Exhibit 99.1
Contact: Mark E. Secor
Chief Financial Officer
Phone: (219) 873-2611
Fax: (219) 874-9280
Date: January 21, 2010
FOR IMMEDIATE RELEASE
Horizon Bancorp Announces Record Earnings for 2009
Michigan City, Indiana (NASDAQ GM: HBNC) – Horizon Bancorp today announced its unaudited financial results for the three and twelve months ended December 31, 2009.
SUMMARY:
| · | Horizon’s net income for the year ending December 31, 2009 was $9.14 million, which exceeded the net income from 2008 of $8.97 million and represents Horizon’s tenth consecutive year of record earnings. |
| · | Horizon’s fourth quarter 2009 net income was $2.08 million or $0.53 diluted earnings per share. |
| · | Net interest margin for the fourth quarter increased compared to the prior two quarters. |
| · | Horizon continued to experience steady residential mortgage loan volume through the fourth quarter. |
| · | Horizon’s quarterly provision to the allowance for loan loss reserve increased by approximately $300,000 from the third quarter of 2009 increasing the ratio of allowance for loan losses to total loans to 1.80%. |
| · | Horizon’s net loans charged off during the fourth quarter were less than the net loans charged off in each of the previous three quarters of 2009. |
| · | Horizon’s balance of Other Real Estate Owned of $1.7 million at December 31, 2009 was at its lowest level compared to the balance at the end of the previous three quarters in 2009. |
| · | Horizon’s non-performing loans increased by $672,000 from September 30, 2009 to December 31, 2009. |
| · | Horizon’s non-performing loans to total loans ratio as of December 31, 2009 was 1.92%, which compares favorably to National and State of Indiana peer averages1 of 4.48% and 2.71% of total loans as of September 30, 2009. |
| · | Horizon’s capital ratios continue to be above the regulatory standards for well-capitalized banks. |
| · | At the end of the fourth quarter of 2009, Horizon announced the purchase of substantially all of the banking-related assets and assumption of all the deposits and certain other liabilities of American Trust & Savings Bank located in Whiting, Indiana. |
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| 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 September 30, 2009. Indiana peer group: Consists of 18 publicly traded banks all headquartered in the State of Indiana as reported by the Uniform Bank Performance Reports as of September 30, 2009. |
Pg. 2 cont. Horizon Announces 4th Quarter Earnings
Craig M. Dwight, Chief Executive Officer of Horizon Bancorp stated, “We are extremely pleased with Horizon’s performance in 2009, especially given the current economic environment, the increase in credit costs and the increase in FDIC insurance premiums.” Mr. Dwight further commented, “Horizon’s talented team was able to achieve record earnings for the tenth consecutive year, due to hard work, investing our resources in counter cyclical business lines and preparing for the future.” In addition, Mr. Dwight stated, “The future looks very promising for well run and profitable banks. Horizon is well positioned to capitalize on these opportunities.” In conclusion, Mr. Dwight stated, “Horizon is safe, strong and still growing.”
Performance Highlights:
Net income for the fourth quarter 2009 was $2.08 million or $.53 diluted earnings per share. This compares to $2.12 million or $.64 diluted earnings per share for the same quarter of the prior year. Net income for the twelve months ended December 31, 2009 was $9.14 million or $2.37 diluted earnings per share. This compares to $8.97 million or $2.75 diluted earnings per share for the same period of the prior year.
Diluted earnings per share were reduced by $.11 for the three months and $.43 for the twelve months ending December 31, 2009 resulting from the preferred stock dividends and the accretion of the discount on the preferred stock. The preferred stock was issued late in the fourth quarter 2008 and therefore did not significantly impact diluted earnings per share for the three or twelve month periods ending December 31, 2008.
Net interest income increased $1.7 million for the three months and $7.4 million for the twelve months ending December 31, 2009 compared to the same prior year periods. This was primarily due to an increase in interest earning assets and a decrease in the cost of funds. The net interest margin increased to 3.66% for the twelve months ending December 31, 2009 compared to 3.45% in the prior year for the same period and the fourth quarter net interest margin increased to 3.76% from 3.65% in the prior year.
The improvement in year-to-date net interest income over the same period of the prior year is a result of Horizon’s ability to reduce the cost of interest bearing liabilities more than the reduction in the yields experienced on the interest earning assets. In addition, interest rate floors on over 50.0% of the Company’s adjustable rate loans have helped in maintaining the yield on interest earning assets.
The provision for loan losses was $3.7 million for three months ending December 31, 2009 compared to $2.2 million for the same period the prior year. The fourth quarter provision is slightly increased from the $3.2 million, $3.3 million, and $3.4 million in reserves taken in the first, second, and third quarters of 2009. Consumer loan charge-offs continue to require quarterly provisions for loan losses but appear to be stabilizing as the amount of consumer charge-offs have been decreasing over the last three quarters. However, the increase in non-performing loans required additional provision expense for loan losses as specific reserves were identified for these loans.
Non-performing loans at December 31, 2009 totaled $17.1 million which was 1.92% of total loans. This is an increase from a balance of $16.5 million on September 30, 2009, or 1.87% of total loans, and an increase from a balance of $7.9 million on December 31, 2008, which was 0.89% of total loans. Horizon’s non-performing loan statistics, while having increased from the prior quarter, still compare favorably to National and State of Indiana1 peer bank averages of 4.48% and 2.71% of total loans as of September 30, 2009.
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Pg. 3 cont. Horizon Announces 4th Quarter Earnings
The increase in non-performing loans over the past quarter is due to an increase of consumer installment borrowers under Chapter 13 bankruptcy repayment plans. The majority of consumer installment borrowers under Chapter 13 repayment plans are paying as agreed, but these loans remain on non-accrual status until six payments are made under the plan. Because of the time it takes for repayment plans to be approved and the six payments to be made, the level of non-performing consumer installment loans have increased as the level of charge-offs in the consumer portfolio has decreased. The increase in the Company’s non-performing loans over the past year can be attributed to the slower economy and continued high local unemployment causing lower business revenues and increased consumer bankruptcies.
Non-accrual loans totaled $15.4 million on December 31, 2009, down slightly from $15.5 million on September 30, 2009, but up from $7.0 million on December 31, 2008. The decrease in the quarter ended December 31, 2009 was primarily due to a lower level of commercial loan non-accruals mostly offset by an increase in consumer loan non-accruals. Commercial loan non-accruals decreased from $9.2 million on September 30, 2009 to $8.1 million on December 31, 2009. During the quarter two loans to one borrower were written down by $535,000, one loan totaling $527,000 that was secured by 18 residential properties was transferred to Other Real Estate Owned (“OREO”) and two loans totaling $441,000 were paid off. Only one commercial loan totaling $320,000 was added to non-accrual during the quarter. Non-accrual loans to restaurant operators totaled $2.6 million at December 31, 2009, the same as the previous quarter. Nonaccrual loans to home builders and land developers totaled $2.2 million on December 31, 2009, down from $2.7 million on September 30, 2009. Mortgage loans on non-accrual totaled $4.6 million at December 31, 2009, the same as at September 30, 2009. Consumer loans on non-accrual increased from $1.8 million to $2.7 million during the quarter primarily due to an increase in the number of consumer bankruptcy filings.
Loans 90 days delinquent but still accruing interest totaled $1.7 million on December 31, 2009, up from $856,000 on September 30, 2009, and $833,000 on December 31, 2008. One commercial loan totaling $925,000 secured by a commercial mixed-use building and one real estate development loan totaling $110,000 caused the increase. Subsequent to December 31, 2009, the $925,000 loan was brought current and renewed for a six-month term. 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.
OREO totaled $1.7 million on December 31, 2009, the same as September 30, 2009 and down from $2.9 million on December 31, 2008. During the current quarter, six properties with a book value of $563,000 (as of September 30, 2009) were sold. Also during the quarter, 19 properties with a book value of $540,000 (as of December 31, 2009) were transferred to OREO. On December 31, 2009, OREO was comprised of 32 properties. Of these, 31 totaling $1.6 million were residential, and the balance was commercial real estate. Repossessed property totaled $23,000 on December 31, 2009, down from $142,000 on September 30, 2009. Repossessed property consists primarily of vehicles.
No mortgage warehouse loans were non-performing or OREO as of December 31, 2009, September 30, 2009, or December 31, 2008.
The residential mortgage loan activity continued to be steady through the fourth quarter as evidenced by volumes higher than the prior year in both the conventional residential mortgage and mortgage warehouse business lines. Conventional residential mortgage refinancing activity has increased the gain on sale of loans by $3.1 million for the twelve months ending December 31, 2009 when compared to the same period in the prior year.
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Pg. 4 cont. Horizon Announces 4th Quarter Earnings
Salaries and benefits increased $2.5 million for the twelve months ended December 31, 2009 compared to the prior year primarily due to branch expansion, annual merit increases, and commissions paid to the mortgage loan division as the primary cost to originate residential mortgage loans is the commissions paid to mortgage originators.
FDIC expense for the twelve months ended December 31, 2009 totaled $2.1 million compared to the prior year of $546,000, an increase of $1.6 million. The increase in FDIC insurance premiums was due to higher assessment rates and a special assessment paid in 2009.
A gain on the sale of securities of $373,000 was realized during the fourth quarter as our analysis determined that market conditions provided the opportunity to add these gains to capital without a negative impact to long term earnings. In addition, the securities sold were experiencing a higher repayment speeds due to the low interest rate environment.
Other items
On December 29, 2009 Horizon announced the signing of a definitive agreement to purchase substantially all of the banking-related assets and assume all deposits and certain other liabilities of American Trust & Savings Bank (“American”) headquartered in Whiting, Indiana and its parent company Am Tru, Inc. (“Am Tru”).
Under the terms of the agreement Horizon will purchase most of the banking-related assets of American (with an estimated value of approximately $110.0 million) and will assume all the deposits, federal home loan bank advances, and accrued interest payable in the approximate amount of $112.0 million. In addition, Horizon will pay a three percent premium on core deposits estimated to be $2.1 million and $500,000 in additional consideration. Horizon will not be purchasing approximately $12.0 million of loan participations owned by American or assuming any contingent liabilities. All values are approximate and based upon September 30, 2009 information and financial results. This transaction is subject to approval by the shareholders of American and Am Tru and bank regulators. This transaction is expected to close in the second quarter of 2010.
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.
| Contact: | Horizon Bancorp | |
| | Mark E. Secor | |
| | Chief Financial Officer | |
| | (219) 873-2611 | |
| | Fax: (219) 874-9280 | |
# # #
HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)
| | | December 31 | | | September 30 | | | June 30 | | | March 31 | | | December 31 | |
| | | 2009 | | | 2009 | | | 2009 | | | 2009 | | | 2008 | |
| Balance sheet: | | | | | | | | | | | | | | | |
| Total assets | | $ | 1,387,020 | | | $ | 1,321,224 | | | $ | 1,343,296 | | | $ | 1,442,851 | | | $ | 1,306,857 | |
| Short term investments | | | 4,783 | | | | 4,464 | | | | 10,418 | | | | 6,444 | | | | 2,679 | |
| Investment securities | | | 344,789 | | | | 333,031 | | | | 331,941 | | | | 327,289 | | | | 303,268 | |
| Commercial loans | | | 314,517 | | | | 312,573 | | | | 313,857 | | | | 313,840 | | | | 310,842 | |
| Mortgage warehouse loans | | | 166,698 | | | | 145,270 | | | | 163,083 | | | | 186,058 | | | | 123,287 | |
| Residential mortgage loans | | | 133,892 | | | | 142,568 | | | | 146,096 | | | | 160,478 | | | | 167,766 | |
| Installment loans | | | 271,210 | | | | 275,299 | | | | 272,394 | | | | 273,728 | | | | 280,072 | |
| Earning assets | | | 1,254,781 | | | | 1,232,549 | | | | 1,260,807 | | | | 1,288,214 | | | | 1,206,494 | |
| Non-interest bearing deposit accounts | | | 84,357 | | | | 87,725 | | | | 83,940 | | | | 81,000 | | | | 83,642 | |
| Interest bearing transaction accounts | | | 540,647 | | | | 375,548 | | | | 388,954 | | | | 489,699 | | | | 428,931 | |
| Time deposits | | | 326,704 | | | | 394,724 | | | | 375,256 | | | | 406,790 | | | | 328,596 | |
| Borrowings | | | 284,016 | | | | 311,884 | | | | 349,499 | | | | 320,956 | | | | 324,383 | |
| Long-term borrowings | | | 27,837 | | | | 27,837 | | | | 27,837 | | | | 27,837 | | | | 27,837 | |
| Common stockholders' equity | | | 90,299 | | | | 89,566 | | | | 82,965 | | | | 82,236 | | | | 79,196 | |
| Total stockholders’ equity | | | 114,605 | | | | 113,833 | | | | 107,194 | | | | 106,427 | | | | 103,350 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income statement: | | Three months ended | |
| Net interest income | | $ | 11,371 | | | $ | 10,719 | | | $ | 11,263 | | | $ | 11,416 | | | $ | 9,689 | |
| Provision for loan losses | | | 3,700 | | | | 3,416 | | | | 3,290 | | | | 3,197 | | | | 2,163 | |
| Other income | | | 4,304 | | | | 4,542 | | | | 4,516 | | | | 4,494 | | | | 3,369 | |
| Other expenses | | | 9,558 | | | | 8,929 | | | | 9,928 | | | | 9,397 | | | | 8,230 | |
| Income tax expense | | | 333 | | | | 559 | | | | 497 | | | | 681 | | | | 543 | |
| Net income | | | 2,084 | | | | 2,357 | | | | 2,064 | | | | 2,635 | | | | 2,122 | |
| Preferred stock dividend | | | (351 | ) | | | (351 | ) | | | (350 | ) | | | (350 | ) | | | (45 | ) |
| Net income available to common shareholders | | | 1,733 | | | | 2,006 | | | | 1,714 | | | | 2,285 | | | | 2,077 | |
| | | | | | | | | | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.53 | | | $ | 0.62 | | | $ | 0.53 | | | $ | 0.71 | | | $ | 0.64 | |
| Diluted earnings per share | | | 0.53 | | | | 0.61 | | | | 0.52 | | | | 0.70 | | | | 0.64 | |
| Cash dividends declared per common share | | | 0.17 | | | | 0.17 | | | | 0.17 | | | | 0.17 | | | | 0.17 | |
| Book value per common share | | | 27.67 | | | | 27.46 | | | | 25.85 | | | | 25.62 | | | | 24.68 | |
| Tangible book value per common share | | | 25.45 | | | | 25.22 | | | | 23.55 | | | | 23.30 | | | | 22.33 | |
| Market value - high | | $ | 17.25 | | | $ | 17.50 | | | $ | 19.45 | | | $ | 13.21 | | | $ | 24.52 | |
| Market value - low | | $ | 14.31 | | | $ | 15.00 | | | $ | 11.00 | | | $ | 10.50 | | | $ | 12.29 | |
| Basic common shares outstanding | | | 3,262,927 | | | | 3,245,505 | | | | 3,209,482 | | | | 3,209,482 | | | | 3,209,482 | |
| Diluted common shares outstanding | | | 3,275,588 | | | | 3,273,742 | | | | 3,270,178 | | | | 3,250,424 | | | | 3,246,664 | |
| | | | | | | | | | | | | | | | | | | | | |
| Key ratios: | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.62 | % | | | 0.72 | % | | | 0.59 | % | | | 0.79 | % | | | 0.71 | % |
| Return on average common stockholders' equity | | | 7.56 | | | | 9.12 | | | | 8.01 | | | | 11.18 | | | | 10.86 | |
| Net interest margin | | | 3.76 | | | | 3.64 | | | | 3.51 | | | | 3.78 | | | | 3.65 | |
| Loan loss reserve to total loans | | | 1.80 | | | | 1.58 | | | | 1.40 | | | | 1.23 | | | | 1.29 | |
| Non-performing loans to loans | | | 1.92 | | | | 1.87 | | | | 1.49 | | | | 1.11 | | | | 0.89 | |
| Average equity to average assets | | | 8.61 | | | | 8.53 | | | | 7.80 | | | | 7.94 | | | | 6.72 | |
| Bank only capital ratios: | | | | | | | | | | | | | | | | | | | | |
| Tier 1 capital to average assets | | | 8.64 | | | | 8.79 | | | | 8.22 | | | | 8.51 | | | | 9.44 | |
| Tier 1 capital to risk weighted assets | | | 11.79 | | | | 12.04 | | | | 11.93 | | | | 11.45 | | | | 11.89 | |
| Total capital to risk weighted assets | | | 13.04 | | | | 13.29 | | | | 13.19 | | | | 12.61 | | | | 13.11 | |
HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)
| | | December 31 | | | December 31 | |
| | | 2009 | | | 2008 | |
| Balance sheet: | | | | | | |
| Total assets | | $ | 1,387,020 | | | $ | 1,306,857 | |
| Short term investments | | | 4,783 | | | | 2,679 | |
| Investment securities | | | 344,789 | | | | 303,268 | |
| Commercial loans | | | 314,517 | | | | 310,842 | |
| Mortgage warehouse loans | | | 166,698 | | | | 123,287 | |
| Residential mortgage loans | | | 133,892 | | | | 167,766 | |
| Installment loans | | | 271,210 | | | | 280,072 | |
| Earning assets | | | 1,254,781 | | | | 1,206,494 | |
| Non-interest bearing deposit accounts | | | 84,357 | | | | 83,642 | |
| Interest bearing transaction accounts | | | 540,647 | | | | 428,931 | |
| Time deposits | | | 326,704 | | | | 328,596 | |
| Borrowings | | | 284,016 | | | | 324,383 | |
| Long-term borrowings | | | 27,837 | | | | 27,837 | |
| Common stockholders' equity | | | 90,299 | | | | 79,196 | |
| Total stockholders’ equity | | | 114,605 | | | | 103,350 | |
| | | | | | | | | |
| Income statement: | | Twelve months ended | |
| Net interest income | | $ | 44,769 | | | $ | 37,350 | |
| Provision for loan losses | | | 13,603 | | | | 7,568 | |
| Other income | | | 17,856 | | | | 13,831 | |
| Other expenses | | | 37,812 | | | | 32,779 | |
| Income tax expense | | | 2,070 | | | | 1,862 | |
| Net income | | | 9,140 | | | | 8,972 | |
| Preferred stock dividend | | | (1,402 | ) | | | (45 | ) |
| Net income available to common shareholders | | | 7,738 | | | | 8,927 | |
| | | | | | | | | |
| Per share data: | | | | | | | | |
| Basic earnings per share | | $ | 2.39 | | | $ | 2.78 | |
| Diluted earnings per share | | | 2.37 | | | | 2.75 | |
| Cash dividends declared per common share | | | 0.68 | | | | 0.66 | |
| Book value per common share | | | 27.67 | | | | 24.68 | |
| Tangible book value per common share | | | 25.45 | | | | 22.33 | |
| Market value - high | | $ | 19.45 | | | $ | 25.73 | |
| Market value - low | | $ | 10.50 | | | $ | 12.29 | |
| Basic common shares outstanding | | | 3,232,033 | | | | 3,208,658 | |
| Diluted common shares outstanding | | | 3,270,723 | | | | 3,246,351 | |
| | | | | | | | | |
| Key ratios: | | | | | | | | |
| Return on average assets | | | 0.68 | % | | | 0.75 | % |
| Return on average common stockholders' equity | | | 8.92 | | | | 11.81 | |
| Net interest margin | | | 3.66 | % | | | 3.45 | % |
| Loan loss reserve to total loans | | | 1.80 | | | | 1.29 | |
| Non-performing loans to loans | | | 1.92 | | | | 0.89 | |
| Average equity to average assets | | | 8.21 | | | | 6.36 | |
| Bank only capital ratios: | | | | | | | | |
| Tier 1 capital to average assets | | | 8.64 | | | | 9.44 | |
| Tier 1 capital to risk weighted assets | | | 11.79 | | | | 11.89 | |
| Total capital to risk weighted assets | | | 13.04 | | | | 13.11 | |
HORIZON BANCORP
Allocation of the Allowance for Loan and Lease Losses
(Dollars in Thousands, Unaudited)
| | | December 31 2009 | | | September 30 2009 | | | June 30 2009 | | | March 31 2009 | | | December 31 2008 | |
| Commercial | | $ | 5,766 | | | $ | 4,699 | | | $ | 3,076 | | | $ | 2,441 | | | $ | 3,202 | |
| Real estate | | | 1,933 | | | | 1,599 | | | | 1,511 | | | | 1,038 | | | | 973 | |
| Mortgage warehousing | | | 1,455 | | | | 1,480 | | | | 1,453 | | | | 1,428 | | | | 1,354 | |
| Installment | | | 6,861 | | | | 6,146 | | | | 6,609 | | | | 6,682 | | | | 5,881 | |
| Unallocated | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total | | $ | 16,015 | | | $ | 13,924 | | | $ | 12,649 | | | $ | 11,589 | | | $ | 11,410 | |
Net Charge-offs
(Dollars in Thousands, Unaudited)
| | | Three months ended | |
| | | December 31 2009 | | | September 30 2009 | | | June 30 2009 | | | March 31 2009 | | | December 31 2008 | |
| Commercial | | $ | 527 | | | $ | 530 | | | $ | 262 | | | $ | 1,076 | | | $ | (5 | ) |
| Real estate | | | 146 | | | | 22 | | | | 214 | | | | 50 | | | | 26 | |
| Mortgage warehousing | | | - | | | | - | | | | - | | | | - | | | | - | |
| Installment | | | 936 | | | | 1,589 | | | | 1,754 | | | | 1,892 | | | | 1,257 | |
| Total | | $ | 1,609 | | | $ | 2,141 | | | $ | 2,230 | | | $ | 3,018 | | | $ | 1,278 | |
Total Non-performing Loans
(Dollars in Thousands, Unaudited)
| | | December 31 2009 | | | September 30 2009 | | | June 30 2009 | | | March 31 2009 | | | December 31 2008 | |
| Commercial | | $ | 9,229 | | | $ | 9,235 | | | $ | 7,959 | | | $ | 6,474 | | | $ | 5,167 | |
| Real estate | | | 4,819 | | | | 4,926 | | | | 3,764 | | | | 2,446 | | | | 1,904 | |
| Mortgage warehousing | | | - | | | | - | | | | - | | | | - | | | | - | |
| Installment | | | 3,097 | | | | 2,312 | | | | 1,754 | | | | 1,549 | | | | 792 | |
| Total | | $ | 17,145 | | | $ | 16,473 | | | $ | 13,477 | | | $ | 10,469 | | | $ | 7,863 | |
Other Real Estate Owned and Repossessed Assets
(Dollars in Thousands, Unauditied)
| | | December 31 2009 | | | September 30 2009 | | | June 30 2009 | | | March 31 2009 | | | December 31 2008 | |
| Commercial | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| Real estate | | | 1,730 | | | | 1,671 | | | | 2,212 | | | | 2,492 | | | | 2,874 | |
| Mortgage warehousing | | | - | | | | - | | | | - | | | | - | | | | - | |
| Installment | | | 23 | | | | 142 | | | | 115 | | | | 204 | | | | 207 | |
| Total | | $ | 1,753 | | | $ | 1,813 | | | $ | 2,327 | | | $ | 2,696 | | | $ | 3,081 | |
HORIZON BANCORP
Loan Portfolio Detail
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| December 31, 2009 (Unaudited) | | | | | | | | | | | Specific Reserves on Non-Performing Loans | | | Percent of Non-performing 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 | | | 126,469 | | | | 4,638 | | | | 3.67 | % | | | 441 | | | | 9.51 | % |
| Residential construction | | | 7,423 | | | | 181 | | | | 2.43 | % | | | 71 | | | | 39.29 | % |
| Mortgage warehouse | | | 166,698 | | | | - | | | | 0.00 | % | | | - | | | | 0.00 | % |
| Total mortgage | | | 300,590 | | | | 4,819 | | | | 1.60 | % | | | 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 | | | 886,317 | | | | 17,145 | | | | 1.93 | % | | | 3,470 | | | | 20.24 | % |
| Allowance for loan losses | | | (16,015 | ) | | | | | | | | | | | | | | | | |
| Net loans | | $ | 870,302 | | | $ | 17,145 | | | | 1.97 | % | | $ | 3,470 | | | | 20.24 | % |
| | | | | | | | | | | | | | | | | | | | | |
HORIZON BANCORP AND SUBSIDIARIES
Average Balance Sheets
(Dollar Amounts in Thousands, Unaudited)
| | | Three Months Ended | | | Three Months Ended | |
| | | December 31, 2009 | | | December 31, 2008 | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| | | | | | | | | | | | | | | | | | | |
| ASSETS | | | | | | | | | | | | | | | | | | |
| Interest-earning assets | | | | | | | | | | | | | | | | | | |
| Federal funds sold | | $ | 19,331 | | | $ | 12 | | | | 0.25 | % | | $ | 7,611 | | | $ | 9 | | | | 0.47 | % |
| Interest-earning deposits | | | 8,111 | | | | 5 | | | | 0.24 | % | | | 5,280 | | | | 8 | | | | 0.60 | % |
| Investment securities - taxable | | | 250,223 | | | | 2,535 | | | | 4.02 | % | | | 174,806 | | | | 2,160 | | | | 4.92 | % |
| Investment securities - non-taxable (1) | | | 107,980 | | | | 1,060 | | | | 5.90 | % | | | 78,209 | | | | 833 | | | | 6.42 | % |
| Loans receivable (2) | | | 873,293 | | | | 14,043 | | | | 6.39 | % | | | 838,168 | | | | 14,038 | | | | 6.67 | % |
| Total interest-earning assets (1) | | | 1,258,938 | | | | 17,655 | | | | 5.74 | % | | | 1,104,074 | | | | 17,048 | | | | 6.31 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-earning assets | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 15,267 | | | | | | | | | | | | 17,494 | | | | | | | | | |
| Allowance for loan losses | | | (14,229 | ) | | | | | | | | | | | (10,578 | ) | | | | | | | | |
| Other assets | | | 78,634 | | | | | | | | | | | | 73,732 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 1,338,610 | | | | | | | | | | | $ | 1,184,722 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | $ | 808,363 | | | $ | 3,275 | | | | 1.61 | % | | $ | 694,247 | | | $ | 3,984 | | | | 2.28 | % |
| Borrowings | | | 288,684 | | | | 2,685 | | | | 3.69 | % | | | 295,410 | | | | 2,990 | | | | 4.03 | % |
| Subordinated debentures | | | 27,837 | | | | 324 | | | | 4.62 | % | | | 27,837 | | | | 385 | | | | 5.50 | % |
| Total interest-bearing liabilities | | | 1,124,884 | | | | 6,284 | | | | 2.22 | % | | | 1,017,494 | | | | 7,359 | | | | 2.88 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 89,137 | | | | | | | | | | | | 79,567 | | | | | | | | | |
Accrued interest payable and other liabilities | | | 9,322 | | | | | | | | | | | | 8,056 | | | | | | | | | |
| Shareholders' equity | | | 115,267 | | | | | | | | | | | | 79,605 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 1,338,610 | | | | | | | | | | | $ | 1,184,722 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income/spread | | | | | | $ | 11,371 | | | | 3.52 | % | | | | | | $ | 9,689 | | | | 3.43 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income as a percent of average interest earning assets (1) | | | | | | | | | | | 3.76 | % | | | | | | | | | | | 3.65 | % |
| (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)
| | | Twelve Months Ended | | | Twelve Months Ended | |
| | | December 31, 2009 | | | December 31, 2008 | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| | | | | | | | | | | | | | | | | | | |
| ASSETS | | | | | | | | | | | | | | | | | | |
| Interest-earning assets | | | | | | | | | | | | | | | | | | |
| Federal funds sold | | $ | 25,551 | | | $ | 56 | | | | 0.22 | % | | $ | 17,040 | | | $ | 443 | | | | 2.60 | % |
| Interest-earning deposits | | | 7,170 | | | | 16 | | | | 0.22 | % | | | 6,430 | | | | 148 | | | | 2.30 | % |
| Investment securities - taxable | | | 247,903 | | | | 10,813 | | | | 4.36 | % | | | 174,427 | | | | 8,520 | | | | 4.88 | % |
| Investment securities - non-taxable (1) | | | 97,913 | | | | 3,942 | | | | 5.75 | % | | | 80,151 | | | | 3,323 | | | | 5.92 | % |
| Loans receivable (2) | | | 892,431 | | | | 57,836 | | | | 6.49 | % | | | 848,279 | | | | 57,801 | | | | 6.82 | % |
| Total interest-earning assets (1) | | | 1,270,968 | | | | 72,663 | | | | 5.85 | % | | | 1,126,327 | | | | 70,235 | | | | 6.37 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-earning assets | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 15,344 | | | | | | | | | | | | 17,397 | | | | | | | | | |
| Allowance for loan losses | | | (12,372 | ) | | | | | | | | | | | (9,930 | ) | | | | | | | | |
| Other assets | | | 77,215 | | | | | | | | | | | | 69,769 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 1,351,155 | | | | | | | | | | | $ | 1,203,563 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | $ | 800,255 | | | $ | 14,792 | | | | 1.85 | % | | $ | 733,868 | | | $ | 19,536 | | | | 2.66 | % |
| Borrowings | | | 318,661 | | | | 11,696 | | | | 3.67 | % | | | 280,766 | | | | 11,772 | | | | 4.19 | % |
| Subordinated debentures | | | 27,837 | | | | 1,406 | | | | 5.05 | % | | | 27,837 | | | | 1,577 | | | | 5.67 | % |
| Total interest-bearing liabilities | | | 1,146,753 | | | | 27,894 | | | | 2.43 | % | | | 1,042,471 | | | | 32,885 | | | | 3.15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 84,209 | | | | | | | | | | | | 77,600 | | | | | | | | | |
Accrued interest payable andother liabilities | | | 9,215 | | | | | | | | | | | | 7,001 | | | | | | | | | |
| Shareholders' equity | | | 110,978 | | | | | | | | | | | | 76,491 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 1,351,155 | | | | | | | | | | | $ | 1,203,563 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income/spread | | | | | | $ | 44,769 | | | | 3.42 | % | | | | | | $ | 37,350 | | | | 3.21 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income as a percent of average interest earning assets (1) | | | | | | | | | | | 3.66 | % | | | | | | | | | | | 3.45 | % |
| (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)
| | | December 31 | | | December 31 | |
| | | 2009 | | | 2008 | |
| | | (Unaudited) | | | | |
| Assets | | | | | | |
| Cash and due from banks | | $ | 63,919 | | | $ | 36,001 | |
| Interest-bearing deposits | | | 4,783 | | | | 2,679 | |
| Investment securities, available for sale | | | 333,132 | | | | 301,638 | |
| Investment securities, held to maturity | | | 11,657 | | | | 1,630 | |
| Loans held for sale | | | 5,703 | | | | 5,955 | |
| Loans, net of allowance for loan losses of $16,015 and $11,410 | | | 870,302 | | | | 870,557 | |
| Premises and equipment | | | 30,534 | | | | 28,280 | |
| Federal Reserve and Federal Home Loan Bank stock | | | 13,189 | | | | 12,625 | |
| Goodwill | | | 5,787 | | | | 5,787 | |
| Other intangible assets | | | 1,447 | | | | 1,751 | |
| Interest receivable | | | 5,986 | | | | 5,708 | |
| Cash value life insurance | | | 23,139 | | | | 22,451 | |
| Other assets | | | 17,442 | | | | 11,795 | |
| Total assets | | $ | 1,387,020 | | | $ | 1,306,857 | |
| | | | | | | | | |
| Liabilities | | | | | | | | |
| Deposits | | | | | | | | |
| Non-interest bearing | | $ | 84,357 | | | $ | 83,642 | |
| Interest bearing | | | 867,351 | | | | 757,527 | |
| Total deposits | | | 951,708 | | | | 841,169 | |
| Borrowings | | | 284,016 | | | | 324,383 | |
| Subordinated debentures | | | 27,837 | | | | 27,837 | |
| Interest payable | | | 1,135 | | | | 1,910 | |
| Other liabilities | | | 7,719 | | | | 8,208 | |
| Total liabilities | | | 1,272,415 | | | | 1,203,507 | |
| | | | | | | | | |
| Commitments and contingent liabilities | | | | | | | | |
| Stockholders’ Equity | | | | | | | | |
| Preferred stock, no par value, $1,000 liquidation value | | | | | | | | |
| Authorized, 1,000,000 shares | | | | | | | | |
| Issued 25,000 shares | | | | | | | | |
| Common stock, $.2222 stated value | | | 24,306 | | | | 24,154 | |
| Authorized, 22,500,000 shares | | | | | | | | |
| Issued, 3,273,881 and 3,254,482 shares | | | 1,119 | | | | 1,114 | |
| Additional paid-in capital | | | 10,030 | | | | 9,650 | |
| Retained earnings | | | 73,431 | | | | 67,804 | |
| Accumulated other comprehensive income | | | 5,719 | | | | 628 | |
| Total stockholders’ equity | | | 114,605 | | | | 103,350 | |
| Total liabilities and stockholders’ equity | | $ | 1,387,020 | | | $ | 1,306,857 | |
| | | | | | | | | |
HORIZON BANCORP AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollar Amounts in Thousands, Except Per Share Data)
| | | Three Months Ended | | | Years Ended | |
| | | December 31 | | | December 31 | |
| | | (Unaudited) | | | (Unaudited) | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Interest Income | | | | | | | | | | | | |
| Loans receivable | | $ | 14,043 | | | $ | 14,038 | | | $ | 57,836 | | | $ | 57,801 | |
| Investment securities | | | | | | | | | | | | | | | | |
| Taxable | | | 2,552 | | | | 2,177 | | | | 10,885 | | | | 9,111 | |
| Tax exempt | | | 1,060 | | | | 833 | | | | 3,942 | | | | 3,323 | |
| Total interest income | | | 17,655 | | | | 17,048 | | | | 72,663 | | | | 70,235 | |
| | | | | | | | | | | | | | | | | |
| Interest Expense | | | | | | | | | | | | | | | | |
| Deposits | | | 3,275 | | | | 3,984 | | | | 14,792 | | | | 19,536 | |
| Borrowed funds | | | 2,685 | | | | 2,990 | | | | 11,696 | | | | 11,772 | |
| Subordinated debentures | | | 324 | | | | 385 | | | | 1,406 | | | | 1,577 | |
| Total interest expense | | | 6,284 | | | | 7,359 | | | | 27,894 | | | | 32,885 | |
| | | | | | | | | | | | | | | | | |
| Net Interest Income | | | 11,371 | | | | 9,689 | | | | 44,769 | | | | 37,350 | |
| Provision for loan losses | | | 3,700 | | | | 2,163 | | | | 13,603 | | | | 7,568 | |
| | | | | | | | | | | | | | | | | |
| Net Interest Income after Provision for Loan Losses | | | 7,671 | | | | 7,526 | | | | 31,166 | | | | 29,782 | |
| | | | | | | | | | | | | | | | | |
| Other Income | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 978 | | | | 910 | | | | 3,858 | | | | 3,885 | |
| Wire transfer fees | | | 212 | | | | 146 | | | | 921 | | | | 528 | |
| Interchange fees | | | 506 | | | | 228 | | | | 1,864 | | | | 846 | |
| Fiduciary activities | | | 850 | | | | 896 | | | | 3,336 | | | | 3,713 | |
| Gain (loss) on sale of securities | | | 373 | | | | - | | | | 795 | | | | (15 | ) |
| Gain on sale of mortgage loans | | | 1,246 | | | | 857 | | | | 6,107 | | | | 2,979 | |
| Mortgage servicing net of impairment | | | (3 | ) | | | 12 | | | | (134 | ) | | | 20 | |
| Increase in cash surrender value of bank owned life insurance | | | 173 | | | | 219 | | | | 720 | | | | 920 | |
| Death benefit on officer life insurance | | | - | | | | - | | | | - | | | | 538 | |
| Other income | | | (31 | ) | | | 101 | | | | 389 | | | | 417 | |
| Total other income | | | 4,304 | | | | 3,369 | | | | 17,856 | | | | 13,831 | |
| | | | | | | | | | | | | | | | | |
| Other Expenses | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 4,940 | | | | 4,051 | | | | 19,204 | | | | 16,749 | |
| Net occupancy expenses | | | 924 | | | | 941 | | | | 3,796 | | | | 3,775 | |
| Data processing | | | 388 | | | | 364 | | | | 1,582 | | | | 1,437 | |
| Professional fees | | | 392 | | | | 330 | | | | 1,413 | | | | 1,133 | |
| Outside services and consultants | | | 428 | | | | 373 | | | | 1,471 | | | | 1,313 | |
| Loan expense | | | 770 | | | | 620 | | | | 2,611 | | | | 2,223 | |
| FDIC insurance expense | | | 375 | | | | 142 | | | | 2,126 | | | | 546 | |
| Other losses | | | 68 | | | | 146 | | | | 510 | | | | 413 | |
| Other expenses | | | 1,273 | | | | 1,263 | | | | 5,099 | | | | 5,190 | |
| Total other expenses | | | 9,558 | | | | 8,230 | | | | 37,812 | | | | 32,779 | |
| | | | | | | | | | | | | | | | | |
| Income Before Income Tax | | | 2,417 | | | | 2,665 | | | | 11,210 | | | | 10,834 | |
| Income tax expense | | | 333 | | | | 543 | | | | 2,070 | | | | 1,862 | |
| | | | | | | | | | | | | | | | | |
| Net Income | | | 2,084 | | | | 2,122 | | | | 9,140 | | | | 8,972 | |
| Preferred stock dividend and discount accretion | | | (351 | ) | | | (45 | ) | | | (1,402 | ) | | | (45 | ) |
| | | | | | | | | | | | | | | | | |
| Net Income Available to Common Shareholders | | $ | 1,733 | | | $ | 2,077 | | | $ | 7,738 | | | $ | 8,927 | |
| | | | | | | | | | | | | | | | | |
| Basic Earnings Per Share | | $ | 0.53 | | | $ | 0.64 | | | $ | 2.39 | | | $ | 2.78 | |
| Diluted Earnings Per Share | | | 0.53 | | | | 0.64 | | | | 2.37 | | | | 2.75 | |
