1
UNITED STATES 2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from
Commission file number 0-10792
----------
______HORIZON BANCORP_______
(Exact name of registrant as specified in its charter)
INDIANA 35-1562417
- ------------------------------ --------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
515 Franklin St., Michigan City, Indiana 46360
---------------------------------------- ------------------
Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 219-879-0211
-------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None
- ------------------- ------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common stock, no par value, 897,311 shares outstanding at March 11, 1997
------------------------------------------------------------------------
(Title of class)
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K X.
---
The aggregate market value of the registrant's common stock held by
nonaffiliates of the registrant, based on the bid price of such stock on March
11, 1997 was $27,059,000.
2
Documents Incorporated by Reference
-----------------------------------
Part of Form 10-K into which
Document portion of document is incorporated
-------- -----------------------------------
Portions of the Registrant's 1996 I, II, VI
annual report to shareholders
Portions of the Registrant's III
proxy statement to be filed for
its May 29,1997 annual meeting
of shareholders
Except as provided in Part I, Part II and Part III, no part of the Registrant's
1996 annual report to shareholders or proxy statement shall be deemed
incorporated herein by this reference or to be filed with the Securities and
Exchange Commission for any purposes.
2
3
PART I
ITEM 1. BUSINESS
(a) General Development of Business
- -----------------------------------
Horizon Bancorp, a registered bank holding company organized under the
laws of the State of Indiana on April 26, 1983, (Registrant), became the
parent corporation and sole shareholder of The First Merchants National
Bank of Michigan City pursuant to a plan of reorganization effective
October 31, 1983. Prior to October 31, 1983, the Registrant conducted no
business and had only nominal assets necessary to complete the plan of
reorganization.
On October 1, 1986 the Registrant issued 399,340 shares of its common
stock in exchange for all of the common stock of Citizens Michiana
Financial Corporation in connection with mergers of such companies and
their subsidiaries. Subsequent to the merger, the Registrant remains a
one-bank holding company with a wholly-owned subsidiary, Horizon Bank,
N.A., formerly known as First Citizens Bank, N.A. (Bank) and Bank's
wholly-owned subsidiary, IMS Investment Management, N.A. (IMS) and non-bank
subsidiaries, HBC Insurance Group (Insurance Company) and The Loan Store,
Inc., (Loan Store).
(b) Financial Information About Industry Segments
- -------------------------------------------------
The Registrant, Bank and its subsidiaries are engaged in the
commercial and retail banking business, investment management services,
retail lending and insurance credit life sales. Refer to Item 1(e) and Item
6 for information pertaining to Registrant's banking business.
(c) Narrative Description of Business
- -------------------------------------
The Registrant's business is that incident to its 100% ownership of
Bank, Loan Store and the Insurance Company. The main source of funds for
the Registrant is dividends from Bank. Bank was chartered as a national
bank association in 1873 and has operated continuously since that time.
Bank, whose deposits are insured by the Federal Deposit Insurance
Corporation to the extent provided by law, is a full-service commercial
bank offering a broad range of commercial and retail banking services,
corporate and individual trust and agency services, and other services
incident to banking. Bank maintains five facilities located exclusively
within LaPorte County, Indiana and three facilities located in Porter
County, Indiana. At December 31, 1996, Bank had total assets of
$382,038,000 and total deposits of $289,180,000. Aside from the stock of
Bank, Insurance Company and Loan Store, the Registrant's only other
significant assets are cash and cash equivalents totaling approximately
$712,000, investment securities totaling approximately $1,404,000 and taxes
receivable of approximately $1,188,000 at December 31, 1996.
The business of the Registrant, Bank, IMS, Insurance Company and Loan
Store is not seasonal to any material degree.
No material part of the Registrant's business is dependent upon a
single or small group of customers, the loss of any one or more of whom
would have a materially adverse effect on the business of the Registrant.
Revenues from loans accounted for 68% in 1996, 67% in 1995, and 66% in 1994
of the total consolidated revenue. Revenues from investment securities
accounted for 15% in 1996, 20% in 1995 and 20% in 1994 of total
consolidated revenue.
The Registrant has no employees and there are approximately 170 full
and part-time persons employed by Bank, IMS and Loan Store as of December
31, 1996.
A high degree of competition exists in all major areas where the
Registrant engages in business. Bank's primary market consists of LaPorte
County, Indiana, portions of Porter County, Indiana, and Berrien County,
Michigan. Bank competes with commercial banks located in the home county
and contiguous counties in Indiana and Michigan, as well as with savings
and loan associations, consumer finance companies, and credit unions
located therein. To a more moderate extent, Bank competes with Chicago
money center banks, mortgage banking companies, insurance companies,
brokerage houses, other institutions engaged in money market financial
services, and certain government agencies.
3
4
The Insurance Company offers credit life and accident and health
insurance. The Loan Store, Inc. is engaged in the business of retail
lending and operates three facilities in Indiana. The net income generated
from the Insurance Company and the Loan Store are not significant to the
overall operations of the Registrant.
Regulation
----------
The earnings and growth of the banking industry and the Registrant are
affected not only by the general economic conditions, but also by the
credit policies of monetary authorities, particularly the Federal Reserve
System. An important function of the Federal Reserve System is to regulate
the national supply of bank credit in order to contest recessionary trends
and curb inflationary pressures. Among the instruments of monetary policy
used by the Federal Reserve System to implement these objectives are open
market operations in U.S. Government securities, changes in the discount
rate on member bank borrowings, and changes in reserve requirements against
member bank deposits. These means are used in varying combinations to
influence overall growth of bank loans, investments and deposits and may
also affect interest rates charged on loans or paid on deposits. The
monetary policies of the Federal Reserve System have had a significant
effect on the operating results of commercial banks in the past and are
expected to continue to do so in the future. Because of changing conditions
in the national and international economy and the money markets, and as a
result of actions by monetary and fiscal authorities, including the Federal
Reserve System, interest rates, credit availability and deposit levels may
change due to circumstances beyond the control of the Registrant or Bank.
The Registrant, as a bank holding company, is subject to regulation
under the Bank Holding Company Act of 1956, as amended (Act), and is
registered with the Board of Governors of the Federal Reserve System (Board
of Governors). Under the Act, the Registrant is required to obtain prior
approval of the Board of Governors before acquiring direct ownership or
control of more than 5% of the voting shares of any bank. With certain
exceptions, the Act precludes the Registrant from acquiring direct or
indirect ownership or control of more than 5% of the voting shares of any
company which is not a bank and from engaging in any business other than
that of banking, managing and controlling banks, or furnishing services to
its subsidiary. The Registrant may engage in, and may own shares of
companies engaged in, certain activities found by the Board of Governors to
be so closely related to banking as to be a proper incident thereto.
The Registrant is required to file annual reports of its operations
with the Board of Governors and such additional information as they may
require pursuant to the Act, and the Registrant and Bank are subject to
examination by the Board of Governors. Further, the Registrant and Bank are
prohibited from engaging in certain tie-in arrangements with respect to any
extension of credit or provision of property or services.
The Board of Governors also possesses the authority through cease and
desist powers to regulate parent holding company and nonbank subsidiaries
where action of a parent holding company or its nonbank subsidiaries
constitutes a serious threat to the safety, soundness or stability of a
subsidiary bank. Federal bank regulatory agencies also have the power to
regulate debt obligations issued by bank holding companies. Included in
these powers is the authority to impose interest ceilings and reserve
requirements on such debt obligations.
The acquisition of banking subsidiaries by bank holding companies is
subject to the jurisdiction of, and requires the prior approval of, the
Federal Reserve and, for institutions resident in Indiana, the Indiana
Department of Financial Institutions. Bank holding companies located in
Indiana are permitted to acquire banking subsidiaries throughout the state,
subject to limitations based upon the percentage of total state deposits of
the holding company's subsidiary banks. Further, Indiana law permits
interstate bank holding company acquisitions on a reciprocal basis, subject
to certain limitations. Beginning July 1, 1992, Indiana law permits the
Registrant to acquire banks, and be acquired by bank holding companies,
located in any state in the country which permits reciprocal entry by
Indiana bank holding companies.
The Registrant, Bank, IMS, Insurance Company and Loan Store are
"affiliates" within the meaning of the Federal Reserve Act. The Federal
Reserve Act and the Federal Deposit Insurance Act limit the amount of the
Bank's loans or extensions of credit to affiliates, its investments in the
stock or other securities thereof, and its taking of such stock or
securities as collateral for loans to any borrower.
4
5
Bank, as a national bank, is regulated and regularly examined by the
Office of the Comptroller of the Currency (OCC). In addition to certain
statutory limitations on the payment of dividends, approval of the OCC is
required for any dividend to the Registrant by Bank if the total of all
dividends, including any proposed dividend, declared by Bank in any
calendar year exceeds the total of its net profits (as defined by the OCC)
for that year combined with its retained net profits for the preceding two
years, less any required transfers to surplus.
The Federal Reserve Board implemented risk-based capital requirements
for banks and bank holding companies in December, 1988. The risk-based
capital requirements have little effect on the Registrant because existing
capital is in excess of the requirements. (See additional discussion in
Management's Discussion and Analysis in Registrant's Annual Report to
Shareholders, Exhibit 13.)
(d) Financial Information about Foreign and Domestic Operations and
- -------------------------------------------------------------------
Export Sales
------------
None
(e) Statistical Disclosures
- ---------------------------
I. DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY; INTEREST RATES
AND INTEREST DIFFERENTIAL
Information required by this section of Securities Act Industry Guide 3 is
presented in Management 's Discussion and Analysis Section of the
Corporation's 1996 Annual Report to Shareholders,
II. INVESTMENT PORTFOLIO
(A) The following is a schedule of the book value of investment securities
available for sale and held to maturity at December 31, 1996, 1995 and 1994.
1996 1995 1994
AVAILABLE FOR SALE
U.S. Treasury and U.S. Government agencies
and corporations $ 4,965 $ 7,165 $18,034
Mortgage-backed securities 49,683 62,717
Other securities 4,248 4,281
Unrealized gain/(loss) 145 779
------- ------- -------
Total investment securities available for sale $59,041 $74,942 $18,034
======= ======= =======
HELD TO MATURITY
U.S. Treasury and U.S. Government agencies and corporations $ 2,793 $ 3,164 $ 3,521
Obligations of states and political subdivisions 10,017 9,003 11,954
Mortgage-backed securities
Other securities
Unrealized gain/(loss) 0 0
------- ------- -------
Total investment securities held to maturity $12,810 $12,167 $15,475
======= ======= =======
Toal investment securities for sale and held
to maturity $ 71,851 $87,109 $33,509
======== ======= =======
5
6
(B) The following is a schedule of maturities of each category of debt
securities and the related weighted average yield of such securities as of
December 31, 1996:
One year or less After one year After five years After ten years
through five years through ten years
(Thousands) Amount Yield Amount Yield Amount Yield Amount Yield
-----------------------------------------------------------------------------
AVAILABLE FOR SALE
U.S. Treasury and U.S. Government $ 1,001 6.20% $ 3,964 6.79%
agency securities(1)
Other securities 4,248 7.12%
Mortgage-backed securities (2) 1,182 7.05% 48,502 7.21%
-----------------------------------------------------------------------------
Total $ 5,249 6.94% $ 5,146 6.85% $ 0 0.00% $48,502 7.21%
HELD TO MATURITY
U.S. Government agency securities $ 2,793 7.38%
Obligations of states and political 2,057 4.17% 3,680 4.44% 3,753 5.04% 527 5.00%
subdivisions
-----------------------------------------------------------------------------
Total $ 4,850 6.02% $ 3,680 4.44% $ 3,753 5.04% $ 527 5.00%
Total investment securities $10,099 6.50% $ 8,826 5.85% $ 3,753 5.04% $49,029 7.19%
available for sale and held to
maturity
<FN>
(1) Amortized cost is based on contractual maturity or call date where a call
option exists
(2) Maturity based upon maturity date
The weighted average interest rates are based on coupon rates for
securities purchased at par value and on effective interest rates
considering amortization or accretion if the securities were purchased at a
premium or discount. Yields are not presented on a tax-equivalent basis.
(C) Excluding those holdings of the investment portfolio in U.S. Treasury
securities and other agencies and corporations of the U.S. Government,
there were no investments in securities of any one issuer which exceeded
10% of the consolidated stockholders' equity of the Registrant at December
31, 1996.
III. LOAN PORTFOLIO
(A) Types of Loans - Total loans on the balance sheet are comprised of
the following classifications at December 31 for the years indicated.
(Thousands) 1996 1995 1994 1993 1992
----------------------------------------------------------------------------
Commercial, financial, agricultural and $ 75,460 $ 66,125 $ 67,177 $ 64,645 $ 67,074
commercial tax-exempt loans
Real estate mortgage loans 133,739 119,739 105,512 103,693 102,398
Installment loans 62,277 55,798 50,933 52,880 48,896
----------------------------------------------------------------------------
Total loans $271,476 $241,662 $223,622 $221,218 $218,368
=============================================================================
6
7
B) Maturities and Sensitivities of Loans to Changes in Interest Rates - The
following is a schedule of maturities and sensitivities of loans to changes
in interest rates, excluding real estate mortgage and installment loans, as
of December 31, 1996:
Maturing or repricing (thousands) One year or One through After five Total
less five years years
-----------------------------------------------------------
Commercial, financial, agricultural and $33,125 $26,900 $15,435 $75,460
commercial tax-exempt loans
The following is a schedule of fixed-rate and variable-rate commercial,
financial, agricultural and commercial tax-exempt loans due after one year.
(Variable-rate loans are those loans with floating or adjustable interest
rates.)
(Thousands) Fixed Rate Variable Rate
--------------------------------
Total commercial, financial, $31,551 $10,984
agricultural, and commercial tax-exempt
loans due after one year
(C) Risk Elements
1. Nonaccrual, Past Due and Restructured Loans - The following schedule
summarizes nonaccrual, past due and restructured loans.
December 31 (thousands) 1996 1995 1994 1993 1992
---------------------------------------------------------------------------
(a) Loans accounted for on a
nonaccrual basis $316 $668 $2,794 $1,687 $2,054
(b) Accruing loans which are
contractually past due 90 days or more 682 533 474 481 205
as to interest and principal payments
(c) Loans not included in (a) or (b)
which are "Troubled Debt
Restructuring's" as defined by SFAS
No. 15
----------------------------------------------------------------------------
Totals $998 $1,201 $3,268 $2,168 $2,259
============================================================================
The decrease in nonaccrual loans in 1995 is primarily due to three
loans which were returned to an accruing basis. These loans had sustained
required payment performance over the last six months or longer. The
increase in nonaccrual loans in 1994 is due primarily to three loans for
approximately $1,500,000, secured by real estate and having common
ownership. These loans were placed on nonaccrual in April and May of 1994.
7
8
III. LOAN PORTFOLIO (Continued)
(Thousands)
Gross interest income that would have $36 $55
been recorded on nonaccrual loans out
standing as of December 31, 1996 in the
period if the loans had been current, in
accordance with their original terms
and had been outstanding throughout
the period or since origination if held for
part of the period
Interest income actually recorded on 0 0
nonaccrual loans outstanding as of December
31, 1996 and included in net income for the
period
Interest income not recognized during the $36 $55
period on nonaccrual loans outstanding as
of December 31, 1996
Discussion of Nonaccrual Policy
From time to time, the Bank obtains information which may lead
management to believe that the collection of interest may be doubtful
on a particular loan. In recognition of such, it is management's policy
to convert the loan from an "earning asset" to a nonaccruing loan.
Further, it is management's policy to place a commercial loan on a
nonaccrual status when delinquent in excess of 90 days, unless the Loan
Committee approves otherwise. All loans placed on nonaccrual status
must be reviewed by the officer responsible for the loan, the senior
lending officer and the loan review officer. The loan review officer
monitors the loan portfolio for any potential problem loans.
2. Potential Problem Loans
Loans where there are serious doubts as to the ability of the borrower
to comply with present loan repayment terms, and not included in
Section 1 above, amount to $124,000 at December 31, 1996. Loan
customers included in this category are having financial difficulties
at the present time and may need adjustments in their repayment terms.
Payments are anticipated or collateral or guarantees are available to
reduce any possible loss. These loans and potential loss exposure have
been considered in management's analysis of the adequacy of the
allowance for loan losses. Consideration was given to loans classified
for regulatory purposes as loss, doubtful, substandard or special
mention that have not been disclosed in Section 1 above. Management
believes that these loans do not represent or result from trends or
uncertainties which management reasonably expects will materially
impact future operating results, liquidity or capital resources, or
management believes that these loans do not represent material credits
about which management is aware of any information which causes
management to have serious doubts as to the ability of such borrowers
to comply with the loan repayment terms.
3. Foreign outstandings
None
4. Loan Concentrations
As of December 31, 1996 there are no significant concentrations of
loans exceeding 10% of total loans other than those disclosed in Item
III above.
8
9
III. LOAN PORTFOLIO (Continued)
(D) Other Interest-Bearing Assets
Other than $349,000 held as other real estate owned, net of allowance,
there are no other interest-bearing assets as of December 31, 1996 which
would be required to be disclosed under Item III C.1 or 2 if such assets
were loans.
IV. SUMMARY OF LOAN LOSS EXPERIENCE
(A) The following schedule presents an analysis of the allowance for loan
losses, average loan data and related ratios for the years ended December 31:
(Thousands) 1996 1995 1994 1993 1992
-------------------------------------------------------------------------------
LOANS
Loans outstanding at the end of the $ 271,476 $ 241,662 $ 223,622 $ 219,139 $ 215,649
period (1)
Average loans outstanding during the $ 256,580 $ 226,198 $ 218,053 $ 214,033 $ 208,615
period (1)
(1) Net of unearned income
and deferred loan fees
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of the period $ 2,777 $ 2,555 $ 2,310 $ 1,997 $ 2,479
Loans charged-off:
Commercial and agricultural loans (11) (45) (213) (1,625)
Real estate mortgage loans (14) (17)
Installment loans (532) (231) (221) (343) (515)
--------- --------- --------- --------- ---------
Total loans charged-off (557) (293) (221) (556) (2,140)
Recoveries of loans previously
charged-off:
Commercial and agricultural loans 27 358 143 339 229
Real estate mortgage loans 8
Installment loans 122 149 158 254 228
--------- --------- --------- --------- ---------
Total loan recoveries 149 515 301 593 457
--------- --------- --------- --------- ---------
Net loans charged-off (408) 222 80 37 (1,683)
--------- --------- --------- --------- ---------
Provision charged to operating expense 66 165 276 1,201
-------------------------------------------------------------------------------
Balance at the end of the period $ 2,435 $ 2,777 $ 2,555 $ 2,310 $ 1,997
================================================================================
Ratio of net charge-offs (recoveries) to .16% (.10)% (.04)% (.02)% .81%
average loans outstanding for the period
9
10
IV. SUMMARY OF LOAN LOSS EXPERIENCE (Continued)
The allowance for loan losses balance and the provision charged to
expense are judgmentally determined by management based upon the
periodic reviews of the loan portfolio. In 1995, nonperforming loans
decreased due primarily to the three loans returned to an accruing
basis. In 1994, the bank experienced an increase in nonperforming loans
which was due principally to the loans to a single borrower. As of
December 31, 1994, the allowance for possible loan losses increased
over 1993 both in terms of amount and percentage of outstanding loans.
The provision for possible loan losses was lower in 1994 than 1993 in
part because the bank experienced net loan recoveries. The provision
for loan losses continues to decrease in 1994, not withstanding the
increase in nonperforming loans, due to the availability of excess
reserves within the allowance. The 1993 provision reflects both the
decrease in charge-offs and nonperforming loans. Management also
considered the varying charge-off and recovery levels relative to the
installment loan portfolio as well as varying levels of charge-offs on
commercial loans in determining an adequate allowance for loan losses
for the periods presented. See also Note 5 of the notes to the
consolidated financial statements. Estimating the risk of loss and the
amount of loss is necessarily subjective. Accordingly, the allowance is
maintained by management at a level considered adequate to cover
possible losses that are currently anticipated based on past loss
experience, general economic conditions, information about specific
borrower situations including their financial position and collateral
values and other factors and estimates which are subject to change over
time.
(B) The following schedule is a breakdown of the allowance for loan losses
allocated by type of loan and the percentage of loans in each category
to total loans.
Allocation of the Allowance for Loan Losses at December 31. (thousands)
1996 1995 1994 1993 1992
------------------------------------------------------------------------------------------------------------------------
Allowance % of Total Allowance % of Total Allowance % of Total Allowance % of Total Allowance % of Total
Amount Loans Amount Loans Amount Loans Amount Loans Amount Loans
-------------------------------------------------------------------------------------------------------------------
Commercial, $576 0.2% $733 0.3% $1,434 0.6% $1,064 0.5% $1,192 0.6%
financial and
agricultural
Real estate 102 0.0% 139 0.1% 111 0.0% 171 0.1% 185 0.1%
mortgage
Installment 1,075 0.4% 655 0.3% 407 0.2% 514 0.2% 389 0.2%
Unallocated 682 1,250 603 561 231
-------------------------------------------------------------------------------------------------------------------
Total $2,435 0.9% $2,777 1.1% $2,555 0.9% $2,310 1.1% $1,997 0.9%
===================================================================================================================
The increase in the reserve allocation for installment loans from 1995 to
1996 is primarily the result of the change in methodology for the
historical portion of the allowance callculation. In 1996, the Bank began
using the industry average charge-off rate instead of the Bank's historical
charge-off rate which was used in previous years. This change in methodolgy
resulted in a $325 increase in the portion of the allowance allocated to
installment loans.
While management's periodic analysis of the adequacy of the allowance for
loan losses may allocate portions of allowance for specific problem loan
situations, the entire allowance is available for any loan charge-offs that
occur.
During 1997, charge-offs are expected to remain consistant with amounts net
charge-offs in each category.
10
11
V. DEPOSITS
Information required by this section is incorporated by reference to
the information appearing under the caption "Summary of Selected
Financial Data" on page 62 of the Registrant's Annual Report to
Shareholders, Exhibit 13.
VI. RETURN ON EQUITY AND ASSETS
Information required by this section is incorporated by reference to
the information appearing under the caption "Summary of Selected
Financial Data" on page 62 of the Registrant's Annual Report to
Shareholders, Exhibit 13.
VII. SHORT-TERM BORROWINGS
The following is a schedule of statistical information relative to
securities sold under agreements to repurchase which are secured by
U.S. Treasury and U.S. Government agency securities and mature within
one year. There were no other categories of short-term borrowings for
which the average balance outstanding during the period was 30 percent
or more of shareholders' equity at the end of the period.
(Thousands) 1996 1995 1994
-----------------------------------------------
Outstanding at year end $11,562 $9,558 $6,693
Approximate weighted average interest 5.14% 5.52% 6.39%
rate at year-end
Highest amount outstanding as of any $14,822 $16,446 $7,980
month-end during the year
Approximate average outstanding during $10,961 $8,196 $6,525
the year
Approximate weighted average interest 5.07% 5.65% 4.11%
rate during the year
ITEM 2. PROPERTIES
- -------------------
The main office of the Registrant and Bank is located at 515 Franklin
Square, Michigan City, Indiana. The building located adjacent to the main
office of the Registrant and Bank, at 502 Franklin Square, houses the
credit administration, operations and micro-computer departments of Bank.
In addition to these principal facilities, the Bank has eight sales
offices located at:
5477 Johnson Road, Michigan City, Indiana
3600 South Franklin Street, Michigan City, Indiana
117 E First St., Wanatah, Indiana
1410 Lincolnway, LaPorte, Indiana
754 Indian Boundary Road, Chesterton, Indiana
3125 N. Calumet, Valparaiso, Indiana
6504 U.S. Highway 6, Portage, Indiana
265 U.S. Highway 30, Valparaiso, Indiana
The Loan Store has sales offices at the following locations:
200 W 80th Place, Suite C, Merriville, Indiana
8343 Indianapolis Blvd. , Highland, Indiana
6313 University Commons, South Bend, Indiana
11
12
ITEM 3. LEGAL PROCEEDINGS
- --------------------------
The information required under this Item is incorporated by reference to
the information appearing under the caption "Note 18 - Commitments,
Off-Balance Sheet Risk and Contingencies" on page 59 of the registrants
Annual Report to Shareholders, Exhibit 13.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
No matters were submitted to a vote of the Registrant's stockholders during
the fourth quarter of the 1996 fiscal year.
PART II
-------
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to
the information appearing under the caption "Market for Horizon's Common
Stock and Related Stockholder Matters" on page 63 of the Registrant's
Annual Report to Shareholders, Exhibit 13.
ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------
The information required under this item is incorporated by reference to
the information appearing under the caption "Summary of Selected Financial
Data" on page 62 of the Registrant's Annual Report to Shareholders, Exhibit
13.
ITEM 7. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND
- -------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
Management's discussion and analysis of financial condition and results of
operations appears on pages 13 through 34 in the 1996 Annual report to
Shareholders, Exhibit 13 and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
The consolidated financial statements and supplementary data required under
this item are incorporated herein by reference to the Annual Report to
Shareholders, pages 35 through 63, Exhibit 13. The Registrant is not
required to furnish the supplementary financial information specified by
Item 302 of Regulation S-K.
Consolidated Balance Sheets, December 31, 1996 and 1995
Consolidated Statements of Income for the years ended December 31,
1996, 1995 and 1994 Consolidated Statements of Changes in
Stockholders' Equity for the years ended December 31,1996,
1995 and 1994
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994
Notes to the Consolidated Financial Statements
Report of Independent Public Accountants
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
The disclosures required under this item are incorporated by reference to
the Registrant's Forms 8-K, Exhibit 16.
PART III
--------
Information relating to the following items will be included in the
Registrant's definitive proxy statement for the annual meeting of
shareholders to be held May 29, 1997 ("1997 Proxy Statement"). The 1997
Proxy Statement will be filed with the Commission within one hundred twenty
days of the close of the Registrant's last fiscal year and is in part
incorporated into this Form 10-K Annual Report by reference.
12
13
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------------------------------
ITEM 11. EXECUTIVE COMPENSATION
- --------------------------------
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- -----------------------------------------------------------------------
(a) 1. Financial Statements
The following consolidated financial statements of the Registrant
appear in the 1996 annual report to shareholders on the pages
referenced and are specifically incorporated by reference under Item 8
of this Form 10-K:
Annual Report
Page Number
--------------
Consolidated Balance Sheets 35
Consolidated Statements of Income 36
Consolidated Statements of Changes in Stockholders' Equity 37
Consolidated Statements of Cash Flows 38
Notes to the Consolidated Financial Statements 39 - 59
Report of Independent Public Accountants 60
(a) 2. Financial Statement Schedules
-----------------------------
Financial statement schedules are omitted for the reason that they are
not required or are not applicable, or the required information is
included in the financial statements.
(a) 3. Exhibits
--------
Reference is made to the Exhibit Index which is found on page 16 of
this Form 10-K.
(b) Reports on Form 8-K
-------------------
None
Exhibits
- --------
(c) Reference is made to the Exhibit Index which is found on page 16 of
this Form 10-K.
(d) Financial Statement Schedules
-----------------------------
Financial statement schedules are omitted for the reason that they are
not required or are not applicable, or the required information is
included in the financial statements.
13
14
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
HORIZON BANCORP
---------------------------------------------
(Registrant)
Date March 28, 1997 /s/ Larry E. Reed
----------------------- -----------------------------------------------
Larry E. Reed
Chairman & Chief Executive Officer
Date March 28, 1997 /s/ Thomas P. McCormick
----------------------- ----------------------------------------------
Thomas P. McCormick
President
Date March 28, 1997 /s/ Diana E. Taylor
----------------------- ----------------------------------------------
Diana E. Taylor
Chief Financial Officer/Secretary/Treasurer
14
15
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Date Signature and Title
---- -------------------
March 28, 1997 /s/ Dale W. Alspaugh
- ------------------ -----------------------------------
Dale W. Alspaugh, Director
March 28, 1997 /s/ Russell L. Arndt
- ------------------ -----------------------------------
Russell L. Arndt, Director
March 28, 1997 /s/ George R. Averitt
- ------------------ -----------------------------------
George R. Averitt, Director
March 28, 1997 /s/ James D. Brown
- ------------------ -----------------------------------
James D. Brown, Director
March 28, 1997 /s/ Robert C. Dabagia
- ------------------ -----------------------------------
Robert C. Dabagia, Director
March 28, 1997 /s/ Myles J. Kerrigan
- ------------------ -----------------------------------
Myles J. Kerrigan, Director
March 28, 1997 /s/ Donald J. Manaher
- ------------------ -----------------------------------
Donald J. Manaher, Director
March 28, 1997 /s/ Robert E. McBride
- ------------------ -----------------------------------
Robert E. McBride, Director
March 28, 1997 /s/ Thomas P. McCormick
- ------------------ -----------------------------------
Thomas P. McCormick, Director
President
March 28, 1997 /s/ Boyd W. Phelps
- ------------------ -----------------------------------
Boyd W. Phelps, Director
March 28, 1997 /s/ Larry E. Reed
- ------------------ -----------------------------------
Larry E. Reed, Director
Chairman & Chief Executive Officer
March 28, 1997 /s/ Gene L. Rice
- ------------------ -----------------------------------
Gene L. Rice, Director
March 28, 1997 /s/ Susan D. Sterger
- ------------------ -----------------------------------
Susan D. Sterger, Director
15
16
EXHIBIT INDEX
-------------
The following exhibits are included in this Form 10-K or are incorporated by
reference as noted in the following table:
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBERS
- ------ ----------- ------------
3.1 ARTICLES OF INCORPORATION OF HORIZON BANCORP INCORPORATED BY REFERENCE
TO 12/31/89 FORM 10-K
3.2 BY-LAWS OF HORIZON BANCORP INCORPORATED BY REFERENCE
TO 12/31/91 FORM 10-K
10.1 MATERIAL CONTRACTS-AGREEMENT REGARDING INCORPORATED BY REFERENCE
EMPLOYMENT CONTRACTS TO 12/31/87 FORM 10-K
10.2 MATERIAL CONTRACTS-1987 STOCK OPTION AND INCORPORATED BY REFERENCE
STOCK APPRECIATION RIGHTS PLAN OF HORIZON TO 12/31/86 FORM 10-K
BANCORP
10.3 MATERIAL CONTRACTS-NONQUALIFIED STOCK OPTION INCORPORATED BY REFERENCE
AND STOCK APPRECIATION RIGHTS AGREEMENT TO 12/31/86 FORM 10-K
10.4 MATERIAL CONTRACTS-AMENDED NONQUALIFIED INCORPORATED BY REFERENCE
DIRECTORS DEFERRED COMPENSATION PLAN TO 12/31/89 FORM 10-K
10.5 MATERIAL CONTRACTS-SUPPLEMENTAL EMPLOYEE INCORPORATED HEREIN
RETIREMENT PLAN PAGES 17 - 34
10.6 MATERIAL CONTRACTS-FIRST AMENDMENT TO INCORPORATED HEREIN
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN PAGES 35 - 36
10.7 MATERIAL CONTRACTS-SECOND AMENDMENT TO INCORPORATED HEREIN
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN PAGES 37 - 38
10.8 MATERIAL CONTRACTS - AGREEMENT REGARDING INCORPORATED HEREIN
EMPLOYMENT CONTRACTS PAGES 39 - 47
11 STATEMENT REGARDING COMPUTATION OF PER SHARE ANNUAL REPORT ATTACHED
EARNINGS-REFER TO ANNUAL REPORT PAGE 41
FOOTNOTE 1 (EXHIBIT 13)
13 REGISTRANT'S ANNUAL REPORT TO SHAREHOLDERS ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 1996 ATTACHED
(NOT DEEMED FILED EXCEPT FOR PORTIONS
THEREOF WHICH ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO THIS FORM 10-K)
21 SUBSIDIARIES OF THE REGISTRANT INCORPORATED HEREIN
PAGE 48
16