The horn could be fine as a lesser item, but the inconvenience is that one needs to instill the effect in one season. So if the item is planned to be useful, the effect in it should be at least the following:
Base 4, +2 Voice, +2 Sun, +2 Group (+1 for 100 ppl), +2 lvl for 2 times/day = 37. No one amongst us can get 72 labtotal for CrMe, not even the Mentem specialist. 
So far, none of the spells used in the banner differentiate between your own covenant folks and the enemy. So both would be affected.
Sure, you can issue an order to never look at the banner, but if it is that easy to circumvent, the enemy can do the same. Detecting an enemy is more within the range of InMe with Detect the Intention so it starts to be complicated.
I love the concept of Banner of Fear, but it seems that Hermetic magic struggles to implement this effect with only a few simple spells.
Maybe you can draw inspiration from the Sunken Laboratory of Hermanus magus in Legend of Hermes (if I recall correctly): Test of Motive, Interrogation of the Interlopers, Assurance of Ownership (could be adapted to "Assurance of Membership" - to assess if the target believe she is member of the covenant).
The base of effect of this spell are relatively high, but since you are OK to have no penetration - which is a fair assumption if you are not facing a crusaders' army - it should be doable to achieve reasonable final effect level (within 30-45), but it probably means that it cannot be instilled within one season unless you are a specialist or seasoned magus.
I think the base group mod for 100 targets is larger than a +2 as well. Have you thought about having one Mage assist the specialist? Or commission the item instead of making it yourself?
Panzerfaust correctly used +3 for 100 targets. The extra magnitude written in parentheses was included in the calculation. The mistake was 37x2=72, which should be 37x2=74.
Everybody is talking about using a large Group target, but I think it'd be better if it had unlimited uses and hit individuals. For one thing, any attacking group larger than you prepare for wouldn't be an applicable target, making it do everything against forces you can handle and absolutely nothing against forces you need the most help against. Also, while I get that it's technically valid, something feels thematically off about a banner of terror that just sort of scares everybody when one person looks at it. Further, it dodges the issue of getting the entire covenant caught in its power by one idiot. Lastly, assuming the covenant doesn't have a really great CrMe specialist, it'd be better to keep the levels lower so somebody can make it without taking forever and a day.
The problem with this approach is that an item can only activate one time per round, so your effect would only scare away one enemy in the first round, another enemy on the second round, etc.
Unlimited (number) of uses doesn't mean unlimited number of targets in a single activation (that's what the Target parameter is for).
As far as I'm aware, the rule is that a person can only trigger an item once per round, not that a particular item's effects are limited to activating once per round. Then again, it's never come up in my games, so I haven't looked at those rules with a terrible amount of depth.
It seems that the item won't be crafted, but the conversation was interesting nevertheless. Thx all the input!