Horizon Bancorp Announces Record Quarterly And Six-Month Earnings

(NASDAQ:HBNC) – Horizon Bancorp today announced its unaudited financial results for the three and six-month periods ended June 30, 2013.

SUMMARY:
  • Second quarter 2013 net income rose 15.4% compared to the same period in 2012 to $5.7 million or $.62 diluted earnings per share, the highest quarterly net income in the Company’s history.
  • Net income for the first six months of 2013 rose 15.3% compared to the same period in 2012 to $11.0 million or $1.20 diluted earnings per share, the highest first half net income in the Company’s history.
  • Net interest income, before provisions for loan losses, for the first six months of 2013 was $32.6 million compared with $26.2 million for the same period of 2012.
  • Non-interest income rose 22.3% to $14.3 million for the first six months of 2013 compared with $11.7 million for the same period of 2012.
  • Return on average assets was 1.29% for the second quarter of 2013 and 1.25% for the first six months of 2013.
  • Return on average common equity was 14.67% for the second quarter of 2013 and 14.31% for the first six months of 2013.
  • Total loans increased $27.9 million during the quarter and $120.5 million compared to June 30, 2012 to $1.1 billion at June 30, 2013.
  • Commercial loans increased $29.1 million during the quarter and $145.7 million compared to June 30, 2012 to $502.2 million at June 30, 2013, marking the first time in Horizon’s history that commercial loans surpassed the $500 million milestone.
  • Tangible book value per share decreased to $14.42 at June 30, 2013, compared to $14.64 and $14.81 at March 31, 2013 and June 30, 2012, respectively, reflecting the decrease in accumulated other comprehensive income and the increase in outstanding shares as a result of the Heartland acquisition.
  • Horizon Bank’s capital ratios, including Tier 1 Capital to Average Assets of 8.84% and Total Capital to Risk Weighted Assets of 13.22% as of June 30, 2013, continue to be well above the regulatory standards for well-capitalized banks.

Craig M. Dwight, Chairman and CEO, commented: “Horizon Bancorp’s commitment to identifying and maximizing key revenue opportunities, combined with operational efficiency and productivity, continue to be evident in our earnings growth. Our strategy of generating a balanced revenue stream in a variety of economic scenarios, and the ability to respond to changing conditions, again proved its value.”

“The increase in interest rates impacted residential mortgage refinancings, mortgage warehousing volume and the gains generated from mortgage loan sales. At the same time, we capitalized on the improving housing market and business environment to grow purchase mortgage originations and commercial lending. Fiduciary activity continued to accelerate, as reflected in the 11.8% increase in trust fee income for the first six months of 2013 compared to the same period of 2012, and we believe this resulted from customers discovering the expert guidance we provide will maximize their investment returns in complex and volatile market conditions.”

Highlighting the Company’s balanced approach to building revenue, Dwight cited examples such as the 16.7% growth in residential mortgage originations to $232.9 million in the first half 2013 compared with $199.6 million in the first half 2012. This volume increase, he noted, was achieved despite less reliance on refinancing activity. Purchase mortgage originations represented 54.6% of total mortgage originations for the first half 2013 compared to 41.8% for the same period of 2012. In the month of June 2013, purchase mortgage originations accounted for 72.9% of all mortgage originations.

“Another highlight is the continued growth and strong revenue contribution from our commercial banking division. Our Kalamazoo and Indianapolis business banking teams, in particular, continue to produce strong results. Their success has not been from loan volume alone but also in developing full-service relationships with checking and deposit accounts, fee-generating merchant services and credit and debit cards. This comprehensive and relationship approach to banking has been a critical aspect of our success in building the commercial banking business.”

“We continue to support our commercial, consumer and mortgage lending activities with a solid and growing base of low-cost core deposits,” explained Dwight. “Since our acquisition of Heartland Bancshares, Inc. in July of 2012, we have grown the Heartland deposit base by 11.0% to $234.4 million as of June 30, 2013 from $211.2 million in deposits acquired in the acquisition. I believe this growth reflects very positively on the success of the transition and the outstanding job our employees have done to create strong banking relationships with our customers.”

Non-interest bearing deposits increased 56.0% to $213.7 million at June 30, 2013 compared to $137.0 million at June 30, 2012, reflecting the growth in the number of small business banking relationships and the acquisition of Heartland, which had a significant number of business relationship customers. Interest bearing transaction accounts rose to $772.8 million at June 30, 2013 compared to $769.8 million at December 31, 2012 and $634.9 million at June 30, 2012.

Income Statement Highlights

Net income for the second quarter of 2013 increased 15.4% to $5.7 million or $.62 diluted earnings per share, compared to $4.9 million or $.62 diluted earnings per share in the second quarter of 2012. This represents the highest quarterly net income in the Company’s history. In addition, diluted earnings per share during the second quarter of 2013 equaled the diluted earnings per share for the second quarter of 2012, which was the period prior to the Heartland acquisition in July of 2012.

Net income for the first six months of 2013 increased 15.3% to $11.0 million or $1.20 diluted earnings per share, compared to $9.5 million or $1.21 diluted earnings per share for the first six months of 2012. This is the highest six months of net income in the Company’s history.

The Company’s net interest margin was 4.21% during the three-month period ended June 30, 2013, up 42 basis points from 3.79% for the three-month period ending June 30, 2012 and up 11 basis points from the three-month period ending March 31, 2013. The increase in the margin during the second quarter of 2013 compared to the same period in 2012 was primarily due to the recognition of approximately $2.4 million of interest income from Heartland loan discounts being accreted and discounts recognized from loans paying off, along with a reduction in the rate paid on interest bearing liabilities. Excluding the interest income recognized from the loan discounts, the margin would have been 3.61% for the three-month period ending June 30, 2013. The net interest margin was 4.17% for the six months ending June 30, 2013, up from 3.84% for the same period in 2012. Excluding the interest income recognized from the loan discounts of $4.3 million for the first six months of 2013, the margin would have been 3.66% for the six-month period ending June 30, 2013.

Residential mortgage lending activity during the second quarter of 2013 generated $2.8 million in income from the gain on sale of mortgage loans, a decrease of $299,000 from the first quarter of 2013. The origination volume in the second quarter of 2013 was similar to the first quarter of 2013, and the reduction in the gain on sale of mortgages was primarily due to the percentage earned on the sale of these loans.

Lending Activity

Total loans decreased by $73.0 million from $1.2 billion at December 31, 2012 to $1.1 billion at June 30, 2013 as mortgage warehouse loans decreased by $96.5 million, residential mortgage loans decreased by $7.1 million and consumer loans decreased by $11.2 million, partially offset by an increase in commercial loans of $41.8 million.

Commercial loans increased from $460.5 million at December 31, 2012 to $502.2 million at June 30, 2013. Dwight noted the continued growth of the commercial loan portfolio, which resulted in the significant achievement of surpassing the $500 million milestone in commercial loan balances for the first time in the Company’s history, helped offset the decrease in the other loan portfolios.

The provision for loan losses was $729,000 for the second quarter of 2013, which was $520,000 higher than the provision for the same period of the prior year and $1.4 million less than the previous quarter. The higher provision for loan losses during the second quarter of 2013 compared to the prior year was primarily related to organic loan growth. The lower provision for loan losses during the second quarter of 2013 compared to the previous quarter was primarily due to the $1.4 million of additional loan loss provision expense experienced in the previous quarter relating to credit losses from certain Heartland loans that exceeded the loan discounts recorded at the time of the acquisition. For the first six months of 2013, the provision for loan losses was $2.8 million, which was $2.0 million more than the provision for the same period of the prior year.

The ratio of the allowance for loan losses to total loans increased to 1.67% as of June 30, 2013 from 1.52% as of December 31, 2012. The increase in the ratio was primarily due to the decrease in total loans outstanding of $73.0 million during the first six months of 2013.

Non-performing loans totaled $25.6 million as of June 30, 2013, up from $23.8 million as of December 31, 2012 and $20.8 million as of June 30, 2012. Non-performing consumer loans increased $2.9 million from December 31, 2012, which was partially offset by a decrease of $1.9 million in non-performing commercial loans. The increase in non-performing consumer loans from December 31, 2012 was primarily due to the addition of three large home equity lines of credit totaling $2.0 million, which have specific reserves included in the allowance for loan losses. The increase from June 30, 2012 was due to the Heartland acquisition. Excluding Heartland loans, non-performing loans totaled $19.5 million at June 30, 2013, an increase of $3.0 million from $16.5 million at December 31, 2012 and a decrease of $1.3 million from $20.8 million at June 30, 2012. As a percentage of total loans, non-performing loans were 2.27% at June 30, 2013, up from 1.97% at December 31, 2012 and 2.07% at June 30, 2012.

At June 30, 2013, loans acquired in the Heartland acquisition represented $6.2 million in non-performing, $16.2 million in substandard and $728,000 in delinquent loans, which compares to $7.3 million in non-performing, $18.1 million in substandard and $3.4 million in delinquent loans represented at December 31, 2012.

Expense Management

Total non-interest expense was $5.4 million higher in the first six months of 2013 compared to the first six months of 2012 and $816,000 higher in the three-month period ending June 30, 2013 compared to the previous quarter. Salaries and employee benefits increased $2.7 million in the first six months of 2013 compared to the same period in 2012 and increased $217,000 in the second quarter of 2013 compared to the previous quarter. The increase over the previous year was primarily the result of changes to annual merit pay, employee benefits costs, commissions earned, bonus accruals and Horizon’s investment in growth markets. In addition, some of the increase in the first six months of 2013 compared to the first six months of 2012 was also related to the Heartland acquisition.

Dwight concluded: “Our managers and employees continue to do an excellent job of identifying opportunities to win new customers and expand relationships with current Horizon clients. We believe our financial performance reflects the fact that our advisors have been able to meet and exceed customer expectations time and again, even in a far from robust economy. We continue looking for opportunities to build on this momentum and expand our footprint. During the second quarter, we entered into an agreement to purchase land in Carmel, Indiana, a vibrant community and business center north of Indianapolis, with plans to establish a full-service office. We also plan to expand our Indianapolis loan production office into a full-service branch in 2013 and have added new loan officers to serve our Lake County, Indiana market.”

“Navigating today’s economic and regulatory conditions demands sharp focus and opportunistic action. We are maintaining that focus to achieve our goals for growth, financial performance and generating value for our shareholders.”

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern and Central Indiana and Southwest Michigan through its commercial banking subsidiary Horizon Bank, NA. 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.

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon. For these statements, Horizon claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in “Item 1A Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.
         

HORIZON BANCORP
Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)
 
June 30 March 31 December 31 September 30 June 30
2013   2013   2012   2012   2012
Balance sheet:
Total assets $ 1,785,907 $ 1,734,250 $ 1,848,227 $ 1,846,776 $ 1,563,265
Investment securities 492,363 482,086 482,801 503,804 441,715
Commercial loans 502,230 473,102 460,471 447,414 356,549
Mortgage warehouse loans 154,962 143,609 251,448 244,233 215,478
Residential mortgage loans 182,610 191,347 189,714 176,553 156,675
Consumer loans 277,864 281,710 289,084 286,848 268,437
Earning assets 1,638,923 1,594,292 1,700,595 1,690,348 1,460,544
Non-interest bearing deposit accounts 213,700 217,197 209,200 211,935 136,979
Interest bearing transaction accounts 772,790 777,973 769,822 767,202 634,907
Time deposits 310,766 319,893 315,131 327,834 273,903
Borrowings 282,837 208,899 345,764 333,150 339,880
Subordinated debentures 32,409 32,370 32,331 32,282 30,722
Common stockholders' equity 147,665 149,777 146,468 143,362 118,112
Total stockholders’ equity 160,165 162,277 158,968 155,862 130,612
 
Income statement: Three months ended
Net interest income $ 16,575 $ 16,010 $ 17,003 $ 14,999 $ 13,006
Provision for loan losses 729 2,084 1,715 1,041 209
Non-interest income 6,849 7,460 7,924 7,710 6,555
Non-interest expenses 14,795 13,979 15,844 14,840 12,180
Income tax expense   2,235       2,096       2,198       1,978       2,262  
Net income 5,665 5,311 5,170 4,850 4,910
Preferred stock dividend   (96 )     (146 )     (156 )     (63 )     (106 )
Net income available to common shareholders $ 5,569     $ 5,165     $ 5,014     $ 4,787     $ 4,804  
 
Per share data:
Basic earnings per share $ 0.65 $ 0.60 $ 0.58 $ 0.56 $ 0.65
Diluted earnings per share 0.62 0.58 0.56 0.54 0.62
Cash dividends declared per common share 0.10 0.10 0.10 0.10 0.09
Book value per common share 17.14 17.38 17.00 16.64 15.88
Tangible book value per common share 14.42 14.64 14.23 13.85 14.81
Market value - high 20.45 20.87 19.68 19.08 17.73
Market value - low $ 18.97 $ 19.10 $ 16.54 $ 16.75 $ 11.76
Weighted average shares outstanding - Basic 8,617,466 8,617,466 8,617,466 8,503,475 7,434,537
Weighted average shares outstanding - Diluted 8,974,103 8,980,655 8,964,315 8,838,659 7,728,519
 
Key ratios:
Return on average assets 1.29 % 1.23 % 1.13 % 1.09 % 1.31 %
Return on average common stockholders' equity 14.67 14.11 13.70 13.96 16.43
Net interest margin 4.21 4.10 4.16 3.79 3.79
Loan loss reserve to total loans 1.67 1.78 1.52 1.58 1.83
Non-performing loans to loans 2.27 2.16 1.97 2.05 2.07
Average equity to average assets 9.34 9.16 8.71 8.45 8.61
Bank only capital ratios:
Tier 1 capital to average assets 8.84 8.66 8.22 8.57 8.74
Tier 1 capital to risk weighted assets 11.97 12.52 11.17 11.58 12.01
Total capital to risk weighted assets 13.22 13.78 12.42 12.83 13.27
 
Loan data:
Substandard loans $ 50,216 $ 53,203 $ 52,114 $ 57,079 $ 35,636
30 to 89 days delinquent 4,083 5,717 6,742 8,351 3,773
 
90 days and greater delinquent - accruing interest $ 122 $ 2 $ 54 $ 109 $ 13
Trouble debt restructures - accruing interest 5,086 4,637 3,702 2,981 3,092
Trouble debt restructures - non-accrual 6,586 6,784 6,649 5,061 2,786
Non-accrual loans   13,855       12,293       13,374       15,887       14,925  
Total non-performing loans $ 25,649     $ 23,716     $ 23,779     $ 24,038     $ 20,816  
   
HORIZON BANCORP
Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)
 
June 30 June 30
2013   2012
Balance sheet:
Total assets $ 1,785,907 $ 1,563,265
Investment securities 492,363 441,715
Commercial loans 502,230 356,549
Mortgage warehouse loans 154,962 215,478
Residential mortgage loans 182,610 156,675
Consumer loans 277,864 268,437
Earning assets 1,638,923 1,460,544
Non-interest bearing deposit accounts 213,700 136,979
Interest bearing transaction accounts 772,790 634,907
Time deposits 310,766 273,903
Borrowings 282,837 339,880
Subordinated debentures 32,409 30,722
Common stockholders' equity 147,665 118,112
Total stockholders’ equity 160,165 130,612
 
Income statement: Six months ended
Net interest income $ 32,585 $ 26,204
Provision for loan losses 2,813 768
Non-interest income 14,309 11,697
Non-interest expenses 28,774 23,340
Income tax expense   4,331       4,270  
Net income 10,976 9,523
Preferred stock dividend   (242 )     (263 )
Net income available to common shareholders $ 10,734     $ 9,260  
 
Per share data:
Basic earnings per share 1.25 $ 1.25
Diluted earnings per share 1.20 1.21
Cash dividends declared per common share 0.20 0.17
Book value per common share 17.14 15.88
Tangible book value per common share 14.42 14.81
Market value - high 20.87 17.73
Market value - low $ 18.97 $ 11.53
Weighted average shares outstanding - Basic 8,617,466 7,428,699
Weighted average shares outstanding - Diluted 8,977,408 7,674,273
 
Key ratios:
Return on average assets 1.25 % 1.27 %
Return on average common stockholders' equity 14.31 16.13
Net interest margin 4.17 3.84
Loan loss reserve to total loans 1.67 1.83
Non-performing loans to loans 2.27 2.07
Average equity to average assets 9.25 8.46
Bank only capital ratios:
Tier 1 capital to average assets 8.84 8.76
Tier 1 capital to risk weighted assets 11.97 12.03
Total capital to risk weighted assets 13.22 13.29
 
Loan data:
Substandard loans $ 50,216 $ 35,636
30 to 89 days delinquent 4,083 3,773
 
90 days and greater delinquent - accruing interest $ 122 $ 13
Trouble debt restructures - accruing interest 5,086 3,092
Trouble debt restructures - non-accrual 6,586 2,786
Non-accrual loans   13,855       14,925  
Total non-performing loans $ 25,649     $ 20,816  
         
HORIZON BANCORP
Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands, Unaudited)
 
June 30 March 31 December 31 September 30 June 30
2013   2013   2012   2012   2012
Commercial $ 7,526 $ 9,166 $ 7,771 $ 8,058 $ 7,766
Real estate 3,734 3,477 3,204 2,974 2,946
Mortgage warehousing 1,610 1,603 1,705 1,716 1,695
Consumer 6,010 5,319 5,590 5,820 5,967
Unallocated   -     -     -     -     -
Total $ 18,880   $ 19,565   $ 18,270   $ 18,568   $ 18,374
 
Net Charge-offs

(Dollars in Thousands, Unaudited)
 
Three months ended
June 30   March 31   December 31   September 30   June 30
2013   2013   2012   2012   2012
Commercial $ 700 $ 347 $ 1,326 $ 333 $ 278
Real estate 411 140 143 205 113
Mortgage warehousing - - - - -
Consumer   303     302     544     309     856
Total $ 1,414   $ 789   $ 2,013   $ 847   $ 1,247
         
Total Non-performing Loans

(Dollars in Thousands, Unaudited)
 
June 30 March 31 December 31 September 30 June 30
2013   2013   2012   2012   2012
Commercial $ 9,465 $ 10,055 $ 10,693 $ 11,579 $ 8,797
Real estate 9,366 8,947 9,155 8,833 8,594
Mortgage warehousing - - - - -
Consumer   6,818     4,714     3,931     3,626     3,425
Total $ 25,649   $ 23,716   $ 23,779   $ 24,038   $ 20,816
         
Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands, Unaudited)
 
June 30 March 31 December 31 September 30 June 30
2013   2013   2012   2012   2012
Commercial $ 629 $ 957 $ 1,337 $ 1,867 $ 688
Real estate 429 745 1,228 716 338
Mortgage warehousing - - - - -
Consumer   37     52     11     72     43
Total $ 1,095   $ 1,754   $ 2,576   $ 2,655   $ 1,069
     
HORIZON BANCORP AND SUBSIDIARIES
Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)
 
Three Months Ended Three Months Ended
June 30, 2013 June 30, 2012
Average     Average Average     Average
Balance   Interest   Rate Balance   Interest   Rate
 
ASSETS
Interest-earning assets
Federal funds sold $ 5,690 $ 3 0.21 % $ 1,348 $ 1 0.30 %
Interest-earning deposits 10,289 5 0.19 % 1,908 1 0.21 %
Investment securities - taxable 369,382 2,039 2.21 % 349,118 2,244 2.59 %
Investment securities - non-taxable (1) 131,474 1,024 4.53 % 105,822 950 5.01 %
Loans receivable (2)(3)(4)   1,109,345       16,906 6.12 %   961,174       13,327 5.58 %
Total interest-earning assets (1) 1,626,180 19,977 5.05 % 1,419,370 16,523 4.79 %
 
Noninterest-earning assets
Cash and due from banks 23,544 15,913
Allowance for loan losses (19,572 ) (19,295 )
Other assets   133,658     95,472  
 
$ 1,763,810   $ 1,511,460  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 1,091,285 $ 1,445 0.53 % $ 924,464 $ 1,526 0.66 %
Borrowings 240,681 1,456 2.43 % 278,357 1,519 2.19 %
Subordinated debentures   32,172       501 6.25 %   31,446       472 6.04 %
Total interest-bearing liabilities 1,364,138 3,402 1.00 % 1,234,267 3,517 1.15 %
 
Noninterest-bearing liabilities
Demand deposits 218,433 133,848
Accrued interest payable and
other liabilities 16,492 13,269
Shareholders' equity   164,747     130,076  
 
$ 1,763,810   $ 1,511,460  
 
Net interest income/spread $ 16,575 4.05 % $ 13,006 3.64 %
 
Net interest income as a percent
of average interest earning assets (1) 4.21 % 3.79 %
 
(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.
(3) Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees.
(4) Loan fees and late fees included in interest on loans.
     
HORIZON BANCORP AND SUBSIDIARIES
Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)
 
Six Months Ended Six Months Ended
June 30, 2013 June 30, 2012
Average     Average Average     Average
Balance   Interest   Rate Balance   Interest   Rate
ASSETS
Interest-earning assets
Federal funds sold $ 9,171 $ 10 0.22 % $ 3,340 $ 4 0.24 %
Interest-earning deposits 8,920 9 0.20 % 2,159 2 0.19 %
Investment securities - taxable 372,394 4,050 2.19 % 346,645 4,554 2.64 %
Investment securities - non-taxable (1) 126,758 1,991 4.95 % 106,857 1,930 5.19 %
Loans receivable (2)(3)(4)   1,113,770       33,346 6.05 %   956,701       26,859 5.65 %
Total interest-earning assets (1) 1,631,013 39,406 5.02 % 1,415,702 33,349 4.86 %
 
Noninterest-earning assets
Cash and due from banks 23,780 15,849
Allowance for loan losses (19,124 ) (19,355 )
Other assets   134,689     95,986  
 
$ 1,770,358   $ 1,508,182  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 1,102,991 $ 2,925 0.53 % $ 916,889 $ 3,165 0.69 %
Borrowings 242,364 2,904 2.42 % 285,981 3,038 2.14 %
Subordinated debentures   32,265       992 6.20 %   31,446       942 6.02 %
Total interest-bearing liabilities 1,377,620 6,821 1.00 % 1,234,316 7,145 1.16 %
 
Noninterest-bearing liabilities
Demand deposits 211,568 132,813
Accrued interest payable and
other liabilities 17,384 13,387
Shareholders' equity   163,786     127,666  
 
$ 1,770,358   $ 1,508,182  
 
Net interest income/spread $ 32,585 4.02 % $ 26,204 3.69 %
 
Net interest income as a percent
of average interest earning assets (1) 4.17 % 3.84 %
 
(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.
(3) Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees.
(4) Loan fees and late fees included in interest on loans.
   
HORIZON BANCORP AND SUBSIDIARIES
Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)
 
June 30 December 31
2013   2012
(Unaudited)    
Assets
Cash and due from banks $ 31,735 $ 30,735
Investment securities, available for sale 482,453 482,801
Investment securities, held to maturity 9,910 -
Loans held for sale 14,710 13,744
Loans, net of allowance for loan losses of $18,880 and $18,270 1,098,786 1,172,447
Premises and equipment 43,362 42,184
Federal Reserve and Federal Home Loan Bank stock 14,184 13,333
Goodwill 19,748 19,748
Other intangible assets 3,667 4,048
Interest receivable 7,749 7,716
Cash value life insurance 35,701 35,192
Other assets   23,902     26,279
Total assets $ 1,785,907   $ 1,848,227
Liabilities
Deposits
Non-interest bearing $ 213,700 $ 209,200
Interest bearing   1,083,556     1,084,953

Total deposits
1,297,256 1,294,153
Borrowings 282,837 345,764
Subordinated debentures 32,409 32,331
Interest payable 931 560
Other liabilities   12,309     16,451
Total liabilities   1,625,742     1,689,259
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, Authorized, 1,000,000 shares
Series B shares $.01 par value, $1,000 liquidation value
Issued 12,500 shares 12,500 12,500
Common stock, no par value

Authorized, 22,500,000 shares
Issued, 8,693,471 shares
Outstanding, 8,617,466 shares - -
Additional paid-in capital 32,108 31,965
Retained earnings 114,398 105,402
Accumulated other comprehensive income   1,159     9,101
Total stockholders’ equity   160,165     158,968
Total liabilities and stockholders’ equity $ 1,785,907   $ 1,848,227
   
HORIZON BANCORP AND SUBSIDIARIES
Condensed Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Per Share Data)
 
Three Months Ended June 30   Six Months Ended June 30
2013   2012 2013   2012
(Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Interest Income
Loans receivable $ 16,906 $ 13,327 $ 33,346 $ 26,859
Investment securities
Taxable 2,047 2,246 4,069 4,560
Tax exempt   1,024       950       1,991       1,930  
Total interest income   19,977       16,523       39,406       33,349  
Interest Expense
Deposits 1,445 1,526 2,925 3,165
Borrowed funds 1,456 1,519 2,904 3,038
Subordinated debentures   501       472       992       942  
Total interest expense   3,402       3,517       6,821       7,145  
Net Interest Income 16,575 13,006 32,585 26,204
Provision for loan losses   729       209       2,813       768  
Net Interest Income after Provision for Loan Losses   15,846       12,797       29,772       25,436  
Non-interest Income
Service charges on deposit accounts 988 763 1,901 1,475
Wire transfer fees 203 213 393 395
Interchange fees 1,060 714 1,926 1,342
Fiduciary activities 1,047 982 2,187 1,957
Gain on sale of investment securities (includes $0 and $368 for the three and
six months ended 2013 and $0 for the three and six months ended 2012,

respectively, related to accumulated other comprehensive earnings reclassifications)
- - 368 -
Gain on sale of mortgage loans 2,807 3,411 5,913 5,685
Mortgage servicing income net of impairment 302 170 465 260
Increase in cash value of bank owned life insurance 257 235 509 460
Other income   185       67       647       123  
Total non-interest income   6,849       6,555       14,309       11,697  
Non-interest Expenses
Salaries and employee benefits 7,721 6,539 15,225 12,502
Net occupancy expenses 1,295 976 2,606 2,030
Data processing 818 603 1,418 1,129
Professional fees 454 583 953 1,117
Outside services and consultants 486 526 1,198 997
Loan expense 1,402 866 2,516 1,568
FDIC insurance expense 268 250 551 507
Other losses 163 162 91 192
Other expenses   2,188       1,675       4,216       3,298  
Total non-interest expenses   14,795       12,180       28,774       23,340  
Income Before Income Tax 7,900 7,172 15,307 13,793
Income tax expense (includes $0 and $129 for the three and six months ended
2013 and $0 for the three and six months ended 2012, respectively, related to
income tax expense from reclassification items)   2,235       2,262       4,331       4,270  
Net Income 5,665 4,910 10,976 9,523
Preferred stock dividend and discount accretion   (96 )     (106 )     (242 )     (263 )
Net Income Available to Common Shareholders $ 5,569     $ 4,804     $ 10,734     $ 9,260  
Basic Earnings Per Share $ 0.65 $ 0.65 $ 1.25 $ 1.25
Diluted Earnings Per Share 0.62 0.62 1.20 1.21

Copyright Business Wire 2010

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