Horizon Bancorp (HBNC) 8-K Horizon Bancorp Announces Record Earnings for 2006

Exhibit 99.1

Contact: James H. Foglesong

Chief Financial Officer

Phone: (219) 873-2608

Fax: (219) 874-9280

Date: January 18, 2007

FOR IMMEDIATE RELEASE

Horizon Bancorp Announces Record Earnings for 2006

Michigan City, Indiana (Nasdaq: HBNC) - Horizon Bancorp today announced its unaudited financial results for the quarter and year ended December 31, 2006. Net income for the year was $7.484 million or $2.33 per fully diluted share. This compares to $7.091 million or $2.24 per fully diluted share for 2005, an increase of $393 thousand or 5.54%. Fourth quarter net income was $2.233 million or $.69 per fully diluted share. This compares to $2.080 million or $.65 per fully diluted share for the fourth quarter of 2005, an increase of $153 thousand or 7.36%. This is Horizon’s seventh consecutive year of record earnings, and the fourth quarter of 2006 is a record for a single quarter.

Craig M. Dwight, President and Chief Executive Officer stated, “We are pleased with 2006 results, considering the flat yield curve, a decline in mortgage activity and charges related to investment portfolio restructuring. Horizon has positioned itself well for 2007 with the changes we’ve made to our investment portfolio, the addition of the mortgage wholesale line of business, and our continued branch expansion. In addition, several bank acquisitions in our market place will provide increased opportunities for Horizon as we continue to position our Company as the key provider of sensible advice in our trade area.”“”

Net interest income was $31.545 million for the year compared to $30.873 for 2005. The increase in net interest income is related to volume and not net interest margin. Horizon’s net interest margin for the year dropped to 3.05% from 3.27% in 2005. This decline in net interest margin is related to the cost of funds increasing faster than the yield on earning assets as consumer and public fund customers desired short-term deposit instruments while borrowers asked for long-term fixed rate loans. In addition, long-term deposits are now maturing and rolling into higher rates. Despite the lack of interest rate increases, the cost of funds continued to increase and the net interest margin continued to decline. Net interest income for the fourth quarter was $8.087 million, which is down approximately $206 thousand from the same quarter of 2005 for the same reasons stated above. However, net interest income improved from the third quarter of 2006 by $275 thousand as the net interest margin was constant from quarter to quarter but average earning assets increased by approximately $35 million.

The provision for loan losses totaled $905 thousand for 2006 compared to $1.521 million in 2005. The provision for loan losses is based on management’s ongoing quarterly assessment of the probable estimated losses inherent in the loan portfolio. Net charge-offs for the year were 0.07% of average loans, which continues a run rate better than peers according to the September 30, 2006 Uniform Bank Performance Report. Part of the decrease in loan loss provision is attributed to a lack of growth in commercial loans, which normally carry a higher degree of risk than other types of loans.

Pg. 2 cont. Horizon Bank 4th Quarter Earnings

Non-interest income increased $324 thousand or 3.3% from 2005. During the fourth quarter of 2006, non-interest income increased $306 thousand from the fourth quarter of 2005. Prior quarters in 2006 were impacted by special items including a gain on the sale of mortgage servicing assets of $656 thousand in the third quarter and $764 thousand in losses from the sale of securities taken throughout the year. The losses on the sale of securities, while having a negative impact on 2006, improved the tax equivalent yield on the investment portfolio by approximately 60 basis points. There were no such nonrecurring items in the fourth quarter of 2006. For the year, service charge income increased due to a full year of charges on accounts acquired in the Alliance Bank acquisition, consummated in June of 2005, and adjustments made to Horizon’s overdraft protection program. Fiduciary fees increased due to an increase in ESOP administration business. Also affecting non-interest income compared to 2005 was approximately $160 thousand in pre-tax income from the sale of the retail property and casualty insurance lines of Horizon Insurance Services, Inc, in the first quarter of 2005.

Non-interest expense for 2006 increased $1.326 million or 4.6% from 2005. Salaries and benefits declined $85 thousand from the prior year due to a decrease in incentive compensation. Factors affecting the increase include: a) on-going expenses related to the Alliance Bank acquisition, including core deposit intangible amortization of approximately $367 thousand and b) expenses related to the newly established mortgage wholesale operation of $472 thousand.

Total assets increased by $95 million or 8.4% from December 31, 2005 to December 31, 2006. The most significant change in assets was an increase in loans of $112 million or 15.4%, which was partially funded by a decline in investment securities of $32 million or 11.7%. For the funding side of the balance sheet, deposits, borrowings and subordinated debentures increased.

The increase in loans came in real estate and installment categories. Real estate loan growth came primarily from adjustable rate loans while installment loan growth came from indirect automobile loans. Commercial loans remained flat for the year.

At December 31, 2006 the total allowance for loan losses was $8.7 million compared to $8.4 million at December 31, 2005. The allowance for loan losses to total loans was 1.05% at December 31, 2006 compared to 1.14% at December 31, 2005. There have been no substantive changes in loan delinquencies, non-accruals, or non-performing loans since December 31, 2005. Horizon considers the allowance for loan losses to be adequate to cover losses inherent in the loan portfolio as of December 31, 2006.

Deposits increased by $58 million in 2006 when compared to December 31, 2005. Year-end deposit totals for both 2005 and 2006 were impacted by large public fund deposits, which came in at the end of the year. At the end of 2005, these deposits were made to non-interest bearing accounts while at the end of 2006 the deposits were made to interest bearing transaction accounts. On average, deposits increased by $93 million, with increases in all categories.

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Pg. 3 cont. Horizon Bank 4th Quarter Earnings

Subordinated debentures increased $12 million from December 31, 2005. On December 15, 2006 Horizon issued $12 million of subordinated debentures which carry an adjustable rate of 165 basis points over 90 day LIBOR, adjusted quarterly. The funds generated from this issue will be used to redeem $12 million of subordinated debentures which have a call date of March 26, 2007 and carry an interest rate of 90 day LIBOR plus 360 basis points.

Stockholders' equity totaled $61.9 million at December 31, 2006 compared to $53.5 million at December 31, 2005. At December 31, 2006, the ratio of stockholders' equity to total assets was 5.06% compared to 4.75% at December 31, 2005. Tangible equity to assets at December 31, 2006 was 4.42% compared to 4.02% at December 31, 2005. Book value per common share at December 31, 2006 increased to $19.11 compared to $17.01 at December 31, 2005. The increase in stockholders' equity during the year was the result of net income, the issuance of new shares for the exercise of stock options and improvement in the market value of investment securities available for sale, offset by dividends declared and the purchase of treasury stock.

Other items

Horizon began construction of a branch in Benton Township, Michigan. This branch is scheduled to open during the second quarter of 2007.

Horizon purchased land in Valparaiso, Indiana for the purpose of constructing a second branch in that community. The target opening date is the second or third quarter of 2007.

Horizon Bancorp is a locally owned, independent, bank holding company serving northern Indiana and southwest Michigan. Horizon offers banking, investment and trust services from offices located in Michigan City, LaPorte, Wanatah, Chesterton, Portage, Valparaiso, Elkhart, South Bend and Merrillville, Indiana, and Harbert, New Buffalo, St. Joseph and Three Oaks, Michigan and provides mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached on the World Wide Web at www.accesshorizon.com. Its common stock is traded on the NASDAQ Capital 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.

Contact:	Horizon Bancorp
	James H. Foglesong
	Chief Financial Officer
	(219) 873 - 2608
	Fax: (219) 874-9280

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HORIZON BANCORP

(In thousands except per share data and ratios)

	Three Months Ended:									Twelve Months Ended:
	December 31,			September 30,			December 31,			December 31,			December 31,
	2006			2006			2005			2006			2005
End of period balances:
Total assets	$	1,222,430		$	1,159,189		$	1,127,875		$	1,222,430		$	1,127,875
Investment securities		243,078			239,869			275,177			243,078			275,177
Commercial loans		271,457			261,133			273,310			271,457			273,310
Mortgage warehouse loans		112,267			113,596			97,730			112,267			97,730
Real estate loans		222,210			220,387			161,752			222,210			161,752
Installment loans		238,688			234,075			202,383			238,688			202,383
Non-interest bearing deposit accounts		81,949			90,205			148,127			90,205			81,949
Interest bearing transaction accounts		468,624			328,665			401,439			328,665			468,624
Time deposits		363,400			396,316			306,001			363,400			306,001
Short-term borrowings		83,842			120,579			50,024			83,842			50,024
Long-term borrowings		115,951			128,969			133,609			115,951			133,609
Stockholder’s equity		61,877			59,490			53,530			61,877			53,530
Average balances :
Total assets	$	1,175,760		$	1,138,548		$	1,069,748		$	1,118,105		$	1,012,757
Investment securities		239,111			242,081			277,879			243,726			286,668
Commercial loans		267,535			263,559			266,636			267,263			239,609
Mortgage warehouse loans		111,336			100,669			115,153			96,334			108,298
Real estate loans		231,027			215,641			152,950			197,012			126,104
Installment loans		236,369			228,932			200,827			220,095			175,510
Non-interest bearing deposit accounts		79,229			79,558			83,081			78,654			74,809
Interest bearing transaction accounts		345,485			349,363			367,136			352,586			328,003
Time deposits		439,393			407,901			342,242			387,365			323,169
Short-term borrowings		87,797			64,819			81,484			78,747			72,229
Long-term borrowings		156,286			174,563			134,302			129,620			130,596
Stockholder’s equity		61,300			57,160			54,604			57,435			52,959
Per share data:
Basic earnings per share	$	0.70		$	0.62		$	0.67		$	2.36		$	2.31
Diluted earnings per share		0.69			0.61			0.65			2.33			2.24
Cash dividends declared per common share		0.14			0.14			0.14			0.56			0.53
Book value per common share		19.11			18.64			17.01			19.11			17.01
Market value - high		27.89			26.93			27.93			32.23			31.51
Market value - low		25.92			25.50			24.95			25.16			24.20
Basic average common shares outstanding		3,193,306			3,189,004			3,111,583			3,177,272			3,067,632
Diluted average common shares outstanding		3,238,648			3,211,777			3,186,780			3,217,050			3,162,950
Key ratios:
Return on average assets		0.75	%		0.69	%		0.75	%		0.67	%		0.70	%
Return on average equity		14.77			13.77			14.98			13.03			13.39
Net interest margin		2.97			2.96			3.23			3.05			3.27
Efficiency		69.98			73.56			68.10			73.07			71.59
Loan loss reserve to loans		1.05			1.05			1.14			1.05			1.14
Non-performing loans to loans		0.31			0.17			0.28			0.31			0.28
Average equity to average assets		5.21			5.02			5.10			5.14			5.23
Bank only capital ratios:
Tier 1 capital to average assets		6.91	%		7.11	%		7.03	%		6.91	%		7.03	%
Tier 1 capital to risk weighted assets		10.03			10.28			10.66			10.03			10.66
Total capital to risk weighted assets		11.12			11.42			11.82			11.12			11.82

Horizon Bancorp and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

	December 31, 2006 (Unaudited)			December 31, 2005
Assets
Cash and due from banks	$	52,311		$	39,163
Interest-bearing demand deposits		1			87
Cash and cash equivalents		52,312			39,250
Interest-bearing deposits		898			15,735
Federal funds sold		6,500
Investment securities, available for sale		243,078			275,177
Loans held for sale		12,315			2,440
Loans, net of allowance for loan losses of $8,738and $8,368		835,884			724,366
Premises and equipment		23,394			21,425
Federal Reserve and Federal Home Loan Bank stock		12,136			12,983
Goodwill		5,787			5,787
Other intangible assets		2,412			2,780
Interest receivable		6,094			5,813
Other assets		21,620			22,119
Total assets	$	1,222,430		$	1,127,875
Liabilities
Deposits
Noninterest bearing	$	81,949		$	148,127
Interest bearing		832,024			707,439
Total deposits		913,973			855,566
Short-term borrowings		83,842			50,024
Long-term borrowings		115,951			133,609
Subordinated debentures		40,209			27,837
Interest payable		1,771			1,663
Other liabilities		4,807			5,646
Total liabilities		1,160,553			1,074,345
Stockholders’ Equity
Preferred stock, no par value
Authorized, 1,000,000 shares
No shares issued
Common stock, $.2222 stated value
Authorized, 22,500,000 shares
Issued, 4,995,906 and 4,852,751 shares		1,111			1,092
Additional paid-in capital		25,229			24,552
Retained earnings		54,196			48,523
Restricted stock, unearned compensation		-			(760	)
Accumulated other comprehensive income (loss)		(1,507	)		(2,853	)
Less treasury stock, at cost, 1,759,424 and 1,755,158 shares		(17,152	)		(17,024	)
Total stockholders’ equity		61,877			53,530
Total liabilities and stockholders’ equity	$	1,222,430		$	1,127,875

Horizon Bancorp and Subsidiaries

Condensed Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Per Share Data)

	Three Months Ended December 31				Year ended
	2006 (Unaudited)		2005 (Unaudited)		2006 (Unaudited)			2005 (Unaudited)
Interest Income
Loans receivable	$	15,670	$	13,033	$	57,282		$	44,749
Investment securities
Taxable		2,079		2,396		8,175			9,691
Tax exempt		860		593		3,223			2,353
Total interest income		18,609		16,022		68,680			56,793
Interest Expense
Deposits		7,461		5,026		25,734			16,374
Federal funds purchased and short-term borrowings		451		667		2,035			2,072
Long-term borrowings		1,987		1,565		7,100			5,927
Subordinated debentures		623		471		2,266			1,547
Total interest expense		10,522		7,729		37,135			25,920
Net Interest Income		8,087		8,293		31,545			30,873
Provision for loan losses		180		450		905			1,521
Net Interest Income after Provision for Loan Losses		7,907		7,843		30,640			29,352
Other Income
Service charges on deposit accounts		805		808		3,102			2,695
Wire transfer fees		106		112		396			438
Fiduciary activities		869		784		3,100			2,748
Commission income from insurance agency		-0-		-0-		-0-			46
Gain on sale of loans		594		415		1,681			1,756
Gain on sale of mortgage servicing rights		-0-		-0-		656			-0-
Increase in cash surrender value of Bank owned life insurance		122		126		470			487
Loss on sale of securities		-0-		-0-		(764	)		-0-
Other income		369		314		1,496			1,643
Total other income		2,865		2,559		10,137			9,813
Other Expenses
Salaries and employee benefits		3,909		4,047		16,433			16,518
Net occupancy expenses		582		605		2,338			2,217
Data processing and equipment expenses		536		606		2,560			2,342
Other expenses		2,637		2,132		9,124			8,052
Total other expenses		7,664		7,390		30,455			29,129
Income Before Income Tax		3,108		3,012		10,322			10,036
Income tax expense		875		932		2,838			2,945
Net Income	$	2,233	$	2,080	$	7,484		$	7,091
Basic Earnings Per Share	$	.70	$	.67	$	2.36		$	2.31
Diluted Earnings Per Share	$	.69	$	.65	$	2.33		$	2.24