XML 18 R9.htm IDEA: XBRL DOCUMENT
v3.23.2

Accounting Policies | 6 Months Ended
--- | ---
Jun. 30, 2023
Accounting Policies [Abstract] |
Accounting Policies | Accounting Policies The accompanying unaudited condensed consolidated financial statements include the accounts of Horizon Bancorp, Inc. (“Horizon” or the “Company”) and its wholly-owned subsidiaries, including Horizon Bank (“Horizon Bank” or the “Bank”), which is an Indiana commercial bank. All inter–company balances and transactions have been eliminated. The results of operations for the periods ended June 30, 2023 and June 30, 2022 are not necessarily indicative of the operating results for the full year of 2023 or 2022. The accompanying unaudited condensed consolidated financial statements reflect all adjustments that are, in the opinion of Horizon’s management, necessary to fairly present the financial position, results of operations and cash flows of Horizon for the periods presented. Those adjustments consist only of normal recurring adjustments. Certain information and note disclosures normally included in Horizon’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Horizon’s Annual Report on Form 10–K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission on March 15, 2023 (the “2022 Annual Report on Form 10–K”). The condensed consolidated balance sheet of Horizon as of December 31, 2022 has been derived from the audited balance sheet as of that date. On July 16, 2019, the Board of Directors of the Company authorized a stock repurchase program for up to 2,250,000 shares of Horizon’s issued and outstanding common stock, no par value. As of June 30, 2023, Horizon had repurchased a total of 803,349 shares at an average price per share of $16.89. Basic earnings per share is computed by dividing net income available to common shareholders (net income less dividend requirements for preferred stock and accretion of preferred stock discount) by the weighted–average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The following table shows computation of basic and diluted earnings per share.
| Three Months Ended |  | Six Months Ended
| June 30 |  | June 30
| 2023 |  | 2022 |  | 2023 |  | 2022
Basic earnings per share |  |  |  |  |  |  |
Net income | $ | 18,763 |  |  | $ | 24,859 |  |  | $ | 36,991 |  |  | $ | 48,422 |
Weighted average common shares outstanding | 43,639,987 |  |  | 43,572,796 |  |  | 43,611,926 |  |  | 43,563,804 |
Basic earnings per share | $ | 0.43 |  |  | $ | 0.57 |  |  | $ | 0.85 |  |  | $ | 1.11 |
Diluted earnings per share |  |  |  |  |  |  |
Net income | $ | 18,763 |  |  | $ | 24,859 |  |  | $ | 36,991 |  |  | $ | 48,422 |
Weighted average common shares outstanding | 43,639,987 |  |  | 43,572,796 |  |  | 43,611,926 |  |  | 43,563,804 |
Effect of dilutive securities: |  |  |  |  |  |  |
Restricted stock | 102,046 |  |  | 77,296 |  |  | 136,693 |  |  | 107,122 |
Stock options | 555 |  |  | 34,599 |  |  | 8,702 |  |  | 40,896 |
Weighted average common shares outstanding | 43,742,588 |  |  | 43,684,691 |  |  | 43,757,321 |  |  | 43,711,822 |
Diluted earnings per share | $ | 0.43 |  |  | $ | 0.57 |  |  | $ | 0.85 |  |  | $ | 1.11 |
There were 484,650 and 415,455 shares for the three and six months ended June 30, 2023 which were not included in the computation of diluted earnings per share because they were non–dilutive. There were 319,692 and 206,421 shares for the three and six months ended June 30, 2022 which were not included in the computation of diluted earnings per share because they were non–dilutive. Reclassifications Certain reclassifications have been made to the 2022 condensed consolidated financial statements to be comparable to 2023. These reclassifications were not material and had no effect on net income. Revision of Previously Issued Financial Statements We have revised amounts reported in previously issued financial statements for the periods presented in this Quarterly Report on Form 10–Q related to immaterial errors. The errors relate to the amortization expense of the indirect loan dealer reserve asset not being reported as a reduction in interest income on loans and the non–cash transfer of available for sale securities to held to maturity securities. The correction of these errors resulted in a reduction in interest income on loans receivable and a reduction in non–interest loan expense on the Company's consolidated income statement and the disclosure of the transfer of available for sale securities to held to maturity securities in the statements of cash flows. This revision does not impact the Company's net income. We evaluated the aggregate effects of these errors to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements and disclosures included in our Quarterly Report on Form 10–Q for the three and six months ended June 30, 2022. The following tables present the revisions to the line items of our previously issued financial statements to reflect the correction of the errors:
Consolidated Statements of Income
Three Months Ended June 30, 2022
| As Reported |  | Indirect Loan Dealer Reserve Adjustment |  | As Revised
Interest income |  |  |  |  |
Loans receivable | $ | 41,549 |  |  | $ | (964) |  |  | $ | 40,585 |
Total interest income | 57,572 |  |  | (964) |  |  | 56,608 |
Net interest income | 53,008 |  |  | (964) |  |  | 52,044 |
Net interest income after credit loss expense (recovery) | 52,768 |  |  | (964) |  |  | 51,804 |
Non–interest expense |  |  |  |  |
Loan expense | 2,497 |  |  | (964) |  |  | 1,533 |
Total non–interest expense | 36,368 |  |  | (964) |  |  | 35,404 |
Net income | 24,859 |  |  | — |  |  | 24,859 |
Consolidated Statements of Income
Six Months Ended June 30, 2022
| As Reported |  | Indirect Loan Dealer Reserve Adjustment |  | As Revised
Interest income |  |  |  |  |
Loans receivable | $ | 79,428 |  |  | $ | (2,304) |  |  | $ | 77,124 |
Total interest income | 109,654 |  |  | (2,304) |  |  | 107,350 |
Net interest income | 101,179 |  |  | (2,304) |  |  | 98,875 |
Net interest income after credit loss expense (recovery) | 102,325 |  |  | (2,304) |  |  | 100,021 |
Non–interest expense |  |  |  |  |
Loan expense | 5,042 |  |  | (2,304) |  |  | 2,738 |
Total non–interest expense | 72,978 |  |  | (2,304) |  |  | 70,674 |
Net income | 48,422 |  |  | — |  |  | 48,422 |
Additional immaterial reclassifications made to the 2022 condensed consolidated financial statements to be comparable to 2023 are not included within the revision to the consolidated statement of cash flows noted below.
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2022
| As Reported |  | Indirect Loan Dealer Reserve Adjustment |  | Transfer of AFS Securities to HTM Securities |  | As Revised
Operating Activities |  |  |  |  |  |  |
Net change in other assets | $ | (11,986) |  |  | $ | 4,153 |  |  | $ | — |  |  | $ | (7,833) |
Net cash provided by operating activities | 51,381 |  |  | 4,153 |  |  | — |  |  | 55,534 |
Investing activities |  |  |  |  |  |  |
Net change in loans | (294,325) |  |  | (4,153) |  |  | — |  |  | (298,478) |
Net cash used in investing activities | (809,869) |  |  | (4,153) |  |  | — |  |  | (814,022) |
Net Change in Cash and Cash Equivalents | (484,660) |  |  | — |  |  | — |  |  | (484,660) |
Additional Supplemental Information |  |  |  |  |  |  |
Transfer of available for sale securities to held to maturity securities | — |  |  | — |  |  | 120,881 |  |  | 120,881 |
Adoption of New Accounting Standards Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2022–02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures The FASB has issued ASU 2022–02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, in March 2022. These amendments eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, these amendments require that an entity disclose current–period gross write–offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326–20. The guidance is effective for entities that have adopted ASU 2016–13 for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. These amendments should be applied prospectively. If an entity elects to early adopt ASU 2022–02 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. An entity may elect to early adopt the amendments about TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The Company adopted this standard during the first quarter of 2023 and it did not have a material impact on the consolidated financial statements. Accounting Guidance Issued But Not Yet Adopted FASB ASU No. 2020–04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting The FASB has issued ASU 2020–04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the transition away from the LIBOR or other interbank offered rates on financial reporting. To help with the transition to new reference rates, the ASU provides optional expedients and exceptions for applying GAAP to affected contract modifications and hedge accounting relationships. The main provisions include: •A change in a contract's reference interest rate would be accounted for as a continuation of that contract rather than as the creation of a new one for contracts, including loans, debt, leases, and other arrangements, that meet specific criteria. •When updating its hedging strategies in response to reference rate reform, an entity would be allowed to preserve its hedge accounting. The guidance is applicable only to contracts or hedge accounting relationships that reference LIBOR or another reference rate expected to be discontinued. Because the guidance is meant to help entities through the transition period, it will be in effect for a limited time and will not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, for which an entity has elected certain optional expedients that are retained through the end of the hedging relationship. The amendments in this ASU are effective March 12, 2020 through December 31, 2022. ASU 2020–04 permits relief solely for reference rate reform actions and permits different elections over the effective date for legacy and new activity. Accordingly, the Company is evaluating and reassessing the elections on a quarterly basis. For current elections in effect regarding the assertion of the probability of forecasted transactions, the Company elects the expedient to assert the probability of the hedged interest payments and receipts regardless of any expected modification in terms related to reference rate reform. The Company believes the adoption of this guidance on activities subsequent to December 31, 2020 through December 31, 2022 will not have a material impact on the consolidated financial statements. FASB ASU No. 2023–02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method The FASB has issued ASU 2023–02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. This guidance allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. This guidance is effective for public business entities for fiscal years including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted in any interim period. The Company is assessing ASU 2023–02 and its impact on its accounting and disclosures.

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147483426/235-10-50-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 235 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//235/tableOfContent + Details
Name: | us-gaap_SignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration