HORIZON BANCORP INC /IN/ Income Taxes Disclosure
| December 31 2024 | December 31 2023 | December 31 2022 | |||||||||||||||
| Income tax expense | |||||||||||||||||
| Currently payable | |||||||||||||||||
| Federal | $ | 8,558 | $ | 14,980 | $ | 9,111 | |||||||||||
| State | 363 | (640) | 888 | ||||||||||||||
| Deferred | |||||||||||||||||
| Federal | (15,528) | (3,393) | 2,208 | ||||||||||||||
| State | (1,472) | 71 | (31) | ||||||||||||||
| Total income tax expense | $ | (8,079) | $ | 11,018 | $ | 12,176 | |||||||||||
| Reconciliation of federal statutory to actual tax expense | |||||||||||||||||
| Federal statutory income tax at 21% | $ | 5,743 | $ | 8,190 | $ | 22,173 | |||||||||||
| Tax exempt interest | (6,427) | (6,777) | (6,623) | ||||||||||||||
| Tax exempt BOLI income | (273) | (779) | (746) | ||||||||||||||
| Stock compensation | 150 | (88) | (232) | ||||||||||||||
| Revaluation of deferred tax assets | (5,201) | 5,201 | — | ||||||||||||||
| Other tax exempt income | — | (371) | (454) | ||||||||||||||
| State tax, net of federal tax effect | (1,185) | 142 | 676 | ||||||||||||||
| Tax credit investments, net of amortization | (1,290) | (2,976) | (2,774) | ||||||||||||||
| BOLI redemption ordinary income | — | 5,316 | — | ||||||||||||||
| BOLI redemption excise | — | 2,532 | — | ||||||||||||||
| Nondeductible and other | 404 | 628 | 156 | ||||||||||||||
| Actual tax expense | $ | (8,079) | $ | 11,018 | $ | 12,176 | |||||||||||
| December 31 2024 | December 31 2023 | ||||||||||
| Assets | |||||||||||
| Allowance for credit losses | $ | 12,590 | $ | 12,546 | |||||||
| Net operating loss and tax credits | 10,805 | 9,592 | |||||||||
| Director and employee benefits | 3,334 | 2,471 | |||||||||
| Unrealized loss on securities and cash flow hedge | 29,355 | 17,706 | |||||||||
| Basis difference in partnership equity investments | 1,940 | 1,322 | |||||||||
| Capital loss carryover | — | 5,201 | |||||||||
| Fair value adjustment on acquisitions | 883 | — | |||||||||
| Other | 2,938 | 2,856 | |||||||||
| Total assets | 61,845 | 51,694 | |||||||||
| Liabilities | |||||||||||
| Depreciation | (4,061) | (4,512) | |||||||||
| State tax | — | (253) | |||||||||
| Federal Home Loan Bank stock dividends | (353) | (365) | |||||||||
| Difference in basis of intangible assets | (6,553) | (4,545) | |||||||||
| Fair value adjustment on acquisitions | — | (2,142) | |||||||||
| Other | (1,003) | (1,131) | |||||||||
| Total liabilities | (11,970) | (12,948) | |||||||||
| Valuation allowance | — | (5,201) | |||||||||
| Net deferred tax asset/(liability) | $ | 49,875 | $ | 33,545 | |||||||
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.