Exhibit 99.1
[GRAPHIC OMITTED]
Contact: James H. Foglesong
Chief Financial Officer
Phone: (219) 873-2608
Fax: (219) 874-9280
Date: July 22, 2003
FOR IMMEDIATE RELEASE
Horizon Bancorp Announces Record Year-to-date Earnings
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Michigan City, Indiana, (July 22, 2003) - Horizon Bancorp today announced
unaudited financial results for the quarter ended June 30, 2003. Craig M.
Dwight, President and Chief Executive Officer stated, "we are pleased to
announce record earnings for the six months ending June 30, 2003. The results
are due to the hard work and dedication of our entire team to deliver to our
customers' exceptional service and sensible advice. Most recently our mortgage
teams exhibited the true spirit of our Company through their dedication and hard
work to deliver exceptional service by exceeding our standards for loan
processing time during a time of record loan volume. In addition, during the
first six months, we were pleased to announce the opening of our newest office
and pending acquisition of Anchor Mortgage in St. Joseph, Michigan. This
acquisition and new office will compliment our expansion plans and accelerate
our anticipated future cash flow from this market."
For the quarter ending June 30, 2003, net income was $1.775 million or $.86 per
fully diluted share. This compares to net income of $1.291 million or $.65 per
fully diluted share for the same quarter of the prior year. This represents a
37% increase in net income over the second quarter of the prior year. Year to
date net income was $3.499 million or $1.70 per fully diluted share compared to
net income of $2.396 million or $1.21 per fully diluted share for the first six
months of the prior year. Year-to-date net income is up 46% over the prior year
same time period. The prior year six month period included a $97 thousand net of
tax, or $.05 per fully diluted share, charge for the cumulative effect of a
change in accounting for goodwill.
Net interest income for the quarter ended June 30, 2003 was $5.985 million, an
increase of $545 thousand or 10% over the same period of the prior year. This
increase was the result of an increase in average earning assets over the second
quarter of 2002 of approximately $105 million and partially offset by a decline
in net interest margin of 24 basis points. The growth in earning assets came
primarily in the investment portfolio and mortgage warehouse loans. Mortgage
warehouse loans continued to experience unprecedented growth due to heavy
refinance activity. Mortgage warehouse loans outstanding averaged $240.3 million
during the second quarter of 2003 compared to $162.2 million for the same
quarter of the prior year. Continuing declines in overall interest rates caused
the net interest margin decrease. Earning assets yields declined due to the
overall decline in market rates; however, rates of interest paid on deposits are
at levels that will not allow for additional reductions that match the declines
experienced by earning assets.
Non-interest income increased $917 thousand or 43% from the second quarter of
2002. This increase relates primarily to increased gains on the sale of mortgage
loans into the secondary market. During the second quarter of 2003, the gain on
sale of mortgage loans totaled $1.190 million on the sale of approximately $61.2
million of mortgage loans. This compares to a gain of $453 thousand on the sale
of approximately $21.5 million of mortgage loans in the second quarter of 2002.
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Pg. 2 Cont. Horizon Second Quarter Earnings
Non-interest expense increased $776 thousand or 14% from the second quarter of
2002. The majority of the increase relates to salaries and employee benefits.
These increased due to additional commissions paid to mortgage loan originators
as a result of increased mortgage loan originations and additional staffing for
new market expansion. Other increases include loan expense, due to increased
volume, and legal expense related to the restatement of Horizon's articles of
incorporation and year-end reporting issues.
At June 30, 2003, Horizon's total assets were $774 million compared to $720
million at December 31, 2002. Total net loans were $553 million at June 30, 2003
compared to $530 million at December 31, 2002. The growth in loans came
primarily in mortgage warehouse loans, as mentioned above and commercial real
estate. Offsetting the growth in these areas was a decrease in the portfolio of
residential mortgage loans due to refinancing activity.
Horizon's allowance for loan losses at June 30, 2003 was $6.6 million, or 1.18%
of gross loans, compared to $6.3 million or 1.17% at December 31, 2002.
Non-performing assets at June 30, 2003 were $1.7 million, or 0.30% of gross
loans, compared to $1.3 million or .24% at December 31, 2002. The growth
occurred in residential real estate loans.
Total deposits were $489 million at June 30, 2003, which is unchanged from
December 31, 2002. Core deposits increased to $360.7 million at June 30, 2003,
from $344.2 million at December 31, 2002. The growth came primarily in
non-interest bearing transaction accounts.
Book value per common share at March 31, 2003 was $22.60 compared to $20.89 at
December 31, 2002. The change in stockholders' equity during the six months
ended June 30, 2003 is the result of net income, net of dividends declared, an
increase in the market value of investment securities available for sale and the
exercise of stock options.
Horizon Bancorp is a locally owned, independent, bank holding company serving
the Northwestern Indiana/Southwestern Michigan area. It offers banking,
insurance, investment and trust services from offices located in Michigan City,
LaPorte, Wanatah, Chesterton, Portage, Valparaiso and Merrillville, Indiana, and
St. Joseph, Michigan. Horizon also 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 SmallCap 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 valid. 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)
At At
June 30, December 31,
2003 2002
---- ----
SELECTED FINANCIAL DATE:
Total assets $779,115 $720,130
Cash and cash equivalents 30,783 35,692
Investment securities available for sale 154,617 109,453
Loans held for sale 4,927 12,620
Loans, net 552,662 529,538
Deposits 489,442 489,259
Total borrowings 238,730 183,521
Total equity 44,926 41,410
CAPITAL RATIOS (BANK ONLY):
Total capital to risk weighted assets 13.90% 13.55%
Tier 1 capital to risk weighted assets 12.65% 12.29%
Tier 1 capital to average assets 7.87% 7.20%
ASSET QUALITY RATIOS:
Nonperforming loans to total loans 0.30% 0.24%
Allowance for loan losses to nonperforming loans 399.68% 483.76%
Allowance for loan losses to total loans 1.18% 1.17%
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- --------------------------
2003 2002 2003 2002
---- ---- ---- ----
SELECTED OPERATING DATA:
Total interest income $ 10,255 $ 10,036 $ 20,430 $ 19,312
Total interest expense 4,270 4,596 8,560 8,617
-------- -------- -------- --------
Net interest income 5,985 5,440 11,870 10,695
Provision for loan losses 375 375 750 750
-------- -------- -------- --------
Net interest income after provision for loan losses 5,610 5,065 11,120 9,945
-------- -------- -------- --------
Noninterest income:
Service charges on deposit accounts 804 722 1,528 1,383
Fiduciary activities 632 630 1,188 1,183
Gain on sale of loans 1,190 453 2,211 978
Other noninterest income 432 336 920 829
-------- -------- -------- --------
Total noninterest income 3,058 2,141 5,847 4,373
-------- -------- -------- --------
Noninterest expense:
Salaries and employee benefits 3,455 3,103 6,704 6,031
Other noninterest expense 2,700 2,276 5,253 4,611
-------- -------- -------- --------
Total noninterest expense 6,155 5,379 11,957 10,642
-------- -------- -------- --------
Net income before taxes and cumulative effect of
change in accounting method 2,513 1,827 5,011 3,676
Income tax expense 738 536 1,511 1,183
-------- -------- -------- --------
Net income before cumulative effect of change in
accounting method 1,775 1,291 3,500 2,493
Cumulative effect of change in accounting method -- -- -- (97)
-------- -------- -------- --------
Net income $ 1,775 $ 1,291 $ 3,500 $ 2,396
PERFORMANCE RATIOS:
Diluted earnings per share $ 0.86 $ 0.65 $ 1.70 $ 1.21
Return on average equity 15.95% 14.05% 15.99% 13.29%
Net interest margin 3.58% 3.82% 3.60% 3.92%