Contact: Mark E. Secor

Chief Financial Officer

Phone: (219) 873-2611

Fax: (219) 874-9280

Date: July 24, 2019

FOR IMMEDIATE RELEASE

Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Michigan City, Indiana (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”) today announced its unaudited financial results for the three-month and six-month periods ended June 30, 2019. All share data has been adjusted to reflect Horizon’s three-for-two stock split effective June 15, 2018.

SUMMARY:

•	Net income for the quarter ended June 30, 2019 was $16.6 million, or $0.37 diluted earnings per share, compared to $14.1 million, or $0.37 diluted earnings per share, for the quarter ended June 30, 2018. This represents the highest quarterly net income in the Company’s history.

•

Core net income for the quarter ended June 30, 2019 increased 26.0% to $17.6 million, or $0.39 diluted earnings per share, compared to $14.0 million, or $0.37 diluted earnings per share, for the same period in 2018. This represents the highest quarter-to-date core net income and core diluted earnings per share in the Company’s history. (See the “Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share” table on page 4 for a description of the elements of core net income)

•	Net income for the first six months of 2019 was $27.5 million, or $0.65 diluted earnings per share, compared to $26.9 million, or $0.70 diluted earnings per share for the first six months of 2018. This represents the highest year-to-date net income as of June 30^th in the Company’s history.

•

Core net income for the first six months of 2019 was $31.8 million, or $0.75 diluted earnings per share, compared to $26.8 million, or $0.70 diluted earnings per share, for the first six months of 2018. This represents the highest year-to-date core net income and core diluted earnings per share as of June 30^th in the Company’s history. (See the “Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share” table on page 4 for a description of the elements of core net income)

•

Net interest margin for the quarter ended June 30, 2019 was 3.73% compared to 3.62% and 3.78% for the quarters ended March 31, 2019 and June 30, 2018, respectively. The increase in net interest margin from the first quarter of 2019 reflects an increase in the yield of interest-earning assets as loans continue to reprice upwards and a decrease in interest-bearing liabilities from reducing short-term borrowings with the liquidity obtained from the Salin acquisition, along with a stabilization in deposit pricing.

•

Core net interest margin for the quarter ended June 30, 2019 was 3.61% compared to 3.46% and 3.60% for the quarters ended March 31, 2019 and June 30, 2018, respectively. (See the “Non-GAAP Reconciliation of Net Interest Margin” table on page 5 for a description of the elements of core net interest margin)

•	Return on average assets was 1.32% for the second quarter of 2019 compared to 1.41% for the second quarter of 2018. Return on average assets was 1.18% for the first six months of 2019 compared to 1.36% for the first six months of 2018.

Pg. 2 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

•

Core return on average assets for the second quarter of 2019 was 1.40% compared to 1.39% for the second quarter of 2018. Core return on average assets was 1.36% for the first six months of 2019 compared to 1.35% for the first six months of 2018. (See the “Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” table on page 10 for the description of core return on average assets)

•	Return on average equity was 10.73% for the second quarter of 2019 compared to 12.15% for the second quarter of 2018. Return on average equity was 9.82% for the first six months of 2019 compared to 11.72% for the first six months of 2018.

•

Core return on average equity for the second quarter of 2019 was 11.34% compared to 12.02% for the second quarter of 2018. Core return on average equity was 11.38% for the first six months of 2019 compared to 11.65% for the first six months of 2018. (See the “Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” table on page 10 for the description of core return on average assets)

•	Horizon’s tangible book value per share increased to $9.91 at June 30, 2019 compared to $9.60 and $8.84 at March 31, 2019 and June 30, 2018, respectively. This represents the highest tangible book value per share in the Company’s history.

•	Horizon closed three full-service branches on April 19, 2019 and one loan production office on April 26, 2019. Horizon also plans to close one additional full-service branch on September 6, 2019.

•	Horizon consolidated five full-service branches acquired in the March 2019 acquisition of Salin Bancshares, Inc. and Salin Bank and Trust Company (“Salin”), in coordination with the core data conversion from the acquisition occurring on April 26, 2019.

•	On June 18, 2019, Horizon’s Board of Directors approved an increase in the Company’s quarterly cash dividend from $0.10 to $0.12 per share, paid on July 19, 2019, to shareholders of record as of July 5, 2019.

•	On July 16, 2019, Horizon’s Board of Directors authorized a stock repurchase program for up to 2,250,000 shares of Horizon’s issued and outstanding common stock, no par value.

Craig Dwight, Chairman and CEO of Horizon, commented: “I am pleased to announce Horizon’s record 2019 second quarter and year-to-date core earnings of $17.6 million, or $0.39 per diluted share, and $31.8 million, or $0.75 per diluted share. Core earnings, exclude merger expenses and other non-core items.”

Dwight added, “Horizon’s total assets continued to grow reaching approximately $5.1 billion at June 30, 2019, as a result of the Salin acquisition and organic loan growth since the beginning of the year. We have experienced organic loan growth at an annualized rate of 5.7% during the first six months of 2019. Along with approximately $568.9 million in loans acquired from Salin, loan growth in the markets of Fort Wayne, Grand Rapids, Indianapolis and Kalamazoo totaled $99.7 million as of June 30, 2019.”

Dwight continued, “During the second quarter of 2019, Horizon continued to maximize operational leverage as a result of increased mass and scale. Annualized non-interest expense to average assets, excluding merger expenses, decreased to 2.39% for the second quarter of 2019 compared to 2.41% for the first quarter of 2019 and 2.49% for the second quarter of 2018. Although the anticipated cost savings from the Salin acquisition have not been fully-realized, our team has been able to leverage new technologies and develop operational efficiencies. In our efforts to improve efficiencies, we closed three legacy full-service branches on April 19, 2019 and we consolidated our existing Fort Wayne loan production office with the acquired Salin locations. We also closed five Salin full-service branches which were in close proximity to an existing Horizon office or that did not meet our branch hurdle rates in conjunction with our data conversion on April 26, 2019. We also plan to consolidate our Midland, Michigan full-service branches into one location on September 6, 2019.”

Pg. 3 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Dwight concluded, “We continue to look for opportunities to provide value for our shareholders. On June 18, 2019, our Board of Directors approved a 20.0% dividend increase from 10 cents to 12 cents per share. This was followed by the Board of Directors authorizing a stock repurchase program of up to 2,250,000 shares of Horizon’s issued and outstanding common stock on July 16, 2019. We believe that at current price levels, Horizon’s shares are an attractive investment and our repurchase program reflects our continuing confidence in Horizon’s financial strength. Given our strong balance sheet, we believe we can implement this program and continue to retain sufficient liquidity and capital to execute business strategies.”

Income Statement Highlights

Net income for the second quarter of 2019 was $16.6 million, or $0.37 diluted earnings per share, compared to $10.8 million, or $0.28 diluted earnings per share, for the first quarter of 2019 and $14.1 million, or $0.37 diluted earnings per share, for the second quarter of 2018. Excluding acquisition-related expenses, gain (loss) on sale of investment securities and death benefit on bank owned life insurance (“core net income”), core net income for the second quarter of 2019 was $17.6 million, or $0.39 diluted earnings per share, compared to $14.2 million, or $0.37 diluted earnings per share, for the first quarter of 2019 and $14.0 million, or $0.37 diluted earnings per share for the second quarter of 2018.

The increase in net income and diluted earnings per share from the first quarter of 2019 to the second quarter of 2019 reflects increases in net interest income of $7.2 million and non-interest income of $2.2 million, offset by increases in non-interest expense of $1.8 million, income tax expense of $1.2 million and provision for loan losses of $532,000.

The increase in net income from the second quarter of 2018 when compared to the same period of 2019 reflects increases in net interest income of $8.0 million and non-interest income of $2.0 million, offset by increases in non-interest expense of $6.6 million, income tax expense of $515,000 and provision for loan losses of $261,000.

Net income for the six months ended June 30, 2019 was $27.5 million, or $0.65 diluted earnings per share, compared to $26.9 million, or $0.70 diluted earnings per share for the six months ended June 30, 2018. Core net income for the six months ended June 30, 2019 was $31.8 million, or $0.75 diluted earnings per share, compared to $26.8 million, or $0.70 diluted earnings per share, for the six months ended June 30, 2018. This represents a 7.1% increase in core diluted earnings per share for the first six months of 2019 compared to the same period in 2018.

The increase in net income when comparing the first six months of 2019 to the prior year period reflects increases in net interest income of $8.8 million and non-interest income of $2.4 million, offset by an increase in non-interest expense of $10.5 million.

Pg. 4 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share
(Dollars in Thousands, Except per Share Data, Unaudited)
	Three Months Ended									Six Months Ended
	June 30			March 31			June 30			June 30			June 30
	2019			2019			2018			2019			2018
Non-GAAP Reconciliation of Net Income
Net income as reported	$	16,642		$	10,816		$	14,115		$	27,458		$	26,919
Merger expenses		1,532			4,118			-			5,650			-
Tax effect		(295	)		(692	)		-			(987	)		-
Net income excluding merger expenses		17,879			14,242			14,115			32,121			26,919
Loss (gain) on sale of investment securities		100			(15	)		-			85			(11	)
Tax effect		(21	)		3			-			(18	)		2
Net income excluding gain on sale of investment securities		17,958			14,230			14,115			32,188			26,910
Death benefit on bank owned life insurance ("BOLI")		(367	)		-			(154	)		(367	)		(154	)
Net income excluding death benefit on BOLI		17,591			14,230			13,961			31,821			26,756
Core Net Income	$	17,591		$	14,230		$	13,961		$	31,821		$	26,756

Non-GAAP Reconciliation of Diluted Earnings per Share
Diluted earnings per share ("EPS") as reported	$	0.37		$	0.28		$	0.37		$	0.65		$	0.70
Merger expenses		0.03			0.11			-			0.13			-
Tax effect		-			(0.02	)		-			(0.02	)		-
Diluted EPS excluding merger expenses		0.40			0.37			0.37			0.76			0.70
Loss (gain) on sale of investment securities		-			-			-			-			-
Tax effect		-			-			-			-			-
Diluted EPS excluding gain on sale of investment securities		0.40			0.37			0.37			0.76			0.70
Death benefit on BOLI		(0.01	)		-			-			(0.01	)		-
Diluted EPS excluding death benefit on BOLI		0.39			0.37			0.37			0.75			0.70
Core Diluted EPS	$	0.39		$	0.37		$	0.37		$	0.75		$	0.70

Horizon’s net interest margin increased to 3.73% for the second quarter of 2019 when compared to 3.62% for the first quarter of 2019. The increase in net interest margin from the first quarter of 2019 reflects an increase in the yield on interest-earning assets of five basis points as loans continue to reprice upwards. The cost of interest-bearing liabilities decreased by six basis points primarily from reducing short-term borrowings during the second quarter with the liquidity obtained through the Salin acquisition. In addition, we are seeing a stabilization in deposit pricing within the markets we serve.

Net interest margin decreased to 3.73% for the second quarter of 2019 when compared to 3.78% for the second quarter of 2018. The decrease in net interest margin was due to an increase in the cost of interest-bearing liabilities of 40 basis points, offset by an increase in the yield on interest-earning assets of 24 basis points. The cost of interest-bearing deposits, borrowings and subordinated debentures increased by 50, 32 and 15 basis points, respectively. The increase in the yield of interest-earning assets was due to increases in the yields on loans receivable of 21 basis points, taxable investment securities of 22 basis points and non-taxable investment securities of 29 basis points.

Net interest margin decreased to 3.68% during the first six months of 2019 when compared to 3.81% for the first six months of 2018. This decrease reflects an increase in the cost of interest-bearing liabilities of 49 basis points, offset by an increase in the yield of interest-earning assets of 24 basis points. The increase in the cost of interest-bearing liabilities was due to an increase in the cost of interest-bearing deposits of 55 basis points and borrowings of 45 basis points. The increase in the yield of interest-earning assets was due to increases in the yields on loans receivable of 23 basis points, taxable investment securities of 25 basis points and non-taxable investment securities of 30 basis points.

Pg. 5 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Net interest margin, excluding acquisition-related purchase accounting adjustments (“core net interest margin”), was 3.61% for the second quarter of 2019 compared to 3.46% for the prior quarter and 3.60% for the second quarter of 2018. Interest income from acquisition-related purchase accounting adjustments was $1.3 million, $1.5 million and $1.6 million for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively. The increase in the core net interest margin during the second quarter of 2019 was due to the pay-down of short-term borrowings with the liquidity obtained through the acquisition of Salin and an increase in the yield on earning assets from higher mortgage warehouse lending balances, loans continuing to reprice higher and the addition of acquired Salin loans.

Non-GAAP Reconciliation of Net Interest Margin
(Dollars in Thousands, Unaudited)
	Three Months Ended									Six Months Ended
	June 30			March 31			June 30			June 30			June 30
	2019			2019			2018			2019			2018
Non-GAAP Reconciliation of Net Interest Margin
Net interest income as reported	$	41,529		$	34,280		$	33,550		$	75,809		$	66,961
Average interest-earning assets		4,566,674			3,929,296			3,638,801			4,249,644			3,600,676
Net interest income as a percentage of average interest-earning assets ("Net Interest Margin")		3.73	%		3.62	%		3.78	%		3.68	%		3.81	%
Acquisition-related purchase accounting adjustments ("PAUs")	$	(1,299	)	$	(1,510	)	$	(1,634	)	$	(2,809	)	$	(3,671	)
Core net interest income	$	40,230		$	32,770		$	31,916		$	73,000		$	63,290
Core net interest margin		3.61	%		3.46	%		3.60	%		3.55	%		3.61	%

Lending Activity

Total loans increased $653.5 million from $3.014 billion as of December 31, 2018 to $3.668 billion as of June 30, 2019. Excluding acquired loans, total loans increased $84.6 million during the first six months of 2019 as residential mortgage loans increased by $14.9 million, consumer loans increased by $20.0 million and mortgage warehouse loans increased by $59.3 million, offset by a decrease in commercial loans of $11.8 million.

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)

	June 30 2019		December 31 2018		Amount Change		Acquired Loans			Amount Change			Percent Change
Commercial	$	2,062,623	$	1,721,590	$	341,033	$	(352,798	)	$	(11,765	)		-0.7	%
Residential mortgage		814,065		668,141		145,924		(131,008	)		14,916			2.2	%
Consumer		654,552		549,481		105,071		(85,112	)		19,959			3.6	%
Subtotal		3,531,240		2,939,212		592,028		(568,918	)		23,110			0.8	%
Held for sale loans		3,185		1,038		2,147		-			2,147			206.8	%
Mortgage warehouse loans		133,428		74,120		59,308		-			59,308			80.0	%
Total loans	$	3,667,853	$	3,014,370	$	653,483	$	(568,918	)	$	84,565			2.8	%

Total loans increased $44.8 million from $3.623 billion as of March 31, 2019 to $3.668 billion as of June 30, 2019. During the second quarter of 2019, consumer loans increased by $14.8 million and mortgage warehouse loans increased $61.5 million, offset by a decrease in commercial loans of $27.0 million and a decrease in residential mortgage loans of $5.8 million.

Pg. 6 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)

	June 30 2019		March 31 2019		Amount Change			Acquired Loans		Amount Change			Percent Change
Commercial	$	2,062,623	$	2,089,579	$	(26,956	)	$	-	$	(26,956	)		-1.3	%
Residential mortgage		814,065		819,824		(5,759	)		-		(5,759	)		-0.7	%
Consumer		654,552		639,710		14,842			-		14,842			2.3	%
Subtotal		3,531,240		3,549,113		(17,873	)		-		(17,873	)		-0.5	%
Held for sale loans		3,185		1,979		1,206			-		1,206			60.9	%
Mortgage warehouse loans		133,428		71,944		61,484			-		61,484			85.5	%
Total loans	$	3,667,853	$	3,623,036	$	44,817		$	-	$	44,817			1.2	%

During the first six months of 2019, the Bank originated approximately $206.0 million of commercial loans; however, only 54.4%, or $112.1 million, of these loan originations had been funded as of June 30, 2019. These originations were offset by commercial loan payoffs totaling approximately $157.8 million during the first six months of 2019, as there was an increase in clients moving projects that had reached stabilization into the long-term, fixed rate conduit financing market.

Residential mortgage lending activity for the three months ended June 30, 2019 generated $2.1 million in income from the gain on sale of mortgage loans, an increase of $769,000 from the first quarter of 2019 and $182,000 from the second quarter of 2018. Total origination volume for the second quarter of 2019, including loans placed into portfolio, totaled $111.4 million, representing an increase of 78.1% from the first quarter of 2019 and an increase of 2.1% from the second quarter of 2018. Total origination volume for the second quarter of 2019 of loans sold to the secondary market totaled $60.6 million, representing an increase of 99.3% from the first quarter of 2019 and an increase of 18.8% from the second quarter of 2018.

Revenue derived from Horizon’s residential mortgage and warehouse lending activities was 5.6% of Horizon’s total revenue for the second quarter of 2019.

The provision for loan losses totaled $896,000 for the second quarter of 2019 compared to $364,000 for the first quarter of 2019 and $635,000 for the second quarter of 2018. The increase in the provision for loan losses from the first quarter of 2019 and the second quarter of 2018 when compared to the second quarter of 2019 was primarily due to a specific reserve placed on a single credit.

The provision for loan losses totaled $1.3 million for the first six months of 2019 compared to $1.2 million for the first six months of 2018. The increase in provision for loan losses from 2018 was primarily due to organic loan growth experienced from June 30, 2018 until June 30, 2019.

The ratio of the allowance for loan losses to total loans decreased to 0.50% as of June 30, 2019 from 0.59% at December 31, 2018. The decrease in the ratio of the allowance for loan losses to total loans is primarily due to increased loan balances from the Salin acquisition. The ratio of the allowance for loan losses to total loans, excluding loans with credit-related purchase accounting adjustments, was 0.68% as of June 30, 2019 compared to 0.72% as of December 31, 2018. Loan loss reserves plus credit-related loan discounts on acquired loans as a percentage of total loans was 1.14% as of June 30, 2019 compared to 0.98% as of December 31, 2018.

Pg. 7 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Non-GAAP Allowance for Loan and Lease Loss Detail
As of June 30, 2019
(Dollars in Thousands, Unaudited)

	Pre-discount Loan Balance		Allowance for Loan Losses (ALLL)		Loan Discount		ALLL + Loan Discount		Loans, net		ALLL/ Pre-discount Loan Balance			Loan Discount/ Pre-discount Loan Balance			ALLL+Loan Discount/ Pre-discount Loan Balance
Horizon Legacy	$	2,677,923	$	18,091		N/A	$	18,091	$	2,659,832		0.68	%		0.00	%		0.68	%
Heartland		6,044		-		621		621		5,423		0.00	%		10.27	%		10.27	%
Summit		17,194		-		1,003		1,003		16,191		0.00	%		5.83	%		5.83	%
Peoples		75,918		-		1,732		1,732		74,186		0.00	%		2.28	%		2.28	%
Kosciusko		34,056		195		567		762		33,294		0.57	%		1.66	%		2.24	%
LaPorte		73,228		-		2,651		2,651		70,577		0.00	%		3.62	%		3.62	%
CNB		3,701		-		94		94		3,607		0.00	%		2.54	%		2.54	%
Lafayette		71,707		19		652		671		71,036		0.03	%		0.91	%		0.94	%
Wolverine		161,066		-		2,120		2,120		158,946		0.00	%		1.32	%		1.32	%
Salin		547,016		-		14,230		14,230		532,786		0.00	%		2.60	%		2.60	%
Total	$	3,667,853	$	18,305	$	23,670	$	41,975	$	3,625,878		0.50	%		0.65	%		1.14	%

As of June 30, 2019, non-performing loans totaled $18.9 million, which reflects a two basis point increase in non-performing loans to total loans, or a $3.8 million increase from $15.2 million in non-performing loans as of December 31, 2018. Compared to December 31, 2018, non-performing commercial loans increased by $1.8 million, non-performing real estate loans increased by $1.4 million and non-performing consumer loans increased by $523,000. Other real estate owned and repossessed assets totaled $3.9 million as of June 30, 2019 which is an increase of $1.8 million from December 31, 2018. The majority of this increase was due to other real estate owned properties acquired in the Salin transaction, including the closed branches, totaling $1.7 million.

Expense Management

Total non-interest expense was $1.8 million higher in the second quarter of 2019 when compared to the first quarter of 2019. Salaries and employee benefits, net occupancy expenses, other expense and FDIC insurance expense increased by $2.5 million, $376,000, $213,000 and $205,000, respectively. Offsetting these increases was a decrease in outside services and consultants expense of $1.9 million. Excluding merger expenses, total non-interest expense increased by $4.4 million during the second quarter of 2019 when compared to the first quarter of 2019.

	Three Months Ended
	June 30									March 31
	2019									2019									Adjusted
Non-interest Expense	Actual			Merger Expenses			Adjusted			Actual			Merger Expenses			Adjusted			Amount Change			Percent Change
Salaries and employee benefits	$	16,951		$	(482	)	$	16,469		$	14,466		$	(2	)	$	14,464		$	2,005			13.9	%
Net occupancy expenses		3,148			(75	)		3,073			2,772			-			2,772			301			10.9	%
Data processing		2,139			(68	)		2,071			1,966			(292	)		1,674			397			23.7	%
Professional fees		598			(153	)		445			493			(239	)		254			191			75.2	%
Outside services and consultants		1,655			(176	)		1,479			3,530			(2,290	)		1,240			239			19.3	%
Loan expense		2,048			(2	)		2,046			1,949			-			1,949			97			5.0	%
FDIC deposit insurance		365			-			365			160			-			160			205			128.1	%
Other losses		169			(69	)		100			104			(2	)		102			(2	)		-2.0	%
Other expenses		4,511			(507	)		4,004			4,298			(1,293	)		3,005			999			33.2	%
Total non-interest expense	$	31,584		$	(1,532	)	$	30,052		$	29,738		$	(4,118	)	$	25,620		$	4,432			17.3	%
Annualized Non-interest Exp. to Avg. Assets		2.51	%					2.39	%		2.80	%					2.41	%

Pg. 8 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Total non-interest expense was $6.6 million higher during the second quarter of 2019 compared to the same period of 2018. Salaries and employee benefits, other expense, net occupancy expense, data processing and loan expense increased $3.1 million, $1.3 million, $628,000, $532,000 and $523,000, respectively. Excluding merger expenses, total non-interest expense increased $5.1 million during the second quarter of 2019 when compared to the second quarter of 2018.

	Three Months Ended
	June 30									June 30
	2019									2018								Adjusted
Non-interest Expense	Actual			Merger Expenses			Adjusted			Actual			Merger Expenses		Adjusted			Amount Change			Percent Change
Salaries and employee benefits	$	16,951		$	(482	)	$	16,469		$	13,809		$	-	$	13,809		$	2,660			19.3	%
Net occupancy expenses		3,148			(75	)		3,073			2,520			-		2,520			553			21.9	%
Data processing		2,139			(68	)		2,071			1,607			-		1,607			464			28.9	%
Professional fees		598			(153	)		445			376			-		376			69			18.4	%
Outside services and consultants		1,655			(176	)		1,479			1,267			-		1,267			212			16.7	%
Loan expense		2,048			(2	)		2,046			1,525			-		1,525			521			34.2	%
FDIC deposit insurance		365			-			365			345			-		345			20			5.8	%
Other losses		169			(69	)		100			269			-		269			(169	)		-62.8	%
Other expenses		4,511			(507	)		4,004			3,224			-		3,224			780			24.2	%
Total non-interest expense	$	31,584		$	(1,532	)	$	30,052		$	24,942		$	-	$	24,942		$	5,110			20.5	%
Annualized Non-interest Exp. to Avg. Assets		2.51	%					2.39	%		2.49	%				2.49	%

Total non-interest expense was $10.5 million higher during the first six months of 2019 when compared to the first six months of 2018. Salaries and employee benefits, outside services and consultants expense, other expense, loan expense and data processing increased $3.2 million, $2.7 million, $2.3 million, $1.2 million and $802,000, respectively. Excluding merger expenses, total non-interest expense increased $4.9 million during the first six months of 2019 when compared to the same period of 2018.

	Six Months Ended
	June 30									June 30
	2019									2018								Adjusted
Non-interest Expense	Actual			Merger Expenses			Adjusted			Actual			Merger Expenses		Adjusted			Amount Change			Percent Change
Salaries and employee benefits	$	31,417		$	(484	)	$	30,933		$	28,182		$	-	$	28,182		$	2,751			9.8	%
Net occupancy expenses		5,920			(75	)		5,845			5,486			-		5,486			359			6.5	%
Data processing		4,105			(360	)		3,745			3,303			-		3,303			442			13.4	%
Professional fees		1,091			(392	)		699			877			-		877			(178	)		-20.3	%
Outside services and consultants		5,185			(2,466	)		2,719			2,531			-		2,531			188			7.4	%
Loan expense		3,997			(2	)		3,995			2,782			-		2,782			1,213			43.6	%
FDIC deposit insurance		525			-			525			655			-		655			(130	)		-19.8	%
Other losses		273			(71	)		202			415			-		415			(213	)		-51.3	%
Other expenses		8,809			(1,800	)		7,009			6,548			-		6,548			461			7.0	%
Total non-interest expense	$	61,322		$	(5,650	)	$	55,672		$	50,779		$	-	$	50,779		$	4,893			9.6	%
Annualized Non-interest Exp. to Avg. Assets		2.64	%					2.40	%		2.57	%				2.57	%

Annualized non-interest expense as a percent of average assets were 2.51%, 2.80% and 2.49% for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively. Annualized non-interest expense, excluding merger expenses, as a percent of average assets continue to decline and were 2.39%, 2.41% and 2.49% for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively.

Annualized non-interest expense as a percent of average assets were 2.64% and 2.57% for the first six months of 2019 and 2018, respectively. Annualized non-interest expense, excluding merger expenses, as a percent of average assets were 2.40% and 2.57% for the first six months of 2019 and 2018, respectively. Horizon’s strategy to build mass and scale continues to prove effective.

Pg. 9 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Income tax expense totaled $3.3 million for the second quarter of 2019, an increase of $1.2 million when compared to the first quarter of 2019 and an increase of $515,000 when compared to the second quarter of 2018. The increase in income tax expense from the first quarter of 2019 and the second quarter of 2018 was primarily due to increases in income before income taxes of $7.1 million and $3.0 million, respectively, when compared to the second quarter of 2019.

Use of Non-GAAP Financial Measures

Certain information set forth in this press release 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, total loans and loan growth, the allowance for loan and lease losses, tangible stockholders’ equity, tangible book value per share, the return on average assets and the return on average equity. In each case, we have identified special circumstances that we consider to be non-recurring and have excluded them, to show the impact of such events as acquisition-related purchase accounting adjustments, among others we have identified in our reconciliations. Horizon believes that these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to the purchase accounting impacts and one-time costs of acquisitions and non-core items. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this press release for reconciliations of the non-GAAP figures identified herein and their most comparable GAAP measures.

Non-GAAP Reconciliation of Tangible Stockholders' 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
	2019		2019		2018		2018		2018
Total stockholders' equity	$	626,461	$	609,468	$	491,992	$	477,594	$	470,535
Less: Intangible assets		179,776		176,864		130,270		130,755		131,239
Total tangible stockholders' equity	$	446,685	$	432,604	$	361,722	$	346,839	$	339,296

Common shares outstanding		45,061,372		45,052,747		38,375,407		38,367,890		38,362,640

Tangible book value per common share	$	9.91	$	9.60	$	9.43	$	9.04	$	8.84

Pg. 10 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity
(Dollars in Thousands, Unaudited)
	Three Months Ended									Six Months Ended
	June 30			March 31			June 30			June 30			June 30
	2019			2019			2018			2019			2018
Non-GAAP Reconciliation of Return on Average Assets
Average assets	$	5,047,365		$	4,307,189		$	4,017,551		$	4,679,423		$	3,980,864
Return on average assets ("ROAA") as reported		1.32	%		1.02	%		1.41	%		1.18	%		1.36	%
Merger expenses		0.12	%		0.39	%		0.00	%		0.24	%		0.00	%
Tax effect		-0.02	%		-0.07	%		0.00	%		-0.04	%		0.00	%
ROAA excluding merger expenses		1.42	%		1.34	%		1.41	%		1.38	%		1.36	%
Loss (gain) on sale of investment securities		0.01	%		0.00	%		0.00	%		0.00	%		0.00	%
Tax effect		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
ROAA excluding gain on sale of investment securities		1.43	%		1.34	%		1.41	%		1.38	%		1.36	%
Death benefit on bank owned life insurance ("BOLI")		-0.03	%		0.00	%		-0.02	%		-0.02	%		-0.01	%
ROAA excluding death benefit on BOLI		1.40	%		1.34	%		1.39	%		1.36	%		1.35	%
Core ROAA		1.40	%		1.34	%		1.39	%		1.36	%		1.35	%

Non-GAAP Reconciliation of Return on Average Common Equity
Average Common Equity	$	622,028		$	506,449		$	465,968		$	563,862		$	463,156
Return on average common equity ("ROACE") as reported		10.73	%		8.66	%		12.15	%		9.82	%		11.72	%
Merger expenses		0.99	%		3.30	%		0.00	%		2.02	%		0.00	%
Tax effect		-0.19	%		-0.55	%		0.00	%		-0.35	%		0.00	%
ROACE excluding merger expenses		11.53	%		11.41	%		12.15	%		11.49	%		11.72	%
Loss (gain) on sale of investment securities		0.06	%		-0.01	%		0.00	%		0.03	%		0.00	%
Tax effect		-0.01	%		0.00	%		0.00	%		-0.01	%		0.00	%
ROACE excluding gain on sale of investment securities		11.58	%		11.40	%		12.15	%		11.51	%		11.72	%
Death benefit on bank owned life insurance ("BOLI")		-0.24	%		0.00	%		-0.13	%		-0.13	%		-0.07	%
ROACE excluding death benefit on BOLI		11.34	%		11.40	%		12.02	%		11.38	%		11.65	%
Core ROACE		11.34	%		11.40	%		12.02	%		11.38	%		11.65	%

About Horizon

Horizon Bancorp, Inc. is an independent, commercial bank holding company serving northern and central Indiana, and southern, central and the Great Lakes Bay regions of Michigan through its commercial banking subsidiary Horizon Bank. Horizon also offers mortgage-banking services throughout the Midwest. Horizon may be reached online at www.horizonbank.com. Its common stock is traded on the NASDAQ Global Select Market under the symbol HBNC.

Pg. 11 cont. Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon. For these statements, Horizon claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. 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,” “estimate,” “project,” “intend,” “plan,” “believe,” “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. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in its Form 10-K. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Contact:	Horizon Bancorp, Inc.
	Mark E. Secor
	Chief Financial Officer
	(219) 873-2611
	Fax: (219) 874-9280

# # #

HORIZON BANCORP, INC.

Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)

	June 30		March 31		December 31		September 30		June 30
	2019		2019		2018		2018		2018
Balance sheet:
Total assets	$	5,098,682	$	5,051,639	$	4,246,688	$	4,150,561	$	4,076,611
Investment securities		887,187		893,469		810,460		766,153		735,962
Commercial loans		2,062,623		2,089,579		1,721,590		1,698,582		1,672,998
Mortgage warehouse loans		133,428		71,944		74,120		71,422		109,016
Residential mortgage loans		814,065		819,824		668,141		651,250		634,636
Consumer loans		654,552		639,710		549,481		536,132		507,866
Earning assets		4,577,487		4,538,952		3,842,903		3,743,592		3,681,583
Non-interest bearing deposit accounts		810,350		811,768		642,129		621,475		615,018
Interest bearing transaction accounts		2,153,189		2,115,847		1,684,336		1,605,825		1,644,758
Time deposits		967,236		960,408		812,911		901,254		756,387
Borrowings		436,233		457,788		550,384		477,719		524,846
Subordinated debentures		56,194		55,310		37,837		37,791		37,745
Total stockholders' equity		626,461		609,468		491,992		477,594		470,535

	Three Months Ended
Income statement:
Net interest income	$	41,529		$	34,280		$	33,836		$	33,772		$	33,550
Provision for loan losses		896			364			528			1,176			635
Non-interest income		10,898			8,712			8,477			8,686			8,932
Non-interest expense		31,584			29,738			26,117			25,620			24,942
Income tax expense		3,305			2,074			2,535			2,597			2,790
Net income	$	16,642		$	10,816		$	13,133		$	13,065		$	14,115

Per share data: (1)
Basic earnings per share	$	0.37		$	0.28		$	0.34		$	0.34		$	0.37
Diluted earnings per share		0.37			0.28			0.34			0.34			0.37
Cash dividends declared per common share		0.12			0.10			0.10			0.10			0.10
Book value per common share		13.90			13.53			12.82			12.45			12.27
Tangible book value per common share		9.91			9.60			9.43			9.04			8.84
Market value - high		17.13			17.82			19.40			21.39			21.94
Market value - low	$	15.51		$	15.50		$	14.94		$	19.44		$	19.17
Weighted average shares outstanding - Basic		45,055,117			38,822,543			38,367,972			38,365,379			38,347,612
Weighted average shares outstanding - Diluted		45,130,408			38,906,172			38,488,002			38,534,970			38,519,401

Key ratios:
Return on average assets		1.32	%		1.02	%		1.25	%		1.26	%		1.41	%
Return on average common stockholders' equity		10.73			8.66			10.73			10.87			12.15
Net interest margin		3.73			3.62			3.60			3.67			3.78
Loan loss reserve to total loans		0.50			0.49			0.59			0.60			0.58
Average equity to average assets		12.32			11.76			11.62			11.62			11.60
Bank only capital ratios:
Tier 1 capital to average assets		9.78			10.99			9.38			9.53			9.65
Tier 1 capital to risk weighted assets		12.22			11.84			11.91			12.09			12.21
Total capital to risk weighted assets		12.69			12.30			12.47			12.66			12.77

Loan data:
Substandard loans	$	47,764		$	41,728		$	38,775		$	34,655		$	40,941
30 to 89 days delinquent		9,633			9,980			7,161			6,878			3,978

90 days and greater delinquent - accruing interest	$	391		$	192		$	568		$	202		$	49
Trouble debt restructures - accruing interest		2,198			2,532			2,002			1,830			1,911
Trouble debt restructures - non-accrual		1,576			1,349			1,057			1,077			894
Non-accrual loans		14,764			15,313			11,548			11,417			12,555
Total non-performing loans	$	18,929		$	19,386		$	15,175		$	14,526		$	15,409
Non-performing loans to total loans		0.52	%		0.54	%		0.50	%		0.49	%		0.53	%

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

HORIZON BANCORP, INC.

Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)

	June 30			June 30
	2019			2018
Balance sheet:
Total assets	$	5,098,682		$	4,076,611
Investment securities		887,187			735,962
Commercial loans		2,062,623			1,672,998
Mortgage warehouse loans		133,428			109,016
Residential mortgage loans		814,065			634,636
Consumer loans		654,552			507,866
Earning assets		4,577,487			3,681,583
Non-interest bearing deposit accounts		810,350			615,018
Interest bearing transaction accounts		2,153,189			1,644,758
Time deposits		967,236			756,387
Borrowings		436,233			524,846
Subordinated debentures		56,194			37,745
Total stockholders' equity		626,461			470,535

	Six Months Ended
Income statement:
Net interest income	$	75,809		$	66,961
Provision for loan losses		1,260			1,202
Non-interest income		19,610			17,250
Non-interest expense		61,322			50,779
Income tax expense		5,379			5,311
Net income	$	27,458		$	26,919

Per share data: (1)
Basic earnings per share	$	0.65		$	0.70
Diluted earnings per share		0.65			0.70
Cash dividends declared per common share		0.22			0.20
Book value per common share		13.90			12.27
Tangible book value per common share		9.91			8.84
Market value - high		17.82			21.94
Market value - low	$	15.50		$	17.87
Weighted average shares outstanding - Basic		41,956,047			38,327,118
Weighted average shares outstanding - Diluted		42,054,352			38,484,321

Key ratios:
Return on average assets		1.18	%		1.36	%
Return on average common stockholders' equity		9.82			11.72
Net interest margin		3.68			3.81
Loan loss reserve to total loans		0.50			0.58
Average equity to average assets		12.05			11.63
Bank only capital ratios:
Tier 1 capital to average assets		9.78			9.65
Tier 1 capital to risk weighted assets		12.22			12.21
Total capital to risk weighted assets		12.69			12.77

Loan data:
Substandard loans	$	47,764		$	40,941
30 to 89 days delinquent		9,633			3,978

90 days and greater delinquent - accruing interest	$	391		$	49
Trouble debt restructures - accruing interest		2,198			1,911
Trouble debt restructures - non-accrual		1,576			894
Non-accrual loans		14,764			12,555
Total non-performing loans	$	18,929		$	15,409
Non-performing loans to total loans		0.52	%		0.53	%

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

HORIZON BANCORP, INC.

Allocation of the Allowance for Loan and Lease Losses
(Dollars in Thousands, Unaudited)

	June 30		March 31		December 31		September 30		June 30
	2019		2019		2018		2018		2018
Commercial	$	11,881	$	11,556	$	10,495	$	10,581	$	8,865
Real estate		1,732		1,588		1,676		1,574		1,761
Mortgage warehousing		1,040		1,014		1,006		1,030		1,084
Consumer		3,652		3,663		4,643		4,613		5,361
Total	$	18,305	$	17,821	$	17,820	$	17,798	$	17,071

Net Charge-offs (Recoveries)
(Dollars in Thousands, Unaudited)

	Three Months Ended
	June 30			March 31			December 31			September 30			June 30
	2019			2019			2018			2018			2018
Commercial	$	265		$	61		$	196		$	179		$	(40	)
Real estate		41			(27	)		47			(2	)		(2	)
Mortgage warehousing		-			-			-			-			-
Consumer		106			329			263			272			80
Total	$	412		$	363		$	506		$	449		$	38
Percent of net charge-offs to average loans outstanding for the period		0.01	%		0.01	%		0.02	%		0.02	%		0.00	%

Total Non-performing Loans
(Dollars in Thousands, Unaudited)

	June 30			March 31			December 31			September 30			June 30
	2019			2019			2018			2018			2018
Commercial	$	8,697		$	9,750		$	6,903		$	8,355		$	8,987
Real estate		6,444			5,995			5,007			3,754			3,915
Mortgage warehousing		-			-			-			-			-
Consumer		3,788			3,641			3,265			2,417			2,507
Total	$	18,929		$	19,386		$	15,175		$	14,526		$	15,409
Non-performing loans to total loans		0.52	%		0.54	%		0.55	%		0.49	%		0.53	%

Other Real Estate Owned and Repossessed Assets
(Dollars in Thousands, Unaudited)

	June 30		March 31		December 31		September 30		June 30
	2019		2019		2018		2018		2018
Commercial	$	3,694	$	3,496	$	1,967	$	2,181	$	2,628
Real estate		113		126		60		58		302
Mortgage warehousing		-		-		-		-		-
Consumer		48		30		48		26		62
Total	$	3,855	$	3,652	$	2,075	$	2,265	$	2,992

HORIZON BANCORP, INC.

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

	Three Months Ended								Three Months Ended
	June 30, 2019								June 30, 2018
	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate
Assets
Interest-earning assets
Federal funds sold	$	18,251		$	120		2.64	%	$	3,367		$	15		1.79	%
Interest-earning deposits		18,516			83		1.80	%		25,946			107		1.65	%
Investment securities - taxable		480,036			3,070		2.57	%		416,182			2,441		2.35	%
Investment securities - non-taxable⁽¹⁾		411,944			2,793		3.44	%		307,219			1,870		3.15	%
Loans receivable⁽²⁾⁽³⁾		3,637,927			47,784		5.29	%		2,886,087			36,308		5.08	%
Total interest-earning assets⁽¹⁾		4,566,674			53,850		4.81	%		3,638,801			40,741		4.57	%

Non-interest-earning assets
Cash and due from banks		67,537								44,213
Allowance for loan losses		(18,036	)							(16,617	)
Other assets		431,190								351,154

Total average assets	$	5,047,365							$	4,017,551

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	3,118,821		$	8,938		1.15	%	$	2,403,780		$	3,920		0.65	%
Borrowings		398,320			2,495		2.51	%		489,608			2,679		2.19	%
Subordinated debentures		53,572			888		6.65	%		36,525			592		6.50	%
Total interest-bearing liabilities		3,570,713			12,321		1.38	%		2,929,913			7,191		0.98	%

Non-interest-bearing liabilities
Demand deposits		818,872								605,188
Accrued interest payable and other liabilities		35,752								16,482
Stockholders' equity		622,028								465,968

Total average liabilities and stockholders' equity	$	5,047,365							$	4,017,551

Net interest income/spread				$	41,529		3.42	%				$	33,550		3.59	%
Net interest income as a percent of average interest-earning assets⁽¹⁾							3.73	%							3.78	%

⁽¹⁾	Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
⁽²⁾	Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.
⁽³⁾	Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees. The average rate is presented on a tax equivalent basis.

HORIZON BANCORP, INC.

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

	Six Months Ended								Six Months Ended
	June 30, 2019								June 30, 2018
	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate
Assets
Interest-earning assets
Federal funds sold	$	13,072		$	224		3.46	%	$	3,560		$	29		1.64	%
Interest-earning deposits		22,414			191		1.72	%		24,749			197		1.61	%
Investment securities - taxable		464,544			5,980		2.60	%		409,669			4,767		2.35	%
Investment securities - non-taxable⁽¹⁾		402,883			5,421		3.43	%		307,462			3,735		3.13	%
Loans receivable⁽²⁾⁽³⁾		3,346,731			87,407		5.28	%		2,855,236			71,439		5.05	%
Total interest-earning assets⁽¹⁾		4,249,644			99,223		4.79	%		3,600,676			80,167		4.55	%

Non-interest-earning assets
Cash and due from banks		56,160								43,984
Allowance for loan losses		(17,939	)							(16,480	)
Other assets		391,558								352,684

Total average assets	$	4,679,423							$	3,980,864

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	2,818,496		$	15,814		1.13	%	$	2,354,578		$	6,791		0.58	%
Borrowings		487,266			6,116		2.53	%		508,731			5,251		2.08	%
Subordinated debentures		45,735			1,484		6.54	%		37,695			1,164		6.23	%
Total interest-bearing liabilities		3,351,497			23,414		1.41	%		2,901,004			13,206		0.92	%

Non-interest-bearing liabilities
Demand deposits		731,556								600,214
Accrued interest payable and other liabilities		32,508								16,490
Stockholders' equity		563,862								463,156

Total average liabilities and stockholders' equity	$	4,679,423							$	3,980,864

Net interest income/spread				$	75,809		3.38	%				$	66,961		3.64	%
Net interest income as a percent of average interest-earning assets⁽¹⁾							3.68	%							3.81	%

⁽¹⁾	Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
⁽²⁾	Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.
⁽³⁾	Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees. The average rate is presented on a tax equivalent basis.

HORIZON BANCORP, INC.

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

	June 30		December 31
	2019		2018
	(Unaudited)
Assets
Cash and due from banks	$	94,686	$	58,492
Interest-earning time deposits		8,090		15,744
Investment securities, available for sale		673,419		600,348
Investment securities, held to maturity (fair value of $219,891 and $208,273)		213,768		210,112
Loans held for sale		3,185		1,038
Loans, net of allowance for loan losses of $18,305 and $17,820		3,646,363		2,995,512
Premises and equipment, net		91,469		74,331
Federal Home Loan Bank stock		22,447		18,073
Goodwill		151,111		119,880
Other intangible assets		28,665		10,390
Interest receivable		19,015		14,239
Cash value of life insurance		94,613		88,062
Other assets		51,851		40,467
Total assets	$	5,098,682	$	4,246,688
Liabilities
Deposits
Non-interest bearing	$	810,350	$	642,129
Interest bearing		3,120,425		2,497,247
Total deposits		3,930,775		3,139,376
Borrowings		436,233		550,384
Subordinated debentures		56,194		37,837
Interest payable		3,005		2,031
Other liabilities		46,014		25,068
Total liabilities		4,472,221		3,754,696
Commitments and contingent liabilities
Stockholders' Equity
Preferred stock, Authorized, 1,000,000 shares, Issued 0 shares		-		-
Common stock, no par value, Authorized 99,000,000 shares (1) Issued 45,086,441 and 38,400,476 shares (1) Outstanding 45,061,372 and 38,375,407 shares (1)		-		-
Additional paid-in capital		380,735		276,101
Retained earnings		241,519		224,035
Accumulated other comprehensive income (loss)		4,207		(8,144	)
Total stockholders' equity		626,461		491,992
Total liabilities and stockholders' equity	$	5,098,682	$	4,246,688

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

HORIZON BANCORP, INC.

Condensed Consolidated Statements of Income
(Dollar Amounts in Thousands, Except Per Share Data, Unaudited)

	Three Months Ended					Six Months Ended
	June 30					June 30
	2019			2018		2019			2018
Interest Income
Loans receivable	$	47,784		$	36,308	$	87,407		$	71,439
Investment securities
Taxable		3,273			2,563		6,395			4,993
Tax exempt		2,793			1,870		5,421			3,735
Total interest income		53,850			40,741		99,223			80,167
Interest Expense
Deposits		8,938			3,920		15,814			6,791
Borrowed funds		2,495			2,679		6,116			5,251
Subordinated debentures		888			592		1,484			1,164
Total interest expense		12,321			7,191		23,414			13,206
Net Interest Income		41,529			33,550		75,809			66,961
Provision for loan losses		896			635		1,260			1,202
Net Interest Income after Provision for Loan Losses		40,633			32,915		74,549			65,759
Non-interest Income
Service charges on deposit accounts		2,480			1,907		4,357			3,795
Wire transfer fees		167			180		285			330
Interchange fees		2,160			1,555		3,521			2,883
Fiduciary activities		2,063			1,818		4,152			3,743
Gains (losses) on sale of investment securities (includes $(100) and $0for the three months ended June 30, 2019 and 2018, respectively, and $(85) and $11 for the six months ended June 30, 2019 and six months ended June 30, 2018 related to accumulated other comprehensive earnings reclassifications)		(100	)		-		(85	)		11
Gain on sale of mortgage loans		2,078			1,896		3,387			3,319
Mortgage servicing income net of impairment		570			511		1,176			860
Increase in cash value of bank owned life insurance		555			442		1,068			877
Death benefit on bank owned life insurance		367			154		367			154
Other income		558			469		1,382			1,278
Total non-interest income		10,898			8,932		19,610			17,250
Non-interest Expense
Salaries and employee benefits		16,951			13,809		31,417			28,182
Net occupancy expenses		3,148			2,520		5,920			5,486
Data processing		2,139			1,607		4,105			3,303
Professional fees		598			376		1,091			877
Outside services and consultants		1,655			1,267		5,185			2,531
Loan expense		2,048			1,525		3,997			2,782
FDIC insurance expense		365			345		525			655
Other losses		169			269		273			415
Other expense		4,511			3,224		8,809			6,548
Total non-interest expense		31,584			24,942		61,322			50,779
Income Before Income Taxes		19,947			16,905		32,837			32,230
Income tax expense (includes $(21) and $0 for the three months ended June 30, 2019 and 2018, respectively, and $(18) and $2 for the six months ended June 30, 2019 and six months ended June 30, 2018 related to income tax expense (benefit) from reclassification items)		3,305			2,790		5,379			5,311
Net Income	$	16,642		$	14,115	$	27,458		$	26,919
Basic Earnings Per Share (Restated - See Note 1)	$	0.37		$	0.37	$	0.65		$	0.70
Diluted Earnings Per Share (Restated - See Note 1)		0.37			0.37		0.65			0.70

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