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http://www.businesswire.com/news/home/2011...d-Earnings-2010

Horizon Bancorp Announces Record Earnings for 2010

MICHIGAN CITY, Ind.--(BUSINESS WIRE)--(NASDAQ:HBNC) – Horizon Bancorp today announced its unaudited financial results for the three and twelve month periods ended December 31, 2010.

“Our performance-based corporate culture is a fundamental part of our ability to motivate and reward a talented group of people, and to attract the best bankers possible to support further growth”

SUMMARY:

* Horizon’s 2010 results represent the Company’s eleventh consecutive year of record earnings.
* Horizon’s net income for the twelve months ended December 31, 2010, was $10.5 million or $2.71 diluted earnings per share compared to $9.1 million or $2.37 diluted earnings per share for the prior year.
* Horizon’s fourth quarter 2010 net income was $2.9 million or $.75 diluted earnings per share, a 37.7% increase from the same period in 2009.
* The net interest margin increased to 4.01% for the three months ending December 31, 2010, primarily as a result of the decrease in the rate paid on interest bearing liabilities during the quarter.
* Horizon’s residential mortgage loan activity provided $2.0 million of income from the gain on sale of mortgage loans during the fourth quarter.
* Total loans decreased during the fourth quarter as the balance of mortgage warehouse loans decreased $70.1 million from September 30, 2010 as a result of rising long term mortgage interest rates.
* The ratio of allowance for loan losses to total loans increased to 2.11% from 1.85% at September 30, 2010 as Horizon’s loan and lease loss reserve increased for probable incurred losses inherent in the portfolio. In addition total loans decreased.
* Horizon’s net loans charged off increased during the fourth quarter to $1.6 million compared to $1.2 million during the third quarter of 2010.
* Horizon’s balance of Other Real Estate Owned (“OREO”) and repossessed assets decreased approximately $1.5 million, to $2.7 million, during the fourth quarter as properties were sold.
* Horizon’s non-performing loans decreased by approximately $252,000 from September 30, 2010 to December 31, 2010 and 30 to 89 days delinquent loans decreased $3.2 million during the same period.
* Horizon’s 30 to 89 day loan delinquencies were 0.66% and 0.93% of total loans at December 31, 2010 and September 30, 2010, respectively.

* Horizon’s non-performing loans to total loans ratio as of December 31, 2010 was 2.38%, which compares favorably to National and State of Indiana peer averages1 as of September 30, 2010 of 4.91% and 2.73%, the most recent data available.
* On November 10, 2010, the Company completed the redemption process to reduce the US Treasury’s preferred stock investment by $6.25 million, which represents a 25% reduction.
* Horizon’s capital ratios continue to be above the regulatory standards for well-capitalized banks.

Craig M. Dwight, Chief Executive Officer of Horizon Bancorp stated, “We are proud of Horizon’s 2010 performance and our eleventh consecutive year of record earnings. We believe Horizon’s continued success reflects our business expansion strategy and focus on a balanced mix of revenue streams that are in counter-cyclical businesses. While we anticipate some slowing of the mortgage lending business, which has been very strong during the past several years, we have strong and proven commercial lending teams in place to generate opportunities in line with the general economic improvement occurring.”

“One of our key goals in 2011 is to build core deposits to help maintain a low cost of funding. Our strong capital position enables us to pursue organic growth and acquisition opportunities. Our acquisition of American Trust & Savings Bank in 2010, for example, added $100 million in deposits, of which 70% were core deposits. We believe bank market fragmentation and Horizon’s competitive strength will generate opportunities to grow and build market share in Northern Indiana and Southwest Michigan.”

Dwight explained the Company plans to continue to invest in people and activities that directly support net income generation. For instance, he noted that while non-interest expense increased in 2010 compared with 2009, a significant portion of this increase reflected new facilities and income-generating personnel, as well as bonuses paid based on exceeding individual and branch profitability goals. “Our performance-based corporate culture is a fundamental part of our ability to motivate and reward a talented group of people, and to attract the best bankers possible to support further growth,” he noted.

Performance Highlights:

Net income for the fourth quarter of 2010 was $2.9 million or $.75 diluted earnings per share. This compares to $2.1 million or $.53 diluted earnings per share for the same quarter of the prior year. Net income for the twelve months ended December 31, 2010 was $10.5 million or $2.71 diluted earnings per share. This compares to $9.1 million or $2.37 diluted earnings per share for the same period of the prior year.

Diluted earnings per share for both the three and twelve month periods ending December 31, 2010 and December 31, 2009 were reduced by $.11 per share and $.42 per share, respectively, due to the preferred stock dividends and the accretion of the discount on the preferred stock held by the U.S. Department of Treasury. The Company repaid $6.3 million of such preferred stock on November 10, 2010, which, will reduce the amount of dividends paid on the preferred stock starting in the first quarter of 2011 by approximately $78,000.

Net interest income increased $1.7 million and $2.8 million for the three and twelve month periods ending December 31, 2010 compared to the same time periods for the prior year. This increase was primarily due to a decrease in interest expense resulting from a decrease in the cost of funds. The net interest margin increased to 3.80% for the twelve months ending December 31, 2010 compared to 3.66% for the same period in the prior year. The net interest margin increased throughout 2010. For the three months ending March 31, 2010, June 30, 2010, September 30, 2010, and December 31, 2010, the net interest margin was 3.55%, 3.78%, 3.84%, and 4.01%, respectively. The increase in the net interest margin during the fourth quarter of 2010 was primarily due to the reduction in cost of funds from repricing wholesale funding into lower rate instruments.

The provision for loan losses was $2.7 million for the three months ending December 31, 2010, which was approximately $1.0 million less than the provision for the same period of the prior year. The 2010 fourth quarter provision was approximately the same as the third quarter of 2010.

Non-performing loans totaled $21.4 million on December 31, 2010, down slightly from $21.7 million on September 30, 2010 and up from $17.1 million on December 31, 2009. As a percentage of total loans non-performing loans were 2.38% on December 31, 2010, up from 2.22% on September 30, 2010 primarily due to a decrease in total loans as the mortgage warehouse loan balance decreased during the quarter.

Horizon’s non-performing loans to total loans ratio as of December 31, 2010 compares favorably to National and State of Indiana peer averages1 of 4.91% and 2.73%, respectively, as of September 30, 2010, the most recent data available.

The decrease of non-performing loans from the prior quarter was primarily due to lower non-performing commercial and installment loans, partially offset by higher non-performing real estate loans. Non-performing commercial loans declined from $8.9 million on September 30, 2010 to $8.1 million on December 31, 2010. The decline was due to charge-offs totaling $549,000, and one loan with a balance of $393,000 on September 30, 2010 being brought current while only two new loans totaling $76,000 were added to non-performing status during the quarter. No commercial loans were moved to OREO during the quarter. Real estate nonperforming loans increased from $8.5 million on September 30, 2010 to $9.3 million on December 31, 2010. Installment non-performing loans decreased from $4.4 million on September 30, 2010 to $4.0 million on December 31, 2010.

Real estate and installment non-performing loans on December 31, 2010 include $1.8 million and $2.3 million, respectively, of loans in bankruptcy. This compares to $0.9 million and $2.3 million on September 30, 2010. These loans are not considered troubled debt restructures (TDR’s) while they are going through bankruptcy, a process that can take six to eighteen months. The increase in the amount of loans in bankruptcy included in the Company’s non-performing loans indicates that this cycle potentially has not peaked. The Company’s experience with bankrupt loans has demonstrated that some debtors continue to make payments during the bankruptcy process, many reaffirm when they come out of bankruptcy, and some loans are discharged or restructured by the court. The Company has been accumulating historical data on the performance of loans going through the bankruptcy process and utilizes that data in the calculation of the allowance for loan losses. Currently only two commercial loans totaling approximately $170,000 are in bankruptcy.

TDR’s are also included in the non-performing loans total. TDR’s increased from $3.9 million on September 30, 2010 to $4.4 million on December 31, 2010. Of these, $3.6 million were real estate loans, $574,000 were commercial loans, and $202,000 were installment loans. The increase was primarily due to the addition of one commercial loan totaling $153,000. Only $278,000 of all TDR’s were on non-accrual as of December 31, 2010.

Non-accrual loans totaled $16.7 million on December 31, 2010, similar to $17.0 million on September 30, 2010, but up from $11.9 million on December 31, 2009. On December 31, 2010, non-accrual loans to hotel owners totaled $4.5 million, to home builders and land developers $1.2 million, and to restaurant operators $1.0 million. Loans 90 days delinquent but still on accrual totaled $358,000 down from $833,000 on September 30, 2010, and down from $1.8 million on December 31, 2009. Horizon’s policy is to place loans over 90 days delinquent on non-accrual unless they are in the process of collection and a full recovery is expected.

Other Real Estate Owned (OREO) totaled $2.7 million on December 31, 2010, down from $4.0 million on September 30, 2010, but up from $1.7 million on December 31, 2009. During the quarter 11 properties with a book value of $934,000 as of September 30, 2010 were sold. Another four properties were written down by $187,000. No properties were transferred into OREO during the quarter. On December 31, 2010, OREO was comprised of 17 properties. Of these, seven totaling $2.0 million were commercial and ten totaling $684,000 were residential real estate. There was no repossessed personal property on December 31, 2010, down from $107,000 on September 30, 2010. Horizon currently has $1.7 million of OREO under contract to sell with closing dates scheduled within the next 90 days.

No mortgage warehouse loans were non-performing as of December 31, 2010, September 30, 2010, or December 31, 2009.

The residential mortgage loan activity during the fourth quarter generated $2.0 million of income from the gain on sale of mortgage loans, up $763,000 from the same period in 2009 but down $464,000 from the third quarter of 2010. For the twelve month period ended December 31, 2010, gain on sale of mortgage loans was up $1.4 million compared to the same twelve month period in 2009.

Increased pre-payments on the mortgage loan servicing portfolio caused the servicing asset to be impaired during the fourth quarter, resulting in a $202,000 net loss on mortgage servicing net of impairment compared to a $3,000 loss for the same period in 2009.

Total other expenses were $2.0 million higher in the fourth quarter of 2010 compared to the fourth quarter of 2009 and $4.8 million higher when comparing the twelve month periods ending December 31, 2010 and 2009. Salaries and employee benefits increased $1.2 million and $2.9 million for the three and twelve month periods ending December 31, 2010, respectively. This increase is the result of additional payroll expense from the consolidation of the American Trust & Savings Bank transaction that closed at the end of the second quarter, the expansion into Kalamazoo, Michigan, and bonus accruals based on the Company’s performance through twelve months of 2010. The Company also continues to experience higher loan expense related to problem loan, bankruptcy, and collection costs. In addition, the Company recognized $664,000 of transaction costs related to the purchase and assumption of American Trust & Savings Bank during the twelve months of 2010.

Other items

On November 3, 2010, the Company received approval to redeem 25%, or $6.25 million, of the US Treasury’s original $25.0 million preferred stock investment in the Company from the Capital Purchase Program, which is a program of the Troubled Assets Relief Program (“TARP”). On November 10, 2010, the Company completed the redemption process reducing the US Treasury’s preferred stock investment in the Company to $18.75 million. This repurchase will result in annual savings of $312,500 or $0.09 per share, due to the elimination of the associated preferred stock dividends. The Company’s plan is to repurchase the remaining preferred stock over the next three years from the Company’s earnings or may seek to replace such amount through the recently announced Small Business Lending Fund program which is part of the Small Business Jobs Act of 2010.

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern Indiana and Southwest Michigan. Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.accesshorizon.com. Its common stock is traded on the NASDAQ Global 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.

1 National peer group: Consists of all insured commercial banks having assets between $1 Billion and $10 Billion as reported by the Uniform Bank Performance Report as of September 30, 2010. Indiana peer group: Consists of 17 publicly traded banks all headquartered in the State of Indiana as reported by the Uniform Bank Performance Reports as of September 30, 2010.

HORIZON BANCORP

Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)

December 31 September 30 June 30 March 31 December 31
2010 2010 2010 2010 2009
Balance sheet:
Total assets $ 1,400,919 $ 1,485,058 $ 1,464,415 $ 1,301,660 $ 1,387,020
Investment securities 391,939 397,694 410,284 368,752 344,789
Commercial loans 330,017 329,230 326,401 310,664 314,517
Mortgage warehouse loans 123,743 193,848 156,915 96,327 166,698
Residential mortgage loans 162,435 165,234 168,238 135,475 133,892
Installment loans 266,682 270,503 271,241 266,954 271,210
Earning assets 1,307,313 1,387,594 1,360,488 1,200,043 1,249,998
Non-interest bearing deposit accounts 107,606 105,376 99,291 91,482 84,357
Interest bearing transaction accounts 506,031 506,031 529,612 423,315 540,647
Time deposits 371,861 388,076 394,092 358,725 326,704
Borrowings 260,741 318,516 282,137 273,235 284,016
Subordinated debentures 30,584 30,562 30,539 27,837 27,837
Common stockholders' equity 94,066 95,686 92,127 91,371 90,299
Total stockholders’ equity 112,283 120,112 116,512 115,716 114,605

Income statement: Three months ended
Net interest income $ 13,075 $ 12,620 $ 11,368 $ 10,553 $ 11,371
Provision for loan losses 2,664 2,657 3,000 3,233 3,700
Other income 4,961 5,648 4,923 4,374 4,304
Other expenses 11,576 11,257 10,184 9,554 9,558
Income tax expense 926 1,075 592 349 333
Net income 2,870 3,279 2,515 1,791 2,084
Preferred stock dividend (349 ) (353 ) (352 ) (352 ) (351 )
Net income available to common shareholders 2,521 2,926 2,163 1,439 1,733

Per share data:
Basic earnings per share $ 0.77 $ 0.89 $ 0.66 $ 0.44 $ 0.53
Diluted earnings per share 0.75 0.88 0.65 0.44 0.53
Cash dividends declared per common share 0.17 0.17 0.17 0.17 0.17
Book value per common share 28.68 29.17 28.10 27.88 27.67
Tangible book value per common share 26.04 26.50 25.39 25.70 25.45
Market value - high $ 26.99 $ 22.60 $ 22.81 $ 19.50 $ 17.25
Market value - low $ 21.89 $ 21.15 $ 19.48 $ 16.44 $ 14.31
Weighted average shares outstanding - Basic 3,280,331 3,279,201 3,278,392 3,270,217 3,262,927
Weighted average shares outstanding - Diluted 3,362,118 3,336,634 3,333,768 3,293,192 3,275,588

Key ratios:
Return on average assets 0.79 % 0.90 % 0.75 % 0.54 % 0.62 %
Return on average common stockholders' equity 10.22 12.12 9.33 6.34 7.56
Net interest margin 4.01 3.84 3.78 3.55 3.76
Loan loss reserve to total loans 2.11 1.85 1.77 1.97 1.80
Non-performing loans to loans 2.38 2.22 2.26 2.00 1.92
Average equity to average assets 8.22 8.32 8.67 8.73 8.61
Bank only capital ratios:
Tier 1 capital to average assets 8.60 8.53 8.92 8.83 8.64
Tier 1 capital to risk weighted assets 12.64 11.69 11.89 12.96 11.85
Total capital to risk weighted assets 13.88 12.94 13.15 14.22 13.10

Loan data:
30 to 89 days delinquent $ 5,907 $ 9,084 $ 8,637 $ 10,926 $ 9,686
90 days and greater delinquent - accruing interest 358 833 77 345 1,758
Trouble debt restructures - accruing interest 4,119 3,445 3,414 1,183 3,472
Trouble debt restructures - non-accrual 278 463 - - -
Non-accrual loans 16,673 16,939 17,682 14,862 11,915
Total non-performing loans 21,428 21,680 21,173 16,390 17,145




HORIZON BANCORP

Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)

December 31 December 31
2010 2009
Balance sheet:
Total assets $ 1,400,919 $ 1,387,020
Investment securities 391,939 344,789
Commercial loans 330,017 314,517
Mortgage warehouse loans 123,743 166,698
Residential mortgage loans 162,435 133,892
Installment loans 266,682 271,210
Earning assets 1,307,313 1,254,781
Non-interest bearing deposit accounts 107,606 84,357
Interest bearing transaction accounts 506,031 540,647
Time deposits 371,861 326,704
Borrowings 260,741 284,016
Subordinated debentures 30,584 27,837
Common stockholders' equity 94,066 90,299
Total stockholders’ equity 112,283 114,605

Income statement: Twelve months ended
Net interest income $ 47,616 $ 44,769
Provision for loan losses 11,554 13,603
Other income 19,906 17,856
Other expenses 42,571 37,812
Income tax expense 2,942 2,070
Net income 10,455 9,140
Preferred stock dividend (1,406 ) (1,402 )
Net income available to common shareholders 9,049 7,738

Per share data:
Basic earnings per share $ 2.76 $ 2.39
Diluted earnings per share 2.71 2.37
Cash dividends declared per common share 0.68 0.68
Book value per common share 28.68 27.67
Tangible book value per common share 26.04 25.45
Market value - high $ 26.99 $ 19.45
Market value - low $ 16.44 $ 10.50
Weighted average shares outstanding - Basic 3,277,069 3,232,033
Weighted average shares outstanding - Diluted 3,334,598 3,270,723

Key ratios:
Return on average assets 0.75 % 0.68 %
Return on average common stockholders' equity 9.56 8.92
Net interest margin 3.80 3.66
Loan loss reserve to total loans 2.11 1.80
Non-performing loans to loans 2.38 1.92
Average equity to average assets 8.47 8.21
Bank only capital ratios:
Tier 1 capital to average assets 8.60 8.64
Tier 1 capital to risk weighted assets 12.64 11.79
Total capital to risk weighted assets 13.88 13.04

Loan data:
30 to 89 days delinquent $ 5,907 $ 9,686
90 days and greater delinquent - accruing interest 358 1,758
Trouble debt restructures - accruing interest 4,119 3,772
Trouble debt restructures - non-accrual 278 -
Non-accrual loans 16,673 11,915
Total non-performing loans 21,428 17,445




HORIZON BANCORP

Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands, Unaudited)

December 31 September 30 June 30 March 31 December 31
2010 2010 2010 2010 2009
Commercial $ 7,554 $ 7,029 $ 6,204 $ 6,010 $ 5,766
Real estate 2,379 1,957 1,536 1,444 1,933
Mortgage warehousing 1,435 1,441 1,362 1,390 1,455
Installment 7,696 7,603 7,441 7,276 6,861
Unallocated - - - - -
Total $ 19,064 $ 18,030 $ 16,543 $ 16,120 $ 16,015


Net Charge-offs

(Dollars in Thousands, Unaudited)

Three months ended
December 31 September 30 June 30 March 31 December 31
2010 2010 2010 2010 2009
Commercial $ 426 $ 485 $ 884 $ 1,832 $ 527
Real estate 128 86 288 309 146
Mortgage warehousing - - - - -
Installment 1,076 599 1,406 986 936
Total $ 1,630 $ 1,170 $ 2,578 $ 3,127

$


1,609


Total Non-performing Loans

(Dollars in Thousands, Unaudited)

December 31 September 30 June 30 March 31 December 31
2010 2010 2010 2010 2009
Commercial $ 8,082 $ 8,855 $ 9,805 $ 7,024 $ 9,229
Real estate 9,326 8,467 8,021 6,217 4,819
Mortgage warehousing - - - - -
Installment 4,020 4,358 3,347 3,149 3,097
Total $ 21,428 $ 21,680 $ 21,173 $ 16,390 $ 17,145


Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands, Unaudited)

December 31 September 30 June 30 March 31 December 31
2010 2010 2010 2010 2009
Commercial $ 1,980 $ 2,751 $ 623 $ 494 $ -
Real estate 684 1,283 2,160 1,581 1,730
Mortgage warehousing - - - - -
Installment - 107 70 101 23
Total $ 2,664 $ 4,141 $ 2,853 $ 2,176 $ 1,753




HORIZON BANCORP

Loan Portfolio Detail

Non- Percent Specific Percent of
Loan Performing of Reserves on Non - Non-performing
December 31, 2010 (Unaudited) Balance Loans Loans Performing Loans Loans
Owner occupied real estate $ 232,402 $ 5,552 2.39 % $ 1,096 19.74 %
Non owner occupied real estate 40,920 1,772 4.33 % 165 9.31 %
Residential development 8,696 266 3.06 % 17 6.39 %
Commercial and industrial 47,999 493 1.03 % 189 38.34 %
Total commercial 330,017 8,083 2.45 % 1,467 18.15 %

Residential mortgage (includes HFS) 173,801 9,327 5.37 % 969 10.39 %
Residential construction 7,467 - 0.00 % - 0.00 %
Mortgage warehouse 123,743 - 0.00 % - 0.00 %
Total mortgage 305,011 9,327 3.06 % 969 10.39 %

Direct installment 24,545 238 0.97 % 976 410.08 %
Indirect installment 128,122 1,431 1.12 % - 0.00 %
Home equity 114,015 2,349 2.06 % - 0.00 %
Total installment 266,682 4,018 1.51 % 976 24.29 %

Total loans 901,710 21,428 2.38 % 3,412 15.92 %
Allowance for loan losses (19,064 )
Net loans $ 882,646 $ 21,428 $ 3,412


Non- Percent Specific Percent of
Loan Performing of Reserves on Non - Non-performing
December 31, 2009 Balance Loans Loans Performing Loans Loans
Owner occupied real estate $ 138,999 $ 3,152 2.27 % $ 700 22.21 %
Non owner occupied real estate 100,502 1,677 1.67 % 125 7.45 %
Residential development 16,101 2,343 14.55 % 125 5.34 %
Commercial and industrial 58,915 2,057 3.49 % 725 35.25 %
Total commercial 314,517 9,229 2.93 % 1,675 18.15 %

Residential mortgage (includes HFS) 132,172 4,638 3.51 % 441 9.51 %
Residential construction 7,423 181 2.43 % 71 39.29 %
Mortgage warehouse 166,698 - 0.00 % - 0.00 %
Total mortgage 306,293 4,819 1.57 % 512 10.62 %

Direct installment 24,908 387 1.55 % - 0.00 %
Indirect installment 136,600 1,089 0.80 % 95 8.72 %
Home equity 109,702 1,621 1.48 % 1,188 73.29 %
Total installment 271,210 3,097 1.14 % 1,283 41.43 %

Total loans 892,020 17,145 1.92 % 3,470 20.24 %
Allowance for loan losses (16,015 )
Net loans $ 876,005 $ 17,145 $ 3,470




HORIZON BANCORP AND SUBSIDIARIES

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

Three Months Ended Three Months Ended
December 31, 2010 December 30, 2009
Average Average Average Average
Balance Interest Rate Balance Interest Rate

ASSETS
Interest-earning assets
Federal funds sold $ 5,039 $ 3 0.24% $ 19,331 $ 12 0.25%
Interest-earning deposits 7,114 3 0.17% 8,111 5 0.24%
Investment securities - taxable 293,537 2,205 2.98% 250,223 2,535 4.02%
Investment securities - non-taxable (1) 109,234 1,010 5.48% 107,980 1,060 5.90%
Loans receivable (2) 931,380 14,455 6.17% 873,293 14,043 6.39%
Total interest-earning assets (1) 1,346,304 17,676 5.36% 1,258,938 17,655 5.74%

Noninterest-earning assets
Cash and due from banks 16,052 15,267
Allowance for loan losses (18,342) (14,229)
Other assets 99,727 78,634

$ 1,443,741 $ 1,338,610

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 901,884 $ 2,473 1.09% $ 808,363 $ 3,275 1.61%
Borrowings 264,173 1,669 2.51% 288,684 2,685 3.69%
Subordinated debentures 34,946 459 5.21% 27,837 324 4.62%
Total interest-bearing liabilities 1,201,003 4,601 1.52% 1,124,884 6,284 2.22%

Noninterest-bearing liabilities
Demand deposits 111,140 89,137

Accrued interest payable and other liabilities
12,960 9,322
Shareholders' equity 118,638 115,267

$ 1,443,741 $ 1,338,610

Net interest income/spread $ 13,075 3.84% $ 11,371 3.52%


Net interest income as a percent of average interest earning assets (1)
4.01% 3.76%
(1) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.




HORIZON BANCORP AND SUBSIDIARIES

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

Twelve Months Ended Twelve Months Ended
December 31, 2010 December 31, 2009
Average Average Average Average
Balance Interest Rate Balance Interest Rate
ASSETS
Interest-earning assets
Federal funds sold $ 23,917 $ 53 0.22 % $ 25,551 $ 56 0.22 %
Interest-earning deposits 8,684 17 0.20 % 7,170 16 0.22 %
Investment securities - taxable 282,507 9,535 3.38 % 247,903 10,813 4.36 %
Investment securities - non-taxable (1) 108,809 4,148 5.45 % 97,913 3,942 5.75 %
Loans receivable (2) 878,181 54,738 6.24 % 892,431 57,836 6.49 %
Total interest-earning assets (1) 1,302,098 68,491 5.40 % 1,270,968 72,663 5.85 %

Noninterest-earning assets
Cash and due from banks 15,341 15,344
Allowance for loan losses (17,058 ) (12,372 )
Other assets 93,671 77,215

$ 1,394,052 $ 1,351,155

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 871,526 $ 10,711 1.23 % $ 800,255 $ 14,792 1.85 %
Borrowings 264,293 8,476 3.21 % 318,661 11,696 3.67 %
Subordinated debentures 32,005 1,688 5.27 % 27,837 1,406 5.05 %

Total interest-bearing liabilities
1,167,824 20,875 1.79 % 1,146,753 27,894 2.43 %

Noninterest-bearing liabilities
Demand deposits 97,665 84,209

Accrued interest payable and other liabilities
10,466 9,215
Shareholders' equity 118,097 110,978

$ 1,394,052 $ 1,351,155

Net interest income/spread $ 47,616 3.61 % $ 44,769 3.42 %


Net interest income as a percent of average interest earning assets (1)
3.80 % 3.66 %
(1) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.



HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

December 31 December 31
2010 2009
(Unaudited)
Assets
Cash and due from banks $ 15,683 $ 68,702
Investment securities, available for sale 382,344 333,132
Investment securities, held to maturity 9,595 11,657
Loans held for sale 18,833 5,703
Loans, net of allowance for loan losses of $19,064 and $16,015 863,813 870,302
Premises and equipment 34,194 30,534
Federal Reserve and Federal Home Loan Bank stock 13,664 13,189
Goodwill 5,910 5,787
Other intangible assets 2,741 1,447
Interest receivable 6,519 5,986
Cash value life insurance 27,195 23,139
Other assets 20,428 17,442
Total assets $ 1,400,919 $ 1,387,020
Liabilities
Deposits
Non-interest bearing $ 107,606 $ 84,357
Interest bearing 877,892 867,351
Total deposits 985,498 951,708
Borrowings 260,741 284,016
Subordinated debentures 30,584 27,837
Interest payable 781 1,135
Other liabilities 11,032 7,719

Total liabilities
1,288,636 1,272,415
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, no par value, $1,000 liquidation value
Authorized, 1,000,000 shares
Issued 25,000 shares 18,217 24,306
Common stock, $.2222 stated value
Authorized, 22,500,000 shares
Issued, 3,301,437 and 3,273,881 shares 1,122 1,119
Additional paid-in capital 10,356 10,030
Retained earnings 80,240 73,431
Accumulated other comprehensive income 2,348 5,719
Total stockholders’ equity 112,283 114,605
Total liabilities and stockholders’ equity $ 1,400,919 $ 1,387,020




HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Per Share Data)

Three Months Ended December 31 Twelve Months Ended December 31
2010 2009 2010 2009
(Unaudited) (Unaudited)
Interest Income
Loans receivable $ 14,455 $ 14,043 $ 54,738 $ 57,836
Investment securities
Taxable 2,211 2,552 9,605 10,885
Tax exempt 1,010 1,060 4,148 3,942
Total interest income 17,676 17,655 68,491 72,663
Interest Expense
Deposits 2,473 3,275 10,711 14,792
Borrowed funds 1,669 2,685 8,476 11,696
Subordinated debentures 459 324 1,688 1,406
Total interest expense 4,601 6,284 20,875 27,894
Net Interest Income 13,075 11,371 47,616 44,769
Provision for loan losses 2,664 3,700 11,554 13,603
Net Interest Income after Provision for Loan Losses 10,411 7,671 36,062 31,166
Other Income
Service charges on deposit accounts 857 978 3,607 3,858
Wire transfer fees 220 212 756 921
Interchange fees 584 506 2,247 1,864
Fiduciary activities 1,043 850 3,979 3,336
Gain (loss) on sale of securities 66 373 533 795
Gain on sale of mortgage loans 2,009 1,246 7,538 6,107
Mortgage servicing net of impairment (202 ) (3 ) (565 ) (134 )
Increase in cash surrender value of bank owned life insurance 204 173 803 720
Other income 180 (31 ) 1,008 389
Total other income 4,961 4,304 19,906 17,856
Other Expenses
Salaries and employee benefits 6,117 4,940 22,090 19,204
Net occupancy expenses 1,118 924 4,195 3,796
Data processing 451 388 1,925 1,582
Professional fees 283 392 1,701 1,413
Outside services and consultants 531 428 1,694 1,471
Loan expense 832 770 3,208 2,611
FDIC insurance expense 416 375 1,635 2,126
Other losses 324 68 504 510
Other expenses 1,504 1,273 5,619 5,099
Total other expenses 11,576 9,558 42,571 37,812
Income Before Income Tax 3,796 2,417 13,397 11,210
Income tax expense 926 333 2,942 2,070
Net Income 2,870 2,084 10,455 9,140
Preferred stock dividend and discount accretion (349 ) (351 ) (1,406 ) (1,402 )
Net Income Available to Common Shareholders $ 2,521 $ 1,733 $ 9,049 $ 7,738
Basic Earnings Per Share $ 0.77 $ 0.53 $ 2.76 $ 2.39
Diluted Earnings Per Share 0.75 0.53 2.71 2.37

Contacts

Horizon Bancorp
Mark E. Secor, (219) 873-2611
Chief Financial Officer
Fax: (219) 874-9280

[Southsider2k12]

http://www.nwitimes.com/business/local/art...bb79a0d72c.html

Northwest Indiana's locally based, publicly traded financial institutions all turned a profit in the first three months of 2011.

However, the institutions warned there are significant challenges remaining in the industry with the continued weakness in the residential and commercial real estate market and the uncertain impact from the federal financial reform and consumer protection legislation.

Record first quarter earnings for Horizon Bank

The first-quarter profit for Michigan City-based Horizon Bancorp was up 54 percent to $2.8 million.

In the first three months of 2011, net income for Horizon Bank's corporate parent was $2.8 million, or 74 cents per share, compared to $1.8 million, or 44 cents per share, posted in the same period last year. The bank said the first quarter net income level was the highest in the company's history.

Bank President and CEO Craig Dwight said the institution continues to gain market share, especially in commercial banking. He also said the loan loss provision reduction is an encouraging trend that points to an improving economic environment.

Non-performing loans totaled $22.1 million as of March 31, up from $16.3 million from the same day in 2010. The rise was attributed to higher commercial non-performing loans only partially offset by a drop in non-performing real estate or residential loans.

As of March 31, assets stood at nearly $1.4 billion, total loans were $814.5 million and deposits were $1 billion.

[Southsider2k12]

http://www.sunherald.com/2011/07/20/328744...rts-record.html

Horizon Bancorp Reports Record Year-to-Date Earnings
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MICHIGAN CITY, Ind. -- (NASDAQ: HBNC) – Horizon Bancorp today announced its unaudited financial results for the three and six month periods ended June 30, 2011.

SUMMARY:

Horizon’s second quarter 2011 net income was $3.1 million or $.83 diluted earnings per share, a 23.0% increase in net income from the same period in 2010 and the highest second quarter net income in the Company’s history.
Horizon’s net income for the first half of 2011 was $5.9 million or $1.57 diluted earnings per share, a 36.0% increase in net income from the same period in 2010 and the highest first half net income in the Company’s history.
Total deposits surpassed $1.0 billion at June 30, 2011 and increased $34.8 million from December 31, 2010.
Borrowings decreased by $30.6 million since December 31, 2010.
Net interest income, after provisions for loan losses, during the six months of 2011 was $19.7 million compared with $15.7 million for the same period in the prior year.
Horizon’s non-performing loans decreased by 6.7% in the second quarter of 2011 compared to the first quarter of 2011.
The provision for loan losses decreased to $2.9 million for the first six months of 2011 compared to $6.2 million for the same period in 2010.
The Company’s mortgage servicing asset recovered $728,000 of impairment during the first six months of 2011 as mortgage loan refinancing activity slowed.
Horizon’s tangible book value per share rose to $28.76 compared with $25.39 at the close of the second quarter of 2010.
Horizon’s capital ratios, including Tier 1 Capital to total risk weighted assets of 13.61%, continue to be well above the regulatory standards for well-capitalized banks.

Craig M. Dwight, President and CEO, stated: “Our continuing ability to generate record earnings reflects our commitment to balanced revenue streams and the tremendous dedication and quality of Horizon’s employees. We have acquired new customers and expanded banking relationships with existing clients by providing exceptional service at competitive pricing. We continued to win market share.”

Read more: http://www.sunherald.com/2011/07/20/328744...l#ixzz1SkgtItc5

[Southsider2k12]

http://eon.businesswire.com/news/eon/20110916005810/en

MICHIGAN CITY, Ind.--(EON: Enhanced Online News)--Horizon Bancorp (NASDAQ: HBNC) announced today that its Board of Directors has approved an increase in its quarterly dividend from 17 cents to 18 cents per share. This represents an increase in the dividend yield from 2.57 percent to a dividend yield of 2.72 percent based on the price per share of $26.50 at the close of markets on September 13, 2011, the date on which the Board approved the increase. The dividend will be paid on October 14, 2011 to shareholders of record as of September 30, 2011.

“With 11 years of annual earnings and cash flow growth, and 102 consecutive quarters of dividend payments, we are pleased to increase our quarterly dividend”

“With 11 years of annual earnings and cash flow growth, and 102 consecutive quarters of dividend payments, we are pleased to increase our quarterly dividend,” said Craig M. Dwight, President and CEO. “Our Board believes dividend payments comprise an important part of a balanced approach to generating shareholder value, and meaningful dividends are particularly valuable when so few investments are generating attractive returns for investors.”

“To maintain a balanced approach to utilizing our free cash flow, our Board feels it’s also critical to continue investing in building our capital position and identifying revenue- and cash-generating opportunities to foster long-term earnings growth, whether organic or via strategic, accretive acquisitions.”

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern Indiana and Southwest Michigan. Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.accesshorizon.com. Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon. For these statements, Horizon claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in Item 1A “Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and in Item 1A “Risk Factors” of Part II of Horizon’s Form 10-Q for the quarter ended June 30, 2011. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this press release. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Contacts

Horizon Bancorp
Mark E. Secor
Chief Financial Officer
(219) 873-2611
Fax: (219) 874-9280

[Southsider2k12]

http://www.sunherald.com/2011/10/20/352069...rts-record.html

Record Quarter and Year-to-Date Earnings
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MICHIGAN CITY, Ind. -- Horizon Bancorp (NASDAQ: HBNC) today announced its unaudited financial results for the three and nine month periods ended September 30, 2011.

SUMMARY:

Third quarter 2011 net income was $3.4 million or $.80 diluted earnings per share, a 4.2% increase in net income from the same period in 2010 and the highest quarterly net income in the Company’s history.
For the first nine months of 2011, net income was $9.3 million or $2.37 diluted earnings per share, a 22.3% increase in net income from the same period in 2010 and the highest year-to-date nine-month net income in the Company’s history.
Total loans increased $86.8 million during the quarter to $925.8 million at September 30, 2011.
Total assets grew to a record $1.49 billion at September 30, 2011 compared to $1.41 billion at June 30, 2011.
Net interest income, after provisions for loan losses, for the nine months of 2011 was $30.1 million compared with $25.7 million for the same period in the prior year.
The provision for loan losses decreased to $4.4 million for the first nine months of 2011 compared to $8.9 million for the same period in 2010.
In August, the Company redeemed all of the US Treasury Department’s preferred stock investment under the TARP Capital Purchase Program using $6.25 million in cash and a $12.5 million investment by the US Treasury Department under the Small Business Lending Fund.
The Company increased its quarterly dividend to $0.18 per share, its 103rd consecutive quarterly cash dividend to Horizon’s shareholders.
Horizon’s tangible book value per share rose to $29.68 compared with $26.50 at the close of the third quarter of 2010.
Horizon’s capital ratios, including Tier 1 Capital to total risk weighted assets of 12.37%, continue to be well above the regulatory standards for well-capitalized banks.

Craig M. Dwight, President and CEO, stated: “Horizon’s record quarterly and nine-month results once again demonstrated our ability to grow in spite of the less than robust economic conditions. Our commitment to a balanced revenue stream has continued to support earnings growth and has enabled us to build our capital position and return some of this income to shareholders through increased dividends. Redeeming the Treasury Department’s investment under the Capital Purchase Program also enabled us to increase our dividend to shareholders.”

Read more: http://www.sunherald.com/2011/10/20/352069...l#ixzz1bQnyNric

[Southsider2k12]

http://www.businesswire.com/news/home/2012...d-Earnings-2011

Horizon Bancorp Announces Record Earnings for 2011

MICHIGAN CITY, Ind.--(BUSINESS WIRE)--Horizon Bancorp (NASDAQ: HBNC) today announced its unaudited financial results for the three and twelve month periods ended December 31, 2011. All share data has been adjusted to reflect Horizon’s three-for-two stock split paid on December 9, 2011.

“There are opportunities to expand in our existing markets and enter new markets in which community banks are under-represented”

SUMMARY:

Fourth quarter 2011 net income was $3.5 million or $.68 diluted earnings per share, a 23% increase in net income from the same period in 2010 and the highest quarterly net income and diluted earnings per share in the Company’s history.
For the twelve months ending 2011, net income was $12.8 million or $2.27 diluted earnings per share, a 22% increase in net income from 2010 and the highest annual net income and diluted earnings per share in the Company’s history.
This represents the Company’s 12th consecutive year of record annual earnings.
Total loans increased $57.4 million during the quarter and $100.3 million during the year to $983.2 million at December 31, 2011.
Total assets grew to a record $1.55 billion at December 31, 2011 compared to $1.49 billion at September 30, 2011 and $1.40 billion at December 31, 2010.
Net interest income, after provisions for loan losses, for the twelve months of 2011 was $42.8 million compared with $36.1 million for the same period in the prior year.
The provision for loan losses decreased to $5.3 million for the twelve months of 2011 compared to $11.6 million for the same period in 2010. Fourth quarter 2011 provision for loan losses was $838,000 compared with $2.67 million in fourth quarter 2010.
Return on average common equity was 11.20% for 2011.
During the fourth quarter of 2012 the Company announced a 3-for-2 stock split and shares were issued for the split on December 9, 2011.
The Company increased its cash dividend in 2011 and paid its 104th consecutive quarterly dividend to shareholders.
Horizon’s tangible book value per share rose to $20.37 compared with $17.36 (split adjusted) at the end of 2010.
In 2011 the Company redeemed all its preferred shares issued to the U.S. Treasury Department under its TARP Capital Purchase Program (“CPP”).
Horizon’s capital ratios, including Tier 1 Capital to total risk weighted assets of 11.89% as of December 31, 2011, continue to be well above the regulatory standards for well-capitalized banks.

Craig M. Dwight, President and CEO, stated: “Achieving record assets and net income and concurrently growing loans and deposits and reducing Horizon’s loan loss provision in a recessionary economy was a gratifying accomplishment. Horizon’s balanced business model proved its value in 2011. For example, our consumer lending was stable compared with 2010; however, our mortgage and mortgage warehouse lending enabled Horizon to capture the benefits of strong nationwide new mortgage and refinancing activity and a pick-up in business activity. The counter-cyclical structure of our revenue model enables us to achieve balanced revenue and growth. Year-over-year, the Bank has increased return on average equity and return on average assets.”

“A key goal in 2011 was to build core deposits to help maintain a low cost of funding. We ended 2011 with $1.01 billion in total deposits compared with $985.5 million in 2010, and we accomplished this growth even as we reduced higher-priced time deposits.”

Dwight added that Horizon continues to make strategic investments in people and activities that directly support net income generation, including adding four mortgage loan production staff members in Portage, Michigan office. He also noted the bank intends to open new full service branches in Valparaiso, Indiana and Portage, Michigan during first quarter 2012.

“There are opportunities to expand in our existing markets and enter new markets in which community banks are under-represented,” explained Dwight. “Additionally, our strong capital position and success generating loan and deposit growth supports our ability to consider community bank or branch acquisitions in the highly competitive and fragmented Indiana and Southwest Michigan markets.”

Performance Highlights

Net income for the fourth quarter of 2011 was $3.5 million or $.68 diluted earnings per share, up 22.7% compared to $2.9 million or $.50 diluted earnings per share in the fourth quarter of 2010. Diluted earnings per share were reduced by $0.01 and $0.26, respectively, for the three and twelve months ending December 31, 2011, compared to reductions of $0.07 and $0.28, respectively, for the three and twelve months ending December 31, 2010. The reduction in the fourth quarter of 2011 resulted from the repayment of CPP capital during the third quarter of 2011 and replacing the remaining $12.5 million with the Small Business Lending Fund capital.

Net income for the year ending 2011 rose 22.4% to $12.8 million or $2.27 diluted earnings per share, compared with $10.5 million or $1.81 diluted earnings per share in 2010. These results were the highest level of net income for a single quarter and for a year in the Company’s 138-year history.

The net interest margin increased to 3.95% in the fourth quarter of 2011 from 3.76% for the three-month period ending September 30, 2011. This increase in the fourth quarter of 2011 primarily reflected an increase in average mortgage warehouse loan volume and balances, which were funded by an increase in average short-term borrowing, resulting in an expanded interest rate spread on interest earning assets. Borrowings in the fourth quarter of 2011 increased by $34.0 million from September 30, 2011, all in short-term instruments primarily to fund the increase in mortgage warehouse lending.

Residential mortgage loan activity during the fourth quarter of 2011 generated $2.5 million in income from the gain on sale of mortgage loans; an increase of $454,000 from the same period in 2010.

Lending Activity

Total loans increased by $100.3 million from $882.9 million at December 31, 2010 to $983.2 million at December 31, 2011. Commercial loans increased by $22.4 million, mortgage warehouse loans increased by $84.6 million, residential mortgage loans decreased by $5.3 million, and consumer loans decreased by $1.3 million.

Dwight explained, “The number of retail households served by Horizon grew in 2011, and we believe this provides opportunities to grow the number of products and services utilized by these customers in the future. We were particularly encouraged by an increase in commercial lending, which we believe indicates our ability to build and win banking relationships with small businesses, which is a significant focus. Our focus on increasing our relationships with small businesses also contributed to an increase in our total direct deposit accounts at year-end compared with 2010.”

The provision for loan losses was $838,000 for the fourth quarter of 2011, which was approximately $1.8 million less than the provision for the same period of the prior year. The 2011 fourth-quarter provision was $726,000 less than the 2011 third quarter provision. The lower provision for loan losses was primarily related to a decrease in non-performing loans in the fourth quarter.

The ratio of allowance for loan losses to total loans decreased to 1.89% as of December 31, 2011 from 2.11% as of December 31, 2010. The decrease in the ratio was due to an overall increase in total loan balances as the total balance for allowance for loan losses decreased from $19.1 million to $18.9 million for year-ends 2010 and 2011 respectively.

Non-performing loans totaled $20.1 million on December 31, 2011, down from $23.6 million on September 30, 2011, and from $21.4 million on December 31, 2010. As a percentage of total loans, non-performing loans were 2.02% on December 31, 2011, down from 2.52% on September 30, 2011, and 2.38% on December 31, 2010.

Dwight added, “The continued decline in our need to reserve for loan losses and a 44% decline in loans 30 to 89 days delinquent at year-end 2011 as compared with 2010 demonstrate Horizon’s ability to effectively manage risk and a general improvement in borrowers’ economic circumstances. Horizon’s strategy of maintaining a broad and diversified loan portfolio has enabled us to minimize exposure to large credits.”

The decrease of non-performing loans in the fourth quarter of 2011 from the prior quarter was primarily due to the payoff of a $4.3 million non-performing commercial loan secured by a hotel property during the fourth quarter. As a result, non-performing commercial loans declined from $12.1 million on September 30, 2011 to $8.0 million on December 31, 2011. Non-performing mortgage loans increased from $7.2 million on September 30, 2011 to $8.5 million on December 31, 2011. Non-performing consumer loans declined from $4.3 million on September 30, 2011 to $3.7 million on December 31, 2011.

Real estate and consumer non-performing loans in bankruptcy on December 31, 2011 totaled $1.5 million and $2.0 million, respectively. This compares to $1.5 million and $1.9 million respectively, on September 30, 2011. These loans are not considered troubled debt restructures (TDR’s) while they are going through bankruptcy, a process that can take six to eighteen months. The Company’s experience with loans in bankruptcy has demonstrated that some debtors continue to make payments during the bankruptcy process, many reaffirm their obligation to Horizon when they come out of bankruptcy, and some loans are discharged or restructured by the court. The Company has been accumulating historical data on the performance of loans going through the bankruptcy process and utilizes that data in the calculation of the allowance for loan losses. Recently, the trend has improved with fewer loans in the bankruptcy process. There were four non-performing loans, totaling $435,000, to commercial borrowers in bankruptcy on December 31, 2011.

TDR’s are also included in the non-performing loans total. TDR’s totaled $5.7 million on both December 31, 2011 and September 30, 2011. Of these, $3.8 million were mortgage loans, $1.1 million were commercial loans, and $883,000 were consumer loans. In addition, $3.5 million of TDR’s were accruing interest as of December 31, 2011, compared to $4.0 million accruing interest at September 30, 2011.

Non-accrual loans, excluding non-accrual TDR’s, were $14.4 million on December 31, 2011, down from $17.8 million on September 30, 2011 and $16.7 million on December 31, 2010. The decrease in the most recent quarter was primarily due to the aforementioned payoff of a commercial loan with a $4.3 million balance on September 30, 2011. Non-accrual commercial loans were the largest component at $6.9 million. Non-accrual commercial loans secured by retail income properties, the largest concentration, totaled $3.2 million. Loans 90 days delinquent but still on accrual totaled $37,000 on December 31, 2011, down from $97,000 on September 30, 2011, and $358,000 on December 31, 2010. Horizon’s policy is to place loans over 90 days delinquent on non-accrual unless they are in the process of collection and a full recovery is expected.

Other Real Estate Owned (OREO) totaled $2.8 million on December 31, 2011, down from $3.6 million on September 30, 2011, but up from $2.7 million on December 31, 2010. During the quarter four properties with a book value of $222,000 as of September 30, 2011 were sold. Another four with a book value of $218,000 were transferred into OREO. Eighteen properties were sold with additional loss or written down by a total of $735,000 during the fourth quarter. On December 31, 2011, OREO was comprised of 26 properties. Of these, four totaling $1.1 million were commercial and 22 totaling $1.7 million were residential real estate. In addition, Horizon currently has offers to purchase on approximately $1.8 million of its $2.8 million in OREO properties.

Expense Management

Total non-interest expenses were $1.5 million higher in the fourth quarter of 2011 compared to the fourth quarter of 2010 and $3.6 million higher for the twelve months ended December 31, 2011 compared to the same period in the prior year. Salaries and employee benefits decreased $154,000 compared to the same quarter in 2010 and increased $785,000 compared to the same twelve-month period of 2010. This twelve-month increase is primarily the result of additional payroll expense from the consolidation of the American Trust & Savings Bank transaction that closed at the end of the second quarter of 2010; expansion into Portage, Michigan, and annual merit pay increases. In the fourth quarter of 2011 other losses included $598,000 in OREO write downs and $370,000 from write downs on two bank-owned properties from branches that were closed in 2010. Horizon currently has offers to purchase both branches.

Dwight concluded: “We are constantly striving to operate as efficiently as possible and to generate greater productivity from our people and physical resources. We reward performance, which is a key reason we believe Horizon Bank is perceived as a great place to work. In 2011, we fully integrated American Trust & Savings Bank, retaining more than 90% of its customers and we met our goal of a payback on our initial cash investment within a year of the acquisition.”

“We believe that excellent opportunities remain for Horizon to grow, so we will continue to make investments that support revenue generation. We are well-positioned to pursue quality loans and deposits throughout our markets.”

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern Indiana and Southwest Michigan. Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.accesshorizon.com. Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon. For these statements, Horizon claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in “Item 1A Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and in Item 1A “Risk Factors” of Part II of Horizon’s Form 10-Q for the quarter ended September 30, 2011. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)

December 31 September 30 June 30 March 31 December 31
2011 2011 2011 2011 2010
Balance sheet:
Total assets $ 1,547,162 $ 1,490,810 $ 1,413,737 $ 1,382,390 $ 1,400,919
Investment securities 438,145 441,334 460,449 445,988 391,939
Commercial loans 352,376 345,366 338,439 335,758 330,018
Mortgage warehouse loans 208,299 151,111 75,057 49,034 123,743
Residential mortgage loans 157,141 165,429 163,803 164,240 162,435
Consumer loans 265,377 263,934 261,971 260,525 266,681
Earning assets 1,447,818 1,391,864 1,316,452 1,274,171 1,307,313
Non-interest bearing deposit accounts 130,673 121,483 113,747 111,155 107,606
Interest bearing transaction accounts 538,083 551,597 567,456 531,250 508,953
Time deposits 341,109 316,669 339,073 359,004 368,939
Borrowings 370,111 336,095 230,141 224,358 260,741
Subordinated debentures 30,676 30,653 30,630 30,607 30,584
Common stockholders' equity 108,965 106,180 103,206 97,802 94,066
Total stockholders’ equity 121,465 118,680 121,507 116,060 112,283

Income statement: Three months ended
Net interest income $ 13,592 $ 11,991 $ 11,463 $ 11,067 $ 13,075
Provision for loan losses 838 1,564 1,332 1,548 2,664
Other income 4,999 6,538 4,448 4,314 4,961
Other expenses 13,089 12,313 10,487 10,258 11,576
Income tax expense 1,142 1,235 999 810 926
Net income 3,522 3,417 3,093 2,765 2,870
Preferred stock dividend (63 ) (710 ) (277 ) (276 ) (349 )
Net income available to common shareholders $ 3,459 $ 2,707 $ 2,816 $ 2,489 $ 2,521

Per share data:
Basic earnings per share $ 0.70 $ 0.55 $ 0.57 $ 0.51 $ 0.51
Diluted earnings per share 0.68 0.53 0.55 0.49 0.50
Cash dividends declared per common share 0.12 0.12 0.11 0.11 0.11
Book value per common share 22.02 21.47 20.88 19.84 19.12
Tangible book value per common share 20.37 19.79 19.17 18.11 17.36
Market value - high 17.95 18.90 18.61 19.46 17.99
Market value - low $ 16.23 $ 17.31 $ 17.67 $ 17.47 $ 14.59
Weighted average shares outstanding - Basic 4,947,696 4,942,695 4,937,750 4,924,715 4,920,497
Weighted average shares outstanding - Diluted 5,050,701 5,064,380 5,065,454 5,074,763 5,043,177

Key ratios:
Return on average assets 0.93 % 0.96 % 0.89 % 0.80 % 0.79 %
Return on average common stockholders' equity 12.74 10.14 11.25 10.55 10.22
Net interest margin 3.95 3.76 3.67 3.57 4.01
Loan loss reserve to total loans 1.89 2.04 2.20 2.34 2.11
Non-performing loans to loans 2.02 2.52 2.44 2.71 2.38
Average equity to average assets 7.96 8.60 8.51 8.14 8.22
Bank only capital ratios:
Tier 1 capital to average assets 8.52 8.89 9.03 8.83 8.60
Tier 1 capital to risk weighted assets 11.89 12.33 13.62 13.56 12.70
Total capital to risk weighted assets 13.14 13.58 14.88 14.79 13.96

Loan data:
30 to 89 days delinquent $ 3,282 $ 4,240 $ 4,903 $ 6,948 $ 5,907

90 days and greater delinquent - accruing interest $ 37 $ 97 $ 55 $ 57 $ 358
Trouble debt restructures - accruing interest 3,540 4,042 4,227 4,014 4,119
Trouble debt restructures - non-accrual 2,198 1,673 1,912 682 278
Non-accrual loans 14,368 17,799 14,430 17,359 16,673
Total non-performing loans $ 20,143 $ 23,611 $ 20,624 $ 22,112 $ 21,428

HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)


December 31 December 31
2011 2010
Balance sheet:
Total assets $ 1,547,162 $ 1,400,919
Investment securities 438,145 391,939
Commercial loans 352,376 330,018
Mortgage warehouse loans 208,299 123,743
Residential mortgage loans 157,141 162,435
Consumer loans 265,377 266,681
Earning assets 1,447,818 1,307,313
Non-interest bearing deposit accounts 130,673 107,606
Interest bearing transaction accounts 538,083 508,953
Time deposits 341,109 368,939
Borrowings 370,111 260,741
Subordinated debentures 30,676 30,584
Common stockholders' equity 108,965 94,066
Total stockholders’ equity 121,465 112,283

Income statement: Twelve months ended
Net interest income $ 48,113 $ 47,616
Provision for loan losses 5,282 11,554
Other income 20,299 19,906
Other expenses 46,147 42,571
Income tax expense 4,186 2,942
Net income 12,797 10,455
Preferred stock dividend (1,325 ) (1,406 )
Net income available to common shareholders $ 11,472 $ 9,049

Per share data:
Basic earnings per share $ 2.32 $ 1.84
Diluted earnings per share 2.27 1.81
Cash dividends declared per common share 0.47 0.45
Book value per common share 22.02 19.12
Tangible book value per common share 20.37 17.36
Market value - high 19.46 17.99
Market value - low $ 16.23 $ 10.96
Weighted average shares outstanding - Basic 4,938,172 4,915,604
Weighted average shares outstanding - Diluted 5,058,929 5,001,897

Key ratios:
Return on average assets 0.90 % 0.75 %
Return on average common stockholders' equity 11.20 9.56
Net interest margin 3.74 3.80
Loan loss reserve to total loans 1.89 2.11
Non-performing loans to loans 2.02 2.38
Average equity to average assets 8.30 8.47
Bank only capital ratios:
Tier 1 capital to average assets 8.52 8.60
Tier 1 capital to risk weighted assets 11.89 12.70
Total capital to risk weighted assets 13.14 13.96

Loan data:
30 to 89 days delinquent $ 3,282 $ 5,907

90 days and greater delinquent - accruing interest $ 37 $ 358
Trouble debt restructures - accruing interest 3,540 4,119
Trouble debt restructures - non-accrual 2,198 278
Non-accrual loans 14,368 16,673
Total non-performing loans $ 20,143 $ 21,428


HORIZON BANCORP

Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands, Unaudited)

December 31 September 30 June 30 March 31 December 31
2011 2011 2011 2011 2010
Commercial $ 8,017 $ 8,151 $ 7,078 $ 8,609 $ 7,554
Real estate 2,472 2,457 1,710 2,357 2,379
Mortgage warehousing 1,695 1,477 1,516 1,421 1,435
Consumer 6,698 7,025 8,282 6,703 7,696
Unallocated - - - - -
Total $ 18,882 $ 19,110 $ 18,586 $ 19,090 $ 19,064

Net Charge-offs

(Dollars in Thousands, Unaudited)

Three months ended
December 31 September 30 June 30 March 31 December 31
2011 2011 2011 2011 2010
Commercial $ 111 $ 269 $ 366 $ 59 $ 426
Real estate 118 86 659 82 128
Mortgage warehousing - - - - -
Consumer 837 685 811 1,380 1,076
Total $ 1,066 $ 1,040 $ 1,836 $ 1,521 $ 1,630

Total Non-performing Loans

(Dollars in Thousands, Unaudited)

December 31 September 30 June 30 March 31 December 31
2011 2011 2011 2011 2010
Commercial $ 7,958 $ 12,094 $ 9,613 $ 9,428 $ 8,082
Real estate 8,496 7,201 6,983 8,744 9,326
Mortgage warehousing - - - - -
Consumer 3,689 4,316 4,028 3,940 4,020
Total $ 20,143 $ 23,611 $ 20,624 $ 22,112 $ 21,428

Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands, Unaudited)

December 31 September 30 June 30 March 31 December 31
2011 2011 2011 2011 2010
Commercial $ 1,092 $ 1,087 $ 1,414 $ 1,443 $ 1,622
Real estate 1,708 2,478 2,679 839 1,042
Mortgage warehousing - - - - -
Consumer 49 90 16 8 -
Total $ 2,849 $ 3,655 $ 4,109 $ 2,290 $ 2,664

HORIZON BANCORP

Loan Portfolio Detail

Non- Percent Specific Percent of
Loan Performing of Reserves on Non - Non-performing
December 31, 2011 (Unaudited) Balance Loans Loans Performing Loans Loans
Owner occupied real estate $ 131,923 $ 2,515 1.91 % $ 770 30.62 %
Non owner occupied real estate 142,363 4,122 2.90 % 1,239 30.06 %
Residential development 12,313 90 0.73 % - 0.00 %
Commercial and industrial 65,777 1,231 1.87 % 428 34.77 %
Total commercial 352,376 7,958 2.26 % 2,437 30.62 %

Residential mortgage (1) 165,050 8,060 4.88 % 980 12.16 %
Residential construction 6,181 436 7.05 % 62 14.22 %
Mortgage warehouse 208,299 - 0.00 % - 0.00 %
Total real estate 379,530 8,496 2.24 % 1,042 12.26 %

Direct installment 24,873 276 1.11 % 132 47.83 %
Indirect installment 127,695 956 0.75 % 8 0.84 %
Home equity 112,809 2,457 2.18 % 995 40.50 %
Total consumer 265,377 3,689 1.39 % 1,135 30.77 %

Total loans 997,283 20,143 2.02 % 4,614 22.91 %
Allowance for loan losses (18,882 )
Net loans $ 978,401 $ 20,143 2.06 % $ 4,614
(1) Residential mortgage total includes Held for Sale mortgage loans

Non- Percent Specific Percent of
Loan Performing of Reserves on Non - Non-performing
December 31, 2010 Balance Loans Loans Performing Loans Loans
Owner occupied real estate $ 125,909 $ 1,042 0.83 % $ 385 36.95 %
Non owner occupied real estate 137,073 6,329 4.62 % 665 10.51 %
Residential development 8,694 266 3.06 % 142 53.38 %
Commercial and industrial 58,342 445 0.76 % 265 59.55 %
Total commercial 330,018 8,082 2.45 % 1,457 18.03 %

Residential mortgage (1) 173,800 9,326 5.37 % 969 10.39 %
Residential construction 7,468 - 0.00 % - 0.00 %
Mortgage warehouse 123,743 - 0.00 % - 0.00 %
Total real estate 305,011 9,326 3.06 % 969 10.39 %

Direct installment 25,058 287 1.15 % 976 340.07 %
Indirect installment 128,129 1,431 1.12 % - 0.00 %
Home equity 113,494 2,302 2.03 % - 0.00 %
Total consumer 266,681 4,020 1.51 % 976 24.28 %

Total loans 901,710 21,428 2.38 % 3,402 15.88 %
Allowance for loan losses (19,064 )
Net loans $ 882,646 $ 21,428 2.43 % $ 3,402

(1) Residential mortgage total includes Held for Sale mortgage loans

HORIZON BANCORP AND SUBSIDIARIES
Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

Three Months Ended Three Months Ended
December 31, 2011 December 31, 2010
Average Average Average Average
Balance Interest Rate Balance Interest Rate


ASSETS

Interest-earning assets
Federal funds sold $ 2,084 $ 1 0.19 % $ 5,039 $ 3 0.24 %
Interest-earning deposits 2,591 1 0.15 % 7,114 3 0.17 %
Investment securities - taxable 340,407 2,371 2.76 % 293,537 2,205 2.98 %
Investment securities - non-taxable (1) 111,344 1,007 5.28 % 109,234 1,010 5.48 %
Loans receivable (2) 957,651 14,080 5.84 % 931,380 14,455 6.17 %
Total interest-earning assets (1) 1,414,077 17,460 5.04 % 1,346,304 17,676 5.36 %

Noninterest-earning assets
Cash and due from banks 16,065 16,052
Allowance for loan losses (19,208 ) (18,342 )
Other assets 99,631 99,727

$ 1,510,565 $ 1,443,741

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 882,213 $ 1,836 0.83 % $ 901,884 $ 2,473 1.09 %
Borrowings 331,769 1,574 1.88 % 264,173 1,669 2.51 %
Subordinated debentures 31,446 458 5.78 % 34,946 459 5.21 %
Total interest-bearing liabilities 1,245,428 3,868 1.23 % 1,201,003 4,601 1.52 %

Noninterest-bearing liabilities
Demand deposits 131,523 111,140
Accrued interest payable and
other liabilities 13,372 12,960
Shareholders' equity 120,242 118,638

$ 1,510,565 $ 1,443,741

Net interest income/spread $ 13,592 3.80 % $ 13,075 3.84 %

Net interest income as a percent
of average interest earning assets (1) 3.95 % 4.01 %

(1) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.

HORIZON BANCORP AND SUBSIDIARIES
Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

Twelve Months Ended Twelve Months Ended
December 31, 2011 December 31, 2010
Average Average Average Average
Balance Interest Rate Balance Interest Rate

ASSETS

Interest-earning assets
Federal funds sold $ 20,307 $ 49 0.24 % $ 23,917 $ 53 0.22 %
Interest-earning deposits 7,262 2 0.03 % 8,684 17 0.20 %
Investment securities - taxable 332,551 10,150 3.05 % 282,507 9,535 3.38 %
Investment securities - non-taxable (1) 111,934 4,073 5.20 % 108,809 4,148 5.45 %
Loans receivable (2) 862,498 50,340 5.84 % 878,181 54,738 6.24 %
Total interest-earning assets (1) 1,334,552 64,614 4.98 % 1,302,098 68,491 5.40 %

Noninterest-earning assets
Cash and due from banks 15,834 15,341
Allowance for loan losses (19,047 ) (17,058 )
Other assets 98,069 93,671

$ 1,429,408 $ 1,394,052

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 887,687 $ 8,346 0.94 % $ 871,526 $ 10,711 1.23 %
Borrowings 261,255 6,334 2.42 % 264,293 8,476 3.21 %
Subordinated debentures 31,446 1,821 5.79 % 32,005 1,688 5.27 %
Total interest-bearing liabilities 1,180,388 16,501 1.40 % 1,167,824 20,875 1.79 %

Noninterest-bearing liabilities
Demand deposits 119,504 97,665
Accrued interest payable and
other liabilities 10,841 10,466
Shareholders' equity 118,675 118,097

$ 1,429,408 $ 1,394,052

Net interest income/spread $ 48,113 3.58 % $ 47,616 3.61 %

Net interest income as a percent
of average interest earning assets (1) 3.74 % 3.80 %

(3) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
(4) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.

HORIZON BANCORP AND SUBSIDIARIES
Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

December 31 December 31
2011 2010
(Unaudited)
Assets
Cash and due from banks $ 20,447 $ 15,683
Investment securities, available for sale 431,045 382,344
Investment securities, held to maturity 7,100 9,595
Loans held for sale 14,090 18,833
Loans, net of allowance for loan losses of $18,882 and $19,064 964,311 863,813
Premises and equipment 34,665 34,194
Federal Reserve and Federal Home Loan Bank stock 12,390 13,664
Goodwill 5,910 5,910
Other intangible assets 2,292 2,741
Interest receivable 6,671 6,519
Cash value life insurance 30,190 27,195
Other assets 18,051 20,428
Total assets $ 1,547,162 $ 1,400,919
Liabilities
Deposits
Non-interest bearing $ 130,673 $ 107,606
Interest bearing 879,192 877,892
Total deposits 1,009,865 985,498
Borrowings 370,111 260,741
Subordinated debentures 30,676 30,584
Interest payable 596 781
Other liabilities 14,449 11,032
Total liabilities 1,425,697 1,288,636
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, $.01 par value, $1,000 liquidation value
Authorized, 1,000,000 Series A shares
Issued 0 and 18,750 shares - 18,217
Preferred stock, $.01 par value, $1,000 liquidation value
Authorized, 1,000,000 Series B shares
Issued 12,500 and 0 shares 12,500 -
Common stock, $.1481 stated value
Authorized, 22,500,000 shares
Issued, 4,967,720 and 4,950,989 shares 1,126 1,122
Additional paid-in capital 10,610 10,356
Retained earnings 89,387 80,240
Accumulated other comprehensive income 7,842 2,348
Total stockholders’ equity 121,465 112,283
Total liabilities and stockholders’ equity $ 1,547,162 $ 1,400,919

HORIZON BANCORP AND SUBSIDIARIES
Condensed Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Per Share Data)

Three Months Ended December 31 Twelve Months Ended December 31
2011 2010 2011 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income
Loans receivable $ 14,080 $ 14,455 $ 50,340 $ 54,738
Investment securities
Taxable 2,373 2,211 10,201 9,605
Tax exempt 1,007 1,010 4,073 4,148
Total interest income 17,460 17,676 64,614 68,491
Interest Expense
Deposits 1,836 2,473 8,346 10,711
Borrowed funds 1,574 1,669 6,334 8,476
Subordinated debentures 458 459 1,821 1,688
Total interest expense 3,868 4,601 16,501 20,875
Net Interest Income 13,592 13,075 48,113 47,616
Provision for loan losses 838 2,664 5,282 11,554
Net Interest Income after Provision for Loan Losses 12,754 10,411 42,831 36,062
Other Income
Service charges on deposit accounts 742 857 3,164 3,607
Wire transfer fees 207 220 619 756
Interchange fees 689 584 2,594 2,247
Fiduciary activities 1,072 1,043 3,983 3,979
Gain on sale of securities 23 66 1,777 533
Gain on sale of mortgage loans 2,463 2,009 6,449 7,538
Mortgage servicing income net of impairment (424 ) (202 ) 267 (565 )
Increase in cash surrender value of bank owned life insurance 230 204 891 803
Death benefit on officer life insurance - - 453 -
Other income (3 ) 180 102 1,008
Total other income 4,999 4,961 20,299 19,906
Other Expenses
Salaries and employee benefits 5,963 6,117 22,875 22,090
Net occupancy expenses 1,091 1,118 4,267 4,195
Data processing 556 451 2,006 1,925
Professional fees 458 283 1,497 1,701
Outside services and consultants 520 531 1,741 1,694
Loan expense 1,310 832 3,586 3,208
FDIC insurance expense 276 416 1,220 1,635
Other losses 1,018 324 2,383 504
Other expenses 1,897 1,504 6,572 5,619
Total other expenses 13,089 11,576 46,147 42,571
Income Before Income Tax 4,664 3,796 16,983 13,397
Income tax expense 1,142 926 4,186 2,942
Net Income 3,522 2,870 12,797 10,455
Preferred stock dividend and discount accretion (63 ) (349 ) (1,325 ) (1,406 )
Net Income Available to Common Shareholders $ 3,459 $ 2,521 $ 11,472 $ 9,049
Basic Earnings Per Share $ 0.70 $ 0.51 $ 2.32 $ 1.84
Diluted Earnings Per Share 0.68 0.50 2.27 1.81


Contacts

Horizon Bancorp
Mark E. Secor
Chief Financial Officer
(219) 873-2611
Fax: (219) 874-9280

[Southsider2k12]

http://www.nwitimes.com/business/local/st-...d0597e4c3b.html

By Times Staff | Posted: Thursday, March 29, 2012 5:15 pm | (2) Comments

Two northern Indiana-based banks were named to KBW Inc.'s Bank Honor Roll of superior performers.

South Bend-based 1st Source Corp. and Michigan City-based Horizon Bancorp were among the 45 U.S. institutions named to the list last week for meeting financial performance metrics. KBW is the parent for the investment bank Keefe, Bruyette & Woods.

Honor Roll winners are publicly traded banking institutions with more than $500 million in total assets that meet the following three conditions:

• They have not reported annual loss in net income per share before extraordinary items over the past 10 years.

• Their 2011 annual reported net income per share before extraordinary items is equal to or greater than peak net income per share over the past 10 years.

• They have seen consecutive increases in net income per share before extraordinary items since 2009.

In terms of stock price performance, Bank Honor Roll companies significantly outperformed the banking industry and the overall stock market during the five-year period between 2006 and 2011.

Read more: http://www.nwitimes.com/business/local/st-...l#ixzz1qbe5xttY

[Southsider2k12]

http://www.marketwatch.com/story/horizon-b...ings-2012-04-18

Horizon Bancorp Announces Record Quarterly Earnings

MICHIGAN CITY, Ind., Apr 18, 2012 (BUSINESS WIRE) -- Horizon Bancorp HBNC +5.35% today announced its unaudited financial results for the three-month period ended March 31, 2012.

SUMMARY:

-- First quarter 2012 net income was $4.6 million or $.88 diluted earnings per share, a 79% increase in diluted earnings per share compared to the same period in 2011 and a 29% increase compared to the most recent linked quarter. In addition, this represents the highest quarterly net income and diluted earnings per share in the Company's history.

-- Total loans increased $5.4 million during the quarter and $179.0 million over the previous twelve months to $988.6 million at March 31, 2012.

-- Net interest income, after provisions for loan losses, for the first three months of 2012 was $12.6 million compared with $9.5 million for the same period in the prior year.

-- The provision for loan losses decreased to $559,000 for the first three months of 2012 compared to $1.5 million for the same period in 2011 and $838,000 for the most recent linked quarter.

-- Net charge-offs for the first three months of 2012 were $29,000 compared to $1.5 million for the same period in 2011 and $1.1 million for the most recent linked quarter.

-- Return on average assets was 1.23% for the first quarter of 2012.

-- Return on average common equity was 15.90% for the first quarter of 2012.

-- Announced the definitive agreement to acquire Heartland Bancshares, Inc ("Heartland") based in Franklin, Indiana.

-- The Company increased its quarterly cash dividend in the first quarter of 2012 to $.13 and paid its 105th consecutive quarterly dividend to shareholders.

-- Horizon's tangible book value per share rose to $21.35 compared with $18.11 at March 31, 2011.

-- Horizon Bank's capital ratios, including Tier 1 Capital to total risk weighted assets of 11.77% as of March 31, 2012, continue to be well above the regulatory standards for well-capitalized banks.

Craig M. Dwight, President and CEO, stated: "Our employees' commitment to delivering superior service and financial solutions led to significant growth in commercial and consumer lending and deposit relationships, which drove year-over-year increases in many key areas. Horizon built market share in its served markets, and we were very pleased with the performance of our newest location in Kalamazoo County, Michigan."

"A sharp reduction in loan loss reserves and ongoing expense management enabled Horizon to flow more revenue to the bottom line, resulting in our best quarterly performance in Horizon's 139 year history. Although the general economy is far from robust, we have seen positive signs that economic activity is stronger than in the past several years."

Mr. Dwight noted the Bank continues to build core deposits to help maintain a low cost of funding. Non-interest bearing deposits increased to $138.6 million at March 31, 2012 compared with $111.2 million in first quarter 2011, which Mr. Dwight explained reflects a growth in the number of banking relationships with small businesses. Interest bearing transaction accounts rose to $641.1 million in the first quarter 2012 compared with $538.1 million at December 31, 2011 and $531.3 million at March 31, 2011. Time deposits declined as the Bank reduced higher priced deposits and didn't aggressively replace them in the continuing low-interest rate environment.

"We experienced balanced performance and gains in our five key business lines, with particularly strong year-over-year increases in mortgage warehouse lending and originated mortgage loans," explained Mr. Dwight. "We grew lending and deposit market share in our established markets, and we were very pleased with the contributions from newer markets."

"We hope to replicate our culture of performance and service in additional markets, which is one of the key reasons for pursuing our strategic merger with Heartland. The preliminary acquisition-related processes are proceeding smoothly, with both sides working well together to coordinate employee communication, analyze operational and technological integration and other activities." The acquisition is still subject to regulatory approval and approval by the Heartland shareholders.

"Horizon is committed to enhancing shareholder value by utilizing our earnings both for growth and returning a portion of earnings to shareholders as a cash dividend. Our Board of Directors believes this represents a prudent and balanced approach to rewarding shareholders for their support and pursuing our goal of becoming a $3 billion asset company in the next few years. This is evidenced by Horizon's recent acquisition announcement and its increase in the quarterly dividend during the first quarter from 12 cents to 13 cents per share."

Performance Highlights

Net income for the first quarter of 2012 was $4.6 million or $.88 diluted earnings per share, up 79% compared to $2.8 million or $.49 diluted earnings per share in the first quarter of 2011. This represents the highest level of net income for a single quarter in the Company's 138-year history.

The net interest margin was 3.87% in the first quarter of 2012 up from 3.57% for the three-month period ending March 31, 2011 but down 8 basis points (or 0.08%) from the three months ending December 31, 2011. This decrease from the fourth quarter of 2011 primarily reflected a decrease in the yield on interest-earning assets greater than the decrease in the rates paid on interest-bearing liabilities.

Residential mortgage loan activity during the first quarter of 2012 generated $2.3 million in income from the gain on sale of mortgage loans; an increase of $1.7 million from the same period in 2011 and a decrease of $189,000 from the fourth quarter of 2011.

Mr. Dwight stated, "Since first quarter 2011, we increased our mortgage loan origination team to 28 individuals from 22, and the team's strong performance was reflected in originations and gains on sale of loans. In the current low-interest rate environment, the Bank primarily retains adjustable rate mortgages and sells long-term fixed-rate loans to the secondary market."

Lending Activity

Total loans increased by $5.4 million from $983.2 million at December 31, 2011 to $988.6 million at March 31, 2012. Mortgage warehouse loans increased by $4.9 million and consumer loans increased by $4.0 million. Commercial loans decreased by $1.9 million and residential mortgage loans decreased by $1.6 million.

The provision for loan losses was $559,000 for the first quarter of 2012, which was approximately $1.0 million less than the provision for the same period of the prior year and $279,000 less than the previous quarter. The lower provision for loan losses was primarily related to a decrease in charged off loans and $332,000 in commercial loan recoveries.

The ratio of allowance for loan losses to total loans increased to 1.94% as of March 31, 2012 from 1.89% as of December 31, 2011. The increase in the ratio was primarily due to additional specific reserves placed on non-performing loans.

"We feel the overall trend of reduced provision for loan loss reserve expense will continue," explained Mr. Dwight. "We believe our residential, commercial and consumer loan portfolios are markedly stronger than any time in the past four years. Although we added three commercial accounts to non-performing assets, we also placed several back on accrual as the loans were brought current, an encouraging indication of economic improvement. Delinquencies are down compared with both year-end 2011 and first quarter 2011, which we interpret as positive indicators of economic improvement and our ability to manage risk and credit quality."

Non-performing loans totaled $21.1 million on March 31, 2012, down from $22.1 million on March 31, 2011, and up from $20.1 million on December 31, 2011. As a percentage of total loans, non-performing loans were 2.11% on March 31, 2012, down from 2.71% on March 31, 2011, and up slightly from 2.02% on December 31, 2011.

The increase of non-performing loans in the first quarter of 2012 from the prior quarter was primarily due to an increase of non-performing commercial loans from $8.0 million on December 31, 2011 to $9.0 million on March 31, 2012. Non-performing mortgage loans increased from $8.5 million on December 31, 2011 to $8.7 million on March 31, 2012. Non-performing consumer loans declined from $3.7 million on December 31, 2011 to $3.4 million on March 31, 2012.

Non-accrual loans, excluding non-accrual troubled debt restructurings, were $15.5 million on March 31, 2012, up from $14.4 million on December 31, 2011, but down from $17.4 million on March 31, 2011. Loans 90 days delinquent but still on accrual totaled $28,000 on March 31, 2012, down from $37,000 on December 31, 2011, and $57,000 on March 31, 2011. Loans 30 to 89 days delinquent declined to $2.93 million in first quarter 2012 compared with $3.28 million at December 31, 2011 and $6.95 million at March 31, 2011. At .30% of total loans, this represents the lowest levels of loans 30-89 days delinquent since 2007.

Other Real Estate Owned (OREO) totaled $803,000 on March 31, 2012, down significantly from $2.8 million on December 31, 2011, and $2.3 million on March 31, 2011. During the quarter 15 properties with a book value of $2.1 million as of December 31, 2011 were sold. Only one property with a book value of $107,000 was transferred into OREO. No write downs on OREO occurred during the quarter.

Expense Management

Total non-interest expenses were $902,000 higher in the first quarter of 2012 compared to the first quarter of 2011 and $1.9 million lower compared to the three months ending December 31, 2011. Salaries and employee benefits increased $602,000 compared to the same quarter in 2011 and was approximately the same as the three months ending December 31, 2011. This increase over the previous year is primarily the result of annual merit pay increases, increase in employee benefits costs and commission and bonus expense for the first quarter results in 2012. Loan expense and other losses were down $608,000 and $1 million, respectively, for the three months ending March 31, 2012 compared the three months ending December 31, 2011. This was primarily due to less credit and OREO related costs. Included in the first quarter of 2012's non-interest expense was $168,000 of transaction expenses related to the transaction with Heartland.

"It's important to note that we continue to invest in quality people and maintain a very disciplined results-oriented corporate culture that compensates superior performance," explained Mr. Dwight. "We attempt to capitalize on every opportunity to reduce costs related to facilities, equipment and technology and focus on improvements to productivity. We believe our ability to cost-effectively deliver superior products and service has contributed to Horizon's earnings growth."

[Southsider2k12]

http://www.southbendtribune.com/business/s...0,6575150.story

Horizon equalized by diversified businesses
GENE STOWE South Bend Tribune Correspondent

June 6, 2012

Michigan City-based Horizon Bank, nationally recognized for its unbroken string of 12 years without a quarterly loss, enjoyed the best quarter in its history -- which reaches to 1873 -- in the first quarter of this year.

Chairman and CEO Craig Dwight credits the bank's diversified lines of business with its success during economic ups and downs, and Horizon has continued to expand through the recent downturn when many banks experienced at least some quarters with losses.

"During this recession we've done well," Dwight says. "We never reported a single quarter loss. Indiana's a great economy. Our bubble wasn't as terrible as other areas of the county, and our employment rates except for Elkhart County were not as bad as they were in the '80s.

"We have five primary businesses that we're in. They complement one another, and they're countercyclical in different economic cycles."

Retail mortgage lending, for example, does well when interest rates are low, as they usually are in a recessionary economy, he says. Horizon also does mortgage warehousing.

While refinancing rather than new purchases accounted for more of the business during the downturn, Dwight says sales have strengthened recently.

"For the first quarter, we're seeing a big shift toward purchases," he says. "Our mix is almost 50 percent purchases and 50 percent re-fis, for the first time in six years. People are seeing a good buy and very low interest rates."

Horizon's other lines are traditional business banking, retail banking and wealth and investment management. "Those do well in rising interest rate environments during inflationary times," Dwight says.

Horizon's expansion includes a bank acquisition and a new office in Portage, Mich., in 2010, a new office in Valparaiso this year, and the acquisition of Heartland Community Bank in Franklin, Ind., expected to close in July.

That will add Marion and Johnson counties to Horizon's presence in Lake, Porter, LaPorte, St. Joseph and Elkhart counties in Indiana. It also has branches in Berrien and Kalamazoo counties in Michigan.

Horizon, whose stock is traded on the Nasdaq, has won national recognition for its success, including four straight years on U.S. Banker magazine's list of Top 200 publicly traded community banks for financial performance, based on a three-year rolling average of returns.

Recently, Horizon was named to the Keefe, Bruyette & Woods (KBW) Honor Roll of 43 banks in the United States, with stringent earnings growth standards.

Dwight says the expanding bank maintains its success by hiring local workers, often professionals disenchanted with careers at larger banks. Horizon has some 350 employees.

"We keep that local feel by focusing on hiring local people," he says. "Here they can come in and be immediately able to have an impact on what we're doing."

Copyright © 2012, South Bend Tribune

[Southsider2k12]

http://www.marketwatch.com/story/horizon-b...ndex-2012-06-14

Horizon Bancorp Set to Join Russell 3000 Index

MICHIGAN CITY, Ind., Jun 14, 2012 (BUSINESS WIRE) -- Horizon Bancorp HBNC 0.00% announced today it has been selected to join the broad-market Russell 3000® Index and Russell Global Index when Russell Investments reconstitutes its comprehensive set of U.S. and global equity indexes on June 25th according to a preliminary list of additions posted by Russell Investments on June 8.

"Joining the Russell 3000® Index represents a significant milestone in Horizon Bancorp's 139 year history," said Craig M. Dwight, President and CEO. "It is a direct result of our Company's consistent year over year growth and strong financial performance which, in turn, has driven the increased value investors have assigned to Horizon's stock and the subsequent market capitalization increase. This has been a long-term goal of the Company, and it is extremely gratifying to have achieved it in what continues to be a challenging environment for banks."

"Membership in a group of companies that serve as a global benchmark for corporate performance is also a tribute to our employees, whose work and dedication have enabled us to grow and build the Horizon Bank franchise. It is an honor to be considered one of the top 3000 largest U.S. publicly traded companies in the United States as determined by the Russell 3000® index."

Annual reconstitution of Russell's U.S. indexes captures the largest U.S. stocks as of the end of May, ranking them by total market capitalization. Russell determines membership for its equity indexes primarily by objective, market-capitalization rankings and style attributes. The Russell 3000 serves as the U.S. component to the Russell Global Index.

According to Russell, its indices are widely used by investment managers and institutional investors worldwide for index funds and as benchmarks for both passive and active investment strategies. In the institutional marketplace, $3.9 trillion in assets are benchmarked to them. Russell calculates more than 80,000 benchmarks daily covering approximately 98 percent of the investable market globally, 83 countries and more than 10,000 securities.

In April 2012 Horizon Bancorp was one of 43 banks nationwide named to the Keefe, Bruyette & Woods Honor Roll, which is based on criteria that includes banks with more than $500 million in assets, no annual loss reported in net income per share (before extraordinary items) over the past 10 years, 2011 annual reported net income per share (before extraordinary items) equal to or greater than peak net income per share over the past 10 years, and consecutive increases in net income per share (before extraordinary items) since 2009.

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern and Central Indiana and Southwest Michigan. Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.accesshorizon.com . Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon. For these statements, Horizon claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Horizon's reports filed with the Securities and Exchange Commission, including those described in Item 1A "Risk Factors" of Part II of Horizon's Form 10-Q for the quarter ended March 31, 2012. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this press release. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

[Southsider2k12]

http://www.marketwatch.com/story/horizon-b...ings-2012-07-18

Horizon Bancorp Announces Record Quarterly and Six-Month Earnings

MICHIGAN CITY, Ind., Jul 18, 2012 (BUSINESS WIRE) -- Horizon Bancorp HBNC 0.00% today announced its unaudited financial results for the three and six month periods ended June 30, 2012.

SUMMARY:

-- Second quarter 2012 net income was $4.9 million or $.93 diluted earnings per share, a 66% increase in diluted earnings per share compared to the same period in 2011. In addition, this represents the highest quarterly net income and diluted earnings per share in the Company's 139-year history.

-- Horizon's net income for the first half of 2012 was $9.5 million or $1.81 diluted earnings per share, a 72% increase in diluted earnings per share compared to the same period in 2011 and the highest first half net income in the Company's history.

-- Total loans increased $8.6 million during the quarter and $157.9 million over the previous twelve months to $997.1 million at June 30, 2012.

-- Net interest income, after provisions for loan losses, for the first six months of 2012 was $25.4 million compared with $19.7 million for the same period in the prior year.

-- The provision for loan losses decreased to $768,000 for the first six months of 2012 compared to $2.9 million for the same period in 2011.

-- Net charge-offs for the first six months of 2012 were $1.3 million compared to $3.4 million for the same period in 2011.

-- Total substandard loans have decreased by $21.9 million in the first six months of 2012.

-- Return on average assets was 1.31% for the second quarter of 2012 and 1.27% for the first six months of 2012.

-- Return on average common equity was 16.43% for the second quarter of 2012 and 16.13% for the first six months of 2012.

-- The merger with Heartland Bancshares, Inc ("Heartland") based in Franklin, Indiana closed on July 17, 2012.

-- Horizon's tangible book value per share rose to $22.22 compared to $21.35 and $19.17 at March 31, 2012 and June 30, 2011, respectively.

-- Horizon Bank's capital ratios, including Tier 1 Capital to total risk weighted assets of 12.03% as of June 30, 2012, continue to be well above the regulatory standards for well-capitalized banks.

Craig M. Dwight, President and CEO, stated: "Our business model continued to deliver a balanced revenue stream, with solid year-over-year growth in key areas. Ongoing reductions in the provision for loan losses, increased revenue from our mortgage operations, and our continued focus on expense management, contributed to the Bank's record earnings for these periods."

"Loan and deposit growth, particularly at Horizon's newer branch locations, demonstrated exceptional productivity and success in earning market share in highly competitive market conditions. At quarter's end, Horizon exceeded $1 billion in loans, including loans held for sale, for the first time in its history."

"Despite continuing pressure on margins, we increased our net interest margin over the prior year, an accomplishment supported in part by our mortgage warehousing business. We were also pleased to have closed the acquisition of Heartland Bancshares on schedule, in what was a very smooth and cooperative process. We look forward to maximizing the value of the new markets and customers in the Indianapolis area. We have complemented our expanded presence by opening a loan and deposit production office in Indianapolis in July."

Performance Highlights

Net income for the second quarter of 2012 was $4.9 million or $.93 diluted earnings per share, up 59% compared to $3.1 million or $.56 diluted earnings per share in the second quarter of 2011. This represents the highest level of net income for a single quarter in the Company's 139-year history.

Net income for the first six months of 2012 rose 63% to $9.5 million or $1.81 diluted earnings per share, compared with $5.9 million or $1.05 diluted earnings per share in the first half of 2011. This is the highest first six months of net income in the Company's history.

The net interest margin was 3.79% in the second quarter of 2012 up from 3.67% for the three-month period ending June 30, 2011 but down 8 basis points (or 0.08%) from the three months ending March 31, 2012. This decrease from the first quarter of 2012 primarily reflected a decrease in the yield on interest-earning assets greater than the decrease in the rates paid on interest-bearing liabilities. The net interest margin was 3.84% for the six months ending June 30, 2012 up from 3.62% for the same period in 2011.

During the second quarter of 2012 residential mortgage loan activity generated $3.4 million in income from the gain on sale of mortgage loans; an increase of $2.1 million from the same period in 2011 and an increase of $1.1 million from the first quarter of 2012.

Lending Activity

Total loans increased by $13.9 million from $983.2 million at December 31, 2011 to $997.1 million at June 30, 2012. Commercial loans increased by $4.2 million, mortgage warehouse loans increased by $7.2 million, consumer loans increased by $3.1 million and residential mortgage loans decreased by $467,000 compared to December 31, 2011 loan levels.

The provision for loan losses was $209,000 for the second quarter of 2012, which was $1.1 million less than the provision for the same period of the prior year. For the first six months of 2012 the provision for loan losses was $2.1 million less than the provision for the same period of the prior year. The lower provision for loan losses was primarily related to a decrease in charged off loans and improvement in substandard loans. Substandard loans have decreased $21.9 million since December 31, 2011.

"We anticipate that with the integration of Heartland, the level of substandard loans will increase," explained Dwight. "Horizon's approach to substandard loans is to work with the borrowers to achieve a reasonable action plan, if the plan cannot be achieved then Horizon moves to protect the shareholders' and depositors' interests to minimize loss. Horizon believes that with a disciplined approach to problem loan resolution we will also be able to reduce the substandard loans being acquired from Heartland."

The ratio of allowance for loan losses to total loans decreased to 1.83% as of June 30, 2012 from 1.89% as of December 31, 2011. The decrease in the ratio was primarily the result of charging off specific reserves previously identified and the reduction in substandard loans.

Non-performing loans totaled $20.8 million on June 30, 2012, down from $21.1 million on March 31, 2012, but up slightly from $20.6 million on June 30, 2011. As a percentage of total loans, non-performing loans were 2.09% on June 30, 2012, similar to 2.10% on March 31, 2012, but down from 2.44% on June 30, 2011. The drop in the percentage of non-performing loans to total loans is the direct result of the loan growth that occurred over the last twelve months.

Other Real Estate Owned (OREO) totaled $1.0 million on June 30, 2012, up from $803,000 on March 31, 2012, but down significantly from $4.1 million on June 30, 2011. During the quarter, eight properties with a book value of $435,000 as of March 31, 2011 were sold and seven properties with a book value of $696,000 were transferred into OREO. There was one write down of $29,000 during the quarter. On June 30, 2012, OREO was comprised of 10 properties. Of these, five totaling $599,000 were commercial loans and five totaling $427,000 were residential real estate loans. Horizon currently has contracts to sell two properties with a book value of $197,000.

Expense Management

Total non-interest expenses were $2.6 million higher in the first six months of 2012 compared to the first six months of 2011 and $1.0 million higher compared to the three months ending March 31, 2012. Salaries and employee benefits at June 30, 2012 increased $1.7 million compared to the same period in 2011 and was $576,000 higher compared to the three months ending March 31, 2012. These increases are primarily the result of annual merit pay increases, increase in employee benefits costs and commission and bonus expense for the first six months of 2012. Also, included in the first six months of 2012's non-interest expense was $500,000 of transaction expenses related to the transaction with Heartland.

Dwight concluded: "We plan to continue to focus on building productivity in every location and department. We expect our expanded presence in Indiana will offer greater visibility for the Horizon franchise, and continued economies of scale."

[Southsider2k12]

http://www.businesswire.com/news/home/2012...ncshares-Merger

Horizon Bancorp Announces Closing of Heartland Bancshares Merger

New Deposit and Loan Production Office Established in Indianapolis to Complement Merger

MICHIGAN CITY, Ind.--(BUSINESS WIRE)--Horizon Bancorp (NASDAQ: HBNC) today announced it has closed its acquisition of Heartland Bancshares, Inc. (OTCBB: HRTB) and Horizon Bank N.A.’s acquisition of Heartland Community Bank, through mergers effective July 17, 2012. As previously announced, the banks will operate under a single Horizon Bank, N.A. charter, and Heartland’s locations will operate in Central Indiana as “Heartland Community Bank, a Horizon Bank, N.A. Company.” Heartland serves Central Indiana, south of Indianapolis, and has the No. 1 deposit market share in Johnson County according to the most recently published information by the Federal Deposit Insurance Corporation.

“We are thrilled to have completed this merger, and we were all pleased with the cooperation and teamwork demonstrated throughout the transaction process. We are confident the integration process will be as smooth and rapid”

“We are thrilled to have completed this merger, and we were all pleased with the cooperation and teamwork demonstrated throughout the transaction process. We are confident the integration process will be as smooth and rapid,” said Craig M. Dwight, Horizon’s Chief Executive Officer. “Central Indiana represents an attractive, growth-oriented market for us,” said Dwight. “This merger provides a strong foothold in Central Indiana and further establishes Horizon’s position as an Indiana-focused financial institution. We also believe the two banks’ philosophies of exceptional customer service and commitment to community banking will result in a strong combined corporate culture that will continue to serve us well for years to come.”

Heartland’s co-founders, Steve Bechman and Jeffrey Goben will continue to provide their expertise as key managers of the Central Indiana banking operation. Steven W. Reed, a Heartland board member and partner with the Indianapolis-based public accounting firm BGBC Partners, LLP, has joined Horizon Bank’s board of directors. Consistent with Horizon’s practice of establishing local advisory boards, Bechman will appoint a local advisory board for Heartland’s market.

Dwight explained that the Heartland merger gives Horizon, based in Northwest Indiana, a significant physical presence in Central Indiana, and the opportunity to continue to expand throughout the northern half of Indiana. Heartland’s branch locations are located south of Indianapolis along the important I-65 corridor. To complement the new market presence, Horizon opened a new deposit and loan production office in Indianapolis in July 2012, its first presence in the Indiana capital and business hub.

“We believe this merger opens many doors to serving business and consumer banking needs throughout Indiana, with both a new physical presence and additional expertise provided by Heartland’s executives and employees,” explained Dwight.

Under the final terms of the acquisition, the exchange ratio was 0.54 shares of Horizon’s common stock for each share of Heartland common stock outstanding. Heartland shares outstanding at the closing were 1,442,449 and the shares of HBNC common stock issued to Heartland shareholders totaled 778,922. Horizon’s stock price was $25.25 per share at the close of business on July 17, 2012. Based upon these numbers, the total value of the consideration for the acquisition was $19,667,792.

As of March 31, 2012, Heartland Community Bank reported total assets of approximately $238.1 million, total deposits of approximately $211.2 million and total loans of approximately $134.9 million.

Dwight added, “Horizon anticipates the acquisition will be accretive to earnings per share after transaction costs. By consolidating back-office capabilities, Horizon anticipates a 25% annual operating cost savings compared with Heartland’s current operations.” Dwight also indicated that Horizon has a successful track record of integrating acquired companies, such as American Trust & Savings Bank (acquired in 2010) and Alliance Financial Corporation (acquired in 2005), and believes they will be equally successful in integrating the Heartland operations into Horizon’s.

Dwight concluded: “This merger is consistent with Horizon’s philosophy of acquiring banks that have corporate cultures and core values similar to Horizon’s and a commitment to serving their local communities. We anticipate that retaining the Heartland name will enable us to capitalize on the visibility and goodwill Heartland has built since opening its doors in 1997. We are thrilled to welcome Heartland’s employees and customers.”

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern and Central Indiana and Southwest Michigan through its commercial banking subsidiary Horizon Bank, NA. Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.accesshorizon.com. Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

[Southsider2k12]

http://www.nwitimes.com/business/local/hor...ae682c1b7a.html

The Michigan City-based parent of Horizon Bank said Friday it would raise its dividend to 15 cents per share.

The board of directors for Horizon Bancorp approved a 2-cent hike from 13 cents per share Sept. 18, according to a U.S. Securities and Exchange Commission filing.

The dividend will be paid Oct. 12 to owners of shares as of Sept. 28.

The bank said the dividend yield is 2.19 percent based on the $27.39 per share price at the Sept. 18 market close.

Horizon common stock is traded on the Nasdaq Global Market under the symbol HBNC.

[Southsider2k12]

http://eon.businesswire.com/news/eon/20121218006038/en

Horizon Bancorp Accelerates Payment of First Quarter Dividend
December 18, 2012 10:42 AM Eastern Time

MICHIGAN CITY, Ind.--(BUSINESS WIRE)--Horizon Bancorp (NASDAQ: HBNC) announced that on December 12, 2012, its Board of Directors declared a dividend of 10 cents per share to shareholders of record on December 24, 2012. The dividend is payable on December 31, 2012. In light of the potential for tax increases in 2013, the Board determined that it would be advisable to accelerate this dividend payment into the 2012 calendar year. This dividend would have typically been paid in the first quarter of 2013.

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern Indiana and Southwest Michigan through its bank subsidiary, Horizon Bank, also doing business as Heartland Community Bank. Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.accesshorizon.com. Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon. For these statements, Horizon claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in Item 1A “Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this press release. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.