哈里逊合众银行 2025年度报告

Dear Fellow Shareholders, 2025 was a positive year for Horizon’s key stakeholders on many fronts. Forour shareholders, we delivered a significant step forward in Horizon’sstrategy to improve shareholder performance. Throughout the first half ofthe year, the team organically advanced the financial results of theorganization and closed the gaps on net interest margin (NIM) and returnon assets (ROA) relative to industry averages. Our community bankingmodel continued to drive our performance improvement, led by strong,quality loan growth and solid deposit gathering efforts, while retainingpeer-leading credit metrics. As we entered the third quarter of 2025 withthe core operations of the Company solidified, executive leadership and theBoard decided to remove the legacy structural inefficiencies on the balancesheet that had prevented Horizon from being recognized as one of the topperforming community banks in our peer set. We initiated these actionsthrough the sale of a large portion of the securities portfolio, the exit of theindirect auto portfolio, and the elimination of non-core funding sources. Asthese balance sheet activities unfolded, our community banking teamremained focused on what we do best - providing active leadership in ourlocal communities, extending credit to build and expand businesses andhomeownership, and delivering excellent products and services foreveryday banking activities. Thomas M. PrameChief Executive Officer& President The balance sheet activities were also accompanied by successful debt andequity raises that align with our sound capital management practices. Inour engagements with the capital markets, we found Horizon’s businessmodel and strategy to be well received. Both offerings were significantlyoversubscribed, with existing and new investors to Horizon, whichre-affirmed our confidence in our strategic plans. Our restructuring efforts concluded in the fourth quarter as Horizonemerged with an industry leading return on asset profile exceeding 1.6%,and ROE of nearly 16% and a net interest margin exceeding 4.20%. Proudly,these results accentuate the high quality, core banking franchise andresilient balance sheet design that has been the foundation to Horizon’ssuccess for decades and the cornerstone of the value proposition for ourshareholders. We are confident our efforts to build today’s balance sheetwill yield consistent and durable top-tier returns for our shareholders heading into 2026, and beyond. Eric P. BlackhurstChairman of the Board For our communities, we continue to take pride in our efforts to help lead success in markets we call home.Horizon’s highly engaged and local teams of 800-plus strong continue to deliver products and servicesaimed at growing and enriching the lives of our clients and providing sound and trusted financial advice.Over the course of 2025, our teams provided over $1 billion in new loans in our local communities, tobusiness owners to create more jobs and grow our economies, and to consumers to purchase and renovatehomes. Additionally, we continue providing multiple impact lending programs to help develop ourcommunities and we are proud to assist in their continued advancement. Finally, our team membersvolunteered over 13,000 hours to 200+ local organizations. These efforts were further supported byHorizon’s contributions exceeding $500,000 in financial support to local organizations, helping to make alasting impact on our communities. Horizon has a long history of giving back to our communities, and welook forward to continuing these strong partnerships across our Indiana and Michigan markets. Select Highlights for 2025 •Quality commercial loan growth of approximately 12%, funded by our granular low-cost, core depositbase through 70 plus branches in some of what we have determined are the most attractive markets inthe Midwest.•Peer-leading credit performance with annualized charge offs of .06%.•Continued strategic investments in our community banking model with a new branch opened inKalamazoo, Michigan and a groundbreaking in Indianapolis, Indiana in anticipation of a mid-2026grand opening.•Exited the year with Q4 2025 net interest margin in excess of 4.25%, increasing over 125 basis pointswhen compared to same period in the prior year. Additionally, return on average assets (ROAA) exitedthe year at over 1.6% annualized in the fourth quarter of 2025. While we are confident in our financial outlook, we must ensure we consistently advance our efforts toattract and engage with clients. In 2025, our technology teams delivered a new teller system in ourbranches and a new loan origination platform for our Commercial business customers, all intended toensure the customer experience with Horizon is simpler, faster, and more secure. Our teller system is fullyintegrated into our core processing system, which permits quicker in-person transactions, seamlessintegration into online platforms, and reduced client fraud losses. The Commercial lending platfo