Horizon Bancorp (HBNC) 8-K Horizon Bancorp Announces First Quarter Earnings

Exhibit 99.1

Contact: James H. Foglesong
Chief Financial Officer
Phone: (219) 873-2608
Fax: (219) 874-9280
Date: December 14, 2005

FOR IMMEDIATE RELEASE

Horizon Bancorp Announces First Quarter Earnings

Michigan City, Indiana (April 25, 2005) – Horizon Bancorp today announced its unaudited financial results for the Quarter ended March 31, 2006. Net income for the first quarter of 2006 was $1.449 million or $.45 per fully diluted share. This compares to $1.303 million or $.42 per fully diluted share for the same quarter of the prior year. This represents an 11.2% increase in net income from the first quarter of the prior year.

Craig M. Dwight, President and Chief Executive Officer stated, “Net income, while showing an increase from the same quarter of the prior year, is down from $2.080 million for the fourth quarter of 2005. Part of this decrease can be attributed to a loss taken in the investment portfolio of $158 thousand and seasonality in the mortgage loan portfolios. The investment portfolio loss is expected to be recovered in the current year and improve earnings in future periods.” “”

Net interest income for the quarter ended March 31, 2006 was $7.810 million, an increase of $1.037 million or an increase of 15.3% over the same period of the prior year. This increase resulted from an increase in average earning assets from the same quarter of the prior year of $144.1 million or 17.3%. A large portion of the growth in earning assets was the result of the Alliance Bank acquisition that contributed approximately $116 million in earning assets. Simultaneously, mortgage warehouse loans declined approximately $19 million on average since the first quarter of 2005, due to a decline in overall residential mortgage activity. Contributing to net interest income in the first quarter of 2006 was approximately $205 thousand of income, which related to commercial loans that were acquired at a discount in the Alliance acquisition and were paid in full during the quarter. Without this income, the net interest margin would have been 3.11%.

Non-interest income decreased $249 thousand or 10.9% from the first quarter of 2005. The main contributing factors were: (a) other income in 2005 included approximately $160 thousand in pre-tax income from the sale of the retail property and casualty insurance lines of Horizon Insurance Services, Inc, and (b) a loss on the sale of investment securities of $158 thousand. In the first quarter of 2006 Horizon sold approximately $45 million of low yielding investment securities, recognizing a loss on the sale of $158 thousand. The proceeds from the sale will be used to reduce short-term debt, fund loan growth and reinvest in higher yielding securities. This transaction is anticipated to have a positive impact on net income in 2006.

Non-interest expense increased $536 thousand or 7.7% from the first quarter of 2005. This increase relates primarily to additional on going expenses related to the Alliance Bank acquisition including core deposit intangible amortization of approximately $93 thousand.

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Pg. 2 Cont. Horizon’s 1st Quarter Earnings 2006

On March 31, 2006, Horizon’s total assets were $1.073 billion, compared to $1.128 billion on December 31, 2005. Cash and cash equivalents declined due to a large cash item deposited on the last day of 2005. Investment securities decreased due to the above mentioned security sale. Loans showed modest growth since December 31, 2005. Growth came in real estate loans, where the Bank continued to hold adjustable rate mortgage loans. This growth was offset by declines in commercial loans caused by unanticipated payoffs and mortgage warehouse loans, which declined due to seasonality and an increase in long term rates. Deposits declined, as a large deposit made by a local municipality at year-end 2005 was withdrawn in their normal course of business in early January 2006. Total average deposits for the first quarter of 2006 declined only $9 million or 1.1% from the fourth quarter of 2005. Short-term borrowings increased to cover the loss of deposits since year-end.

Horizon’s allowance for loan losses at March 31, 2006 was $8.7 million, or 1.17% of gross loans, compared to $8.4 million or 1.14% at December 31, 2005. Non-performing assets at March 31, 2006 were $1.7 million, or 0.23% of gross loans, compared to $2.1 million or .28% at December 31, 2005. The decrease in non-performing assets occurred primarily in consumer loans.

Stockholders’ equity totaled $55.1 million at March 31, 2006 compared to $53.5 million at December 31, 2005. At March 31, 2006, the ratio of stockholders’ equity to total assets was 5.13% compared to 4.75% at December 31, 2005. Book value per common share at March 31, 2006 increased to $17.31 compared to $17.01 at December 31, 2005. The increase in stockholders’ equity during the year was the result of net income and the issuance of new shares for the exercise of stock options, offset by dividends declared, a decrease in the market value of investment securities available for sale, and the purchase of treasury stock.

Other items
A full service branch is anticipated to open in Elkhart, Indiana during June of 2006. Horizon has operated a loan production office in Elkhart since March of 2004.

Land was acquired in Lake County, Indiana with the intent of opening a full service branch in the first quarter 2007.

Horizon has signed a purchase agreement to acquire land for a future branch location in Benton Township, Michigan.

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

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Pg. 3 Cont. Horizon’s 1st Quarter Earnings 2006

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
Financial Highlights
(Unaudited – dollars in thousands except share and per share data and ratios)

	Three months ended
	March 31,			December 31,			March 31,
	2006			2005			2005
End of period balances:
Total assets	$	1,072,983		$	1,127,875		$	911,706
Investment securities		250,103			275,177			296,907
Commercial loans		266,526			273,310			208,102
Mortgage warehouse loans		88,871			97,730			90,150
Real estate loans		178,236			161,752			101,495
Installment loans		204,953			202,383			152,130
Non-interest bearing deposit accounts		89,615			148,127			71,764
Interest bearing transaction accounts		366,135			401,439			278,825
Time deposits		322,160			306,001			284,221
Short-term borrowings		76,754			76,025			58,983
Long-term borrowings		129,098			107,609			139,697
Stockholder’s equity		55,096			53,530			49,638
Average balances :
Total assets	$	1,065,928		$	1,069,748		$	897,570
Investment securities		253,523			277,879			285,856
Commercial loans		273,043			266,636			205,797
Mortgage warehouse loans		79,189			115,153			98,077
Real estate loans		169,306			152,950			97,376
Installment loans		202,871			200,827			146,710
Non-interest bearing deposit accounts		76,715			83,081			63,502
Interest bearing transaction accounts		372,758			367,136			277,615
Time deposits		330,945			342,242			289,371
Short-term borrowings		61,809			81,484			45,185
Long-term borrowings		135,329			134,302			142,481
Stockholder’s equity		55,483			54,604			51,547
Per share data:
Basic earnings per share	$	.46		$	.67		$	.43
Diluted earnings per share		.45			.65			.42
Cash dividends declared per common share		.14			.14			.13
Book value per common share		17.31			17.01			15.95
Market value — high		32.23			27.93			31.51
Market value — low		26.30			24.95			26.30
Basic common shares outstanding		3,142,219			3,111,583			3,016,609
Diluted common shares outstanding		3,202,036			3,186,780			3,140,322
Key ratios:
Return on average assets		.55	%		.75	%		.59	%
Return on average equity		10.59			14.98			10.28
Net interest margin		3.19			3.23			3.26
Loan loss reserve to loans		1.17			1.14			1.34
Non-performing loans to loans		.23			.28			.37
Average equity to average assets		5.21			5.10			5.75
Tier 1 capital to average assets		7.31			7.02			7.80
Tier 1 capital to risk weighted assets		10.83			10.66			12.45
Total capital to risk weighted assets		12.05			11.82			13.70

Horizon Bancorp and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollar Amounts in Thousands)

	March 31, 2006			December 31,
	(Unaudited)			2005
Assets
Cash and due from banks	$	21,111		$	39,163
Interest-bearing demand deposits		1			87
Cash and cash equivalents		21,112			39,250
Interest-bearing deposits		988			15,735
Investment securities, available for sale		250,103			275,177
Loans held for sale		2,371			2,440
Loans, net of allowance for loan losses of $8,671 and $8,368		727,543			724,366
Premises and equipment		21,781			21,425
Federal Reserve and Federal Home Loan Bank stock		12,983			12,983
Goodwill		5,7875			,787
Other intangible assets		2,6872			,780
Interest receivable		5,318			5,813
Other assets		22,310			22,119
Total assets	$	1,072,983		$	1,127,875
Liabilities
Deposits
Noninterest bearing	$	89,615		$	148,127
Interest bearing		688,295			707,439
Total deposits		777,910			855,566
Short-term borrowings		76,754			50,024
Long-term borrowings		129,098			133,609
Subordinated debentures		27,837			27,837
Interest payable		1,315			1,663
Other liabilities		4,973			5,646
Total liabilities		1,017,887			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, 4,852,751 and 4,987,806 shares		1,108			1,092
Additional paid-in capital		25,608			24,552
Retained earnings		49,524			48,523
Restricted stock, unearned compensation		(707	)		(760	)
Accumulated other comprehensive income (loss)		(3,285	)		(2,853	)
Less treasury stock, at cost, 1,741,239 and 1,759,424 shares		(17,152	)		(17,024	)
Total stockholders’ equity		55,096			53,530
Total liabilities and stockholders’ equity	$	1,072,983		$	1,127,875

See notes to condensed consolidated financial statements

Horizon Bancorp and Subsidiaries
Condensed Consolidated Statements of Income
(Dollar Amounts in Thousands, Except Per Share Data)

	Three Months Ended March 31
	2006			2005
	(Unaudited)			(Unaudited)
Interest Income
Loans receivable	$	12,773		$	8,883
Investment securities:
Taxable		2,167			2,341
Tax exempt		723			571
Total interest income		15,663			11,795
Interest Expense
Deposits		5,293			2,957
Federal funds purchased and short-term borrowings		398			173
Long-term borrowings		1,650			1,588
Subordinated debentures		512			304
Total interest expense		7,853			5,022
Net Interest Income		7,810			6,773
Provision for loan losses		380			330
Net Interest Income after Provision for Loan Losses		7,430			6,443
Other Income
Service charges on deposit accounts		686			538
Wire transfer fees		86			89
Fiduciary activities		663			627
Commission income from insurance agency					46
Gain on sale of loans		303			389
Increase in cash surrender value of Bank owned life insurance		108			114
Loss on sale of securities		(158	)
Other income		343			477
Total other income		2,031			2,280
Other Expenses
Salaries and employee benefits		4,234			4,150
Net occupancy expenses		618			521
Data processing and equipment expenses		640			507
Other expenses		2,022			1,800
Total other expenses		7,514			6,978
Income Before Income Tax		1,947			1,745
Income tax expense		498			442
Net income	$	1,449		$	1,303
Basic Earnings Per Share	$	.46		$	.43
Diluted Earnings Per Share	$	.45		$	.42

See notes to condensed consolidated financial statements