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Here are a few analogies to describe Horizon Bancorp (HBNC):

• A regional version of U.S. Bank, specifically serving Indiana and Michigan.

• Like PNC Financial Services, but scaled for the Indiana and Michigan markets.

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• Deposits: Financial accounts where customers can store their money, often earning interest.
• Loans: Funds provided to individuals and businesses, which must be repaid with interest, including commercial, residential real estate, mortgage warehouse, and consumer loans.
• Trust & Investment Management Services: Services related to managing assets for individuals and corporations, encompassing trust administration, agency services, and investment advice.
• Insurance Products: Various types of insurance coverage sold to protect clients against financial loss.

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Major Customers of Horizon Bancorp (HBNC)

Horizon Bancorp (HBNC) operates as a regional bank holding company offering a diversified range of commercial and retail banking services. Given the nature of its business, which involves providing financial services through a network of local branches, it does not have a few "major customers" in the traditional sense (e.g., specific named corporate entities representing a significant portion of its revenue). Instead, its customer base is broadly diversified across many individuals and businesses within its service areas in northern and central Indiana and southern and central Michigan.

Horizon Bancorp primarily serves the following categories of customers:

• Individual Consumers: This category includes individuals and households who utilize Horizon Bank's personal banking services, such as checking and savings accounts, consumer loans (e.g., auto loans, personal loans), residential mortgages, and individual trust and investment management services.
• Small to Medium-sized Businesses (SMBs): Local and regional businesses constitute a key customer segment, relying on Horizon Bank for commercial loans, business deposit accounts, treasury management solutions, and corporate trust and investment services.
• Commercial Real Estate Developers and Investors: This category comprises businesses and entities involved in commercial real estate. They utilize the bank's commercial real estate loans for development, acquisition, and investment purposes, including specialized offerings like mortgage warehouse loans.

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Thomas M. Prame Chief Executive Officer & President - Horizon Bancorp, Inc. & Horizon Bank

Appointed Chief Executive Officer effective June 1, 2023, having joined Horizon in August 2022 as President. Prior to Horizon, he held executive roles at First Midwest Bank (Illinois) from 2012 to 2022 and Citizens Bank (Rhode Island) from 2010 to 2012. His background includes leadership experience at larger metropolitan banks, where he focused on implementing strategic plans and significantly increasing operational efficiency and sales productivity. He holds an MBA from the University of Notre Dame.

John R. Stewart, CFA Executive Vice President, Chief Financial Officer - Horizon Bancorp, Inc. & Horizon Bank

Assumed responsibilities as Chief Financial Officer on May 20, 2024. He brings 22 years of financial services experience, spanning banking, investment management, and corporate finance at regional banks, global investment banks, and institutional asset management firms. Most recently, he served as Deputy Chief Financial Officer of a $30 billion publicly traded bank. His expertise includes corporate treasury, accounting, financial planning and analysis, capital planning, strategic planning, corporate development, and investor relations.

Mark E. Secor Executive Vice President & Chief Administration Officer - Horizon Bancorp, Inc. & Horizon Bank

Served as Horizon's Chief Financial Officer for 16 years, from 2009 to May 2024. During his tenure as CFO, Horizon grew from $893 million to $7.8 billion in assets and successfully integrated 12 mergers. He transitioned to the role of Chief Administration Officer in May 2024, where his responsibilities include investor relations, legal matters, benefits administration, and corporate facilities.

Kathie A. DeRuiter Executive Vice President & Senior Operations Officer - Horizon Bancorp, Inc.

Has served as Executive Vice President of Horizon and Senior Bank Operations Officer since January 2014.

Todd A. Etzler Executive Vice President, Chief Legal And Risk Officer & Corporate Secretary - Horizon Bancorp, Inc.

Has been Executive Vice President and Chief Legal and Risk Officer since 2023. He previously held roles as Senior Vice President and General Counsel from July 2018 to December 2020, and Vice President and General Counsel from March 2017 to July 2018. He has been Corporate Secretary since January 2018, and prior to that, he was General Counsel of Family Express Corporation from July 2011 to March 2017.

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1. Credit Quality in a Commercial-Heavy Portfolio

Horizon Bancorp faces significant risks related to the credit quality within its loan portfolio, which is heavily concentrated in commercial lending. Commercial loans constitute a substantial portion of its portfolio, making the bank particularly susceptible to fluctuations in the commercial sector. Analysts have indicated that potential increases in non-performing loans could necessitate higher provisioning, thereby exacerbating the bank's financial challenges. While the bank's nonperforming loans were reported at 72 basis points, an 8 basis point sequential increase, the bank generally maintains sound reserves given its loan portfolio is largely secured by real assets.

2. Sensitivity to Interest Rates

The company is highly sensitive to changes in interest rates, a key risk factor for its financial performance. A sustained period of higher interest rates can negatively impact Horizon Bancorp's net interest margin (NIM) due to liquidity being tied up in its investment portfolio and increased reliance on borrowings to fund loan growth and cover deposit outflows. Increased pricing pressure on deposits and greater reliance on borrowings are anticipated to weaken the bank's margins and net interest income, especially in an environment of slower loan growth.

3. Regulatory and Legal Pressures

Horizon Bancorp operates in a highly regulated environment, exposing it to ongoing regulatory and legal pressures. The evolving regulatory landscape is a key risk highlighted for the company. The bank is routinely subject to litigation, regulatory examinations, and supervisory actions across its various banking activities, including lending, deposits, and wealth management. Such proceedings could result in substantial defense costs, fines, penalties, operational restrictions, and reputational damage, all of which could materially impair its financial condition and strategic flexibility.

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The primary emerging threats to Horizon Bancorp, as a traditional regional bank, stem from the accelerating digital transformation of financial services. These include:

• Digital-only banks (neobanks) and challenger banks: These agile, technology-first institutions operate with significantly lower overheads, offering competitive deposit rates, lower fees, and highly convenient mobile-first banking experiences. They directly threaten Horizon Bancorp's ability to attract and retain customers, particularly younger demographics and those prioritizing digital convenience over physical branches, thereby eroding its deposit base and consumer loan origination capabilities.
• Specialized fintech lenders: Companies leveraging technology to offer specific loan products (e.g., mortgages, personal loans, small business loans) with streamlined online application processes, faster approvals, and often more competitive rates. These directly compete with and can capture market share from Horizon Bancorp's commercial, residential real estate, and consumer loan portfolios.
• Big Tech companies entering financial services: Giants like Apple, Google, and Amazon are increasingly offering financial products such as payment processing, lending, and credit solutions, leveraging their vast user bases and data. This poses a threat to Horizon Bancorp's traditional payment services and various lending segments by introducing highly capitalized and tech-savvy competitors.

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Horizon Bancorp (HBNC) operates in northern and central Indiana and southern and central Michigan, offering a range of commercial and retail banking services, trust and investment management, and insurance products. The addressable markets for its main products and services in these regions are substantial.

Indiana

• Deposits: The total deposits in Indiana banks were $209 billion in 2024.
• Residential Real Estate Loans: New home loans booked in Indiana amounted to $17.2 billion in 2024.
• Commercial Loans: Small business loans in Indiana totaled $12.3 billion in 2024. Small farm loans were $847.8 million in 2024. The commercial banking industry in Indiana has been growing at an average annual rate of 6.1% from 2020 to 2025. Demand for commercial property loans is rising in Indiana.
• Insurance Products: The health and medical insurance market size in Indiana is projected to be $27.1 billion in 2026. In 2021, the top 125 insurance companies reported $23.0 billion in premiums written in Indiana.

Michigan

• Deposits: The total deposits in Michigan banks were $311 billion in 2024. As of June 30, 2025, JPMorgan Chase alone held $62.95 billion in deposits in Michigan.
• Residential Real Estate Loans: New home loans booked in Michigan amounted to $20.3 billion in 2024. Mortgage lenders in Michigan originated $54.5 billion in volume in 2022.
• Commercial Loans: The commercial banking industry market size in Michigan is $23.6 billion in 2026. Small business loans in Michigan totaled $16.7 billion in 2024. Michigan-based banks had approximately $7.9 billion in commercial real estate loans out of $14.8 billion in total loans for the top 20 banks with the highest commercial real estate exposure. Demand for commercial property loans is rising.
• Insurance Products: Insurance industry spending in Michigan equates to $37.1 billion, which includes direct and indirect economic output, jobs, and earnings. The market size for insurance brokers and agencies in Michigan is $7.0 billion in 2026. Over 9.5 million people in Michigan had medical coverage as of June 30, 2025.

Wealth Management and Trust Services

While specific market sizes for wealth management and trust services at the state level (Indiana and Michigan) are not readily available, broader market data indicates significant opportunities. The global wealth management market was valued at $1.25 trillion in 2020 and is projected to reach $3.43 trillion by 2030. North America held the largest share of the global wealth management market in 2020 and 2025, with a valuation of $1.26 billion in 2025, and is expected to maintain its dominance. The U.S. wealth management market is projected to grow by 10% by 2034. The wealth management market size is expected to increase by $469.1 billion globally at a CAGR of 8.1% from 2025 to 2030. For Michigan, the estimated total wealth transfer over a 50-year period is $972.24 billion.

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1. Continued Commercial Loan Growth: Horizon Bancorp anticipates mid-single-digit loan growth on an annualized basis, with a primary focus on its organic commercial growth engine. The company's commercial loans increased by 9% on an annualized basis in Q4 2025, reaching $76 million, and robust commercial loan growth of 7.0% annualized was observed in Q3 2025. This growth is driven by its commercial relationship lending strategy.
2. Net Interest Margin (NIM) Expansion: The company has demonstrated a consistent trend of net interest margin expansion, with Q4 2025 seeing a NIM of 4.29%. Horizon Bancorp projects a net interest margin between 4.25% and 4.35% for 2026. This expansion is attributed to a more favorable earning asset mix, increased loan yields, and a reduction in the total cost of liabilities through disciplined pricing and the strategic reduction of higher-cost borrowings.
3. Growth in Relationship-Based Core Deposits: Horizon Bancorp expects balance sheet growth to be fueled by organic deposit funding, leveraging its community banking model and extensive branch network across Indiana and Michigan. A key focus for 2026 is to grow well-rounded customer relationships, driving cross-sell activity in deposit gathering and treasury management services, while continuing to strategically reduce higher-cost, non-core transactional accounts.
4. Increased Fee Income from Diverse Businesses: While recent noninterest income was impacted by one-time events, the underlying fee-based businesses have performed in line with management's expectations. The company projects fee income in the mid-$40 million range for 2026. Residential mortgage lending, with volumes largely sold in the secondary market, is expected to continue contributing to gain on sale fee income.

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