2016			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net Interest Margin As Reported
Net interest income	$	20,869		$	19,774		$	17,850		$	40,643		$	34,736
Average interest-earning assets		2,471,354			2,367,250			2,008,191			2,406,468			1,954,287
Net interest income as a percent of average interest-earning assets (“Net Interest Margin”)		3.48	%		3.45	%		3.67	%		3.47	%		3.68	%
Impact of Acquisitions
Interest income from acquisition-related purchase accounting adjustments	$	(397	)	$	(547	)	$	(797	)	$	(944	)	$	(1,880	)
Excluding Impact of Acquisitions
Net interest income	$	20,472		$	19,227		$	17,053		$	39,699		$	32,856
Average interest-earning assets		2,471,354			2,367,250			2,008,191			2,406,468			1,954,287
Core Net Interest Margin		3.42	%		3.36	%		3.51	%		3.40	%		3.49	%

55

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, 2016

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

(Dollars in Thousands Except per Share Data, Unaudited)

	Three Months Ended						Six Months Ended
	June 30						June 30
	2016			2015			2016			2015
Non-GAAP Reconciliation of Net Income
Net income as reported	$	6,326		$	4,728		$	11,707		$	10,086
Merger expenses		1,881			570			2,520			716
Tax effect		(531	)		(132	)		(696	)		(183	)
Net income excluding merger expenses		7,676			5,166			13,531			10,619
Gain on sale of investment securities		(767	)		—			(875	)		(124	)
Tax effect		268			—			306			43
Net income excluding gain on sale of investment securities		7,177			5,166			12,962			10,538
Death benefit on bank owned life insurance (“BOLI”)		—			—			—			(145	)
Tax effect		—			—			—			51
Net income excluding death benefit on BOLI		7,177			5,166			12,962			10,444
Acquisition-related purchase accounting adjustments (“PAUs”)		(397	)		(797	)		(944	)		(1,880	)
Tax effect		139			279			330			658
Net income excluding PAUs	$	6,919		$	4,648		$	12,348		$	9,222
Non-GAAP Reconciliation of Diluted Earnings per Share
Diluted earnings per share as reported	$	0.52		$	0.49		$	0.96		$	1.04
Merger expenses		0.15			0.06			0.21			0.07
Tax effect		(0.04	)		(0.01	)		(0.06	)		(0.02	)
Diluted earnings per share excluding merger expenses		0.63			0.54			1.11			1.09
Gain on sale of investment securities		(0.06	)		—			(0.07	)		(0.01	)
Tax effect		0.02			—			0.03			0.00
Net income excluding gain on sale of investment securities		0.59			0.54			1.07			1.09
Death benefit on BOLI		—			—			—			(0.02	)
Tax effect		—			—			—			0.01
Net income excluding death benefit on BOLI		0.59			0.54			1.07			1.08
Acquisition-related PAUs		(0.03	)		(0.08	)		(0.09	)		(0.20	)
Tax effect		0.01			0.03			0.03			0.07
Diluted earnings per share excluding PAUs	$	0.57		$	0.49		$	1.01		$	0.95

56

HORIZON BANCORP AND SUBSIDIARIES

Quantitative and Qualitative Disclosures About Market Risk

For the Three and Six Months ended June 30, 2016

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We refer you to Horizon’s 2015 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 2015 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, 2016, 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, 2016, 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.

57

HORIZON BANCORP AND SUBSIDIARIES

Part II – Other Information

For the Three and Six Months ended June 30, 2016

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 2015.

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

58

HORIZON BANCORP AND SUBSIDIARIES

Part II – Other Information

For the Three and Six Months ended June 30, 2016

ITEM 6. EXHIBITS

(a) Exhibits

Exhibit No.	Description
3.1	Amended and Restated Articles of Incorporation of Horizon Bancorp (incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K filed May 10, 2016)
3.2	Amended and Restated Bylaws of Horizon Bancorp (incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K filed April 18, 2013)
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

59

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 9, 2016	/s/ Craig M. Dwight
	Craig M. Dwight
	Chief Executive Officer
Dated: August 9, 2016	/s/ Mark E. Secor
	Mark E. Secor
	Chief Financial Officer

60

INDEX TO EXHIBITS

Exhibit No.	Description	Location
Exhibit 3.1	Amended and Restated Articles of Incorporation of Horizon Bancorp	Incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K filed May 10, 2016
Exhibit 3.2	Amended and Restated Bylaws of Horizon Bancorp	Incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K filed April 18, 2013
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

61

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 principles;

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 9, 2016	/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 principles;

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 9, 2016	/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, 2016 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 9, 2016	/s/ Craig M. Dwight
	Craig M. Dwight
	Chief Executive Officer
Dated: August 9, 2016	/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

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 09, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
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		14,776,952

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Assets
Cash and due from banks	$ 109,224	$ 48,650
Investment securities, available for sale	455,239	444,982
Investment securities, held to maturity (fair value of $180,059 and $193,703)	173,696	187,629
Loans held for sale	7,812	7,917
Loans, net of allowance for loan losses of $14,226 and $14,534	1,923,599	1,734,597
Premises and equipment, net	61,186	60,798
Federal Reserve and Federal Home Loan Bank stock	16,636	13,823
Goodwill	56,458	49,600
Other intangible assets	8,686	7,371
Interest receivable	11,526	10,535
Cash value of life insurance	57,944	54,504
Other assets	36,074	31,995
Total assets	2,918,080	2,652,401
Liabilities
Non-interest bearing	397,412	335,955
Interest bearing	1,684,849	1,544,198
Total deposits	2,082,261	1,880,153
Borrowings	492,883	449,347
Subordinated debentures	32,874	32,797
Interest payable	961	507
Other liabilities	28,099	22,765
Total liabilities	2,637,078	2,385,569
Commitments and contingent liabilities
Stockholders' Equity
Common stock, no par value Authorized, 44,000,000 shares Issued, 12,590,784 and 11,995,324 shares Outstanding, 12,571,534 and 11,939,887 shares	0	0
Additional paid-in capital	120,758	106,370
Retained earnings	156,651	148,685
Accumulated other comprehensive income (loss)	3,593	(723)
Total stockholders' equity	281,002	266,832
Total liabilities and stockholders' equity	$ 2,918,080	2,652,401
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 0 and 12,500 shares		$ 12,500

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Investment securities, held to maturity fair value	$ 180,059	$ 193,703
Allowance for loan losses	$ 14,226	$ 14,534
Common stock, par value
Common stock, shares authorized	44,000,000	44,000,000
Common stock, shares issued	12,590,784	11,995,324
Common stock, shares outstanding	12,571,534	11,939,887
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	0	12,500

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest Income
Loans receivable	$ 20,794	$ 17,981	$ 40,541	$ 34,843
Investment securities
Taxable	2,661	2,067	5,205	4,221
Tax exempt	1,195	1,079	2,432	2,156
Total interest income	24,650	21,127	48,178	41,220
Interest Expense
Deposits	1,557	1,237	3,048	2,469
Borrowed funds	1,721	1,539	3,480	3,018
Subordinated debentures	503	501	1,007	997
Total interest expense	3,781	3,277	7,535	6,484
Net Interest Income	20,869	17,850	40,643	34,736
Provision for loan losses	232	1,906	764	2,520
Net Interest Income after Provision for Loan Losses	20,637	15,944	39,879	32,216
Non-interest Income
Service charges on deposit accounts	1,335	1,085	2,573	2,084
Wire transfer fees	175	182	296	333
Interchange fees	1,663	1,366	3,121	2,468
Fiduciary activities	1,465	1,216	3,100	2,513
Gain on sale of investment securities (includes $767 for the three months ended and $875 for the six months ended June 30, 2016 and $0 for the three months ended and $124 for the six months ended June 30, 2015, related to accumulated other comprehensive earnings reclassifications)	767		875	124
Gain on sale of mortgage loans	3,529	2,642	5,643	5,021
Mortgage servicing income net of impairment	500	300	947	479
Increase in cash value of bank owned life insurance	351	257	696	515
Death benefit on bank owned life insurance				145
Other income	84	138	482	570
Total non-interest income	9,869	7,186	17,733	14,252
Non-interest Expense
Salaries and employee benefits	10,317	8,385	20,382	16,889
Net occupancy expenses	1,901	1,375	3,837	2,926
Data processing	1,134	966	2,239	1,889
Professional fees	747	660	1,578	1,187
Outside services and consultants	2,198	918	3,297	1,544
Loan expense	1,409	1,367	2,604	2,624
FDIC insurance expense	409	339	814	676
Other losses	136	150	403	105
Other expense	3,304	2,490	6,148	4,878
Total non-interest expense	21,555	16,650	41,302	32,718
Income Before Income Tax	8,951	6,480	16,310	13,750
Income tax expense (includes $268 for the three months ended and $306 for the six months ended June 30, 2016 and $0 for the three months ended and $43 for the six months ended June 30, 2015, related to income tax expense from reclassification items)	2,625	1,752	4,603	3,664
Net Income	6,326	4,728	11,707	10,086
Preferred stock dividend		(31)	(42)	(63)
Net Income Available to Common Shareholders	$ 6,326	$ 4,697	$ 11,665	$ 10,023
Basic Earnings Per Share	$ 0.52	$ 0.51	$ 0.97	$ 1.09
Diluted Earnings Per Share	$ 0.52	$ 0.49	$ 0.96	$ 1.04

XML

Condensed Consolidated Statements of Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Accumulated other comprehensive earnings reclassifications	$ 767	$ 0	$ 875	$ 124
Income tax expense from reclassification	$ 268	$ 0	$ 306	$ 43

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 6,326	$ 4,728	$ 11,707	$ 10,086
Change in fair value of derivative instruments:
Change in fair value of derivative instruments for the period	(83)	511	(645)	182
Income tax effect	29	(179)	226	(64)
Changes from derivative instruments	(54)	332	(419)	118
Change in securities:
Unrealized appreciation (depreciation) for the period on AFS securities	2,691	(2,364)	8,637	(402)
Amortization from transfer of securities from available-for-sale to held-to-maturity securities	(248)	(158)	(477)	(272)
Reclassification adjustment for securities gains realized in income	(767)	0	(875)	(124)
Income tax effect	(511)	882	(2,550)	279
Unrealized gains (losses) on securities	949	(1,640)	4,735	(519)
Other Comprehensive Income (Loss), Net of Tax	895	(1,308)	4,316	(401)
Comprehensive Income	$ 7,221	$ 3,420	$ 16,023	$ 9,685

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands	Total	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]
Beginning Balances at Dec. 31, 2015	$ 266,832	$ 12,500	$ 106,370	$ 148,685	$ (723)
Net income	11,707			11,707
Other comprehensive loss, net of tax	4,316				4,316
Redemption of preferred stock	(12,500)	$ (12,500)
Amortization of unearned compensation	150		150
Stock option expense	170		170
Stock issued in acquisition	14,068		14,068
Cash dividends on preferred stock	(42)			(42)
Cash dividends on common stock	(3,699)			(3,699)
Ending Balances at Jun. 30, 2016	$ 281,002		$ 120,758	$ 156,651	$ 3,593

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical)	6 Months Ended
	Jun. 30, 2016 $ / shares
Cash dividends on preferred stock, rate	1.00%
Cash dividends on common stock, per share	$ 0.30
Retained Earnings [Member]
Cash dividends on preferred stock, rate	1.00%
Cash dividends on common stock, per share	$ 0.30

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)
Operating Activities
Net income	$ 11,707	$ 10,086
Items not requiring (providing) cash
Provision for loan losses	764	2,520
Depreciation and amortization	2,463	1,883
Share based compensation	170	138
Mortgage servicing rights net impairment	840	356
Premium amortization on securities available for sale, net	2,673	1,289
Gain on sale of investment securities	(875)	(124)
Gain on sale of mortgage loans	(5,643)	(5,021)
Proceeds from sales of loans	144,197	155,746
Loans originated for sale	(138,452)	(152,259)
Change in cash value of life insurance	(695)	(515)
Gain (Loss) on sale of other real estate owned	118	(206)
Net change in
Interest receivable	(355)	(577)
Interest payable	399	(36)
Other assets	(5,624)	4,099
Other liabilities	316	(1,511)
Net cash provided by operating activities	12,003	15,868
Investing Activities
Purchases of securities available for sale	(50,143)	(47,958)
Proceeds from sales, maturities, calls, and principal repayments of securities available for sale	65,523	40,359
Purchases of securities held to maturity	(17,960)
Proceeds from maturities of securities held to maturity	12,934	1,535
Proceeds from the sale of FHLB stock	(2,231)	268
Net change in loans	(88,250)	(142,131)
Proceeds on the sale of OREO and repossessed assets	1,253	1,793
Change in premises and equipment, net	(683)	(3,587)
Acquisition of Kosciusko, net of cash received	30,437
Net cash used in investing activities	(49,120)	(149,721)
Net change in
Deposits	78,622	102,404
Borrowings	35,310	34,115
Redemption of preferred stock	(12,500)
Proceeds from issuance of stock		389
Dividends paid on common shares	(3,699)	(2,611)
Dividends paid on preferred shares	(42)	(63)
Net cash provided by financing activities	97,691	134,234
Net Change in Cash and Cash Equivalents	60,574	381
Cash and Cash Equivalents, Beginning of Period	48,650	43,476
Cash and Cash Equivalents, End of Period	109,224	43,857
Additional Supplemental Information
Interest paid	7,081	6,519
Income taxes paid	4,750	3,700
Transfer of loans to other real estate owned	1,971	$ (1,384)
The Company purchased all of the capital stock of Kosciusko for $22,581 on June 1, 2016. In conjunction with the acquisition, liabilities were assumed as follows:
Fair value of assets acquired	155,413
Less: common stock issued	14,068
Cash paid for the capital stock	8,513
Liabilities assumed	$ 132,832

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) $ in Thousands	Jun. 01, 2016 USD ($)
Kosciusko Financial Inc [Member]
Capital stock purchased	$ 22,581

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Accounting Policies

6 Months Ended

Jun. 30, 2016

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, 2016 and June 30, 2015 are not necessarily indicative of the operating results for the full year of 2016 or 2015. 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 2015 filed with the Securities and Exchange Commission on February 29, 2016. The condensed consolidated balance sheet of Horizon as of December 31, 2015 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				Six Months Ended
	June 30				June 30
	2016		2015		2016		2015
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	6,326	$	4,728	$	11,707	$	10,086
Less: Preferred stock dividends		—		31		42		63
Net income available to common shareholders	$	6,326	$	4,697	$	11,665	$	10,023
Weighted average common shares outstanding		12,179,253		9,240,005		12,064,335		9,228,075
Basic earnings per share	$	0.52	$	0.51	$	0.97	$	1.09
Diluted earnings per share
Net income available to common shareholders	$	6,326	$	4,697	$	11,665	$	10,023
Weighted average common shares outstanding		12,179,253		9,240,005		12,064,335		9,228,075
Effect of dilutive securities:
Warrants		—		324,698		—		323,198
Restricted stock		20,721		34,892		21,050		30,816
Stock options		42,804		37,991		41,643		33,462
Weighted average shares outstanding		12,242,778		9,637,586		12,127,028		9,615,551
Diluted earnings per share	$	0.52	$	0.49	$	0.96	$	1.04

There were zero shares for both the three and six months ended June 30, 2016, respectively, and 2,500 and 41,444 for the three and six months ended June 30, 2015 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, 2015 Annual Report on Form 10-K.

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Acquisitions

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Acquisitions

Note 2 – Acquisitions

On July 1, 2015, Horizon completed the acquisition of Peoples Bancorp, an Indiana corporation (“Peoples”) and Horizon Bank N.A.’s acquisition of Peoples Federal Savings Bank of DeKalb County (“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. The Company had approximately $4.9 million in costs related to the acquisition as of December 31, 2015. These expenses were 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 increased its deposit base and reduced 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 Peoples 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 final purchase price for the Peoples acquisition is allocated as follows:

ASSETS
Cash and due from banks	$	205,054
Investment securities, held to maturity		2,038
Commercial		67,435
Residential mortgage		137,331
Consumer		19,593
Total loans		224,359
Premises and equipment, net		5,524
FRB and FHLB stock		2,743
Goodwill		21,424
Core deposit intangible		4,394
Interest receivable		1,279
Cash value of life insurance		13,898
Other assets		4,364
Total assets purchased	$	485,077
Common shares issued	$	55,506
Cash paid		22,641
Total estimated purchase price	$	78,147

LIABILITIES
Deposits
Non-interest bearing	$	28,251
NOW accounts		65,771
Savings and money market		125,176
Certificates of deposits		131,889
Total deposits		351,087
Borrowings		48,884
Interest payable		21
Other liabilities		6,938
Total liabilities assumed	$	406,930

Of the total purchase price of $78.1 million, $4.4 million has been allocated to core deposit intangible. Additionally, $21.0 million has been allocated to goodwill and none of the purchase price is deductible. The core deposit intangible will be amortized over seven years on a straight line basis.

The Company acquired the $228.6 million loan portfolio at a fair value discount of $4.8 million. The performing portion of the portfolio, $223.4 million, had an estimated fair value of $220.0 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.

The Company acquired certain 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.

The 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.

Loans with 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 July 1, 2015.

Contractually required principal and interest at acquisition	$	5,730
Contractual cash flows not expected to be collected (nonaccretable differences)		715
Expected cash flows at acquisition		5,015
Interest component of expected cash flows (accretable discount)		647
Fair value of acquired loans accounted for under ASC 310-30	$	4,368

The results of operations of Peoples and Peoples FSB have been included in the Company’s consolidated financial statements since the acquisition dates. The following schedule includes pro forma results for the periods ended June 30, 2016 and 2015 as if the Peoples and Peoples FSB acquisitions had occurred as of the beginning of the comparable prior reporting period.

	Three Months Ended				Six Months Ended
	June 30		June 30		June 30		June 30
	2016		2015		2016		2015
Summary of Operations:
Net Interest Income	$	20,869	$	20,829	$	40,643	$	40,690
Provision for Loan Losses		232		1,936		764		2,580
Net Interest Income after Provision for Loan Losses		20,637		18,893		39,879		38,110
Non-interest Income		9,869		8,086		17,733		16,145
Non-Interest Expense		21,555		19,852		41,302		39,014
Income before Income Taxes		8,951		7,127		16,310		15,241
Income Tax Expense		2,625		1,779		4,603		3,791
Net Income		6,326		5,348		11,707		11,450
Net Income Available to Common Shareholders	$	6,326	$	5,317	$	11,665	$	11,387
Basic Earnings Per Share	$	0.52	$	0.46	$	0.97	$	0.99
Diluted Earnings Per Share	$	0.52	$	0.45	$	0.96	$	0.96

The pro forma information includes adjustments for interest income on loans, amortization of intangibles arising from the transaction, interest expense on deposits acquired, premises expense for the banking centers acquired and the related income tax effects. The pro forma information for the three and six months ended June 30, 2015 includes $657,000, net of tax, of operating revenue from Peoples and approximately $95,000, net of tax, of non-recurring expenses directly attributable to the Peoples acquisition.

The pro forma financial information is presented for information purposes only and is not indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future results.

On June 1, 2016, Horizon completed the acquisition of Kosciusko Financial, Inc., an Indiana corporation (“Kosciusko”) and Horizon Bank’s acquisition of Farmers State Bank, a state-chartered bank and wholly owned subsidiary of Kosciusko, through mergers effective June 1, 2016. Under the terms of the Merger Agreement, shareholders of Kosciusko had the option to receive $81.75 per share in cash or 3.0122 shares of Horizon common stock for each share of Kosciusko’s common stock, subject to allocation provisions to assure that in aggregate, Kosciusko shareholders received total consideration that consists of 65% stock and 35% cash. Kosciusko shareholders owning fewer than 100 shares of common stock received $81.75 in cash for each common share. As a result of Kosciusko stockholder stock and cash elections and the related proration provisions of the Merger Agreement, Horizon issued 582,287 shares of its common stock in the merger. Based upon the June 1, 2016 closing price of $24.85 per share of Horizon common stock, the transaction has an implied valuation of approximately $23.0 million. The Company has had approximately $1.6 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 acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on preliminary valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change, the purchase price for the Kosciusko acquisition is detailed in the following table. Prior to the end of the one year measurement period for finalizing the purchase price allocation, if information becomes available which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation prospectively. If any adjustments are made to the preliminary assumptions (provisional amounts), disclosures will be made in the notes to the financial statements of the amounts recorded in the current period earnings by line item that have been recorded in previous reporting periods if the adjustments to the provisional amounts had been recognized as of the acquisition date.

ASSETS
Cash and due from banks	$	38,950
Investment securities, held to maturity		1,191
Commercial		67,310
Residential mortgage		26,244
Consumer		6,319
Total loans		99,873
Premises and equipment, net		1,466
FRB and FHLB stock		582
Goodwill		6,858
Core deposit intangible		1,867
Interest receivable		636
Cash value of life insurance		2,745
Other assets		1,245
Total assets purchased	$	155,413
Common shares issued	$	14,068
Cash paid		8,513
Total estimated purchase price	$	22,581

LIABILITIES
Deposits
Non-interest bearing	$	28,549
NOW accounts		35,213
Savings and money market		26,953
Certificates of deposits		32,771
Total deposits		123,486
Borrowings		8,303
Interest payable		55
Other liabilities		988
Total liabilities assumed	$	132,832

Of the total estimated purchase price of $22.6 million, $1.9 million has been allocated to core deposit intangible. Additionally, $6.9 million has been allocated to goodwill and none of the purchase price is deductible. 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.

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

On July 18, 2016, Horizon completed the acquisition of LaPorte Bancorp, Inc., a Maryland corporation (“LaPorte Bancorp”) and Horizon Bank’s acquisition of The LaPorte Savings Bank, a state-chartered savings bank and wholly owned subsidiary of LaPorte Bancorp, through mergers effective July 18, 2016. Under the terms of the Merger Agreement, shareholders of LaPorte Bancorp had the option to receive $17.50 per share in cash or 0.629 shares of Horizon common stock for each share of LaPorte Bancorp’s common stock, subject to allocation provisions to assure that in aggregate, LaPorte Bancorp shareholders received total consideration that consists of 65% stock and 35% cash. LaPorte Bancorp shareholders owning fewer than 100 shares of common stock received $17.50 in cash for each common share. As a result of LaPorte stockholder stock and cash elections and the related proration provisions of the Merger Agreement, Horizon issued 2,280,992 shares of its common stock in the merger. Based upon the July 18, 2016 closing price of $27.54 per share of Horizon common stock, the transaction has an implied valuation of approximately $101.7 million.

As of July 18, 2016, LaPorte Bancorp had total assets of approximately $536.0 million, total deposits of approximately $370.9 million and total net loans of approximately $316.8 million.

Utilizing July 15, 2016 financials for both Horizon and LaPorte Bancorp and an estimate of the fair market value adjustments associated with the merger, Horizon would have total assets of approximately $3.5 billion, total deposits of approximately $2.5 billion and total net loans of approximately $2.2 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.

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Securities

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Securities

Note 3 – Securities

The fair value of securities is as follows:

			Gross		Gross
June 30, 2016	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale
U.S. Treasury and federal agencies	$	18,384	$	86	$	—		$	18,470
State and municipal		60,961		1,654		(4	)		62,611
Federal agency collateralized mortgage obligations		151,736		2,596		(69	)		154,263
Federal agency mortgage-backed pools		215,445		4,654		(276	)		219,823
Corporate notes		32		40		—			72
Total available for sale investment securities	$	446,558	$	9,030	$	(349	)	$	455,239
Held to maturity
State and municipal	$	143,093	$	7,586	$	(2,606	)	$	148,073
Federal agency collateralized mortgage obligations		8,424		199		—			8,623
Federal agency mortgage-backed pools		22,179		1,184		—			23,363
Total held to maturity investment securities	$	173,696	$	8,969	$	(2,606	)	$	180,059
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2015	Cost		Gains		Losses			Value
Available for sale
U.S. Treasury and federal agencies	$	5,940	$	3	$	(17	)	$	5,926
State and municipal		73,829		1,299		(33	)		75,095
Federal agency collateralized mortgage obligations		157,291		567		(1,655	)		156,203
Federal agency mortgage-backed pools		206,970		2,080		(1,346	)		207,704
Corporate notes		32		22		—			54
Total available for sale investment securities	$	444,062	$	3,971	$	(3,051	)	$	444,982
Held to maturity
U.S. Treasury and federal agencies	$	5,859	$	93	$	—		$	5,952
State and municipal		146,331		5,375		(253	)		151,453
Federal agency collateralized mortgage obligations		9,051		27		(124	)		8,954
Federal agency mortgage-backed pools		26,388		1,141		(185	)		27,344
Total held to maturity investment securities	$	187,629	$	6,636	$	(562	)	$	193,703

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, 2016, 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, 2016.

The amortized cost and fair value of securities available for sale and held to maturity at June 30, 2016 and December 31, 2015, 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, 2016				December 31, 2015
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
Within one year	$	7,123	$	7,153	$	7,192	$	7,232
One to five years		46,104		46,664		38,197		38,894
Five to ten years		11,351		11,804		16,807		17,152
After ten years		14,799		15,532		17,605		17,797
		79,377		81,153		79,801		81,075
Federal agency collateralized mortgage obligations		151,736		154,263		157,291		156,203
Federal agency mortgage-backed pools		215,445		219,823		206,970		207,704
Total available for sale investment securities	$	446,558	$	455,239	$	444,062	$	444,982
Held to maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		20,415		20,436		17,815		18,403
Five to ten years		88,183		92,551		106,167		110,026
After ten years		34,495		35,086		28,208		28,976
		143,093		148,073		152,190		157,405
Federal agency collateralized mortgage obligations		8,424		8,623		9,051		8,954
Federal agency mortgage-backed pools		22,179		23,363		26,388		27,344
Total held to maturity investment securities	$	173,696	$	180,059	$	187,629	$	193,703

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

	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
June 30, 2016	Value		Losses			Value		Losses			Value		Losses
State and municipal	$	1,763	$	(2,609	)	$	132	$	(1	)	$	1,895	$	(2,610	)
Federal agency collateralized mortgage obligations		4,059		(23	)		9,079		(46	)		13,138		(69	)
Federal agency mortgage-backed pools		23,361		(276	)		—		—			23,361		(276	)
Total temporarily impaired securities	$	29,183	$	(2,908	)	$	9,211	$	(47	)	$	38,394	$	(2,955	)
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2015	Value		Losses			Value		Losses			Value		Losses
U.S. Treasury and federal agencies	$	5,468	$	(17	)	$	—	$	—		$	5,468	$	(17	)
State and municipal		17,353		(280	)		446		(6	)		17,799		(286	)
Federal agency collateralized mortgage obligations		89,459		(1,124	)		25,428		(655	)		114,887		(1,779	)
Federal agency mortgage-backed pools		113,244		(1,212	)		16,506		(319	)		129,750		(1,531	)
Total temporarily impaired securities	$	225,524	$	(2,633	)	$	42,380	$	(980	)	$	267,904	$	(3,613	)

	Three Months Ended June 30					Six Months Ended June 30
	2016			2015		2016			2015
Sales of securities available for sale (Unaudited)
Proceeds	$	17,536		$	—	$	25,077		$	13,332
Gross gains		952			—		1,060			147
Gross losses		(185	)		—		(185	)		(23	)

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Loans

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Loans

Note 4 – Loans

	June 30			December 31
	2016			2015
Commercial
Working capital and equipment	$	416,205		$	381,245
Real estate, including agriculture		424,300			391,668
Tax exempt		11,458			8,674
Other		22,617			23,408
Total		874,580			804,995
Real estate
1–4 family		489,133			433,015
Other		4,493			4,129
Total		493,626			437,144
Consumer
Auto		162,172			168,397
Recreation		5,005			5,365
Real estate/home improvement		50,121			47,015
Home equity		130,017			127,113
Unsecured		4,175			4,120
Other		12,430			10,290
Total		363,920			362,300
Mortgage warehouse		205,699			144,692
Total loans		1,937,825			1,749,131
Allowance for loan losses		(14,226	)		(14,534	)
Loans, net	$	1,923,599		$	1,734,597

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 and the related mortgagee are underwritten by Horizon to the end investor guidelines and is assigned to Horizon until the loan is sold to the secondary market by the mortgage company. 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 reacquires the loan under its option within the agreement. Due to the reacquire 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 reacquire 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 reacquire 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 reacquire its loan on an individual mortgage, Horizon would be able to exercise its rights under the agreement.

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

	Loan					Deferred			Recorded
June 30, 2016	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	298,481		$	1,068	$	1,134		$	300,683
Non owner occupied real estate		343,360			346		566			344,272
Residential spec homes		7,660			13		13			7,686
Development & spec land loans		23,171			58		16			23,245
Commercial and industrial		199,933			1,419		246			201,598
Total commercial		872,605			2,904		1,975			877,484
Residential mortgage		473,563			1,434		2,277			477,274
Residential construction		17,786			36		—			17,822
Mortgage warehouse		205,699			480		—			206,179
Total real estate		697,048			1,950		2,277			701,275
Direct installment		59,105			164		(383	)		58,886
Direct installment purchased		131			—		—			131
Indirect installment		144,935			300		—			145,235
Home equity		160,955			621		(823	)		160,753
Total consumer		365,126			1,085		(1,206	)		365,005
Total loans		1,934,779			5,939		3,046			1,943,764
Allowance for loan losses		(14,226	)		—		—			(14,226	)
Net loans	$	1,920,553		$	5,939	$	3,046		$	1,929,538
	Loan					Deferred			Recorded
December 31, 2015	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	268,281		$	613	$	1,328		$	270,222
Non owner occupied real estate		326,399			306		497			327,202
Residential spec homes		5,018			9		17			5,044
Development & spec land loans		18,183			33		26			18,242
Commercial and industrial		184,911			1,246		335			186,492
Total commercial		802,792			2,207		2,203			807,202
Residential mortgage		414,924			1,275		2,470			418,669
Residential construction		19,751			34		—			19,785
Mortgage warehouse		144,692			480		—			145,172
Total real estate		579,367			1,789		2,470			583,626
Direct installment		54,341			168		(359	)		54,150
Direct installment purchased		153			—		—			153
Indirect installment		151,523			323		—			151,846
Home equity		157,164			628		(522	)		157,270
Total consumer		363,181			1,119		(881	)		363,419
Total loans		1,745,340			5,115		3,792			1,754,247
Allowance for loan losses		(14,534	)		—		—			(14,534	)
Net loans	$	1,730,806		$	5,115	$	3,792		$	1,739,713

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Accounting for Certain Loans Acquired in a Transfer

6 Months Ended

Jun. 30, 2016

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. Amounts for Kosciusko were estimated as of June 30, 2016 as the final analysis of loans with deterioration was not completed.

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

	June 30		June 30		June 30		June 30		June 30
	2016		2016		2016		2016		2016
	Heartland		Summit		Peoples		Kosciusko		Total
Commercial	$	1,243	$	5,409	$	750	$	7,576	$	14,978
Real estate		641		1,181		281		316		2,419
Consumer		1		9		—		22		32
Outstanding balance	$	1,885	$	6,599	$	1,031	$	7,914	$	17,429
Carrying amount, net of allowance of $0									$	17,429
	December 31		December 31		December 31		December 31		December 31
	2015		2015		2015		2015		2015
	Heartland		Summit		Peoples		Kosciusko		Total
Commercial	$	1,633	$	5,567	$	1,061	$	—	$	8,261
Real estate		693		1,216		179		—		2,088
Consumer		6		35		—		—		41
Outstanding balance	$	2,332	$	6,818	$	1,240	$	—	$	10,390
Carrying amount, net of allowance of $63									$	10,327

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

	Six Months Ended June 30, 2016
	Heartland			Summit			Peoples			Kosciusko		Total
Balance at January 1	$	795		$	708		$	555		$	—	$	2,058
Additions		—			—			—			950		950
Accretion		(89	)		(103	)		(69	)		—		(261	)
Reclassification from nonaccretable difference		—			—			—			—		—
Disposals		(24	)		(4	)		(58	)		—		(86	)
Balance at June 30	$	682		$	601		$	428		$	950	$	2,661
	Six Months Ended June 30, 2015
	Heartland			Summit			Peoples			Kosciusko		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

During the six months ended June 30, 2016 and 2015, the Company decreased the allowance for loan losses on purchased loans by a recovery to the income statement of $0 and $76,000, respectively.

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Allowance for Loan Losses

6 Months Ended

Jun. 30, 2016

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						Six Months Ended
	June 30						June 30
	2016			2015			2016			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance at beginning of the period	$	14,236		$	16,634		$	14,534		$	16,501
Loans charged-off:
Commercial
Owner occupied real estate		31			1,422			178			1,422
Non owner occupied real estate		173			—			472			16
Residential development		—			—			—			—
Development & Spec Land Loans		—			—			—			—
Commercial and industrial		—			253			39			253
Total commercial		204			1,675			689			1,691
Real estate
Residential mortgage		—			164			115			186
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		—			164			115			186
Consumer
Direct Installment		46			96			104			155
Direct Installment Purchased		—			—			—			—
Indirect Installment		279			196			555			565
Home Equity		64			304			239			504
Total consumer		389			596			898			1,224
Total loans charged-off		593			2,435			1,702			3,101
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		4			78			29			86
Non owner occupied real estate		31			—			54			—
Residential development		2			—			4			—
Development & Spec Land Loans		—			—			—			—
Commercial and industrial		63			14			95			33
Total commercial		100			92			182			119
Real estate
Residential mortgage		31			3			63			5
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		31			3			63			5
Consumer
Direct Installment		28			47			44			76
Direct Installment Purchased		—			—			—			—
Indirect Installment		146			134			240			235
Home Equity		46			40			101			66
Total consumer		220			221			385			377
Total loan recoveries		351			316			630			501
Net loans charged-off (recovered)		242			2,119			1,072			2,600
Provision charged to operating expense
Commercial		(305	)		2,093			(639	)		2,048
Real estate		343			(29	)		(249	)		904
Consumer		194			(158	)		1,652			(432	)
Total provision charged to operating expense		232			1,906			764			2,520
Balance at the end of the period	$	14,226		$	16,421		$	14,226		$	16,421

Certain loans are individually evaluated for impairment, and the Company’s general practice is to proactively charge down impaired loans to the fair value, which is the appraised value less estimated selling costs, 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, 2016	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	500	$	—	$	—	$	—	$	500
Collectively evaluated for impairment		5,551		2,102		1,080		4,993		13,726
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	6,051	$	2,102	$	1,080	$	4,993	$	14,226
Loans:
Individually evaluated for impairment	$	4,344	$	—	$	—	$	—	$	4,344
Collectively evaluated for impairment		873,140		495,096		206,179		365,005		1,939,420
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	877,484	$	495,096	$	206,179	$	365,005	$	1,943,764
December 31, 2015	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	202	$	—	$	—	$	—	$	202
Collectively evaluated for impairment		6,739		2,476		1,007		3,856		14,078
Loans acquired with deteriorated credit quality		254		—		—		—		254
Total ending allowance balance	$	7,195	$	2,476	$	1,007	$	3,856	$	14,534
Loans:
Individually evaluated for impairment	$	7,019	$	—	$	—	$	—	$	7,019
Collectively evaluated for impairment		798,454		438,454		145,172		363,419		1,745,499
Loans acquired with deteriorated credit quality		1,729		—		—		—		1,729
Total ending loans balance	$	807,202	$	438,454	$	145,172	$	363,419	$	1,754,247

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Non-performing Loans and Impaired Loans

6 Months Ended

Jun. 30, 2016

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, 2016	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,054	$	—	$	—	$	—	$	1,054
Non owner occupied real estate		2,901		—		243		60		3,204
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		71		—		—		—		71
Total commercial		4,026		—		243		60		4,329
Real estate
Residential mortgage		3,664		1		803		950		5,418
Residential construction		—		—		242		—		242
Mortgage warehouse		—		—		—		—		—
Total real estate		3,664		1		1,045		950		5,660
Consumer
Direct Installment		345		—		—		—		345
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		837		23		—		—		860
Home Equity		1,554		—		178		246		1,978
Total Consumer		2,736		23		178		246		3,183
Total	$	10,426	$	24	$	1,466	$	1,256	$	13,172
December 31, 2015	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,749	$	—	$	—	$	—	$	1,749
Non owner occupied real estate		3,034		—		1,915		60		5,009
Residential development		—		—		—		—		—
Development & Spec Land Loans		71		—		—		—		71
Commercial and industrial		176		—		—		—		176
Total commercial		5,030		—		1,915		60		7,005
Real estate
Residential mortgage		4,354		1		824		808		5,987
Residential construction		—		—		250		—		250
Mortgage warehouse		—		—		—		—		—
Total real estate		4,354		1		1,074		808		6,237
Consumer
Direct Installment		541		—		—		—		541
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		601		27		—		—		628
Home Equity		1,736		—		183		350		2,269
Total Consumer		2,878		27		183		350		3,438
Total	$	12,262	$	28	$	3,172	$	1,218	$	16,680

Included in the $10.4 million of non-accrual loans and the $1.5 million of non-performing TDRs at June 30, 2016 were $2.1 million and $94,000, 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 generally 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 Operations Officer or the senior collection officer must review all loans placed on non-accrual status. Subsequent payments on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal in accordance with the loan terms. The Company requires a period of satisfactory performance of not less than six months before returning a non-accrual loan to accrual status.

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

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

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

The Company’s TDRs are considered impaired loans and included in the allowance methodology using the guidance for impaired loans. At June 30, 2016, 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, 2016, the Company had $2.7 million in TDRs and $1.3 million were performing according to the restructured terms and zero TDRs were returned to accrual status during the first six months of 2016. There was $107,000 of specific reserves allocated to TDRs at June 30, 2016 based on the discounted cash flows or when appropriate the fair value of the collateral.

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

							Three Months Ending				Six Months Ending
June 30, 2016	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	$	1,054	$	1,054	$	—	$	1,062	$	—	$	1,079	$	—
Non owner occupied real estate		476		480		—		600		1		1,331		2
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		71		71		—		320		—		325		—
Total commercial		1,601		1,605		—		1,982		1		2,735		2
With an allowance recorded
Commercial
Owner occupied real estate		—		—		—		—		—		—		—
Non owner occupied real estate		2,729		2,739		500		2,747		—		2,757		—
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		—
Total commercial		2,729		2,739		500		2,747		—		2,757		—
Total	$	4,330	$	4,344	$	500	$	4,729	$	1	$	5,492	$	2

							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

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

June 30, 2016	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	$	98		$	437		$	—		$	535		$	297,946		$	298,481
Non owner occupied real estate		20			—			—			20			343,340			343,360
Residential development		—			—			—			—			7,660			7,660
Development & Spec Land Loans		2			—			—			2			23,169			23,171
Commercial and industrial		—			91			—			91			199,842			199,933
Total commercial		120			528			—			648			871,957			872,605
Real estate
Residential mortgage		1,023			300			1			1,324			472,239			473,563
Residential construction		—			271			—			271			17,515			17,786
Mortgage warehouse		—			—			—			—			205,699			205,699
Total real estate		1,023			571			1			1,595			695,453			697,048
Consumer
Direct Installment		155			16			—			171			58,934			59,105
Direct Installment Purchased		—			—			—			—			131			131
Indirect Installment		493			75			23			591			144,344			144,935
Home Equity		310			134			—			444			160,511			160,955
Total consumer		958			225			23			1,206			363,920			365,126
Total	$	2,101		$	1,324		$	24		$	3,449		$	1,931,330		$	1,934,779
Percentage of total loans		0.11	%		0.07	%		0.00	%		0.18	%		99.82	%
December 31, 2015	30 - 59 Days Past Due			60 - 89 Days Past Due			Greater than 90 Days Past Due			Total Past Due			Loans Not Past Due			Total
Commercial
Owner occupied real estate	$	481		$	18		$	—		$	499		$	267,782		$	268,281
Non owner occupied real estate		49			—			—			49			326,350			326,399
Residential development		—			—			—			—			5,018			5,018
Development & Spec Land Loans		—			—			—			—			18,183			18,183
Commercial and industrial		32			—			—			32			184,879			184,911
Total commercial		562			18			—			580			802,212			802,792
Real estate
Residential mortgage		1,121			344			1			1,466			413,458			414,924
Residential construction		—			—			—			—			19,751			19,751
Mortgage warehouse		—			—			—			—			144,692			144,692
Total real estate		1,121			344			1			1,466			577,901			579,367
Consumer
Direct Installment		106			10			—			116			54,225			54,341
Direct Installment Purchased		—			—			—			—			153			153
Indirect Installment		1,186			268			27			1,481			150,042			151,523
Home Equity		1,193			203			—			1,396			155,768			157,164
Total consumer		2,485			481			27			2,993			360,188			363,181
Total	$	4,168		$	843		$	28		$	5,039		$	1,740,301		$	1,745,340
Percentage of total loans		0.24	%		0.05	%		0.00	%		0.29	%		99.71	%

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 to 120 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, 2016	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	282,204		$	8,716		$	7,561		$	—		$	298,481
Non owner occupied real estate		336,897			3,033			3,430			—			343,360
Residential development		7,660			—			—			—			7,660
Development & Spec Land Loans		23,171			—			—			—			23,171
Commercial and industrial		188,713			2,342			8,878			—			199,933
Total commercial		838,645			14,091			19,869			—			872,605
Real estate
Residential mortgage		468,145			—			5,418			—			473,563
Residential construction		17,544			—			242			—			17,786
Mortgage warehouse		205,699			—			—			—			205,699
Total real estate		691,388			—			5,660			—			697,048
Consumer
Direct Installment		58,760			—			345			—			59,105
Direct Installment Purchased		131			—			—			—			131
Indirect Installment		144,075			—			860			—			144,935
Home Equity		158,977			—			1,978			—			160,955
Total Consumer		361,943			—			3,183			—			365,126
Total	$	1,891,976		$	14,091		$	28,712		$	—		$	1,934,779
Percentage of total loans		97.79	%		0.73	%		1.48	%		0.00	%
December 31, 2015	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	257,181		$	4,954		$	6,146		$	—		$	268,281
Non owner occupied real estate		320,216			585			5,598			—			326,399
Residential development		5,018			—			—			—			5,018
Development & Spec Land Loans		18,112			—			71			—			18,183
Commercial and industrial		180,581			693			3,637			—			184,911
Total commercial		781,108			6,232			15,452			—			802,792
Real estate
Residential mortgage		408,937			—			5,987			—			414,924
Residential construction		19,501			—			250			—			19,751
Mortgage warehouse		144,692			—			—			—			144,692
Total real estate		573,130			—			6,237			—			579,367
Consumer
Direct Installment		53,800			—			541			—			54,341
Direct Installment Purchased		153			—			—			—			153
Indirect Installment		150,895			—			628			—			151,523
Home Equity		154,895			—			2,269			—			157,164
Total Consumer		359,743			—			3,438			—			363,181
Total	$	1,713,981		$	6,232		$	25,127		$	—		$	1,745,340
Percentage of total loans		98.20	%		0.36	%		1.44	%		0.00	%

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Repurchase Agreements

6 Months Ended

Jun. 30, 2016

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 acquire 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	$	50,348		$	25,000	$	60,000	$	10,000	$	—		$	—		$	145,348
Securities lending transactions
U.S. Treasury and federal agencies	$	4,038		$	—	$	—	$	—	$	—		$	—		$	4,038
Federal agency collateralized mortgage obligations		44,521			—		388		173		21,541			30,301			96,924
Federal agency mortgage-backed pools		15,003			—		110		2,404		21,304			28,396			67,217
Total		63,562			—		498		2,577		42,845			58,697			168,179
Total borrowings	$	(13,214	)	$	25,000	$	59,502	$	7,423	$	(42,845	)	$	(58,697	)	$	(22,831	)

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2016

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, 2016 and December 31, 2015. 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, 2016, 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, 2016, 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 $121.7 million at June 30, 2016 and $117.3 million at December 31, 2015.

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, 2016, 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 Derivatives				Liability Derivatives
	June 30, 2016				June 30, 2016
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts		Loans	$	—		Other liabilities	$	5,393
Interest rate contracts		Other Assets		5,393		Other liabilities		3,786
Total derivatives designated as hedging instruments				5,393				9,179
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		1,111		Other liabilities		—
Total derivatives not designated as hedging instruments				1,111				—
Total derivatives			$	6,504			$	9,179
	Asset Derivatives				Liability Derivatives
	December 31, 2015				December 31, 2015
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts		Loans	$	—		Other liabilities	$	1,782
Interest rate contracts		Other Assets		1,782		Other liabilities		3,141
Total derivatives designated as hedging instruments				1,782				4,923
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		642		Other liabilities		—
Total derivatives not designated as hedging instruments				642				—
Total derivatives			$	2,424			$	4,923

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

	Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)					Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended June 30					Six Months Ended June 30
Derivative in cash flow	2016			2015		2016			2015
hedging relationship	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
Interest rate contracts	$	(54	)	$	332	$	(419	)	$	118

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	Location of gain (loss)	2016			2015			2016			2015
hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest rate contracts	Interest income - loans	$	1,110		$	(1,186	)	$	3,611		$	(186	)
Interest rate contracts	Interest income - loans		(1,110	)		1,186			(3,611	)		186
Total		$	—		$	—		$	—		$	—
		Amount of Gain (Loss) Recognized on Derivative Three Months Ended June 30						Amount of Gain (Loss) Recognized on Derivative Six Months Ended June 30
Derivative not designated	Location of gain (loss)	2016			2015			2016			2015
as hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Mortgage contracts	Other income - gain on sale of loans	$	468		$	83		$	471		$	272

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Disclosures about Fair Value of Assets and Liabilities

6 Months Ended

Jun. 30, 2016

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, 2016. 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 collateralized mortgage obligations and mortgage-backed pools and corporate notes. Level 2 securities are valued by a third 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 third party using inputs that are primarily unobservable including a yield curve, adjusted for liquidity and credit risk, contracted terms and discounted cash flow analysis, and therefore, are classified within Level 2 of the valuation hierarchy.

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

				Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
	Fair Value			(Level 1)		(Level 2)			(Level 3)
June 30, 2016
Available-for-sale securities
U.S. Treasury and federal agencies	$	18,470		$	—	$	18,470		$	—
State and municipal		62,611			—		62,611			—
Federal agency collateralized mortgage obligations		154,263			—		154,263			—
Federal agency mortgage-backed pools		219,823			—		219,823			—
Corporate notes		72			—		72			—
Total available-for-sale securities		455,239			—		455,239			—
Hedged loans		116,338			—		116,338			—
Forward sale commitments		1,111			—		1,111			—
Interest rate swap agreements		(9,179	)		—		(9,179	)		—
Commitments to originate loans		—			—		—			—
December 31, 2015
Available-for-sale securities
U.S. Treasury and federal agencies	$	5,926		$	—	$	5,926		$	—
State and municipal		75,095			—		75,095			—
Federal agency collateralized mortgage obligations		156,203			—		156,203			—
Federal agency mortgage-backed pools		207,704			—		207,704			—
Corporate notes		54			—		54			—
Total available-for-sale securities		444,982			—		444,982			—
Hedged loans		115,472			—		115,472			—
Forward sale commitments		642			—		642			—
Interest rate swap agreements		(4,923	)		—		(4,923	)		—

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	2016			2015			2016			2015
Total gains and losses from:	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Hedged loans	$	1,110		$	(1,186	)	$	3,611		$	(186	)
Fair value interest rate swap agreements		(1,110	)		1,186			(3,611	)		186
Derivative loan commitments		468			83			471			272
	$	468		$	83		$	471		$	272

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

			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2016
Impaired loans	$	3,830	$	—	$	—	$	3,830
Mortgage servicing rights		9,714		—		—		9,714
December 31, 2015
Impaired loans	$	6,803	$	—	$	—	$	6,803
Mortgage servicing rights		8,874		—		—		8,874

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 due to impairment decreased by $46,000 during the first six months of 2016 and decreased by $18,000 during the first six months of 2015.

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

	Fair Value at		Valuation		Range (Weighted
	June 30, 2016		Technique	Unobservable Inputs	Average)
Impaired loans	$	3,830	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	10% - 15% (12%)
Mortgage servicing rights	$	9,714	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default	10% - 15% (12%), 4% - 7% (4.6%), 1% - 10% (4.5%)
	Fair Value at		Valuation		Range (Weighted
	December 31, 2015		Technique	Unobservable Inputs	Average)
Impaired loans	$	6,803	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	10% - 15% (12%)
Mortgage servicing rights	$	8,874	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default	10% - 15% (12%), 4% - 7% (4.6%), 1% - 10% (4.5%)

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2016

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, 2016 and December 31, 2015. 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, 2016
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	109,224	$	109,224	$	—	$	—
Investment securities, held to maturity		173,696		—		180,059		—
Loans held for sale		7,812		—		—		7,812
Loans excluding loan level hedges, net		1,807,261		—		—		1,798,943
Stock in FHLB and FRB		16,636		—		16,636		—
Interest receivable		11,526		—		11,526		—
Liabilities
Non-interest bearing deposits	$	397,412	$	397,412	$	—	$	—
Interest-bearing deposits		1,684,849		—		1,656,009		—
Borrowings		492,883		—		491,538		—
Subordinated debentures		32,874		—		33,000		—
Interest payable		961		—		961		—
	December 31, 2015
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	48,650	$	48,650	$	—	$	—
Investment securities, held to maturity		187,629		—		193,703		—
Loans held for sale		7,917		—		—		7,917
Loans excluding loan level hedges, net		1,619,125		—		—		1,703,506
Stock in FHLB and FRB		13,823		—		13,823		—
Interest receivable		10,535		—		10,535		—
Liabilities
Non-interest bearing deposits	$	335,955	$	335,955	$	—	$	—
Interest-bearing deposits		1,544,198		—		1,461,314		—
Borrowings		449,347		—		441,547		—
Subordinated debentures		32,797		—		32,996		—
Interest payable		507		—		507		—

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Accumulated Other Comprehensive Income

Note 12 – Accumulated Other Comprehensive Income

	June 30 2016			December 31 2015
Unrealized gain on securities available for sale	$	8,681		$	920
Unamortized gain on securities held to maturity, previously transferred from AFS		632			1,109
Unrealized loss on derivative instruments		(3,786	)		(3,141	)
Tax effect		(1,934	)		389
Total accumulated other comprehensive income (loss)	$	3,593		$	(723	)

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Regulatory Capital

6 Months Ended

Jun. 30, 2016

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, 2016, 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.

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, 2016) and Tier I leverage ratios as set forth in the table below. As of June 30, 2016 and December 31, 2015, 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 2016 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, 2016 and December 31, 2015 were as follows:

						Required For Capital1					Well Capitalized Under Prompt1
	Actual					Adequacy Purposes					Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2016
Total capital1 (to risk-weighted assets)
Consolidated	$	267,414		12.56	%	$	183,703		8.63	%		N/A		N/A
Bank		257,203		12.45	%		178,286		8.63	%	$	206,589		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		253,188		11.89	%		141,130		6.63	%		N/A		N/A
Bank		242,977		11.77	%		136,868		6.63	%		165,150		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets) Consolidated		220,120		10.34	%		109,200		5.13	%		N/A		N/A
Bank		242,977		11.77	%		105,902		5.13	%		134,184		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		253,188		9.55	%		106,069		4.00	%		N/A		N/A
Bank		242,977		9.18	%		105,872		4.00	%		132,340		5.00	%
As of December 31, 2015
Total capital1 (to risk-weighted assets)
Consolidated	$	264,452		13.99	%	$	151,223		8.00	%		N/A		N/A
Bank		237,348		12.57	%		151,057		8.00	%	$	188,821		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		249,918		13.22	%		113,427		6.00	%		N/A		N/A
Bank		222,814		11.80	%		113,295		6.00	%		151,060		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets) Consolidated		204,350		10.81	%		85,067		4.50	%		N/A		N/A
Bank		222,814		11.80	%		84,971		4.50	%		122,737		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		249,918		9.82	%		101,800		4.00	%		N/A		N/A
Bank		222,814		8.77	%		101,626		4.00	%		127,032		5.00	%

¹  As defined by regulatory agencies

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Preferred Stock Redemption

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Preferred Stock Redemption

Note 14 – Preferred Stock Redemption

On February 1, 2016, Horizon completed the redemption (the “Redemption”) of all 12,500 outstanding shares of Senior Non-Cumulative Perpetual Preferred Stock, Series B (the “SBLF Preferred Stock”) which were held by the U.S. Department of Treasury and issued pursuant to its Small Business Lending Fund (“SBLF”). The SBLF Preferred Stock was redeemed at its liquidation value of $1,000 per share, plus accrued dividends, for a total Redemption price of $12,510,416.67. Horizon funded the Redemption using cash on hand without borrowing and without a special dividend from the Bank. Following the Redemption, Horizon does not have any shares of its Senior Non-Cumulative Perpetual Preferred Stock, Series B outstanding. The Redemption terminates Horizon’s participation in the SBLF.

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Business Combinations

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Business Combinations

Note 15 – Business Combinations

On July 12, 2016, Horizon announced the acquisition of CNB Bancorp, parent company of The Central National Bank and Trust Company (“Central National Bank & Trust”). Under the terms of the Merger Agreement, stockholders of CNB Bancorp will receive cash consideration consisting of a special dividend calculated as capital in excess of 8% of CNB Bancorp’s total assets, less certain after tax transaction costs and an amount to be paid by Horizon equal to 120% of remaining capital. These amounts will be determined as of the end of the month prior to the closing of the merger. These amounts are dependent on CNB Bancorp’s earnings and other factors, but if the cash consideration for the stockholders were calculated as of March 31, 2016, the stockholders would receive, in the aggregate, a $6.7 million special dividend and a $5.3 million payment from Horizon. As of June 30, 2016, CNB Bancorp had total assets of approximately $56.4 million.

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Future Accounting Matters

6 Months Ended

Jun. 30, 2016

Accounting Changes and Error Corrections [Abstract]

Future Accounting Matters

Note 16 – Future Accounting Matters

In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting. The amendments affect all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. The amendments eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required.

The amendments require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method.

The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted.

In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements. Topic 326 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. The ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.

Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. The ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.

The ASU is effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (i.e., January 1, 2020, for calendar year entities. Early application will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.

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General Litigation

6 Months Ended

Jun. 30, 2016

Text Block [Abstract]

General Litigation

Note 17 – 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 of operation and cash flows of the Company.

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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

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				Six Months Ended
	June 30				June 30
	2016		2015		2016		2015
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	6,326	$	4,728	$	11,707	$	10,086
Less: Preferred stock dividends		—		31		42		63
Net income available to common shareholders	$	6,326	$	4,697	$	11,665	$	10,023
Weighted average common shares outstanding		12,179,253		9,240,005		12,064,335		9,228,075
Basic earnings per share	$	0.52	$	0.51	$	0.97	$	1.09
Diluted earnings per share
Net income available to common shareholders	$	6,326	$	4,697	$	11,665	$	10,023
Weighted average common shares outstanding		12,179,253		9,240,005		12,064,335		9,228,075
Effect of dilutive securities:
Warrants		—		324,698		—		323,198
Restricted stock		20,721		34,892		21,050		30,816
Stock options		42,804		37,991		41,643		33,462
Weighted average shares outstanding		12,242,778		9,637,586		12,127,028		9,615,551
Diluted earnings per share	$	0.52	$	0.49	$	0.96	$	1.04

There were zero shares for both the three and six months ended June 30, 2016, respectively, and 2,500 and 41,444 for the three and six months ended June 30, 2015 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, 2015 Annual Report on Form 10-K.

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Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2016

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				Six Months Ended
	June 30				June 30
	2016		2015		2016		2015
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	6,326	$	4,728	$	11,707	$	10,086
Less: Preferred stock dividends		—		31		42		63
Net income available to common shareholders	$	6,326	$	4,697	$	11,665	$	10,023
Weighted average common shares outstanding		12,179,253		9,240,005		12,064,335		9,228,075
Basic earnings per share	$	0.52	$	0.51	$	0.97	$	1.09
Diluted earnings per share
Net income available to common shareholders	$	6,326	$	4,697	$	11,665	$	10,023
Weighted average common shares outstanding		12,179,253		9,240,005		12,064,335		9,228,075
Effect of dilutive securities:
Warrants		—		324,698		—		323,198
Restricted stock		20,721		34,892		21,050		30,816
Stock options		42,804		37,991		41,643		33,462
Weighted average shares outstanding		12,242,778		9,637,586		12,127,028		9,615,551
Diluted earnings per share	$	0.52	$	0.49	$	0.96	$	1.04

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2016

Peoples Bancorp Inc [Member]

Schedule of Purchase Price of Assets Acquired and Liabilities Assumed

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 final purchase price for the Peoples acquisition is allocated as follows:

ASSETS
Cash and due from banks	$	205,054
Investment securities, held to maturity		2,038
Commercial		67,435
Residential mortgage		137,331
Consumer		19,593
Total loans		224,359
Premises and equipment, net		5,524
FRB and FHLB stock		2,743
Goodwill		21,424
Core deposit intangible		4,394
Interest receivable		1,279
Cash value of life insurance		13,898
Other assets		4,364
Total assets purchased	$	485,077
Common shares issued	$	55,506
Cash paid		22,641
Total estimated purchase price	$	78,147

LIABILITIES
Deposits
Non-interest bearing	$	28,251
NOW accounts		65,771
Savings and money market		125,176
Certificates of deposits		131,889
Total deposits		351,087
Borrowings		48,884
Interest payable		21
Other liabilities		6,938
Total liabilities assumed	$	406,930

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 July 1, 2015.

Contractually required principal and interest at acquisition	$	5,730
Contractual cash flows not expected to be collected (nonaccretable differences)		715
Expected cash flows at acquisition		5,015
Interest component of expected cash flows (accretable discount)		647
Fair value of acquired loans accounted for under ASC 310-30	$	4,368

Pro Forma Result of Comparable Prior Reporting Period

The following schedule includes pro forma results for the periods ended June 30, 2016 and 2015 as if the Peoples and Peoples FSB acquisitions had occurred as of the beginning of the comparable prior reporting period.

	Three Months Ended				Six Months Ended
	June 30		June 30		June 30		June 30
	2016		2015		2016		2015
Summary of Operations:
Net Interest Income	$	20,869	$	20,829	$	40,643	$	40,690
Provision for Loan Losses		232		1,936		764		2,580
Net Interest Income after Provision for Loan Losses		20,637		18,893		39,879		38,110
Non-interest Income		9,869		8,086		17,733		16,145
Non-Interest Expense		21,555		19,852		41,302		39,014
Income before Income Taxes		8,951		7,127		16,310		15,241
Income Tax Expense		2,625		1,779		4,603		3,791
Net Income		6,326		5,348		11,707		11,450
Net Income Available to Common Shareholders	$	6,326	$	5,317	$	11,665	$	11,387
Basic Earnings Per Share	$	0.52	$	0.46	$	0.97	$	0.99
Diluted Earnings Per Share	$	0.52	$	0.45	$	0.96	$	0.96

Kosciusko Financial Inc [Member]

Schedule of Purchase Price of Assets Acquired and Liabilities Assumed

Based on preliminary valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change, the purchase price for the Kosciusko acquisition is detailed in the following table. Prior to the end of the one year measurement period for finalizing the purchase price allocation, if information becomes available which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation prospectively. If any adjustments are made to the preliminary assumptions (provisional amounts), disclosures will be made in the notes to the financial statements of the amounts recorded in the current period earnings by line item that have been recorded in previous reporting periods if the adjustments to the provisional amounts had been recognized as of the acquisition date.

ASSETS
Cash and due from banks	$	38,950
Investment securities, held to maturity		1,191
Commercial		67,310
Residential mortgage		26,244
Consumer		6,319
Total loans		99,873
Premises and equipment, net		1,466
FRB and FHLB stock		582
Goodwill		6,858
Core deposit intangible		1,867
Interest receivable		636
Cash value of life insurance		2,745
Other assets		1,245
Total assets purchased	$	155,413
Common shares issued	$	14,068
Cash paid		8,513
Total estimated purchase price	$	22,581

LIABILITIES
Deposits
Non-interest bearing	$	28,549
NOW accounts		35,213
Savings and money market		26,953
Certificates of deposits		32,771
Total deposits		123,486
Borrowings		8,303
Interest payable		55
Other liabilities		988
Total liabilities assumed	$	132,832

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Securities (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Fair Value of Securities

The fair value of securities is as follows:

			Gross		Gross
June 30, 2016	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale
U.S. Treasury and federal agencies	$	18,384	$	86	$	—		$	18,470
State and municipal		60,961		1,654		(4	)		62,611
Federal agency collateralized mortgage obligations		151,736		2,596		(69	)		154,263
Federal agency mortgage-backed pools		215,445		4,654		(276	)		219,823
Corporate notes		32		40		—			72
Total available for sale investment securities	$	446,558	$	9,030	$	(349	)	$	455,239
Held to maturity
State and municipal	$	143,093	$	7,586	$	(2,606	)	$	148,073
Federal agency collateralized mortgage obligations		8,424		199		—			8,623
Federal agency mortgage-backed pools		22,179		1,184		—			23,363
Total held to maturity investment securities	$	173,696	$	8,969	$	(2,606	)	$	180,059
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2015	Cost		Gains		Losses			Value
Available for sale
U.S. Treasury and federal agencies	$	5,940	$	3	$	(17	)	$	5,926
State and municipal		73,829		1,299		(33	)		75,095
Federal agency collateralized mortgage obligations		157,291		567		(1,655	)		156,203
Federal agency mortgage-backed pools		206,970		2,080		(1,346	)		207,704
Corporate notes		32		22		—			54
Total available for sale investment securities	$	444,062	$	3,971	$	(3,051	)	$	444,982
Held to maturity
U.S. Treasury and federal agencies	$	5,859	$	93	$	—		$	5,952
State and municipal		146,331		5,375		(253	)		151,453
Federal agency collateralized mortgage obligations		9,051		27		(124	)		8,954
Federal agency mortgage-backed pools		26,388		1,141		(185	)		27,344
Total held to maturity investment securities	$	187,629	$	6,636	$	(562	)	$	193,703

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, 2016 and December 31, 2015, 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, 2016				December 31, 2015
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
Within one year	$	7,123	$	7,153	$	7,192	$	7,232
One to five years		46,104		46,664		38,197		38,894
Five to ten years		11,351		11,804		16,807		17,152
After ten years		14,799		15,532		17,605		17,797
		79,377		81,153		79,801		81,075
Federal agency collateralized mortgage obligations		151,736		154,263		157,291		156,203
Federal agency mortgage-backed pools		215,445		219,823		206,970		207,704
Total available for sale investment securities	$	446,558	$	455,239	$	444,062	$	444,982
Held to maturity
Within one year	$	—	$	—	$	—	$	—
One to five years		20,415		20,436		17,815		18,403
Five to ten years		88,183		92,551		106,167		110,026
After ten years		34,495		35,086		28,208		28,976
		143,093		148,073		152,190		157,405
Federal agency collateralized mortgage obligations		8,424		8,623		9,051		8,954
Federal agency mortgage-backed pools		22,179		23,363		26,388		27,344
Total held to maturity investment securities	$	173,696	$	180,059	$	187,629	$	193,703

Gross Unrealized Losses and Fair Value of Company's Investments

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

	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
June 30, 2016	Value		Losses			Value		Losses			Value		Losses
State and municipal	$	1,763	$	(2,609	)	$	132	$	(1	)	$	1,895	$	(2,610	)
Federal agency collateralized mortgage obligations		4,059		(23	)		9,079		(46	)		13,138		(69	)
Federal agency mortgage-backed pools		23,361		(276	)		—		—			23,361		(276	)
Total temporarily impaired securities	$	29,183	$	(2,908	)	$	9,211	$	(47	)	$	38,394	$	(2,955	)
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2015	Value		Losses			Value		Losses			Value		Losses
U.S. Treasury and federal agencies	$	5,468	$	(17	)	$	—	$	—		$	5,468	$	(17	)
State and municipal		17,353		(280	)		446		(6	)		17,799		(286	)
Federal agency collateralized mortgage obligations		89,459		(1,124	)		25,428		(655	)		114,887		(1,779	)
Federal agency mortgage-backed pools		113,244		(1,212	)		16,506		(319	)		129,750		(1,531	)
Total temporarily impaired securities	$	225,524	$	(2,633	)	$	42,380	$	(980	)	$	267,904	$	(3,613	)

Sales of Securities Available for Sale

	Three Months Ended June 30					Six Months Ended June 30
	2016			2015		2016			2015
Sales of securities available for sale (Unaudited)
Proceeds	$	17,536		$	—	$	25,077		$	13,332
Gross gains		952			—		1,060			147
Gross losses		(185	)		—		(185	)		(23	)

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Loans (Tables)

6 Months Ended

Jun. 30, 2016

Amounts of Loans

	June 30			December 31
	2016			2015
Commercial
Working capital and equipment	$	416,205		$	381,245
Real estate, including agriculture		424,300			391,668
Tax exempt		11,458			8,674
Other		22,617			23,408
Total		874,580			804,995
Real estate
1–4 family		489,133			433,015
Other		4,493			4,129
Total		493,626			437,144
Consumer
Auto		162,172			168,397
Recreation		5,005			5,365
Real estate/home improvement		50,121			47,015
Home equity		130,017			127,113
Unsecured		4,175			4,120
Other		12,430			10,290
Total		363,920			362,300
Mortgage warehouse		205,699			144,692
Total loans		1,937,825			1,749,131
Allowance for loan losses		(14,226	)		(14,534	)
Loans, net	$	1,923,599		$	1,734,597

Recorded Investment of Individual Loan Categories

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

	Loan					Deferred			Recorded
June 30, 2016	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	298,481		$	1,068	$	1,134		$	300,683
Non owner occupied real estate		343,360			346		566			344,272
Residential spec homes		7,660			13		13			7,686
Development & spec land loans		23,171			58		16			23,245
Commercial and industrial		199,933			1,419		246			201,598
Total commercial		872,605			2,904		1,975			877,484
Residential mortgage		473,563			1,434		2,277			477,274
Residential construction		17,786			36		—			17,822
Mortgage warehouse		205,699			480		—			206,179
Total real estate		697,048			1,950		2,277			701,275
Direct installment		59,105			164		(383	)		58,886
Direct installment purchased		131			—		—			131
Indirect installment		144,935			300		—			145,235
Home equity		160,955			621		(823	)		160,753
Total consumer		365,126			1,085		(1,206	)		365,005
Total loans		1,934,779			5,939		3,046			1,943,764
Allowance for loan losses		(14,226	)		—		—			(14,226	)
Net loans	$	1,920,553		$	5,939	$	3,046		$	1,929,538
	Loan					Deferred			Recorded
December 31, 2015	Balance			Interest Due		Fees / (Costs)			Investment
Owner occupied real estate	$	268,281		$	613	$	1,328		$	270,222
Non owner occupied real estate		326,399			306		497			327,202
Residential spec homes		5,018			9		17			5,044
Development & spec land loans		18,183			33		26			18,242
Commercial and industrial		184,911			1,246		335			186,492
Total commercial		802,792			2,207		2,203			807,202
Residential mortgage		414,924			1,275		2,470			418,669
Residential construction		19,751			34		—			19,785
Mortgage warehouse		144,692			480		—			145,172
Total real estate		579,367			1,789		2,470			583,626
Direct installment		54,341			168		(359	)		54,150
Direct installment purchased		153			—		—			153
Indirect installment		151,523			323		—			151,846
Home equity		157,164			628		(522	)		157,270
Total consumer		363,181			1,119		(881	)		363,419
Total loans		1,745,340			5,115		3,792			1,754,247
Allowance for loan losses		(14,534	)		—		—			(14,534	)
Net loans	$	1,730,806		$	5,115	$	3,792		$	1,739,713

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		June 30		June 30		June 30		June 30
	2016		2016		2016		2016		2016
	Heartland		Summit		Peoples		Kosciusko		Total
Commercial	$	1,243	$	5,409	$	750	$	7,576	$	14,978
Real estate		641		1,181		281		316		2,419
Consumer		1		9		—		22		32
Outstanding balance	$	1,885	$	6,599	$	1,031	$	7,914	$	17,429
Carrying amount, net of allowance of $0									$	17,429
	December 31		December 31		December 31		December 31		December 31
	2015		2015		2015		2015		2015
	Heartland		Summit		Peoples		Kosciusko		Total
Commercial	$	1,633	$	5,567	$	1,061	$	—	$	8,261
Real estate		693		1,216		179		—		2,088
Consumer		6		35		—		—		41
Outstanding balance	$	2,332	$	6,818	$	1,240	$	—	$	10,390
Carrying amount, net of allowance of $63									$	10,327

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Accounting for Certain Loans Acquired in a Transfer (Tables)

6 Months Ended

Jun. 30, 2016

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, 2016
	Heartland			Summit			Peoples			Kosciusko		Total
Balance at January 1	$	795		$	708		$	555		$	—	$	2,058
Additions		—			—			—			950		950
Accretion		(89	)		(103	)		(69	)		—		(261	)
Reclassification from nonaccretable difference		—			—			—			—		—
Disposals		(24	)		(4	)		(58	)		—		(86	)
Balance at June 30	$	682		$	601		$	428		$	950	$	2,661
	Six Months Ended June 30, 2015
	Heartland			Summit			Peoples			Kosciusko		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

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Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2016

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						Six Months Ended
	June 30						June 30
	2016			2015			2016			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance at beginning of the period	$	14,236		$	16,634		$	14,534		$	16,501
Loans charged-off:
Commercial
Owner occupied real estate		31			1,422			178			1,422
Non owner occupied real estate		173			—			472			16
Residential development		—			—			—			—
Development & Spec Land Loans		—			—			—			—
Commercial and industrial		—			253			39			253
Total commercial		204			1,675			689			1,691
Real estate
Residential mortgage		—			164			115			186
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		—			164			115			186
Consumer
Direct Installment		46			96			104			155
Direct Installment Purchased		—			—			—			—
Indirect Installment		279			196			555			565
Home Equity		64			304			239			504
Total consumer		389			596			898			1,224
Total loans charged-off		593			2,435			1,702			3,101
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		4			78			29			86
Non owner occupied real estate		31			—			54			—
Residential development		2			—			4			—
Development & Spec Land Loans		—			—			—			—
Commercial and industrial		63			14			95			33
Total commercial		100			92			182			119
Real estate
Residential mortgage		31			3			63			5
Residential construction		—			—			—			—
Mortgage warehouse		—			—			—			—
Total real estate		31			3			63			5
Consumer
Direct Installment		28			47			44			76
Direct Installment Purchased		—			—			—			—
Indirect Installment		146			134			240			235
Home Equity		46			40			101			66
Total consumer		220			221			385			377
Total loan recoveries		351			316			630			501
Net loans charged-off (recovered)		242			2,119			1,072			2,600
Provision charged to operating expense
Commercial		(305	)		2,093			(639	)		2,048
Real estate		343			(29	)		(249	)		904
Consumer		194			(158	)		1,652			(432	)
Total provision charged to operating expense		232			1,906			764			2,520
Balance at the end of the period	$	14,226		$	16,421		$	14,226		$	16,421

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, 2016	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	500	$	—	$	—	$	—	$	500
Collectively evaluated for impairment		5,551		2,102		1,080		4,993		13,726
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	6,051	$	2,102	$	1,080	$	4,993	$	14,226
Loans:
Individually evaluated for impairment	$	4,344	$	—	$	—	$	—	$	4,344
Collectively evaluated for impairment		873,140		495,096		206,179		365,005		1,939,420
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	877,484	$	495,096	$	206,179	$	365,005	$	1,943,764
December 31, 2015	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	202	$	—	$	—	$	—	$	202
Collectively evaluated for impairment		6,739		2,476		1,007		3,856		14,078
Loans acquired with deteriorated credit quality		254		—		—		—		254
Total ending allowance balance	$	7,195	$	2,476	$	1,007	$	3,856	$	14,534
Loans:
Individually evaluated for impairment	$	7,019	$	—	$	—	$	—	$	7,019
Collectively evaluated for impairment		798,454		438,454		145,172		363,419		1,745,499
Loans acquired with deteriorated credit quality		1,729		—		—		—		1,729
Total ending loans balance	$	807,202	$	438,454	$	145,172	$	363,419	$	1,754,247

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Non-performing Loans and Impaired Loans (Tables)

6 Months Ended

Jun. 30, 2016

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, 2016	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,054	$	—	$	—	$	—	$	1,054
Non owner occupied real estate		2,901		—		243		60		3,204
Residential development		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—
Commercial and industrial		71		—		—		—		71
Total commercial		4,026		—		243		60		4,329
Real estate
Residential mortgage		3,664		1		803		950		5,418
Residential construction		—		—		242		—		242
Mortgage warehouse		—		—		—		—		—
Total real estate		3,664		1		1,045		950		5,660
Consumer
Direct Installment		345		—		—		—		345
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		837		23		—		—		860
Home Equity		1,554		—		178		246		1,978
Total Consumer		2,736		23		178		246		3,183
Total	$	10,426	$	24	$	1,466	$	1,256	$	13,172
December 31, 2015	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non- Performing TDRs		Performing TDRs		Total Non- Performing Loans
Commercial
Owner occupied real estate	$	1,749	$	—	$	—	$	—	$	1,749
Non owner occupied real estate		3,034		—		1,915		60		5,009
Residential development		—		—		—		—		—
Development & Spec Land Loans		71		—		—		—		71
Commercial and industrial		176		—		—		—		176
Total commercial		5,030		—		1,915		60		7,005
Real estate
Residential mortgage		4,354		1		824		808		5,987
Residential construction		—		—		250		—		250
Mortgage warehouse		—		—		—		—		—
Total real estate		4,354		1		1,074		808		6,237
Consumer
Direct Installment		541		—		—		—		541
Direct Installment Purchased		—		—		—		—		—
Indirect Installment		601		27		—		—		628
Home Equity		1,736		—		183		350		2,269
Total Consumer		2,878		27		183		350		3,438
Total	$	12,262	$	28	$	3,172	$	1,218	$	16,680

Commercial Loans Individually Evaluated for Impairment by Class of Loan

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

							Three Months Ending				Six Months Ending
June 30, 2016	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	$	1,054	$	1,054	$	—	$	1,062	$	—	$	1,079	$	—
Non owner occupied real estate		476		480		—		600		1		1,331		2
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		71		71		—		320		—		325		—
Total commercial		1,601		1,605		—		1,982		1		2,735		2
With an allowance recorded
Commercial
Owner occupied real estate		—		—		—		—		—		—		—
Non owner occupied real estate		2,729		2,739		500		2,747		—		2,757		—
Residential development		—		—		—		—		—		—		—
Development & Spec Land Loans		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		—
Total commercial		2,729		2,739		500		2,747		—		2,757		—
Total	$	4,330	$	4,344	$	500	$	4,729	$	1	$	5,492	$	2

							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

Payment Status by Class of Loan

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

June 30, 2016	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	$	98		$	437		$	—		$	535		$	297,946		$	298,481
Non owner occupied real estate		20			—			—			20			343,340			343,360
Residential development		—			—			—			—			7,660			7,660
Development & Spec Land Loans		2			—			—			2			23,169			23,171
Commercial and industrial		—			91			—			91			199,842			199,933
Total commercial		120			528			—			648			871,957			872,605
Real estate
Residential mortgage		1,023			300			1			1,324			472,239			473,563
Residential construction		—			271			—			271			17,515			17,786
Mortgage warehouse		—			—			—			—			205,699			205,699
Total real estate		1,023			571			1			1,595			695,453			697,048
Consumer
Direct Installment		155			16			—			171			58,934			59,105
Direct Installment Purchased		—			—			—			—			131			131
Indirect Installment		493			75			23			591			144,344			144,935
Home Equity		310			134			—			444			160,511			160,955
Total consumer		958			225			23			1,206			363,920			365,126
Total	$	2,101		$	1,324		$	24		$	3,449		$	1,931,330		$	1,934,779
Percentage of total loans		0.11	%		0.07	%		0.00	%		0.18	%		99.82	%
December 31, 2015	30 - 59 Days Past Due			60 - 89 Days Past Due			Greater than 90 Days Past Due			Total Past Due			Loans Not Past Due			Total
Commercial
Owner occupied real estate	$	481		$	18		$	—		$	499		$	267,782		$	268,281
Non owner occupied real estate		49			—			—			49			326,350			326,399
Residential development		—			—			—			—			5,018			5,018
Development & Spec Land Loans		—			—			—			—			18,183			18,183
Commercial and industrial		32			—			—			32			184,879			184,911
Total commercial		562			18			—			580			802,212			802,792
Real estate
Residential mortgage		1,121			344			1			1,466			413,458			414,924
Residential construction		—			—			—			—			19,751			19,751
Mortgage warehouse		—			—			—			—			144,692			144,692
Total real estate		1,121			344			1			1,466			577,901			579,367
Consumer
Direct Installment		106			10			—			116			54,225			54,341
Direct Installment Purchased		—			—			—			—			153			153
Indirect Installment		1,186			268			27			1,481			150,042			151,523
Home Equity		1,193			203			—			1,396			155,768			157,164
Total consumer		2,485			481			27			2,993			360,188			363,181
Total	$	4,168		$	843		$	28		$	5,039		$	1,740,301		$	1,745,340
Percentage of total loans		0.24	%		0.05	%		0.00	%		0.29	%		99.71	%

Loans by Credit Grades

The following table presents loans by credit grades.

June 30, 2016	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	282,204		$	8,716		$	7,561		$	—		$	298,481
Non owner occupied real estate		336,897			3,033			3,430			—			343,360
Residential development		7,660			—			—			—			7,660
Development & Spec Land Loans		23,171			—			—			—			23,171
Commercial and industrial		188,713			2,342			8,878			—			199,933
Total commercial		838,645			14,091			19,869			—			872,605
Real estate
Residential mortgage		468,145			—			5,418			—			473,563
Residential construction		17,544			—			242			—			17,786
Mortgage warehouse		205,699			—			—			—			205,699
Total real estate		691,388			—			5,660			—			697,048
Consumer
Direct Installment		58,760			—			345			—			59,105
Direct Installment Purchased		131			—			—			—			131
Indirect Installment		144,075			—			860			—			144,935
Home Equity		158,977			—			1,978			—			160,955
Total Consumer		361,943			—			3,183			—			365,126
Total	$	1,891,976		$	14,091		$	28,712		$	—		$	1,934,779
Percentage of total loans		97.79	%		0.73	%		1.48	%		0.00	%

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Repurchase Agreements (Tables)

6 Months Ended

Jun. 30, 2016

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	$	50,348		$	25,000	$	60,000	$	10,000	$	—		$	—		$	145,348
Securities lending transactions
U.S. Treasury and federal agencies	$	4,038		$	—	$	—	$	—	$	—		$	—		$	4,038
Federal agency collateralized mortgage obligations		44,521			—		388		173		21,541			30,301			96,924
Federal agency mortgage-backed pools		15,003			—		110		2,404		21,304			28,396			67,217
Total		63,562			—		498		2,577		42,845			58,697			168,179
Total borrowings	$	(13,214	)	$	25,000	$	59,502	$	7,423	$	(42,845	)	$	(58,697	)	$	(22,831	)

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

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 Derivatives				Liability Derivatives
	June 30, 2016				June 30, 2016
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts		Loans	$	—		Other liabilities	$	5,393
Interest rate contracts		Other Assets		5,393		Other liabilities		3,786
Total derivatives designated as hedging instruments				5,393				9,179
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		1,111		Other liabilities		—
Total derivatives not designated as hedging instruments				1,111				—
Total derivatives			$	6,504			$	9,179
	Asset Derivatives				Liability Derivatives
	December 31, 2015				December 31, 2015
Derivatives designated as hedging instruments (Unaudited)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Interest rate contracts		Loans	$	—		Other liabilities	$	1,782
Interest rate contracts		Other Assets		1,782		Other liabilities		3,141
Total derivatives designated as hedging instruments				1,782				4,923
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		642		Other liabilities		—
Total derivatives not designated as hedging instruments				642				—
Total derivatives			$	2,424			$	4,923

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

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

	Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)					Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended June 30					Six Months Ended June 30
Derivative in cash flow	2016			2015		2016			2015
hedging relationship	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
Interest rate contracts	$	(54	)	$	332	$	(419	)	$	118

Effect of Derivative Instruments on Consolidated Statements 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	Location of gain (loss)	2016			2015			2016			2015
hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest rate contracts	Interest income - loans	$	1,110		$	(1,186	)	$	3,611		$	(186	)
Interest rate contracts	Interest income - loans		(1,110	)		1,186			(3,611	)		186
Total		$	—		$	—		$	—		$	—
		Amount of Gain (Loss) Recognized on Derivative Three Months Ended June 30						Amount of Gain (Loss) Recognized on Derivative Six Months Ended June 30
Derivative not designated	Location of gain (loss)	2016			2015			2016			2015
as hedging relationship	recognized on derivative	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Mortgage contracts	Other income - gain on sale of loans	$	468		$	83		$	471		$	272

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Disclosures about Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Text Block [Abstract]

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

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

				Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
	Fair Value			(Level 1)		(Level 2)			(Level 3)
June 30, 2016
Available-for-sale securities
U.S. Treasury and federal agencies	$	18,470		$	—	$	18,470		$	—
State and municipal		62,611			—		62,611			—
Federal agency collateralized mortgage obligations		154,263			—		154,263			—
Federal agency mortgage-backed pools		219,823			—		219,823			—
Corporate notes		72			—		72			—
Total available-for-sale securities		455,239			—		455,239			—
Hedged loans		116,338			—		116,338			—
Forward sale commitments		1,111			—		1,111			—
Interest rate swap agreements		(9,179	)		—		(9,179	)		—
Commitments to originate loans		—			—		—			—
December 31, 2015
Available-for-sale securities
U.S. Treasury and federal agencies	$	5,926		$	—	$	5,926		$	—
State and municipal		75,095			—		75,095			—
Federal agency collateralized mortgage obligations		156,203			—		156,203			—
Federal agency mortgage-backed pools		207,704			—		207,704			—
Corporate notes		54			—		54			—
Total available-for-sale securities		444,982			—		444,982			—
Hedged loans		115,472			—		115,472			—
Forward sale commitments		642			—		642			—
Interest rate swap agreements		(4,923	)		—		(4,923	)		—

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	2016			2015			2016			2015
Total gains and losses from:	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Hedged loans	$	1,110		$	(1,186	)	$	3,611		$	(186	)
Fair value interest rate swap agreements		(1,110	)		1,186			(3,611	)		186
Derivative loan commitments		468			83			471			272
	$	468		$	83		$	471		$	272

Other Assets Measured at Fair Value on Nonrecurring Basis

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

			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2016
Impaired loans	$	3,830	$	—	$	—	$	3,830
Mortgage servicing rights		9,714		—		—		9,714
December 31, 2015
Impaired loans	$	6,803	$	—	$	—	$	6,803
Mortgage servicing rights		8,874		—		—		8,874

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

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

	Fair Value at		Valuation		Range (Weighted
	June 30, 2016		Technique	Unobservable Inputs	Average)
Impaired loans	$	3,830	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	10% - 15% (12%)
Mortgage servicing rights	$	9,714	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default	10% - 15% (12%), 4% - 7% (4.6%), 1% - 10% (4.5%)
	Fair Value at		Valuation		Range (Weighted
	December 31, 2015		Technique	Unobservable Inputs	Average)
Impaired loans	$	6,803	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	10% - 15% (12%)
Mortgage servicing rights	$	8,874	Discounted cashflows	Discount rate, Constant prepayment rate, Probability of default	10% - 15% (12%), 4% - 7% (4.6%), 1% - 10% (4.5%)

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

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, 2016
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	109,224	$	109,224	$	—	$	—
Investment securities, held to maturity		173,696		—		180,059		—
Loans held for sale		7,812		—		—		7,812
Loans excluding loan level hedges, net		1,807,261		—		—		1,798,943
Stock in FHLB and FRB		16,636		—		16,636		—
Interest receivable		11,526		—		11,526		—
Liabilities
Non-interest bearing deposits	$	397,412	$	397,412	$	—	$	—
Interest-bearing deposits		1,684,849		—		1,656,009		—
Borrowings		492,883		—		491,538		—
Subordinated debentures		32,874		—		33,000		—
Interest payable		961		—		961		—
	December 31, 2015
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	48,650	$	48,650	$	—	$	—
Investment securities, held to maturity		187,629		—		193,703		—
Loans held for sale		7,917		—		—		7,917
Loans excluding loan level hedges, net		1,619,125		—		—		1,703,506
Stock in FHLB and FRB		13,823		—		13,823		—
Interest receivable		10,535		—		10,535		—
Liabilities
Non-interest bearing deposits	$	335,955	$	335,955	$	—	$	—
Interest-bearing deposits		1,544,198		—		1,461,314		—
Borrowings		449,347		—		441,547		—
Subordinated debentures		32,797		—		32,996		—
Interest payable		507		—		507		—

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Components of Accumulated Other Comprehensive Income

	June 30 2016			December 31 2015
Unrealized gain on securities available for sale	$	8,681		$	920
Unamortized gain on securities held to maturity, previously transferred from AFS		632			1,109
Unrealized loss on derivative instruments		(3,786	)		(3,141	)
Tax effect		(1,934	)		389
Total accumulated other comprehensive income (loss)	$	3,593		$	(723	)

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Regulatory Capital (Tables)

6 Months Ended

Jun. 30, 2016

Banking and Thrift [Abstract]

Summary of Regulatory Capital Requirement

Horizon and the Bank’s actual and required capital ratios as of June 30, 2016 and December 31, 2015 were as follows:

						Required For Capital1					Well Capitalized Under Prompt1
	Actual					Adequacy Purposes					Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2016
Total capital1 (to risk-weighted assets)
Consolidated	$	267,414		12.56	%	$	183,703		8.63	%		N/A		N/A
Bank		257,203		12.45	%		178,286		8.63	%	$	206,589		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		253,188		11.89	%		141,130		6.63	%		N/A		N/A
Bank		242,977		11.77	%		136,868		6.63	%		165,150		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets) Consolidated		220,120		10.34	%		109,200		5.13	%		N/A		N/A
Bank		242,977		11.77	%		105,902		5.13	%		134,184		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		253,188		9.55	%		106,069		4.00	%		N/A		N/A
Bank		242,977		9.18	%		105,872		4.00	%		132,340		5.00	%
As of December 31, 2015
Total capital1 (to risk-weighted assets)
Consolidated	$	264,452		13.99	%	$	151,223		8.00	%		N/A		N/A
Bank		237,348		12.57	%		151,057		8.00	%	$	188,821		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		249,918		13.22	%		113,427		6.00	%		N/A		N/A
Bank		222,814		11.80	%		113,295		6.00	%		151,060		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets) Consolidated		204,350		10.81	%		85,067		4.50	%		N/A		N/A
Bank		222,814		11.80	%		84,971		4.50	%		122,737		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		249,918		9.82	%		101,800		4.00	%		N/A		N/A
Bank		222,814		8.77	%		101,626		4.00	%		127,032		5.00	%

¹  As defined by regulatory agencies

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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, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Basic earnings per share
Net income	$ 6,326	$ 4,728	$ 11,707	$ 10,086
Less: Preferred stock dividends		31	42	63
Net income available to common shareholders	$ 6,326	$ 4,697	$ 11,665	$ 10,023
Weighted average common shares outstanding	12,179,253	9,240,005	12,064,335	9,228,075
Basic Earnings Per Share	$ 0.52	$ 0.51	$ 0.97	$ 1.09
Diluted earnings per share
Net income available to common shareholders	$ 6,326	$ 4,697	$ 11,665	$ 10,023
Weighted average common shares outstanding	12,179,253	9,240,005	12,064,335	9,228,075
Effect of dilutive securities:
Warrants		324,698		323,198
Weighted average shares outstanding	12,242,778	9,637,586	12,127,028	9,615,551
Diluted Earnings Per Share	$ 0.52	$ 0.49	$ 0.96	$ 1.04
Restricted Stock [Member]
Effect of dilutive securities:
Effect of dilutive securities	20,721	34,892	21,050	30,816
Stock Options [Member]
Effect of dilutive securities:
Effect of dilutive securities	42,804	37,991	41,643	33,462

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Accounting Policies - Additional Information (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Regulatory Assets [Abstract]
Shares, non-dilutive	0	2,500	0	41,444

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Acquisitions - Additional Information (Detail) - USD ($)				3 Months Ended	6 Months Ended		12 Months Ended
	Jul. 18, 2016	Jun. 01, 2016	Jul. 01, 2015	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Jul. 15, 2016
Business Acquisition [Line Items]
Common stock, shares outstanding					12,571,534		11,939,887
Acquisition of goodwill					$ 56,458,000		$ 49,600,000
Subsequent Event [Member] | Pro Forma [Member] | Horizon [Member]
Business Acquisition [Line Items]
Reported total assets of acquiree								$ 3,500,000,000
Total deposits held by acquiree								2,500,000,000
Total loans of acquiree								$ 2,200,000,000
Kosciusko Financial Inc [Member]
Business Acquisition [Line Items]
Exchange ratio per share		301.22%
Common stock issued		582,287
Market closing price per share		$ 24.85
Total estimated purchase price		$ 22,581,000
Costs related to the acquisition		1,600,000
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
Net intangible assets acquired		1,867,000
Acquisition of goodwill		6,858,000
Purchase price of the business assets, portion deductible		$ 0
Core deposit intangible amortization period					7 years
Cash paid for each share		$ 81.75
Business combination stock transferred, percentage of consideration		65.00%
Business combination cash transferred, percentage of consideration		35.00%
Estimated transaction value		$ 23,000,000
Reported total assets of acquiree		155,413,000
Total deposits held by acquiree		$ 132,832,000
Kosciusko Financial Inc [Member] | Maximum [Member]
Business Acquisition [Line Items]
Share of common stock outstanding per share		$ 81.75
Number of shares owned		100
Peoples Bancorp Inc [Member]
Business Acquisition [Line Items]
Exchange ratio per share			95.00%
Share of common stock outstanding per share			$ 9.75
Common stock, shares outstanding			2,311,858
Common stock issued					2,192,202
Market closing price per share			$ 25.32
Total estimated purchase price			$ 78,147,000
Costs related to the acquisition							$ 4,900,000
Loan portfolio acquired			228,600,000
Discount on loan portfolio acquired			4,800,000
Performing portion of the loan portfolio acquired			223,400,000
Estimated fair value of performing portion of the loan portfolio			220,000,000
Net intangible assets acquired			4,394,000
Acquisition of goodwill			21,424,000
Purchase price of the business assets, portion deductible			0
Core deposit intangible amortization period					7 years
Operating revenue, net of tax				$ 657,000		$ 657,000
Non-recurring expense, net of tax				$ 95,000		$ 95,000
Reported total assets of acquiree			485,077,000
Total deposits held by acquiree			$ 406,930,000
Peoples Bancorp Inc [Member] | Maximum [Member]
Business Acquisition [Line Items]
Share of common stock outstanding per share			$ 33.14
Number of shares owned			100
LaPorte Bancorp Inc [Member] | Subsequent Event [Member]
Business Acquisition [Line Items]
Exchange ratio per share	62.90%
Common stock issued	2,280,992
Market closing price per share	$ 27.54
Cash paid for each share	$ 17.50
Business combination stock transferred, percentage of consideration	65.00%
Business combination cash transferred, percentage of consideration	35.00%
Estimated transaction value	$ 101,700,000
Reported total assets of acquiree	536,000,000
Total deposits held by acquiree	370,900,000
Total loans of acquiree	$ 316,800,000
LaPorte Bancorp Inc [Member] | Maximum [Member] | Subsequent Event [Member]
Business Acquisition [Line Items]
Share of common stock outstanding per share	$ 17.50
Number of shares owned	100

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Acquisitions - Schedule of Final Purchase Price of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jul. 01, 2015
ASSETS
Goodwill	$ 56,458	$ 49,600
Common shares issued	14,068
Cash paid	$ 8,513
Peoples Bancorp Inc [Member]
ASSETS
Cash and due from banks			$ 205,054
Investment securities, held to maturity			2,038
Total loans			224,359
Premises and equipment, net			5,524
FRB and FHLB stock			2,743
Goodwill			21,424
Core deposit intangible			4,394
Interest receivable			1,279
Cash value of life insurance			13,898
Other assets			4,364
Total assets purchased			485,077
Common shares issued			55,506
Cash paid			22,641
Total estimated purchase price			78,147
Deposits
Non-interest bearing			28,251
NOW accounts			65,771
Savings and money market			125,176
Certificates of deposits			131,889
Total deposits			351,087
Borrowings			48,884
Interest payable			21
Other liabilities			6,938
Total liabilities assumed			406,930
Peoples Bancorp Inc [Member] | Residential Mortgage [Member]
ASSETS
Total loans			137,331
Peoples Bancorp Inc [Member] | Commercial [Member]
ASSETS
Total loans			67,435
Peoples Bancorp Inc [Member] | Consumer [Member]
ASSETS
Total loans			$ 19,593

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Acquisitions - Schedule of Acquired Loans Accounted for in Accordance with ASC 310-30 (Detail) - Peoples Bancorp Inc [Member] $ in Thousands	Jul. 01, 2015 USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Contractually required principal and interest at acquisition	$ 5,730
Contractual cash flows not expected to be collected (nonaccretable differences)	715
Expected cash flows at acquisition	5,015
Interest component of expected cash flows (accretable discount)	647
Fair value of acquired loans accounted for under ASC 310-30	$ 4,368

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Acquisitions - Pro Forma Result of Comparable Prior Reporting Period (Detail) - Peoples Bancorp Inc [Member] - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Business Acquisition [Line Items]
Net Interest Income	$ 20,869	$ 20,829	$ 40,643	$ 40,690
Provision for Loan Losses	232	1,936	764	2,580
Net Interest Income after Provision for Loan Losses	20,637	18,893	39,879	38,110
Non-interest Income	9,869	8,086	17,733	16,145
Non-Interest Expense	21,555	19,852	41,302	39,014
Income before Income Taxes	8,951	7,127	16,310	15,241
Income Tax Expense	2,625	1,779	4,603	3,791
Net Income	6,326	5,348	11,707	11,450
Net Income Available to Common Shareholders	$ 6,326	$ 5,317	$ 11,665	$ 11,387
Basic Earnings Per Share	$ 0.52	$ 0.46	$ 0.97	$ 0.99
Diluted Earnings Per Share	$ 0.52	$ 0.45	$ 0.96	$ 0.96

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Acquisitions - Schedule of Purchase Price of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Jun. 01, 2016	Dec. 31, 2015
ASSETS
Goodwill	$ 56,458		$ 49,600
Common shares issued	14,068
Cash paid	$ 8,513
Kosciusko Financial Inc [Member]
ASSETS
Cash and due from banks		$ 38,950
Investment securities, held to maturity		1,191
Total loans		99,873
Premises and equipment, net		1,466
FRB and FHLB stock		582
Goodwill		6,858
Core deposit intangible		1,867
Interest receivable		636
Cash value of life insurance		2,745
Other assets		1,245
Total assets purchased		155,413
Common shares issued		14,068
Cash paid		8,513
Total estimated purchase price		22,581
Deposits
Non-interest bearing		28,549
NOW accounts		35,213
Savings and money market		26,953
Certificates of deposits		32,771
Total deposits		123,486
Borrowings		8,303
Interest payable		55
Other liabilities		988
Total liabilities assumed		132,832
Kosciusko Financial Inc [Member] | Residential Mortgage [Member]
ASSETS
Total loans		26,244
Kosciusko Financial Inc [Member] | Commercial [Member]
ASSETS
Total loans		67,310
Kosciusko Financial Inc [Member] | Consumer [Member]
ASSETS
Total loans		$ 6,319

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Securities - Fair Value of Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	$ 446,558	$ 444,062
Gross Unrealized Gains	9,030	3,971
Held-to-maturity, Amortized Cost	173,696	187,629
Gross Unrealized Losses	(349)	(3,051)
Held-to-maturity, Gross Unrealized Gains	8,969	6,636
Available-for-sale Securities, Fair Value	455,239	444,982
Held-to-maturity, Gross Unrealized Losses	(2,606)	(562)
Held-to-maturity, Fair Value	180,059	193,703
U.S. Treasury and Federal Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	18,384	5,940
Gross Unrealized Gains	86	3
Held-to-maturity, Amortized Cost		5,859
Gross Unrealized Losses		(17)
Held-to-maturity, Gross Unrealized Gains		93
Available-for-sale Securities, Fair Value	18,470	5,926
Held-to-maturity, Fair Value		5,952
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	60,961	73,829
Gross Unrealized Gains	1,654	1,299
Held-to-maturity, Amortized Cost	143,093	146,331
Gross Unrealized Losses	(4)	(33)
Held-to-maturity, Gross Unrealized Gains	7,586	5,375
Available-for-sale Securities, Fair Value	62,611	75,095
Held-to-maturity, Gross Unrealized Losses	(2,606)	(253)
Held-to-maturity, Fair Value	148,073	151,453
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	151,736	157,291
Gross Unrealized Gains	2,596	567
Held-to-maturity, Amortized Cost	8,424	9,051
Gross Unrealized Losses	(69)	(1,655)
Held-to-maturity, Gross Unrealized Gains	199	27
Available-for-sale Securities, Fair Value	154,263	156,203
Held-to-maturity, Gross Unrealized Losses		(124)
Held-to-maturity, Fair Value	8,623	8,954
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	215,445	206,970
Gross Unrealized Gains	4,654	2,080
Held-to-maturity, Amortized Cost	22,179	26,388
Gross Unrealized Losses	(276)	(1,346)
Held-to-maturity, Gross Unrealized Gains	1,184	1,141
Available-for-sale Securities, Fair Value	219,823	207,704
Held-to-maturity, Gross Unrealized Losses		(185)
Held-to-maturity, Fair Value	23,363	27,344
Corporate Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	32	32
Gross Unrealized Gains	40	22
Available-for-sale Securities, Fair Value	$ 72	$ 54

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Securities - Additional Information (Detail)	Jun. 30, 2016 USD ($)
Amortized Cost and Fair Value Debt Securities [Abstract]
Unrealized loss, other than temporary securities	$ 0

XML

Securities - Amortized Cost and Fair Value of Securities Available for Sale and Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Amortized cost within one year	$ 7,123	$ 7,192
Amortized cost one to five years	46,104	38,197
Amortized cost for five to ten years	11,351	16,807
Amortized cost for after ten years	14,799	17,605
Total amortized cost	79,377	79,801
Total available for sale investment securities, Amortized Cost	446,558	444,062
Within one year, amortized cost	0	0
One to five years, amortized cost	20,415	17,815
Five to ten years, amortized cost	88,183	106,167
After ten years, amortized cost	34,495	28,208
Total amortized cost	143,093	152,190
Total held to maturity investment securities, amortized cost	173,696	187,629
Fair value within one year	7,153	7,232
Fair value for one to five years	46,664	38,894
Fair value for five to ten years	11,804	17,152
Fair value for after ten years	15,532	17,797
Total fair value	81,153	81,075
Investment securities, available for sale	455,239	444,982
Within one year, fair value	0	0
One to five years, fair value	20,436	18,403
five to ten years, fair value	92,551	110,026
After ten years, fair value	35,086	28,976
Total fair value	148,073	157,405
Held-to-maturity, Fair Value	180,059	193,703
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	151,736	157,291
Total held to maturity investment securities, amortized cost	8,424	9,051
Investment securities, available for sale	154,263	156,203
Held-to-maturity, Fair Value	8,623	8,954
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	215,445	206,970
Total held to maturity investment securities, amortized cost	22,179	26,388
Investment securities, available for sale	219,823	207,704
Held-to-maturity, Fair Value	$ 23,363	$ 27,344

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Securities - Gross Unrealized Losses and Fair Value of Company's Investments (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	$ 29,183	$ 225,524
Fair value more than 12 months	9,211	42,380
Total fair value	38,394	267,904
Unrealized losses less than 12 months	(2,908)	(2,633)
Unrealized losses more than 12 months	(47)	(980)
Total unrealized losses	(2,955)	(3,613)
U.S. Treasury and Federal Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months		5,468
Total fair value		5,468
Unrealized losses less than 12 months		(17)
Total unrealized losses		(17)
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	1,763	17,353
Fair value more than 12 months	132	446
Total fair value	1,895	17,799
Unrealized losses less than 12 months	(2,609)	(280)
Unrealized losses more than 12 months	(1)	(6)
Total unrealized losses	(2,610)	(286)
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	4,059	89,459
Fair value more than 12 months	9,079	25,428
Total fair value	13,138	114,887
Unrealized losses less than 12 months	(23)	(1,124)
Unrealized losses more than 12 months	(46)	(655)
Total unrealized losses	(69)	(1,779)
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	23,361	113,244
Fair value more than 12 months		16,506
Total fair value	23,361	129,750
Unrealized losses less than 12 months	(276)	(1,212)
Unrealized losses more than 12 months		(319)
Total unrealized losses	$ (276)	$ (1,531)

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Securities - Sales of Securities Available for Sale (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Jun. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Proceeds	$ 17,536	$ 25,077	$ 13,332
Gross gains	952	1,060	147
Gross losses	$ (185)	$ (185)	$ (23)

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Loans - Amounts of Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage warehouse	$ 205,699		$ 144,692
Total loans	1,937,825		1,749,131
Allowance for loan losses	(14,226)	$ (14,236)	(14,534)	$ (16,421)	$ (16,634)	$ (16,501)
Loans, net	1,923,599		1,734,597
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	874,580		804,995
Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	493,626		437,144
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	363,920		362,300
Working Capital and Equipment [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	416,205		381,245
Real Estate Including Agriculture [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	424,300		391,668
Tax Exempt Loans Receivable [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	11,458		8,674
Other Commercial Loans [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	22,617		23,408
1-4 Family [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	489,133		433,015
Other Real Estate Loans [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	4,493		4,129
Auto [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	162,172		168,397
Recreation Consumer Loans Receivable [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	5,005		5,365
Real Estate Home Improvement Loans Receivable [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	50,121		47,015
Home Equity Loan [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	130,017		127,113
Unsecured Debt [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	4,175		4,120
Other Consumer Loans [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	$ 12,430		$ 10,290

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Loans - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016
Receivables [Abstract]
Period of loan sold	30 days
Minimum period seldom held	90 days
Mortgage warehousing maximum pay off period	30 days

XML

Loans - Recorded Investment of Individual Loan Categories (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	$ 1,934,779		$ 1,745,340
Net loans	1,920,553		1,730,806
Interest Due	5,939		5,115
Deferred Fees / (Costs)	3,046		3,792
Recorded Investment	1,943,764		1,754,247
Recorded Investment	1,929,538		1,739,713
Allowance for loan losses	(14,226)	$ (14,236)	(14,534)	$ (16,421)	$ (16,634)	$ (16,501)
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	872,605		802,792
Interest Due	2,904		2,207
Deferred Fees / (Costs)	1,975		2,203
Recorded Investment	877,484		807,202
Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	697,048		579,367
Interest Due	1,950		1,789
Deferred Fees / (Costs)	2,277		2,470
Recorded Investment	701,275		583,626
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	365,126		363,181
Interest Due	1,085		1,119
Deferred Fees / (Costs)	(1,206)		(881)
Recorded Investment	365,005		363,419
Owner Occupied Real Estate [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	298,481		268,281
Interest Due	1,068		613
Deferred Fees / (Costs)	1,134		1,328
Recorded Investment	300,683		270,222
Non Owner Occupied Real Estate [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	343,360		326,399
Interest Due	346		306
Deferred Fees / (Costs)	566		497
Recorded Investment	344,272		327,202
Residential Spec Homes [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	7,660		5,018
Interest Due	13		9
Deferred Fees / (Costs)	13		17
Recorded Investment	7,686		5,044
Development & Spec Land Loans [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	23,171		18,183
Interest Due	58		33
Deferred Fees / (Costs)	16		26
Recorded Investment	23,245		18,242
Commercial and Industrial [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	199,933		184,911
Interest Due	1,419		1,246
Deferred Fees / (Costs)	246		335
Recorded Investment	201,598		186,492
Residential Mortgage [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	473,563		414,924
Interest Due	1,434		1,275
Deferred Fees / (Costs)	2,277		2,470
Recorded Investment	477,274		418,669
Residential Construction [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	17,786		19,751
Interest Due	36		34
Recorded Investment	17,822		19,785
Mortgage Warehousing [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	205,699		144,692
Interest Due	480		480
Recorded Investment	206,179		145,172
Direct Installment [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	59,105		54,341
Interest Due	164		168
Deferred Fees / (Costs)	(383)		(359)
Recorded Investment	58,886		54,150
Direct Installment Purchased [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	131		153
Recorded Investment	131		153
Indirect Installment [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	144,935		151,523
Interest Due	300		323
Recorded Investment	145,235		151,846
Home Equity Loan [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	160,955		157,164
Interest Due	621		628
Deferred Fees / (Costs)	(823)		(522)
Recorded Investment	$ 160,753		$ 157,270

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Accounting for Certain Loans Acquired in a Transfer - Amounts of Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	$ 1,937,825	$ 1,749,131
Carrying amount, net of allowance	1,920,553	1,730,806
Loans Purchased With Evidence Of Credit Deterioration [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	17,429	10,390
Carrying amount, net of allowance	17,429	10,327
Loans Purchased With Evidence Of Credit Deterioration [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	14,978	8,261
Loans Purchased With Evidence Of Credit Deterioration [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	2,419	2,088
Loans Purchased With Evidence Of Credit Deterioration [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	32	41
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	1,885	2,332
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	1,243	1,633
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	641	693
Loans Purchased With Evidence Of Credit Deterioration [Member] | Heartland [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	1	6
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	6,599	6,818
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	5,409	5,567
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	1,181	1,216
Loans Purchased With Evidence Of Credit Deterioration [Member] | Summit [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	9	35
Loans Purchased With Evidence Of Credit Deterioration [Member] | Peoples Bancorp Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	1,031	1,240
Loans Purchased With Evidence Of Credit Deterioration [Member] | Peoples Bancorp Inc [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	750	1,061
Loans Purchased With Evidence Of Credit Deterioration [Member] | Peoples Bancorp Inc [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	281	$ 179
Loans Purchased With Evidence Of Credit Deterioration [Member] | Kosciusko Financial Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	7,914
Loans Purchased With Evidence Of Credit Deterioration [Member] | Kosciusko Financial Inc [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	7,576
Loans Purchased With Evidence Of Credit Deterioration [Member] | Kosciusko Financial Inc [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	316
Loans Purchased With Evidence Of Credit Deterioration [Member] | Kosciusko Financial Inc [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	$ 22

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Accounting for Certain Loans Acquired in a Transfer - Amounts of Loans (Parenthetical) (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for loan losses	$ 14,226	$ 14,236	$ 14,534	$ 16,421	$ 16,634	$ 16,501
Loans Purchased With Evidence Of Credit Deterioration [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for loan losses	$ 0		$ 63

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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, 2016	Jun. 30, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	$ 2,058	$ 3,668
Additions	950
Accretion	(261)	(385)
Reclassification from nonaccretable difference	0	0
Disposals	(86)	(166)
Balance at June 30	2,661	3,117
Heartland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	795	2,400
Accretion	(89)	(205)
Reclassification from nonaccretable difference	0	0
Disposals	(24)	(117)
Balance at June 30	682	2,078
Summit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	708	1,268
Accretion	(103)	(180)
Reclassification from nonaccretable difference	0	0
Disposals	(4)	(49)
Balance at June 30	601	1,039
Peoples Bancorp Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at January 1	555
Accretion	(69)
Reclassification from nonaccretable difference	0	0
Disposals	(58)
Balance at June 30	428
Kosciusko Financial Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Additions	950
Reclassification from nonaccretable difference	0	$ 0
Balance at June 30	$ 950

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Accounting for Certain Loans Acquired in a Transfer - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Business Acquisition [Line Items]
Total provision charged to operating expense	$ 232,000	$ 1,906,000	$ 764,000	$ 2,520,000
Loans Purchased With Evidence Of Credit Deterioration [Member]
Business Acquisition [Line Items]
Total provision charged to operating expense			$ 0	$ 76,000

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Allowance for Loan Losses - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016
Scenario, Actual [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Actual loss history experienced by the Company	5 years
Minimum [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Actual loss history experienced by the Company	1 year
Maximum [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Actual loss history experienced by the Company	5 years
Allowance for loan losses charge down family first and junior lien mortgages past due period	180 days
Allowance for loan losses charge down unsecured open end loans past due period	90 days
Allowance for loan losses charge down other secured loans past due period	90 days

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Allowance for Loan Losses - Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of the period	$ 14,236	$ 16,634	$ 14,534	$ 16,501
Total loans charged-off	593	2,435	1,702	3,101
Total loan recoveries	351	316	630	501
Net loans charged-off (recovered)	242	2,119	1,072	2,600
Total provision charged to operating expense	232	1,906	764	2,520
Balance at the end of the period	14,226	16,421	14,226	16,421
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	204	1,675	689	1,691
Total loan recoveries	100	92	182	119
Total provision charged to operating expense	(305)	2,093	(639)	2,048
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	31	1,422	178	1,422
Total loan recoveries	4	78	29	86
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	173		472	16
Total loan recoveries	31		54
Commercial [Member] | Residential Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loan recoveries	2		4
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off		253	39	253
Total loan recoveries	63	14	95	33
Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off		164	115	186
Total loan recoveries	31	3	63	5
Total provision charged to operating expense	343	(29)	(249)	904
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off		164	115	186
Total loan recoveries	31	3	63	5
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	389	596	898	1,224
Total loan recoveries	220	221	385	377
Total provision charged to operating expense	194	(158)	1,652	(432)
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	46	96	104	155
Total loan recoveries	28	47	44	76
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	279	196	555	565
Total loan recoveries	146	134	240	235
Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	64	304	239	504
Total loan recoveries	$ 46	$ 40	$ 101	$ 66

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Allowance for Loan Losses - Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Total ending allowance balance	$ 14,226	$ 14,236	$ 14,534	$ 16,421	$ 16,634	$ 16,501
Loans acquired with deteriorated credit quality	1,923,599		1,734,597
Total ending loans balance	4,344			$ 10,274
Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Individually evaluated for impairment	500		202
Allowance For Loan Losses, Collectively evaluated for impairment	13,726		14,078
Total ending allowance balance	14,226		14,534
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
Commercial [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Individually evaluated for impairment	500		202
Allowance For Loan Losses, Collectively evaluated for impairment	5,551		6,739
Total ending allowance balance	6,051		7,195
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
Real Estate [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	2,102		2,476
Total ending allowance balance	2,102		2,476
Consumer [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	4,993		3,856
Total ending allowance balance	4,993		3,856
Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Individually evaluated for impairment	4,344		7,019
Loans: Collectively evaluated for impairment	1,939,420		1,745,499
Total ending loans balance	1,943,764		1,754,247
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
Loans [Member] | Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Individually evaluated for impairment	4,344		7,019
Loans: Collectively evaluated for impairment	873,140		798,454
Total ending loans balance	877,484		807,202
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
Loans [Member] | Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	495,096		438,454
Total ending loans balance	495,096		438,454
Loans [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	365,005		363,419
Total ending loans balance	365,005		363,419
Mortgage Warehousing [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	1,080		1,007
Total ending allowance balance	1,080		1,007
Mortgage Warehousing [Member] | Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	206,179		145,172
Total ending loans balance	$ 206,179		$ 145,172

XML

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, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	$ 10,426	$ 12,262
Loans Past Due Over 90 Days Still Accruing	24	28
Non-Performing TDRs	1,466	3,172
Performing TDRs	1,256	1,218
Total Non-Performing Loans	13,172	16,680
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	4,026	5,030
Non-Performing TDRs	243	1,915
Performing TDRs	60	60
Total Non-Performing Loans	4,329	7,005
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	1,054	1,749
Total Non-Performing Loans	1,054	1,749
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,901	3,034
Non-Performing TDRs	243	1,915
Performing TDRs	60	60
Total Non-Performing Loans	3,204	5,009
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual		71
Total Non-Performing Loans		71
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	71	176
Total Non-Performing Loans	71	176
Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	3,664	4,354
Loans Past Due Over 90 Days Still Accruing	1	1
Non-Performing TDRs	1,045	1,074
Performing TDRs	950	808
Total Non-Performing Loans	5,660	6,237
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	3,664	4,354
Loans Past Due Over 90 Days Still Accruing	1	1
Non-Performing TDRs	803	824
Performing TDRs	950	808
Total Non-Performing Loans	5,418	5,987
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Performing TDRs	242	250
Total Non-Performing Loans	242	250
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,736	2,878
Loans Past Due Over 90 Days Still Accruing	23	27
Non-Performing TDRs	178	183
Performing TDRs	246	350
Total Non-Performing Loans	3,183	3,438
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	345	541
Total Non-Performing Loans	345	541
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	837	601
Loans Past Due Over 90 Days Still Accruing	23	27
Total Non-Performing Loans	860	628
Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	1,554	1,736
Non-Performing TDRs	178	183
Performing TDRs	246	350
Total Non-Performing Loans	$ 1,978	$ 2,269

XML

Non-performing Loans and Impaired Loans - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016 USD ($) ConsecutivePayment Contract	Dec. 31, 2015 USD ($)
Financing Receivable, Modifications [Line Items]
Non-accrual loans	$ 10,426,000	$ 12,262,000
Non-performing TDRs	1,500,000
Loans acquired included in non-accrual loans	2,100,000
Loans acquired included in non-performing TDRs	$ 94,000
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	$ 2,700,000
Specific reserves allocated to troubled debt restructuring	$ 107,000
Number TDRs returned to accrual status | Contract	0
Loans classified as TDR after a period	90 days
Performing Financing Receivable [Member]
Financing Receivable, Modifications [Line Items]
Restructured loan	$ 1,300,000
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
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

Non-performing Loans and Impaired Loans - Commercial Loans Individually Evaluated for Impairment by Class of Loan (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance total	$ 4,330	$ 10,269	$ 4,330	$ 10,269
Total ending loans balance	4,344	10,274	4,344	10,274
Allowance For Loan Loss Allocated	500	1,291	500	1,291
Average Balance in Impaired Loans total	4,729	12,121	5,492	9,543
Cash/Accrual Interest Income Recognized, Total	1	78	2	85
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	1,601	4,804	1,601	4,804
Recorded Investment With no recorded allowance	1,605	4,809	1,605	4,809
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Average Balance in Impaired Loans With no recorded allowance	1,982	5,157	2,735	4,987
Cash/Accrual Interest Income Recognized, With no recorded allowance	1	24	2	31
Unpaid Principal Balance With an allowance recorded	2,729	5,465	2,729	5,465
Recorded Investment With an allowance recorded	2,739	5,465	2,739	5,465
Allowance For Loan Loss Allocated	500	1,291	500	1,291
Average Balance in Impaired Loans With an allowance recorded	2,747	6,964	2,757	4,556
Cash/Accrual Interest Income Recognized, With an allowance recorded		54		54
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	1,054	1,605	1,054	1,605
Recorded Investment With no recorded allowance	1,054	1,606	1,054	1,606
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Average Balance in Impaired Loans With no recorded allowance	1,062	1,350	1,079	1,118
Cash/Accrual Interest Income Recognized, With no recorded allowance		17		17
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]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	476	2,820	476	2,820
Recorded Investment With no recorded allowance	480	2,824	480	2,824
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Average Balance in Impaired Loans With no recorded allowance	600	3,168	1,331	3,270
Cash/Accrual Interest Income Recognized, With no recorded allowance	1	7	2	14
Unpaid Principal Balance With an allowance recorded	2,729	1,590	2,729	1,590
Recorded Investment With an allowance recorded	2,739	1,590	2,739	1,590
Allowance For Loan Loss Allocated	500	200	500	200
Average Balance in Impaired Loans With an allowance recorded	2,747	1,590	2,757	1,590
Commercial [Member] | Residential Development [Member]
Financing Receivable, Impaired [Line Items]
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Impaired [Line Items]
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	71	379	71	379
Recorded Investment With no recorded allowance	71	379	71	379
Allowance For Loan Loss Allocated With no recorded allowance	0	0	0	0
Average Balance in Impaired Loans With no recorded allowance	$ 320	639	$ 325	599
Unpaid Principal Balance With an allowance recorded		884		884
Recorded Investment With an allowance recorded		884		884
Allowance For Loan Loss Allocated		498		498
Average Balance in Impaired Loans With an allowance recorded		$ 1,008		$ 974

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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, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 3,449	$ 5,039
Loans Not Past Due	1,931,330	1,740,301
Total	$ 1,934,779	$ 1,745,340
Total Past Due, Percentage of Total Loans	0.18%	0.29%
Loans Not Past Due, Percentage of Total Loans	99.82%	99.71%
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 648	$ 580
Loans Not Past Due	871,957	802,212
Total	872,605	802,792
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	535	499
Loans Not Past Due	297,946	267,782
Total	298,481	268,281
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	20	49
Loans Not Past Due	343,340	326,350
Total	343,360	326,399
Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	7,660	5,018
Total	7,660	5,018
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2
Loans Not Past Due	23,169	18,183
Total	23,171	18,183
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	91	32
Loans Not Past Due	199,842	184,879
Total	199,933	184,911
Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,595	1,466
Loans Not Past Due	695,453	577,901
Total	697,048	579,367
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,324	1,466
Loans Not Past Due	472,239	413,458
Total	473,563	414,924
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	271
Loans Not Past Due	17,515	19,751
Total	17,786	19,751
Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	205,699	144,692
Total	205,699	144,692
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,206	2,993
Loans Not Past Due	363,920	360,188
Total	365,126	363,181
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	171	116
Loans Not Past Due	58,934	54,225
Total	59,105	54,341
Consumer [Member] | Direct Installment Purchased [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Not Past Due	131	153
Total	131	153
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	591	1,481
Loans Not Past Due	144,344	150,042
Total	144,935	151,523
Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	444	1,396
Loans Not Past Due	160,511	155,768
Total	160,955	157,164
30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 2,101	$ 4,168
Total Past Due, Percentage of Total Loans	0.11%	0.24%
30 - 59 Days Past Due [Member] | Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 120	$ 562
30 - 59 Days Past Due [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	98	481
30 - 59 Days Past Due [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	20	49
30 - 59 Days Past Due [Member] | Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2
30 - 59 Days Past Due [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		32
30 - 59 Days Past Due [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,023	1,121
30 - 59 Days Past Due [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,023	1,121
30 - 59 Days Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	958	2,485
30 - 59 Days Past Due [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	155	106
30 - 59 Days Past Due [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	493	1,186
30 - 59 Days Past Due [Member] | Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	310	1,193
60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 1,324	$ 843
Total Past Due, Percentage of Total Loans	0.07%	0.05%
60 - 89 Days Past Due [Member] | Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 528	$ 18
60 - 89 Days Past Due [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	437	18
60 - 89 Days Past Due [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	91
60 - 89 Days Past Due [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	571	344
60 - 89 Days Past Due [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	300	344
60 - 89 Days Past Due [Member] | Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	271
60 - 89 Days Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	225	481
60 - 89 Days Past Due [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	16	10
60 - 89 Days Past Due [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	75	268
60 - 89 Days Past Due [Member] | Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	134	203
Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 24	$ 28
Total Past Due, Percentage of Total Loans	0.00%	0.00%
Greater than 90 Days Past Due [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 1	$ 1
Greater than 90 Days Past Due [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1	1
Greater than 90 Days Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	23	27
Greater than 90 Days Past Due [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 23	$ 27

XML

Non-performing Loans and Impaired Loans - Loans by Credit Grades (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Total	$ 1,934,779	$ 1,745,340
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	872,605	802,792
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	298,481	268,281
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	343,360	326,399
Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	7,660	5,018
Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	23,171	18,183
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	199,933	184,911
Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	697,048	579,367
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	473,563	414,924
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	17,786	19,751
Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	205,699	144,692
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	365,126	363,181
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	59,105	54,341
Consumer [Member] | Direct Installment Purchased [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	131	153
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	144,935	151,523
Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	160,955	157,164
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 1,891,976	$ 1,713,981
Percentage of total loans	97.79%	98.20%
Pass [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 838,645	$ 781,108
Pass [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	282,204	257,181
Pass [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	336,897	320,216
Pass [Member] | Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	7,660	5,018
Pass [Member] | Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	23,171	18,112
Pass [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	188,713	180,581
Pass [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	691,388	573,130
Pass [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	468,145	408,937
Pass [Member] | Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	17,544	19,501
Pass [Member] | Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	205,699	144,692
Pass [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	361,943	359,743
Pass [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	58,760	53,800
Pass [Member] | Consumer [Member] | Direct Installment Purchased [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	131	153
Pass [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	144,075	150,895
Pass [Member] | Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	158,977	154,895
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 14,091	$ 6,232
Percentage of total loans	0.73%	0.36%
Special Mention [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 14,091	$ 6,232
Special Mention [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	8,716	4,954
Special Mention [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,033	585
Special Mention [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	2,342	693
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 28,712	$ 25,127
Percentage of total loans	1.48%	1.44%
Substandard [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 19,869	$ 15,452
Substandard [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	7,561	6,146
Substandard [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,430	5,598
Substandard [Member] | Commercial [Member] | Development & Spec Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total		71
Substandard [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	8,878	3,637
Substandard [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,660	6,237
Substandard [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,418	5,987
Substandard [Member] | Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	242	250
Substandard [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,183	3,438
Substandard [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	345	541
Substandard [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	860	628
Substandard [Member] | Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 1,978	$ 2,269
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Percentage of total loans	0.00%	0.00%

XML

Repurchase Agreements - Summary of Repurchase Agreements Accounted as Secured Borrowings (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	$ 145,348
Securities lending transactions, Total	168,179
Total borrowings	(22,831)
U.S. Treasury and Federal Agencies [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	4,038
Federal Agency Collateralized Mortgage Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	96,924
Federal Agency Mortgage-backed Pools [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	67,217
Remaining Contractual Maturity of the Agreements, Overnight and Continuous [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	50,348
Securities lending transactions, Total	63,562
Total borrowings	(13,214)
Remaining Contractual Maturity of the Agreements, Overnight and Continuous [Member] | U.S. Treasury and Federal Agencies [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	4,038
Remaining Contractual Maturity of the Agreements, Overnight and Continuous [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	44,521
Remaining Contractual Maturity of the Agreements, Overnight and Continuous [Member] | Federal Agency Mortgage-backed Pools [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	15,003
Remaining Contractual Maturity of the Agreements, Up to One Year [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	25,000
Total borrowings	25,000
Remaining Contractual Maturity of the Agreements, One to Three Years [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	60,000
Securities lending transactions, Total	498
Total borrowings	59,502
Remaining Contractual Maturity of the Agreements, One to Three Years [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	388
Remaining Contractual Maturity of the Agreements, One to Three Years [Member] | Federal Agency Mortgage-backed Pools [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	110
Remaining Contractual Maturity of the Agreements, Three to Five Years [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	10,000
Securities lending transactions, Total	2,577
Total borrowings	7,423
Remaining Contractual Maturity of the Agreements, Three to Five Years [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	173
Remaining Contractual Maturity of the Agreements, Three to Five Years [Member] | Federal Agency Mortgage-backed Pools [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	2,404
Remaining Contractual Maturity of the Agreements, Five to Ten Years [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	42,845
Total borrowings	(42,845)
Remaining Contractual Maturity of the Agreements, Five to Ten Years [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	21,541
Remaining Contractual Maturity of the Agreements, Five to Ten Years [Member] | Federal Agency Mortgage-backed Pools [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	21,304
Remaining Contractual Maturity of the Agreements, Beyond Ten Years [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	58,697
Total borrowings	(58,697)
Remaining Contractual Maturity of the Agreements, Beyond Ten Years [Member] | Federal Agency Collateralized Mortgage Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	30,301
Remaining Contractual Maturity of the Agreements, Beyond Ten Years [Member] | Federal Agency Mortgage-backed Pools [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities lending transactions, Total	$ 28,396

XML

Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
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	$ 121.7	$ 117.3

XML

Derivative Financial Instruments - Fair Value of Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	$ 6,504	$ 2,424
Total Liability Derivatives	9,179	4,923
Derivatives Designated as Hedging Instruments [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	5,393	1,782
Total Liability Derivatives	9,179	4,923
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	5,393	1,782
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	3,786	3,141
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	5,393	1,782
Derivatives Not Designated as Hedging Instruments [Member]
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Total Asset Derivatives	1,111	642
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	$ 1,111	$ 642

XML

Derivative Financial Instruments - Effect of Derivative Instruments on Condensed Consolidated Statements of Income Derivative in Cash Flow Hedging Relationship (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Cash Flow Hedging [Member] | Interest Rate Contracts One [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Gain (Loss) Recognized in Other Comprehensive Income	$ (54)	$ 332	$ (419)	$ 118

XML

Derivative Financial Instruments - Effect of Derivative Instruments on Consolidated Statements of Income Derivative in Fair Value Hedging Relationship (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
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	$ 1,110	$ (1,186)	$ 3,611	$ (186)
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	(1,110)	1,186	(3,611)	186
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	$ 468	$ 83	$ 471	$ 272

XML

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, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	$ 455,239	$ 444,982
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	18,470	5,926
State and Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	62,611	75,095
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	154,263	156,203
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	219,823	207,704
Corporate Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	72	54
Recurring Basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	455,239	444,982
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	18,470	5,926
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	62,611	75,095
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	154,263	156,203
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	219,823	207,704
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	72	54
Recurring Basis [Member] | Hedged Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	116,338	115,472
Recurring Basis [Member] | Forward Sale Commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	1,111	642
Recurring Basis [Member] | Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	(9,179)	(4,923)
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	455,239	444,982
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	18,470	5,926
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	62,611	75,095
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	154,263	156,203
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	219,823	207,704
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	72	54
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	116,338	115,472
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	1,111	642
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	$ (9,179)	$ (4,923)

XML

Disclosures about Fair Value of Assets and Liabilities - Realized Gains and Losses included in Net Income for Periods in Consolidated Statements of Income (Detail) - Non Interest Income Total Gains and Losses [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	$ 468	$ 83	$ 471	$ 272
Hedged Loans [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	1,110	(1,186)	3,611	(186)
Interest Rate Swap [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	(1,110)	1,186	(3,611)	186
Derivative Loan Commitments [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	$ 468	$ 83	$ 471	$ 272

XML

Disclosures about Fair Value of Assets and Liabilities - Other Assets Measured at Fair Value on Nonrecurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Significant Unobservable Inputs (Level 3) [Member] | Impaired Loans [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	$ 3,830	$ 6,803
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	9,714	8,874
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	3,830	6,803
Fair Value, Measurements, Nonrecurring [Member] | Mortgage Servicing Rights [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	9,714	8,874
Fair Value, Measurements, Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Impaired Loans [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	3,830	6,803
Fair Value, Measurements, Nonrecurring [Member] | 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	$ 9,714	$ 8,874

XML

Disclosures about Fair Value of Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Fair Value Disclosures [Abstract]
Reduced in carrying amount of mortgage servicing rights	$ (46,000)	$ (18,000)

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, 2016	Dec. 31, 2015
Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	$ 3,830	$ 6,803
Valuation Technique	Collateral based measurement
Impaired loans	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	$ 9,714	$ 8,874
Valuation Technique	Discounted cashflows
Impaired loans	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%
Probability 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%
Probability 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%
Probability 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, 2016	Dec. 31, 2015
Assets
Cash and due from banks	$ 109,224	$ 48,650
Investment securities, held to maturity	173,696	187,629
Loans held for sale	7,812	7,917
Loans excluding loan level hedges, net	1,929,538	1,739,713
Stock in FHLB and FRB	16,636	13,823
Interest receivable	11,526	10,535
Liabilities
Non-interest bearing deposits	397,412	335,955
Interest-bearing deposits	1,684,849	1,544,198
Subordinated debentures	32,874	32,797
Interest payable	961	507
Carrying Amount [Member]
Assets
Cash and due from banks	109,224	48,650
Investment securities, held to maturity	173,696	187,629
Loans held for sale	7,812	7,917
Loans excluding loan level hedges, net	1,807,261	1,619,125
Stock in FHLB and FRB	16,636	13,823
Interest receivable	11,526	10,535
Liabilities
Non-interest bearing deposits	397,412	335,955
Interest-bearing deposits	1,684,849	1,544,198
Borrowings	492,883	449,347
Subordinated debentures	32,874	32,797
Interest payable	961	507
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets
Cash and due from banks	109,224	48,650
Liabilities
Non-interest bearing deposits	397,412	335,955
Significant Other Observable Inputs (Level 2) [Member]
Assets
Investment securities, held to maturity	180,059	193,703
Stock in FHLB and FRB	16,636	13,823
Interest receivable	11,526	10,535
Liabilities
Interest-bearing deposits	1,656,009	1,461,314
Borrowings	491,538	441,547
Subordinated debentures	33,000	32,996
Interest payable	961	507
Significant Unobservable Inputs (Level 3) [Member]
Assets
Loans held for sale	7,812	7,917
Loans excluding loan level hedges, net	$ 1,798,943	$ 1,703,506

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Accumulated Other Comprehensive Income - Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Unrealized gain on securities available for sale	$ 8,681	$ 920
Unamortized gain on securities held to maturity, previously transferred from AFS	632	1,109
Unrealized loss on derivative instruments	(3,786)	(3,141)
Tax effect	(1,934)	389
Total accumulated other comprehensive income (loss)	$ 3,593	$ (723)

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Regulatory Capital - Summary of Regulatory Capital Requirement (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule Of Regulatory Assets And Liabilities [Line Items]
Total capital (to risk-weighted assets), Actual, Amount	$ 267,414	$ 264,452
Total capital (to risk-weighted assets), Actual, Ratio	12.56%	13.99%
Total capital (to risk-weighted assets), For capital adequacy purposes, Amount	$ 183,703	$ 151,223
Total capital (to risk-weighted assets), For capital adequacy purposes, Ratio	8.63%	8.00%
Tier 1 capital (to average assets), Actual, Amount	$ 253,188	$ 249,918
Tier 1 capital (to average assets), Actual, Ratio	11.89%	13.22%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 141,130	$ 113,427
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	6.63%	6.00%
Common equity tier 1 capital, Actual Amount	$ 220,120	$ 249,918
Common equity tier 1 capital, Actual Ratio	10.34%	13.22%
Common equity tier 1 capital,For capital adequacy purposes, Amount	$ 109,200	$ 113,427
Common equity tier 1 capital, For capital adequacy purpose, Ratio	5.13%	6.00%
Tier 1 capital (to average assets), Actual, Amount	$ 253,188	$ 249,918
Tier 1 capital (to average assets), Actual, Ratio	9.55%	9.82%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 106,069	$ 101,800
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	4.00%	4.00%
Bank [Member]
Schedule Of Regulatory Assets And Liabilities [Line Items]
Total capital (to risk-weighted assets), Actual, Amount	$ 257,203	$ 237,348
Total capital (to risk-weighted assets), Actual, Ratio	12.45%	12.57%
Total capital (to risk-weighted assets), For capital adequacy purposes, Amount	$ 178,286	$ 151,057
Total capital (to risk-weighted assets), For capital adequacy purposes, Ratio	8.63%	8.00%
Total capital (to risk-weighted assets), For well capitalized purpose, Amount	$ 206,589	$ 188,821
Total capital (to risk-weighted assets), For well capitalized purpose, Ratio	10.00%	10.00%
Tier 1 capital (to average assets), Actual, Amount	$ 242,977	$ 222,814
Tier 1 capital (to average assets), Actual, Ratio	11.77%	11.80%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 136,868	$ 113,295
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	6.63%	6.00%
Tier 1 capital (to average assets), For well capitalized purpose, Amount	$ 165,150	$ 151,060
Tier 1 capital (to average assets), For well capitalized purposes, Ratio	8.00%	8.00%
Common equity tier 1 capital, Actual Amount	$ 242,977	$ 222,814
Common equity tier 1 capital, Actual Ratio	11.77%	11.80%
Common equity tier 1 capital,For capital adequacy purposes, Amount	$ 105,902	$ 113,295
Common equity tier 1 capital, For capital adequacy purpose, Ratio	5.13%	6.00%
Common equity tier 1 capital, For well capitalized purpose, Amount	$ 134,184	$ 151,060
Common equity tier 1 capital, For well capitalized purposes, Ratio	6.50%	8.00%
Tier 1 capital (to average assets), Actual, Amount	$ 242,977	$ 222,814
Tier 1 capital (to average assets), Actual, Ratio	9.18%	8.77%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 105,872	$ 101,626
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	$ 132,340	$ 127,032
Tier 1 capital (to average assets), For well capitalized purposes, Ratio	5.00%	5.00%

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Preferred Stock Redemption - Additional Information (Detail) - Series B Preferred Stock [Member]	Feb. 01, 2016 USD ($) shares
Schedule of Capitalization, Equity [Line Items]
Preferred stock, shares outstanding | shares	12,500
Preferred stock, liquidation value	$ 1,000
Preferred stock, redemption price	$ 12,510,416.67

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Business Combinations - Additional Information (Detail) - Central National Bank & Trust [Member] - USD ($) $ in Millions	Jul. 12, 2016	Mar. 31, 2016	Jun. 30, 2016
Business Acquisition [Line Items]
Cash consideration received as special dividend		$ 6.7
Payments received as cash consideration		$ 5.3
Reported total assets of acquiree			$ 56.4
Subsequent Event [Member]
Business Acquisition [Line Items]
Percentage of cash consideration received as capital in excess of assets	8.00%
Percentage of cash consideration received from parent as percentage of remaining capital	120.00%