Regulatory Capital

9 Months Ended

Sep. 30, 2022

Banking and Thrift, Interest [Abstract]

Regulatory Capital

Regulatory CapitalHorizon and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. These capital requirements implement changes arising from the Dodd–Frank Wall Street Reform and Consumer Protection Act and the U.S. Basel Committee on Banking Supervision’s capital framework (known as “Basel III”). Failure to meet the minimum regulatory capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators, which if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective actions, the Company and Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off–balance–sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

The Company and Bank are subject to minimum regulatory capital requirements as defined and calculated in accordance with the Basel III–based regulations. As allowed under Basel III rules, the Company made the decision to opt–out of including accumulated other comprehensive income in regulatory capital. The minimum regulatory capital requirements are set forth in the table below.

In addition, to be categorized as well capitalized, the Company and Bank must maintain Total risk–based, Tier I risk–based, common equity Tier I risk–based and Tier I leverage ratios as set forth in the table below. As of September 30, 2022 and December 31, 2021, the Company and Bank met all capital adequacy requirements to be considered well capitalized. There have been no conditions or events since the end of the third quarter of 2022 that management believes have changed the Bank’s classification as well capitalized. There is no threshold for well capitalized status for bank holding companies.

As of March 31, 2020, the Company and Bank elected the transition option of the 2019 CECL Rule which allows banking organizations to phase in over a three–year period the day–one adverse effects of CECL on their regulatory capital ratios.

Horizon and the Bank’s actual and required capital ratios as of September 30, 2022 and December 31, 2021 were as follows:

	Actual				Required for Capital Adequacy Purposes(1)				Required For Capital Adequacy Purposes with Capital Buffer(1)				Well Capitalized  Under Prompt Corrective Action Provisions(1)
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2022
Total capital (to risk–weighted assets)(1)
Consolidated	$	760,102	14.44	%	$	421,180	8.00	%	$	552,798	10.50	%	N/A		N/A
Bank	711,478		13.65	%	416,859		8.00	%	547,127		10.50	%	$	521,073	10.00	%
Tier 1 capital (to risk–weighted assets)(1)
Consolidated	712,642		13.54	%	315,885		6.00	%	447,503		8.50	%	N/A		N/A
Bank	664,018		12.74	%	312,644		6.00	%	442,912		8.50	%	416,859		8.00	%
Common equity tier 1 capital (to risk–weighted assets)(1)
Consolidated	592,723		11.26	%	236,914		4.50	%	368,532		7.00	%	N/A		N/A
Bank	664,018		12.74	%	234,483		4.50	%	364,751		7.00	%	338,698		6.50	%
Tier 1 capital (to average assets)(1)
Consolidated	712,642		9.56	%	298,240		4.00	%	298,240		4.00	%	N/A		N/A
Bank	664,018		8.84	%	300,512		4.00	%	300,512		4.00	%	375,641		5.00	%
December 31, 2021
Total capital (to risk–weighted assets)(1)
Consolidated	$	708,198	15.71	%	$	360,737	8.00	%	$	473,468	10.50	%	N/A		N/A
Bank	664,061		14.72	%	361,015		8.00	%	473,832		10.50	%	$	451,269	10.00	%
Tier 1 capital (to risk–weighted assets)(1)
Consolidated	661,729		14.68	%	270,553		6.00	%	383,284		8.50	%	N/A		N/A
Bank	617,592		13.69	%	270,761		6.00	%	383,578		8.50	%	361,015		8.00	%
Common equity tier 1 capital (to risk–weighted assets)(1)
Consolidated	541,920		12.02	%	202,915		4.50	%	315,645		7.00	%	N/A		N/A
Bank	617,592		13.69	%	203,071		4.50	%	315,888		7.00	%	293,325		6.50	%
Tier 1 capital (to average assets)(1)
Consolidated	661,729		9.05	%	292,335		4.00	%	292,335		4.00	%	N/A		N/A
Bank	617,592		8.50	%	290,646		4.00	%	290,646		4.00	%	363,307		5.00	%
(1) As defined by regulatory agencies