10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

Commission file number 0-10792

HORIZON BANCORP, INC.

(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 Street, 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

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

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

Indicate by check mark whether the registrant (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   ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).     Yes   ☒    No   ☐

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

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging growth company	☐

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 45,052,747 shares of Common Stock, no par value, at May 8, 2019.

HORIZON BANCORP, INC.

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	47
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	61
Item 4.	Controls and Procedures	61
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 3.	Defaults Upon Senior Securities	62
Item 4.	Mine Safety Disclosures	62
Item 5.	Other Information	62
Item 6.	Exhibits	63
Index to Exhibits		63
Signatures		64

2

PART 1 — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

	March 31 2019		December 31 2018
Assets
Cash and due from banks	$	86,131	$	58,492
Interest-earning time deposits		15,987		15,744
Investment securities, available for sale		687,142		600,348
Investment securities, held to maturity (fair value of $210,106 and $208,273)		206,327		210,112
Loans held for sale		1,979		1,038
Loans, net of allowance for loan losses of $17,821 and $17,820		3,603,236		2,995,512
Premises and equipment, net		93,822		74,331
Federal Home Loan Bank stock		22,447		18,073
Goodwill		145,690		119,880
Other intangible assets		31,174		10,390
Interest receivable		17,423		14,239
Cash value of life insurance		94,449		88,062
Other assets		45,832		40,467
Total assets	$	5,051,639	$	4,246,688
Liabilities
Deposits
Non-interest bearing	$	811,768	$	642,129
Interest bearing		3,076,255		2,497,247
Total deposits		3,888,023		3,139,376
Borrowings		457,788		550,384
Subordinated debentures		55,310		37,837
Interest payable		2,471		2,031
Other liabilities		38,579		25,068
Total liabilities		4,442,171		3,754,696
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, Authorized, 1,000,000 shares, Issued 0 shares		—		—
Common stock, no par value, Authorized 99,000,000 shares (Restated - See Note 1)
Issued 45,077,816 and 38,400,476 shares (Restated - See Note 1),
Outstanding 45,052,747 and 38,375,407 shares (Restated - See Note 1)		—		—
Additional paid-in capital		378,963		276,101
Retained earnings		230,327		224,035
Accumulated other comprehensive income (loss)		178		(8,144	)
Total stockholders’ equity		609,468		491,992
Total liabilities and stockholders’ equity	$	5,051,639	$	4,246,688

See notes to condensed consolidated financial statements

3

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)

(Dollar Amounts in Thousands, Except Per Share Data)

	Three Months Ended March 31
	2019		2018
Interest Income
Loans receivable	$	39,623	$	35,131
Investment securities
Taxable		3,122		2,430
Tax exempt		2,628		1,865
Total interest income		45,373		39,426
Interest Expense
Deposits		6,876		2,871
Borrowed funds		3,621		2,572
Subordinated debentures		596		572
Total interest expense		11,093		6,015
Net Interest Income		34,280		33,411
Provision for loan losses		364		567
Net Interest Income after Provision for Loan Losses		33,916		32,844
Non-interest Income
Service charges on deposit accounts		1,877		1,888
Wire transfer fees		118		150
Interchange fees		1,361		1,328
Fiduciary activities		2,089		1,925
Gains on sale of investment securities (includes $15 and $11 for the three months ended March 31, 2019 and 2018, respectively, related to accumulated other comprehensive earnings		15		11
Gain on sale of mortgage loans		1,309		1,423
Mortgage servicing income net of impairment		606		349
Increase in cash value of bank owned life insurance		513		435
Other income		824		809
Total non-interest income		8,712		8,318
Non-interest Expense
Salaries and employee benefits		14,466		14,373
Net occupancy expenses		2,772		2,966
Data processing		1,966		1,696
Professional fees		493		501
Outside services and consultants		3,530		1,264
Loan expense		1,949		1,257
FDIC insurance expense		160		310
Other losses		104		146
Other expense		4,298		3,324
Total non-interest expense		29,738		25,837
Income Before Income Taxes		12,890		15,325
Income tax expense (includes $3 and $2 for the three months ended March 31, 2019 and 2018, respectively, related to income tax expense from reclassification items)		2,074		2,521
Net Income	$	10,816	$	12,804
Basic Earnings Per Share (Restated - See Note 1)	$	0.28	$	0.33
Diluted Earnings Per Share (Restated - See Note 1)		0.28		0.33

See notes to condensed consolidated financial statements

4

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(Dollar Amounts in Thousands)

	Three Months Ended March 31
	2019			2018
Net Income		$10,816		$	12,804
Other Comprehensive Income (Loss)
Change in fair value of derivative instruments:
Change in fair value of derivative instruments for the period		(1,106	)		759
Income tax effect		232			(159	)
Changes from derivative instruments		(874	)		600
Change in securities:
Unrealized appreciation (depreciation) for the period on AFS securities		11,694			(8,114	)
Amortization from transfer of securities from available for sale to held to maturity securities		(38	)		(52	)
Reclassification adjustment for securities (gains) losses realized in income		(15	)		(11	)
Income tax effect		(2,445	)		1,716
Unrealized gains (losses) on securities		9,196			(6,461	)
Other Comprehensive Income (Loss), Net of Tax		8,322			(5,861	)
Comprehensive Income	$	19,138		$	6,943

See notes to condensed consolidated financial statements

5

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

(Dollar Amounts in Thousands, Except Per Share Data)

											Accumulated
					Additional						Other
	Preferred		Common		Paid-in			Retained			Comprehensive
	Stock		Stock		Capital			Earnings			Loss			Total
Balances, January 1, 2018	$	—	$	—	$	275,059		$	185,570		$	(3,551	)	$	457,078
Net income		—		—		—			12,804			—			12,804
Other comprehensive loss, net of tax		—		—		—			—			(5,861	)		(5,861	)
Amortization of unearned compensation		—		—		61			—			—			61
Exercise of stock options		—		—		100			—			—			100
Stock option expense		—		—		82			—			—			82
Reclassification of tax adjustment on accumulated other comprehensive loss		—		—		—			766			(766	)		—
Cash dividends on common stock ($0.10 per share)		—		—		—			(3,848	)		—			(3,848	)
Balances, March 31, 2018	$	—	$	—	$	275,302		$	195,292		$	(10,178	)	$	460,416
Balances, January 1, 2019	$	—	$	—	$	276,101		$	224,035		$	(8,144	)	$	491,992
Net income		—		—		—			10,816			—			10,816
Other comprehensive income, net of tax		—		—		—			—			8,322			8,322
Amortization of unearned compensation		—		—		91			—			—			91
Exercise of stock options		—		—		117			—			—			117
Stock option expense		—		—		57			—			—			57
Stock issued stock plans		—		—		(125	)		—			—			(125	)
Stock issued in Salin acquisition		—		—		102,722			—			—			102,722
Cash dividends on common stock ($0.10 per share)		—		—		—			(4,524	)		—			(4,524	)
Balances, March 31, 2019	$	—	$	—	$	378,963		$	230,327		$	178		$	609,468

See notes to condensed consolidated financial statements

6

HORIZON BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollar Amounts in Thousands)

	Three Months Ended March 31
	2019			2018
Operating Activities
Net income	$	10,816		$	12,804
Items not requiring (providing) cash
Provision for loan losses		364			567
Depreciation and amortization		1,549			1,814
Share based compensation		57			82
Mortgage servicing rights, net impairment		(14	)		6
Premium amortization on securities, net		1,285			1,476
Gain on sale of investment securities		(15	)		(11	)
Gain on sale of mortgage loans		(1,309	)		(1,423	)
Proceeds from sales of loans		30,801			43,307
Loans originated for sale		(30,433	)		(35,770	)
Change in cash value life insurance		(513	)		(435	)
(Gain)/loss on sale of other real estate owned		26			—
Net change in:
Interest receivable		(696	)		4,200
Interest payable		(386	)		330
Other assets		97,788			6,595
Other liabilities		2,246			(3,556	)
Net cash provided by operating activities		111,566			29,986
Investing Activities
Purchases of securities available for sale		(63,574	)		(36,389	)
Proceeds from sales, maturities, calls and principal repayments of securities available for sale		42,715			30,415
Purchases of securities held to maturity		—			(8,703	)
Proceeds from maturities of securities held to maturity		2,927			721
Net change in interest-earning time deposits		(243	)		(289	)
Change in Federal Reserve and FHLB stock		(803	)		—
Net change in loans		(37,028	)		(33,312	)
Proceeds on the sale of OREO and repossessed assets		487			392
Change in premises and equipment, net		3,260			(1,074	)
Net cash received in acquisition, Salin		128,745			—
Net cash used in investing activities		76,486			(48,239	)
Financing Activities
Net change in:
Deposits		7,180			52,673
Borrowings		(163,061	)		(43,811	)
Proceeds from issuance of stock		(8	)		100
Dividends paid on common stock		(4,524	)		(3,848	)
Net cash provided by financing activities		(160,413	)		5,114
Net Change in Cash and Cash Equivalents		27,639			(13,139	)
Cash and Cash Equivalents, Beginning of Period		58,492			59,980
Cash and Cash Equivalents, End of Period	$	86,131		$	46,841
Additional Supplemental Information
Interest paid	$	10,653		$	5,685
Income taxes paid		—			—
Transfer of loans to other real estate		759			266
Right-of-use assets exchanged for lease obligations		3,411			—

See notes to condensed consolidated financial statements

7

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(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, Inc. (“Horizon” or the “Company”) and its wholly-owned subsidiaries, including Horizon Bank (“Horizon Bank” or the “Bank”). Horizon Bank (formerly known as “Horizon Bank, N.A.”) was a national association until its conversion to an Indiana commercial bank effective June 23, 2017. All inter-company balances and transactions have been eliminated. The results of operations for the periods ended March 31, 2019 and March 31, 2018 are not necessarily indicative of the operating results for the full year of 2019 or 2018. 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 2018 filed with the Securities and Exchange Commission on February 28, 2019. The condensed consolidated balance sheet of Horizon as of December 31, 2018 has been derived from the audited balance sheet as of that date.

On May 15, 2018, the Board of Directors of the Company approved a three-for-two stock split of the Company’s authorized common stock, no par value. All share and per share amounts in the condensed consolidated financial statements and notes thereto have been retroactively adjusted, where necessary, to reflect this three-for-two stock split. The effect of the three-for-two stock split on the outstanding common shares is that shareholders of record as of the close of business on May 31, 2018, the record date, received an additional half share for each share of common stock held, with shareholders receiving cash in lieu of any fractional shares. The additional shares issued in the stock split were payable and issued on June 15, 2018, and the common shares began trading on a split-adjusted basis on June 19, 2018.

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.

8

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

	Three Months Ended March 31
	2019		2018
Basic earnings per share
Net income	$	10,816	$	12,804
Weighted average common shares outstanding(1)		38,822,543		38,306,395
Basic earnings per share	$	0.28	$	0.33
Diluted earnings per share
Net income available to common shareholders	$	10,816	$	12,804
Weighted average common shares outstanding(1)		38,822,543		38,306,395
Effect of dilutive securities:
Restricted stock		—		35,356
Stock options		83,629		127,059
Weighted average common shares outstanding		38,906,172		38,468,810
	$	0.28	$	0.33

⁽¹⁾  Adjusted for 3:2 stock split on June 15, 2018

There were 350,618 and 44,053 shares for the three months ended March 31, 2019 and 2018, respectively, which were not included in the computation of diluted earnings per share because they were non-dilutive.

Horizon has share-based employee compensation plans, which are described in the notes to the financial statements included in the December 31, 2018 Annual Report on Form 10-K.

Adoption of New Accounting Standards

9

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities

The FASB has issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this ASU also make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. For public entities, this new guidance became effective in fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Early adoption was permitted in any interim period after issuance of the ASU. All transition requirements and elections should be applied to hedging relationships existing (that is, hedging relationships in which the hedging instrument has not expired, been sold, terminated, or exercised or the entity has not removed the designation of the hedging relationship) on the date of adoption. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption (that is, the initial application date). The Company adopted ASU 2017-12 on January 1, 2019 and there was no material impact to the consolidated financial statements.

FASB Accounting Standards Updates No. 2016-02, Leases (Topic 842)

The FASB has issued Accounting Standards Update (ASU) No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right- of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. The amendments in this update became effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. The Company adopted this ASU as of January 1, 2019 using the alternative transition method. In addition, the Company utilized the practical expedients allowing it to retain the classifications of existing leases, not re-assess if existing leases have initial direct costs and hindsight when determining the lease term and assessment of impairment. Upon adoption, the Company capitalized $3.5 million for right-of- use assets and lease liabilities, net of existing straight-line lease liabilities. See Note 8, “Leases”.

10

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Revenue Recognition

Accounting Standards Codification 606, “Revenue from Contracts with Customers” (ASC 606) provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance enumerates five steps that entities should follow in achieving this core principle. Revenue generated from financial instruments, including loans and investment securities, are not included in the scope of ASC 606. The adoption of ASC 606 did not result in a change to the accounting for any of the Company’s revenue streams that are within the scope of the amendments. Revenue-generating activities that are within the scope of ASC 606 and that are presented as non-interest income in the Company’s consolidated statements of income include:

• Service charges and fees on deposit accounts – these include general service fees charged for deposit account maintenance and activity and transaction-based fees charged for certain services, such as debit card, wire transfer or overdraft activities. Revenue is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services.

• Fiduciary activities – this includes periodic fees due from trust and wealth management customers for managing the customers’ financial assets. Fees are charged based on a standard agreement and are recognized as they are earned.

Reclassifications

Certain reclassifications have been made to the 2018 condensed consolidated financial statements to be comparable to 2019. These reclassifications had no effect on net income.

Note 2 – Acquisitions

Salin Bancshares, Inc.

On March 26, 2019, Horizon completed the acquisition of Salin Bancshares, Inc. (“Salin”), an Indiana corporation, and Horizon Bank’s acquisition of Salin Bank and Trust Company (“Salin Bank”), an Indiana commercial bank and wholly-owned subsidiary of Salin, through mergers effective March 26, 2019. Under the terms of the Merger Agreement, shareholders of Salin received 23,907.5 shares of Horizon common stock and $87,417.17 in cash for each outstanding share of Salin common stock. Salin shares outstanding at the closing to be exchanged were 275, and the shares of Horizon common stock issued to Salin shareholders totaled 6,563,697. The Salin shareholders received cash in lieu of fractional shares. Based upon the March 25, 2019 closing price of $15.65 per share of Horizon common stock immediately prior to the effectiveness of the merger the transaction has an implied valuation of approximately $126.7 million. The Company incurred approximately $4.6 million in costs related to the acquisition. These expenses are classified in the non-interest expense section of the income statement and are primarily located in the data processing, professional fees, outside services and consultants and other expense line items. As a result of the acquisition, the Company was able to increase its deposit base and reduce transaction costs. The Company also expects to reduce costs through economies of scale.

11

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 estimates and assumptions that are subject to change, the preliminary purchase price for the Salin acquisition is detailed in the following table. Final estimates of fair value on the date of acquisition have not been received yet. 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	$	152,745
Investment securities, available for sale		54,706
Loans
Commercial		350,916
Residential mortgage		136,089
Consumer		84,814
Total loans		571,819
Premises and equipment, net		23,882
FRB and FHLB stock		3,571
Goodwill		25,810
Core deposit intangible		21,111
Interest receivable		2,488
Other assets		107,611
Total assets purchased	$	963,743
Common shares issued	$	102,722
Cash paid		24,000
Total purchase price	$	126,722

Liabilities
Deposits
Non-interest bearing	$	188,744
NOW accounts		207,567
Savings and money market		274,504
Certificates of deposit		70,652
Total deposits		741,467
Borrowings		70,495
Subordinated debentures		17,443
Interest payable		826
Other liabilities		6,790
Total liabilities assumed	$	837,021

Of the total purchase price of $126.7 million, $21.1 million has been allocated to core deposit intangible. Additionally, $25.8 million has been allocated to goodwill and none of the purchase price is deductible. The core deposit intangible is being amortized over 10 years on a straight line basis.

The Company acquired various loans in the acquisition that 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 assumptions, such as default rates, severity and prepayment speeds.

12

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

The following table details an estimate of the acquired loans that are accounted for in accordance with ASC 310-30 as of March 26, 2019. Final valuation estimates have not yet been determined for acquired loans as of March 31, 2019. If information becomes available which would indicate adjustment to the purchase price allocation, such adjustments would be made prospectively.

Contractually required principal and interest at acquisition	$	22,209
Contractual cash flows not expected to be collected (nonaccretable differences)		8,632
Expected cash flows at acquisition		13,577
Interest component of expected cash flows (accretable discount)		1,333
Fair value of acquired loans accounted for under ASC 310-30	$	12,244

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.

13

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

The results of operations of Salin have been included in the Company’s consolidated financial statements since the acquisition date. The following schedule includes pro-forma results for the three months ended March 31, 2019 and 2018 as if the Salin acquisition had occurred as of the beginning of the comparable prior reporting periods.

	Three Months Ended
	March 31		March 31
	2019		2018
Summary of Operations:
Net Interest Income	$	42,182	$	40,619
Provision for Loan Losses		664		1,167
Net Interest Income after Provision for Loan Losses		41,518		39,452
Non-interest Income		9,126		9,999
Non-interest Expense		42,152		33,169
Income before Income Taxes		8,492		16,282
Income Tax Expense		2,017		2,465
Net Income		6,475		13,817
Net Income Available to Common Shareholders	$	6,475	$	13,817
Basic Earnings per Share	$	0.17	$	0.36
Diluted Earnings per Share	$	0.17	$	0.36

14

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 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.

Note 3 – Securities

The fair value of securities is as follows:

	March 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale
U.S. Treasury and federal agencies	$	14,087	$	—	$	(92	)	$	13,995
State and municipal		245,577		5,266		(1,083	)		249,760
Federal agency collateralized mortgage obligations		212,829		1,774		(1,560	)		213,043
Federal agency mortgage-backed pools		193,932		294		(1,961	)		192,265
Corporate notes		17,598		481		—			18,079
Total available for sale investment securities	$	684,023	$	7,815	$	(4,696	)	$	687,142
Held to maturity
State and municipal	$	187,847	$	4,053	$	(330	)	$	191,570
Federal agency collateralized mortgage obligations		5,019		8		(48	)		4,979
Federal agency mortgage-backed pools		13,461		152		(56	)		13,557
Total held to maturity investment securities
	$	206,327	$	4,213	$	(434	)	$	210,106
	December 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale
U.S. Treasury and federal agencies	$	16,815	$	1	$	(208	)	$	16,608
State and municipal		210,386		1,495		(2,578	)		209,303
Federal agency collateralized mortgage obligations		187,563		625		(3,185	)		185,003
Federal agency mortgage-backed pools		183,479		80		(4,823	)		178,736
Corporate notes		10,666		107		(75	)		10,698
Total available for sale investment securities	$	608,909	$	2,308	$	(10,869	)	$	600,348
Held to maturity
State and municipal	$	191,269	$	1,773	$	(3,366	)	$	189,676
Federal agency collateralized mortgage obligations		5,144		6		(120	)		5,030
Federal agency mortgage-backed pools		13,699		74		(206	)		13,567
Total held to maturity investment securities	$	210,112	$	1,853	$	(3,692	)	$	208,273

15

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified. At March 31, 2019, no individual investment security had an unrealized loss that was determined to be other-than-temporary.

The unrealized losses on the Company’s investments in securities of state and municipal governmental agencies, U.S. Treasury and federal agencies, federal agency collateralized mortgage obligations, and federal agency mortgage-backed pools were caused by interest rate volatility and not a decline in credit quality. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company expects to recover the amortized cost basis over the term of the securities. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company did not consider those investments to be other-than-temporarily impaired at March 31, 2019.

The amortized cost and fair value of securities available for sale and held to maturity at March 31, 2019 and December 31, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2019				December 31, 2018
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
Within one year	$	29,589	$	29,552	$	20,532	$	20,448
One to five years		52,250		51,759		42,476		41,705
Five to ten years		100,190		102,334		107,839		107,107
After ten years		95,233		98,189		67,020		67,349
		277,262		281,834		237,867		236,609
Federal agency collateralized mortgage obligations		212,829		213,043		187,563		185,003
Federal agency mortgage-backed pools		193,932		192,265		183,479		178,736
Private labeled mortgage-backed pools		—		—		—		—
Total available for sale investment securities
	$	684,023	$	687,142	$	608,909	$	600,348
Held to maturity
Within one year	$	150	$	150	$	70	$	70
One to five years		50,317		51,152		48,732		49,324
Five to ten years		99,413		101,178		101,809		101,533
After ten years		37,967		37,207		40,658		38,749
		187,847		189,687		191,269		189,676
Federal agency collateralized mortgage obligations		5,019		4,979		5,144		5,030
Federal agency mortgage-backed pools		13,461		13,557		13,699		13,567
Total held to maturity investment securities	$	206,327	$	208,223	$	210,112	$	208,273

16

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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.

	March 31, 2019
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Investment Securities
U.S. Treasury and federal agencies	$	—	$	—		$	9,823	$	(92	)	$	9,823	$	(92	)
State and municipal		65,265		(697	)		44,783		(2,500	)		110,048		(3,197	)
Federal agency collateralized mortgage obligations		431		(1	)		100,886		(1,607	)		101,317		(1,608	)
Federal agency mortgage-backed pools		—		—			152,582		(2,017	)		152,582		(2,017	)
Corporate notes		—		—			—		—			—		—
Total temporarily impaired securities	$	65,696	$	(698	)	$	308,074	$	(6,216	)	$	373,770	$	(6,914	)
	December 31, 2018
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Investment Securities
U.S. Treasury and federal agencies	$	—	$	—		$	9,707	$	(208	)	$	9,707	$	(208	)
State and municipal		75,163		(1,628	)		106,335		(4,316	)		181,498		(5,944	)
Federal agency collateralized mortgage obligations		6,450		(25	)		106,257		(3,280	)		112,707		(3,305	)
Federal agency mortgage-backed pools		5,739		(39	)		175,865		(4,990	)		181,604		(5,029	)
Corporate notes		5,263		(75	)		—		—			5,263		(75	)
Total temporarily impaired securities	$	92,615	$	(1,767	)	$	398,164	$	(12,794	)	$	490,779	$	(14,561	)

Information regarding security proceeds, gross gains and gross losses are presented below.

	Three Months Ended
	March 31
	2019			2018
Sales of securities available for sale
Proceeds	$	17,587		$	9,836
Gross gains		59			37
Gross losses		(44	)		(26	)

17

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Note 4 – Loans

	March 31			December 31
	2019			2018
Commercial
Working capital and equipment	$	924,435		$	804,083
Real estate, including agriculture		1,076,077			834,037
Tax exempt		60,062			48,975
Other		29,005			34,495
Total		2,089,579			1,721,590
Real estate
1-4 family		808,401			659,754
Other		11,423			8,387
Total		819,824			668,141
Consumer
Auto		331,572			327,413
Recreation		14,262			13,975
Real estate/home improvement		40,998			39,587
Home equity		245,940			163,209
Unsecured		4,124			4,043
Other		2,814			1,254
Total		639,710			549,481
Mortgage warehouse		71,944			74,120
Total loans		3,621,057			3,013,332
Allowance for loan losses		(17,821	)		(17,820	)
Loans, net
	$	3,603,236		$	2,995,512

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.

18

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(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 mortgage loan funded by Horizon undergoes an underwriting review 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.

19

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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

	March 31, 2019
	Loan			Interest		Deferred			Recorded
	Balance			Due		Costs/(Fees)			Investment
Owner occupied real estate	$	676,517		$	975	$	(1,687	)	$	675,805
Non-owner occupied real estate		833,803			1,645		(1,666	)		833,782
Residential spec homes		10,221			27		(3	)		10,245
Development & spec land		75,079			249		(16	)		75,312
Commercial and industrial		497,624			4,291		(293	)		501,622
Total commercial		2,093,244			7,187		(3,665	)		2,096,766
Residential mortgage		797,174			2,346		(1,943	)		797,577
Residential construction		24,593			43		—			24,636
Mortgage warehouse		71,944			480		—			72,424
Total real estate		893,711			2,869		(1,943	)		894,637
Direct installment		37,417			135		560			38,112
Indirect installment		317,629			750		—			318,379
Home equity		282,160			1,504		1,944			285,608
Total consumer		637,206			2,389		2,504			642,099
Total loans		3,624,161			12,445		(3,104	)		3,633,502
Allowance for loan losses		(17,821	)		—		—			(17,821	)
Net loans	$	3,606,340		$	12,445	$	(3,104	)	$	3,615,681
	December 31, 2018
	Loan			Interest		Deferred			Recorded
	Balance			Due		Costs/(Fees)			Investment
Owner occupied real estate	$	561,463		$	1,240	$	(1,629	)	$	561,074
Non-owner occupied real estate		717,814			1,063		(1,839	)		717,038
Residential spec homes		5,199			13		(2	)		5,210
Development & spec land		46,547			131		(12	)		46,666
Commercial and industrial		394,346			3,149		(297	)		397,198
Total commercial		1,725,369			5,596		(3,779	)		1,727,186
Residential mortgage		646,136			1,861		(2,025	)		645,972
Residential construction		24,030			42		—			24,072
Mortgage warehouse		74,120			480		—			74,600
Total real estate		744,286			2,383		(2,025	)		744,644
Direct installment		38,173			103		566			38,842
Indirect installment		314,177			738		—			314,915
Home equity		194,766			973		1,799			197,538
Total consumer		547,116			1,814		2,365			551,295
Total loans		3,016,771			9,793		(3,439	)		3,023,125
Allowance for loan losses		(17,820	)		—		—			(17,820	)
Net loans	$	2,998,951		$	9,793	$	(3,439	)	$	3,005,305

20

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Note 5 – Accounting for Certain Loans Acquired in a Transfer

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

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

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

	March 31, 2019
									Allowance
							Outstanding		for Loan		Carrying
	Commercial		Real Estate		Consumer		Balance		Losses		Amount
Heartland	$	229	$	164	$	—	$	393	$	—	$	393
Summit		220		535		—		755		—		755
Peoples		260		44		—		304		—		304
Kosciusko		712		163		—		875		296		579
LaPorte		708		836		26		1,570		—		1,570
Lafayette		2,204		—		—		2,204		—		2,204
Wolverine		5,736		—		—		5,736		—		5,736
Salin		10,329		1,986		1,262		13,577		—		13,577
Total	$	20,398	$	3,728	$	1,288	$	25,414	$	296	$	25,118
	December 31, 2018
									Allowance
							Outstanding		for Loan		Carrying
	Commercial		Real Estate		Consumer		Balance		Losses		Amount
Heartland	$	232	$	175	$	—	$	407	$	—	$	407
Summit		323		555		—		878		—		878
Peoples		270		58		—		328		—		328
Kosciusko		746		155		—		901		—		901
LaPorte		753		947		27		1,727		60		1,667
Lafayette		3,080		—		—		3,080		—		3,080
Wolverine		7,841		—		—		7,841		—		7,841
Total	$	13,245	$	1,890	$	27	$	15,162	$	60	$	15,102

21

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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

	Three Months Ended March 31, 2019
								Reclassification
								from
	Beginning							nonaccretable					Ending
	balance		Additions		Accretion			difference		Disposals			balance
Heartland	$	174	$	—	$	(8	)	$	—	$	—		$	166
Summit		42		—		(3	)		—		(11	)		28
Kosciusko		300		—		(17	)		—		—			283
LaPorte		829		—		(29	)		—		—			800
Lafayette		609		—		(35	)		—		(171	)		403
Wolverine		698		—		(123	)		—		(8	)		567
Salin		—		3,368		—			—		—			3,368
Total	$	2,652	$	3,368	$	(215	)	$	—	$	(190	)	$	5,615
	Three Months Ended March 31, 2018
								Reclassification
								from
	Beginning							nonaccretable					Ending
	balance		Additions		Accretion			difference		Disposals			balance
Heartland	$	452	$	—	$	(59	)	$	—	$	—		$	393
Summit		147		—		(18	)		—		(2	)		127
Kosciusko		386		—		(20	)		—		—			366
LaPorte		980		—		(40	)		—		(7	)		933
Lafayette		933		—		(118	)		—		(2	)		813
Wolverine		2,267		—		(387	)		—		(42	)		1,838
Total	$	5,165	$	—	$	(642	)	$	—	$	(53	)	$	4,470

During the three months ended March 31, 2019 and 2018 the Company increased the allowance for loan losses on purchased loans by a charge to the income statement of $296,000 and $0, respectively.

22

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Note 6 – Allowance for Loan Losses

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

	Three Months Ended March 31
	2019			2018
	(Unaudited)			(Unaudited)
Balance at beginning of the period	$	17,820		$	16,394
Loans charged-off:
Commercial
Owner occupied real estate		1			13
Non-owner occupied real estate		64			—
Residential spec homes		—			—
Development & spec land		—			—
Commercial and industrial		12			—
Total commercial		77			13
Real estate
Residential mortgage		—			12
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		—			12
Consumer
Direct installment		28			55
Indirect installment		540			505
Home equity		16			131
Total consumer		584			691
Total loans charged-off		661			716
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		—			12
Non-owner occupied real estate		6			5
Residential spec homes		2			2
Development & spec land		—			—
Commercial and industrial		8			32
Total commercial		16			51
Real estate
Residential mortgage		27			6
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		27			6
Consumer
Direct installment		11			11
Indirect installment		201			139
Home equity		43			22
Total consumer		255			172
Total loan recoveries		298			229
Net loans charged-off		363			487
Provision charged to operating expense
Commercial		1,122			(1,291	)
Real estate		(107	)		(252	)
Consumer		(651	)		2,110
Total provision charged to operating expense		364			567
Balance at the end of the period	$	17,821		$	16,474

23

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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

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 contractually 90 days past due, and charges down to the net realizable value other secured loans when they are contractually 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection in full will occur regardless of delinquency status, are not charged off.

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

	March 31, 2019
					Mortgage
	Commercial		Real Estate		Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	915	$	—	$	—	$	—	$	915
Collectively evaluated for impairment		10,641		1,588		1,014		3,663		16,906
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	11,556	$	1,588	$	1,014	$	3,663	$	17,821
Loans:
Individually evaluated for impairment	$	6,233	$	—	$	—	$	—	$	6,233
Collectively evaluated for impairment		2,087,011		821,767		71,944		637,206		3,617,928
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	2,093,244	$	821,767	$	71,944	$	637,206	$	3,624,161

24

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

	December 31, 2018
					Mortgage
	Commercial		Real Estate		Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,035	$	—	$	—	$	—	$	1,035
Collectively evaluated for impairment		9,460		1,676		1,006		4,643		16,785
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	10,495	$	1,676	$	1,006	$	4,643	$	17,820
Loans:
Individually evaluated for impairment	$	6,708	$	—	$	—	$	—	$	6,708
Collectively evaluated for impairment		1,718,661		670,166		74,120		547,116		3,010,063
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	1,725,369	$	670,166	$	74,120	$	547,116	$	3,016,771

Note 7 – Non-performing Loans and Impaired Loans

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

	March 31, 2019
			Loans Past
			Due Over 90						Total
			Days Still		Non-peforming		Performing		Non-performing
	Non-accrual		Accruing		TDRs		TDRs		Loans
Commercial
Owner occupied real estate	$	3,372	$	—	$	389	$	139	$	3,900
Non-owner occupied real estate		3,041		—		404		314		3,759
Residential spec homes		261		—		—		—		261
Development & spec land		177		—		—		—		177
Commercial and industrial		1,653		—		—		—		1,653
Total commercial		8,504		—		793		453		9,750
Real estate
Residential mortgage		3,691		140		416		1,748		5,995
Residential construction		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—
Total real estate		3,691		140		416		1,748		5,995
Consumer
Direct installment		55		17		—		—		72
Indirect installment		986		30		—		—		1,016
Home equity		2,077		5		140		331		2,553
Total consumer		3,118		52		140		331		3,641
Total	$	15,313	$	192	$	1,349	$	2,532	$	19,386

25

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

	December 31, 2018
			Loans Past
			Due Over 90						Total
			Days Still		Non-peforming		Performing		Non-performing
	Non-accrual		Accruing		TDRs		TDRs		Loans
Commercial
Owner occupied real estate	$	3,413	$	—	$	—	$	109	$	3,522
Non-owner occupied real estate		554		—		492		—		1,046
Residential spec homes		—		—		—		—		—
Development & spec land		68		—		—		—		68
Commercial and industrial		2,059		208		—		—		2,267
Total commercial		6,094		208		492		109		6,903
Real estate
Residential mortgage		2,846		180		423		1,558		5,007
Residential construction		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—
Total real estate		2,846		180		423		1,558		5,007
Consumer
Direct installment		35		—		—		—		35
Indirect installment		916		173		—		—		1,089
Home equity		1,657		7		142		335		2,141
Total consumer		2,608		180		142		335		3,265
Total	$	11,548	$	568	$	1,057	$	2,002	$	15,175

Included in the $15.3 million of non-accrual loans and the $1.3 million of non-performing TDRs at March 31, 2019 were $3.1 million and $629,000, 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 Commercial Banking Officer and/or the Chief Operations 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.

26

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 the three methods described above.

The Company’s TDRs are considered impaired loans and included in the allowance methodology using the guidance for impaired loans. At March 31, 2019, the type of concessions the Company has made on restructured loans has been temporary rate reductions and/or reductions in monthly payments and there have been no restructured loans with modified recorded balances. Any modification to a loan that is a concession and is not in the normal course of lending is considered a restructured loan. A restructured loan is returned to accruing status after six consecutive payments but is still reported as TDR unless the loan bears interest at a market rate. As of March 31, 2019, the Company had $3.9 million in TDRs and $2.5 million were performing according to the restructured terms and $315,000 in TDRs were returned to accrual status during the first three months of 2019. There were $20,000 specific reserves allocated to TDRs at March 31, 2019 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:

	March 31, 2019
							Three Months Ended
	Unpaid				Allowance for		Average Balance in		Cash/Accrual Interest
	Principal		Recorded		Loan Loss		Impaired		Income
	Balance		Investment		Allocated		Loans		Recognized
With no recorded allowance Commercial
Owner occupied real estate	$	3,275	$	3,269	$	—	$	3,650	$	60
Non-owner occupied real estate		840		869		—		875		32
Residential spec homes		261		261		—		261		3
Development & spec land		66		64		—		65		—
Commercial and industrial		656		648		—		668		7
Total commercial		5,098		5,111		—		5,519		102
With an allowance recorded
Commercial
Owner occupied real estate		355		355		25		358		—
Non-owner occupied real estate		135		135		40		135		—
Residential spec homes		—		—		—		—		—
Development & spec land		—		—		—		—		—
Commercial and industrial		632		632		850		632		—
Total commercial		1,122		1,122		915		1,125		—
Total	$	6,220	$	6,233	$	915	$	6,644	$	102

27

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

	March 31, 2018
							Three Months Ended
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Rec Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	4,038	$	4,063	$	—	$	4,590	$	37
Non-owner occupied real estate		1,033		1,049		—		975		5
Residential spec homes		—		—		—		—		—
Development & spec land		76		74		—		75		—
Commercial and industrial		737		745		—		1,447		—
Total commercial		5,884		5,931		—		7,087		42
With an allowance recorded
Commercial
Owner occupied real estate		893		893		184		900		—
Non-owner occupied real estate		—		—		—		—		—
Residential spec homes		—		—		—		—		—
Development & spec land		—		—		—		—		—
Commercial and industrial		—		—		—		—		—
Total commercial		893		893		184		900		—
Total	$	6,777	$	6,824	$	184	$	7,987	$	42

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

	March 31, 2019
	Current			30-59 Days Past Due			60-89 Days Past Due			90 Days or Greater Past Due			Non-accrual			Total Past Due & Non-accrual Loans			Total
Commercial
Owner occupied real estate	$	672,729		$	27		$	—		$	—		$	3,761		$	3,788		$	676,517
Non-owner occupied real estate		827,610			2,386			362			—			3,445			6,193			833,803
Residential spec homes		9,469			491			—			—			261			752			10,221
Development & spec land		74,885			17			—			—			177			194			75,079
Commercial and industrial		493,723			1,616			632			—			1,653			3,901			497,624
Total commercial		2,078,416			4,537			994			—			9,297			14,828			2,093,244
Real estate
Residential mortgage		790,848			1,910			169			140			4,107			6,326			797,174
Residential construction		24,593			—			—			—			—			—			24,593
Mortgage warehouse		71,944			—			—			—			—			—			71,944
Total real estate		887,385			1,910			169			140			4,107			6,326			893,711
Consumer
Direct installment		37,345			67			48			17			55			72			37,417
Indirect installment		316,613			906			129			30			986			1,016			317,629
Home equity		279,938			956			264			5			2,217			2,222			282,160
Total consumer		633,896			1,929			441			52			3,258			3,310			637,206
Total	$	3,599,697		$	8,376		$	1,604		$	192		$	16,662		$	24,464		$	3,624,161
Percentage of total loans		99.32	%		0.23	%		0.04	%		0.01	%		0.46	%		0.68	%

28

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

	December 31, 2018
	Current			30-59 Days Past Due			60-89 Days Past Due			90 Days or Greater Past Due			Non-accrual			Total Past Due & Non-accrual Loans			Total
Commercial
Owner occupied real estate	$	556,516		$	537		$	997		$	—		$	3,413		$	4,947		$	561,463
Non-owner occupied real estate		716,574			175			19			—			1,046			1,240			717,814
Residential spec homes		4,707			492			—			—			—			492			5,199
Development & spec land		46,479			—			—			—			68			68			46,547
Commercial and industrial		390,828			515			736			208			2,059			3,518			394,346
Total commercial		1,715,104			1,719			1,752			208			6,586			10,265			1,725,369
Real estate
Residential mortgage		641,500			1,131			56			180			3,269			4,636			646,136
Residential construction		24,030			—			—			—			—			—			24,030
Mortgage warehouse		74,120			—			—			—			—			—			74,120
Total real estate		739,650			1,131			56			180			3,269			4,636			744,286
Consumer
Direct installment		38,027			93			18			—			35			146			38,173
Indirect installment		311,494			1,396			198			173			916			2,683			314,177
Home equity		192,162			761			37			7			1,799			2,604			194,766
Total consumer		541,794			2,250			253			180			2,750			5,433			547,116
Total	$	2,996,548		$	5,100		$	2,061		$	568		$	12,605		$	20,334		$	3,016,771
Percentage of total loans		99.33	%		0.17	%		0.07	%		0.02	%		0.42	%		0.67	%

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 $3,500,000) are validated by the Loan Committee, which is chaired by the Chief Commercial Banking Officer (CCBO).

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

• The CCBO, 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.

29

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 unstablized, 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.

30

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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.

31

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

The following table presents loans by credit grades.

	March 31, 2019
	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	656,354		$	5,046		$	15,117		$	—		$	676,517
Non-owner occupied real estate		815,974			9,048			8,781			—			833,803
Residential spec homes		9,960			—			261			—			10,221
Development & spec land		74,805			97			177			—			75,079
Commercial and industrial		482,091			7,074			8,459			—			497,624
Total commercial		2,039,184			21,265			32,795			—			2,093,244
Real estate
Residential mortgage		791,663			—			5,511			—			797,174
Residential construction		24,593			—			—			—			24,593
Mortgage warehouse		71,944			—			—			—			71,944
Total real estate		888,200			—			5,511			—			893,711
Consumer
Direct installment		37,345			—			72			—			37,417
Indirect installment		316,613			—			1,016			—			317,629
Home equity		279,826			—			2,334			—			282,160
Total consumer		633,784			—			3,422			—			637,206
Total	$	3,561,168		$	21,265		$	41,728		$	—		$	3,624,161
Percentage of total loans		98.26	%		0.59	%		1.15	%		0.00	%

	December 31, 2018
	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	538,177		$	6,618		$	16,668		$	—		$	561,463
Non-owner occupied real estate		702,269			9,682			5,863			—			717,814
Residential spec homes		5,199			—			—			—			5,199
Development & spec land		46,382			97			68			—			46,547
Commercial and industrial		379,607			6,655			8,084			—			394,346
Total commercial		1,671,634			23,052			30,683			—			1,725,369
Real estate
Residential mortgage		641,309			—			4,827			—			646,136
Residential construction		24,030			—			—			—			24,030
Mortgage warehouse		74,120			—			—			—			74,120
Total real estate		739,459			—			4,827			—			744,286
Consumer
Direct installment		38,138			—			35			—			38,173
Indirect installment		313,088			—			1,089			—			314,177
Home equity		192,625			—			2,141			—			194,766
Total consumer		543,851			—			3,265			—			547,116
Total	$	2,954,944		$	23,052		$	38,775		$	—		$	3,016,771
Percentage of total loans		97.95	%		0.76	%		1.29	%		0.00	%

32

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Note 8 – Leases

Operating leases are recorded as a right-of-use (“ROU”) asset and operating lease liability, included in other assets and other liabilities, respectively, on the consolidated balance sheet beginning January 1, 2019 when the Company adopted ASU 2016-02 prospectively. Operating lease ROU assets represent the right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date.

Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating liability, is recognized on a straight-line basis over the lease term, and is recorded primarily in net occupancy expense in the consolidated statements of income.

The Company adopted the guidance on January 1, 2019 by electing the optional alternative transition method permitted by ASU 2018-11 allowing for recognition of applicable leases as of January 1, 2019. Additionally, the Company elected the following accounting policies:

• The practical expedient package that forgoes:

• Reassessment of any expired or existing contracts for a lease

• Reassessment of lease classification for expired or existing leases

• Reassessment of initial direct costs for existing leases

• The hindsight practical expedient to determine lease term and impairment of ROU assets

• Other practical expedients regarding combination of lease and non-lease components and the exclusion of short-term leases

• The practical expedient for land easements and the portfolio approach were not elected

Operating leases relate primarily to bank branches and office space with remaining average lease terms of seven years. The weighted average discount rate utilized to calculate the ROU asset and operating lease liability was approximately 2.57%, which represents the incremental borrowing rate. At inception, the Company recorded a ROU asset and operating lease liability of $3.5 million. At March 31, 2019, a ROU asset of $3.3 million is included in other assets and an operating lease liability of $3.4 million is included in other liabilities, respectively. Options to extend a lease were considered in the remaining lease term determination. The lease expense for operating leases was $148,000 for the three months ended March 31, 2019.

Future minimum operating lease payments under non-cancellable leases with initial or remaining lease terms at March 31, 2019 were as follows:

Year	Amount
2020	$	484
2021		476
2022		483
2023		504
2024 and thereafter		1,483
Total lease payments	$	3,430
Less: Interest		(180	)
Present value of lease liabilities	$	3,250

33

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Note 9 – 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:

	March 31, 2019
	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	$	90,885	$	—	$	—	$	—	$	—	$	—	$	90,885
Securities pledged for Repurchase Agreements
Federal agency collateralized mortgage obligations	$	33,798	$	—	$	—	$	—	$	—	$	—	$	33,798
Federal agency mortgage-backed pools		87,795		—		—		—		—		—		87,795
Total	$	121,593	$	—	$	—	$	—	$	—	$	—	$	121,593

Note 10 – 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 5.81% on a notional amount of $30.5 million at March 31, 2019 and December 31, 2018. Under the agreements, the Company pays or receives the net interest amount monthly, with the monthly settlements included in interest expense.

The Company assumed additional interest rate swap agreements as the result of the LaPorte acquisition in July 2016. The agreements provide for the Company to receive interest from the counterparty at one month LIBOR and to pay interest to the counterparty at a weighted average fixed rate of 2.31% on a notional amount of $30.0 million at March 31, 2019 and December 31, 2018. Under the agreements, the Company pays or receives the net interest amount monthly, with the monthly settlements included in interest expense.

On July 20, 2018, the Company entered into an interest rate swap agreement for an additional portion of its floating rate debt. The agreement provides for the Company to receive interest from the counterparty at one month LIBOR and to pay interest to the counterparty at a rate of 2.81% on a notional amount of $50.0 million at March 31, 2019. Under the agreement, the Company pays or receives the net interest amount monthly, with the monthly settlements included in interest expense.

34

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 September 30, 2018, the Company’s cash flow hedge was effective and is not expected to have a significant impact on the Company’s net income over the next 12 months.

Fair Value Hedges

Fair value hedges are intended to reduce the interest rate risk associated with the underlying hedged item. The Company enters into fixed rate loan agreements as part of its lending policy. To mitigate the risk of changes in fair value based on fluctuations in interest rates, the Company has entered into interest rate swap agreements on individual loans, converting the fixed rate loans to a variable rate. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings. At March 31, 2019, 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 $234.3 million at March 31, 2019 and $209.2 million at December 31, 2018.

Other Derivative Instruments

The Company enters into non-hedging derivatives in the form of mortgage loan forward sale commitments with investors and commitments to originate mortgage loans as part of its mortgage banking business. At March 31, 2019, 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.

35

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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

	Asset Derivatives March 31, 2019				Liability Derivatives March 31, 2019
	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Derivatives designated as hedging instruments
Interest rate contracts		Loans	$	—		Loans	$	4,093
Interest rate contracts		Other Assets		4,093		Other liabilities		2,866
Total derivatives desginated as hedging instruments				4,093				6,959
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		392		Other liabilities		—
Total derivatives not designated as hedging instruments				392				—
Total derivatives			$	4,485			$	6,959
	Asset Derivatives				Liability Derivatives
	December 31, 2018				December 31, 2018
	Balance Sheet		Fair		Balance Sheet		Fair
	Location		Value		Location		Value
Derivatives designated as hedging instruments
Interest rate contracts		Loans	$	—		Loans	$	42
Interest rate contracts		Other Assets		42		Other liabilities		1,760
Total derivatives desginated as hedging instruments				42				1,802
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		135		Other liabilities		—
Total derivatives not designated as hedging instruments				135				—
Total derivatives			$	177			$	1,802

The effect of the derivative instruments on the condensed consolidated statements of income for the three-month periods ending March 31 is as follows:

	Amount of Loss Recognized in Other
	Comprehensive Income on Derivative
	(Effective Portion)
	Three Months Ended
	March 31, 2019			March 31, 2018
Derivatives in cash flow hedging relationship
Interest rate contracts	$	(874	)	$	358

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.

36

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

	Location of gain (loss) recognized on derivative		Amount of Gain (Loss) Recognized on Derivative Three Months Ended
			March 31, 2019			March 31, 2018
Derivative in fair value hedging relationship
Interest rate contracts		Interest income -loans	$	(4,051	)	$	2,768
Interest rate contracts		Interest income -loans		4,051			(2,768	)
Total			$	—		$	—
	Location of gain (loss) recognized on derivative		Amount of Gain (Loss) Recognized on Derivative Three Months Ended
			March 31, 2019			March 31, 2018
Derivative not designated as hedging relationship
Mortgage contracts		Other income - gain on sale of loans	$	257		$	112

Note 11 – 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 September 30, 2018. 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

37

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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:

	March 31, 2019
	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Treasury and federal agencies	$	13,995		$	—	$	13,995		$	—
State and municipal		249,760			—		249,760			—
Federal agency collateralized mortgage obligations		213,043			—		213,043			—
Federal agency mortgage-backed pools		192,265			—		192,265			—
Corporate notes		18,079			—		18,079			—
Total available for sale securities		687,142			—		687,142			—
Hedged loans		234,325			—		234,325			—
Forward sale commitments		392			—		392			—
Interest rate swap agreements		(6,958	)		—		(6,958	)		—
Commitments to originate loans		—			—		—			—

38

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

	December 31, 2018
				Quoted Prices in		Significant
				Active Markets		Other			Significant
				for Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Fair Value			(Level 1)		(Level 2)			(Level 3)
Available for sale securities
U.S. Treasury and federal agencies	$	16,608		$	—	$	16,608		$	—
State and municipal		209,303			—		209,303			—
Federal agency collateralized mortgage obligations		185,003			—		185,003			—
Federal agency mortgage-backed pools		178,736			—		178,736			—
Corporate notes		10,698			—		10,698			—
Total available for sale securities		600,348			—		600,348			—
Hedged loans		209,161			—		209,161			—
Forward sale commitments		135			—		135			—
Interest rate swap agreements		(1,801	)		—		(1,801	)		—
Commitments to originate loans		—			—		—			—

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

Non-interest Income	Three Months Ended
Total gains and losses from:	March 31, 2019			March 31, 2018
Hedged loans	$	(4,051	)	$	2,768
Fair value interest rate swap agreements		4,051			(2,768	)
Derivative loan commitments		257			112
	$	257		$	112

Certain other assets are measured at fair value on a non-recurring 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		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2019
Impaired loans	$	5,318	$	—	$	—	$	5,318
Mortgage servicing rights		13,366		—		—		13,366
December 31, 2018
Impaired loans	$	5,661	$	—	$	—	$	5,661
Mortgage servicing rights		12,349		—		—		12,349

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.

39

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 increased by $14,000 during the first three months of 2019 and decreased by $6,000 during the first three months of 2018.

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

	March 31, 2019
	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Impaired loans	$	5,318	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	0%-100% (14.7%)
				Discount rate,	9.7%-10.0% (9.7%),
Mortgage servicing rights		13,366	Discounted cash flows	Constant prepayment rate,	8.9%-21.8% (9.0%),
				Probability of default	0.1%-3.1% (0.6%)
	December 31, 2018
	Fair		Valuation	Unobservable	Range
	Value		Technique	Inputs	(Weighted Average)
Impaired loans	$	5,661	Collateral based measurement	Discount to reflect current market conditions and ultimate collectability	0%-100% (15.5%)
Mortgage servicing rights		12,349	Discounted cash flows	Discount rate, Constant prepayment rate, Probability of default	10.2%-11.0% (10.3%), 9.1%-21.9% (9.3%), 0.1%-2.8% (0.6%)

Note 12 – Fair Value of Financial Instruments

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

The estimated fair values of financial instruments, as shown below, are not intended to reflect the estimated liquidation or market value of Horizon taken as a whole. The disclosed fair value estimates are limited to Horizon’s significant financial instruments at March 31, 2019 and December 31, 2018. 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.

40

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 net loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.

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).

41

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

	March 31, 2019
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	86,131	$	86,131	$	—	$	—
Interest-earning time deposits		15,987		—		—		—
Investment securities, held to maturity		206,327		—		210,106		—
Loans held for sale		1,979		—		—		1,979
Loans (excluding loan level hedges), net		3,368,911		—		—		3,267,463
Stock in FHLB		22,447		—		22,447		—
Interest receivable		17,423		—		17,423		—
Liabilities
Non-interest bearing deposits	$	811,768	$	811,768	$	—	$	—
Interest bearing deposits		3,076,255		—		3,005,839		—
Borrowings		457,788		—		412,884		—
Subordinated debentures		55,310		—		49,568		—
Interest payable		2,471		—		2,471		—
	December 31, 2018
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	58,492	$	58,492	$	—	$	—
Interest-earning time deposits		15,744		—		15,542		—
Investment securities, held to maturity		210,112		—		208,273		—
Loans held for sale		1,038		—		—		1,038
Loans (excluding loan level hedges), net		2,786,351		—		—		2,681,741
Stock in FHLB		18,073		—		18,073		—
Interest receivable		14,239		—		14,239		—
Liabilities
Non-interest bearing deposits	$	642,129	$	642,129	$	—	$	—
Interest bearing deposits		2,497,247		—		2,377,274		—
Borrowings		550,384		—		542,311		—
Subordinated debentures		37,837		—		35,711		—
Interest payable		2,031		—		2,031		—

42

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Note 13 – Accumulated Other Comprehensive Income

	March 31			December 31
	2019			2018
Unrealized gain (loss) on securities available for sale	$	3,118		$	(8,561	)
Unamortized gain (loss) on securities held to maturity, previously transferred from AFS		(28	)		10
Unrealized loss on derivative instruments		(2,866	)		(1,760	)
Tax effect		(46	)		2,167
Total accumulated other comprehensive income (loss)	$	178		$	(8,144	)

Note 14 – 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. 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 and Tier I leverage ratios as set forth in the table below. As of March 31, 2019 and December 31, 2018, the Bank met all capital adequacy requirements to be considered well capitalized. There have been no conditions or events since the end of the first quarter of 2019 that management believes have changed the Bank’s classification as well capitalized. There is no threshold for well-capitalized status for bank holding companies.

43

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Horizon and the Bank’s actual and required capital ratios as of March 31, 2019 and December 31, 2018 were as follows:

	Actual					Required for Capital1 Adequacy Purposes					Required For Capital1 Adequacy Purposes with Capital Buffer					Well Capitalized Under Prompt1 Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2019
Total capital1 (to risk-weighted assets)
Consolidated	$	509,214		13.25	%	$	307,362		8.00	%	$	403,412		10.50	%		N/A		N/A
Bank		472,621		12.30	%		307,361		8.00	%		403,411		10.50	%	$	384,201		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		491,302		12.79	%		230,521		6.00	%		326,572		8.50	%		N/A		N/A
Bank		454,709		11.84	%		230,520		6.00	%		326,570		8.50	%		307,360		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		433,809		11.29	%		172,890		4.50	%		268,941		7.00	%		N/A		N/A
Bank		454,709		11.84	%		172,890		4.50	%		268,940		7.00	%		249,730		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		491,302		11.85	%		165,789		4.00	%		165,789		4.00	%		N/A		N/A
Bank		454,709		10.99	%		165,523		4.00	%		165,523		4.000	%		206,904		5.00	%
December 31, 2018
Total capital1 (to risk-weighted assets)
Consolidated	$	427,616		13.39	%	$	255,419		8.00	%	$	315,283		9.875	%		N/A		N/A
Bank		396,755		12.43	%		255,419		8.00	%		315,283		9.875	%	$	319,274		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		409,760		12.83	%		191,565		6.00	%		251,429		7.875	%		N/A		N/A
Bank		378,899		11.87	%		191,565		6.00	%		251,429		7.875	%		255,420		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		371,297		11.63	%		143,673		4.50	%		203,537		6.375	%		N/A		N/A
Bank		378,899		11.87	%		143,674		4.50	%		203,537		6.375	%		207,528		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		409,760		10.12	%		162,033		4.00	%		162,033		4.000	%		N/A		N/A
Bank		378,899		9.34	%		162,327		4.00	%		162,327		4.000	%		202,908		5.00	%

44

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Note 15 – Future Accounting Matters

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement

The FASB has issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. These amendments modify the disclosure requirements in Topic 820 as follows:

Removals: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements.

Modifications: for investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and the amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.

Additions: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

The guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should all be applied prospectively for only the most recent interim or annual period presented in the initial year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU No. 2018-13 and delay adoption of the additional disclosures until their effective date. We are currently evaluating the impact of adoption of ASU 2018-13 and the impact on our accounting and disclosures.

FASB ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

The FASB has issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance is intended to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, the income tax effects of tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the qualitative impairment test is necessary. The amendments should be applied on a prospective basis. The nature of and reason for the change in accounting principle should be disclosed upon transition. The amendments in this update should be adopted for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted on testing dates after January 1, 2017. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

45

HORIZON BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

FASB ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

The FASB has issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The main objective of this amendment is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendment 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 enhance their credit loss estimates. The amendment 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. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2019. Early adoption will be permitted beginning after December 15, 2018. We expect a one-time cumulative-effect adjustment to the allowance for loan losses will be recognized in retained earnings on the consolidated balance sheet as of the beginning of the first reporting period in which the new standard is effective, as is consistent with regulatory expectations set forth in interagency guidance issued at the end of 2016. We are currently implementing third-party software that was purchased and are validating the data loaded into the solution. Our implementation team meets on a regular basis to oversee activities and monitor progress. Methodologies are still being evaluated at this time so the magnitude of any such adjustment or the overall impact of the new standard on the financial condition or results of operations cannot yet be determined.

Note 16 – 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.

46

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

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, Inc. (“Horizon” or the “Company”) and Horizon Bank (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;

• loss of fee income, including interchange fees, as new and emerging alternative payment platforms (e.g. Apple Pay or Bitcoin) take a greater market share of the payment systems;

• 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 whole or partial dismantling of provisions of the Dodd-Frank Act under the current federal administration, including the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act;

• the impact of the Basel III capital rules;

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

47

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

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

• rapid technological developments and changes;

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

• containing costs and expenses;

• the slowing or failure of economic recovery;

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

• the potential influence on the U.S. financial markets and economy from material changes outside the U.S. or in overseas relations, including changes in the U.S. trade relations related to imposition of tariffs, Brexit and the phase out in 2021 of the London Interbank Offered Rate (“LIBOR”); 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 us or on our behalf. 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 2018 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 regions of Indiana and the Southern, Central and Great Lakes Bay regions of 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 originally chartered as a national banking association in 1873 and has operated continuously since that time and converted to an Indiana state-chartered bank effective on June 23, 2017. 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. Upon approval of a name change by Horizon’s shareholders at the annual meeting on May 3, 2018, Horizon’s full corporate name became “Horizon Bancorp, Inc.”

On March 26, 2019, Horizon completed the acquisition of Salin Bancshares, Inc. (“Salin”), an Indiana corporation and Horizon Bank’s acquisition of Salin Bank and Trust Company (“Salin Bank”), an Indiana commercial bank and wholly-owned subsidiary of Salin, through mergers effective March 26, 2019. Under the terms of the Merger Agreement, shareholders of Salin received 23,907.5 shares of Horizon common stock and $87,417.17 in cash for each outstanding share of Salin common stock. Salin shares outstanding at the closing to be exchanged were 275, and the shares of Horizon common stock issued to Salin shareholders totaled 6,563,697. Based upon the March 25, 2019 closing price of $15.65 per share of Horizon common stock immediately prior to the effectiveness of the merger, the transaction has an implied valuation of approximately $126.7 million.

On October 17, 2017, Horizon completed the acquisition of Wolverine Bancorp, Inc., a Maryland corporation (“Wolverine”) and Horizon Bank’s acquisition of Wolverine Bank, a federally-chartered savings bank and wholly-owned subsidiary of Wolverine, through mergers effective October 17, 2017. Under the terms of the Merger Agreement, shareholders of Wolverine received 1.5228 shares of Horizon common stock and $14.00 in cash for each outstanding share of Wolverine common stock. Wolverine shares outstanding at the closing to be exchanged were 2,129,331 and the shares of Horizon common stock issued to Wolverine shareholders totaled 3,241,045. Based upon the October 16, 2017 closing price of $19.37 per share of Horizon common stock immediately prior to the effectiveness of the merger, less the consideration used to pay off Wolverine Bancorp’s ESOP loan receivable, the transaction has an implied valuation of approximately $93.8 million.

48

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

On September 1, 2017, Horizon completed the acquisition of Lafayette Community Bancorp, an Indiana corporation (“Lafayette”) and Horizon Bank’s acquisition of Lafayette Community Bank, a state-chartered bank and wholly-owned subsidiary of Lafayette, through mergers effective September 1, 2017. Under the terms of the Merger Agreement, shareholders of Lafayette received 0.8817 shares of Horizon common stock and $1.73 in cash for each outstanding share of Lafayette common stock. Lafayette shareholders owning fewer than 100 shares of common stock received $17.25 in cash for each common share. Lafayette shares outstanding at the closing to be exchanged were 1,856,679, and the shares of Horizon common stock issued to Lafayette shareholders totaled 1,636,888. Based upon the August 31, 2017 closing price of $17.45 per share of Horizon common stock immediately prior to the effectiveness of the merger, the transaction has an implied valuation of approximately $34.5 million.

On February 3, 2017, Horizon completed the purchase and assumption of certain assets and liabilities of a single branch of First Farmers Bank & Trust Company, located in Bargersville, Indiana. Net cash of $11.0 million was received in the transaction, representing the deposit balances assumed at closing, net of amounts paid for loans acquired in the transaction and a premium on deposits assumed in the transaction.

Following is a summary of Horizon’s financial performance through the first three months of 2019:

• Net income for the quarter ended March 31, 2019 decreased 15.5% to $10.8 million, or $0.28 diluted earnings per share, compared to $12.8 million, or $0.33 diluted earnings per share for the quarter ended March 31, 2018.

• Core net income for the quarter ended March 31, 2019 increased 16.5% to $13.0 million, or $0.34 diluted earnings per share, compared to $11.2 million, or $0.29 diluted earnings per share, for the same period in 2018. This represents the highest quarter-to-date core net income and core diluted earnings per share in the Company’s history. (Please refer to the section captioned “Use of Non-GAAP Financial Measures” within this Item 2 for a description of the elements of core net income and a table reconciling core net income to its most closely related GAAP measures.)

• Return on average assets was 1.02% for the first quarter of 2019 compared to 1.32% for the first quarter of 2018.

• Core return on average assets for the first quarter of 2019 was 1.23% compared to 1.15% for the first quarter of 2018. (Please refer to the section captioned “Use of Non-GAAP Financial Measures” within this Item 2 for a description of the elements of core return on average assets and a table reconciling core return on average assets to tis most closely related GAAP measures.)

• Total loans, excluding acquired loans, increased by an annualized rate of 5.0%, or $36.8 million, during the first quarter of 2019.

• Net interest margin was 3.62% for the three months ended March 31, 2019 compared to 3.60% for the three months ended December 31, 2018 and 3.81% for the three months ended March 31, 2018.

• Core net interest margin (defined as net interest margin excluding acquisition-related purchase accounting adjustments) was 3.46% for the three months ended March 31, 2019 compared to 3.43% for the three months ended December 31, 2018 and 3.55% for the three months ended March 31, 2018.

49

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

• Horizon’s tangible book value per share increased to $9.60 at March 31, 2019 compared to $9.43 and $8.57 at December 31, 2018 and March 31, 2018, respectively. This represents the highest tangible book value per share in the Company’s history.

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 2018 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, goodwill and intangible assets, mortgage servicing rights, hedge accounting and valuation measurements.

Allowance for Loan Losses

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

Goodwill and Intangible Assets

Management believes that the accounting for goodwill and other intangible assets also involves a higher degree of judgment than most other significant accounting policies. FASB ASC 350-10 establishes standards for the amortization of acquired intangible assets and impairment assessment of goodwill. At March 31, 2019, Horizon had core deposit intangibles of $31.2 million subject to amortization and $145.7 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 March 29, 2019 was $16.09 per share compared to a book value of $13.53 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

50

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

impairment reserve is recognized so that each individual stratum is carried at the lower of its amortized book value or fair value. In periods of falling market interest rates, accelerated loan prepayment can adversely affect the fair value of these mortgage-servicing rights relative to their book value. In the event that the fair value of these assets was to increase in the future, Horizon can recognize the increased fair value to the extent of the impairment allowance but cannot recognize an asset in excess of its amortized book value. Future changes in management’s assessment of the impairment of these servicing assets, as a result of changes in observable market data relating to market interest rates, loan prepayment speeds, and other factors, could impact Horizon’s financial condition and results of operations either positively or negatively.

Generally, when market interest rates decline and other factors favorable to prepayments occur, there is a corresponding increase in prepayments as customers refinance existing mortgages under more favorable interest rate terms. When a mortgage loan is prepaid, the anticipated cash flows associated with servicing that loan are terminated, resulting in a reduction of the fair value of the capitalized mortgage servicing rights. To the extent that actual borrower prepayments do not react as anticipated by the prepayment model (i.e., the historical data observed in the model does not correspond to actual market activity), it is possible that the prepayment model could fail to accurately predict mortgage prepayments and could result in significant earnings volatility. To estimate prepayment speeds, Horizon utilizes a third-party prepayment model, which is based upon statistically derived data linked to certain key principal indicators involving historical borrower 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

51

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

value for such assets and liabilities is determined. In addition, the outcomes of valuations have a direct bearing on the carrying amounts of goodwill, mortgage servicing rights, and pension and other post-retirement benefit obligations. To determine the values of these assets and liabilities, as well as the extent, to which related assets may be impaired, management makes assumptions and estimates related to discount rates, asset returns, prepayment speeds and other factors. The use of different discount rates or other valuation assumptions could produce significantly different results, which could affect Horizon’s results of operations.

Financial Condition

On March 31, 2019, Horizon’s total assets were $5.052 billion, an increase of approximately $805.0 million compared to December 31, 2018. The increase was primarily in net loans of $607.7 million, investment securities available for sale of $86.8 million, cash and due from banks of $27.6 million, goodwill of $25.8 million, other intangible assets of $20.8 million and premises and equipment of $19.5 million due to the acquisition of Salin Bancshares, Inc.

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

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
U.S. Treasury and federal agencies	$	14,087	$	13,995	$	16,815	$	16,608
State and municipal		245,577		249,760		210,386		209,303
Federal agency collateralized mortgage obligations		212,829		213,043		187,563		185,003
Federal agency mortgage-backed pools		193,932		192,265		183,479		178,736
Private labeled mortgage-backed pools		—		—		—		—
Corporate notes		17,598		18,079		10,666		10,698
Total available for sale investment securities	$	684,023	$	687,142	$	608,909	$	600,348
Held to maturity
State and municipal	$	187,847	$	191,570	$	191,269	$	189,676
Federal agency collateralized mortgage obligations		5,019		4,979		5,144		5,030
Federal agency mortgage-backed pools		13,461		13,557		13,699		13,567
Total held to maturity investment securities	$	206,327	$	210,106	$	210,112	$	208,273

Investment securities available for sale increased $86.8 million since December 31, 2018 to $687.1 million as of March 31, 2019. This increase was primarily due to securities acquired through the acquisition of Salin which totaled approximately $54.7 million.

Total loans increased $608.7 million since December 31, 2018 to $3.623 billion as of March 31, 2019. This increase was primarily due to $571.8 million in loans through the acquisition of Salin. Total loans, excluding acquired loans, increased $36.8 million due to increases in commercial loans of $17.1 million, residential mortgage loans of $15.6 million and consumer loans of $5.4 million, offset by a decrease in mortgage warehouse loans of $2.2 million. The growth markets of Fort Wayne, Grand Rapids, Indianapolis and Kalamazoo contributed total loan growth of $77.7 million during the first three months of 2019. Management believes that this growth is due to our seasoned lending team who live and work within these expanding and robust communities.

Total deposits increased $748.6 million since December 31, 2018 to $3.888 billion as of March 31, 2019. This increase was primarily due to $741.5 million in deposits through the acquisition of Salin.

52

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

The Company decreased total borrowings from $550.4 million as of December 31, 2018 to $457.8 million as of March 31, 2019. At March 31, 2019, the Company had $272.9 million in short-term funds borrowed compared to $402.8 million at December 31, 2018. The decrease in borrowings was primarily due to net cash received in the acquisition of Salin totaling $128.7 million.

Stockholders’ equity totaled $609.5 million at March 31, 2019 compared to $492.0 million at December 31, 2018. The increase in stockholders’ equity during the period was due to the acquisition of Salin, generation of net income, net of dividends declared, and an increase in accumulated other comprehensive income. At March 31, 2019, the ratio of average stockholders’ equity to average assets was 11.76% compared to 11.65% at December 31, 2018. Book value per common share at March 31, 2019 increased to $13.53 compared to $12.82 at December 31, 2018.

Results of Operations

Overview

Consolidated net income for the three-month period ended March 31, 2019 was $10.8 million compared to $12.8 million for the same period in 2018. Earnings per common share for the three months ended March 31, 2019 were $0.28 basic and diluted, compared to $0.33 basic and diluted for the same three- month period in the previous year. The decrease in net income and earnings per share from the previous year reflects an increase in non-interest expense of $3.9 million, primarily due to merger expenses totaling $4.1 million (before tax expense), offset by increases in net interest income of $869,000 and non- interest income of $394,000 in addition to decreases in provision for loan losses of $ 203,000 and income tax expense of $447,000. Excluding merger expenses, loss on sale of investment securities and purchase accounting adjustments, net income for the first quarter of 2019 was $13.0 million or $0.34 diluted earnings per share compared to $11.2 million or $0.29 diluted earnings per share in the same period of 2018.

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.

53

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

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

	Three Months Ended March 31, 2019								Three Months Ended March 31, 2018
	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate
Assets
Interest-earning assets
Federal funds sold	$	7,843		$	57		2.95	%	$	3,714		$	14		1.53	%
Interest-earning deposits		26,355			155		2.39	%		22,962			90		1.59	%
Investment securities—taxable		448,840			2,910		2.63	%		421,068			2,326		2.24	%
Investment securities—non-taxable(1)		393,720			2,628		3.40	%		307,921			1,865		2.88	%
Loans receivable(2)(3)		3,052,538			39,623		5.27	%		2,824,478			35,131		5.04	%
Total interest-earning assets(1)		3,929,296			45,373		4.76	%		3,580,143			39,426		4.50	%
Non-interest-earning assets
Cash and due from banks		44,527								43,809
Allowance for loan losses		(17,836	)							(16,342	)
Other assets		351,202								335,227
Total average assets	$	4,307,189							$	3,942,837
Liabilities and Stockholders’ Equity
Interest-bearing liabilities
Interest-bearing deposits	$	2,514,841		$	6,876		1.11	%	$	2,304,829		$	2,871		0.51	%
Borrowings		577,199			3,621		2.54	%		528,066			2,572		1.98	%
Subordinated debentures		39,236			596		6.16	%		36,477			572		6.36	%
Total interest-bearing liabilities		3,131,276			11,093		1.44	%		2,869,372			6,015		0.85	%
Non-interest-bearing liabilities
Demand deposits		643,601								595,644
Accrued interest payable and other liabilities		25,863								17,745
Stockholders’ equity		506,449								460,076
Total average liabilities and stockholders’ equity	$	4,307,189							$	3,942,837
Net interest income/spread					$34,280		3.32	%					$33,411		3.65	%
Net interest income as a percent of average interest-earning assets(1)							3.62	%							3.81	%

(1) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.

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

(3) Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees. The average rate is presented on a tax equivalent basis.

Net interest income during the three months ended March 31, 2019 was $34.3 million, an increase of $869,000 from the $33.4 million earned during the same period in 2018. Yields on the Company’s interest-earning assets increased by 26 basis points to 4.76% for the three months ending March 31, 2019 from 4.50% for the three months ended March 31, 2018. Interest income increased $ 5.9 million from $39.4 million for the three months ended March 31, 2018 to $45.4 million for the same period in 2019. This was due to an increase in average interest-earning assets through organic and acquisition-related growth, in addition to an increase in yield. Interest income from acquisition-related purchase accounting adjustments was $1.5 million for the three months ending March 31, 2019 compared to $2.0 million for the same period of 2018.

54

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

Rates paid on interest-bearing liabilities increased by 59 basis points for the three-month period ended March 31, 2019 compared to the same period in 2018. Interest expense increased $ 5.1 million compared to the three-month period ended March 31, 2018 to $11.1 million for the same period in 2019. This increase was due to higher average balances of interest-bearing deposits and borrowings in addition to the higher rates paid on both. Average balances of interest-bearing deposits increased $ 210.0 million and was due to the acquisition of Salin during the first quarter of 2019, as well as organic growth since March 31, 2018.

The net interest margin decreased 19 basis points from 3.81% for the three-month period ended March 31, 2018 to 3.62% for the same period in 2019. The decrease in the margin for the three-month period ended March 31, 2019 compared to the same period in 2018 was due to an increase in the cost of interest-bearing liabilities, offset by an increase in the yield of taxable interest-earning assets. Excluding the interest income recognized from the acquisition-related purchase accounting adjustments, the margin would have been 3.46% for the three-month period ending March 31, 2019 compared to 3.55% for the same period in 2018.

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 March 31, 2019, a provision of $364,000 was required to adequately fund the ALLL compared to $567,000 for the same period of 2018. Commercial loan net charge-offs during the three-month period ended March 31, 2019 were $61,000, residential mortgage loans had a net recovery of $27,000 and consumer loan net charge-offs were $329,000. The decrease in the provision for loan losses in the first quarter of 2019 compared to the same period of 2018 was primarily due to improving credit trends and a continued low level of charge-offs. The ALLL balance at March 31, 2019 was $17.8 million or 0.49% of total loans. This compares to an ALLL balance of $17.8 million at December 31, 2018 or 0.59% of total loans.

Horizon’s loan loss reserve ratio, excluding loans with credit-related purchase accounting adjustments, stood at 0.69% as of March 31, 2019. Loan loss reserves and credit-related loan discounts on acquired loans as a percentage of total loans was 1.10% as of March 31, 2019. The table below illustrates Horizon’s loan loss reserve ratio composition as of March 31, 2019.

Non-GAAP Allowance for Loan and Lease Loss Detail

As of March 31, 2019

(Dollars in Thousands, Unaudited)

	Pre-discount Loan Balance		Allowance for Loan Losses (ALLL)		Loan Discount		ALLL + Loan Discount		Loans, net		ALLL/ Pre-discount Loan Balance			Loan Discount/ Pre-discount Loan Balance			ALLL+Loan Discount/ Pre-discount Loan Balance
Horizon Legacy	$	2,547,794	$	17,525		N/A	$	17,525	$	2,530,269		0.69	%		0.00	%		0.69	%
Heartland		7,202		—		641		641		6,561		0.00	%		8.90	%		8.90	%
Summit		18,396		—		1,007		1,007		17,389		0.00	%		5.47	%		5.47	%
Peoples		81,713		—		1,861		1,861		79,852		0.00	%		2.28	%		2.28	%
Kosciusko		35,182		296		569		865		34,317		0.84	%		1.62	%		2.46	%
LaPorte		84,230		—		2,838		2,838		81,392		0.00	%		3.37	%		3.37	%
CNB		4,321		—		112		112		4,209		0.00	%		2.59	%		2.59	%
Lafayette		82,448		—		1,008		1,008		81,440		0.00	%		1.22	%		1.22	%
Wolverine		178,573		—		2,136		2,136		176,437		0.00	%		1.20	%		1.20	%
Salin		583,177		—		11,918		11,918		571,259		0.00	%		2.04	%		2.04	%
Total	$	3,623,036	$	17,821	$	22,090	$	39,911	$	3,583,125		0.49	%		0.61	%		1.10	%

No assurance can be given that Horizon will not, in any particular period, sustain loan losses that are significant in relation to the amount reserved, or that subsequent evaluations of the loan portfolio, in light of factors then prevailing, including economic conditions and management’s ongoing quarterly assessments of the portfolio, will not require increases in the allowance for loan losses. Horizon considers the allowance for loan losses to be appropriate to cover probable incurred losses in the loan portfolio as of March 31, 2019.

55

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

Non-performing loans totaled $19.4 million as of March 31, 2019, up from $ 15.2 million as of December 31, 2018. Non-performing commercial loans increased by $2.8 million, non-performing real estate loans increased by $988,000 and non-performing consumer loans increased by $376,000 at March 31, 2019 compared to December 31, 2018. The increase in non-performing loans was primarily due to non-performing loans acquired from Salin.

Other Real Estate Owned (OREO) and repossessed assets totaled $3.7 million at March 31, 2019 compared to $2.1 million on December 31, 2018. The majority of this increase was due to other real estate owned properties acquired in the Salin transaction totaling $1.6 million.

Non-interest Income

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

	Three Months Ended
Non-interest Income	March 31 2019		March 31 2018		Amount Change			Percent Change
Service charges on deposit accounts	$	1,877	$	1,888	$	(11	)		-0.6	%
Wire transfer fees		118		150		(32	)		-21.3	%
Interchange fees		1,361		1,328		33			2.5	%
Fiduciary activities		2,089		1,925		164			8.5	%
Gain on sale of investment securities		15		11		4			36.4	%
Gain on sale of mortgage loans		1,309		1,423		(114	)		-8.0	%
Mortgage servicing net of impairment		606		349		257			73.6	%
Increase in cash surrender value of bank owned life insurance		513		435		78			17.9	%
Other income		824		809		15			1.9	%
Total non-interest income	$	8,712	$	8,318	$	394			4.7	%

Total non-interest income was $394,000 higher during the first quarter of 2019 compared to the same period of 2018. Income from mortgage servicing, net of impairment, and fiduciary activities increased $257,000 and $164,000, respectively, during the first quarter of 2019 when compared to the first quarter of 2018. Residential mortgage loan activity during the first quarter of 2019 generated $1.3 million of income from the gain on sale of mortgage loans, down from $1.4 million for the same period in 2018.

56

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

Non-interest Expense

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

	Three Months Ended
	March 31 2019							March 31 2018						Adjusted
			Merger							Merger				Amount			Percent
Non-interest Expense	Actual		Expenses			Adjusted		Actual		Expenses		Adjusted		Change			Change
Salaries and employee benefits	$	14,466	$	(2	)	$	14,464	$	14,373	$	—	$	14,373	$	91			0.6	%
Net occupancy expenses		2,772		—			2,772		2,966		—		2,966		(194	)		-6.5	%
Data processing		1,966		(292	)		1,674		1,696		—		1,696		(22	)		-1.3	%
Professional fees		493		(239	)		254		501		—		501		(247	)		-49.3	%
Outside services and consultants		3,530		(2,290	)		1,240		1,264		—		1,264		(24	)		-1.9	%
Loan expense		1,949		—			1,949		1,257		—		1,257		692			55.1	%
FDIC deposit insurance		160		—			160		310		—		310		(150	)		-48.4	%
Other losses		104		(2	)		102		146		—		146		(44	)		-30.1	%
Other expenses		4,298		(1,293	)		3,005		3,324		—		3,324		(319	)		-9.6	%
Total non-interest expense	$	29,738	$	(4,118	)	$	25,620	$	25,837	$	—	$	25,837	$	(217	)		-0.8	%

Total non-interest expense was $3.9 million higher in the first quarter of 2019 compared to the same period of 2018, primarily due to merger expenses. Outside services and consultants, other expense, loan expense and data processing increased $ 2.3 million, $974,000, $692,000 and $270,000, respectively. Offsetting these increases was a decrease in net occupancy expense of $194,000 and FDIC insurance expense of $150,000. Excluding merger expenses, total non-interest expense decreased $217,000 during the first quarter of 2019 when compared to the first quarter of 2018.

Income Taxes

Income tax expense totaled $2.1 million for the first quarter of 2019, a decrease of $447,000 when compared to the first quarter of 2018. The decrease was primarily due to a decrease in income before income tax of $2.4 million when compared to the first quarter of 2018.

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, unpledged investment securities and borrowing relationships with correspondent banks, including the FHLB. During the three months ended March 31, 2019, cash and cash equivalents increased by approximately $27.6 million. At March 31, 2019, in addition to liquidity available from the normal operating, funding, and investing activities of Horizon, the Bank had approximately $480.7 million in unused credit lines with various money center banks, including the FHLB and the FRB Discount Window compared to $340.3 million at December 31, 2018 and $161.6 million at March 31, 2018. The Bank had approximately $ 663.7 million of unpledged investment securities at March 31, 2019 compared to $648.6 million at December 31, 2018 and $518.2 million at March 31, 2018.

Capital Resources

The capital resources of Horizon and the Bank exceeded regulatory capital ratios for “well capitalized” banks at March 31, 2019. Stockholders’ equity totaled $609.5 million as of March 31, 2019, compared to $492.0 million as of December 31, 2018. For the three months ended March 31, 2019, the ratio of average stockholders’ equity to average assets was 11.76% compared to 11.65% for the twelve months ended December 31, 2018. The increase in stockholders’ equity during the period was the result of stock issued through the acquisition of Salin and the generation of net income, net of dividends declared.

57

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

Horizon declared common stock dividends in the amount of $0.10 per share during the first three months of 2019 and 2018. The dividend payout ratio (dividends as a percent of basic earnings per share) was 35.7% and 30.0% for the first three months of 2019 and 2018, respectively. For additional information regarding dividends, see Horizon’s Annual Report on Form 10-K for 2018.

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 relating to net income, diluted earnings per share, net interest margin, the allowance for loan and lease losses, tangible stockholders’ equity, tangible book value per share, the return on average assets and the return on average common equity. In each case, we have identified special circumstances that we consider to be non-recurring and have excluded them, to show the impact of such events as acquisition-related purchase accounting adjustments and the tax reform bill, among others we have identified in our reconciliations. 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. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this Report on Form 10-Q for reconciliations of the non-GAAP figures identified herein and their most comparable GAAP measures.

Non-GAAP Reconciliation of Net Interest Margin

(Dollars in Thousands, Unaudited)

	Three Months Ended
	March 31 2019			December 31 2018			March 31 2018
Non-GAAP Reconciliation of Net Interest Margin
Net interest income as reported	$	34,280		$	33,836		$	33,411
Average interest-earning assets		3,929,296			3,808,822			3,580,143
Net interest income as a percentage of average interest-earning assets (“Net Interest Margin”)		3.62	%		3.60	%		3.81	%
Acquisition-related purchase accounting adjustments (“PAUs”)	$	(1,510	)	$	(1,629	)	$	(2,037	)
Core net interest income	$	32,770		$	32,207		$	31,374
Core net interest margin		3.46	%		3.43	%		3.55	%

58

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

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

(Dollars in Thousands, Except per Share Data, Unaudited)

	Three Months Ended
	March 31 2019			December 31 2018			March 31 2018
Non-GAAP Reconciliation of Net Income
Net income as reported	$	10,816		$	13,133		$	12,804
Merger expenses		4,118			487			—
Tax effect		(692	)		(102	)		—
Net income excluding merger expenses		14,242			13,518			12,804
Loss (gain) on sale of investment securities		(15	)		332			(11	)
Tax effect		3			(70	)		2
Net income excluding gain on sale of investment securities		14,230			13,780			12,795
Acquisition-related purchase accounting adjustments (“PAUs”)		(1,510	)		(1,629	)		(2,037	)
Tax effect		317			342			428
Core Net Income	$	13,037		$	12,493		$	11,186
Non-GAAP Reconciliation of Diluted Earnings per Share
Diluted earnings per share (“EPS”) as reported	$	0.28		$	0.34		$	0.33
Merger expenses		0.11			0.01			—
Tax effect		(0.02	)		—			—
Diluted EPS excluding merger expenses		0.37			0.35			0.33
Loss (gain) on sale of investment securities		—			0.01			—
Tax effect		—			—			—
Diluted EPS excluding gain on sale of investment securities		0.37			0.36			0.33
Acquisition-related PAUs		(0.04	)		(0.04	)		(0.05	)
Tax effect		0.01			0.01			0.01
Core Diluted EPS	$	0.34		$	0.33		$	0.29

Non-GAAP Reconciliation of Tangible Stockholders’ Equity and Tangible Book Value per Share

(Dollars in Thousands, Except per Share Data, Unaudited)

	March 31 2019		December 31 2018		September 30 2018		June 30 2018		March 31 2018
Total stockholders’ equity	$	609,468	$	491,992	$	477,594	$	470,535	$	460,416
Less: Intangible assets		176,864		130,270		130,755		131,239		131,724
Total tangible stockholders’ equity	$	432,604	$	361,722	$	346,839	$	339,296	$	328,692
Common shares outstanding		45,052,747		38,375,407		38,367,890		38,362,640		38,332,853
Tangible book value per common share	$	9.60	$	9.43	$	9.04	$	8.84	$	8.57

59

HORIZON BANCORP, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition

And Results of Operations

For the Three Months ended March 31, 2019 and 2018

Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity

(Dollars in Thousands, Unaudited)

	Three Months Ended
	March 31 2019			December 31 2018			March 31 2018
Non-GAAP Reconciliation of Return on Average Assets
Average assets	$	4,307,189		$	4,179,140		$	3,942,837
Return on average assets (“ROAA”) as reported		1.02	%		1.25	%		1.32	%
Merger expenses		0.39	%		0.05	%		0.00	%
Tax effect		-0.07	%		-0.01	%		0.00	%
ROAA excluding merger expenses		1.34	%		1.29	%		1.32	%
Gain on sale of investment securities		0.00	%		0.03	%		0.00	%
Tax effect		0.00	%		-0.01	%		0.00	%
ROAA excluding gain on sale of investment securities		1.34	%		1.31	%		1.32	%
Acquisition-related purchase accounting adjustments (“PAUs”)		-0.14	%		-0.15	%		-0.21	%
Tax effect		0.03	%		0.03	%		0.04	%
Core ROAA		1.23	%		1.19	%		1.15	%
Non-GAAP Reconciliation of Return on Average Common Equity
Average Common Equity	$	506,449		$	485,662		$	460,076
Return on average common equity (“ROACE”) as reported		8.66	%		10.73	%		11.29	%
Merger expenses		3.30	%		0.40	%		0.00	%
Tax effect		-0.55	%		-0.08	%		0.00	%
ROACE excluding merger expenses		11.41	%		11.05	%		11.29	%
Gain on sale of investment securities		-0.01	%		0.27	%		-0.01	%
Tax effect		0.00	%		-0.06	%		0.00	%
ROACE excluding gain on sale of investment securities		11.40	%		11.26	%		11.28	%
Acquisition-related purchase accounting adjustments (“PAUs”)		-1.21	%		-1.33	%		-1.80	%
Tax effect		0.25	%		0.28	%		0.38	%
Core ROACE		10.44	%		10.21	%		9.86	%

60

HORIZON BANCORP, INC. AND SUBSIDIARIES Quantitative and

Qualitative Disclosures About Market Risk

For the Three ended March 31, 2019 and 2018

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We refer you to Horizon’s 2018 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 2018 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on an evaluation of disclosure controls and procedures as of March 31, 2019, Horizon’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of Horizon’s disclosure controls (as defined in Exchange Act Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on such evaluation, such officers have concluded that, as of the evaluation date, Horizon’s disclosure controls and procedures are effective to ensure that the information required to be disclosed by Horizon in the reports it files under the Exchange Act is recorded, processed, summarized and reported within the time specified in Securities and Exchange Commission rules and forms and are designed to ensure that information required to be disclosed in those reports is accumulated and communicated to management as appropriate to allow timely decisions regarding disclosure.

Changes in Internal Control Over Financial Reporting

Horizon’s management, including its Chief Executive Officer and Chief Financial Officer, also have concluded that during the fiscal quarter ended March 31, 2019, 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.

61

HORIZON BANCORP, INC. AND SUBSIDIARIES

Part II – Other Information

For the Three Months ended March 31, 2019 and 2018

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 2018.

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

None not previously reported on a Current Report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

Not Applicable

62

HORIZON BANCORP, INC. AND SUBSIDIARIES

Part II – Other Information

For the Three Months ended March 31, 2019 and 2018

ITEM 6. EXHIBITS

(a) Exhibits

Exhibit Index

Exhibit No.	Description	Location
31.1	Certification of Craig M. Dwight	Attached
31.2	Certification of Mark E. Secor	Attached
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
101	Interactive Data Files	Attached

63

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, INC.
Dated:	May 9, 2019	/s/ Craig M. Dwight
		Craig M. Dwight
		Chief Executive Officer
Dated:	May 9, 2019	/s/ Mark E. Secor
		Mark E. Secor
		Chief Financial Officer

64

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, Inc.;

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: May 9, 2019	/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, Inc.;

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: May 9, 2019	/s/ Mark E. Secor
	Mark E. Secor
	Chief Financial Officer

EX-32

EXHIBIT 32

HORIZON BANCORP, INC.

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, Inc. (the “Company”) certifies that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2019	/s/ Craig M. Dwight
	Craig M. Dwight
	Chief Executive Officer
Dated: May 9, 2019	/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, Inc. and will be retained by Horizon Bancorp, Inc. and furnished to the Securities Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 08, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Registrant Name	HORIZON BANCORP INC /IN/
Entity Central Index Key	0000706129
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	HBNC
Entity Common Stock, Shares Outstanding		45,052,747
Entity Emerging Growth Company	false
Entity Small Business	false

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 86,131	$ 58,492
Interest-earning time deposits	15,987	15,744
Investment securities, available for sale	687,142	600,348
Investment securities, held to maturity (fair value of $210,106 and $208,273)	206,327	210,112
Loans held for sale	1,979	1,038
Loans, net of allowance for loan losses of $17,821 and $17,820	3,603,236	2,995,512
Premises and equipment, net	93,822	74,331
Federal Home Loan Bank stock	22,447	18,073
Goodwill	145,690	119,880
Other intangible assets	31,174	10,390
Interest receivable	17,423	14,239
Cash value of life insurance	94,449	88,062
Other assets	45,832	40,467
Total assets	5,051,639	4,246,688
Liabilities
Non-interest bearing	811,768	642,129
Interest bearing	3,076,255	2,497,247
Total deposits	3,888,023	3,139,376
Borrowings	457,788	550,384
Subordinated debentures	55,310	37,837
Interest payable	2,471	2,031
Other liabilities	38,579	25,068
Total liabilities	4,442,171	3,754,696
Commitments and contingent liabilities
Stockholders' Equity
Preferred stock, Authorized, 1,000,000 shares, Issued 0 shares
Common stock, no par value, Authorized 99,000,000 shares (Restated - See Note 1) Issued 45,077,816 and 38,400,476 shares (Restated - See Note 1), Outstanding 45,052,747 and 38,375,407 shares (Restated - See Note 1)
Additional paid-in capital	378,963	276,101
Retained earnings	230,327	224,035
Accumulated other comprehensive income (loss)	178	(8,144)
Total stockholders' equity	609,468	491,992
Total liabilities and stockholders' equity	$ 5,051,639	$ 4,246,688

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Investment securities, held to maturity fair value	$ 210,106	$ 208,273
Allowance for loan losses	$ 17,821	$ 17,820
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value
Common stock, shares authorized	99,000,000	99,000,000
Common stock, shares issued	45,077,816	38,400,476
Common stock, shares outstanding	45,052,747	38,375,407

XML

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Interest Income
Loans receivable	$ 39,623	$ 35,131
Investment securities
Taxable	3,122	2,430
Tax exempt	2,628	1,865
Total interest income	45,373	39,426
Interest Expense
Deposits	6,876	2,871
Borrowed funds	3,621	2,572
Subordinated debentures	596	572
Total interest expense	11,093	6,015
Net Interest Income	34,280	33,411
Provision for loan losses	364	567
Net Interest Income after Provision for Loan Losses	33,916	32,844
Non-interest Income
Service charges on deposit accounts	1,877	1,888
Wire transfer fees	118	150
Interchange fees	1,361	1,328
Fiduciary activities	2,089	1,925
Gains on sale of investment securities (includes $15 and $11 for the three months ended March 31, 2019 and 2018, respectively, related to accumulated other comprehensive earnings	15	11
Gain on sale of mortgage loans	1,309	1,423
Mortgage servicing income net of impairment	606	349
Increase in cash value of bank owned life insurance	513	435
Other income	824	809
Total non-interest income	8,712	8,318
Non-interest Expense
Salaries and employee benefits	14,466	14,373
Net occupancy expenses	2,772	2,966
Data processing	1,966	1,696
Professional fees	493	501
Outside services and consultants	3,530	1,264
Loan expense	1,949	1,257
FDIC insurance expense	160	310
Other losses	104	146
Other expense	4,298	3,324
Total non-interest expense	29,738	25,837
Income Before Income Taxes	12,890	15,325
Income tax expense (includes $3 and $2 for the three months ended March 31, 2019 and 2018, respectively, related to income tax expense from reclassification items)	2,074	2,521
Net Income	$ 10,816	$ 12,804
Basic Earnings Per Share (Restated - See Note 1)	$ 0.28	$ 0.33
Diluted Earnings Per Share (Restated - See Note 1)	$ 0.28	$ 0.33

XML

Condensed Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Accumulated other comprehensive earnings reclassifications	$ 15	$ 11
Income tax expense from reclassification	$ 3	$ 2

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net Income	$ 10,816	$ 12,804
Change in fair value of derivative instruments:
Change in fair value of derivative instruments for the period	(1,106)	759
Income tax effect	232	(159)
Changes from derivative instruments	(874)	600
Change in securities:
Unrealized appreciation (depreciation) for the period on AFS securities	11,694	(8,114)
Amortization from transfer of securities from available for sale to held to maturity securities	(38)	(52)
Reclassification adjustment for securities (gains) losses realized in income	(15)	(11)
Income tax effect	(2,445)	1,716
Unrealized gains (losses) on securities	9,196	(6,461)
Other Comprehensive Income (Loss), Net of Tax	8,322	(5,861)
Comprehensive Income	$ 19,138	$ 6,943

XML

Condensed Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands	Total	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]
Beginning Balances at Dec. 31, 2017	$ 457,078	$ 275,059	$ 185,570	$ (3,551)
Net income	12,804		12,804
Other comprehensive income (loss), net of tax	(5,861)			(5,861)
Amortization of unearned compensation	61	61
Exercise of stock options	100	100
Stock option expense	82	82
Reclassification of tax adjustment on accumulated other comprehensive loss			766	(766)
Cash dividends on common stock ($0.10 per share)	(3,848)		(3,848)
Ending Balances at Mar. 31, 2018	460,416	275,302	195,292	(10,178)
Beginning Balances at Dec. 31, 2018	491,992	276,101	224,035	(8,144)
Net income	10,816		10,816
Other comprehensive income (loss), net of tax	8,322			8,322
Amortization of unearned compensation	91	91
Exercise of stock options	117	117
Stock option expense	57	57
Stock issued stock plans	(125)	(125)
Stock issued in Salin acquisition	102,722	102,722
Cash dividends on common stock ($0.10 per share)	(4,524)		(4,524)
Ending Balances at Mar. 31, 2019	$ 609,468	$ 378,963	$ 230,327	$ 178

XML

Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash dividends on common stock, per share	$ 0.10	$ 0.10

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating Activities
Net income	$ 10,816	$ 12,804
Items not requiring (providing) cash
Provision for loan losses	364	567
Depreciation and amortization	1,549	1,814
Share based compensation	57	82
Mortgage servicing rights, net impairment	(14)	6
Premium amortization on securities, net	1,285	1,476
Loss (gain) on sale of investment securities	(15)	(11)
Gain on sale of mortgage loans	(1,309)	(1,423)
Proceeds from sales of loans	30,801	43,307
Loans originated for sale	(30,433)	(35,770)
Change in cash value life insurance	(513)	(435)
(Gain)/loss on sale of other real estate owned	26
Net change in:
Interest receivable	(696)	4,200
Interest payable	(386)	330
Other assets	97,788	6,595
Other liabilities	2,246	(3,556)
Net cash provided by operating activities	111,566	29,986
Investing Activities
Purchases of securities available for sale	(63,574)	(36,389)
Proceeds from sales, maturities, calls and principal repayments of securities available for sale	42,715	30,415
Purchases of securities held to maturity		(8,703)
Proceeds from maturities of securities held to maturity	2,927	721
Net change in interest-earning time deposits	(243)	(289)
Change in Federal Reserve and FHLB stock	(803)
Net change in loans	(37,028)	(33,312)
Proceeds on the sale of OREO and repossessed assets	487	392
Change in premises and equipment, net	3,260	(1,074)
Net cash used in investing activities	76,486	(48,239)
Net change in:
Deposits	7,180	52,673
Borrowings	(163,061)	(43,811)
Proceeds from issuance of stock	(8)	100
Dividends paid on common stock	(4,524)	(3,848)
Net cash provided by (used in) financing activities	(160,413)	5,114
Net Change in Cash and Cash Equivalents	27,639	(13,139)
Cash and Cash Equivalents at Beginning of Year	58,492	59,980
Cash and Cash Equivalents at End of Year	86,131	46,841
Additional Supplemental Information
Interest paid	10,653	5,685
Transfer of loans to other real estate	759	$ 266
Right-of-use assets exchanged for lease obligations	3,411
Salin Bank and Trust Company [Member]
Investing Activities
Net cash received in acquisition	$ 128,745

XML

Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Accounting Policies

Note 1 - Accounting Policies

The accompanying unaudited condensed consolidated financial statements include the accounts of Horizon Bancorp, Inc. (“Horizon” or the “Company”) and its wholly-owned subsidiaries, including Horizon Bank (“Horizon Bank” or the “Bank”). Horizon Bank (formerly known as “Horizon Bank, N.A.”) was a national association until its conversion to an Indiana commercial bank effective June 23, 2017. All inter-company balances and transactions have been eliminated. The results of operations for the periods ended March 31, 2019 and March 31, 2018 are not necessarily indicative of the operating results for the full year of 2019 or 2018. 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 2018 filed with the Securities and Exchange Commission on February 28, 2019. The condensed consolidated balance sheet of Horizon as of December 31, 2018 has been derived from the audited balance sheet as of that date.

On May 15, 2018, the Board of Directors of the Company approved a three-for-two stock split of the Company’s authorized common stock, no par value. All share and per share amounts in the condensed consolidated financial statements and notes thereto have been retroactively adjusted, where necessary, to reflect this three-for-two stock split. The effect of the three-for-two stock split on the outstanding common shares is that shareholders of record as of the close of business on May 31, 2018, the record date, received an additional half share for each share of common stock held, with shareholders receiving cash in lieu of any fractional shares. The additional shares issued in the stock split were payable and issued on June 15, 2018, and the common shares began trading on a split-adjusted basis on June 19, 2018.

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

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

	Three Months Ended March 31
	2019		2018
Basic earnings per share
Net income	$	10,816	$	12,804
Weighted average common shares outstanding(1)		38,822,543		38,306,395
Basic earnings per share	$	0.28	$	0.33
Diluted earnings per share
Net income available to common shareholders	$	10,816	$	12,804
Weighted average common shares outstanding(1)		38,822,543		38,306,395
Effect of dilutive securities:
Restricted stock		—		35,356
Stock options		83,629		127,059
Weighted average common shares outstanding		38,906,172		38,468,810
	$	0.28	$	0.33

(1)  Adjusted for 3:2 stock split on June 15, 2018

There were 350,618 and 44,053 shares for the three months ended March 31, 2019 and 2018, respectively, which were not included in the computation of diluted earnings per share because they were non-dilutive.

Horizon has share-based employee compensation plans, which are described in the notes to the financial statements included in the December 31, 2018 Annual Report on Form 10-K.

Adoption of New Accounting Standards

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities

The FASB has issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this ASU also make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. For public entities, this new guidance became effective in fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Early adoption was permitted in any interim period after issuance of the ASU. All transition requirements and elections should be applied to hedging relationships existing (that is, hedging relationships in which the hedging instrument has not expired, been sold, terminated, or exercised or the entity has not removed the designation of the hedging relationship) on the date of adoption. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption (that is, the initial application date). The Company adopted ASU 2017-12 on January 1, 2019 and there was no material impact to the consolidated financial statements.

FASB Accounting Standards Updates No. 2016-02, Leases (Topic 842)

The FASB has issued Accounting Standards Update (ASU) No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right- of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. The amendments in this update became effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. The Company adopted this ASU as of January 1, 2019 using the alternative transition method. In addition, the Company utilized the practical expedients allowing it to retain the classifications of existing leases, not re-assess if existing leases have initial direct costs and hindsight when determining the lease term and assessment of impairment. Upon adoption, the Company capitalized $3.5 million for right-of- use assets and lease liabilities, net of existing straight-line lease liabilities. See Note 8, “Leases”.

Revenue Recognition

Accounting Standards Codification 606, “Revenue from Contracts with Customers” (ASC 606) provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance enumerates five steps that entities should follow in achieving this core principle. Revenue generated from financial instruments, including loans and investment securities, are not included in the scope of ASC 606. The adoption of ASC 606 did not result in a change to the accounting for any of the Company’s revenue streams that are within the scope of the amendments. Revenue-generating activities that are within the scope of ASC 606 and that are presented as non-interest income in the Company’s consolidated statements of income include:

• Service charges and fees on deposit accounts – these include general service fees charged for deposit account maintenance and activity and transaction-based fees charged for certain services, such as debit card, wire transfer or overdraft activities. Revenue is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services.

• Fiduciary activities – this includes periodic fees due from trust and wealth management customers for managing the customers’ financial assets. Fees are charged based on a standard agreement and are recognized as they are earned.

Reclassifications

Certain reclassifications have been made to the 2018 condensed consolidated financial statements to be comparable to 2019. These reclassifications had no effect on net income.

XML

Acquisitions

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Acquisitions

Note 2 – Acquisitions

Salin Bancshares, Inc.

On March 26, 2019, Horizon completed the acquisition of Salin Bancshares, Inc. (“Salin”), an Indiana corporation, and Horizon Bank’s acquisition of Salin Bank and Trust Company (“Salin Bank”), an Indiana commercial bank and wholly-owned subsidiary of Salin, through mergers effective March 26, 2019. Under the terms of the Merger Agreement, shareholders of Salin received 23,907.5 shares of Horizon common stock and $87,417.17 in cash for each outstanding share of Salin common stock. Salin shares outstanding at the closing to be exchanged were 275, and the shares of Horizon common stock issued to Salin shareholders totaled 6,563,697. The Salin shareholders received cash in lieu of fractional shares. Based upon the March 25, 2019 closing price of $15.65 per share of Horizon common stock immediately prior to the effectiveness of the merger the transaction has an implied valuation of approximately $126.7 million. The Company incurred approximately $4.6 million in costs related to the acquisition. These expenses are classified in the non-interest expense section of the income statement and are primarily located in the data processing, professional fees, outside services and consultants and other expense line items. As a result of the acquisition, the Company was able to increase its deposit base and reduce transaction costs. The Company also expects to reduce costs 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 estimates and assumptions that are subject to change, the preliminary purchase price for the Salin acquisition is detailed in the following table. Final estimates of fair value on the date of acquisition have not been received yet. 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	$	152,745
Investment securities, available for sale		54,706
Loans
Commercial		350,916
Residential mortgage		136,089
Consumer		84,814
Total loans		571,819
Premises and equipment, net		23,882
FRB and FHLB stock		3,571
Goodwill		25,810
Core deposit intangible		21,111
Interest receivable		2,488
Other assets		107,611
Total assets purchased	$	963,743
Common shares issued	$	102,722
Cash paid		24,000
Total purchase price	$	126,722
Liabilities
Deposits
Non-interest bearing	$	188,744
NOW accounts		207,567
Savings and money market		274,504
Certificates of deposit		70,652
Total deposits		741,467
Borrowings		70,495
Subordinated debentures		17,443
Interest payable		826
Other liabilities		6,790
Total liabilities assumed	$	837,021

Of the total purchase price of $126.7 million, $21.1 million has been allocated to core deposit intangible. Additionally, $25.8 million has been allocated to goodwill and none of the purchase price is deductible. The core deposit intangible is being amortized over 10 years on a straight line basis.

The Company acquired various loans in the acquisition that 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 assumptions, such as default rates, severity and prepayment speeds.

The following table details an estimate of the acquired loans that are accounted for in accordance with ASC 310-30 as of March 26, 2019. Final valuation estimates have not yet been determined for acquired loans as of March 31, 2019. If information becomes available which would indicate adjustment to the purchase price allocation, such adjustments would be made prospectively.

Contractually required principal and interest at acquisition	$	22,209
Contractual cash flows not expected to be collected (nonaccretable differences)		8,632
Expected cash flows at acquisition		13,577
Interest component of expected cash flows (accretable discount)		1,333
Fair value of acquired loans accounted for under ASC 310-30	$	12,244

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

The results of operations of Salin have been included in the Company’s consolidated financial statements since the acquisition date. The following schedule includes pro-forma results for the three months ended March 31, 2019 and 2018 as if the Salin acquisition had occurred as of the beginning of the comparable prior reporting periods.

	Three Months Ended
	March 31		March 31
	2019		2018
Summary of Operations:
Net Interest Income	$	42,182	$	40,619
Provision for Loan Losses		664		1,167
Net Interest Income after Provision for Loan Losses		41,518		39,452
Non-interest Income		9,126		9,999
Non-interest Expense		42,152		33,169
Income before Income Taxes		8,492		16,282
Income Tax Expense		2,017		2,465
Net Income		6,475		13,817
Net Income Available to Common Shareholders	$	6,475	$	13,817
Basic Earnings per Share	$	0.17	$	0.36
Diluted Earnings per Share	$	0.17	$	0.36

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 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.

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Securities

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Securities

Note 3 – Securities

The fair value of securities is as follows:

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	14,087	$	—	$	(92	)	$	13,995
State and municipal		245,577		5,266		(1,083	)		249,760
Federal agency collateralized mortgage obligations		212,829		1,774		(1,560	)		213,043
Federal agency mortgage-backed pools		193,932		294		(1,961	)		192,265
Corporate notes		17,598		481		—			18,079
Total available for sale investment securities	$	684,023	$	7,815	$	(4,696	)	$	687,142
Held to maturity
State and municipal	$	187,847	$	4,053	$	(330	)	$	191,570
Federal agency collateralized mortgage obligations		5,019		8		(48	)		4,979
Federal agency mortgage-backed pools		13,461		152		(56	)		13,557
Total held to maturity investment securities
	$	206,327	$	4,213	$	(434	)	$	210,106

	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	16,815	$	1	$	(208	)	$	16,608
State and municipal		210,386		1,495		(2,578	)		209,303
Federal agency collateralized mortgage obligations		187,563		625		(3,185	)		185,003
Federal agency mortgage-backed pools		183,479		80		(4,823	)		178,736
Corporate notes		10,666		107		(75	)		10,698
Total available for sale investment securities	$	608,909	$	2,308	$	(10,869	)	$	600,348
Held to maturity
State and municipal	$	191,269	$	1,773	$	(3,366	)	$	189,676
Federal agency collateralized mortgage obligations		5,144		6		(120	)		5,030
Federal agency mortgage-backed pools		13,699		74		(206	)		13,567
Total held to maturity investment securities	$	210,112	$	1,853	$	(3,692	)	$	208,273

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

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified. At March 31, 2019, no individual investment security had an unrealized loss that was determined to be other-than-temporary.

The unrealized losses on the Company’s investments in securities of state and municipal governmental agencies, U.S. Treasury and federal agencies, federal agency collateralized mortgage obligations, and federal agency mortgage-backed pools were caused by interest rate volatility and not a decline in credit quality. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company expects to recover the amortized cost basis over the term of the securities. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company did not consider those investments to be other-than-temporarily impaired at March 31, 2019.

The amortized cost and fair value of securities available for sale and held to maturity at March 31, 2019 and December 31, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Within one year	$	29,589	$	29,552	$	20,532	$	20,448
One to five years		52,250		51,759		42,476		41,705
Five to ten years		100,190		102,334		107,839		107,107
After ten years		95,233		98,189		67,020		67,349
		277,262		281,834		237,867		236,609
Federal agency collateralized mortgage obligations		212,829		213,043		187,563		185,003
Federal agency mortgage-backed pools		193,932		192,265		183,479		178,736
Private labeled mortgage-backed pools		—		—		—		—
Total available for sale investment securities
	$	684,023	$	687,142	$	608,909	$	600,348
Held to maturity
Within one year	$	150	$	150	$	70	$	70
One to five years		50,317		51,152		48,732		49,324
Five to ten years		99,413		101,178		101,809		101,533
After ten years		37,967		37,207		40,658		38,749
		187,847		189,687		191,269		189,676
Federal agency collateralized mortgage obligations		5,019		4,979		5,144		5,030
Federal agency mortgage-backed pools		13,461		13,557		13,699		13,567
Total held to maturity investment securities	$	206,327	$	208,223	$	210,112	$	208,273

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.

	March 31, 2019
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Investment Securities
U.S. Treasury and federal agencies	$	—	$	—		$	9,823	$	(92	)	$	9,823	$	(92	)
State and municipal		65,265		(697	)		44,783		(2,500	)		110,048		(3,197	)
Federal agency collateralized mortgage obligations		431		(1	)		100,886		(1,607	)		101,317		(1,608	)
Federal agency mortgage-backed pools		—		—			152,582		(2,017	)		152,582		(2,017	)
Corporate notes		—		—			—		—			—		—
Total temporarily impaired securities	$	65,696	$	(698	)	$	308,074	$	(6,216	)	$	373,770	$	(6,914	)

	December 31, 2018
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Investment Securities
U.S. Treasury and federal agencies	$	—	$	—		$	9,707	$	(208	)	$	9,707	$	(208	)
State and municipal		75,163		(1,628	)		106,335		(4,316	)		181,498		(5,944	)
Federal agency collateralized mortgage obligations		6,450		(25	)		106,257		(3,280	)		112,707		(3,305	)
Federal agency mortgage-backed pools		5,739		(39	)		175,865		(4,990	)		181,604		(5,029	)
Corporate notes		5,263		(75	)		—		—			5,263		(75	)
Total temporarily impaired securities	$	92,615	$	(1,767	)	$	398,164	$	(12,794	)	$	490,779	$	(14,561	)

Information regarding security proceeds, gross gains and gross losses are presented below.

	Three Months Ended March 31
	2019			2018
Sales of securities available for sale
Proceeds	$	17,587		$	9,836
Gross gains		59			37
Gross losses		(44	)		(26	)

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Loans

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Loans

Note 4 – Loans

	March 31 2019			December 31 2018
Commercial
Working capital and equipment	$	924,435		$	804,083
Real estate, including agriculture		1,076,077			834,037
Tax exempt		60,062			48,975
Other		29,005			34,495
Total		2,089,579			1,721,590
Real estate
1-4 family		808,401			659,754
Other		11,423			8,387
Total		819,824			668,141
Consumer
Auto		331,572			327,413
Recreation		14,262			13,975
Real estate/home improvement		40,998			39,587
Home equity		245,940			163,209
Unsecured		4,124			4,043
Other		2,814			1,254
Total		639,710			549,481
Mortgage warehouse		71,944			74,120
Total loans		3,621,057			3,013,332
Allowance for loan losses		(17,821	)		(17,820	)
Loans, net
	$	3,603,236		$	2,995,512

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 mortgage loan funded by Horizon undergoes an underwriting review 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.

	March 31, 2019
	Loan Balance			Interest Due		Deferred Costs/(Fees)			Recorded Investment
Owner occupied real estate	$	676,517		$	975	$	(1,687	)	$	675,805
Non-owner occupied real estate		833,803			1,645		(1,666	)		833,782
Residential spec homes		10,221			27		(3	)		10,245
Development & spec land		75,079			249		(16	)		75,312
Commercial and industrial		497,624			4,291		(293	)		501,622
Total commercial		2,093,244			7,187		(3,665	)		2,096,766
Residential mortgage		797,174			2,346		(1,943	)		797,577
Residential construction		24,593			43		—			24,636
Mortgage warehouse		71,944			480		—			72,424
Total real estate		893,711			2,869		(1,943	)		894,637
Direct installment		37,417			135		560			38,112
Indirect installment		317,629			750		—			318,379
Home equity		282,160			1,504		1,944			285,608
Total consumer		637,206			2,389		2,504			642,099
Total loans		3,624,161			12,445		(3,104	)		3,633,502
Allowance for loan losses		(17,821	)		—		—			(17,821	)
Net loans	$	3,606,340		$	12,445	$	(3,104	)	$	3,615,681

	December 31, 2018
	Loan Balance			Interest Due		Deferred Costs/(Fees)			Recorded Investment
Owner occupied real estate	$	561,463		$	1,240	$	(1,629	)	$	561,074
Non-owner occupied real estate		717,814			1,063		(1,839	)		717,038
Residential spec homes		5,199			13		(2	)		5,210
Development & spec land		46,547			131		(12	)		46,666
Commercial and industrial		394,346			3,149		(297	)		397,198
Total commercial		1,725,369			5,596		(3,779	)		1,727,186
Residential mortgage		646,136			1,861		(2,025	)		645,972
Residential construction		24,030			42		—			24,072
Mortgage warehouse		74,120			480		—			74,600
Total real estate		744,286			2,383		(2,025	)		744,644
Direct installment		38,173			103		566			38,842
Indirect installment		314,177			738		—			314,915
Home equity		194,766			973		1,799			197,538
Total consumer		547,116			1,814		2,365			551,295
Total loans		3,016,771			9,793		(3,439	)		3,023,125
Allowance for loan losses		(17,820	)		—		—			(17,820	)
Net loans	$	2,998,951		$	9,793	$	(3,439	)	$	3,005,305

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Accounting for Certain Loans Acquired in a Transfer

3 Months Ended

Mar. 31, 2019

Transfers and Servicing [Abstract]

Accounting for Certain Loans Acquired in a Transfer

Note 5 – Accounting for Certain Loans Acquired in a Transfer

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

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

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

	March 31, 2019
	Commercial		Real Estate		Consumer		Outstanding Balance		Allowance for Loan Losses		Carrying Amount
Heartland	$	229	$	164	$	—	$	393	$	—	$	393
Summit		220		535		—		755		—		755
Peoples		260		44		—		304		—		304
Kosciusko		712		163		—		875		296		579
LaPorte		708		836		26		1,570		—		1,570
Lafayette		2,204		—		—		2,204		—		2,204
Wolverine		5,736		—		—		5,736		—		5,736
Salin		10,329		1,986		1,262		13,577		—		13,577
Total	$	20,398	$	3,728	$	1,288	$	25,414	$	296	$	25,118

	December 31, 2018
	Commercial		Real Estate		Consumer		Outstanding Balance		Allowance for Loan Losses		Carrying Amount
Heartland	$	232	$	175	$	—	$	407	$	—	$	407
Summit		323		555		—		878		—		878
Peoples		270		58		—		328		—		328
Kosciusko		746		155		—		901		—		901
LaPorte		753		947		27		1,727		60		1,667
Lafayette		3,080		—		—		3,080		—		3,080
Wolverine		7,841		—		—		7,841		—		7,841
Total	$	13,245	$	1,890	$	27	$	15,162	$	60	$	15,102

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

	Three Months Ended March 31, 2019
	Beginning balance		Additions		Accretion			Reclassification from nonaccretable difference		Disposals			Ending balance
Heartland	$	174	$	—	$	(8	)	$	—	$	—		$	166
Summit		42		—		(3	)		—		(11	)		28
Kosciusko		300		—		(17	)		—		—			283
LaPorte		829		—		(29	)		—		—			800
Lafayette		609		—		(35	)		—		(171	)		403
Wolverine		698		—		(123	)		—		(8	)		567
Salin		—		3,368		—			—		—			3,368
Total	$	2,652	$	3,368	$	(215	)	$	—	$	(190	)	$	5,615

	Three Months Ended March 31, 2018
	Beginning balance		Additions		Accretion			Reclassification from nonaccretable difference		Disposals			Ending balance
Heartland	$	452	$	—	$	(59	)	$	—	$	—		$	393
Summit		147		—		(18	)		—		(2	)		127
Kosciusko		386		—		(20	)		—		—			366
LaPorte		980		—		(40	)		—		(7	)		933
Lafayette		933		—		(118	)		—		(2	)		813
Wolverine		2,267		—		(387	)		—		(42	)		1,838
Total	$	5,165	$	—	$	(642	)	$	—	$	(53	)	$	4,470

During the three months ended March 31, 2019 and 2018 the Company increased the allowance for loan losses on purchased loans by a charge to the income statement of $296,000 and $0, respectively. 

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Allowance for Loan Losses

3 Months Ended

Mar. 31, 2019

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 using the highest of the one, two or five-year historical loss experience is an appropriate methodology in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed. The actual allowance for loan loss activity is provided below.

	Three Months Ended
	March 31
	2019			2018
	(Unaudited)			(Unaudited)
Balance at beginning of the period	$	17,820		$	16,394
Loans charged-off:
Commercial
Owner occupied real estate		1			13
Non-owner occupied real estate		64			—
Residential spec homes		—			—
Development & spec land		—			—
Commercial and industrial		12			—
Total commercial		77			13
Real estate
Residential mortgage		—			12
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		—			12
Consumer
Direct installment		28			55
Indirect installment		540			505
Home equity		16			131
Total consumer		584			691
Total loans charged-off		661			716
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		—			12
Non-owner occupied real estate		6			5
Residential spec homes		2			2
Development & spec land		—			—
Commercial and industrial		8			32
Total commercial		16			51
Real estate
Residential mortgage		27			6
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		27			6
Consumer
Direct installment		11			11
Indirect installment		201			139
Home equity		43			22
Total consumer		255			172
Total loan recoveries		298			229
Net loans charged-off		363			487
Provision charged to operating expense
Commercial		1,122			(1,291	)
Real estate		(107	)		(252	)
Consumer		(651	)		2,110
Total provision charged to operating expense		364			567
Balance at the end of the period	$	17,821		$	16,474

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

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 contractually 90 days past due, and charges down to the net realizable value other secured loans when they are contractually 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection in full will occur regardless of delinquency status, are not charged off.

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

	March 31, 2019
	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	915	$	—	$	—	$	—	$	915
Collectively evaluated for impairment		10,641		1,588		1,014		3,663		16,906
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	11,556	$	1,588	$	1,014	$	3,663	$	17,821
Loans:
Individually evaluated for impairment	$	6,233	$	—	$	—	$	—	$	6,233
Collectively evaluated for impairment		2,087,011		821,767		71,944		637,206		3,617,928
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	2,093,244	$	821,767	$	71,944	$	637,206	$	3,624,161

	December 31, 2018
	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,035	$	—	$	—	$	—	$	1,035
Collectively evaluated for impairment		9,460		1,676		1,006		4,643		16,785
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	10,495	$	1,676	$	1,006	$	4,643	$	17,820
Loans:
Individually evaluated for impairment	$	6,708	$	—	$	—	$	—	$	6,708
Collectively evaluated for impairment		1,718,661		670,166		74,120		547,116		3,010,063
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	1,725,369	$	670,166	$	74,120	$	547,116	$	3,016,771

XML

Non-performing Loans and Impaired Loans

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

Non-performing Loans and Impaired Loans

Note 7 – Non-performing Loans and Impaired Loans

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

	March 31, 2019
	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non-peforming TDRs		Performing TDRs		Total Non-performing Loans
Commercial
Owner occupied real estate	$	3,372	$	—	$	389	$	139	$	3,900
Non-owner occupied real estate		3,041		—		404		314		3,759
Residential spec homes		261		—		—		—		261
Development & spec land		177		—		—		—		177
Commercial and industrial		1,653		—		—		—		1,653
Total commercial		8,504		—		793		453		9,750
Real estate
Residential mortgage		3,691		140		416		1,748		5,995
Residential construction		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—
Total real estate		3,691		140		416		1,748		5,995
Consumer
Direct installment		55		17		—		—		72
Indirect installment		986		30		—		—		1,016
Home equity		2,077		5		140		331		2,553
Total consumer		3,118		52		140		331		3,641
Total	$	15,313	$	192	$	1,349	$	2,532	$	19,386

	December 31, 2018
	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non-peforming TDRs		Performing TDRs		Total Non-performing Loans
Commercial
Owner occupied real estate	$	3,413	$	—	$	—	$	109	$	3,522
Non-owner occupied real estate		554		—		492		—		1,046
Residential spec homes		—		—		—		—		—
Development & spec land		68		—		—		—		68
Commercial and industrial		2,059		208		—		—		2,267
Total commercial		6,094		208		492		109		6,903
Real estate
Residential mortgage		2,846		180		423		1,558		5,007
Residential construction		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—
Total real estate		2,846		180		423		1,558		5,007
Consumer
Direct installment		35		—		—		—		35
Indirect installment		916		173		—		—		1,089
Home equity		1,657		7		142		335		2,141
Total consumer		2,608		180		142		335		3,265
Total	$	11,548	$	568	$	1,057	$	2,002	$	15,175

Included in the $19.4 million of non-accrual loans and the $1.3 million of non-performing TDRs at March 31, 2019 were $3.1 million and $629,000, 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 Commercial Banking Officer and/or the Chief Operations 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 the three methods described above.

The Company’s TDRs are considered impaired loans and included in the allowance methodology using the guidance for impaired loans. At March 31, 2019, the type of concessions the Company has made on restructured loans has been temporary rate reductions and/or reductions in monthly payments and there have been no restructured loans with modified recorded balances. Any modification to a loan that is a concession and is not in the normal course of lending is considered a restructured loan. A restructured loan is returned to accruing status after six consecutive payments but is still reported as TDR unless the loan bears interest at a market rate. As of March 31, 2019, the Company had $3.9 million in TDRs and $2.5 million were performing according to the restructured terms and $315,000 in TDRs were returned to accrual status during the first three months of 2019. There were $20,000 specific reserves allocated to TDRs at March 31, 2019 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:

	March 31, 2019
							Three Months Ended
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance Commercial
Owner occupied real estate	$	3,275	$	3,269	$	—	$	3,650	$	60
Non-owner occupied real estate		840		869		—		875		32
Residential spec homes		261		261		—		261		3
Development & spec land		66		64		—		65		—
Commercial and industrial		656		648		—		668		7
Total commercial		5,098		5,111		—		5,519		102
With an allowance recorded
Commercial
Owner occupied real estate		355		355		25		358		—
Non-owner occupied real estate		135		135		40		135		—
Residential spec homes		—		—		—		—		—
Development & spec land		—		—		—		—		—
Commercial and industrial		632		632		850		632		—
Total commercial		1,122		1,122		915		1,125		—
Total	$	6,220	$	6,233	$	915	$	6,644	$	102

	March 31, 2018
							Three Months Ended
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	4,038	$	4,063	$	—	$	4,590	$	37
Non-owner occupied real estate		1,033		1,049		—		975		5
Residential spec homes		—		—		—		—		—
Development & spec land		76		74		—		75		—
Commercial and industrial		737		745		—		1,447		—
Total commercial		5,884		5,931		—		7,087		42
With an allowance recorded
Commercial
Owner occupied real estate		893		893		184		900		—
Non-owner occupied real estate		—		—		—		—		—
Residential spec homes		—		—		—		—		—
Development & spec land		—		—		—		—		—
Commercial and industrial		—		—		—		—		—
Total commercial		893		893		184		900		—
Total	$	6,777	$	6,824	$	184	$	7,987	$	42

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

	March 31, 2019
	Current			30-59 Days Past Due			60-89 Days Past Due			90 Days or Greater Past Due			Non-accrual			Total Past Due & Non-accrual Loans			Total
Commercial
Owner occupied real estate	$	672,729		$	27		$	—		$	—		$	3,761		$	3,788		$	676,517
Non-owner occupied real estate		827,610			2,386			362			—			3,445			6,193			833,803
Residential spec homes		9,469			491			—			—			261			752			10,221
Development & spec land		74,885			17			—			—			177			194			75,079
Commercial and industrial		493,723			1,616			632			—			1,653			3,901			497,624
Total commercial		2,078,416			4,537			994			—			9,297			14,828			2,093,244
Real estate
Residential mortgage		790,848			1,910			169			140			4,107			6,326			797,174
Residential construction		24,593			—			—			—			—			—			24,593
Mortgage warehouse		71,944			—			—			—			—			—			71,944
Total real estate		887,385			1,910			169			140			4,107			6,326			893,711
Consumer
Direct installment		37,345			67			48			17			55			72			37,417
Indirect installment		316,613			906			129			30			986			1,016			317,629
Home equity		279,938			956			264			5			2,217			2,222			282,160
Total consumer		633,896			1,929			441			52			3,258			3,310			637,206
Total	$	3,599,697		$	8,376		$	1,604		$	192		$	16,662		$	24,464		$	3,624,161
Percentage of total loans		99.32	%		0.23	%		0.04	%		0.01	%		0.46	%		0.68	%

	December 31, 2018
	Current			30-59 Days Past Due			60-89 Days Past Due			90 Days or Greater Past Due			Non-accrual			Total Past Due & Non-accrual Loans			Total
Commercial
Owner occupied real estate	$	556,516		$	537		$	997		$	—		$	3,413		$	4,947		$	561,463
Non-owner occupied real estate		716,574			175			19			—			1,046			1,240			717,814
Residential spec homes		4,707			492			—			—			—			492			5,199
Development & spec land		46,479			—			—			—			68			68			46,547
Commercial and industrial		390,828			515			736			208			2,059			3,518			394,346
Total commercial		1,715,104			1,719			1,752			208			6,586			10,265			1,725,369
Real estate
Residential mortgage		641,500			1,131			56			180			3,269			4,636			646,136
Residential construction		24,030			—			—			—			—			—			24,030
Mortgage warehouse		74,120			—			—			—			—			—			74,120
Total real estate		739,650			1,131			56			180			3,269			4,636			744,286
Consumer
Direct installment		38,138			93			18			—			35			146			38,284
Indirect installment		313,088			1,396			198			173			916			2,683			315,771
Home equity		192,960			761			37			7			1,799			2,604			195,564
Total consumer		544,186			2,250			253			180			2,750			5,433			549,619
Total	$	2,998,940		$	5,100		$	2,061		$	568		$	12,605		$	20,334		$	3,019,274
Percentage of total loans		99.33	%		0.17	%		0.07	%		0.02	%		0.42	%		0.67	%

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 $3,500,000) are validated by the Loan Committee, which is chaired by the Chief Commercial Banking Officer (CCBO).

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

• The CCBO, 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 unstablized, high risk or in decline. These loans require an increased level of loan officer supervision and monitoring to assure that any deterioration is addressed in a timely fashion.

Risk Grade 5: Special Mention

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

Risk Grade 6: Substandard

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

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

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

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

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

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

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

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

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

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

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

Risk Grade 7: Doubtful

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

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

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

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

Risk Grade 8: Loss

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

The following table presents loans by credit grades.

	March 31, 2019
	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	656,354		$	5,046		$	15,117		$	—		$	676,517
Non-owner occupied real estate		815,974			9,048			8,781			—			833,803
Residential spec homes		9,960			—			261			—			10,221
Development & spec land		74,805			97			177			—			75,079
Commercial and industrial		482,091			7,074			8,459			—			497,624
Total commercial		2,039,184			21,265			32,795			—			2,093,244
Real estate
Residential mortgage		791,663			—			5,511			—			797,174
Residential construction		24,593			—			—			—			24,593
Mortgage warehouse		71,944			—			—			—			71,944
Total real estate		888,200			—			5,511			—			893,711
Consumer
Direct installment		37,345			—			72			—			37,417
Indirect installment		316,613			—			1,016			—			317,629
Home equity		279,826			—			2,334			—			282,160
Total consumer		633,784			—			3,422			—			637,206
Total	$	3,561,168		$	21,265		$	41,728		$	—		$	3,624,161
Percentage of total loans		98.26	%		0.59	%		1.15	%		0.00	%

	December 31, 2018
	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	538,177		$	6,618		$	16,668		$	—		$	561,463
Non-owner occupied real estate		702,269			9,682			5,863			—			717,814
Residential spec homes		5,199			—			—			—			5,199
Development & spec land		46,382			97			68			—			46,547
Commercial and industrial		379,607			6,655			8,084			—			394,346
Total commercial		1,671,634			23,052			30,683			—			1,725,369
Real estate
Residential mortgage		641,309			—			4,827			—			646,136
Residential construction		24,030			—			—			—			24,030
Mortgage warehouse		74,120			—			—			—			74,120
Total real estate		739,459			—			4,827			—			744,286
Consumer
Direct installment		38,138			—			35			—			38,173
Indirect installment		313,088			—			1,089			—			314,177
Home equity		192,625			—			2,141			—			194,766
Total consumer		543,851			—			3,265			—			547,116
Total	$	2,954,944		$	23,052		$	38,775		$	—		$	3,016,771
Percentage of total loans		97.95	%		0.76	%		1.29	%		0.00	%

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

Note 8 – Leases

Operating leases are recorded as a right-of-use (“ROU”) asset and operating lease liability, included in other assets and other liabilities, respectively, on the consolidated balance sheet beginning January 1, 2019 when the Company adopted ASU 2016-02 prospectively. Operating lease ROU assets represent the right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date.

Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating liability, is recognized on a straight-line basis over the lease term, and is recorded primarily in net occupancy expense in the consolidated statements of income.

The Company adopted the guidance on January 1, 2019 by electing the optional alternative transition method permitted by ASU 2018-11 allowing for recognition of applicable leases as of January 1, 2019. Additionally, the Company elected the following accounting policies:

• The practical expedient package that forgoes:

• Reassessment of any expired or existing contracts for a lease

• Reassessment of lease classification for expired or existing leases

• Reassessment of initial direct costs for existing leases

• The hindsight practical expedient to determine lease term and impairment of ROU assets

• Other practical expedients regarding combination of lease and non-lease components and the exclusion of short-term leases

• The practical expedient for land easements and the portfolio approach were not elected

Operating leases relate primarily to bank branches and office space with remaining average lease terms of seven years. The weighted average discount rate utilized to calculate the ROU asset and operating lease liability was approximately 2.57%, which represents the incremental borrowing rate. At inception, the Company recorded a ROU asset and operating lease liability of $3.5 million. At March 31, 2019, a ROU asset of $3.3 million is included in other assets and an operating lease liability of $3.4 million is included in other liabilities, respectively. Options to extend a lease were considered in the remaining lease term determination. The lease expense for operating leases was $148,000 for the three months ended March 31, 2019.

Future minimum operating lease payments under non-cancellable leases with initial or remaining lease terms at March 31, 2019 were as follows:

Year	Amount
2020	$	484
2021		476
2022		483
2023		504
2024 and thereafter		1,483
Total lease payments	$	3,430
Less: Interest		(180	)
Present value of lease liabilities	$	3,250

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Repurchase Agreements

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

Repurchase Agreements

Note 9 – 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:

	March 31, 2019
	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	$	90,885	$	—	$	—	$	—	$	—	$	—	$	90,885
Securities pledged for Repurchase Agreements
Federal agency collateralized mortgage obligations	$	33,798	$	—	$	—	$	—	$	—	$	—	$	33,798
Federal agency mortgage-backed pools		87,795		—		—		—		—		—		87,795
Total	$	121,593	$	—	$	—	$	—	$	—	$	—	$	121,593

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 10 – 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 5.81% on a notional amount of $30.5 million at March 31, 2019 and December 31, 2018. Under the agreements, the Company pays or receives the net interest amount monthly, with the monthly settlements included in interest expense.

The Company assumed additional interest rate swap agreements as the result of the LaPorte acquisition in July 2016. The agreements provide for the Company to receive interest from the counterparty at one month LIBOR and to pay interest to the counterparty at a weighted average fixed rate of 2.31% on a notional amount of $30.0 million at March 31, 2019 and December 31, 2018. Under the agreements, the Company pays or receives the net interest amount monthly, with the monthly settlements included in interest expense.

On July 20, 2018, the Company entered into an interest rate swap agreement for an additional portion of its floating rate debt. The agreement provides for the Company to receive interest from the counterparty at one month LIBOR and to pay interest to the counterparty at a rate of 2.81% on a notional amount of $50.0 million at March 31, 2019. Under the agreement, 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 September 30, 2018, the Company’s cash flow hedge was effective and is not expected to have a significant impact on the Company’s net income over the next 12 months.

Fair Value Hedges

Fair value hedges are intended to reduce the interest rate risk associated with the underlying hedged item. The Company enters into fixed rate loan agreements as part of its lending policy. To mitigate the risk of changes in fair value based on fluctuations in interest rates, the Company has entered into interest rate swap agreements on individual loans, converting the fixed rate loans to a variable rate. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings. At March 31, 2019, 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 $234.3 million at March 31, 2019 and $209.2 million at December 31, 2018.

Other Derivative Instruments

The Company enters into non-hedging derivatives in the form of mortgage loan forward sale commitments with investors and commitments to originate mortgage loans as part of its mortgage banking business. At March 31, 2019, 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
	March 31, 2019				March 31, 2019
	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Derivatives designated as hedging instruments
Interest rate contracts		Loans	$	—		Loans	$	4,093
Interest rate contracts		Other Assets		4,093		Other liabilities		2,866
Total derivatives desginated as hedging instruments				4,093				6,959
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		392		Other liabilities		—
Total derivatives not designated as hedging instruments				392				—
Total derivatives			$	4,485			$	6,959

	Asset Derivatives				Liability Derivatives
	December 31, 2018				December 31, 2018
	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Derivatives designated as hedging instruments
Interest rate contracts		Loans	$	—		Loans	$	42
Interest rate contracts		Other Assets		42		Other liabilities		1,760
Total derivatives desginated as hedging instruments				42				1,802
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		135		Other liabilities		—
Total derivatives not designated as hedging instruments				135				—
Total derivatives			$	177			$	1,802

The effect of the derivative instruments on the condensed consolidated statements of income for the three-month periods ending March 31 is as follows:

	Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended
	March 31, 2019			March 31, 2018
Derivatives in cash flow hedging relationship
Interest rate contracts	$	(874	)	$	358

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.

	Location of gain		Amount of Gain (Loss) Recognized on Derivative
	(loss) recognized on		Three Months Ended
	derivative		March 31, 2019			March 31, 2018
Derivative in fair value hedging relationship
Interest rate contracts		Interest income -loans	$	(4,051	)	$	2,768
Interest rate contracts		Interest income -loans		4,051			(2,768	)
Total			$	—		$	—

	Location of gain		Amount of Gain (Loss) Recognized on Derivative
	(loss) recognized on		Three Months Ended
	derivative		March 31, 2019		March 31, 2018
Derivative not designated as hedging relationship
Mortgage contracts		Other income - gain on sale of loans	$	257	$	112

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Disclosures about fair value of assets and liabilities

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

Disclosures about fair value of assets and liabilities

Note 11 – 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 September 30, 2018. 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:

	March 31, 2019
	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Treasury and federal agencies	$	13,995		$	—	$	13,995		$	—
State and municipal		249,760			—		249,760			—
Federal agency collateralized mortgage obligations		213,043			—		213,043			—
Federal agency mortgage-backed pools		192,265			—		192,265			—
Corporate notes		18,079			—		18,079			—
Total available for sale securities		687,142			—		687,142			—
Hedged loans		234,325			—		234,325			—
Forward sale commitments		392			—		392			—
Interest rate swap agreements		(6,958	)		—		(6,958	)		—
Commitments to originate loans		—			—		—			—

	December 31, 2018
	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Treasury and federal agencies	$	16,608		$	—	$	16,608		$	—
State and municipal		209,303			—		209,303			—
Federal agency collateralized mortgage obligations		185,003			—		185,003			—
Federal agency mortgage-backed pools		178,736			—		178,736			—
Corporate notes		10,698			—		10,698			—
Total available for sale securities		600,348			—		600,348			—
Hedged loans		209,161			—		209,161			—
Forward sale commitments		135			—		135			—
Interest rate swap agreements		(1,801	)		—		(1,801	)		—
Commitments to originate loans		—			—		—			—

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

Non-interest Income	Three Months Ended
Total gains and losses from:	March 31, 2019			March 31, 2018
Hedged loans	$	(4,051	)	$	2,768
Fair value interest rate swap agreements		4,051			(2,768	)
Derivative loan commitments		257			112
	$	257		$	112

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

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2019
Impaired loans	$	5,318	$	—	$	—	$	5,318
Mortgage servicing rights		13,366		—		—		13,366
December 31, 2018
Impaired loans	$	5,661	$	—	$	—	$	5,661
Mortgage servicing rights		12,349		—		—		12,349

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 increased by $14,000 during the first three months of 2019 and decreased by $6,000 during the first three months of 2018.

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

	March 31, 2019
	Fair		Valuation		Unobservable		Range
	Value		Technique		Inputs		(Weighted Average)
Impaired loans	$	5,318		Collateral based measurement		Discount to reflect current market conditions and ultimate collectability		0%-100% (14.7%)
Mortgage servicing rights		13,366		Discounted cash flows		Discount rate, Constant prepayment rate, Probability of default		9.7%-10.0% (9.7%), 8.9%-21.8% (9.0%), 0.1%-3.1% (0.6%)

	December 31, 2018
	Fair		Valuation		Unobservable		Range
	Value		Technique		Inputs		(Weighted Average)
Impaired loans	$	5,661		Collateral based measurement		Discount to reflect current market conditions and ultimate collectability		0%-100% (15.5%)
Mortgage servicing rights		12,349		Discounted cash flows		Discount rate, Constant prepayment rate, Probability of default		10.2%-11.0% (10.3%), 9.1%-21.9% (9.3%), 0.1%-2.8% (0.6%)

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 12 – Fair Value of Financial Instruments

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

The estimated fair values of financial instruments, as shown below, are not intended to reflect the estimated liquidation or market value of Horizon taken as a whole. The disclosed fair value estimates are limited to Horizon’s significant financial instruments at March 31, 2019 and December 31, 2018. 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 net loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.

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

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

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

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

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

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

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

	March 31, 2019
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	86,131	$	86,131	$	—	$	—
Interest-earning time deposits		15,987		—		—		—
Investment securities, held to maturity		206,327		—		210,106		—
Loans held for sale		1,979		—		—		1,979
Loans (excluding loan level hedges), net		3,368,911		—		—		3,267,463
Stock in FHLB		22,447		—		22,447		—
Interest receivable		17,423		—		17,423		—
Liabilities
Non-interest bearing deposits	$	811,768	$	811,768	$	—	$	—
Interest bearing deposits		3,076,255		—		3,005,839		—
Borrowings		457,788		—		412,884		—
Subordinated debentures		55,310		—		49,568		—
Interest payable		2,471		—		2,471		—

	December 31, 2018
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	58,492	$	58,492	$	—	$	—
Interest-earning time deposits		15,744		—		15,542		—
Investment securities, held to maturity		210,112		—		208,273		—
Loans held for sale		1,038		—		—		1,038
Loans (excluding loan level hedges), net		2,786,351		—		—		2,681,741
Stock in FHLB		18,073		—		18,073		—
Interest receivable		14,239		—		14,239		—
Liabilities
Non-interest bearing deposits	$	642,129	$	642,129	$	—	$	—
Interest bearing deposits		2,497,247		—		2,377,274		—
Borrowings		550,384		—		542,311		—
Subordinated debentures		37,837		—		35,711		—
Interest payable		2,031		—		2,031		—

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Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Accumulated Other Comprehensive Loss

Note 13 – Accumulated Other Comprehensive Income

	March 31			December 31
	2019			2018
Unrealized gain (loss) on securities available for sale	$	3,118		$	(8,561	)
Unamortized gain (loss) on securities held to maturity, previously transferred from AFS		(28	)		10
Unrealized loss on derivative instruments		(2,866	)		(1,760	)
Tax effect		(46	)		2,167
Total accumulated other comprehensive income (loss)	$	178		$	(8,144	)

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Regulatory Capital

3 Months Ended

Mar. 31, 2019

Banking and Thrift [Abstract]

Regulatory Capital

Note 14 – 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. 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 and Tier I leverage ratios as set forth in the table below. As of March 31, 2019 and December 31, 2018, the Bank met all capital adequacy requirements to be considered well capitalized. There have been no conditions or events since the end of the first quarter of 2019 that management believes have changed the Bank’s classification as well capitalized. There is no threshold for well-capitalized status for bank holding companies.

Horizon and the Bank’s actual and required capital ratios as of March 31, 2019 and December 31, 2018 were as follows:

	Actual					Required for Capital1 Adequacy Purposes					Required For Capital1 Adequacy Purposes with Capital Buffer					Well Capitalized Under Prompt1 Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2019
Total capital1 (to risk-weighted assets)
Consolidated	$	509,214		13.25	%	$	307,362		8.00	%	$	403,412		10.50	%		N/A		N/A
Bank		472,621		12.30	%		307,361		8.00	%		403,411		10.50	%	$	384,201		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		491,302		12.79	%		230,521		6.00	%		326,572		8.50	%		N/A		N/A
Bank		454,709		11.84	%		230,520		6.00	%		326,570		8.50	%		307,360		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		433,809		11.29	%		172,890		4.50	%		268,941		7.00	%		N/A		N/A
Bank		454,709		11.84	%		172,890		4.50	%		268,940		7.00	%		249,730		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		491,302		11.85	%		165,789		4.00	%		165,789		4.00	%		N/A		N/A
Bank		454,709		10.99	%		165,523		4.00	%		165,523		4.000	%		206,904		5.00	%
December 31, 2018
Total capital1 (to risk-weighted assets)
Consolidated	$	427,616		13.39	%	$	255,419		8.00	%	$	315,283		9.875	%		N/A		N/A
Bank		396,755		12.43	%		255,419		8.00	%		315,283		9.875	%	$	319,274		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		409,760		12.83	%		191,565		6.00	%		251,429		7.875	%		N/A		N/A
Bank		378,899		11.87	%		191,565		6.00	%		251,429		7.875	%		255,420		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		371,297		11.63	%		143,673		4.50	%		203,537		6.375	%		N/A		N/A
Bank		378,899		11.87	%		143,674		4.50	%		203,537		6.375	%		207,528		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		409,760		10.12	%		162,033		4.00	%		162,033		4.000	%		N/A		N/A
Bank		378,899		9.34	%		162,327		4.00	%		162,327		4.000	%		202,908		5.00	%

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Future Accounting Matters

3 Months Ended

Mar. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Future Accounting Matters

Note 15 – Future Accounting Matters

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement

The FASB has issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. These amendments modify the disclosure requirements in Topic 820 as follows:

Removals: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements.

Modifications: for investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and the amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.

Additions: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

The guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should all be applied prospectively for only the most recent interim or annual period presented in the initial year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU No. 2018-13 and delay adoption of the additional disclosures until their effective date. We are currently evaluating the impact of adoption of ASU 2018-13 and the impact on our accounting and disclosures.

FASB ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

The FASB has issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance is intended to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, the income tax effects of tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the qualitative impairment test is necessary. The amendments should be applied on a prospective basis. The nature of and reason for the change in accounting principle should be disclosed upon transition. The amendments in this update should be adopted for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted on testing dates after January 1, 2017. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

FASB ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

The FASB has issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The main objective of this amendment is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendment 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 enhance their credit loss estimates. The amendment 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. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2019. Early adoption will be permitted beginning after December 15, 2018. We expect a one-time cumulative-effect adjustment to the allowance for loan losses will be recognized in retained earnings on the consolidated balance sheet as of the beginning of the first reporting period in which the new standard is effective, as is consistent with regulatory expectations set forth in interagency guidance issued at the end of 2016. We are currently implementing third-party software that was purchased and are validating the data loaded into the solution. Our implementation team meets on a regular basis to oversee activities and monitor progress. Methodologies are still being evaluated at this time so the magnitude of any such adjustment or the overall impact of the new standard on the financial condition or results of operations cannot yet be determined.

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General Litigation

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

General Litigation

Note 16 – 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)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Earnings per Common Share

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

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

	Three Months Ended March 31
	2019		2018
Basic earnings per share
Net income	$	10,816	$	12,804
Weighted average common shares outstanding(1)		38,822,543		38,306,395
Basic earnings per share	$	0.28	$	0.33
Diluted earnings per share
Net income available to common shareholders	$	10,816	$	12,804
Weighted average common shares outstanding(1)		38,822,543		38,306,395
Effect of dilutive securities:
Restricted stock		—		35,356
Stock options		83,629		127,059
Weighted average common shares outstanding		38,906,172		38,468,810
	$	0.28	$	0.33

(1)  Adjusted for 3:2 stock split on June 15, 2018

There were 350,618 and 44,053 shares for the three months ended March 31, 2019 and 2018, respectively, which were not included in the computation of diluted earnings per share because they were non-dilutive.

Horizon has share-based employee compensation plans, which are described in the notes to the financial statements included in the December 31, 2018 Annual Report on Form 10-K.

Recent Accounting Pronouncements

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities

The FASB has issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this ASU also make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. For public entities, this new guidance became effective in fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Early adoption was permitted in any interim period after issuance of the ASU. All transition requirements and elections should be applied to hedging relationships existing (that is, hedging relationships in which the hedging instrument has not expired, been sold, terminated, or exercised or the entity has not removed the designation of the hedging relationship) on the date of adoption. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption (that is, the initial application date). The Company adopted ASU 2017-12 on January 1, 2019 and there was no material impact to the consolidated financial statements.

FASB Accounting Standards Updates No. 2016-02, Leases (Topic 842)

The FASB has issued Accounting Standards Update (ASU) No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right- of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. The amendments in this update became effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. The Company adopted this ASU as of January 1, 2019 using the alternative transition method. In addition, the Company utilized the practical expedients allowing it to retain the classifications of existing leases, not re-assess if existing leases have initial direct costs and hindsight when determining the lease term and assessment of impairment. Upon adoption, the Company capitalized $3.5 million for right-of- use assets and lease liabilities, net of existing straight-line lease liabilities. See Note 8, “Leases”.

Revenue Recognition

Revenue Recognition

Accounting Standards Codification 606, “Revenue from Contracts with Customers” (ASC 606) provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance enumerates five steps that entities should follow in achieving this core principle. Revenue generated from financial instruments, including loans and investment securities, are not included in the scope of ASC 606. The adoption of ASC 606 did not result in a change to the accounting for any of the Company’s revenue streams that are within the scope of the amendments. Revenue-generating activities that are within the scope of ASC 606 and that are presented as non-interest income in the Company’s consolidated statements of income include:

• Service charges and fees on deposit accounts – these include general service fees charged for deposit account maintenance and activity and transaction-based fees charged for certain services, such as debit card, wire transfer or overdraft activities. Revenue is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services.

• Fiduciary activities – this includes periodic fees due from trust and wealth management customers for managing the customers’ financial assets. Fees are charged based on a standard agreement and are recognized as they are earned.

Reclassifications

Reclassifications

Certain reclassifications have been made to the 2018 condensed consolidated financial statements to be comparable to 2019. These reclassifications had no effect on net income.

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Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Summary of Computation of Basic and Diluted Earnings Per Share

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

	Three Months Ended March 31
	2019		2018
Basic earnings per share
Net income	$	10,816	$	12,804
Weighted average common shares outstanding(1)		38,822,543		38,306,395
Basic earnings per share	$	0.28	$	0.33
Diluted earnings per share
Net income available to common shareholders	$	10,816	$	12,804
Weighted average common shares outstanding(1)		38,822,543		38,306,395
Effect of dilutive securities:
Restricted stock		—		35,356
Stock options		83,629		127,059
Weighted average common shares outstanding		38,906,172		38,468,810
	$	0.28	$	0.33

(1)  Adjusted for 3:2 stock split on June 15, 2018

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2019

Pro Forma Result of Comparable Prior Reporting Period

The following schedule includes pro-forma results for the three months ended March 31, 2019 and 2018 as if the Salin acquisition had occurred as of the beginning of the comparable prior reporting periods.

	Three Months Ended
	March 31		March 31
	2019		2018
Summary of Operations:
Net Interest Income	$	42,182	$	40,619
Provision for Loan Losses		664		1,167
Net Interest Income after Provision for Loan Losses		41,518		39,452
Non-interest Income		9,126		9,999
Non-interest Expense		42,152		33,169
Income before Income Taxes		8,492		16,282
Income Tax Expense		2,017		2,465
Net Income		6,475		13,817
Net Income Available to Common Shareholders	$	6,475	$	13,817
Basic Earnings per Share	$	0.17	$	0.36
Diluted Earnings per Share	$	0.17	$	0.36

Salin Bancshares, 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 estimates and assumptions that are subject to change, the preliminary purchase price for the Salin acquisition is detailed in the following table.

Assets
Cash and due from banks	$	152,745
Investment securities, available for sale		54,706
Loans
Commercial		350,916
Residential mortgage		136,089
Consumer		84,814
Total loans		571,819
Premises and equipment, net		23,882
FRB and FHLB stock		3,571
Goodwill		25,810
Core deposit intangible		21,111
Interest receivable		2,488
Other assets		107,611
Total assets purchased	$	963,743
Common shares issued	$	102,722
Cash paid		24,000
Total purchase price	$	126,722
Liabilities
Deposits
Non-interest bearing	$	188,744
NOW accounts		207,567
Savings and money market		274,504
Certificates of deposit		70,652
Total deposits		741,467
Borrowings		70,495
Subordinated debentures		17,443
Interest payable		826
Other liabilities		6,790
Total liabilities assumed	$	837,021

Schedule of Acquired Loans Accounted for in Accordance with ASC 310-30

The following table details an estimate of the acquired loans that are accounted for in accordance with ASC 310-30 as of March 26, 2019. Final valuation estimates have not yet been determined for acquired loans as of March 31, 2019. If information becomes available which would indicate adjustment to the purchase price allocation, such adjustments would be made prospectively.

Contractually required principal and interest at acquisition	$	22,209
Contractual cash flows not expected to be collected (nonaccretable differences)		8,632
Expected cash flows at acquisition		13,577
Interest component of expected cash flows (accretable discount)		1,333
Fair value of acquired loans accounted for under ASC 310-30	$	12,244

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Securities (Tables)

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Fair Value of Securities

The fair value of securities is as follows:

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	14,087	$	—	$	(92	)	$	13,995
State and municipal		245,577		5,266		(1,083	)		249,760
Federal agency collateralized mortgage obligations		212,829		1,774		(1,560	)		213,043
Federal agency mortgage-backed pools		193,932		294		(1,961	)		192,265
Corporate notes		17,598		481		—			18,079
Total available for sale investment securities	$	684,023	$	7,815	$	(4,696	)	$	687,142
Held to maturity
State and municipal	$	187,847	$	4,053	$	(330	)	$	191,570
Federal agency collateralized mortgage obligations		5,019		8		(48	)		4,979
Federal agency mortgage-backed pools		13,461		152		(56	)		13,557
Total held to maturity investment securities
	$	206,327	$	4,213	$	(434	)	$	210,106

	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Treasury and federal agencies	$	16,815	$	1	$	(208	)	$	16,608
State and municipal		210,386		1,495		(2,578	)		209,303
Federal agency collateralized mortgage obligations		187,563		625		(3,185	)		185,003
Federal agency mortgage-backed pools		183,479		80		(4,823	)		178,736
Corporate notes		10,666		107		(75	)		10,698
Total available for sale investment securities	$	608,909	$	2,308	$	(10,869	)	$	600,348
Held to maturity
State and municipal	$	191,269	$	1,773	$	(3,366	)	$	189,676
Federal agency collateralized mortgage obligations		5,144		6		(120	)		5,030
Federal agency mortgage-backed pools		13,699		74		(206	)		13,567
Total held to maturity investment securities	$	210,112	$	1,853	$	(3,692	)	$	208,273

Amortized Cost and Fair Value of Securities Available for Sale and Held to Maturity

The amortized cost and fair value of securities available for sale and held to maturity at March 31, 2019 and December 31, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Within one year	$	29,589	$	29,552	$	20,532	$	20,448
One to five years		52,250		51,759		42,476		41,705
Five to ten years		100,190		102,334		107,839		107,107
After ten years		95,233		98,189		67,020		67,349
		277,262		281,834		237,867		236,609
Federal agency collateralized mortgage obligations		212,829		213,043		187,563		185,003
Federal agency mortgage-backed pools		193,932		192,265		183,479		178,736
Private labeled mortgage-backed pools		—		—		—		—
Total available for sale investment securities
	$	684,023	$	687,142	$	608,909	$	600,348
Held to maturity
Within one year	$	150	$	150	$	70	$	70
One to five years		50,317		51,152		48,732		49,324
Five to ten years		99,413		101,178		101,809		101,533
After ten years		37,967		37,207		40,658		38,749
		187,847		189,687		191,269		189,676
Federal agency collateralized mortgage obligations		5,019		4,979		5,144		5,030
Federal agency mortgage-backed pools		13,461		13,557		13,699		13,567
Total held to maturity investment securities	$	206,327	$	208,223	$	210,112	$	208,273

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.

	March 31, 2019
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Investment Securities
U.S. Treasury and federal agencies	$	—	$	—		$	9,823	$	(92	)	$	9,823	$	(92	)
State and municipal		65,265		(697	)		44,783		(2,500	)		110,048		(3,197	)
Federal agency collateralized mortgage obligations		431		(1	)		100,886		(1,607	)		101,317		(1,608	)
Federal agency mortgage-backed pools		—		—			152,582		(2,017	)		152,582		(2,017	)
Corporate notes		—		—			—		—			—		—
Total temporarily impaired securities	$	65,696	$	(698	)	$	308,074	$	(6,216	)	$	373,770	$	(6,914	)

	December 31, 2018
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Investment Securities
U.S. Treasury and federal agencies	$	—	$	—		$	9,707	$	(208	)	$	9,707	$	(208	)
State and municipal		75,163		(1,628	)		106,335		(4,316	)		181,498		(5,944	)
Federal agency collateralized mortgage obligations		6,450		(25	)		106,257		(3,280	)		112,707		(3,305	)
Federal agency mortgage-backed pools		5,739		(39	)		175,865		(4,990	)		181,604		(5,029	)
Corporate notes		5,263		(75	)		—		—			5,263		(75	)
Total temporarily impaired securities	$	92,615	$	(1,767	)	$	398,164	$	(12,794	)	$	490,779	$	(14,561	)

Sales of Securities Available for Sale

Information regarding security proceeds, gross gains and gross losses are presented below.

	Three Months Ended March 31
	2019			2018
Sales of securities available for sale
Proceeds	$	17,587		$	9,836
Gross gains		59			37
Gross losses		(44	)		(26	)

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Loans (Tables)

3 Months Ended

Mar. 31, 2019

Amounts of Loans

	March 31 2019			December 31 2018
Commercial
Working capital and equipment	$	924,435		$	804,083
Real estate, including agriculture		1,076,077			834,037
Tax exempt		60,062			48,975
Other		29,005			34,495
Total		2,089,579			1,721,590
Real estate
1-4 family		808,401			659,754
Other		11,423			8,387
Total		819,824			668,141
Consumer
Auto		331,572			327,413
Recreation		14,262			13,975
Real estate/home improvement		40,998			39,587
Home equity		245,940			163,209
Unsecured		4,124			4,043
Other		2,814			1,254
Total		639,710			549,481
Mortgage warehouse		71,944			74,120
Total loans		3,621,057			3,013,332
Allowance for loan losses		(17,821	)		(17,820	)
Loans, net
	$	3,603,236		$	2,995,512

Recorded Investment of Individual Loan Categories

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

	March 31, 2019
	Loan Balance			Interest Due		Deferred Costs/(Fees)			Recorded Investment
Owner occupied real estate	$	676,517		$	975	$	(1,687	)	$	675,805
Non-owner occupied real estate		833,803			1,645		(1,666	)		833,782
Residential spec homes		10,221			27		(3	)		10,245
Development & spec land		75,079			249		(16	)		75,312
Commercial and industrial		497,624			4,291		(293	)		501,622
Total commercial		2,093,244			7,187		(3,665	)		2,096,766
Residential mortgage		797,174			2,346		(1,943	)		797,577
Residential construction		24,593			43		—			24,636
Mortgage warehouse		71,944			480		—			72,424
Total real estate		893,711			2,869		(1,943	)		894,637
Direct installment		37,417			135		560			38,112
Indirect installment		317,629			750		—			318,379
Home equity		282,160			1,504		1,944			285,608
Total consumer		637,206			2,389		2,504			642,099
Total loans		3,624,161			12,445		(3,104	)		3,633,502
Allowance for loan losses		(17,821	)		—		—			(17,821	)
Net loans	$	3,606,340		$	12,445	$	(3,104	)	$	3,615,681

	December 31, 2018
	Loan Balance			Interest Due		Deferred Costs/(Fees)			Recorded Investment
Owner occupied real estate	$	561,463		$	1,240	$	(1,629	)	$	561,074
Non-owner occupied real estate		717,814			1,063		(1,839	)		717,038
Residential spec homes		5,199			13		(2	)		5,210
Development & spec land		46,547			131		(12	)		46,666
Commercial and industrial		394,346			3,149		(297	)		397,198
Total commercial		1,725,369			5,596		(3,779	)		1,727,186
Residential mortgage		646,136			1,861		(2,025	)		645,972
Residential construction		24,030			42		—			24,072
Mortgage warehouse		74,120			480		—			74,600
Total real estate		744,286			2,383		(2,025	)		744,644
Direct installment		38,173			103		566			38,842
Indirect installment		314,177			738		—			314,915
Home equity		194,766			973		1,799			197,538
Total consumer		547,116			1,814		2,365			551,295
Total loans		3,016,771			9,793		(3,439	)		3,023,125
Allowance for loan losses		(17,820	)		—		—			(17,820	)
Net loans	$	2,998,951		$	9,793	$	(3,439	)	$	3,005,305

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Accounting for Certain Loans Acquired in a Transfer (Tables)

3 Months Ended

Mar. 31, 2019

Carrying Amounts of Loans

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

	March 31, 2019
	Commercial		Real Estate		Consumer		Outstanding Balance		Allowance for Loan Losses		Carrying Amount
Heartland	$	229	$	164	$	—	$	393	$	—	$	393
Summit		220		535		—		755		—		755
Peoples		260		44		—		304		—		304
Kosciusko		712		163		—		875		296		579
LaPorte		708		836		26		1,570		—		1,570
Lafayette		2,204		—		—		2,204		—		2,204
Wolverine		5,736		—		—		5,736		—		5,736
Salin		10,329		1,986		1,262		13,577		—		13,577
Total	$	20,398	$	3,728	$	1,288	$	25,414	$	296	$	25,118

	December 31, 2018
	Commercial		Real Estate		Consumer		Outstanding Balance		Allowance for Loan Losses		Carrying Amount
Heartland	$	232	$	175	$	—	$	407	$	—	$	407
Summit		323		555		—		878		—		878
Peoples		270		58		—		328		—		328
Kosciusko		746		155		—		901		—		901
LaPorte		753		947		27		1,727		60		1,667
Lafayette		3,080		—		—		3,080		—		3,080
Wolverine		7,841		—		—		7,841		—		7,841
Total	$	13,245	$	1,890	$	27	$	15,162	$	60	$	15,102

Accretable Yield or Income Expected to be Collected

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

	Three Months Ended March 31, 2019
	Beginning balance		Additions		Accretion			Reclassification from nonaccretable difference		Disposals			Ending balance
Heartland	$	174	$	—	$	(8	)	$	—	$	—		$	166
Summit		42		—		(3	)		—		(11	)		28
Kosciusko		300		—		(17	)		—		—			283
LaPorte		829		—		(29	)		—		—			800
Lafayette		609		—		(35	)		—		(171	)		403
Wolverine		698		—		(123	)		—		(8	)		567
Salin		—		3,368		—			—		—			3,368
Total	$	2,652	$	3,368	$	(215	)	$	—	$	(190	)	$	5,615

	Three Months Ended March 31, 2018
	Beginning balance		Additions		Accretion			Reclassification from nonaccretable difference		Disposals			Ending balance
Heartland	$	452	$	—	$	(59	)	$	—	$	—		$	393
Summit		147		—		(18	)		—		(2	)		127
Kosciusko		386		—		(20	)		—		—			366
LaPorte		980		—		(40	)		—		(7	)		933
Lafayette		933		—		(118	)		—		(2	)		813
Wolverine		2,267		—		(387	)		—		(42	)		1,838
Total	$	5,165	$	—	$	(642	)	$	—	$	(53	)	$	4,470

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Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2019

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 using the highest of the one, two or five-year historical loss experience is an appropriate methodology in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed. The actual allowance for loan loss activity is provided below.

	Three Months Ended
	March 31
	2019			2018
	(Unaudited)			(Unaudited)
Balance at beginning of the period	$	17,820		$	16,394
Loans charged-off:
Commercial
Owner occupied real estate		1			13
Non-owner occupied real estate		64			—
Residential spec homes		—			—
Development & spec land		—			—
Commercial and industrial		12			—
Total commercial		77			13
Real estate
Residential mortgage		—			12
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		—			12
Consumer
Direct installment		28			55
Indirect installment		540			505
Home equity		16			131
Total consumer		584			691
Total loans charged-off		661			716
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		—			12
Non-owner occupied real estate		6			5
Residential spec homes		2			2
Development & spec land		—			—
Commercial and industrial		8			32
Total commercial		16			51
Real estate
Residential mortgage		27			6
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		27			6
Consumer
Direct installment		11			11
Indirect installment		201			139
Home equity		43			22
Total consumer		255			172
Total loan recoveries		298			229
Net loans charged-off		363			487
Provision charged to operating expense
Commercial		1,122			(1,291	)
Real estate		(107	)		(252	)
Consumer		(651	)		2,110
Total provision charged to operating expense		364			567
Balance at the end of the period	$	17,821		$	16,474

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

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

	March 31, 2019
	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	915	$	—	$	—	$	—	$	915
Collectively evaluated for impairment		10,641		1,588		1,014		3,663		16,906
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	11,556	$	1,588	$	1,014	$	3,663	$	17,821
Loans:
Individually evaluated for impairment	$	6,233	$	—	$	—	$	—	$	6,233
Collectively evaluated for impairment		2,087,011		821,767		71,944		637,206		3,617,928
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	2,093,244	$	821,767	$	71,944	$	637,206	$	3,624,161

	December 31, 2018
	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,035	$	—	$	—	$	—	$	1,035
Collectively evaluated for impairment		9,460		1,676		1,006		4,643		16,785
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	10,495	$	1,676	$	1,006	$	4,643	$	17,820
Loans:
Individually evaluated for impairment	$	6,708	$	—	$	—	$	—	$	6,708
Collectively evaluated for impairment		1,718,661		670,166		74,120		547,116		3,010,063
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	1,725,369	$	670,166	$	74,120	$	547,116	$	3,016,771

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Non-performing Loans and Impaired Loans (Tables)

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

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

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

	March 31, 2019
	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non-peforming TDRs		Performing TDRs		Total Non-performing Loans
Commercial
Owner occupied real estate	$	3,372	$	—	$	389	$	139	$	3,900
Non-owner occupied real estate		3,041		—		404		314		3,759
Residential spec homes		261		—		—		—		261
Development & spec land		177		—		—		—		177
Commercial and industrial		1,653		—		—		—		1,653
Total commercial		8,504		—		793		453		9,750
Real estate
Residential mortgage		3,691		140		416		1,748		5,995
Residential construction		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—
Total real estate		3,691		140		416		1,748		5,995
Consumer
Direct installment		55		17		—		—		72
Indirect installment		986		30		—		—		1,016
Home equity		2,077		5		140		331		2,553
Total consumer		3,118		52		140		331		3,641
Total	$	15,313	$	192	$	1,349	$	2,532	$	19,386

	December 31, 2018
	Non-accrual		Loans Past Due Over 90 Days Still Accruing		Non-peforming TDRs		Performing TDRs		Total Non-performing Loans
Commercial
Owner occupied real estate	$	3,413	$	—	$	—	$	109	$	3,522
Non-owner occupied real estate		554		—		492		—		1,046
Residential spec homes		—		—		—		—		—
Development & spec land		68		—		—		—		68
Commercial and industrial		2,059		208		—		—		2,267
Total commercial		6,094		208		492		109		6,903
Real estate
Residential mortgage		2,846		180		423		1,558		5,007
Residential construction		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—
Total real estate		2,846		180		423		1,558		5,007
Consumer
Direct installment		35		—		—		—		35
Indirect installment		916		173		—		—		1,089
Home equity		1,657		7		142		335		2,141
Total consumer		2,608		180		142		335		3,265
Total	$	11,548	$	568	$	1,057	$	2,002	$	15,175

Commercial Loans Individually Evaluated for Impairment by Class of Loans

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

	March 31, 2019
							Three Months Ended
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance Commercial
Owner occupied real estate	$	3,275	$	3,269	$	—	$	3,650	$	60
Non-owner occupied real estate		840		869		—		875		32
Residential spec homes		261		261		—		261		3
Development & spec land		66		64		—		65		—
Commercial and industrial		656		648		—		668		7
Total commercial		5,098		5,111		—		5,519		102
With an allowance recorded
Commercial
Owner occupied real estate		355		355		25		358		—
Non-owner occupied real estate		135		135		40		135		—
Residential spec homes		—		—		—		—		—
Development & spec land		—		—		—		—		—
Commercial and industrial		632		632		850		632		—
Total commercial		1,122		1,122		915		1,125		—
Total	$	6,220	$	6,233	$	915	$	6,644	$	102

	March 31, 2018
							Three Months Ended
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Loss Allocated		Average Balance in Impaired Loans		Cash/Accrual Interest Income Recognized
With no recorded allowance
Commercial
Owner occupied real estate	$	4,038	$	4,063	$	—	$	4,590	$	37
Non-owner occupied real estate		1,033		1,049		—		975		5
Residential spec homes		—		—		—		—		—
Development & spec land		76		74		—		75		—
Commercial and industrial		737		745		—		1,447		—
Total commercial		5,884		5,931		—		7,087		42
With an allowance recorded
Commercial
Owner occupied real estate		893		893		184		900		—
Non-owner occupied real estate		—		—		—		—		—
Residential spec homes		—		—		—		—		—
Development & spec land		—		—		—		—		—
Commercial and industrial		—		—		—		—		—
Total commercial		893		893		184		900		—
Total	$	6,777	$	6,824	$	184	$	7,987	$	42

Payment Status by Class of Loan

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

	March 31, 2019
	Current			30-59 Days Past Due			60-89 Days Past Due			90 Days or Greater Past Due			Non-accrual			Total Past Due & Non-accrual Loans			Total
Commercial
Owner occupied real estate	$	672,729		$	27		$	—		$	—		$	3,761		$	3,788		$	676,517
Non-owner occupied real estate		827,610			2,386			362			—			3,445			6,193			833,803
Residential spec homes		9,469			491			—			—			261			752			10,221
Development & spec land		74,885			17			—			—			177			194			75,079
Commercial and industrial		493,723			1,616			632			—			1,653			3,901			497,624
Total commercial		2,078,416			4,537			994			—			9,297			14,828			2,093,244
Real estate
Residential mortgage		790,848			1,910			169			140			4,107			6,326			797,174
Residential construction		24,593			—			—			—			—			—			24,593
Mortgage warehouse		71,944			—			—			—			—			—			71,944
Total real estate		887,385			1,910			169			140			4,107			6,326			893,711
Consumer
Direct installment		37,345			67			48			17			55			72			37,417
Indirect installment		316,613			906			129			30			986			1,016			317,629
Home equity		279,938			956			264			5			2,217			2,222			282,160
Total consumer		633,896			1,929			441			52			3,258			3,310			637,206
Total	$	3,599,697		$	8,376		$	1,604		$	192		$	16,662		$	24,464		$	3,624,161
Percentage of total loans		99.32	%		0.23	%		0.04	%		0.01	%		0.46	%		0.68	%

	December 31, 2018
	Current			30-59 Days Past Due			60-89 Days Past Due			90 Days or Greater Past Due			Non-accrual			Total Past Due & Non-accrual Loans			Total
Commercial
Owner occupied real estate	$	556,516		$	537		$	997		$	—		$	3,413		$	4,947		$	561,463
Non-owner occupied real estate		716,574			175			19			—			1,046			1,240			717,814
Residential spec homes		4,707			492			—			—			—			492			5,199
Development & spec land		46,479			—			—			—			68			68			46,547
Commercial and industrial		390,828			515			736			208			2,059			3,518			394,346
Total commercial		1,715,104			1,719			1,752			208			6,586			10,265			1,725,369
Real estate
Residential mortgage		641,500			1,131			56			180			3,269			4,636			646,136
Residential construction		24,030			—			—			—			—			—			24,030
Mortgage warehouse		74,120			—			—			—			—			—			74,120
Total real estate		739,650			1,131			56			180			3,269			4,636			744,286
Consumer
Direct installment		38,027			93			18			—			35			146			38,173
Indirect installment		311,494			1,396			198			173			916			2,683			314,177
Home equity		192,162			761			37			7			1,799			2,604			194,766
Total consumer		541,794			2,250			253			180			2,750			5,433			547,116
Total	$	2,996,548		$	5,100		$	2,061		$	568		$	12,605		$	20,334		$	3,016,771
Percentage of total loans		99.33	%		0.17	%		0.07	%		0.02	%		0.42	%		0.67	%

Loans by Credit Grades

The following table presents loans by credit grades.

	March 31, 2019
	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	656,354		$	5,046		$	15,117		$	—		$	676,517
Non-owner occupied real estate		815,974			9,048			8,781			—			833,803
Residential spec homes		9,960			—			261			—			10,221
Development & spec land		74,805			97			177			—			75,079
Commercial and industrial		482,091			7,074			8,459			—			497,624
Total commercial		2,039,184			21,265			32,795			—			2,093,244
Real estate
Residential mortgage		791,663			—			5,511			—			797,174
Residential construction		24,593			—			—			—			24,593
Mortgage warehouse		71,944			—			—			—			71,944
Total real estate		888,200			—			5,511			—			893,711
Consumer
Direct installment		37,345			—			72			—			37,417
Indirect installment		316,613			—			1,016			—			317,629
Home equity		279,826			—			2,334			—			282,160
Total consumer		633,784			—			3,422			—			637,206
Total	$	3,561,168		$	21,265		$	41,728		$	—		$	3,624,161
Percentage of total loans		98.26	%		0.59	%		1.15	%		0.00	%

	December 31, 2018
	Pass			Special Mention			Substandard			Doubtful			Total
Commercial
Owner occupied real estate	$	538,177		$	6,618		$	16,668		$	—		$	561,463
Non-owner occupied real estate		702,269			9,682			5,863			—			717,814
Residential spec homes		5,199			—			—			—			5,199
Development & spec land		46,382			97			68			—			46,547
Commercial and industrial		379,607			6,655			8,084			—			394,346
Total commercial		1,671,634			23,052			30,683			—			1,725,369
Real estate
Residential mortgage		641,309			—			4,827			—			646,136
Residential construction		24,030			—			—			—			24,030
Mortgage warehouse		74,120			—			—			—			74,120
Total real estate		739,459			—			4,827			—			744,286
Consumer
Direct installment		38,138			—			35			—			38,173
Indirect installment		313,088			—			1,089			—			314,177
Home equity		192,625			—			2,141			—			194,766
Total consumer		543,851			—			3,265			—			547,116
Total	$	2,954,944		$	23,052		$	38,775		$	—		$	3,016,771
Percentage of total loans		97.95	%		0.76	%		1.29	%		0.00	%

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Schedule Of Future Minimum Rental Payments For Operating Leases

Future minimum operating lease payments under non-cancellable leases with initial or remaining lease terms at March 31, 2019 were as follows:

Year	Amount
2020	$	484
2021		476
2022		483
2023		504
2024 and thereafter		1,483
Total lease payments	$	3,430
Less: Interest		(180	)
Present value of lease liabilities	$	3,250

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Repurchase Agreements (Tables)

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

Summary of Repurchase Agreements Accounted as Secured Borrowings

The following table shows repurchase agreements accounted for as secured borrowings:

	March 31, 2019
	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	$	90,885	$	—	$	—	$	—	$	—	$	—	$	90,885
Securities pledged for Repurchase Agreements
Federal agency collateralized mortgage obligations	$	33,798	$	—	$	—	$	—	$	—	$	—	$	33,798
Federal agency mortgage-backed pools		87,795		—		—		—		—		—		87,795
Total	$	121,593	$	—	$	—	$	—	$	—	$	—	$	121,593

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

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
	March 31, 2019				March 31, 2019
	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Derivatives designated as hedging instruments
Interest rate contracts		Loans	$	—		Loans	$	4,093
Interest rate contracts		Other Assets		4,093		Other liabilities		2,866
Total derivatives desginated as hedging instruments				4,093				6,959
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		392		Other liabilities		—
Total derivatives not designated as hedging instruments				392				—
Total derivatives			$	4,485			$	6,959

	Asset Derivatives				Liability Derivatives
	December 31, 2018				December 31, 2018
	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Derivatives designated as hedging instruments
Interest rate contracts		Loans	$	—		Loans	$	42
Interest rate contracts		Other Assets		42		Other liabilities		1,760
Total derivatives desginated as hedging instruments				42				1,802
Derivatives not designated as hedging instruments
Mortgage loan contracts		Other assets		135		Other liabilities		—
Total derivatives not designated as hedging instruments				135				—
Total derivatives			$	177			$	1,802

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

The effect of the derivative instruments on the condensed consolidated statements of income for the three-month periods ending March 31 is as follows:

	Amount of Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)
	Three Months Ended
	March 31, 2019			March 31, 2018
Derivatives in cash flow hedging relationship
Interest rate contracts	$	(874	)	$	358

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

	Location of gain		Amount of Gain (Loss) Recognized on Derivative
	(loss) recognized on		Three Months Ended
	derivative		March 31, 2019			March 31, 2018
Derivative in fair value hedging relationship
Interest rate contracts		Interest income -loans	$	(4,051	)	$	2,768
Interest rate contracts		Interest income -loans		4,051			(2,768	)
Total			$	—		$	—

	Location of gain		Amount of Gain (Loss) Recognized on Derivative
	(loss) recognized on		Three Months Ended
	derivative		March 31, 2019		March 31, 2018
Derivative not designated as hedging relationship
Mortgage contracts		Other income - gain on sale of loans	$	257	$	112

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Disclosures about fair value of assets and liabilities (Tables)

3 Months Ended

Mar. 31, 2019

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:

	March 31, 2019
	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Treasury and federal agencies	$	13,995		$	—	$	13,995		$	—
State and municipal		249,760			—		249,760			—
Federal agency collateralized mortgage obligations		213,043			—		213,043			—
Federal agency mortgage-backed pools		192,265			—		192,265			—
Corporate notes		18,079			—		18,079			—
Total available for sale securities		687,142			—		687,142			—
Hedged loans		234,325			—		234,325			—
Forward sale commitments		392			—		392			—
Interest rate swap agreements		(6,958	)		—		(6,958	)		—
Commitments to originate loans		—			—		—			—

	December 31, 2018
	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Treasury and federal agencies	$	16,608		$	—	$	16,608		$	—
State and municipal		209,303			—		209,303			—
Federal agency collateralized mortgage obligations		185,003			—		185,003			—
Federal agency mortgage-backed pools		178,736			—		178,736			—
Corporate notes		10,698			—		10,698			—
Total available for sale securities		600,348			—		600,348			—
Hedged loans		209,161			—		209,161			—
Forward sale commitments		135			—		135			—
Interest rate swap agreements		(1,801	)		—		(1,801	)		—
Commitments to originate loans		—			—		—			—

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

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

Non-interest Income	Three Months Ended
Total gains and losses from:	March 31, 2019			March 31, 2018
Hedged loans	$	(4,051	)	$	2,768
Fair value interest rate swap agreements		4,051			(2,768	)
Derivative loan commitments		257			112
	$	257		$	112

Other Assets Measured at Fair Value on Nonrecurring Basis

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

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2019
Impaired loans	$	5,318	$	—	$	—	$	5,318
Mortgage servicing rights		13,366		—		—		13,366
December 31, 2018
Impaired loans	$	5,661	$	—	$	—	$	5,661
Mortgage servicing rights		12,349		—		—		12,349

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 non-recurring Level 3 fair value measurements, other than goodwill.

	March 31, 2019
	Fair		Valuation		Unobservable		Range
	Value		Technique		Inputs		(Weighted Average)
Impaired loans	$	5,318		Collateral based measurement		Discount to reflect current market conditions and ultimate collectability		0%-100% (14.7%)
Mortgage servicing rights		13,366		Discounted cash flows		Discount rate, Constant prepayment rate, Probability of default		9.7%-10.0% (9.7%), 8.9%-21.8% (9.0%), 0.1%-3.1% (0.6%)

	December 31, 2018
	Fair		Valuation		Unobservable		Range
	Value		Technique		Inputs		(Weighted Average)
Impaired loans	$	5,661		Collateral based measurement		Discount to reflect current market conditions and ultimate collectability		0%-100% (15.5%)
Mortgage servicing rights		12,349		Discounted cash flows		Discount rate, Constant prepayment rate, Probability of default		10.2%-11.0% (10.3%), 9.1%-21.9% (9.3%), 0.1%-2.8% (0.6%)

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Summary of Estimated Fair Values of Financial Instruments

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

	March 31, 2019
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	86,131	$	86,131	$	—	$	—
Interest-earning time deposits		15,987		—		—		—
Investment securities, held to maturity		206,327		—		210,106		—
Loans held for sale		1,979		—		—		1,979
Loans (excluding loan level hedges), net		3,368,911		—		—		3,267,463
Stock in FHLB		22,447		—		22,447		—
Interest receivable		17,423		—		17,423		—
Liabilities
Non-interest bearing deposits	$	811,768	$	811,768	$	—	$	—
Interest bearing deposits		3,076,255		—		3,005,839		—
Borrowings		457,788		—		412,884		—
Subordinated debentures		55,310		—		49,568		—
Interest payable		2,471		—		2,471		—

	December 31, 2018
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	58,492	$	58,492	$	—	$	—
Interest-earning time deposits		15,744		—		15,542		—
Investment securities, held to maturity		210,112		—		208,273		—
Loans held for sale		1,038		—		—		1,038
Loans (excluding loan level hedges), net		2,786,351		—		—		2,681,741
Stock in FHLB		18,073		—		18,073		—
Interest receivable		14,239		—		14,239		—
Liabilities
Non-interest bearing deposits	$	642,129	$	642,129	$	—	$	—
Interest bearing deposits		2,497,247		—		2,377,274		—
Borrowings		550,384		—		542,311		—
Subordinated debentures		37,837		—		35,711		—
Interest payable		2,031		—		2,031		—

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Components of Accumulated Other Comprehensive Loss

	March 31			December 31
	2019			2018
Unrealized gain (loss) on securities available for sale	$	3,118		$	(8,561	)
Unamortized gain (loss) on securities held to maturity, previously transferred from AFS		(28	)		10
Unrealized loss on derivative instruments		(2,866	)		(1,760	)
Tax effect		(46	)		2,167
Total accumulated other comprehensive income (loss)	$	178		$	(8,144	)

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Regulatory Capital (Tables)

3 Months Ended

Mar. 31, 2019

Banking and Thrift [Abstract]

Summary of Regulatory Capital Requirement

Horizon and the Bank’s actual and required capital ratios as of March 31, 2019 and December 31, 2018 were as follows:

	Actual					Required for Capital1 Adequacy Purposes					Required For Capital1 Adequacy Purposes with Capital Buffer					Well Capitalized Under Prompt1 Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2019
Total capital1 (to risk-weighted assets)
Consolidated	$	509,214		13.25	%	$	307,362		8.00	%	$	403,412		10.50	%		N/A		N/A
Bank		472,621		12.30	%		307,361		8.00	%		403,411		10.50	%	$	384,201		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		491,302		12.79	%		230,521		6.00	%		326,572		8.50	%		N/A		N/A
Bank		454,709		11.84	%		230,520		6.00	%		326,570		8.50	%		307,360		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		433,809		11.29	%		172,890		4.50	%		268,941		7.00	%		N/A		N/A
Bank		454,709		11.84	%		172,890		4.50	%		268,940		7.00	%		249,730		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		491,302		11.85	%		165,789		4.00	%		165,789		4.00	%		N/A		N/A
Bank		454,709		10.99	%		165,523		4.00	%		165,523		4.000	%		206,904		5.00	%
December 31, 2018
Total capital1 (to risk-weighted assets)
Consolidated	$	427,616		13.39	%	$	255,419		8.00	%	$	315,283		9.875	%		N/A		N/A
Bank		396,755		12.43	%		255,419		8.00	%		315,283		9.875	%	$	319,274		10.00	%
Tier 1 capital1 (to risk-weighted assets)
Consolidated		409,760		12.83	%		191,565		6.00	%		251,429		7.875	%		N/A		N/A
Bank		378,899		11.87	%		191,565		6.00	%		251,429		7.875	%		255,420		8.00	%
Common equity tier 1 capital1 (to risk-weighted assets)
Consolidated		371,297		11.63	%		143,673		4.50	%		203,537		6.375	%		N/A		N/A
Bank		378,899		11.87	%		143,674		4.50	%		203,537		6.375	%		207,528		6.50	%
Tier 1 capital1 (to average assets)
Consolidated		409,760		10.12	%		162,033		4.00	%		162,033		4.000	%		N/A		N/A
Bank		378,899		9.34	%		162,327		4.00	%		162,327		4.000	%		202,908		5.00	%

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Accounting Policies - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019	May 15, 2018
Schedule Of Accounting Policies [Line Items]
Shares, non-dilutive	350,618	44,053
Reclassifications effect on net income		$ 0
Common stock, par value				$ 0
Operating Lease, Liability	$ 3,250		$ 3,400
Operating Lease, Right-of-Use Asset			3,500
Accounting Standards Update 2016-02 [Member]
Schedule Of Accounting Policies [Line Items]
Operating Lease, Liability			3,500
Operating Lease, Right-of-Use Asset			$ 3,500

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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
	Mar. 31, 2019	Mar. 31, 2018
Basic earnings per share
Net income	$ (10,816)	$ (12,804)
Weighted average common shares outstanding	38,822,543	38,306,395
Basic Earnings Per Share	$ 0.28	$ 0.33
Diluted earnings per share
Net income available to common shareholders	$ 10,816	$ 12,804
Weighted average common shares outstanding	38,822,543	38,306,395
Effect of dilutive securities:
Weighted average common shares outstanding	38,906,172	38,468,810
Diluted Earnings Per Share	$ 0.28	$ 0.33
Restricted Stock [Member]
Effect of dilutive securities:
Effect of dilutive securities	0	35,356
Stock Options [Member]
Effect of dilutive securities:
Effect of dilutive securities	83,629	127,059

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Accounting Policies - Summary of Computation of Basic and Diluted Earnings Per Share (Parenthetical) (Detail)	Jun. 15, 2018	May 15, 2018
Accounting Policies [Abstract]
Stock split ratio	0.015	0.015

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Acquisitions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Mar. 26, 2019	Mar. 31, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Common stock, shares outstanding		45,052,747	38,375,407
Acquisition of goodwill		$ 145,690	$ 119,880
Salin Bank and Trust Company [Member]
Business Acquisition [Line Items]
Exchange ratio per share	23907.50%
Cash paid for each share	$ 87,417.17
Common stock, shares outstanding	275,000
Common stock issued	6,563,697
Market closing price per share	$ 15.65
Estimated transaction value	$ 126,700
Costs related to the acquisition	4,600
Total purchase price	126,722
Net intangible assets acquired	21,111
Acquisition of goodwill	$ 25,810
Core deposit intangible amortization period		10 years

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Acquisitions - Schedule of Final Purchase Price of Assets Acquired and Liabilities Assumed for Salin (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 26, 2019	Dec. 31, 2018
Loans
Goodwill	$ 145,690		$ 119,880
Salin Bancshares, Inc [Member]
Assets
Cash and due from banks		$ 152,745
Investment securities, available for sale		54,706
Loans
Total loans		571,819
Premises and equipment, net		23,882
FRB and FHLB stock		3,571
Goodwill		25,810
Core deposit intangible		21,111
Interest receivable		2,488
Other assets		107,611
Total assets purchased		963,743
Common shares issued		102,722
Cash paid		24,000
Total purchase price		126,722
Deposits
Non-interest bearing		188,744
NOW accounts		207,567
Savings and money market		274,504
Certificates of deposit		70,652
Total deposits		741,467
Borrowings		70,495
Subordinated debentures		17,443
Interest payable		826
Other liabilities		6,790
Total liabilities assumed		837,021
Salin Bancshares, Inc [Member] | Residential Mortgage [Member]
Loans
Total loans		136,089
Salin Bancshares, Inc [Member] | Commercial [Member]
Loans
Total loans		350,916
Salin Bancshares, Inc [Member] | Consumer [Member]
Loans
Total loans		$ 84,814

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Acquisitions - Schedule of Acquired Loans Accounted for in Accordance with ASC 310-30 (Detail) - Salin Bancshares, Inc [Member] $ in Thousands	Mar. 26, 2019 USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Contractually required principal and interest at acquisition	$ 22,209
Contractual cash flows not expected to be collected (nonaccretable differences)	8,632
Expected cash flows at acquisition	13,577
Interest component of expected cash flows (accretable discount)	1,333
Fair value of acquired loans accounted for under ASC 310-30	$ 12,244

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Acquisitions - Pro Forma Result of Comparable Prior Reporting Period (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Business Acquisition [Line Items]
Net Interest Income	$ 42,182	$ 40,619
Provision for loan losses	664	1,167
Net Interest Income after Provision for Loan Losses	41,518	39,452
Non-interest Income	9,126	9,999
Non-interest Expense	42,152	33,169
Income before Income Taxes	8,492	16,282
Income Tax Expense	2,017	2,465
Net Income	6,475	13,817
Net Income Available to Common Shareholders	$ 6,475	$ 13,817
Basic Earnings Per Share	$ 0.17	$ 0.36
Diluted Earnings Per Share	$ 0.17	$ 0.36

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Securities - Fair Value of Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	$ 684,023	$ 608,909
Gross Unrealized Gains	7,815	2,308
Gross Unrealized Losses	(4,696)	(10,869)
Available-for-sale Securities, Fair Value	687,142	600,348
Held-to-maturity, Amortized Cost	206,327	210,112
Held-to-maturity, Gross Unrealized Gains	4,213	1,853
Held-to-maturity, Gross Unrealized Losses	(434)	(3,692)
Held-to-maturity, Fair Value	210,106	208,273
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	245,577	210,386
Gross Unrealized Gains	5,266	1,495
Gross Unrealized Losses	(1,083)	(2,578)
Available-for-sale Securities, Fair Value	249,760	209,303
Held-to-maturity, Amortized Cost	187,847	191,269
Held-to-maturity, Gross Unrealized Gains	4,053	1,773
Held-to-maturity, Gross Unrealized Losses	(330)	(3,366)
Held-to-maturity, Fair Value	191,570	189,676
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	212,829	187,563
Gross Unrealized Gains	1,774	625
Gross Unrealized Losses	(1,560)	(3,185)
Available-for-sale Securities, Fair Value	213,043	185,003
Held-to-maturity, Amortized Cost	5,019	5,144
Held-to-maturity, Gross Unrealized Gains	8	6
Held-to-maturity, Gross Unrealized Losses	(48)	(120)
Held-to-maturity, Fair Value	4,979	5,030
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	193,932	183,479
Gross Unrealized Gains	294	80
Gross Unrealized Losses	(1,961)	(4,823)
Available-for-sale Securities, Fair Value	192,265	178,736
Held-to-maturity, Amortized Cost	13,461	13,699
Held-to-maturity, Gross Unrealized Gains	152	74
Held-to-maturity, Gross Unrealized Losses	(56)	(206)
Held-to-maturity, Fair Value	13,557	13,567
U.S. Treasury and Federal Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	14,087	16,815
Gross Unrealized Gains		1
Gross Unrealized Losses	(92)	(208)
Available-for-sale Securities, Fair Value	13,995	16,608
Corporate Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	17,598	10,666
Gross Unrealized Gains	481	107
Gross Unrealized Losses		(75)
Available-for-sale Securities, Fair Value	$ 18,079	$ 10,698

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Securities - Amortized Cost and Fair Value of Securities Available for Sale and Held to Maturity (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Amortized cost within one year	$ 29,589	$ 20,532
Amortized cost one to five years	52,250	42,476
Amortized cost for five to ten years	100,190	107,839
Amortized cost for after ten years	95,233	67,020
Total amortized cost	277,262	237,867
Total available for sale investment securities, Amortized Cost	684,023	608,909
Within one year, amortized cost	150	70
One to five years, amortized cost	50,317	48,732
Five to ten years, amortized cost	99,413	101,809
After ten years, amortized cost	37,967	40,658
Total amortized cost	187,847	191,269
Total held to maturity investment securities, amortized cost	206,327	210,112
Fair value within one year	29,552	20,448
Fair value for one to five years	51,759	41,705
Fair value for five to ten years	102,334	107,107
Fair value for after ten years	98,189	67,349
Total fair value	281,834	236,609
Investment securities, available for sale	687,142	600,348
Within one year, fair value	150	70
One to five years, fair value	51,152	49,324
five to ten years, fair value	101,178	101,533
After ten years, fair value	37,207	38,749
Total fair value	189,687	189,676
Held-to-maturity, Fair Value	210,106	208,273
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	212,829	187,563
Total held to maturity investment securities, amortized cost	5,019	5,144
Investment securities, available for sale	213,043	185,003
Held-to-maturity, Fair Value	4,979	5,030
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Total available for sale investment securities, Amortized Cost	193,932	183,479
Total held to maturity investment securities, amortized cost	13,461	13,699
Investment securities, available for sale	192,265	178,736
Held-to-maturity, Fair Value	$ 13,557	$ 13,567

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Securities - Gross Unrealized Losses and Fair Value of Company's Investments (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	$ 65,696	$ 92,615
Fair value more than 12 months	308,074	398,164
Total fair value	373,770	490,779
Unrealized losses less than 12 months	(698)	(1,767)
Unrealized losses more than 12 months	(6,216)	(12,794)
Total unrealized losses	(6,914)	(14,561)
U.S. Treasury and Federal Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value more than 12 months	9,823	9,707
Total fair value	9,823	9,707
Unrealized losses more than 12 months	(92)	(208)
Total unrealized losses	(92)	(208)
State and Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	65,265	75,163
Fair value more than 12 months	44,783	106,335
Total fair value	110,048	181,498
Unrealized losses less than 12 months	(697)	(1,628)
Unrealized losses more than 12 months	(2,500)	(4,316)
Total unrealized losses	(3,197)	(5,944)
Federal Agency Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months	431	6,450
Fair value more than 12 months	100,886	106,257
Total fair value	101,317	112,707
Unrealized losses less than 12 months	(1)	(25)
Unrealized losses more than 12 months	(1,607)	(3,280)
Total unrealized losses	(1,608)	(3,305)
Federal Agency Mortgage-backed Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months		5,739
Fair value more than 12 months	152,582	175,865
Total fair value	152,582	181,604
Unrealized losses less than 12 months		(39)
Unrealized losses more than 12 months	(2,017)	(4,990)
Total unrealized losses	$ (2,017)	(5,029)
Corporate Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value less than 12 months		5,263
Total fair value		5,263
Unrealized losses less than 12 months		(75)
Total unrealized losses		$ (75)

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Securities - Sales of Securities Available for Sale (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Proceeds	$ 17,587	$ 9,836
Gross gains	59	37
Gross losses	$ (44)	$ (26)

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Loans - Amounts of Loans (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage warehouse	$ 71,944	$ 74,120
Total loans	3,621,057	3,013,332
Allowance for loan losses	(17,821)	(17,820)	$ (16,474)	$ (16,394)
Loans, net	3,603,236	2,995,512
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	2,089,579	1,721,590
Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	819,824	668,141
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	639,710	549,481
Working Capital and Equipment [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	924,435	804,083
Real Estate Including Agriculture [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	1,076,077	834,037
Tax Exempt Loans Receivable [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	60,062	48,975
Other Commercial Loans [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	29,005	34,495
1-4 Family [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	808,401	659,754
Other Real Estate Loans [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate, Total	11,423	8,387
Auto [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	331,572	327,413
Recreation Consumer Loans Receivable [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	14,262	13,975
Real Estate Home Improvement Loans Receivable [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	40,998	39,587
Home Equity Loan [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	245,940	163,209
Unsecured Debt [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	4,124	4,043
Other Consumer Loans [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial/Consumer, Total	$ 2,814	$ 1,254

XML

Loans - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019
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	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	$ 3,624,161	$ 3,016,771
Net loans	3,606,340	2,998,951
Interest Due	12,445	9,793
Deferred Fees / (Costs)	(3,104)	(3,439)
Recorded Investment	3,633,502	3,023,125
Recorded Investment	3,615,681	3,005,305
Allowance for loan losses	(17,821)	(17,820)	$ (16,474)	$ (16,394)
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	2,093,244	1,725,369
Interest Due	7,187	5,596
Deferred Fees / (Costs)	(3,665)	(3,779)
Recorded Investment	2,096,766	1,727,186
Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	893,711	744,286
Interest Due	2,869	2,383
Deferred Fees / (Costs)	(1,943)	(2,025)
Recorded Investment	894,637	744,644
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	637,206	547,116
Interest Due	2,389	1,814
Deferred Fees / (Costs)	2,504	2,365
Recorded Investment	642,099	551,295
Owner Occupied Real Estate [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	676,517	561,463
Interest Due	975	1,240
Deferred Fees / (Costs)	(1,687)	(1,629)
Recorded Investment	675,805	561,074
Non Owner Occupied Real Estate [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	833,803	717,814
Interest Due	1,645	1,063
Deferred Fees / (Costs)	(1,666)	(1,839)
Recorded Investment	833,782	717,038
Residential Spec Homes [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	10,221	5,199
Interest Due	27	13
Deferred Fees / (Costs)	(3)	(2)
Recorded Investment	10,245	5,210
Development & Spec Land [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	75,079	46,547
Interest Due	249	131
Deferred Fees / (Costs)	(16)	(12)
Recorded Investment	75,312	46,666
Commercial and Industrial [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	497,624	394,346
Interest Due	4,291	3,149
Deferred Fees / (Costs)	(293)	(297)
Recorded Investment	501,622	397,198
Residential Mortgage [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	797,174	646,136
Interest Due	2,346	1,861
Deferred Fees / (Costs)	(1,943)	(2,025)
Recorded Investment	797,577	645,972
Residential Construction [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	24,593	24,030
Interest Due	43	42
Recorded Investment	24,636	24,072
Mortgage Warehousing [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	71,944	74,120
Interest Due	480	480
Recorded Investment	72,424	74,600
Direct Installment [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	37,417	38,173
Interest Due	135	103
Deferred Fees / (Costs)	560	566
Recorded Investment	38,112	38,842
Indirect Installment [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	317,629	314,177
Interest Due	750	738
Recorded Investment	318,379	314,915
Home Equity Loan [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan Balance	282,160	194,766
Interest Due	1,504	973
Deferred Fees / (Costs)	1,944	1,799
Recorded Investment	$ 285,608	$ 197,538

XML

Accounting for Certain Loans Acquired in a Transfer - Amounts of Loans (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	$ 3,621,057	$ 3,013,332
Allowance for loan losses	17,821	17,820	$ 16,474	$ 16,394
Carrying Amount	3,606,340	2,998,951
Loans Purchased With Evidence of Credit Deterioration [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	25,414	15,162
Allowance for loan losses	296	60
Carrying Amount	25,118	15,102
Loans Purchased With Evidence of Credit Deterioration [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	20,398	13,245
Loans Purchased With Evidence of Credit Deterioration [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	3,728	1,890
Loans Purchased With Evidence of Credit Deterioration [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	1,288	27
Loans Purchased With Evidence of Credit Deterioration [Member] | Heartland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	393	407
Carrying Amount	393	407
Loans Purchased With Evidence of Credit Deterioration [Member] | Heartland [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	229	232
Loans Purchased With Evidence of Credit Deterioration [Member] | Heartland [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	164	175
Loans Purchased With Evidence of Credit Deterioration [Member] | Summit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	755	878
Carrying Amount	755	878
Loans Purchased With Evidence of Credit Deterioration [Member] | Summit [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	220	323
Loans Purchased With Evidence of Credit Deterioration [Member] | Summit [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	535	555
Loans Purchased With Evidence of Credit Deterioration [Member] | Peoples Bancorp Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	304	328
Carrying Amount	304	328
Loans Purchased With Evidence of Credit Deterioration [Member] | Peoples Bancorp Inc [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	260	270
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	44	58
Loans Purchased With Evidence of Credit Deterioration [Member] | Kosciusko Financial Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	875	901
Allowance for loan losses	296
Carrying Amount	579	901
Loans Purchased With Evidence of Credit Deterioration [Member] | Kosciusko Financial Inc [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	712	746
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	163	155
Loans Purchased With Evidence of Credit Deterioration [Member] | LaPorte Bancorp Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	1,570	1,727
Allowance for loan losses		60
Carrying Amount	1,570	1,667
Loans Purchased With Evidence of Credit Deterioration [Member] | LaPorte Bancorp Inc [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	708	753
Loans Purchased With Evidence of Credit Deterioration [Member] | LaPorte Bancorp Inc [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	836	947
Loans Purchased With Evidence of Credit Deterioration [Member] | LaPorte Bancorp Inc [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	26	27
Loans Purchased With Evidence of Credit Deterioration [Member] | Lafayette Community Bancorp [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	2,204	3,080
Carrying Amount	2,204	3,080
Loans Purchased With Evidence of Credit Deterioration [Member] | Lafayette Community Bancorp [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	2,204	3,080
Loans Purchased With Evidence of Credit Deterioration [Member] | Wolverine Bancorp Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	5,736	7,841
Carrying Amount	5,736	7,841
Loans Purchased With Evidence of Credit Deterioration [Member] | Wolverine Bancorp Inc [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	5,736	$ 7,841
Loans Purchased With Evidence of Credit Deterioration [Member] | Salin Bank and Trust Company [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	13,577
Carrying Amount	13,577
Loans Purchased With Evidence of Credit Deterioration [Member] | Salin Bank and Trust Company [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	10,329
Loans Purchased With Evidence of Credit Deterioration [Member] | Salin Bank and Trust Company [Member] | Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	1,986
Loans Purchased With Evidence of Credit Deterioration [Member] | Salin Bank and Trust Company [Member] | Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	$ 1,262

XML

Accounting for Certain Loans Acquired in a Transfer - Accretable Yield or Income Expected to be Collected (Detail) - Loans Purchased With Evidence of Credit Deterioration [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	$ 2,652	$ 5,165
Additions	3,368
Accretion	(215)	(642)
Disposals	(190)	(53)
Ending balance	5,615	4,470
Heartland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	174	452
Accretion	(8)	(59)
Ending balance	166	393
Summit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	42	147
Accretion	(3)	(18)
Disposals	(11)	(2)
Ending balance	28	127
Kosciusko Financial Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	300	386
Accretion	(17)	(20)
Ending balance	283	366
LaPorte Bancorp Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	829	980
Accretion	(29)	(40)
Disposals		(7)
Ending balance	800	933
Lafayette Community Bancorp [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	609	933
Accretion	(35)	(118)
Disposals	(171)	(2)
Ending balance	403	813
Wolverine Bancorp Inc [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	698	2,267
Accretion	(123)	(387)
Disposals	(8)	(42)
Ending balance	567	$ 1,838
Salin Bank and Trust Company [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Additions	3,368
Ending balance	$ 3,368

XML

Accounting for Certain Loans Acquired in a Transfer - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Business Acquisition [Line Items]
Total provision charged to operating expense	$ 364,000	$ 567,000
Loans Purchased With Evidence of Credit Deterioration [Member]
Business Acquisition [Line Items]
Total provision charged to operating expense	$ 296,000	$ 0

XML

Allowance for Loan Losses - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019
Minimum [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Actual loss history experienced by the Company	1 year
Maximum [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Actual loss history experienced by the Company	5 years
Allowance for loan losses charge down family first and junior lien mortgages past due period	180 days
Allowance for loan losses charge down unsecured open end loans past due period	90 days
Allowance for loan losses charge down other secured loans past due period	90 days

XML

Allowance for Loan Losses - Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of the period	$ 17,820	$ 16,394
Total loans charged-off	661	716
Total loan recoveries	298	229
Net loans charged-off	363	487
Total provision charged to operating expense	364	567
Balance at the end of the period	17,821	16,474
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	77	13
Total loan recoveries	16	51
Total provision charged to operating expense	1,122	(1,291)
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	1	13
Total loan recoveries		12
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	64
Total loan recoveries	6	5
Commercial [Member] | Residential Spec Homes [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loan recoveries	2	2
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	12
Total loan recoveries	8	32
Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off		12
Total loan recoveries	27	6
Total provision charged to operating expense	(107)	(252)
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off		12
Total loan recoveries	27	6
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	584	691
Total loan recoveries	255	172
Total provision charged to operating expense	(651)	2,110
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	28	55
Total loan recoveries	11	11
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	540	505
Total loan recoveries	201	139
Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans charged-off	16	131
Total loan recoveries	$ 43	$ 22

XML

Allowance for Loan Losses - Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Total ending allowance balance	$ 17,821	$ 17,820	$ 16,474	$ 16,394
Total ending loans balance	6,233		$ 6,824
Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Individually evaluated for impairment	915	1,035
Allowance For Loan Losses, Collectively evaluated for impairment	16,906	16,785
Total ending allowance balance	17,821	17,820
Commercial [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Individually evaluated for impairment	915	1,035
Allowance For Loan Losses, Collectively evaluated for impairment	10,641	9,460
Total ending allowance balance	11,556	10,495
Real Estate [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	1,588	1,676
Total ending allowance balance	1,588	1,676
Consumer [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	3,663	4,643
Total ending allowance balance	3,663	4,643
Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Individually evaluated for impairment	6,233	6,708
Loans: Collectively evaluated for impairment	3,617,928	3,010,063
Total ending loans balance	3,624,161	3,016,771
Loans [Member] | Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Individually evaluated for impairment	6,233	6,708
Loans: Collectively evaluated for impairment	2,087,011	1,718,661
Total ending loans balance	2,093,244	1,725,369
Loans [Member] | Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	821,767	670,166
Total ending loans balance	821,767	670,166
Loans [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	637,206	547,116
Total ending loans balance	637,206	547,116
Mortgage Warehousing [Member] | Allowance for Loan Losses [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance For Loan Losses, Collectively evaluated for impairment	1,014	1,006
Total ending allowance balance	1,014	1,006
Mortgage Warehousing [Member] | Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Collectively evaluated for impairment	71,944	74,120
Total ending loans balance	$ 71,944	$ 74,120

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	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	$ 15,313	$ 11,548
Loans Past Due Over 90 Days Still Accruing	192	568
Non-Performing TDRs	1,349	1,057
Performing TDRs	2,532	2,002
Total Non-Performing Loans	19,386	15,175
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	8,504	6,094
Loans Past Due Over 90 Days Still Accruing		208
Non-Performing TDRs	793	492
Performing TDRs	453	109
Total Non-Performing Loans	9,750	6,903
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	3,372	3,413
Non-Performing TDRs	389
Performing TDRs	139	109
Total Non-Performing Loans	3,900	3,522
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	3,041	554
Non-Performing TDRs	404	492
Performing TDRs	314
Total Non-Performing Loans	3,759	1,046
Commercial [Member] | Development & Spec Land [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	177	68
Total Non-Performing Loans	177	68
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	1,653	2,059
Loans Past Due Over 90 Days Still Accruing		208
Total Non-Performing Loans	1,653	2,267
Commercial [Member] | Residential Spec Homes [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	261
Total Non-Performing Loans	261
Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	3,691	2,846
Loans Past Due Over 90 Days Still Accruing	140	180
Non-Performing TDRs	416	423
Performing TDRs	1,748	1,558
Total Non-Performing Loans	5,995	5,007
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	3,691	2,846
Loans Past Due Over 90 Days Still Accruing	140	180
Non-Performing TDRs	416	423
Performing TDRs	1,748	1,558
Total Non-Performing Loans	5,995	5,007
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	3,118	2,608
Loans Past Due Over 90 Days Still Accruing	52	180
Non-Performing TDRs	140	142
Performing TDRs	331	335
Total Non-Performing Loans	3,641	3,265
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	55	35
Loans Past Due Over 90 Days Still Accruing	17
Total Non-Performing Loans	72	35
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	986	916
Loans Past Due Over 90 Days Still Accruing	30	173
Total Non-Performing Loans	1,016	1,089
Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual	2,077	1,657
Loans Past Due Over 90 Days Still Accruing	5	7
Non-Performing TDRs	140	142
Performing TDRs	331	335
Total Non-Performing Loans	$ 2,553	$ 2,141

XML

Non-performing Loans and Impaired Loans - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 USD ($) ConsecutivePayment	Dec. 31, 2018 USD ($)
Financing Receivable, Modifications [Line Items]
Non-accrual loans	$ 15,313,000	$ 11,548,000
Non-performing TDRs	$ 1,300,000
Loan delinquency period	90 days
Minimum period required for satisfactory performance to return loan from non-accrual to accrual status	6 months
Restructured loan reported in TDRs	$ 3,900,000
Restructured loan returned to accruing status number of Consecutive Payments of loan | ConsecutivePayment	6
Specific reserves allocated to troubled debt restructuring	$ 20,000
Number TDRs returned to accrual status | ConsecutivePayment	315,000
Performing Financing Receivable [Member]
Financing Receivable, Modifications [Line Items]
Restructured loan reported in TDRs	$ 2,500,000
Loans Purchased With Evidence of Credit Deterioration [Member]
Financing Receivable, Modifications [Line Items]
Non-accrual loans	3,100,000
Non-performing TDRs	$ 629,000,000,000
Minimum [Member]
Financing Receivable, Modifications [Line Items]
Loan delinquency period	90 days
Delay or shortfall in payments of loan	30 days
Loans with an aggregate credit exposure	$ 1,000,000
Loans classified as TDR after a period	90 days
Minimum [Member] | 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] | Satisfactory Pass [Member]
Financing Receivable, Modifications [Line Items]
Number of consecutive years of profit for Good Pass Rating	3 years
Maximum [Member]
Financing Receivable, Modifications [Line Items]
Loans with an aggregate credit exposure	$ 3,500,000
Loans classified as TDR after a period	120 days
Minimum number of years of Satisfactory Repayment required for Satisfactory Pass Rating	2 years

XML

Non-performing Loans and Impaired Loans - Commercial Loans Individually Evaluated for Impairment by Class of Loans (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance total	$ 6,220	$ 6,777
Total ending loans balance	6,233	6,824
Allowance For Loan Loss Allocated	915	184
Average Balance in Impaired Loans total	6,644	7,987
Cash/Accrual Interest Income Recognized, Total	102	42
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	5,098	5,884
Recorded Investment With no recorded allowance	5,111	5,931
Average Balance in Impaired Loans With no recorded allowance	5,519	7,087
Cash/Accrual Interest Income Recognized, With no recorded allowance	102	42
Unpaid Principal Balance With an allowance recorded	1,122
Recorded Investment With an allowance recorded	1,122
Allowance For Loan Loss Allocated	915
Average Balance in Impaired Loans With an allowance recorded	1,125
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	3,275	4,038
Recorded Investment With no recorded allowance	3,269	4,063
Average Balance in Impaired Loans With no recorded allowance	3,650	4,590
Cash/Accrual Interest Income Recognized, With no recorded allowance	60	37
Unpaid Principal Balance With an allowance recorded	355	893
Recorded Investment With an allowance recorded	355	893
Allowance For Loan Loss Allocated	25	184
Average Balance in Impaired Loans With an allowance recorded	358	900
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	840	1,033
Recorded Investment With no recorded allowance	869	1,049
Average Balance in Impaired Loans With no recorded allowance	875	975
Cash/Accrual Interest Income Recognized, With no recorded allowance	32	5
Unpaid Principal Balance With an allowance recorded	135
Recorded Investment With an allowance recorded	135
Allowance For Loan Loss Allocated	40
Average Balance in Impaired Loans With an allowance recorded	135
Commercial [Member] | Development & Spec Land [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	66	76
Recorded Investment With no recorded allowance	64	74
Average Balance in Impaired Loans With no recorded allowance	65	75
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	656	737
Recorded Investment With no recorded allowance	648	745
Average Balance in Impaired Loans With no recorded allowance	668	1,447
Cash/Accrual Interest Income Recognized, With no recorded allowance	7	0
Unpaid Principal Balance With an allowance recorded	632	893
Recorded Investment With an allowance recorded	632	893
Allowance For Loan Loss Allocated	850	184
Average Balance in Impaired Loans With an allowance recorded	632	$ 900
Commercial [Member] | Residential Spec Homes [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance With no recorded allowance	261
Recorded Investment With no recorded allowance	261
Average Balance in Impaired Loans With no recorded allowance	261
Cash/Accrual Interest Income Recognized, With no recorded allowance	$ 3

XML

Non-performing Loans and Impaired Loans - Payment Status by Class of Loan (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 3,599,697	$ 2,996,548
Total Past Due	16,662	12,605
Loans Not Past Due	24,464	20,334
Total	$ 3,624,161	$ 3,016,771
Total Past Due, Percentage of Total Loans	0.46%	0.42%
Loans Not Past Due, Percentage of Total Loans	0.68%	0.67%
Current,Percentage of total loans	99.32%	99.33%
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 2,078,416	$ 1,715,104
Total Past Due	9,297	6,586
Loans Not Past Due	14,828	10,265
Total	2,093,244	1,725,369
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	672,729	556,516
Total Past Due	3,761	3,413
Loans Not Past Due	3,788	4,947
Total	676,517	561,463
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	827,610	716,574
Total Past Due	3,445	1,046
Loans Not Past Due	6,193	1,240
Total	833,803	717,814
Commercial [Member] | Residential Spec Homes [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	9,469	4,707
Total Past Due	261
Loans Not Past Due	752	492
Total	10,221	5,199
Commercial [Member] | Development & Spec Land [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	74,885	46,479
Total Past Due	177	68
Loans Not Past Due	194	68
Total	75,079	46,547
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	493,723	390,828
Total Past Due	1,653	2,059
Loans Not Past Due	3,901	3,518
Total	497,624	394,346
Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	887,385	739,650
Total Past Due	4,107	3,269
Loans Not Past Due	6,326	4,636
Total	893,711	744,286
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	790,848	641,500
Total Past Due	4,107	3,269
Loans Not Past Due	6,326	4,636
Total	797,174	646,136
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	24,593	24,030
Total	24,593	24,030
Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	71,944	74,120
Total	71,944	74,120
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	633,896	541,794
Total Past Due	3,258	2,750
Loans Not Past Due	3,310	5,433
Total	637,206	547,116
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	37,345	38,027
Total Past Due	55	35
Loans Not Past Due	72	146
Total	37,417	38,173
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	316,613	311,494
Total Past Due	986	916
Loans Not Past Due	1,016	2,683
Total	317,629	314,177
Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	279,938	192,162
Total Past Due	2,217	1,799
Loans Not Past Due	2,222	2,604
Total	282,160	194,766
30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 8,376	$ 5,100
Total Past Due, Percentage of Total Loans	0.23%	0.17%
30 - 59 Days Past Due [Member] | Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 4,537	$ 1,719
30 - 59 Days Past Due [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	27	537
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	2,386	175
30 - 59 Days Past Due [Member] | Commercial [Member] | Residential Spec Homes [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	491	492
30 - 59 Days Past Due [Member] | Commercial [Member] | Development & Spec Land [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	17
30 - 59 Days Past Due [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,616	515
30 - 59 Days Past Due [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,910	1,131
30 - 59 Days Past Due [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,910	1,131
30 - 59 Days Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,929	2,250
30 - 59 Days Past Due [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	67	93
30 - 59 Days Past Due [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	906	1,396
30 - 59 Days Past Due [Member] | Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	956	761
60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 1,604	$ 2,061
Total Past Due, Percentage of Total Loans	0.04%	0.07%
60 - 89 Days Past Due [Member] | Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 994	$ 1,752
60 - 89 Days Past Due [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		997
60 - 89 Days Past Due [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	362	19
60 - 89 Days Past Due [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	632	736
60 - 89 Days Past Due [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	169	56
60 - 89 Days Past Due [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	169	56
60 - 89 Days Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	441	253
60 - 89 Days Past Due [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	48	18
60 - 89 Days Past Due [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	129	198
60 - 89 Days Past Due [Member] | Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	264	37
Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 192	$ 568
Total Past Due, Percentage of Total Loans	0.01%	0.02%
Greater than 90 Days Past Due [Member] | Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		$ 208
Greater than 90 Days Past Due [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		208
Greater than 90 Days Past Due [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 140	180
Greater than 90 Days Past Due [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	140	180
Greater than 90 Days Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	52	180
Greater than 90 Days Past Due [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	17
Greater than 90 Days Past Due [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	30	173
Greater than 90 Days Past Due [Member] | Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 5	$ 7

XML

Non-performing Loans and Impaired Loans - Loans by Credit Grades (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Total	$ 3,624,161	$ 3,016,771
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	2,093,244	1,725,369
Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	676,517	561,463
Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	833,803	717,814
Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	10,221	5,199
Commercial [Member] | Development & Spec Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	75,079	46,547
Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	497,624	394,346
Commercial [Member] | Residential Spec Homes [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	10,221	5,199
Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	893,711	744,286
Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	797,174	646,136
Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	24,593	24,030
Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	71,944	74,120
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	637,206	547,116
Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	37,417	38,173
Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	317,629	314,177
Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	282,160	194,766
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 3,561,168	$ 2,954,944
Percentage of total loans	98.26%	97.95%
Pass [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 2,039,184	$ 1,671,634
Pass [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	656,354	538,177
Pass [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	815,974	702,269
Pass [Member] | Commercial [Member] | Residential Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	9,960	5,199
Pass [Member] | Commercial [Member] | Development & Spec Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	74,805	46,382
Pass [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	482,091	379,607
Pass [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	888,200	739,459
Pass [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	791,663	641,309
Pass [Member] | Real Estate [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	24,593	24,030
Pass [Member] | Real Estate [Member] | Mortgage Warehousing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	71,944	74,120
Pass [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	633,784	543,851
Pass [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	37,345	38,138
Pass [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	316,613	313,088
Pass [Member] | Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	279,826	192,625
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 21,265	$ 23,052
Percentage of total loans	0.59%	0.76%
Special Mention [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 21,265	$ 23,052
Special Mention [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,046	6,618
Special Mention [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	9,048	9,682
Special Mention [Member] | Commercial [Member] | Development & Spec Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	97	97
Special Mention [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	7,074	6,655
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 41,728	$ 38,775
Percentage of total loans	1.15%	1.29%
Substandard [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 32,795	$ 30,683
Substandard [Member] | Commercial [Member] | Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	15,117	16,668
Substandard [Member] | Commercial [Member] | Non Owner Occupied Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	8,781	5,863
Substandard [Member] | Commercial [Member] | Development & Spec Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	177	68
Substandard [Member] | Commercial [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	8,459	8,084
Substandard [Member] | Commercial [Member] | Residential Spec Homes [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	261
Substandard [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,511	4,827
Substandard [Member] | Real Estate [Member] | Residential Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,511	4,827
Substandard [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,422	3,265
Substandard [Member] | Consumer [Member] | Direct Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	72	35
Substandard [Member] | Consumer [Member] | Indirect Installment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,016	1,089
Substandard [Member] | Consumer [Member] | Home Equity Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 2,334	$ 2,141
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Percentage of total loans	0.00%	0.00%

XML

Leases - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Jan. 01, 2019
Operating Lease, Right-of-Use Asset		$ 3,500,000
Operating Lease, Liability	$ 3,250,000	$ 3,400,000
Operating Lease, Expense	$ 148,000
Operating leases terms	7 years
Weighted average discount rate, percentage	2.57%
Other Assets [Member]
Operating Lease, Right-of-Use Asset	$ 3,300,000
Other Liabilities [Member]
Operating Lease, Liability	$ 3,400,000

XML

Leases - Schedule Of Future Minimum Rental Payments For Operating Leases (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
2020	$ 484
2021	476
2022	483
2023	504
2024 and thereafter	1,483
Total lease payments	3,430
Less: Interest	(180)
Present value of lease liabilities	$ 3,250	$ 3,400

XML

Repurchase Agreements - Summary of Repurchase Agreements Accounted as Secured Borrowings (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	$ 90,885
Securities pledged for Repurchase Agreements, Total	121,593
Federal Agency Collateralized Mortgage Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities pledged for Repurchase Agreements, Total	33,798
Federal Agency Mortgage-backed Pools [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Securities pledged for Repurchase Agreements, Total	87,795
Remaining Contractual Maturity of the Agreements, Overnight and Continuous [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	90,885
Securities pledged for Repurchase Agreements, Total	121,593
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 pledged for Repurchase Agreements, Total	33,798
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 pledged for Repurchase Agreements, Total	$ 87,795

XML

Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
LIBOR period	3 months
Weighted average fixed rate	5.81%
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
Interest Rate Swap [Member]
Derivative [Line Items]
LIBOR period	1 month
Weighted average fixed rate	2.81%
LaPorte Bancorp Inc [Member]
Derivative [Line Items]
LIBOR period	1 month
Weighted average fixed rate	2.31%
Cash Flow Hedging [Member]
Derivative [Line Items]
Notional amount of interest	$ 30.5	$ 30.5
Cash Flow Hedging [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Notional amount of interest	50.0
Cash Flow Hedging [Member] | LaPorte Bancorp Inc [Member]
Derivative [Line Items]
Notional amount of interest	30.0	30.0
Derivative in Fair Value Hedging Relationship [Member]
Derivative [Line Items]
Notional amount of interest	$ 234.3	$ 209.2

XML

Derivative Financial Instruments - Fair Value of Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	$ 4,485	$ 177
Total Liability Derivatives	6,959	1,802
Derivatives Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	4,093	42
Total Liability Derivatives	6,959	1,802
Derivatives Designated as Hedging Instruments [Member] | Interest Rate Contracts One [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Total Liability Derivatives	4,093	42
Derivatives Designated as Hedging Instruments [Member] | Interest Rate Contracts Two [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Total Liability Derivatives	2,866	1,760
Derivatives Designated as Hedging Instruments [Member] | Interest Rate Contracts Two [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	4,093	42
Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	392	135
Total Liability Derivatives	0	0
Derivatives Not Designated as Hedging Instruments [Member] | Mortgage Loan Contracts [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Total Liability Derivatives	0	0
Derivatives Not Designated as Hedging Instruments [Member] | Mortgage Loan Contracts [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	$ 392	$ 135

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
	Mar. 31, 2019	Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Comprehensive Income on Derivative (Effective Portion)	$ (1,106)	$ 759
Cash Flow Hedging [Member] | Interest Rate Contracts One [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Comprehensive Income on Derivative (Effective Portion)	$ (874)	$ 358

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
	Mar. 31, 2019	Mar. 31, 2018
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	$ (4,051)	$ 2,768
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	4,051	(2,768)
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	$ 257	$ 112

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	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	$ 687,142	$ 600,348
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	13,995	16,608
State and Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	249,760	209,303
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	213,043	185,003
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	192,265	178,736
Corporate Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	18,079	10,698
Recurring Basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities, Fair Value	687,142	600,348
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	13,995	16,608
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	249,760	209,303
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	213,043	185,003
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	192,265	178,736
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	18,079	10,698
Recurring Basis [Member] | Hedged Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	234,325	209,161
Recurring Basis [Member] | Forward Sale Commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	392	135
Recurring Basis [Member] | Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, fair value	(6,958)	(1,801)
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	687,142	600,348
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	13,995	16,608
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	249,760	209,303
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	213,043	185,003
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	192,265	178,736
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	18,079	10,698
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	234,325	209,161
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	392	135
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	$ (6,958)	$ (1,801)

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
	Mar. 31, 2019	Mar. 31, 2018
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	$ 257	$ 112
Hedged Loans [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	(4,051)	2,768
Interest Rate Swap [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	4,051	(2,768)
Derivative Loan Commitments [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Included in net income	$ 257	$ 112

XML

Disclosures about Fair Value of Assets and Liabilities - Other Assets Measured at Fair Value on Nonrecurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Significant Unobservable Inputs (Level 3) [Member] | Impaired Loans [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	$ 5,318	$ 5,661
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	13,366	12,349
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	5,318	5,661
Fair Value, Measurements, Nonrecurring [Member] | Mortgage Servicing Rights [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impaired loans	13,366	12,349
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	5,318	5,661
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	$ 13,366	$ 12,349

XML

Disclosures about Fair Value of Assets and Liabilities - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Fair Value Disclosures [Abstract]
Reduced in carrying amount of mortgage servicing rights	$ 14,000	$ 6,000

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) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) ConsecutivePayment	Dec. 31, 2018 USD ($) ConsecutivePayment
Measurement Input, Discount Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	10
Significant Unobservable Inputs (Level 3) [Member] | Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value | $	$ 5,318	$ 5,661
Valuation Technique	Collateral based measurement	Collateral based measurement
Impaired loans	Discount to reflect current market conditions and ultimate collectability	Discount to reflect current market conditions and ultimate collectability
Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value | $	$ 13,366	$ 12,349
Valuation Technique	Discounted cash flows	Discounted cash flows
Impaired loans	Discount rate, Constant prepayment rate, Probability of default	Discount rate, Constant prepayment rate, Probability of default
Minimum [Member] | Significant Unobservable Inputs (Level 3) [Member] | Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount to reflect current market conditions and ultimate collectability	0.00%	0.00%
Minimum [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member] | Measurement Input, Discount Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	9.7	10.2
Minimum [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member] | Measurement Input, Constant Prepayment Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	8.9	9.1
Minimum [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member] | Measurement Input, Default Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	0.1	0.1
Maximum [Member] | Significant Unobservable Inputs (Level 3) [Member] | Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount to reflect current market conditions and ultimate collectability	100.00%	100.00%
Maximum [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member] | Measurement Input, Discount Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	10.0	11.0
Maximum [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member] | Measurement Input, Constant Prepayment Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	21.8	21.9
Maximum [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member] | Measurement Input, Default Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	3.1	2.8
Weighted Average [Member] | Significant Unobservable Inputs (Level 3) [Member] | Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount to reflect current market conditions and ultimate collectability	14.70%	15.50%
Weighted Average [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member] | Measurement Input, Discount Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	9.7	10.3
Weighted Average [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member] | Measurement Input, Constant Prepayment Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	9.0	9.3
Weighted Average [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Servicing Rights [Member] | Measurement Input, Default Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Unobservable inputs	0.6	0.6

XML

Fair Value of Financial Instruments - Summary of Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 86,131	$ 58,492
Interest-earning time deposits	15,987	15,744
Investment securities, held to maturity	206,327	210,112
Loans held for sale	1,979	1,038
Loans (excluding loan level hedges), net	3,615,681	3,005,305
Stock in FHLB	22,447	18,073
Interest receivable	17,423	14,239
Liabilities
Non-interest bearing deposits	811,768	642,129
Interest bearing deposits	3,076,255	2,497,247
Borrowings	457,788	550,384
Subordinated debentures	55,310	37,837
Interest payable	2,471	2,031
Carrying Amount [Member]
Assets
Cash and due from banks	86,131	58,492
Interest-earning time deposits	15,987	15,744
Investment securities, held to maturity	206,327	210,112
Loans held for sale	1,979	1,038
Loans (excluding loan level hedges), net	3,368,911	2,786,351
Stock in FHLB	22,447	18,073
Interest receivable	17,423	14,239
Liabilities
Non-interest bearing deposits	811,768	642,129
Interest bearing deposits	3,076,255	2,497,247
Borrowings	457,788	550,384
Subordinated debentures	55,310	37,837
Interest payable	2,471	2,031
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets
Cash and due from banks	86,131	58,492
Liabilities
Non-interest bearing deposits	811,768	642,129
Significant Other Observable Inputs (Level 2) [Member]
Assets
Interest-earning time deposits		15,542
Investment securities, held to maturity	210,106	208,273
Stock in FHLB	22,447	18,073
Interest receivable	17,423	14,239
Liabilities
Interest bearing deposits	3,005,839	2,377,274
Borrowings	412,884	542,311
Subordinated debentures	49,568	35,711
Interest payable	2,471	2,031
Significant Unobservable Inputs (Level 3) [Member]
Assets
Loans held for sale	1,979	1,038
Loans (excluding loan level hedges), net	$ 3,267,463	$ 2,681,741

XML

Accumulated Other Comprehensive Income - Components of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Tax effect	$ (46)	$ 2,167
Total accumulated other comprehensive income (loss)	178	(8,144)
Unrealized gain (loss) on securities available for sale [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss), before tax	3,118	(8,561)
Unamortized gain (loss) on securities held to maturity, previously transferred from AFS [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss), before tax	(28)	10
Unrealized loss on derivative instruments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss), before tax	$ (2,866)	$ (1,760)

XML

Regulatory Capital - Summary of Regulatory Capital Requirement (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total capital (to risk-weighted assets), Actual, Amount	$ 509,214	$ 427,616
Total capital (to risk-weighted assets), Actual, Ratio	13.25%	13.39%
Total capital (to risk-weighted assets), For capital adequacy purposes, Amount	$ 307,362	$ 255,419
Total capital (to risk-weighted assets), For capital adequacy purposes, Ratio	8.00%	8.00%
Total capital (to risk-weighted assets), Required for capital1 adequacy purposes with capital buffer, Amount	$ 403,412	$ 315,283
Total capital (to risk-weighted assets), Required for capital1 adequacy purposes with capital buffer, Ratio	10.50%	9.875%
Tier 1 capital (to average assets), Actual, Amount	$ 491,302	$ 409,760
Tier 1 capital (to average assets), Actual, Ratio	12.79%	12.83%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 230,521	$ 191,565
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	6.00%	6.00%
Tier 1 capital (to average assets), Required for capital1 adequacy purposes with capital buffer, Amount	$ 326,572	$ 251,429
Tier 1 capital (to average assets), Required for capital1 adequacy purposes with capital buffer, Ratio	8.50%	7.875%
Common equity tier 1 capital, Actual Amount	$ 433,809	$ 371,297
Common equity tier 1 capital, Actual Ratio	11.29%	11.63%
Common equity tier 1 capital,For capital adequacy purposes, Amount	$ 172,890	$ 143,673
Common equity tier 1 capital, For capital adequacy purpose, Ratio	4.50%	4.50%
Common equity tier 1 capital (to risk-weighted assets), Required for capital1 adequacy purposes with capital buffer, Amount	$ 268,941	$ 203,537
Common equity tier 1 capital (to risk-weighted assets), Required for capital1 adequacy purposes with capital buffer, Ratio	7.00%	6.375%
Tier 1 capital (to average assets), Actual, Amount	$ 491,302	$ 409,760
Tier 1 capital (to average assets), Actual, Ratio	11.85%	10.12%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 165,789	$ 162,033
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	4.00%	4.00%
Tier 1 capital (to average assets), Required for capital1 adequacy purposes with capital buffer, Amount	$ 165,789	$ 162,033
Tier 1 capital (to average assets), Required for capital1 adequacy purposes with capital buffer, Ratio	4.00%	4.00%
Bank [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total capital (to risk-weighted assets), Actual, Amount	$ 472,621	$ 396,755
Total capital (to risk-weighted assets), Actual, Ratio	12.30%	12.43%
Total capital (to risk-weighted assets), For capital adequacy purposes, Amount	$ 307,361	$ 255,419
Total capital (to risk-weighted assets), For capital adequacy purposes, Ratio	8.00%	8.00%
Total capital (to risk-weighted assets), Required for capital1 adequacy purposes with capital buffer, Amount	$ 403,411	$ 315,283
Total capital (to risk-weighted assets), Required for capital1 adequacy purposes with capital buffer, Ratio	10.50%	9.875%
Total capital (to risk-weighted assets), For well capitalized purpose, Amount	$ 384,201	$ 319,274
Total capital (to risk-weighted assets), For well capitalized purpose, Ratio	10.00%	10.00%
Tier 1 capital (to average assets), Actual, Amount	$ 454,709	$ 378,899
Tier 1 capital (to average assets), Actual, Ratio	11.84%	11.87%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 230,520	$ 191,565
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	6.00%	6.00%
Tier 1 capital (to average assets), Required for capital1 adequacy purposes with capital buffer, Amount	$ 326,570	$ 251,429
Tier 1 capital (to average assets), Required for capital1 adequacy purposes with capital buffer, Ratio	8.50%	7.875%
Tier 1 capital (to average assets), For well capitalized purpose, Amount	$ 307,360	$ 255,420
Tier 1 capital (to average assets), For well capitalized purposes, Ratio	8.00%	8.00%
Common equity tier 1 capital, Actual Amount	$ 454,709	$ 378,899
Common equity tier 1 capital, Actual Ratio	11.84%	11.87%
Common equity tier 1 capital,For capital adequacy purposes, Amount	$ 172,890	$ 143,674
Common equity tier 1 capital, For capital adequacy purpose, Ratio	4.50%	4.50%
Common equity tier 1 capital (to risk-weighted assets), Required for capital1 adequacy purposes with capital buffer, Amount	$ 268,940	$ 203,537
Common equity tier 1 capital (to risk-weighted assets), Required for capital1 adequacy purposes with capital buffer, Ratio	7.00%	6.375%
Common equity tier 1 capital, For well capitalized purpose, Amount	$ 249,730	$ 207,528
Common equity tier 1 capital, For well capitalized purposes, Ratio	6.50%	6.50%
Tier 1 capital (to average assets), Actual, Amount	$ 454,709	$ 378,899
Tier 1 capital (to average assets), Actual, Ratio	10.99%	9.34%
Tier 1 capital (to average assets), For capital adequacy purposes, Amount	$ 165,523	$ 162,327
Tier 1 capital (to average assets), For capital adequacy purpose, Ratio	4.00%	4.00%
Tier 1 capital (to average assets), Required for capital1 adequacy purposes with capital buffer, Amount	$ 165,523	$ 162,327
Tier 1 capital (to average assets), Required for capital1 adequacy purposes with capital buffer, Ratio	4.00%	4.00%
Tier 1 capital (to average assets), For well capitalized purpose, Amount	$ 206,904	$ 202,908
Tier 1 capital (to average assets), For well capitalized purposes, Ratio	5.00%	5.00%