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Derivative Financial Instruments
 9 Months Ended
Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Our hedging policy allows the use of interest rate derivative instruments to manage our exposure to interest rate risk of specified assets and liabilities. All derivative instruments are carried on the balance sheet at their estimated fair value and are recorded in other assets or other liabilities, as appropriate, and in the net change in each of these financial statement line items in the accompanying consolidated statement of cash flows.
Fair Value Hedges
Fair value hedges are used to manage interest rate risk related to the underlying hedged items. The Company utilizes fair value hedges and applies the portfolio layer method to hedge stated amounts within a closed portfolio of certain available-for-sale mortgage-backed debt securities. As of September 30, 2025, and December 31, 2024, the amortized cost of closed portfolios of AFS debt securities using the portfolio layer method was $124.1 million and $0 million, respectively.

To mitigate the impact of interest rate fluctuations on fair value, the Company previously entered into interest rate swap agreements on individual loans, converting the fixed rate loans to a variable rate. The Company also previously utilized fair value hedges to hedge investment securities, converting the fixed rate security to a variable rate. During the year ended December 31, 2024, the Company terminated the fair value hedges on loans and securities, recording a deferred gain of $2.3 million on the loan termination that will be accreted into interest income over the remaining life of the underlying loans, and a mark-to-market adjustment of $0.3 million that was recorded in non-interest income upon termination of the fair value hedges on investment securities.

Changes to fair-value hedges on loans and the related loans are recorded as gains or losses in non–interest income. Changes to fair value hedges on mortgage-backed securities are recorded in interest income. The fair value hedges are considered highly effective.
Other Derivative Instruments

From time to time, the Company may enter into interest rate swaps that are not designated as hedging instruments. These derivative contracts typically involve transactions in which the Company enters into an interest rate swap with a customer while simultaneously executing an offsetting interest rate swap with a third-party financial institution. Under these arrangements, the Company agrees to pay interest to the customer on a notional amount at a variable rate and receives interest from the customer at a fixed rate. Concurrently, the Company pays the same fixed rate to the third-party financial institution and receives the same variable rate on the same notional amount. These interest rate derivative contracts allow our customers to effectively convert variable rate loans to fixed rate loans.
The Company also enters into non–hedging derivatives in the form of mortgage loan forward sale commitments with investors and commitments to originate mortgage loans as part of its mortgage banking operations. As of September 30, 2025, these derivatives are recorded at fair value and are not expected to have a significant impact on the Company's net income over the next 12 months.
Changes in fair value of both the forward sale commitments and commitments to originate mortgage loans were recorded and the net gains or losses included in the Company’s gain on sale of loans.
The following tables summarize the fair value of our derivative financial instruments utilized by Horizon on a gross basis for the periods indicated.
Asset DerivativesLiability Derivatives
September 30, 2025September 30, 2025
Notional
Amount		Fair
Value		Notional
Amount		Fair
Value
Derivatives designated as hedging instruments
  Interest rate contracts – fair value hedges$— $— $124,093 $530 
      Total derivatives designated as hedging instruments— — 124,093 530 
Derivatives not designated as hedging instruments
Interest rate contracts -customer accommodation$462,008 $13,973 $462,008 $13,973 
Mortgage loan contracts— — 21,246 18 
Commitments to originate mortgage loans10,992 314 — — 
Total derivatives not designated as hedging instruments473,000 14,287 483,254 13,991 
Total derivatives subject to enforceable master netting arrangements, gross$473,000 $14,287 $483,254 $13,991 
Less: Gross amounts offset— — — — 
Total derivatives subject to enforceable master netting arrangements, net$473,000 $14,287 $483,254 $13,991 

Asset DerivativesLiability Derivatives
December 31, 2024December 31, 2024
Notional
Amount
Fair
Value
Notional
Amount
Fair
Value
Derivatives not designated as hedging instruments
Interest rate contracts - customer accommodation$521,520 $28,817 $521,520 $28,817 
Mortgage loan contracts6,155 27 — — 
Commitments to originate mortgage loans6,856 202 — — 
Total derivatives not designated as hedging instruments534,531 29,046 521,520 28,817 
Total derivatives subject to enforceable master netting arrangements, gross$534,531 $29,046 $521,520 $28,817 
Less: Gross amounts offset— — — — 
Total derivatives subject to enforceable master netting arrangements, net$534,531 $29,046 $521,520 $28,817 

While the Company is party to master netting arrangements with most of its swap derivative counterparties, the Company has elected to not offset derivative assets and liabilities under these agreements on its consolidated balance sheets.
Collateral exchanged between the Company and dealer bank counterparties is generally subject to thresholds and transfer minimums and usually consists of marketable securities. At September 30, 2025, the Company pledged marketable securities as collateral with a carrying value of $27.7 million.
The effect of the derivative and the hedged item in fair value hedging relationships on the condensed consolidated statements of income for three and nine month periods ended September 30, 2025 and September 30, 2024 is as follows:
Location of gain
(loss)
recognized on derivative and Hedge item
Amount of Gain (Loss) Recognized on Derivative and Hedged Item
Three Months Ended
Nine Months Ended
September 30, 2025September 30, 2024September 30, 2025September 30, 2024
Derivatives designated as hedging instruments
Interest rate contracts - fair value hedgeInterest income - loans receivable$— $317 $— $982 
Hedged item— (317)— (982)
Interest rate contracts - fair value hedgeInterest income - investment securities18 — 18 — 
Hedged item72 — 72 — 
Total$90 $— $90 $— 
The effect of derivatives not designated as hedging instruments on the condensed consolidated statements of income for the three and nine month periods ended September 30, 2025 and September 30, 2024 is as follows:
Location of gain
(loss)
recognized on derivative
Amount of Gain (Loss) Recognized on Derivative
Three Months Ended
Nine Months Ended
September 30, 2025September 30, 2024September 30, 2025September 30, 2024
Derivative not designated as hedging relationship
Mortgage loan contractsNon-interest income-Gain on sale of loans$(331)$(24)$112 $34 
Commitments to originate mortgage loansNon-interest income-Gain on sale of loans101 378 (45)181 
Total$(230)$354 $67 $215 

The following tables summarize the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships.

Amortized Cost of Hedged ItemsCumulative Hedge Accounting Basis Adjustments
September 30, 2025December 31, 2024September 30, 2025December 31, 2024
Available-for-Sale Debt Securities$125,367 $— $530 $—