Horizon Bancorp (NASDAQ: HBNC) today announced its unaudited financial results for the three and nine month periods ended September 30, 2010.

SUMMARY:
  • Horizon’s third quarter 2010 net income was $3.3 million or $.88 diluted earnings per share, a 30.3% increase in net income from the previous quarter and a 39.1% increase from the same period in 2009.
  • Horizon’s net income for the nine months ended September 30, 2010, was $7.6 million or $1.96 diluted earnings per share compared to $7.1 million or $1.84 diluted earnings per share for the same period of the prior year.
  • The net interest margin increased to 3.84% for the three months ending September 30, 2010 as the rate paid on interest bearing liabilities decreased during the quarter more than the yield received on interest earning assets.
  • The activity in mortgage warehouse lending increased the average loan balance during the quarter, increasing interest income.
  • Horizon continued to experience strong residential mortgage loan activity during the third quarter providing $2.5 million of income from the gain on sale of mortgage loans.
  • Horizon’s quarterly provision for loan losses decreased by approximately $343,000 from the provision taken during the second quarter of 2010.
  • The ratio of allowance for loan losses to total loans increased to 1.85% from 1.77% at June 30, 2010 as Horizon loan and lease loss reserve continues to build for probable incurred losses inherent in the portfolio.
  • Horizon’s net loans charged off declined during the third quarter to $1.2 million compared to $2.6 million during the second quarter of 2010.
  • Horizon’s balance of Other Real Estate Owned (“OREO”) and repossessed assets increased approximately $1.2 million, to $4.1 million, during the third quarter as certain non-performing loans transferred to OREO.
  • Horizon’s non-performing loans increased approximately $507,000 from June 30, 2010 to September 30, 2010 and 30 to 89 days delinquent loans increased $447,000 during the same period.
  • Horizon’s 30 to 89 day loan delinquency remained steady at 0.93% and 0.92% of total loans at September 30, 2010 and June 30, 2010, respectively.
  • Horizon’s non-performing loans to total loans ratio as of September 30, 2010 was 2.22%, which compares favorably to National and State of Indiana peer averages 1 of 4.77% and 2.78%, respectively, as of June 30, 2010, the most recent data available.
  • Horizon’s capital ratios continue to be above the regulatory standards for well-capitalized banks.

Craig M. Dwight, Chief Executive Officer of Horizon Bancorp stated, “We are extremely proud of Horizon’s year-to-date results and the incredible effort put forth by our employees to maintain our performance at such high levels. Horizon’s year-to-date financial performance is on pace to achieve its eleventh year of record earnings. We truly are fortunate to have such a dedicated team that can deliver results.”

Performance Highlights:

Net income for the third quarter of 2010 was $3.3 million or $.88 diluted earnings per share. This compares to $2.4 million or $.61 diluted earnings per share for the same quarter of the prior year. Net income for the nine months ended September 30, 2010 was $7.6 million or $1.96 diluted earnings per share. This compares to $7.1 million or $1.84 diluted earnings per share for the same period of the prior year.

Diluted earnings per share for both the three and nine month periods ending September 30, 2010 and September 30, 2009 were reduced by $.11 per share and $.32 per share, respectively, due to the preferred stock dividends and the accretion of the discount on the preferred stock.

Net interest income increased $1.9 million and $1.1 million for the three and nine month periods ending September 30, 2010 compared to the same time periods for the prior year. This increase was primarily due to an increase in interest income from a higher average balance of interest earning assets along with a decrease in the cost of funds. The net interest margin increased to 3.72% for the nine months ending September 30, 2010 compared to 3.64% for the same period in the prior year. The net interest margin has been increasing throughout 2010. At three months ending March 31, 2010, June 30, 2010, and September 30, 2010, the net interest margin was 3.55%, 3.78%, and 3.84%, respectively. The increase in the net interest margin during the third quarter of 2010 was primarily due to the reduction in cost of funds from lower deposit rates and the repricing of certificates of deposits and wholesale funding into lower rate instruments.

The provision for loan losses was $2.7 million for the three months ending September 30, 2010, which was approximately $759,000 less than the provision for the same period of the prior year. The 2010 third quarter provision was the lowest compared to any of the previous four quarters as net charge-offs also declined to their lowest level over that same period.

Non-performing loans totaled $21.7 on September 30, 2010, up slightly from $21.2 million on June 30, 2010 and up from $16.5 million on September 30, 2009. As a percentage of total loans non-performing loans were 2.22% on September 30, 2010, down from 2.26% on June 30, 2010, but up from 1.87% on September 30, 2009. Horizon’s non-performing loans to total loans ratio as of September 30, 2010 compares favorably to National and State of Indiana peer averages 1 of 4.77% and 2.78%, respectively, as of June 30, 2010, the most recent data available.

The increase of non-performing loans from the prior quarter was due to an increase in residential mortgage and consumer installment non-performing loans, partially offset by lower commercial (which includes commercial real estate) non-performing loans. Residential mortgage non-performing loans increased from $7.9 million on June 30, 2010 to $8.5 million on September 30, 2010. Consumer installment non-performing loans increased from $3.5 million on June 30, 2010 to $4.4 million on September 30, 2010. Non-performing commercial loans declined from $9.8 million on June 30, 2010, to $8.9 million on September 30, 2010. The change in non-performing commercial loans during the quarter was the result of four non-performing loans totaling $2.0 million being moved to OREO, $471,000 of charge offs, and $856,000 of pay downs. There were nine new non-performing loans added totaling $1.9 million and one new troubled debt restructure (“TDR”) for $427,000. The new non-performing loans during the quarter included a $910,000 loan secured by a restaurant that is current but placed on non-accrual due to other deterioration of the credit factors.

Residential mortgage and consumer installment non-performing loans at September 30, 2010 include $896,000 and $2.3 million, respectively, of loans in bankruptcy. This compares to $261,000 and $1.8 million at June 30, 2010. These loans are not considered TDR’s while they are going through bankruptcy. The bankruptcy process can take six to eighteen months. Therefore, the amount of loans in bankruptcy included in the Company’s non-performing loans continues to increase, which indicates that this cycle potentially has not peeked. The Company’s experience with bankrupt loans has demonstrated that some continue to make payments during the bankruptcy process, many reaffirm when they come out of bankruptcy, and some are discharged or restructured by the court. The Company has been accumulating historical data on the performance of loans going through the bankruptcy process and utilizes that data in the calculation for allowance for loan losses. No commercial loans are currently in bankruptcy.

TDR’s are also included in the non-performing loans. TDR’s increased from $3.4 million at June 30, 2010 to $3.9 million on September 30, 2010. Of these, $3.3 million were residential mortgage loans, $427,000 were commercial loans, and $202,000 were consumer installment loans. The increase was primarily due to the addition of one commercial loan totaling $427,000. These TDR’s were accruing interest and were not over 30 days delinquent based on their restructured terms, except for one consumer installment loan for $37,000, and the new commercial loan for $427,000, both of which were on non-accrual.

Non-accrual loans totaled $16.8 million on September 30, 2010, down from $17.7 million on June 30, 2010, but up from $15.7 million on September 30, 2009. On September 30, 2010, nonaccrual loans to hotel owners totaled $4.6 million, to home builders and land developers $1.2 million, and to restaurant operators $1.0 million.

Loans 90 days delinquent but still on accrual totaled $833,000 on September 30, 2010, up from $77,000 on June 30, 2010, and $856,000 on September 30, 2009. Horizon’s policy is to place loans over 90 days delinquent on non-accrual unless they are in the process of collection and a full recovery is expected.

The increase in the Company’s non-performing loans over the past year can be attributed to the continued slow economy and continued high local unemployment causing an increase in consumer bankruptcies. Business conditions in our markets are improving but remain weak.

Other Real Estate Owned (OREO) totaled $3.9 million on September 30, 2010, up from $2.8 million on June 30, 2010, and $1.7 million on September 30, 2009. During the quarter 24 properties with a book value of $1.6 million on June 30, 2010 were sold. Another nine properties with a book value of $3.0 million on September 30, 2010 were transferred into OREO. On September 30, 2010, OREO was comprised of 29 properties. Of these, 9 totaling $2.5 million were commercial and 20 totaling $1.5 million were residential. Repossessed personal property totaled $107,000 on September 30, 2010, up from $70,000 on June 30, 2010.

No mortgage warehouse loans were non-performing as of September 30, 2010, June 30, 2010, or September 30, 2009.

The residential mortgage loan activity was strong through the third quarter of 2010 with $2.5 million of income from the gain on sale of mortgage loans, up $1.3 million from the same period in 2009 and up $800,000 from the second quarter of 2010. For the nine month period ending September 30, 2010, gain on sale of mortgage loans was up $668,000 compared to the same nine month period in 2009.

Increased pre-payment speeds on the mortgage loan servicing portfolio caused the servicing asset to be impaired during the third quarter resulting in a $331,000 net loss on mortgage servicing net of impairment compared to $35,000 of income for the same period in 2009.

Total other expenses were $2.3 million higher in the third quarter of 2010 compared to the third quarter of 2009 and $2.7 million higher when comparing the nine month periods ending September 30, 2010 and 2009. Salaries and employee benefits increased $1.4 million and $1.7 million for the three and nine month periods ending September 30, 2010, respectively. This increase is the result of additional payroll expense from the consolidation of the American Trust & Savings Bank transaction that closed at the end of the second quarter, the expansion into Kalamazoo, Michigan, and bonus accruals based on the Company’s performance through nine months of 2010. The Company also continues to experience higher loan expense related to problem loan, bankruptcy, and collection costs. In addition, the Company recognized $664,000 of transaction costs related to the purchase and assumption of American Trust & Savings Bank during the first nine months of 2010.

Other items
  • Horizon closed two branches in the third quarter of 2010. One branch was acquired from American Trust & Savings Bank and was located within three miles of an existing Horizon Bank branch. The second branch was located in Harbert, Michigan and had not experienced core deposit growth for several years.
  • Horizon relocated its South Bend office in the third quarter of 2010, which should lower related occupancy expense by approximately $95,000 per year.

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern Indiana and Southwest Michigan. Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.accesshorizon.com. Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

Statements in this press release which express “belief,” “intention,” “expectation,” and similar expressions, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by, and information currently available to, such management. Such statements are inherently uncertain and there can be no assurance that the underlying assumptions will prove to be accurate. Actual results could differ materially from those contemplated by the forward-looking statements. Any forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

1 National peer group: Consists of all insured commercial banks having assets between $1 Billion and $10 Billion as reported by the Uniform Bank Performance Report as of June 30, 2010. Indiana peer group: Consists of 17 publicly traded banks all headquartered in the State of Indiana as reported by the Uniform Bank Performance Reports as of June 30, 2010.

           
 

HORIZON BANCORP

Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)
 
September 30 June 30 March 31 December 31 September 30
2010   2010   2010   2009   2009
Balance sheet:
Total assets $ 1,485,058 $ 1,464,415 $ 1,301,660 $ 1,387,020 $ 1,321,224
Investment securities 397,694 410,284 368,752 344,789 333,031
Commercial loans 329,230 326,401 310,664 314,517 312,573
Mortgage warehouse loans 193,848 156,915 96,327 166,698 145,270
Residential mortgage loans 165,234 168,238 135,475 133,892 142,568
Installment loans 270,503 271,241 266,954 271,210 275,299
Earning assets 1,387,594 1,360,488 1,200,043 1,249,998 1,228,085
Non-interest bearing deposit accounts 105,376 99,291 91,482 84,357 87,725
Interest bearing transaction accounts 506,031 529,612 423,315 540,647 375,548
Time deposits 388,076 394,092 358,725 326,704 394,724
Borrowings 318,516 282,137 273,235 284,016 311,884
Subordinated debentures 30,562 30,539 27,837 27,837 27,837
Common stockholders' equity 95,686 92,127 91,371 90,299 89,566
Total stockholders’ equity 120,112 116,512 115,716 114,605 113,833
 
Income statement: Three months ended
Net interest income $ 12,620 $ 11,368 $ 10,553 $ 11,371 $ 10,719
Provision for loan losses 2,657 3,000 3,233 3,700 3,416
Other income 5,648 4,923 4,374 4,304 4,542
Other expenses 11,257 10,184 9,554 9,558 8,929
Income tax expense 1,075 592 349 333 559
Net income 3,279 2,515 1,791 2,084 2,357
Preferred stock dividend (353 ) (352 ) (352 ) (351 ) (351 )
Net income available to common shareholders 2,926 2,163 1,439 1,733 2,006
 
Per share data:
Basic earnings per share $ 0.89 $ 0.66 $ 0.44 $ 0.53 $ 0.62
Diluted earnings per share 0.88 0.65 0.44 0.53 0.61
Cash dividends declared per common share 0.17 0.17 0.17 0.17 0.17
Book value per common share 29.18 28.10 27.88 27.67 27.46
Tangible book value per common share 26.51 25.39 25.70 25.45 25.22
Market value - high $ 22.60 $ 22.81 $ 19.50 $ 17.25 $ 17.50
Market value - low $ 21.15 $ 19.48 $ 16.44 $ 14.31 $ 15.00
Basic common shares outstanding 3,279,201 3,278,392 3,270,217 3,262,927 3,245,505
Diluted common shares outstanding 3,336,634 3,333,768 3,293,192 3,275,588 3,273,742
 
Key ratios:
Return on average assets 0.90 % 0.75 % 0.54 % 0.62 % 0.72 %
Return on average common stockholders' equity 12.12 9.33 6.34 7.56 9.12
Net interest margin 3.84 3.78 3.55 3.76 3.64
Loan loss reserve to total loans 1.85 1.77 1.97 1.80 1.58
Non-performing loans to loans 2.22 2.26 2.00 1.92 1.87
Average equity to average assets 8.32 8.67 8.73 8.61 8.53
Bank only capital ratios:
Tier 1 capital to average assets 8.53 8.92 8.83 8.64 8.79
Tier 1 capital to risk weighted assets 11.65 11.89 12.96 11.85 12.04
Total capital to risk weighted assets 12.89 13.15 14.22 13.10 13.29
 
Loan data:
30 to 89 days delinquent $ 9,084 $ 8,637 $ 10,926 $ 9,686 $ 11,641
 
90 days and greater delinquent - accruing interest 833 77 345 1,758 856
Trouble debt restructures - accruing interest 3,445 3,414 1,183 3,472 2,783
Trouble debt restructures - non-accrual 463 - - - -
Non-accrual loans   16,939       17,682       14,862       11,915       12,834  
Total non-performing loans 21,680 21,173 16,390 17,145 16,473
 
       
 

HORIZON BANCORP

Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)
 
September 30 September 30
2010     2009
Balance sheet:
Total assets $ 1,485,058 $ 1,321,224
Investment securities 397,694 333,031
Commercial loans 329,230 312,573
Mortgage warehouse loans 193,848 145,270
Residential mortgage loans 165,234 142,568
Installment loans 270,503 275,299
Earning assets 1,387,594 1,232,548
Non-interest bearing deposit accounts 105,376 87,725
Interest bearing transaction accounts 506,031 375,548
Time deposits 388,076 394,724
Borrowings 318,516 311,884
Subordinated debentures 30,562 27,837
Common stockholders' equity 95,686 89,566
Total stockholders’ equity 120,112 113,833
 
Income statement: Nine months ended
Net interest income $ 34,541 $ 33,398
Provision for loan losses 8,890 9,903
Other income 14,945 13,552
Other expenses 30,995 28,254
Income tax expense 2,016 1,737
Net income 7,585 7,056
Preferred stock dividend (1,057 ) (1,051 )
Net income available to common shareholders 6,528 6,005
 
Per share data:
Basic earnings per share $ 1.99 $ 1.86
Diluted earnings per share 1.96 1.84
Cash dividends declared per common share 0.51 0.51
Book value per common share 29.21 27.46
Tangible book value per common share 26.53 25.22
Market value - high $ 22.81 $ 19.45
Market value - low $ 16.44 $ 10.50
Basic common shares outstanding 3,275,969 3,221,622
Diluted common shares outstanding 3,323,830 3,270,154
 
Key ratios:
Return on average assets 0.74 % 0.70 %
Return on average common stockholders' equity 9.33 9.41
Net interest margin 3.72 3.64
Loan loss reserve to total loans 1.85 1.58
Non-performing loans to loans 2.22 1.87
Average equity to average assets 8.56 8.08
Bank only capital ratios:
Tier 1 capital to average assets 8.53 8.82
Tier 1 capital to risk weighted assets 11.65 12.10
Total capital to risk weighted assets 12.89 13.35
 
Loan data:
30 to 89 days delinquent $ 9,084 $ 11,641
 
90 days and greater delinquent - accruing interest 833 856
Trouble debt restructures - accruing interest 3,445 2,783
Trouble debt restructures - non-accrual 463 -
Non-accrual loans   16,939         12,834  
Total non-performing loans 21,680 16,473
 
           
 

HORIZON BANCORP

Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands, Unaudited)
 
September 30 June 30 March 31 December 31 September 30
2010   2010   2010   2009   2009
Commercial $ 7,029 $ 6,204 $ 6,010 $ 5,766 $ 4,699
Real estate 1,957 1,536 1,444 1,933 1,599
Mortgage warehousing 1,441 1,362 1,390 1,455 1,480
Installment 7,603 7,441 7,276 6,861 6,146
Unallocated   -     -     -     -     -
Total $ 18,030   $ 16,543   $ 16,120   $ 16,015   $ 13,924
 
   

Net Charge-offs

(Dollars in Thousands, Unaudited)
 
Three months ended
September 30   June 30   March 31   December 31   September 30
2010   2010   2010   2009   2009
Commercial $ 485 $ 884 $ 1,832 $ 527 $ 530
Real estate 86 288 309 146 22
Mortgage warehousing - - - - -
Installment   599     1,406     986     936     1,589
Total $ 1,170   $ 2,578   $ 3,127   $ 1,609   $ 2,141
 
           

Total Non-performing Loans

(Dollars in Thousands, Unaudited)
 
September 30 June 30 March 31 December 31 September 30
2010   2010   2010   2009   2009
Commercial $ 8,855 $ 9,805 $ 7,024 $ 9,229 $ 9,235
Real estate 8,467 7,855 6,217 4,819 4,926
Mortgage warehousing - - - - -
Installment   4,358     3,513     3,149     3,097     2,312
Total $ 21,680   $ 21,173   $ 16,390   $ 17,145   $ 16,473
 
           

Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands, Unaudited)
 
September 30 June 30 March 31 December 31 September 30
2010   2010   2010   2009   2009
Commercial $ 2,751 $ 623 $ 494 $ - $ -
Real estate 1,283 2,160 1,581 1,730 1,671
Mortgage warehousing - - - - -
Installment   107     70     101     23     142
Total $ 4,141   $ 2,853   $ 2,176   $ 1,753   $ 1,813
 
           
 

HORIZON BANCORP

Loan Portfolio Detail
 
Non- Percent Specific Percent of
Loan Performing of

Reserves on Non-
Non-performing
September 30, 2010 (Unaudited) Balance   Loans Loans Performing Loans Loans
Owner occupied real estate $ 200,975 $ 6,159 3.06 % $ 894 14.52 %
Non owner occupied real estate 67,272 2,002 2.98 % 383 19.13 %
Residential development 12,282 267 2.17 % 125 46.82 %
Commercial and industrial   48,701       427 0.88 %   125 29.27 %
Total commercial 329,230 8,855 2.69 % 1,527 17.24 %
 
Residential mortgage (includes HFS) 174,112 8,098 4.65 % 594 7.34 %
Residential construction 7,604 369 4.85 % - 0.00 %
Mortgage warehouse   193,848       - 0.00 %   - 0.00 %
Total mortgage 375,564 8,467 2.25 % 594 7.02 %
 
Direct installment 25,233 180 0.71 % - 0.00 %
Indirect installment 130,359 1,396 1.07 % 21 1.50 %
Home equity   114,911       2,782 2.42 %   887 31.88 %
Total installment 270,503 4,358 1.61 % 908 20.84 %
       
Total loans 975,297 21,680 2.22 % 3,029 13.97 %
Allowance for loan losses   (18,030 )      
Net loans $ 957,267     $ 21,680 $ 3,029
 
 
 
Non- Percent Specific Percent of
Loan Performing of

Reserves on Non-
Non-performing
December 31, 2009 Balance   Loans Loans Performing Loans Loans
Owner occupied real estate $ 138,999 $ 3,152 2.27 % $ 700 22.21 %
Non owner occupied real estate 100,502 1,677 1.67 % 125 7.45 %
Residential development 16,101 2,343 14.55 % 125 5.34 %
Commercial and industrial   58,915       2,057 3.49 %   725 35.25 %
Total commercial 314,517 9,229 2.93 % 1,675 18.15 %
 
Residential mortgage (includes HFS) 132,172 4,638 3.51 % 441 9.51 %
Residential construction 7,423 181 2.43 % 71 39.29 %
Mortgage warehouse   166,698       - 0.00 %   - 0.00 %
Total mortgage 306,293 4,819 1.57 % 512 10.62 %
 
Direct installment 24,908 387 1.55 % - 0.00 %
Indirect installment 136,600 1,089 0.80 % 95 8.72 %
Home equity   109,702       1,621 1.48 %   1,188 73.29 %
Total installment 271,210 3,097 1.14 % 1,283 41.43 %
       
Total loans 892,020 17,145 1.92 % 3,470 20.24 %
Allowance for loan losses   (16,015 )      
Net loans $ 876,005  

 
$ 17,145 $ 3,470
 
       
 

HORIZON BANCORP AND SUBSIDIARIES

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)
 
Three Months Ended Three Months Ended
September 30, 2010 September 30, 2009
Average     Average Average     Average
Balance   Interest   Rate Balance   Interest   Rate
 
ASSETS
Interest-earning assets
Federal funds sold $ 12,273 $ 4 0.13 % $ 10,711 $ 7 0.26 %
Interest-earning deposits 15,349 4 0.10 % 7,783 - 0.00 %
Investment securities - taxable 298,152 2,423 3.22 % 248,165 2,666 4.26 %
Investment securities - non-taxable (1) 102,885 979 5.32 % 102,286 1,015 5.97 %
Loans receivable (2)   918,930       14,466 6.25 %   857,801       13,797 6.39 %
Total interest-earning assets (1) 1,347,589 17,876 5.39 % 1,226,746 17,485 5.83 %
 
Noninterest-earning assets
Cash and due from banks 16,518 15,277
Allowance for loan losses (17,137 ) (12,513 )
Other assets   97,460     77,734  
 
$ 1,444,430   $ 1,307,244  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 913,473 $ 2,769 1.20 % $ 756,567 $ 3,528 1.85 %
Borrowings 258,476 2,026 3.11 % 317,224 2,897 3.62 %
Subordinated debentures   34,946       461 5.23 %   27,837       341 4.86 %
Total interest-bearing liabilities 1,206,895 5,256 1.73 % 1,101,628 6,766 2.44 %
 
Noninterest-bearing liabilities
Demand deposits 106,152 84,897

Accrued interest payable and other liabilities
11,204 9,238
Shareholders' equity   120,179     111,481  
 
$ 1,444,430   $ 1,307,244  
 
Net interest income/spread $ 12,620 3.66 % $ 10,719 3.39 %
 
Net interest income as a percent
of average interest earning assets (1) 3.84 % 3.64 %
 
(1)  

Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.
   
       
 

HORIZON BANCORP AND SUBSIDIARIES

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)
 
Nine Months Ended Nine Months Ended
September 30, 2010 September 30, 2009
Average     Average Average     Average
Balance   Interest   Rate     Balance   Interest   Rate
ASSETS
Interest-earning assets
Federal funds sold $ 30,279 $ 13 0.06 % $ 27,647 $ 9 0.04 %
Interest-earning deposits 9,213 38 0.55 % 6,979 54 1.03 %
Investment securities - taxable 278,790 7,343 3.52 % 247,168 8,270 4.47 %
Investment securities - non-taxable (1) 108,666 3,138 5.36 % 94,473 2,882 5.91 %
Loans receivable (2)   860,253       40,283 6.27 %   898,876       43,793 6.52 %
Total interest-earning assets (1) 1,287,201 50,815 5.41 % 1,275,143 55,008 5.91 %
 
Noninterest-earning assets
Cash and due from banks 15,101 15,370
Allowance for loan losses (16,625 ) (11,742 )
Other assets   91,630     76,613  
 
$ 1,377,307   $ 1,355,384  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 861,296 $ 8,238 1.28 % $ 797,523 $ 11,517 1.93 %
Borrowings 264,333 6,807 3.44 % 328,763 9,011 3.66 %
Subordinated debentures   31,014       1,229 5.30 %   27,837       1,082 5.20 %
Total interest-bearing liabilities 1,156,643 16,274 1.88 % 1,154,123 21,610 2.50 %
 
Noninterest-bearing liabilities
Demand deposits 93,123 82,548

Accrued interest payable and other liabilities
9,627 9,180
Shareholders' equity   117,914     109,533  
 
$ 1,377,307   $ 1,355,384  
 
Net interest income/spread $ 34,541 3.53 % $ 33,398 3.41 %
 
Net interest income as a percent
of average interest earning assets (1) 3.72 % 3.64 %
 
(1)   Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.
 
           
 

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)
 
September 30 December 31
2010 2009
(Unaudited)      
Assets
Cash and due from banks $ 18,203 $ 68,702
Investment securities, available for sale 384,204 333,132
Investment securities, held to maturity 13,490 11,657
Loans held for sale 16,483 5,703
Loans, net of allowance for loan losses of $18,030 and $16,015 940,784 870,302
Premises and equipment 34,274 30,534
Federal Reserve and Federal Home Loan Bank stock 14,603 13,189
Goodwill 5,910 5,787
Other intangible assets 2,855 1,447
Interest receivable 6,720 5,986
Cash value life insurance 26,991 23,139
Other assets   20,541       17,442
Total assets $ 1,485,058     $ 1,387,020
Liabilities
Deposits
Non-interest bearing $ 105,376 $ 84,357
Interest bearing   894,107       867,351
Total deposits 999,483 951,708
Borrowings 318,516 284,016
Subordinated debentures 30,562 27,837
Interest payable 766 1,135
Other liabilities   15,619       7,719
Total liabilities   1,364,946       1,272,415
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, no par value, $1,000 liquidation value
Authorized, 1,000,000 shares
Issued 25,000 shares 24,426 24,306
Common stock, $.2222 stated value
Authorized, 22,500,000 shares
Issued, 3,301,437 and 3,273,881 shares 1,122 1,119
Additional paid-in capital 10,295 10,030
Retained earnings 78,280 73,431
Accumulated other comprehensive income   5,989       5,719
Total stockholders’ equity   120,112       114,605
Total liabilities and stockholders’ equity $ 1,485,058     $ 1,387,020
 
       
 

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statements of Income(Dollar Amounts in Thousands, Except Per Share Data)
 
Three Months Ended September 30     Nine Months Ended September 30
2010   2009 2010   2009
(Unaudited)   (Unaudited)     (Unaudited)   (Unaudited)
Interest Income
Loans receivable $ 14,466 $ 13,797 $ 40,283 $ 43,793
Investment securities
Taxable 2,431 2,673 7,394 8,333
Tax exempt   979       1,015         3,138       2,882  
Total interest income   17,876       17,485         50,815       55,008  
Interest Expense
Deposits 2,769 3,528 8,238 11,517
Borrowed funds 2,026 2,897 6,807 9,011
Subordinated debentures   461       341         1,229       1,082  
Total interest expense   5,256       6,766         16,274       21,610  
Net Interest Income 12,620 10,719 34,541 33,398
Provision for loan losses   2,657       3,416         8,890       9,903  
Net Interest Income after Provision for Loan Losses   9,963       7,303         25,651       23,495  
Other Income
Service charges on deposit accounts 921 972 2,750 2,880
Wire transfer fees 211 201 536 709
Interchange fees 649 514 1,663 1,358
Fiduciary activities 934 745 2,936 2,486
Gain (loss) on sale of securities 336 422 467 422
Gain on sale of mortgage loans 2,473 1,277 5,529 4,861
Mortgage servicing net of impairment (331 ) 35 (363 ) (131 )
Increase in cash surrender value of bank owned life insurance 246 206 599 547
Other income   209       170         828       420  
Total other income   5,648       4,542         14,945       13,552  
Other Expenses
Salaries and employee benefits 5,985 4,539 15,973 14,264
Net occupancy expenses 1,036 941 3,077 2,872
Data processing 502 419 1,474 1,194
Professional fees 417 316 1,418 1,021
Outside services and consultants 374 366 1,163 1,043
Loan expense 855 631 2,376 1,841
FDIC insurance expense 423 400 1,219 1,751
Other losses 143 (25 ) 180 442
Other expenses   1,522       1,342         4,115       3,826  
Total other expenses   11,257       8,929         30,995       28,254  
Income Before Income Tax 4,354 2,916 9,601 8,793
Income tax expense   1,075       559         2,016       1,737  
Net Income 3,279 2,357 7,585 7,056
Preferred stock dividend and discount accretion   (353 )     (351 )       (1,057 )     (1,051 )
Net Income Available to Common Shareholders $ 2,926     $ 2,006       $ 6,528     $ 6,005  
Basic Earnings Per Share $ 0.89 $ 0.62 $ 1.99 $ 1.86
Diluted Earnings Per Share $ 0.88 $ 0.61 $ 1.96 $ 1.84
 

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