Exhibit 99.1
[HORIZON LOGO]
Contact: James H. Foglesong
Chief Financial Officer
Phone: (219) 873-2608
Fax: (219) 874-9280
Date: January 21, 2005
FOR IMMEDIATE RELEASE
HORIZON BANCORP ANNOUNCES RECORD EARNINGS FOR 2004
Michigan City, Indiana (January 21, 2005) - Horizon Bancorp today announced its
unaudited financial results for the year ended December 31, 2004. Net income was
$6.935 million or $2.22 per fully diluted share. This compares to $6.534 million
or $2.10 per fully diluted share for the prior year. This represents a 6.1%
increase in net income over the prior year and a new record level of annual net
income for the Company. For the quarter ending December 31, 2004, net income was
$1.852 million or $.59 per fully diluted share. This compares to net income of
$1.007 million or $.32 per fully diluted share for the same quarter of the prior
year.
Craig M. Dwight, President and Chief Executive Officer, stated, "We are pleased
with our record financial performance in 2004 and are proud of our ability to
diversify Horizon's revenue streams. During the year Horizon successfully
reduced our dependency on mortgage revenue. This was accomplished by focusing
our efforts on commercial and consumer loans, which experienced impressive
growth of 34% and 40% respectively since December 31, 2003. This growth has more
than offset the decline in mortgage loan volume. In addition to loan growth,
Horizon was able to increase deposit market share in all markets served. We
attribute our success and growth to our expansion into new markets, recruitment
of experienced lenders in existing markets, retention of seasoned bankers in our
core markets and our philosophy of providing exceptional service and sensible
advice to all customers."
Net interest income for the year ended December 31, 2004 was $25.422 million, an
increase of $1.271 million or 5.3% over the prior year. This increase resulted
primarily from an increase in average earning assets for the year of $65
million. Partially offsetting this was a decline in the net interest margin of
15 basis points. For the year, much of the increase in average earning assets
resulted from additional investment securities, which carry a lower yield and
therefore caused some shrinkage in the net interest margin.
Non-interest income decreased $472 thousand from 2003. A reduction in the gain
on sale of loans caused by anticipated lower residential mortgage loan volume is
the primary cause for the decline in non-interest income. During 2004 the total
volume of residential mortgage loans sold was $106 million, a reduction of $79
million or 43% from 2003. During 2003, losses of $510 thousand were recognized
on the sale of securities. There were no security sales during 2004.
Non-interest expense increased $900 thousand or 3.6% from 2003. This increase
relates primarily to additional human resource costs to support Horizon's
expansion in new and existing markets throughout northern Indiana and southwest
Michigan. An increase in health insurance costs was also a primary cause for the
increase in non-interest expense.
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Pg. 2 Cont. Horizon Announces Record Earnings
Net income for the fourth quarter of 2004 increased from the same quarter of the
previous year due in part to an increase in earning assets. Average earning
assets increased to $840 million in the fourth quarter of 2004 compared to $710
million for the same quarter of the prior year. This is an increase of $130
million or 18%. The majority of the increase came in commercial and consumer
loans.
On December 31, 2004, Horizon's total assets were $914 million, compared to $757
million on December 31, 2003. Total net loans were $557 million at December 31,
2004 compared to $441 million at December 31, 2003. Consumer and commercial
loans were the primary drivers of this growth. Consumer loans increased over $40
million to $143 million at year-end, and commercial loans increased over $50
million to $204 million at December 31, 2004. Mortgage warehouse loans totaled
$128 million at December 31, 2004 compared to $126 million at December 31, 2003.
However, due to the slow down in residential mortgage activity, the annual
average balance for this category declined from $226 million in 2003 to $134
million in 2004.
Horizon's allowance for loan losses at December 31, 2004 was $7.2 million, or
1.28% of gross loans, compared to $6.9 million or 1.54% at December 31, 2003.
Non-performing assets at December 31, 2004 were $1.4 million, or 0.24% of gross
loans, compared to $1.9 million or .42% at December 31, 2003. The reduction
occurred primarily in residential real estate loans. Asset quality results are a
testimonial to Horizon's commitment to asset quality.
Total deposits were $612 million at December 31, 2004, an increase of $66
million from December 31, 2003. Core deposits increased to $409 million at
December 31, 2004, from $396 million at December 31, 2003. The growth in core
deposits came primarily in NOW accounts and certificates of deposit.
Book value per common share at December 31, 2004 increased to $16.56 compared to
$15.48 at December 31, 2003. This increase in stockholders' equity is primarily
the result of net income, net of dividends declared, a decrease in the market
value of investment securities available-for-sale, the exercise of stock options
and the amortization of unearned compensation.
Horizon Bancorp is a locally owned, independent, bank holding company serving
northern Indiana and southwest Michigan. Horizon offers banking, insurance,
investment and trust services from offices located in Michigan City, LaPorte,
Wanatah, Chesterton, Portage, Valparaiso, Elkhart, South Bend and Merrillville,
Indiana, and St. Joseph, 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 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 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
# # #
HORIZON BANCORP
(in thousands except per share data and ratios)
At At
December 31, December 31,
2004 2003
--------- ---------
SELECTED FINANCIAL DATA:
Total assets $ 913,813 $ 757,443
Cash and cash equivalents 18,254 45,464
Investment securities available for sale 281,282 215,695
Loans held for sale 3,836 8,213
Commercial 203,966 152,362
Mortgage warehouse 127,992 126,056
Real estate 89,139 67,428
Installment 142,945 101,872
Allowance for loan losses (7,193) (6,909)
--------- ---------
Loans, net 556,849 440,809
Deposits 612,217 546,168
Total borrowings 243,985 158,585
Total equity 50,432 46,223
CAPITAL RATIOS (BANK ONLY):
Total capital to risk weighted assets 13.48% 15.22%
Tier 1 capital to risk weighted assets 12.23% 13.97%
Tier 1 capital to average assets 7.73% 7.90%
ASSET QUALITY RATIOS:
Nonperforming loans to total loans 0.24% 0.42%
Allowance for loan losses to nonperforming loans 529.73% 367.11%
Allowance for loan losses to total loans 1.28% 1.54%
HORIZON BANCORP
(in thousands except per share data and ratios)
Three Months Ended Year ended
December 31, December 31,
----------------------- ----------------------
2004 2003 2004 2003
-------- -------- -------- --------
SELECTED OPERATING DATA:
Total interest income $ 11,770 $ 10,019 $ 42,988 $ 41,543
Total interest expense 4,850 4,344 17,566 17,392
-------- -------- -------- --------
Net interest income 6,920 5,675 25,422 24,151
Provision for loan losses 309 300 990 1,350
-------- -------- -------- --------
Net interest income after provision for loan losses 6,611 5,375 24,432 22,801
-------- -------- -------- --------
Non-interest income:
Service charges on deposit accounts 780 814 3,088 3,161
Fiduciary activities 764 614 1,930 2,411
Gain on sale of loans 413 516 2,126 3,843
Loss on sale of securities (236) (510)
Other non-interest income 686 758 2,761 2,235
-------- -------- -------- --------
Total non-interest income 2,643 2,466 10,669 11,140
-------- -------- -------- --------
Non-interest expense:
Salaries and employee benefits 3,929 3,582 14,767 13,948
Other non-interest expense 2,746 2,944 10,905 10,823
-------- -------- -------- --------
Total non-interest expense 6,675 6,526 25,672 24,771
-------- -------- -------- --------
Net income before taxes 2,579 1,315 9,429 9,170
Income tax expense 727 308 2,494 2,636
-------- -------- -------- --------
Net income $ 1,852 $ 1,007 $ 6,935 $ 6,534
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PERFORMANCE RATIOS:
Diluted earnings per share $ 0.59 $ 0.32 $ 2.22 $ 2.10
Return on average equity 14.53% 8.78% 14.35% 14.65%
Net interest margin 3.31% 3.27% 3.35% 3.50%