Management report and analysis of the financial situation and results of operations for the three and six months ended June 30, 2022 and 2021


ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS ON FINANCIAL POSITION 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, negatively or positively, from the Company’s expectations expressed or implied by any forward-looking statement. The risks, uncertainties and factors that could cause the Company’s actual results to differ materially from those expressed or implied by any forward-looking statements include, but are not limited to:

•COVID-19 related impact on Horizon and its customers, employees and vendors,
which may depend on several factors, including the scope and continued duration
of the pandemic, its influence on the financial markets, long-term and
post-pandemic changes in the banking preferences and behaviors of customers,
supply chain risks to the bank and its customers and actions taken by
governmental authorities and other third parties in response to the pandemic;

•economic conditions and their impact on Horizon and its customers, including
local and global economic recovery from the pandemic and changes in rates of
inflation or deflation;

•changes in government regulations, including the CARES Act, on accounting for modified loans;

•changes in the level and volatility of interest rates, differences between earning assets and interest-bearing liabilities and sensitivity to interest rates;

• the monetary, commercial policies and other regulations of the WE government, including recent and expected interest rate increases;

•the growing use of Bitcoin and other crypto-currencies and/or stablecoins and the possible impact that these alternative currencies may have on the disintermediation of deposits and revenues from payment systems;

•the effect of low interest rates on the net interest rate margin and their impact on mortgage loan volumes and deposit outflows;

•loss of key Horizon personnel;

•increased disintermediation, as new technologies allow consumers to carry out financial transactions without the help of banks, which may have been accelerated by the pandemic;

•potential 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 the fair value of certain assets and liabilities of Horizon;

•volatility and disruption of financial markets;

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

•sources of liquidity;

•the potential risk of environmental liability associated with lending and acquisition activities;

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

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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

•laws and/or regulations affecting the financial services industry as a whole, and Horizon and its subsidiaries in particular;

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

•changes in accounting policies or procedures that may be adopted and required by regulatory bodies;

• litigation, regulatory enforcement, tax and legal compliance risks and costs as they apply generally and specifically to the financial and fiduciary environment (generally and as an ESOP fiduciary ), particularly if they differ materially from the amount we expect to incur or have accrued for , and any disruption caused thereby;

• the effects and costs of government investigations or related actions by third parties;

• rapid technological developments and changes;

•the risks presented by cyberterrorism and breaches of data security;

•the rising costs of effective cybersecurity;

•contain costs and expenses;

• the capacity of the WE federal government to manage federal debt limits;

•the potential influence on the WE financial markets and the economy against the effects of climate change and social justice initiatives;

•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 of
the London Interbank Offered Rate ("LIBOR") according to regulatory guidance;

•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; and

•acts of terrorism, war and global conflicts, such as the Russia and Ukraine
conflict, and the potential impact they may have on supply chains, the
availability of commodities, commodity prices, inflationary pressure and the
overall U.S. and global financial markets.

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 2021
Annual Report on Form 10-K and in the subsequent reports we file with the SEC.

Insight

Horizon Bancorp, Inc. ("Horizon" or the "Company") is a registered bank holding
company incorporated in Indiana and headquartered in Michigan City, Indiana.
Horizon provides a broad range of banking services in northern and central
Indiana and southern and central Michigan through its bank subsidiary, Horizon
Bank ("Horizon Bank" or the "Bank"), and other affiliated entities and Horizon
Risk Management, Inc. 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. Horizon Bank (formerly known as "Horizon Bank, N.A.") was
founded in 1873 as a national association, and it remained a national
association until its conversion to an Indiana commercial bank effective 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. Horizon Risk Management, Inc. is a captive
insurance company incorporated in Nevada and was formed as a wholly-owned
subsidiary of Horizon.


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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

Over the last 20 years, Horizon has expanded its geographic reach and
experienced financial growth through a combination of both organic expansion and
mergers and acquisitions. Horizon's initial operations focused on northwest
Indiana, but since then, the Company has developed a presence in new markets in
southern and central Michigan and northeastern and central Indiana.


Second Quarter 2022 Highlights

•Net income grew to a record $24.9 million, up 5.5% from the linked quarter and
12.1% from the prior year period. Diluted earnings per share ("EPS") of $0.57
was up from $0.54 for the first quarter of 2022 and $0.50 for the second quarter
of 2021.

•Pre-tax, pre-provision net income grew to $29.1 million, up 13.1% from the
linked quarter and 18.9% from the prior year period. This non-GAAP financial
measure is utilized by banks to provide a greater understanding of pre-tax
profitability before giving effect to credit loss expense. (See the "Non-GAAP
Reconciliation of Pre-Tax, Pre-Provision Net Income" table below.) Horizon
recorded a provision expense of $240,000 in the quarter compared to a provision
release of $1.4 million in the linked quarter, and a provision release of $1.5
million in the prior year period.

•Reported net interest margin ("NIM") was 3.19% and adjusted NIM was 3.12%, with
reported NIM increasing by 20 basis points and adjusted NIM increasing by 19
basis points from the first quarter of 2022. (See the "Non-GAAP Reconciliation
of Net Interest Margin" table below for the definition of this non-GAAP
calculation of adjusted NIM.)

•Total loans, excluding Federal Paycheck Protection Program ("PPP") loans and
sold commercial participation loans, grew by 6.2%, or 25.1% annualized, during
the second quarter to $3.89 billion at period end compared to $3.66 billion on
March 31, 2022.

•Commercial loans, excluding PPP loans and sold commercial participation loans,
grew by 4.9%, or 19.7% annualized, during the second quarter to a record $2.31
billion from $2.20 billion on March 31, 2022.

• Consumer loans rose 12.6%, or 50.5% annualized, in the second quarter to a record high $848.7 million at the end of the period.

•Non-interest expense was $36.4 million in the quarter, or 1.95% of average
assets on an annualized basis, compared to $36.6 million, or 2.03%, in the first
quarter of 2022 and $33.4 million, or 2.18%, in the second quarter of 2021.
Non-interest expense was $73.0 million, or 1.99% of average assets on an
annualized basis for the six months ended June 30, 2022 compared to $65.6
million, or 2.19% of average assets on an annualized basis for the six months
ended June 30, 2021.

•The efficiency ratio for the period was 55.57% compared to 58.74% for the first
quarter of 2022 and 57.73% for the second quarter of 2021. The adjusted
efficiency ratio was 56.13% compared to 58.74% for the first quarter of 2022 and
57.45% for the second quarter of 2021. (See the "Non-GAAP Calculation and
Reconciliation of Efficiency Ratio and Adjusted Efficiency Ratio" table below.)
•As part of the Company's annual branch performance review of Horizon Bank's
(the "Bank") retail network, Horizon's Board of Directors approved the permanent
closure of seven branch locations in the second half of 2022. A one-time charge
of approximately $380,000 was recorded during the second quarter to record these
branch locations' fixed assets at fair value.

•Asset quality remains favorable as evidenced by non-performing loans at 0.51%
of total loans at period end and net charge-offs to average loans represented
0.01% for the second quarter of 2022.
•The Company was more asset sensitive as of June 30, 2022 compared to the
previous quarter end, as deposit BETA's have lagged rising rates and an increase
in adjustable rate assets. Current estimates for parallel rate shocks to the
balance sheet, at a 100 basis point shock and 200 basis point shock, increase
net interest income by approximately $7.0 million and $12.8 million,
respectively.
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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

•Since March 31, 2022, deposit betas have significantly lagged our modeled betas
at a 3% beta on total deposits over the last three months compared to our model
using a beta of 35% for total deposits.

•During the second quarter of 2022, the continued steepening of the yield curve
resulted in unrealized losses on available for sale investments of $122.0
million compared to unrealized losses of $73.6 million at March 31, 2022. The
impact to the tangible capital ratio was a decrease of 46 basis points from
6.94% at March 31, 2022 to 6.48% at June 30, 2022, a 6.63% decrease.

•The Bank’s capital remains strong with leverage and capital at risk ratios of 9.17% and 14.81%, respectively.

Financial Summary

                                                          For the Three Months Ended
                                                    June 30,       March 31,      June 30,
Net Interest Income and Net Interest Margin           2022           2022           2021
Net interest income                                $ 53,008       $ 48,171       $ 42,632
Net interest margin                                    3.19  %        2.99  %        3.14  %
Adjusted net interest margin                           3.12  %        2.93  %        3.13  %


                                                      For the Three Months Ended
                                                 June 30,              March 31,      June 30,
    Asset Yields and Funding Costs                 2022                  2022           2021
    Interest earning assets                                3.46  %        

3.22% 3.48%

    Interest bearing liabilities                           0.34  %        0.30  %       0.45  %


                                                                     For the Three Months Ended
Non-interest Income and                                   June 30,            March 31,            June 30,
Mortgage Banking Income                                     2022                 2022                2021
Total non-interest income                              $    12,434          $    14,155          $   15,207
Gain on sale of mortgage loans                               2,501                2,027               5,612
Mortgage servicing income net of impairment or                 319                3,489               1,503
recovery


                                                                 For the Three Months Ended
                                                           June 30,       March 31,      June 30,
 Non-interest Expense                                        2022           2022           2021
 Total non-interest expense                               $ 36,368       $ 36,610       $ 33,388
 Annualized non-interest expense to average assets            1.95  %        2.03  %        2.18  %



                                                                           

On or for the three months ended

                                                             June 30,                 March 31,                  June 30,
Credit Quality                                                 2022                      2022                      2021
Allowance for credit losses to total loans                         1.33  %                    1.41  %                   1.58  %
Non-performing loans to total loans                                0.51  %                    0.54  %                   0.63  %
Percent of net charge-offs to average loans                        0.01  %                    0.00  %                   0.00  %
outstanding for the period



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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021
   Allowance for                              June 30,                  Net Reserve            December 31,
   Credit Losses                                2022                 2Q22          1Q22            2021
   Commercial                                $ 34,802             $ (2,987)     $ (2,986)     $     40,775
   Retail Mortgage                              4,422                   71           495             3,856
   Warehouse                                    1,067                   12            (4)            1,059
   Consumer                                    12,059                2,746           717             8,596
   Allowance for Credit Losses ("ACL")       $ 52,350             $   (158)       (1,778)     $     54,286
   ACL/Total Loans                               1.33  %                                              1.51  %


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 2021 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 credit losses, goodwill and intangible
assets, mortgage servicing rights, hedge accounting and valuation measurements.

Provision for credit losses

The allowance for credit losses represents management's best estimate of current
expected credit losses over the life of the portfolio of loan and leases.
Estimating credit losses requires judgment in determining loan specific
attributes impacting the borrower's ability to repay contractual obligations.
Other factors such as economic forecasts used to determine a reasonable and
supportable forecast, prepayment assumptions, the value of underlying
collateral, and changes in size composition and risks within the portfolio are
also considered.

The allowance for credit losses is assessed at each balance sheet date and
adjustments are recorded in the provision for credit losses. The allowance is
estimated based on loan level characteristics using historical loss rates, a
reasonable and supportable economic forecast. Loan losses are estimated using
the fair value of collateral for collateral-dependent loans, or when the
borrower is experiencing financial difficulty such that repayment of the loan is
expected to be made through the operation or sale of the collateral. Loan
balances considered uncollectible are charged-off against the ACL. Recoveries of
amounts previously charged-off are credited to the ACL. Assets purchased with
credit deterioration ("PCD") assets represent assets that are acquired with
evidence of more than insignificant credit quality deterioration since
origination at the acquisition date. At acquisition, the allowance for credit
losses on PCD assets is booked directly the ACL. Any subsequent changes in the
ACL on PCD assets is recorded through the provision for credit losses.
Management believes that the ACL is adequate to absorb the expected life of loan
credit losses on the portfolio of loans and leases as of the balance sheet date.
Actual losses incurred may differ materially from our estimates. Particularly,
the impact of COVID-19 on both borrower credit and the greater macroeconomic
environment is uncertain and changes in the duration, spread and severity of the
virus will affect our loss experience.

Good will and intangible assets

Management believes that the accounting for goodwill and other intangible assets
also involves a higher degree of judgment than most other significant accounting
policies. FASB ASC 350-10 establishes standards for the amortization of acquired
intangible assets and impairment assessment of goodwill. At June 30, 2022,
Horizon had core deposit intangibles of $19.1 million subject to amortization
and $154.6 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.


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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

At each reporting date between annual goodwill impairment tests, Horizon
considers potential indicators of impairment. Given the current economic
uncertainty and volatility surrounding COVID-19, Horizon assessed whether the
events and circumstances resulted in it being more likely than not that the fair
value of any reporting unit was less than its carrying value. Impairment
indicators considered comprised the condition of the economy and banking
industry; government intervention and regulatory updates; the impact of recent
events to financial performance and cost factors of the reporting unit;
performance of the Company's stock and other relevant events. Horizon further
considered the amount by which fair value exceeded book value in the most recent
quantitative analysis and stress testing performed. At the conclusion of the
most recent qualitative assessment, the Company determined that as of June 30,
2022, it was more likely than not that the fair value exceeded its carrying
values. Horizon will continue to monitor developments regarding the COVID-19
pandemic and measures implemented in response to the pandemic, market
capitalization, overall economic conditions and any other triggering events or
circumstances that may indicate an impairment of goodwill in the future.

Mortgage service fees

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

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

Derivatives

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
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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

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.

Evaluation measures

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

Financial condition

On June 30, 2022, Horizon's total assets were $7.6 billion, an increase of
approximately $229.0 million compared to December 31, 2021. The increase in
total assets was primarily in investments held to maturity of $500.3 million
purchased and growth in net loans of $295.1 million. These increases were offset
by decreases in cash and due from banks of $484.7 million used to fund the
growth and investments available for sale of $119.8 million due to unrealized
losses.

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

                                                            June 30, 2022                           December 31, 2021
                                                   Amortized               Fair              Amortized               Fair
                                                      Cost                Value                 Cost                Value
Available for sale
U.S. Treasury and federal agencies               $   294,793          $   275,176          $   118,595          $   116,979
State and municipal                                  507,128              438,167              632,652              639,746
Federal agency collateralized mortgage
obligations                                           41,329               40,286               60,600               61,577
Federal agency mortgage-backed pools                 235,337              210,485              257,185              257,691

Corporate notes                                       84,389               76,906               84,579               84,819

Total marketable securities available for sale $1,162,976 $1,041,020 $1,153,611 $1,160,812
Held to maturity
WE Treasury and federal agencies

               $   295,386          $   261,248          $   195,429          $   194,226
State and municipal                                1,135,751              951,992              862,461              878,917
Federal agency collateralized mortgage
obligations                                           59,694               53,534               48,482               47,465
Federal agency mortgage-backed pools                 360,446              313,826              247,937              244,136
Private labeled mortgage-backed pools                 37,101               32,755               40,447               40,005
Corporate notes                                      164,394              140,859              157,687              155,242

Total marketable securities held to maturity $2,052,772 $1,754,214 $1,552,443 $1,559,991



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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

Marketable securities available for sale decreased $119.8 million since
December 31, 2021 at $1.0 billion of the June 30, 2022 primarily due to unrealized losses and held-to-maturity marketable securities $500.3 million since December 31, 2021 at $2.1 billion of the June 30, 2022. This increase in held-to-maturity investments is due to additional purchases aimed at increasing earning assets due to organic deposit growth.

Net loans increased $295.1 million since December 31, 2021 to $3.9 billion as of
June 30, 2022. Commercial loans, excluding PPP loans and sold commercial
participation loans, increased $108.0 million, consumer loans increased $94.8
million, residential mortgage loans increased $15.2 million, mortgage warehouse
loans increased $11.4 million and sold commercial participation loans increased
$1.0 million since December 31, 2021. These increases were offset by decreases
in PPP loans of $4.4 million and loans held for sale of $838,000 since
December 31, 2021.

Other assets increased $47.6 million since December 31, 2021 to $128.4 million
as of June 30, 2022. This increase was primarily due to an increase in deferred
tax assets related to the level of unrealized losses on available for sale
securities of approximately $27.1 million and an increase in the unrealized gain
of fair value hedges of approximately $9.9 million.

Total deposits increased $42.6 million since December 31, 2021 at $5.8 billion
of the June 30, 2022from organic growth.

Total borrowings increased from $712.7 million as of December 31, 2021 to $959.2
million as of June 30, 2022. At June 30, 2022, the Company had $458.0 million in
short-term funds borrowed compared to $180.8 million at December 31, 2021.

Stockholders' equity totaled $657.9 million at June 30, 2022 compared to $723.2
million at December 31, 2021. The decrease in stockholders' equity during the
period was primarily due to a decrease in accumulated other comprehensive income
of $38.3 million as unrealized losses on available for sale securities totaled
$122.0 million and the amount of dividends paid during the quarter, offset by
the generation of net income. Book value per common share at June 30, 2022
decreased to $15.10 compared to $15.55 at December 31, 2021.


Results of Operations

Overview

Consolidated net income for the three-month period ended June 30, 2022 was $24.9
million, or $0.57 diluted earnings per share, compared to $22.2 million, or
$0.50 diluted earnings per share for the same period in 2021. The increase in
net income for the three-month period ended June 30, 2022 when compared to the
same prior year period reflects an increase in net interest income of $10.4
million, offset by an increase in non-interest expense of $3.0 million, a
decrease in non-interest income of $2.8 million, an increase in credit loss
expense of $1.7 million and an increase in income tax expense of $205,000.

Consolidated net income for the six-month period ended June 30, 2022 was $48.4
million, or $1.11 diluted earnings per share, compared to $42.6 million, or
$0.97 diluted earnings per share for the same period in 2021. The increase in
net income for the six-month period ended June 30, 2022 when compared to the
same prior year period reflects an increase in net interest income of $16.0
million and a decrease in credit loss expense of $21,000, offset by an increase
in non-interest expense of $7.4 million, a decrease in non-interest income of
$2.5 million and an increase in income tax expense of $294,000.

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, less 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.


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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

Net interest income during the three months ended June 30, 2022 was $53.0
million, an increase of $10.4 million from the $42.6 million earned during the
same period in 2021. Yields on the Company's interest earning assets decreased
by two basis points to 3.46% for the three months ended June 30, 2022 from 3.48%
for the three months ended June 30, 2021. Interest income increased $10.2
million from $47.4 million for the three months ended June 30, 2021 to $57.6
million for the same period in 2022. The increase in interest income was due to
an increase in average balances of interest earning assets of $1.3 billion
during the three months ended June 30, 2022. Interest income from
acquisition-related purchase accounting adjustments was $1.2 million for the
three months ending June 30, 2022 compared to $230,000 for the same period of
2021.

Rates paid on interest bearing liabilities decreased by 11 basis points for the
three-month period ended June 30, 2022 compared to the same period in 2021.
Interest expense decreased $224,000 when compared to the three-month period
ended June 30, 2021 to $4.6 million for the same period in 2022. This decrease
was due to lower rates paid on deposits and borrowings. The cost of average
interest bearing deposits decreased seven basis points while the cost of average
borrowings decreased 58 basis points. Average balances of interest bearing
deposits increased $860.2 million and average balances of borrowings increased
$278.5 million for the three-month period ended June 30, 2022 when compared to
the same period in 2021.

The net interest margin increased five basis points from 3.14% for the
three-month period ended June 30, 2021 to 3.19% for the same period in 2022. The
increase in the margin for the three-month period ended June 30, 2022 compared
to the same period in 2021 was due to a decrease in the cost of interest bearing
liabilities, offset by a decrease in the yield on interest earning assets.
Excluding the interest income recognized from the acquisition-related purchase
accounting adjustments ("adjusted net interest margin"), the margin would have
been 3.12% for the three-month period ending June 30, 2022 compared to 3.13% for
the same period in 2021.




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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021
The following are the average balance sheets for the three months ending
(dollars in thousands):
                                                                     Average Balance Sheets
                                                             (Dollar Amount in Thousands, Unaudited)
                                                           Three Months Ended                                          Three Months Ended
                                                             June 30, 2022                                                June 30, 2021
                                             Average                                Average              Average                                Average
                                             Balance            Interest              Rate               Balance            Interest              Rate
      Assets
      Interest earning assets
      Federal funds sold                 $      7,083          $     17                 0.96  %       $   359,184          $     98                 

0.11%

      Interest earning deposits                15,661                26                 0.67  %            29,584                44                 

0.60%

      Investment securities - taxable       1,770,816             8,673                 1.96  %           645,139             2,386                 

1.48%

Investment security –

      non-taxable (1)                       1,374,032             7,307                 2.70  %         1,054,703             5,656                 

2.72%

      Loans receivable (2) (3)              3,759,718            41,549                 4.45  %         3,570,774            39,236                 

4.43%

      Total interest earning assets         6,927,310            57,572                 3.46  %         5,659,384            47,420                 

3.48%

      Non-interest earning assets
      Cash and due from banks                  98,040                                                      84,469
      Allowance for credit losses             (52,525)                                                    (57,196)
      Other assets                            503,413                                                     455,850
      Total average assets               $  7,476,238                                                 $ 6,142,507
      Liabilities and Stockholders'
      Equity
      Interest bearing liabilities
      Interest bearing deposits          $  4,540,959          $  1,677                 0.15  %       $ 3,680,796          $  2,053                
0.22  %
      Borrowings                              613,282             1,409                 0.92  %           334,804             1,256                 1.50  %
      Repurchase agreements                   141,470                41                 0.12  %           119,052                40                 0.13  %
      Subordinated notes                       58,800               881                 6.01  %            58,653               881                 6.02  %

Junior subordinated debentures

      issued to capital trusts                 56,870               556                 3.92  %            56,627               558                 

3.95%

      Total interest bearing liabilities    5,411,381             4,564                 0.34  %         4,249,932             4,788                 

0.45%

      Non-interest bearing liabilities
      Demand deposits                       1,335,779                                                   1,139,068
      Accrued interest payable and other
      liabilities                              51,779                                                      46,855
      Stockholders' equity                    677,299                                                     706,652
      Total average liabilities and
      stockholders' equity               $  7,476,238                                                 $ 6,142,507

      Net interest income/spread                               $ 53,008                 3.12  %                            $ 42,632                

3.03%

Net interest income as a percentage

average interest-earning assets

      (1)                                                                               3.19  %                                                     

3.14%

(1) Securities balances represent daily average fair value balances of securities. The average rate is calculated on the basis of the daily average

balance of the amortized cost of the securities. The average rate is presented in fiscal equivalent.

(2) Includes commissions on borrowings. The inclusion of borrowing costs does not have a material impact on the average interest rate.

(3) For the purposes of the above calculation, non-accumulated loans are included in the average daily loans outstanding. Loan totals are presented net of

unearned income and deferred loan fees. The average rate is presented in fiscal equivalent.





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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

Net interest income during the six months ended June 30, 2022 was $101.2
million, an increase of $16.0 million from the $85.2 million earned during the
same period in 2021. Yields on the Company's interest earning assets decreased
by 23 basis points to 3.34% for the six months ended June 30, 2022 from 3.57%
for the six months ended June 30, 2021. Interest income increased $14.6 million
from $95.0 million for the six months ended June 30, 2021 to $109.7 million for
the same period in 2022. The increase in interest income was due to an increase
in average balances of interest earning assets of $1.3 billion during the six
months ended June 30, 2022. Interest income from acquisition-related purchase
accounting adjustments was $2.1 million for the six months ended June 30, 2022
compared to $1.8 million for the same period of 2021.

Rates paid on interest bearing liabilities decreased by 15 basis points for the
six-month period ended June 30, 2022 compared to the same period in 2021.
Interest expense decreased $1.4 million when compared to the six-month period
ended June 30, 2021 to $8.5 million for the same period in 2022. This decrease
was due to lower rates paid on deposits and borrowings. The cost of average
interest bearing deposits decreased 11 basis points while the cost of average
borrowings decreased 54 basis points. Average balances of interest bearing
deposits increased $907.1 million and average balances of borrowings increased
$208.8 million for the six-month period ended June 30, 2022 when compared to the
same period in 2021.

The net interest margin decreased 18 basis points from 3.21% for the six-month
period ended June 30, 2021 to 3.03% for the same period in 2022. The decrease in
the margin for the six-month period ended June 30, 2022 compared to the same
period in 2021 was due to a decrease in the yield on interest earning assets,
offset by a decrease in the cost of interest bearing liabilities. Excluding the
interest income recognized from the acquisition-related purchase accounting
adjustments ("adjusted net interest margin"), the margin would have been 2.97%
for the six-month period ending June 30, 2022 compared to 3.15% for the same
period in 2021.



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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

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

                                                                      Average Balance Sheets
                                                             (Dollar Amount in Thousands, Unaudited)
                                                            Six Months Ended                                             Six Months Ended
                                                              June 30, 2022                                                June 30, 2021
                                             Average                                 Average              Average                                Average
                                             Balance             Interest              Rate               Balance            Interest              Rate
      Assets
      Interest earning assets
      Federal funds sold                 $    121,707          $     108                 0.18  %       $   313,467          $    164                 

0.11%

      Interest earning deposits                18,154                 50                 0.56  %            27,567                90                 

0.66%

      Investment securities - taxable       1,709,014             16,064                 1.90  %           528,250             3,822                 

1.46%

Investment security –

      non-taxable (1)                       1,326,819             14,004                 2.69  %         1,005,855            10,879                 

2.76%

      Loans receivable (2) (3)              3,688,586             79,428                 4.36  %         3,674,977            80,054                 

4.41%

      Total interest earning assets         6,864,280            109,654                 3.34  %         5,550,116            95,009                 

3.57%

      Non-interest earning assets
      Cash and due from banks                 101,340                                                       84,866
      Allowance for credit losses             (53,411)                                                     (57,486)
      Other assets                            479,139                                                      462,401
      Total average assets               $  7,391,348                                                  $ 6,039,897
      Liabilities and Stockholders'
      Equity
      Interest bearing liabilities
      Interest bearing deposits          $  4,509,962          $   3,173                 0.14  %       $ 3,602,882          $  4,396                
0.25  %
      Borrowings                              558,867              2,453                 0.89  %           350,110             2,487                 1.43  %
      Repurchase agreements                   140,610                 77                 0.11  %           115,392                78                 0.14  %
      Subordinated notes                       58,782              1,761                 6.04  %            58,635             1,761                 6.06  %

Junior subordinated debentures

      issued to capital trusts                 56,839              1,011                 3.59  %            56,599             1,117                 

3.98%

      Total interest bearing liabilities    5,325,060              8,475                 0.32  %         4,183,618             9,839                 

0.47%

      Non-interest bearing liabilities
      Demand deposits                       1,329,316                                                    1,101,377
      Accrued interest payable and other
      liabilities                              39,968                                                       52,850
      Stockholders' equity                    697,004                                                      702,052
      Total average liabilities and
      stockholders' equity               $  7,391,348                                                  $ 6,039,897

      Net interest income/spread                               $ 101,179                 3.02  %                            $ 85,170                

3.10%

Net interest income as a percentage

average interest-earning assets

      (1)                                                                                3.03  %                                                     

3.21%

(1) Securities balances represent daily average fair value balances of securities. The average rate is calculated on the basis of the daily average

balance of the amortized cost of the securities. The average rate is presented in fiscal equivalent.

(2) Includes commissions on borrowings. The inclusion of borrowing costs does not have a material impact on the average interest rate.

(3) For the purposes of the above calculation, non-accumulated loans are included in the average daily loans outstanding. Loan totals are shown net of

unearned income and deferred loan fees. The average rate is presented in fiscal equivalent.




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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

Rate/volume analysis

The following table illustrates the impact of changes in the volume of interest-earning assets and interest-earning liabilities and interest rates on net interest income for the periods indicated.

                                  Three Months Ended June 30, 2022 vs.                         Six Months Ended June 30, 2022 vs.
                                    Three Months Ended June 30, 2021                             Six Months Ended June 30, 2021
                                                   Change             Change                                  Change             Change
                               Total               Due to             Due to               Total              Due to             Due to
                               Change              Volume              Rate               Change              Volume              Rate
Interest Income
Federal funds sold        $         (81)         $   (724)         $     643          $        (56)         $   (276)         $     220
Interest earning deposits           (18)              (91)                73                   (40)              (55)                15
Investment securities -           6,287            21,252            (14,965)               12,242            21,776             (9,534)

taxable

Investment securities -           1,651             8,624             (6,973)                3,125             8,663             (5,538)

not taxable

Loans receivable                  2,313             8,405             (6,092)                 (626)              598             (1,224)

Total interest income $10,152 $37,466 ($27,314) $14,645 $30,706 ($16,061)

Interest expense Interest-bearing deposits ($376) $1,634 $(2,010) ($1,223) $1,907 ($3,130)
Loans

                          153             2,898             (2,745)                  (34)            2,291             (2,325)
Repurchase agreements                 1                29                (28)                   (1)               31                (32)
Subordinated notes                    -                 9                 (9)                    -                 9                 (9)
Junior subordinated
debentures issued to                 (2)               10                (12)                 (106)               10               (116)
capital trusts
Total interest expense             (224)            4,580             (4,804)               (1,364)            4,248             (5,612)

Net interest income $10,376 $32,886 ($22,510) $16,009 $26,458 ($10,449)

Expenses for credit losses

Horizon assesses the adequacy of its Allowance for Credit Losses ("ACL") by
regularly reviewing the performance of its loan portfolio. During the
three-month period ended June 30, 2022, credit loss expense totaled $240,000
compared to a credit loss recovery of $1.5 million for the same period of 2021.
During the three-month period ended June 30, 2022, commercial loan net
recoveries were $75,000, residential mortgage loan net charge-offs were $40,000
and consumer loan net charge-offs were $319,000.

During the six-month period ended June 30, 2022, credit loss expense totaled a
recovery of $1.1 million compared to a credit loss recovery of $1.1 million for
the same period of 2021. During the six-month period ended June 30, 2022,
commercial loan net charge-offs were $37,000, residential mortgage loan net
charge-offs were $30,000 and consumer loan net charge-offs were $427,000.

The ACL balance at June 30, 2022 was $52.4 million, or 1.33% of total loans
compared to an ACL balance of $54.3 million at December 31, 2021 or 1.51% of
total loans. The decrease in the ACL to total loans ratio was primarily due to
favorable asset quality with non-performing loans at 0.51% of total loans at
period end and net charge-offs to average loans represented 0.01% for the second
quarter of 2022.

As of June 30, 2022, non-performing loans totaled $20.2 million, reflecting a
$1.2 million increase from $19.0 million in non-performing loans as of
December 31, 2021. Non-performing commercial loans increased by $499,000,
non-performing real estate loans increased by $464,000 and non-performing
consumer loans increased by $224,000 at June 30, 2022 compared to December 31,
2021.
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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

Other Real Estate Owned ("OREO") and repossessed assets totaled $1.5 million at
June 30, 2022 compared to $2.4 million at December 31, 2021. The decrease was
primarily due to the sale of nine properties during the first six months of
2022.

Non-interest income

The following is a summary of the changes in non-interest income for the three months ending June 30, 2022 and 2021 (table amounts in thousands):

                                                     Three Months Ended
                                                          June 30,                     Amount              Percent
                                                   2022               2021             Change               Change
Non-interest Income
Service charges on deposit accounts            $    2,833          $  2,157          $    676                   31.3  %
Wire transfer fees                                    170               222               (52)                 (23.4) %
Interchange fees                                    3,582             2,892               690                   23.9  %
Fiduciary activities                                1,405             1,961              (556)                 (28.4) %
Gain on sale of investment securities                   -                 -                 -                  100.0  %
Gain on sale of mortgage loans                      2,501             5,612            (3,111)                 (55.4) %
Mortgage servicing net of impairment                  319             1,503            (1,184)                 (78.8) %
Increase in cash surrender value of bank owned
life insurance                                        519               502                17                    3.4  %
Death benefit on bank owned life insurance            644               266               378                    0.0  %
Other income                                          461                92               369                  401.1  %
Total non-interest income                      $   12,434          $ 15,207          $ (2,773)                 (18.2) %


Total non-interest income was $2.8 million lower during the second quarter of
2022 compared to the same period of 2021. Residential mortgage loan activity
during the second quarter of 2022 generated $2.5 million of income from the gain
on sale of mortgage loans, down from $5.6 million for the same period in 2021
due to a lower volume of loans sold and a decrease in the percentage gain on
loans sold. Mortgage servicing income, net of impairment or recovery, decreased
$1.2 million during the second quarter of 2022 compared to the same period of
2021 due to an impairment recovery of $1.6 million recorded during the second
quarter of 2021 as mortgage pre-payment speeds slowed. Service charges on
deposit accounts and interchange fees increased $676,000 and $690,000,
respectively, when comparing the second quarter of 2022 to the same period of
2021 primarily due to the deposits acquired with the branch acquisition
completed during the third quarter of 2021.

                                                     Six Months Ended
                                                         June 30,                    Amount               Percent
                                                  2022              2021             Change               Change
Non-interest Income
Service charges on deposit accounts            $  5,628          $  4,391          $  1,237                    28.2  %
Wire transfer fees                                  329               477              (148)                  (31.0) %
Interchange fees                                  6,362             5,232             1,130                    21.6  %
Fiduciary activities                              2,908             3,704              (796)                  (21.5) %
Gain on sale of investment securities                 -               914              (914)                 (100.0) %
Gain on sale of mortgage loans                    4,528            10,908            (6,380)                  (58.5) %
Mortgage servicing net of impairment              3,808             1,716             2,092                   121.9  %
Increase in cash surrender value of bank owned
life insurance                                    1,029             1,013                16                     1.6  %
Death benefit on bank owned life insurance          644               266               378                   142.1  %
Other income                                      1,353               459               894                   194.8  %
Total non-interest income                      $ 26,589          $ 29,080          $ (2,491)                   (8.6) %


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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

Total non-interest income was $2.5 million lower for the six-month period ended
June 30, 2022 compared to the same period of 2021. Residential mortgage loan
activity for the six-month period ended June 30, 2022 generated $4.5 million of
income from the gain on sale of mortgage loans, down from $10.9 million for the
same period in 2021 due to a lower volume of loans sold and a decrease in the
percentage gain on loans sold. Mortgage servicing income, net of impairment or
recovery, increased $2.1 million for the six-month period ended June 30, 2022
compared to the same period of 2021 due to an impairment recovery of $2.6
million recorded for the six-month period ended June 30, 2022 as mortgage
pre-payment speeds slowed. Service charges on deposit accounts and interchange
fees increased $1.2 million and $1.1 million, respectively, when comparing the
six-month period ended June 30, 2022 to the same period of 2021 primarily due to
the deposits acquired with the branch acquisition completed during the third
quarter of 2021.

Non-interest Expense

The following is a summary of the changes in non-interest expense for the three months ending June 30, 2022 and 2021 (table amounts in thousands):

                                                                                           Three Months Ended
                                               June 30,                                                  June 30,
                                                 2022                                                      2021                                           Adjusted
                                              Acquisition                                               Acquisition                             Amount             Percent
                            Actual             Expenses            Adjusted           Actual             Expenses            Adjusted           Change              Change

Non-interest Expense
Salaries and employee
benefits                  $ 19,957          $          -          $ 19,957          $ 17,730          $          -          $ 17,730          $ 2,227                   12.6  %
Net occupancy expenses       3,190                     -             3,190             3,084                     -             3,084              106                    3.4  %
Data processing              2,607                     -             2,607             2,388                     -             2,388              219                    9.2  %
Professional fees              283                     -               283               588                   (51)              537             (254)                 (47.3) %
Outside services and
consultants                  2,485                     -             2,485             2,220                  (187)            2,033              452                   22.2  %
Loan expense                 2,497                     -             2,497             3,107                     -             3,107             (610)                 (19.6) %
FDIC deposit insurance         775                     -               775               500                     -               500              275                   55.0  %
Other losses                   362                     -               362                 6                     -                 6              356                5,933.3  %
Other expenses               4,212                     -             4,212             3,765                    (4)            3,761              451                   12.0  %
Total non-interest
expense                   $ 36,368          $          -          $ 36,368          $ 33,388          $       (242)         $ 33,146          $ 3,222                    9.7  %
Annualized Non-interest
Exp. to Avg. Assets           1.95  %                                 1.95  %           2.18  %                                 2.16  %


Total non-interest expense was $3.0 million higher for the second quarter of
2022 when compared to the second quarter of 2021. The increases in expenses was
primarily due to an increase in salaries and employee benefits of $2.2 million,
an increase in other expense of $447,000, an increase in other losses of
$356,000, an increase in FDIC deposit insurance of $275,000 and an increase in
outside services and consultants of $265,000 primarily due to the 14 branches
acquired in September 2021, wage increases, higher health care costs and
continued investments in technology. These increases were partially offset by
decreases of $610,000 in loan expense and $305,000 in professional fees.

Annualized non-interest expense as a percent of average assets was 1.95% and
2.18% for the three months ended June 30, 2022 and 2021, respectively.
Annualized non-interest expense, excluding acquisition expenses, as a percentage
of average assets was 1.95% and 2.16% for the three months ended June 30, 2022
and 2021, respectively.
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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

The following is a summary of the changes in non-interest expense for the six months ending June 30, 2022 and 2021 (tables in thousands of dollars):

                                                                                          Six Months Ended
                                              June 30,                                                  June 30,
                                                2022                                                      2021                                          Adjusted
                                             Acquisition                                               Acquisition                             Amount            Percent
                           Actual             Expenses            Adjusted           Actual             Expenses            Adjusted           Change             Change
Non-interest Expense
Salaries and employee
benefits                 $ 39,692          $          -          $ 39,692          $ 34,601          $          -          $ 34,601          $ 5,091                 14.7  %
Net occupancy expenses      6,751                     -             6,751             6,402                     -             6,402              349                  5.5  %
Data processing             5,144                     -             5,144             4,764                     -             4,764              380                  8.0  %
Professional fees             597                     -               597             1,132                   (51)            1,081             (484)               (44.8) %
Outside services and
consultants                 5,010                     -             5,010             3,922                  (187)            3,735            1,275                 34.1  %
Loan expense                5,042                     -             5,042             5,929                     -             5,929             (887)               (15.0) %
FDIC deposit insurance      1,500                     -             1,500             1,300                     -             1,300              200                 15.4  %
Other losses                  530                     -               530               289                     -               289              241                 83.4  %
Other expenses              8,712                     -             8,712             7,221                    (4)            7,217            1,495                 20.7  %
Total non-interest
expense                  $ 72,978          $          -          $ 72,978          $ 65,560          $       (242)         $ 65,318          $ 7,660                 11.7  %
Annualized
Non-interest Exp. to
Avg. Assets                  1.99  %                                 1.99  %           2.19  %                                 2.18  %


Total non-interest expense was $7.4 million higher for the six-month period
ended June 30, 2022 when compared to the same period of 2021. The increase in
expenses was primarily due to an increase in salaries and employee benefits of
$5.1 million, an increase in other expense of $1.5 million and an increase in
outside services and consultants of $1.1 million primarily due to the 14
branches acquired in September 2021, wage increases and higher health care
costs. These increases were partially offset by decreases of $887,000 in loan
expense and $535,000 in professional fees.

Annualized non-interest expense as a percent of average assets was 1.99% and
2.19% for the six months ended June 30, 2022 and 2021, respectively. Annualized
non-interest expense, excluding acquisition expenses, as a percentage of average
assets was 1.99% and 2.18% for the six months ended June 30, 2022 and 2021,
respectively.

Income taxes

Income tax expense totaled $4.0 million for the second quarter of 2022, an increase of $205,000 compared to the second quarter of 2021.

Income tax expense totaled $7.5 million for the six months ended June 30, 2022an augmentation of $294,000 compared to the same period in 2021.

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. At June 30, 2022, in addition to liquidity available from
the normal operating, funding, and investing activities of Horizon, the Bank had
approximately $917.6 million in unused credit lines with various money center
banks, including the FHLB and the FRB Discount Window compared to $672.7 million
at December 31, 2021. The Bank had approximately $2.2 billion of unpledged
investment securities at June 30, 2022 compared to $2.0 billion at December 31,
2021.
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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

Capital resources

The capital resources of Horizon and the Bank exceeded regulatory capital ratios
for "well capitalized" banks at June 30, 2022. Stockholders' equity totaled
$657.9 million as of June 30, 2022, compared to $723.2 million as of
December 31, 2021. For the six months ended June 30, 2022, the ratio of average
stockholders' equity to average assets was 9.06% compared to 10.93% for the
twelve months ended December 31, 2021. The decrease in stockholders' equity
during the period was due to an decrease in accumulated other comprehensive
income of $38.3 million and the amount of dividends paid, offset by net income
recorded during the period.

Horizon declared common stock dividends in the amount of $0.31 per share during
the first six months of 2022 and $0.26 per share for the same period of 2021.
The dividend payout ratio (dividends as a percent of basic earnings per share)
was 27.9% and 25.8% for the first six months of 2022 and 2021, respectively. For
additional information regarding dividends, see Horizon's Annual Report on Form
10-K for 2021.


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, tangible stockholders'
equity, tangible book value per share, efficiency ratio, the return on average
assets, the return on average common equity, the return on average tangible
equity and pre-tax pre-provision net income. In each case, we have identified
special circumstances that we consider to be adjustments and have excluded them,
to show the impact of such events as acquisition-related purchase accounting
adjustments, 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 and financial results without
giving effect to the purchase accounting impacts and other adjustments. 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.
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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

                                                             Non-GAAP Reconciliation of Net Income
                                                               (Dollars in Thousands, Unaudited)
                                                                  Three Months Ended                                                    Six Months Ended
                             June 30,          March 31,           December 31,           September 30,          June 30,          June 30,          June 30,
                               2022               2022                 2021                   2021                 2021              2022              2021
Net income as
reported                    $ 24,859          $  23,563          $      21,425          $       23,071          $ 22,173          $ 48,422          $ 42,595
Acquisition expenses               -                  -                    884                     799               242                 -               242
Tax effect                         -                  -                   (184)                   (166)              (51)                -               (51)
Net income excluding
acquisition expenses          24,859             23,563                 22,125                  23,704            22,364            48,422            42,786
Credit loss expense
acquired loans                     -                  -                      -                   2,034                 -                 -                 -
Tax effect                         -                  -                      -                    (427)                -                 -                 -
Net income excluding
credit loss expense
acquired loans                24,859             23,563                 22,125                  25,311            22,364            48,422            42,786
Gain on sale of ESOP
trustee accounts                   -                  -                      -                  (2,329)                -                 -                 -
Tax effect                         -                  -                      -                     489                 -                 -                 -
Net income excluding
gain on sale of ESOP
trustee accounts              24,859             23,563                 22,125                  23,471            22,364            48,422            42,786
DOL ESOP settlement
expenses                           -                  -                  1,900                       -                 -                 -                 -
Tax effect                         -                  -                   (315)                      -                 -                 -                 -
Net income excluding
DOL ESOP settlement
expenses                      24,859             23,563                 23,710                  23,471            22,364            48,422            42,786
(Gain)/loss on sale
of investment
securities                         -                  -                      -                       -                 -                 -              (914)
Tax effect                         -                  -                      -                       -                 -                 -               192
Net income excluding
(gain)/loss on sale
of investment
securities                    24,859             23,563                 23,710                  23,471            22,364            48,422            42,064
Death benefit on bank
owned life insurance
("BOLI")                        (644)                 -                      -                    (517)             (266)             (644)             (266)
Net income excluding
death benefit on BOLI         24,215             23,563                 23,710                  22,954            22,098            47,778            41,798
Prepayment penalties
on borrowings                      -                  -                      -                       -               125                 -               125
Tax effect                         -                  -                      -                       -               (26)                -               (26)
Net income excluding
prepayment penalties
on borrowings                 24,215             23,563                 23,710                  22,954            22,197            47,778            41,897
Adjusted net income         $ 24,215          $  23,563          $      23,710          $       22,954          $ 22,197          $ 47,778          $ 41,897



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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021
                                                          Non-GAAP

Reconciliation of diluted earnings per share

                                                                               (Unaudited)
                                                                      Three Months Ended                                                        Six Months Ended
                                 June 30,           March 31,          December 31,           September 30,           June 30,            June 30,             June 30,
                                   2022               2022                 2021                   2021                  2021                2022                 2021
Diluted earnings per
share ("EPS") as
reported                       $    0.57          $     0.54          $       0.49          $         0.52          $    0.50          $    1.11             $    0.97
Acquisition expenses                   -                   -                  0.02                    0.02               0.01                  -                  0.01
Tax effect                             -                   -                     -                       -                  -                  -                     -
Diluted EPS excluding
acquisition expenses                0.57                0.54                  0.51                    0.54               0.51               1.11                  0.98
Credit loss expense
acquired loans                         -                   -                     -                    0.05                  -                  -                     -
Tax effect                             -                   -                     -                   (0.01)                 -                  -                     -
Diluted EPS excluding
credit loss expense
acquired loans                      0.57                0.54                  0.51                    0.58               0.51               1.11                  0.98
Gain on sale of ESOP
trustee accounts                       -                   -                     -                   (0.05)                 -                  -                     -
Tax effect                             -                   -                     -                    0.01                  -                  -                     -
Diluted EPS excluding
gain on sale of ESOP
trustee accounts                    0.57                0.54                  0.51                    0.54               0.51               1.11                  0.98
DOL ESOP settlement
expenses                               -                   -                  0.04                       -                  -                  -                     -
Tax effect                             -                   -                 (0.01)                      -                  -                  -                     -
Diluted EPS excluding
DOL ESOP settlement
expenses                            0.57                0.54                  0.54                    0.54               0.51               1.11                  0.98
(Gain)/loss on sale of
investment securities                  -                   -                     -                       -                  -                  -                 (0.02)
Tax effect                             -                   -                     -                       -                  -                  -                     -
Diluted EPS excluding
(gain)/loss on
investment securities               0.57                0.54                  0.54                    0.54               0.51               1.11                  0.96
Death benefit on BOLI              (0.01)                  -                     -                   (0.02)             (0.01)             (0.01)                (0.01)
Diluted EPS excluding
death benefit on BOLI               0.56                0.54                  0.54                    0.52               0.50               1.10                  0.95
Prepayment penalties on
borrowings                             -                   -                     -                       -                  -                  -                     -
Tax effect                             -                   -                     -                       -                  -                  -                     -
Diluted EPS excluding
prepayment penalties on
borrowings                          0.56                0.54                  0.54                    0.52               0.50               1.10                  0.95
Adjusted Diluted EPS           $    0.56          $     0.54          $       0.54          $         0.52          $    0.50          $    1.10             $    0.95



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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021
                                                  Non-GAAP Reconciliation

net income before tax and before provision

                                                                (Dollars in Thousands, Unaudited)
                                                                    Three Months Ended                                                    Six Months Ended
                               June 30,          March 31,           December 31,           September 30,          June 30,          June 30,          June 30,
                                 2022               2022                 2021                   2021                 2021              2022              2021
Pre-tax income                $ 28,834          $  27,102          $      25,505          $       27,127          $ 25,943          $ 55,936          $ 49,815
Credit loss expense
(reversal)                         240             (1,386)                (2,071)                  1,112            (1,492)           (1,146)           (1,125)
Pre-tax, pre-provision
net income                    $ 29,074          $  25,716          $      23,434          $       28,239          $ 24,451          $ 54,790          $ 48,690
Pre-tax, pre-provision
net income                    $ 29,074          $  25,716          $      23,434          $       28,239          $ 24,451          $ 54,790          $ 48,690
Acquisition expenses                 -                  -                    884                     799               242                 -               242
Gain on sale of ESOP
trustee accounts                     -                  -                      -                  (2,329)                -                 -                 -
DOL ESOP settlement
expenses                             -                  -                  1,900                       -                 -                 -                 -
(Gain)/loss on sale of
investment securities                -                  -                      -                       -                 -                 -              (914)
Death benefit on bank
owned life insurance              (644)                 -                      -                    (517)             (266)             (644)             (266)
Prepayment penalties on
borrowings                           -                  -                      -                       -               125                 -               125
Adjusted pre-tax,
pre-provision net
income                        $ 28,430          $  25,716          $      26,218          $       26,192          $ 24,552          $ 54,146          $ 47,877


                                                                   

Non-GAAP reconciliation of net interest margin

(Dollars in thousands, unaudited)

                                                                                 Three Months Ended                                                          Six Months Ended
                                           June 30,            March 31,           December 31,          September 30,            June 30,            June 30,             June 30,
                                             2022                 2022                 2021                   2021                  2021                2022                 2021

Net interest income as reported $53,008 $48,171

$49,976 $46,544 $42,632 $101,179 $85,170
Average interest-earning assets

           6,927,310            6,800,549             6,938,258              6,033,088            5,659,384           6,864,280            5,550,116
Net interest income as a
percentage of average interest                 3.19  %              2.99  %               2.97  %                3.17  %              3.14  %             3.03  %              3.21  %
earning assets
("Net Interest Margin")
Net interest income as reported         $    53,008          $    48,171          $     49,976          $      46,544          $    42,632          $  101,179          $    85,170
Acquisition-related purchase
accounting adjustments
("PAUs")                                     (1,223)                (916)               (1,819)                  (875)                (230)             (2,139)              (1,809)
Prepayment penalties on
borrowings                                        -                    -                     -                      -                  125                   -                  125
Adjusted net interest income            $    51,785          $    47,255    

$48,157 $45,669 $42,527 $99,040 $83,486
Adjusted net interest margin

                   3.12  %              2.93  %               2.86  %                3.12  %              3.13  %             2.97  %              3.15  %



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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021
                            Non-GAAP Reconciliation of Tangible

Equity and tangible book value per share

                                             (Dollars in Thousands Except per Share Data, Unaudited)
                                           June 30,              March 31,            December 31,           September 30,            June 30,
                                             2022                  2022                   2021                   2021                   2021
Total stockholders' equity              $    657,865          $    677,450          $     723,209          $      708,542          $    710,374
Less: Intangible assets                      173,662               174,588                175,513                 183,938               172,398
Total tangible stockholders'
equity                                  $    484,203          $    502,862          $     547,696          $      524,604          $    537,976
Common shares outstanding                 43,572,796            43,572,796             43,547,942              43,520,694            43,950,720
Book value per common share             $      15.10          $      15.55          $       16.61          $        16.28          $      16.16
Tangible book value per common
share                                   $      11.11          $      11.54          $       12.58          $        12.05          $      12.24


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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021
                                  Non-GAAP Calculation and Reconciliation

efficiency ratio and adjusted efficiency ratio

                                                              (Dollars in Thousands, Unaudited)
                                                                  Three Months Ended                                                  Six Months Ended
                              June 30,          March 31,         December 31,          September 30,          June 30,          June 30,          June 30,
                                2022              2022                2021                   2021                2021              2022              2021
Non-interest expense
as reported                  $ 36,368          $ 36,610          $     39,370          $      34,349          $ 33,388          $ 72,978          $ 65,560
Net interest income as
reported                       53,008            48,171                49,976                 46,544            42,632           101,179           

85 170

Non-interest income as
reported                     $ 12,434          $ 14,155          $     12,828          $      16,044          $ 15,207          $ 26,589          $ 29,080
Non-interest
expense/(Net interest
income + Non-interest
income)
("Efficiency
Ratio")                         55.57  %          58.74  %              62.69  %               54.88  %          57.73  %          57.12  %          57.38  %

Non-interest expense
as reported                  $ 36,368          $ 36,610          $     

39,370 $34,349 $33,388 $72,978 $65,560
Acquisition fee

                -                 -                  (884)                  (799)             (242)                -              (242)
DOL ESOP settlement
expenses                            -                 -                (1,900)                     -                 -                 -                 -
Non-interest expense
excluding acquisition
expenses and DOL ESOP
settlement expenses            36,368            36,610                36,586                 33,550            33,146            72,978           

65,318

Net interest income as
reported                       53,008            48,171                49,976                 46,544            42,632           101,179            85,170
Prepayment penalties
on borrowings                       -                 -                     -                      -               125                 -               125
Net interest income
excluding prepayment
penalties on
borrowings                     53,008            48,171                49,976                 46,544            42,757           101,179            85,295
Non-interest income as
reported                       12,434            14,155                12,828                 16,044            15,207            26,589            29,080
Gain on sale of ESOP
trustee accounts                    -                 -                     -                 (2,329)                -                 -                 -
(Gain)/loss on sale of
investment securities               -                 -                     -                      -                 -                 -              (914)
Death benefit on bank
owned life insurance
("BOLI")                         (644)                -                     -                   (517)             (266)             (644)             (266)
Non-interest income
excluding (gain)/loss
on sale of investment
securities and death
benefit on BOLI              $ 11,790          $ 14,155          $     12,828          $      13,198          $ 14,941          $ 25,945          $ 27,900
Adjusted efficiency
ratio                           56.13  %          58.74  %              58.25  %               56.16  %          57.45  %          57.41  %          57.70  %


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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021
                                                             Non-GAAP

Return on Average Assets Reconciliation

(Dollars in thousands, unaudited)

                                                                        Three Months Ended                                                         

Semester completed

                                   June 30,            March 31,           December 31,         September 30,           June 30,             June 30,             June 30,
                                     2022                 2022                 2021                 2021                  2021                 2022                 2021
Average assets                  $ 7,476,238          $ 7,319,675          $ 7,461,343          $  6,507,673          $ 6,142,507          $ 7,391,348          $ 6,039,897
Return on average assets
("ROAA") as reported                   1.33  %              1.31  %              1.14  %               1.41  %              1.45  %              1.32  %              1.42  %
Acquisition expenses                      -                    -                 0.05                  0.05                 0.02                    -                 0.01
Tax effect                                -                    -                (0.01)                (0.01)                   -                    -                    -
ROAA excluding
acquisition expenses                   1.33                 1.31                 1.18                  1.45                 1.47                 1.32                 1.43
Credit loss expense
acquired loans                            -                    -                    -                  0.12                    -                    -                    -
Tax effect                                -                    -                    -                 (0.03)                   -                    -                    -
ROAA excluding credit
loss expense acquired
loans                                  1.33                 1.31                 1.18                  1.54                 1.47                 1.32                 1.43
Gain on sale of ESOP
trustee accounts                          -                    -                    -                 (0.14)                   -                    -                    -
Tax effect                                -                    -                    -                  0.03                    -                    -                    -
ROAA excluding gain on
sale of ESOP trustee
accounts                               1.33                 1.31                 1.18                  1.43                 1.47                 1.32                 1.43
DOL ESOP settlement
expenses                                  -                    -                 0.10                     -                    -                    -                    -
Tax effect                                -                    -                (0.02)                    -                    -                    -                    -
ROAA excluding DOL ESOP
settlement expenses                    1.33                 1.31                 1.26                  1.43                 1.47                 1.32  
              1.43
(Gain)/loss on sale of
investment securities                     -                    -                    -                     -                    -                    -                (0.03)
Tax effect                                -                    -                    -                     -                    -                    -                 0.01
ROAA excluding
(gain)/loss on sale of
investment securities                  1.33                 1.31           
     1.26                  1.43                 1.47                 1.32                 1.41
Death benefit on bank
owned life insurance
("BOLI")                              (0.03)                   -                    -                 (0.03)               (0.02)               (0.02)               (0.01)
ROAA excluding death
benefit on BOLI                        1.30                 1.31                 1.26                  1.40                 1.45                 1.30  
              1.40
Prepayment penalties on
borrowings                                -                    -                    -                     -                 0.01                    -                    -
Tax effect                                -                    -                    -                     -                    -                    -                    -
ROAA excluding prepayment
penalties on borrowings                1.30                 1.31           
     1.26                  1.40                 1.46                 1.30                 1.40
Adjusted ROAA                          1.30  %              1.31  %              1.26  %               1.40  %              1.46  %              1.30  %              1.40  %



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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021
                                                    Non-GAAP Reconciliation

return on average equity

                                                                (Dollars in Thousands, Unaudited)
                                                                   Three Months Ended                                                     Six Months Ended
                               June 30,          March 31,          December 31,          September 30,           June 30,           June 30,           June 30,
                                 2022               2022                2021                   2021                 2021               2022               2021

Average common stock $677,299 $716,341 $719,643 $724,412 $706,652 $697,004

          $ 702,052
Return on average
common equity
("ROACE") as reported            14.72  %           13.34  %              11.81  %               12.64  %           12.59  %           14.01  %           12.23  %
Acquisition expenses                 -                  -                  0.49                   0.44               0.14                  -               0.07
Tax effect                           -                  -                 (0.10)                 (0.09)             (0.03)                 -              (0.01)
ROACE excluding
acquisition expenses             14.72              13.34                 12.20                  12.99              12.70              14.01          

12.29

Credit loss expense
acquired loans                       -                  -                     -                   1.11                  -                  -                  -
Tax effect                           -                  -                     -                  (0.23)                 -                  -                  -
ROACE excluding credit
loss expense acquired
loans                            14.72              13.34                 12.20                  13.87              12.70              14.01          

12.29

Gain on sale of ESOP
trustee accounts                     -                  -                     -                  (1.28)                 -                  -                  -
Tax effect                           -                  -                     -                   0.27                  -                  -                  -
ROACE excluding gain
on sale of ESOP
trustee accounts                 14.72              13.34                 12.20                  12.86              12.70              14.01              12.29
DOL ESOP settlement
expenses                             -                  -                  1.05                      -                  -                  -                  -
Tax effect                           -                  -                 (0.17)                     -                  -                  -                  -
ROACE DOL ESOP
settlement expenses              14.72              13.34                 13.08                  12.86              12.70              14.01              12.29
(Gain)/loss on sale of
investment securities                -                  -                     -                      -                  -                  -              (0.26)
Tax effect                           -                  -                     -                      -                  -                  -               0.06
ROACE excluding
(gain)/loss on sale of
investment securities            14.72              13.34                 13.08                  12.86              12.70              14.01          

12.09

Death benefit on bank
owned life insurance
("BOLI")                         (0.38)                 -                     -                  (0.28)             (0.15)             (0.19)             (0.08)
ROACE excluding death
benefit on BOLI                  14.34              13.34                 13.08                  12.58              12.55              13.82              12.01
Prepayment penalties
on borrowings                        -                  -                     -                      -               0.07                  -               0.04
Tax effect                           -                  -                     -                      -              (0.01)                 -              (0.01)
ROACE excluding
prepayment penalties
on borrowings                    14.34              13.34                 13.08                  12.58              12.61              13.82              12.04
Adjusted ROACE                   14.34  %           13.34  %              13.08  %               12.58  %           12.61  %           13.82  %           12.04  %



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                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021
                                                   Non-GAAP Reconciliation

return on average tangible equity

                                                                (Dollars in Thousands, Unaudited)
                                                                   Three Months Ended                                                     Six Months Ended
                               June 30,          March 31,          December 31,          September 30,           June 30,           June 30,           June 30,
                                 2022               2022                2021                   2021                 2021               2022               2021
Average common equity        $ 677,299          $ 716,341          $    719,643          $     724,412          $ 706,652          $ 697,004          $ 702,052
Less: Average
intangible assets              175,321            176,356               179,594                174,920            173,905            175,836            174,343
Average tangible
equity                       $ 501,978          $ 539,985          $    540,049          $     549,492          $ 532,747          $ 521,168          $ 527,709
Return on average
common equity
("ROATE")                        19.86  %           17.70  %              15.74  %               16.66  %           16.69  %           18.74  %           16.28  %
Acquisition expenses                 -                  -                  0.65                   0.58               0.18                  -               0.09
Tax effect                           -                  -                 (0.14)                 (0.12)             (0.04)                 -              (0.02)
ROATE excluding
acquisition expenses             19.86              17.70                 16.25                  17.12              16.83              18.74          

4:35 p.m.

Credit loss expense
acquired loans                       -                  -                     -                   1.47                  -                  -                  -
Tax effect                           -                  -                     -                  (0.31)                 -                  -                  -
ROATE excluding credit
loss expense acquired
loans                            19.86              17.70                 16.25                  18.28              16.83              18.74          

4:35 p.m.

Gain on sale of ESOP
trustee accounts                     -                  -                     -                  (1.68)                 -                  -                  -
Tax effect                           -                  -                     -                   0.35                  -                  -                  -
ROATE excluding gain
on sale of ESOP
trustee accounts                 19.86              17.70                 16.25                  16.95              16.83              18.74              16.35
DOL ESOP settlement
expenses                             -                  -                  1.40                      -                  -                  -                  -
Tax effect                           -                  -                 (0.23)                     -                  -                  -                  -
ROATE DOL ESOP
settlement expenses              19.86              17.70                 17.42                  16.95              16.83              18.74              16.35
(Gain)/loss on sale of
investment securities                -                  -                     -                      -                  -                  -              (0.35)
Tax effect                           -                  -                     -                      -                  -                  -               0.07
ROATE excluding
(gain)/loss on sale of
investment securities            19.86              17.70                 17.42                  16.95              16.83              18.74          

16.07

Death benefit on bank
owned life insurance
("BOLI")                         (0.51)                 -                     -                  (0.37)             (0.20)             (0.25)             (0.10)
ROATE excluding death
benefit on BOLI                  19.35              17.70                 17.42                  16.58              16.63              18.49              15.97
Prepayment penalties
on borrowings                        -                  -                     -                      -               0.09                  -               0.05
Tax effect                           -                  -                     -                      -              (0.02)                 -              (0.01)
ROATE excluding
prepayment penalties
on borrowings                    19.35              17.70                 17.42                  16.58              16.70              18.49              16.01
Adjusted ROATE                   19.35  %           17.70  %              17.42  %               16.58  %           16.70  %           18.49  %           16.01  %




                                       72

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  Table of Contents
                     HORIZON BANCORP, INC. AND SUBSIDIARIES
          Management's Discussion and Analysis of Financial Condition
                           And Results of Operations
           For the Three and Six Months ended June 30, 2022 and 2021

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