Business Combination (SCB Bancorp [Member])

3 Months Ended

Mar. 31, 2014

SCB Bancorp [Member]

Business Combination

Note 11—Business Combination

On November 12, 2013, Horizon entered into an Agreement and Plan of Merger (the “Merger Agreement”) providing for Horizon’s acquisition of SCB Bancorp, Inc., a Michigan corporation (“SCB”). Pursuant to the Merger Agreement, SCB would merge with and into Horizon, with Horizon surviving the merger (the “Merger”), and Summit Community Bank, a Michigan-chartered commercial bank and wholly owned subsidiary of SCB, would merge with and into a wholly owned subsidiary of Horizon, Horizon Bank, N.A. (“Horizon Bank”), with Horizon Bank as the surviving bank.

On April 3, 2014 Horizon completed the acquisition of SCB and Horizon Bank N.A.’s acquisition of Summit Community Bank, through mergers effective April 3, 2014. Under the terms of the acquisition, the exchange ratio was 0.4904 shares of Horizon common stock (the “Exchange Ratio”) and $5.15 in cash for each outstanding share of SCB common stock. SCB shares outstanding at the closing were 1,164,442, and the shares of Horizon common stock issued to SCB shareholders totaled 570,820. Horizon’s stock price was $22.23 per share at the close of business on April 3, 2014. Based upon these numbers, the total value of the consideration for the acquisition was $18.9 million.

As of March 31, 2013, Summit Community Bank reported total assets of approximately $154.1 million, total deposits of approximately $119.3 million and total net loans of approximately $130.9 million.