1
HORIZON BANCORP
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
450 5th Street N.W.
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1998 commission file number 0-10792
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HORIZON BANCORP
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(Exact name of registrant as specified in its charter)
Indiana 35-1562417
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(State or other jurisdiction of incorporation or (I. R. S. Employer Identification No.)
organization)
515 Franklin Square, Michigan City, Indiana 46360
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219) 879-0211
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Securities registered pursuant to Section 12(b) of the Act:
NONE
----
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
--------------------------
(Title of class)
Indicate by check mark 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
672,802 at October 31, 1998
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2
HORIZON BANCORP
FORM 10-Q
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL INFORMATION REQUIRED BY RULE 10-01 OF REGULATION S-X IS
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INCLUDED IN THIS FORM 10-Q AS REFERENCED BELOW
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FINANCIAL STATEMENTS PAGE
-------------------- ----
Consolidated Balance Sheet (Unaudited) 1
Consolidated Statement of Income (Unaudited) 2
Condensed Consolidated Statement of Changes 3
in Stockholders' Equity (Unaudited)
Consolidated Statement of Cash Flows (Unaudited) 4
Notes to the Consolidated Financial Statements (Unaudited) 5 - 11
3
CONSOLIDATED BALANCE SHEET (THOUSANDS) (UNAUDITED)
Sept 30 Dec 31
1998 1997
---- ----
ASSETS
Cash and cash equivalents
Cash and due from banks $12,587 $19,506
Money market investment 507 852
Federal funds sold 1,350 0
----------- -----------
Total cash and cash equivalents 14,444 20,358
Short-term investments-interest-bearing balances in banks 223 219
Investment securities available for sale, net 62,809 48,638
Investment securities held to maturity,
(Estimated market value of $13,141 September 30, 1998 and 12,741 11,447
$11,756 December 31,1997)
Loans held for sale 2,119
Total loans 271,467 258,115
Allowance for loan losses (2,860) (2,702)
----------- -----------
Net loans 268,607 255,413
Premises and equipment, net 16,850 16,144
Accrued interest receivable 2,251 2,264
Other assets 4,658 3,149
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Total assets $382,583 $359,751
=========== ===========
LIABILITIES
Deposits
Noninterest-bearing $52,981 $61,474
Interest-bearing 235,998 202,939
----------- -----------
Total deposits 288,979 264,413
Short-term borrowings 7,550 16,000
Federal Home Loan Bank Advances 50,000 42,000
Accrued interest payable 778 674
Other liabilities 3,001 3,907
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Total liabilities 350,308 326,994
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Commitments and contingencies
Equity received from contributions and dividends to the ESOP 3,736 4,048
STOCKHOLDERS' EQUITY
Common stock: $1 stated value, 5,000,000 shares authorized and
1,034,428 shares issued, less ESOP shares of 292,960 at September 30, 1998 and 742 720
307,538 at December 31, 1997.
Additional paid-in capital 8,694 7,763
Retained earnings 24,939 24,355
Unrealized gain/loss on securities available for sale (net of tax) 310 400
Less treasury stock, at cost - 173,223 shares at September 30, 1998 and 146,263 shares at
December 31, 1997. (6,146) (4,529)
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Total stockholders' equity 28,539 28,709
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Total liabilities and stockholder's equity $382,583 $359,751
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See notes to the consolidated financial statements.
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4
CONSOLIDATED STATEMENTS OF INCOME (THOUSANDS) (UNAUDITED)
Three Months Nine Months
Ended Sept 30 Ended Sept 30
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1998 1997 1998 1997
---- ---- ---- ----
INTEREST INCOME
Interest and fees on loans $ 6,043 $ 6,214 $ 17,952 $ 18,476
Interest and dividends on investments
Taxable 994 1,058 2,929 3,199
Nontaxable 114 104 333 323
-------- -------- -------- --------
Total interest income 7,151 7,376 21,214 21,998
-------- -------- -------- --------
INTEREST EXPENSE
Interest on deposits 2,657 2,614 7,700 7,794
Interest on Federal funds purchased and other
short term borrowings 93 22 210 107
Interest on Federal Home Loan Bank advances 713 681 1,914 1,839
-------- -------- -------- --------
Total interest expense 3,463 3,317 9,824 9,740
-------- -------- -------- --------
NET INTEREST INCOME 3,688 4,059 11,390 12,258
PROVISION FOR LOAN LOSSES 225 765 775 965
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,463 3,294 10,615 11,293
-------- -------- -------- --------
NONINTEREST INCOME
Service charges on deposits 581 506 1,711 1,324
Fiduciary income 523 582 1,652 1,755
Insurance agency income 205 257
Other income 146 212 409 371
-------- -------- -------- --------
Total noninterest income 1,455 1,300 4,029 3,450
-------- -------- -------- --------
NONINTEREST EXPENSE
Salaries and employee benefits 2,246 1,986 6,453 6,052
Occupancy expense of Company premises, net of rental income 399 323 1,023 928
Data processing and equipment expenses 486 548 1,580 1,630
Loss on other real estate owned and repossessed collateral 10 0 40 39
Loss on disposal of fixed assets 28 225 28 225
Other expenses 1,167 1,207 3,376 3,534
-------- -------- -------- --------
Total noninterest expense 4,336 4,289 12,500 12,408
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 582 305 2,144 2,335
PROVISION FOR INCOME TAXES 212 7 630 626
-------- -------- -------- --------
NET INCOME 370 298 1,514 1,709
-------- -------- -------- --------
OTHER COMPREHENSIVE INCOME
Change in unrealized gains on securities (1) (21) (90) 279
-------- -------- -------- --------
COMPREHENSIVE INCOME $ 369 $ 277 $ 1,424 $ 1,988
======== ======== ======== ========
Basic earnings per common share $ 0.54 $ 0.42 $ 2.19 $ 2.39
See notes to the consolidated financial statements.
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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY (UNAUDITED)
(In thousands)
Three Months Nine Months
Ended Sept 30 Ended Sept 30
------------- -------------
1998 1997 1998 1997
---- ---- ---- ----
Balance, beginning of period $ 29,358 $ 30,011 $ 28,709 $ 29,297
Net income 370 298 1,514 1,709
Cash dividends ($.45 for the three months ended September 30, 1998 (307) (274) (930) (956)
and $.45 for the three months ended September 30, 1997)
Purchase of Treasury Stock (1,032) (705) (1,617) (1,045)
Net repurchases and distributions with ESOP 151 (505) 953 (480)
Change in unrealized gain (loss) on securities available for sale (1) (21) (90) 279
------------ ------------ ------------ ------------
Balance, September 30 $ 28,539 $ 28,804 $ 28,539 $ 28,804
============ ============ ============ ============
See notes to the consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS (THOUSANDS) (UNAUDITED) Sept 30 Sept 30
1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,514 $ 1,709
Adjustments to reconcile net income to net cash from operating activities:
Depreciation 849 829
Net (accretion)/amortization 163 118
Additional paid in capital from release of ESOP shares (149) 127
Loss on disposal of fixed assets 28 225
Provision for loan losses 775 965
Loss on other real estate owned 40 39
Change in income taxes (368) 23
Change in deferred loan fees (55) (46)
Change in unearned income (88) 36
Change in interest receivable 13 (35)
Change in interest payable 104 97
Change in other assets (405) (373)
Change in other liabilities (906) (747)
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Net cash provided by operating activities 1,515 2,967
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities, calls and principal repayments of investment
securities-available for sale 13,469 9,094
Proceeds from maturities, calls and principal repayments of investment 0
securities-held to maturity 1,287 2,343
Purchase of investment securities-available for sale (27,864) (1,887)
Purchase of investment securities-held to maturity (2,597) (1,235)
Increase in short-term investments (4) (4)
Change in loans (14,483) (3,041)
Purchase of loans (1,379)
Proceeds from sales of loans 2,481 11,403
Recoveries on loans previously charged off 295 175
Premises and equipment expenditures (1,582) (3,167)
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Net cash provided by (used in) investing activities (28,998) 12,302
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase/(decrease) in deposits 24,566 (6,951)
Dividends paid (930) (956)
Change in short-term borrowings (8,450) (12,849)
Purchase of treasury stock (1,617) (1,045)
Change in Federal Home Loan Bank advance 8,000 3,500
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Net cash provided by (used in) financing activities 21,569 (18,301)
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NET CHANGE IN CASH AND CASH EQUIVALENTS (5,914) (6,746)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 20,358 20,340
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 14,444 $ 13,594
======== ========
CASH PAID DURING THE YEAR FOR:
Interest $ 9,928 9,705
Income taxes 590 411
See notes to the consolidated financial statements.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying consolidated financial statements include the accounts
of Horizon Bancorp (Horizon) and its wholly-owned subsidiaries, Horizon Bank,
N.A. (Bank), HBC Insurance Group, Inc. (Insurance Company) and The Loan Store,
Inc. All intercompany balances and transactions have been eliminated. The
results of operations for the period ended September 30, 1998 and September 30,
1997 are not necessarily indicative of the operating results for the full year
of 1998 or 1997. These interim financial statements are prepared without audit
and reflect all adjustments (consisting of normal recurring adjustments) which,
in the opinion of management, are necessary to present fairly the consolidated
position of Horizon Bancorp at September 30, 1998 and its results of operations
and cash flows for the periods presented. The accompanying consolidated
financial statements do not purport to contain all the necessary financial
disclosure required by generally accepted accounting principals that might
otherwise be necessary in the circumstances and should be read in conjunction
with the 1997 Horizon Bancorp consolidated financial statements and related
notes thereto included in its Annual Report for the year ended December 31,
1997.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2 - INVESTMENT SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY
The amortized cost and estimated fair value of investment securities available
for sale and held to maturity are as follows:
(Thousands) Gross Gross
Amortized unrealized unrealized
Cost gains losses Fair Value
AVAILABLE FOR SALE AT SEPTEMBER 30, 1998:
U. S. Treasury and U. S. Government agency securities $12,946 $54 $0 $13,000
FHLMC 9,976 201 0 10,177
FNMA 22,301 227 0 22,528
GNMA 12,695 86 (11) 12,770
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Total mortgage-backed securities 44,972 514 (11) 45,475
Total debt securities 57,918 568 (11) 58,475
Equity securities 4,374 35 (75) 4,334
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Total investment securities available for sale $62,292 $603 $ (86) $62,809
============ ============ ============= =============
HELD TO MATURITY AT SEPTEMBER 30, 1998:
U. S. Government agency securities $1,825 $81 $0 $1,906
Obligations of states and political subdivisions 10,916 322 (3) 11,235
------------ ------------ ------------- -------------
Total debt securities held to maturity $12,741 $403 $ (3) $13,141
============ ============ ============= =============
AVAILABLE FOR SALE AT DECEMBER 31 1997:
U. S. Treasury and U. S. Government agency securities $3,965 $60 $0 $4,025
FHLMC 13,126 244 13,370
FNMA 20,811 229 21,040
GNMA 6,048 140 6,188
------------ ------------ ------------- -------------
Total mortgage-backed securities 39,985 613 40,598
Total debt securities 43,950 673 44,623
Equity securities 4,020 (5) 4,015
------------ ------------ ------------- -------------
Total investment securities available for sale $47,970 $673 $ (5) $48,638
============ ============ ============= =============
HELD TO MATURITY AT DECEMBER 31, 1997:
U. S. Government agency securities $2,040 $104 $0 $2,144
Obligations of states and political subdivisions 9,407 205 9,612
------------ ------------ ------------- -------------
Total debt securities held to maturity $11,447 $309 $0 $11,756
============ ============ ============= =============
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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NOTE 2 - INVESTMENT SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY
- ----------------------------------------------------------------------
(CONTINUED)
- -----------
The amortized cost and estimated fair value of debt securities at September 30,
1998, by contractual maturity, are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
(Thousands) Amortized Fair
Cost Value
---- -----
AVAILABLE FOR SALE:
Due after one year through five years $6,696 $6,746
Due after five years through ten years 4,250 4,254
Due after ten years 2,000 2,000
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Subtotal 12,946 13,000
Mortgage-backed securities 44,972 45,475
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Total debt securities available for sale $57,918 $58,475
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HELD TO MATURITY:
Due in one year or less $2,475 $2,485
Due after one year through five years 3,208 3,289
Due after five years through ten years 5,377 5,634
Due after ten years 1,681 1,733
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Total debt securities held to maturity $12,741 $13,141
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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NOTE 3 - LOANS AVAILABLE FOR SALE AND HELD TO MATURITY
- -----------------------------------------------------------
Loans held to maturity are comprised of the following classifications: Sept 30 Dec 31
1998 1997
---- ----
Commercial $74,104 $73,177
Real estate mortgage 136,580 120,345
Installment 60,783 64,593
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Total loans held to maturity $271,467 $258,115
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NOTE 4 - ALLOWANCE FOR LOAN LOSSES
- ----------------------------------
The following is an analysis of the activity in the allowance for loan losses account: Sept 30 Dec 31
1998 1997
---- ----
Balance, beginning of period $2,702 $2,435
Provision charged to expense 775 1,325
Recoveries 295 383
Loan charge-offs (912) (1,441)
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Balance, end of period $2,860 $2,702
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NOTE 5 - NONPERFORMING ASSETS:
- ------------------------------
The following is a summary of nonperforming loans and Other Real Estate Owned (OREO). Sept 30 Dec 31
OREO is presented before the allowance for OREO losses: 1998 1997
---- ----
Nonperforming Loans $680 $1,181
OREO before allowance for OREO losses 155 125
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Total nonperforming assets $835 $1,306
=========== ============
Horizon adopted Statement of Financial Accounting Standards FAS 114 "Accounting
by Creditors for Impairment of a Loan" as of January 1, 1995. At September 30,
1998 there were no impaired loans outstanding.
NOTE 6 - SUBSEQUENT EVENTS
- --------------------------
On October 20, 1998, the Board of Directors of Horizon Bancorp and Horizon Bank
terminated the employment of the President and Chief Administrative Officer of
Horizon Bancorp and Horizon Bank. This individual was a party to an employment
contract dated January 1, 1997 which was filed as an exhibit to the December 31,
1996 Form 10-K. The severance benefits required under this contract were paid on
November 3, 1998 and totaled approximately $610 thousand.
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FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
--------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
INTRODUCTION
- ------------
The purpose of this discussion is to focus on Horizon's financial condition,
changes in financial condition and the results of operations in order to provide
a better understanding of the consolidated financial statements included
elsewhere herein. This discussion should be read in conjunction with the
consolidated financial statements and the related notes.
FINANCIAL CONDITION
- -------------------
LIQUIDITY
- ---------
The Bank maintains a stable base of core deposits provided by long standing
relationships with consumers and local businesses. These deposits are the
principal source of liquidity for Horizon. Other sources of liquidity for
Horizon include earnings, loan repayment, investment security sales and
maturities, sale of real estate loans and borrowing relationships with
correspondent banks, including the Federal Home Loan Bank (FHLB). During the
nine months ended September 30, 1998 cash flows were generated from earnings of
$1.514 million, a $25 million increase in deposits and an $8 million increase in
FHLB Advances. Cash flows were used for a $15 million increase in investment
securities, an $11 million increase in total loans, and a $9 million decrease in
short term borrowings. The net cash position decreased $5 million, primarily in
cash and due from banks. In addition to liquidity provided from the normal
operating, funding and investing activities of Horizon, at September 30, 1998,
Bank has available approximately $70.5 million in unused credit lines with
various money center banks.
There have been no other material changes in the liquidity of Horizon from
December 31, 1997 to September 30, 1998.
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FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
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CAPITAL RESOURCES
- -----------------
The capital resources of Horizon and Bank remain strong and exceed regulatory
capital ratios for "well capitalized" banks at September 30, 1998. Stockholders'
equity totaled $32.275 million ($3.736 million from ESOP) as of September 30,
1998 compared to $32.757 million ($4.048 million from ESOP) as of December 31,
1997. The change in stockholders' equity during the nine months ended September
30,1998 is the result of the decrease in the market value of investment
securities available for sale accounted for as an addition/reduction of
stockholders' equity, and net income, net of dividends paid. At September 30,
1998, the ratio of stockholders' equity to assets was 8.44% compared to 9.11% at
December 31, 1997.
Horizon has selectively purchased shares that became available in the market
from time to time. During the nine months ended September 30,1998, management
purchased 26,960 shares at a cost of $1.617 million.
The decrease in equity received from contributions and dividends to the ESOP and
the corresponding increase in additional paid in capital is related to the
expiration of the obligation to repurchase ESOP shares that were distributed to
participants who exited the plan.
There have been no other material changes in Horizon's capital resources from
December 31, 1997 to September 30, 1998.
MATERIAL CHANGES IN FINANCIAL CONDITION - SEPTEMBER 30, 1998 COMPARED TO
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DECEMBER 31, 1997
-----------------
Because of the nature of its activities, Horizon is subject to pending and
threatened legal actions that arise in the normal course of business. In
management's opinion, after consultation with counsel, none of the litigation to
which Horizon or any of its subsidiaries is a party will have a material effect
on the consolidated financial position or results of operations of Horizon.
As of April 1, 1998, Horizon's wholly owned subsidiary, Horizon Bank, N.A.
consummated the acquisition of the assets of Phoenix Insurance Services, Inc.
(Phoenix). Phoenix is an independent insurance agency offering a full line of
commercial and personal insurance products, located in LaPorte county, Indiana.
As of July 1, 1998, Horizon's wholly owned subsidiary, Horizon Bank, N.A.
consummated the acquisition of the assets of the Trowbridge Insurance Agency.
Trowbridge is an independent insurance agency offering a full line of commercial
and personal insurance products, located in Porter county, Indiana.
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As of September 30, 1998, the Employee Stock Ownership Plan (ESOP) owned 34.02%
of the outstanding shares of Horizon and is subject to regulation and review by
the Federal Reserve Bank as a bank holding company. Also, shares owned in the
ESOP are subject to the voting decisions of the individual employees and are not
otherwise voted by management. Through their Visions and Values document, the
employees have indicated that it is their intent to maintain their ownership in
Horizon as an independent community bank. They are committed to doing those
things necessary to make it a strong financial institution which brings high
value to its stakeholders - its customers, shareholders, employees and
communities. Horizon Bancorp articles of incorporation require the affirmative
vote of the holders of not less the 70% of the outstanding common stock of the
Corporation to approve any merger or consolidation of the Corporation with or
into any other corporation which: (i) is not recommended by the vote of 70% of
the Corporation's directors; or (ii) is proposed by a person, whether an
individual, partnership, corporation, group, or otherwise, who separately or in
association with one or more other persons holds at the date of the proposal 10%
or more of the then outstanding common stock of the Corporation and such
proposal does not offer to all shareholders of the Corporation consideration for
their shares which is at least equal to the highest percent over book value paid
by such person for the shares of the Corporation held by it at the date of the
proposal. All other business combinations will require the affirmative vote of a
majority of the outstanding common stock of the Corporation. This Article shall
not be altered, amended or repealed except by an affirmative vote of at least
seventy percent (70%) of the total number of shares of the Corporation entitled
to vote on such matter.
There have been no other material changes in the financial condition of Horizon
from December 31, 1997 to September 30, 1998.
RESULTS OF OPERATIONS
---------------------
MATERIAL CHANGES IN RESULTS OF OPERATIONS - SEPTEMBER 30, 1998 COMPARED TO
--------------------------------------------------------------------------
SEPTEMBER 30, 1997
------------------
During the nine months ended September 30, 1998 earnings totaled $1.514 million
or $2.19 per share compared to $1.709 million or $2.39 per share for the same
period in 1997.
Net interest income was $11.390 million for the nine months ended September 30,
1998 compared to $12.258 million for the same period 1997. The decline in net
interest income is related primarily to volume in the loan portfolio, rate in
the investment portfolio and the change in the mix of the deposit portfolio
resulting in more higher interest bearing products.
Total noninterest income for the nine months ended September 30, 1998 increased
$579 thousand or 17% from the same period in 1997. The largest component of the
change was in the service charge income which increased $387 thousand or 29%
from the same period in 1997. This increase is primarily related to service
charges on ATM transactions.
Noninterest expense increased $92 thousand or .7% to $12.5 million for the nine
months ended September 30, 1998, compared to the same period in 1997.
There have been no other material changes in the results of operations of
Horizon from September 30, 1997 to September 30, 1998.
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YEAR 2000
---------
Horizon began it's Year 2000 ("Y2K") planning and evaluation process in 1997 and
developed a plan to address Y2K compliance. A project team was formed and began
meeting in September 1997. The systems within the Company have been reviewed and
each system assigned a rating of mission critical or non-mission critical.
Eight critical vendors were identified that provide hardware and software in
order to operate the core data processing systems utilized by the Company. The
core data processing systems of the Bank and The Loan Store, and the machines on
which they reside, were brought Y2K compliant and tested during the third
quarter of 1998. The Y2K compliant version of the core data processing system of
the Bank's wholly owned subsidiary IMS Investment Management, N.A. was received
from the vendor in the 3rd quarter of 1998 and will be installed and tested
during the 4th quarter of 1998. The Y2K compliant version of the core data
processing system of Phoenix Insurance was received during the 3rd quarter of
1998 and will be installed and tested during the 4th quarter of 1998.
The Bank also utilizes four outside vendor to interface information into the
core data processing systems. Two of these vendors have certified that they are
Y2K compliant, one will be compliant by December 31, 1998 and one vendor was
unable to become compliant on a timely basis. The Bank is converting to another
vendor for this service as of January 1, 1999.
The Bank's large loan customers have been contacted regarding their readiness
for the Year 2000 to determine if the Company has significant risk or exposure
due to potential problems of customers related to the Year 2000. Information is
being gathered on the majority of these customer and evaluated on an ongoing
basis. These customer's will be monitored on a consistent basis through the Year
2000.
The costs associated with Y2K are anticipated to be approximately $280,000. This
does not include upgrades to systems that would have been replaced in the normal
upgrade processes. Approximately 70% of these costs have been incurred to date.
The major risks of Horizon's Y2K issues are its ability to provide consistent
daily processing of customer information and the soundness of Horizon's loan
portfolio. Horizon is managing this risk by performing extensive analysis and
testing to identify potential problem areas for its systems and throughout its
customer base. In order to obtain assistance in this analysis, Horizon hired a
consultant to perform an assessment report regarding Horizon's Y2K preparedness
and testing strategies.
Horizon's contingency plans consist primarily of manual processing of the core
data in the event that the core data processing system is not operable during
the effected time frames.
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PART II - OTHER INFORMATION
---------------------------
For the nine months ended September 30, 1998
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
See Management's Discussion and Analysis
ITEM 2. CHANGES IN SECURITIES
- ------- ---------------------
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ------- -------------------------------
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
Not Applicable
ITEM 5. OTHER INFORMATION
- ------- -----------------
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
a. Financial Data Schedule
b. Form 8-K dated October 20, 1998 was filed with reference to the
termination of the President and Chief Administrative Officer.
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SIGNATURES
----------
Pursuant to the requirements 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
11/13/98 /s/ Larry E. Reed
------------------ -----------------------------------------------------------
Date: BY: Larry E. Reed
Chairman and Chief Executive Officer
11/13/98 /s/ Diana E. Taylor
------------------ -----------------------------------------------------------
Date: BY: Diana E. Taylor
Senior Vice President and Chief Financial Officer
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