EXHIBIT 99.1
(HORIZON LOGO)
Contact: James H. Foglesong
Chief Financial Officer
Phone: (219) 873-2608
Fax: (219) 874-9280
Date: October 24, 2003
FOR IMMEDIATE RELEASE
Horizon Bancorp Announces Record Year-to-date Earnings
Michigan City, Indiana, (October 24, 2003) - Horizon Bancorp today announced
unaudited financial results for the quarter ended September 30, 2003. Net income
was $2.028 million or $.65 per fully diluted share. This compares to net income
of $1.528 million or $.51 per fully diluted share for the same quarter of the
prior year. This represents a 33% increase in net income over the third quarter
of the prior year. Year-to-date net income was $5.527 million or $1.78 per fully
diluted share compared to net income of $3.924 million or $1.32 per fully
diluted share for the first nine months of the prior year. Year-to-date net
income was up 41% over the prior year same time period. All per share amounts
have been adjusted for the three-for-two stock split declared on October 21,
2003.
Craig M. Dwight, President and Chief Executive Officer stated, "We are pleased
to announce record earnings for the nine months ending September 30, 2003.
Horizon has been able to take advantage of a very active mortgage refinance
market through the first nine months of 2003. The hard work and dedication of
our mortgage origination and processing team has helped Horizon generate record
earnings. I am also pleased with the success of our new St. Joseph, Michigan
operation. This new office hit breakeven after only four months of operation. We
at Horizon look forward to continued success by delivering exceptional service
and sensible advice."
Net interest income for the quarter ended September 30, 2003 was $6.606 million,
an increase of $532 thousand or 8.76% over the same period of the prior year.
This increase was the result of an increase in average earning assets over the
third quarter of 2002 of approximately $132 million and was partially offset by
a decline in net interest margin of 40 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 $275.2
million during the third quarter of 2003 compared to $214.4 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 interest rates.
Non-interest income decreased $411 thousand or 12.7% from the third quarter of
2002. This decrease relates primarily to a decrease in the gain on sale of
mortgage loans into the secondary market and a loss on the sale of securities.
During the third quarter of 2002, approximately $8.9 million of portfolio
mortgage loans were sold at a gain of $350 thousand. During the third quarter of
2003 approximately $10.8 million of investment securities were sold at a loss of
$267 thousand. These securities had a yield of 2.63% and an estimated average
life of 8.7 years. These funds were reinvested in securities with a yield of
4.77% and an average life of 4.81 years Due to the increased yield, the loss
will be recovered in approximately 14 months. The impact on the 2003 financial
results will be an after tax reduction in net income of approximately $123
thousand, but should positively impact the 2004 financial results and future
years by approximately $139 thousand per year after tax.
- MORE -
Pg. 2 Cont. Horizon Third Quarter Earnings
Non-interest expense decreased $324 thousand or 4.90% from the third quarter of
2002. The third quarter of 2002 included an charge for goodwill impairment of
$714 thousand. The increase in salaries and employee benefits primarily related
to increased commissions paid to mortgage loan originators and additional
staffing for new market expansion.
At September 30, 2003, Horizon's total assets were $755 million compared to $720
million at December 31, 2002. Total net loans were $452 million at September 30,
2003 compared to $530 million at December 31, 2002. Mortgage warehouse loans
declined by approximately $100 million due to the slow down in mortgage
refinance activity which occurred late in the third quarter. Partially
offsetting this decline was growth in commercial loans primarily in the new St
Joseph Michigan market. Commercial loans increased in other markets as well.
Horizon's allowance for loan losses at September 30, 2003 was $6.75 million, or
1.47% of gross loans, compared to $6.3 million or 1.17% at December 31, 2002.
Non-performing assets at September 30, 2003 were $1.8 million, or 0.40% of gross
loans, compared to $1.3 million or .24% at December 31, 2002. The increase
occurred in residential real estate loans.
Total deposits were $535 million at September 30, 2003, an increase of $46
million or 9.44% from December 31, 2002. Core deposits increased to $370.7
million at September 30, 2003, from $344.2 million at December 31, 2002. Other
growth came in short term negotiable CDs that were acquired to fund the high
average mortgage warehouse balances. These CDs will mature over the next five
months.
The increase in stockholders' equity of $3.4 million during the nine months
ended September 30, 2003 was the result of net income, net of dividends
declared, and a decrease in the market value of investment securities available
for sale.
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
# # #
At At
September 30, December 31,
2003 2002
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SELECTED FINANCIAL DATE:
Total assets $755,089 $720,130
Cash and cash equivalents 74,224 35,692
Investment securities available for sale 189,476 109,453
Loans held for sale 3,314 12,620
Loans, net 452,299 529,538
Deposits 535,200 489,259
Total borrowings 168,536 183,521
Total equity 44,831 41,410
CAPITAL RATIOS (BANK ONLY):
Total capital to risk weighted assets 15.19% 13.55%
Tier 1 capital to risk weighted assets 13.93% 12.29%
Tier 1 capital to average assets 7.40% 7.20%
ASSET QUALITY RATIOS:
Nonperforming loans to total loans 0.40% 0.24%
Allowance for loan losses to nonperforming loans 366.26% 483.76%
Allowance for loan losses to total loans 1.47% 1.17%
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------ ----------------------
2003 2002 2003 2002
-------- -------- ------- --------
SELECTED OPERATING DATA:
Total interest income $ 11,094 $ 10,828 $31,524 $ 30,140
Total interest expense 4,488 4,754 13,048 13,371
-------- -------- ------- --------
Net interest income 6,606 6,074 18,476 16,769
Provision for loan losses 300 375 1,050 1,125
-------- -------- ------- --------
Net interest income after provision for loan losses 6,306 5,699 17,426 15,644
-------- -------- ------- --------
Noninterest income:
Service charges on deposit accounts 818 772 2,346 2,155
Fiduciary activities 610 593 1,797 1,776
Gain on sale of loans 1,116 1,302 3,327 2,280
Loss on sale of securities (267) (273)
Other noninterest income 551 572 1,478 1,542
-------- -------- ------- --------
Total noninterest income 2,828 3,239 8,675 7,753
-------- -------- ------- --------
Noninterest expense:
Salaries and employee benefits 3,662 3,145 10,366 9,176
Other noninterest expense 2,627 3,468 7,880 8,220
-------- -------- ------- --------
Total noninterest expense 6,289 6,613 18,246 17,396
-------- -------- ------- --------
Net income before taxes and cumulative effect of
change in accounting method 2,845 2,325 7,855 6,001
Income tax expense 817 797 2,328 1,980
-------- -------- ------- --------
Net income before cumulative effect of change in
accounting method 2,028 1,528 5,527 4,021
Cumulative effect of change in accounting method -- -- -- (97)
-------- -------- ------- --------
Net income $ 2,028 $ 1,528 $ 5,527 $ 3,924
======== ======== ======= ========
PERFORMANCE RATIOS:
Diluted earnings per share(1) $ 0.65 $ 0.51 $ 1.78 $ 1.32
Return on average equity 18.03% 15.22% 15.01% 13.90%
Net interest margin 3.56% 3.96% 3.58% 3.93%
(1) Reflects 3 for 2 stock split declared October 21, 2003