Horizon Bancorp Lake Havasu City AZ : Annual Report Period Ended 12/31/2021

Consolidated Financial Statements December 31, 2021 and 2020

Horizon Bancorp, Inc. and Subsidiary

Horizon Bancorp, Inc. and Subsidiary

Table of Contents

December 31, 2021 and 2020

Independent Auditor's Report ................................................................................................................................... 1

Consolidated Financial Statements

Consolidated Balance Sheets ................................................................................................................................. 3

Consolidated Statements of Income ...................................................................................................................... 4

Consolidated Statements of Comprehensive Income ........................................................................................... 5

Consolidated Statements of Stockholders' Equity ................................................................................................. 6

Consolidated Statements of Cash Flows ................................................................................................................ 7

Notes to Consolidated Financial Statements ......................................................................................................... 9

Independent Auditor's Report

To the Board of Directors

Horizon Bancorp, Inc. and Subsidiary Lake Havasu City, Arizona

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Horizon Bancorp, Inc. and Subsidiary (the Company), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of their operations and their cash flows for years then ended, in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the consolidated financial statements are available to be issued.

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Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

•  Exercise professional judgment and maintain professional skepticism throughout the audit.

•  Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

•  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

•  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

•  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Phoenix, Arizona

April 21, 2022

Horizon Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets December 31, 2021 and 2020

2021

Assets

Cash and due from banks

$ 6,825,330

2020

$ 8,347,762

Federal funds sold 59,122,000 23,347,000

Cash and cash equivalents 65,947,330 31,694,762

Interest-bearing deposits in banks 20,760,869 28,486,796

Securities available-for-sale 174,140,614 103,557,995

Federal Home Loan Bank stock Loans held-for-sale

2,204,400 1,456,400 - 1,866,276

Loans, net 255,734,531 287,174,442

Premises and equipment, net Operating right-of-use asset Accrued interest receivable Bank owned life insurance Foreclosed real estate Deferred tax asset Other assets

8,729,789 8,194,369

735,259

935,792

1,052,549 1,421,106

7,601,370 7,389,518

30,964 1,226,312

1,998,905 1,485,820

547,341

830,204

Total assets

Liabilities and Stockholders' Equity

Liabilities

Deposits

Noninterest-bearing

• $ 539,483,921

• $ 165,728,370

• $ 475,719,792

• $ 137,534,404

• Interest-bearing 305,340,653 276,353,062

• Total deposits 471,069,023 413,887,466

• Repurchase agreements 12,228,075 10,115,137

• Short and long-term borrowings 7,468,735 12,700,000

Operating lease liability Accrued interest payable Other liabilities

735,259 935,792

77,837 108,987 10,366,031 4,212,853

Total liabilities 501,944,960 441,960,235

Stockholders' Equity

Common stock, par value $0, voting, authorized 20,000,000 shares; issued and outstanding, 4,145,432 4,130,682 as of December 31, 2021 and 2020, respectfully 25,379,182 25,252,182

Retained earnings

Accumulated other comprehensive income (loss)Total stockholders' equity

Total liabilities and stockholders' equity

See Notes to Consolidated Financial Statements

13,359,254 7,703,755

(1,199,475)

37,538,961 $ 539,483,921

803,620 33,759,557 $ 475,719,792

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