On March 10, 2023, after trading hours, Horizon Bank filed a current report on Form 8-K as well as a late filing notice with the Securities & Exchange Commission (“SEC”). In these filings, it announced that it had received a notice from NASDAQ as a result of failing to timely file its annual report, and that it had identified material weaknesses in its internal controls.

Specifically, the material weaknesses in internal controls issues related to “(i) accounting revisions of previously issued financial statements with respect to the classification of sold commercial loan participation balances, the reporting of indirect loan dealer reserve asset balances and related amortization expense and the classification of certain available for sale and held to maturity securities from private labeled mortgage-backed pools to federal agency mortgage pool, which revisions were previously disclosed in the Earnings Release and the Company’s Form 10-Q filings during 2022, in addition to errors in previously issued financial statement disclosures relating to the transfer of available for sale to held to maturity securities and the cash flow classification of repurchases of outstanding stock from an investing activity to a financing activity, which will be disclosed for the first time in the 2022 Form 10-K, and (ii) a calculation error in the Company’s public float as noted above.”

On this news, the price of Horizon Bank’s stock fell $1.43, or 10.9%, to close at $11.62 per share on March 13, 2023, the next trading day.