Attached files
| file | filename |
|---|---|
| 8-K - HORIZON BANCORP INC /IN/ | hb_8k1020.htm |
Exhibit 99.1
Contact: Mark E. Secor
Chief Financial Officer
Phone: (219) 873-2611
Fax: (219) 874-9280
Date: October 20, 2011
FOR IMMEDIATE RELEASE
Horizon Bancorp Reports Record Quarter and Year-to-Date Earnings
Michigan City, Indiana (NASDAQ GM: HBNC) – Horizon Bancorp 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.”
- MORE -
Pg. 2 cont. Horizon Bancorp Reports Record Quarter and Year-to-Date Earnings
“The tremendous dedication of our employees, and their commitment to give customers a superior banking experience has led to high customer retention levels, expanded banking relationships and new customer relationships. This commitment, supported by a diverse range of financial products, has enabled us to win market share as individuals and businesses seek a better banking experience.”
“We have expanded our market and outreach efforts to win more business. The successful results of these efforts have been reflected in growing revenue.”
Dwight further explained the numerous operating efficiencies implemented in past years are enabling Horizon to operate more profitably. He noted that a significant year-over-year reduction in the Bank’s loan loss reserve demonstrates an ongoing trend of loan charge-offs reducing, while a 53.3 % decline in loans 30 to 89 days delinquent is an encouraging indication that this trend may continue.
“We continue to develop initiatives to expand our product and service capabilities and build market share,” said Dwight. “We remain watchful for opportunities to grow organically by hiring exceptionally talented producers and for accretive acquisition opportunities in a consolidating banking market.”
Performance Highlights
Net income for the third quarter of 2011 was $3.4 million or $.80 diluted earnings per share, up 4.2% compared to $3.3 million or $.88 diluted earnings per share in the third quarter of 2010. Redeeming the US Treasury Department’s preferred stock investment from the TARP Capital Purchase Program (“CPP”) during the third quarter required that the discount on the preferred stock be completely recognized, resulting in a reduction in net income available to common shareholders of $449,000, or $0.13 per diluted share. This was a one time event and had no net impact on the equity of the Company.
On August 25, 2011, the Company redeemed all of the US Treasury Department’s preferred stock investment from the CPP using $6.25 million in cash and $12.5 million investment from the US Treasury Department under the Small Business Lending Fund (“SBLF”) in a new series of our preferred stock. The total preferred stock dividends and accretion of the discount for the third quarter was $710,000, representing $261,000 in preferred stock dividends and $449,000 in discount accretion. The quarterly dividend payment on the SBLF preferred shares is expected to be approximately $156,000 based on the $12.5 million in preferred shares currently outstanding.
Diluted earnings per share were reduced by $0.21 and $0.36, respectively, for the three and nine months ending September 30, 2011, compared to $0.11 and $0.32, respectively, for the three and nine months ending September 30, 2010. The reduction to diluted earnings per share was greater in 2011 due to the recognition of the remaining discount on the CPP preferred stock in the third quarter of 2011 but offset by a decrease in preferred stock dividends. The reduction in 2011 on the preferred stock dividend was due to the repurchase of $6.25 million of CPP preferred stock during the fourth quarter of 2010.
Net income for the first nine months of 2011 rose 22.3% to $9.3 million or $2.37 diluted earnings per share, compared with $7.6 million or $1.96 diluted earnings per share in the first nine months of 2010. This is the highest level of net income for the first three quarters in the Company’s history.
- MORE -
Pg. 3 cont. Horizon Bancorp Reports Record Quarter and Year-to-Date Earnings
The net interest margin increased to 3.76% in the third quarter of 2011 from 3.67% for the three-month period ending June 30, 2011. This increase in the third quarter of 2011 primarily reflected an increase in average mortgage warehouse loan volume and balances, which were funded by an increase in average federal funds purchased, resulting in an expanded interest rate spread on interest earning assets. Borrowings increased by $106.0 million since June 30, 2011 all in short-term instruments primarily to fund the increase in mortgage warehouse.
“While average aggregate mortgage warehouse loans in 2011 are lower than in 2010, the levels met our expectations,” explained Dwight. “We have operated our mortgage warehousing business for 12 years without a loss. While it is subject to seasonal and rate-driven fluctuations in the mortgage market, it is an important part of our diversified income stream. Overall, in an environment that has caused margin compression, we were satisfied with our ability to maintain relative stability in our net interest margin.”
Residential mortgage loan sale activity during the third quarter of 2011 generated $2.1 million in income from the gain on sale of mortgage loans, a decrease of $328,000 from the same period in 2010 but an increase of $837,000 from the second quarter of 2011. In addition, Horizon recognized a $1.1 million gain on the sale of securities of during the third quarter of 2011 as the result of restructuring a portion of the investment portfolio, utilizing the gains to offset a $798,000 pre-payment penalty, included in other losses, for the repayment of an FHLB advance before its scheduled maturity.
Lending Activity
With respect to Horizon’s lending activities, Dwight commented, “Expanding Horizon’s overall loan activity continues to be a challenge given the local and national economies. Given this challenge, Horizon has increased its marketing and outbound calling efforts in order to increase market share. In addition, we continue to hire talented people to help fuel expansion efforts.”
Total loans increased by $43.0 million from $882.9 million at December 31, 2010 to $925.8 million at September 30, 2011, as the balances in all loan categories have increased except for installment loans which decreased by $2.7 million. Commercial loans increased by $15.3 million, residential mortgage loans increased by $3.0 million, and mortgage warehouse loans increased by $27.4 million.
The provision for loan losses was $1.6 million for the third quarter of 2011, which was approximately $1.1 million less than the provision for the same period of the prior year. The 2011 third-quarter provision was $232,000 more than the 2011 second quarter provision and $16,000 more than the first quarter provision. The higher provision for loan losses was primarily related to an increase of non-performing loans in the third quarter.
The ratio of allowance for loan losses to total loans decreased to 2.04% from 2.11% as of September 30, 2011 and December 31, 2010, respectively. The decrease in the ratio was due to an overall increase in total loan balances as the total allowance for loan losses balance increase slightly during this same period.
Non-performing loans totaled $23.6 million on September 30, 2011, up from $20.6 million on June 30, 2011, and from $21.7 million on September 30, 2010. As a percentage of total loans, non-performing loans were 2.52% on September 30, 2011, up from 2.44% on June 30, 2011, and 2.22% on September 30, 2010.
- MORE -
Pg. 4 cont. Horizon Bancorp Reports Record Quarter and Year-to-Date Earnings
The increase of non-performing loans from the prior quarter was primarily due to higher non-performing commercial loans, which increased from $9.6 million on June 30, 2011, to $12.1 million on September 30, 2011. This increase resulted primarily from the addition of two loans totaling $2.1 million secured by a retail income property. Non-performing mortgage loans increased from $7.0 million on June 30, 2011 to $7.2 million on September 30, 2011. Non-performing installment loans increased from $4.0 million on June 30, 2011 to $4.3 million on September 30, 2011.
“We continue to reserve for potential loan losses, but we believe the outlook is significantly more encouraging than a year ago,” said Dwight “Because our non-performing assets represent a small percentage of our total loans, and our capital position remains strong, we are able to seek out new quality lending opportunities that other banks are not able to pursue because of their financial or regulatory situation.”
Real estate and installment non-performing loans on September 30, 2011 included $1.5 million and $1.9 million respectively, of loans in bankruptcy. This compares to $1.7 million and $2.7 million, respectively, on June 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 the Company 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. The recent trend is for fewer loans to be involved in the bankruptcy process. There were three non-performing loans, totaling $235,000, to commercial borrowers in bankruptcy on September 30, 2011.
TDR’s are also included in the non-performing loan totals. TDR’s declined from $6.1 million on June 30, 2011 to $5.7 million on September 30, 2011. Of these, $3.7 million were mortgage loans, $1.2 million were commercial loans, and $849,000 were consumer installment loans.
Non-accrual loans totaled $17.8 million on September 30, 2011 up from $14.4 million on June 30, 2011, and $16.8 million on September 30, 2010. The increase in the most recent quarter was primarily due to the aforementioned addition of two large commercial loans secured by retail income property. Non-accrual commercial loans were the largest component at $10.9 million. Non-accrual commercial loans to a hotel owner totaled $4.2 million, and loans secured by retail strip malls totaled $2.3 million. The hotel is under contract to sell with little or no additional loss expected. Loans 90 days delinquent but still on accrual totaled $97,000 on September 30, 2011, up from $55,000 on June 30, 2011, but down from $833,000 on September 30, 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 $3.6 million on September 30, 2011, down from $4.1 million on June 30, 2011, and $4.1 million on September 30, 2010. During the quarter, ten properties with a book value of $869,000 as of June 30, 2011 were sold. Another ten with a book value of $461,000 were transferred into OREO status. Three properties were reduced through partial sales or payments by $119,000. On September 30, 2011, OREO was comprised of 28 properties. Of these, five totaling $1.1 million were commercial properties and 23 totaling $2.5 million were residential real estate.
- MORE -
Pg. 5 cont. Horizon Bancorp Reports Record Quarter and Year-to-Date Earnings
Expense Management
Total non-interest expenses were $1.1 million higher in the third quarter of 2011 compared to the third quarter of 2010 and $2.1 million higher for the nine months ended September 30, 2011 compared to the same period in the prior year. Salaries and employee benefits increased $96,000 compared to the same quarter in 2010 and $939,000 compared to the same nine-month period of 2010. These increases are 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, the expansion into Portage, Michigan, and annual merit pay increases. In third quarter of 2011, included in the other loss line item of non-interest expense, was a $798,000 pre-payment penalty from the early repayment of an FHLB advance and $210,000 for the settlement of a lawsuit.
Dwight concluded, “Horizon has already developed the infrastructure and operations to meet increased regulation, and to comfortably add loans and deposits while managing expenses. We believe Horizon is well-positioned to capitalize on strategic growth opportunities that would contribute to earnings growth.”
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 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.
Contact: Horizon Bancorp
Mark E. Secor
Chief Financial Officer
(219) 873-2611
Fax: (219) 874-9280
# # #
HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)
|
September 30
|
June 30
|
March 31
|
December 31
|
September 30
|
||||||||||||||||
|
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
|
Balance sheet:
|
||||||||||||||||||||
|
Total assets
|
$ | 1,490,810 | $ | 1,413,737 | $ | 1,382,390 | $ | 1,400,919 | $ | 1,485,058 | ||||||||||
|
Investment securities
|
441,334 | 460,449 | 445,988 | 391,939 | 397,694 | |||||||||||||||
|
Commercial loans
|
345,366 | 338,439 | 335,758 | 330,018 | 329,230 | |||||||||||||||
|
Mortgage warehouse loans
|
151,111 | 75,057 | 49,034 | 123,743 | 193,848 | |||||||||||||||
|
Residential mortgage loans
|
165,429 | 163,803 | 164,240 | 162,435 | 165,234 | |||||||||||||||
|
Installment loans
|
263,934 | 261,971 | 260,525 | 266,681 | 270,503 | |||||||||||||||
|
Earning assets
|
1,391,864 | 1,316,452 | 1,274,171 | 1,307,313 | 1,387,594 | |||||||||||||||
|
Non-interest bearing deposit accounts
|
121,483 | 113,747 | 111,155 | 107,606 | 105,376 | |||||||||||||||
|
Interest bearing transaction accounts
|
551,597 | 567,456 | 531,250 | 508,953 | 506,031 | |||||||||||||||
|
Time deposits
|
316,669 | 339,073 | 359,004 | 368,939 | 388,076 | |||||||||||||||
|
Borrowings
|
336,095 | 230,141 | 224,358 | 260,741 | 318,516 | |||||||||||||||
|
Subordinated debentures
|
30,653 | 30,630 | 30,607 | 30,584 | 30,562 | |||||||||||||||
|
Common stockholders' equity
|
106,180 | 103,206 | 97,802 | 94,066 | 95,686 | |||||||||||||||
|
Total stockholders’ equity
|
118,680 | 121,507 | 116,060 | 112,283 | 120,112 | |||||||||||||||
|
Income statement:
|
Three months ended
|
|||||||||||||||||||
|
Net interest income
|
$ | 11,991 | $ | 11,463 | $ | 11,067 | $ | 13,075 | $ | 12,620 | ||||||||||
|
Provision for loan losses
|
1,564 | 1,332 | 1,548 | 2,664 | 2,657 | |||||||||||||||
|
Other income
|
6,538 | 4,448 | 4,314 | 4,961 | 5,648 | |||||||||||||||
|
Other expenses
|
12,313 | 10,487 | 10,258 | 11,576 | 11,257 | |||||||||||||||
|
Income tax expense
|
1,235 | 999 | 810 | 926 | 1,075 | |||||||||||||||
|
Net income
|
3,417 | 3,093 | 2,765 | 2,870 | 3,279 | |||||||||||||||
|
Preferred stock dividend
|
(710 | ) | (277 | ) | (276 | ) | (349 | ) | (353 | ) | ||||||||||
|
Net income available to common shareholders
|
$ | 2,707 | $ | 2,816 | $ | 2,489 | $ | 2,521 | $ | 2,926 | ||||||||||
|
Per share data:
|
||||||||||||||||||||
|
Basic earnings per share
|
$ | 0.82 | $ | 0.86 | $ | 0.76 | $ | 0.77 | $ | 0.89 | ||||||||||
|
Diluted earnings per share
|
0.80 | 0.83 | 0.74 | 0.75 | 0.88 | |||||||||||||||
|
Cash dividends declared per common share
|
0.18 | 0.17 | 0.17 | 0.17 | 0.17 | |||||||||||||||
|
Book value per common share
|
32.20 | 31.32 | 29.76 | 28.68 | 29.17 | |||||||||||||||
|
Tangible book value per common share
|
29.68 | 28.76 | 27.17 | 26.04 | 26.50 | |||||||||||||||
|
Market value - high
|
28.35 | 27.92 | 29.19 | 26.99 | 22.60 | |||||||||||||||
|
Market value - low
|
$ | 25.97 | $ | 26.50 | $ | 26.20 | $ | 21.89 | $ | 21.15 | ||||||||||
|
Weighted average shares outstanding - Basic
|
3,295,130 | 3,291,833 | 3,283,143 | 3,280,331 | 3,279,201 | |||||||||||||||
|
Weighted average shares outstanding - Diluted
|
3,376,253 | 3,376,969 | 3,383,175 | 3,362,118 | 3,336,634 | |||||||||||||||
|
Key ratios:
|
||||||||||||||||||||
|
Return on average assets
|
0.96 | % | 0.89 | % | 0.80 | % | 0.79 | % | 0.90 | % | ||||||||||
|
Return on average common stockholders' equity
|
10.14 | 11.25 | 10.55 | 10.22 | 12.12 | |||||||||||||||
|
Net interest margin
|
3.76 | 3.67 | 3.57 | 4.01 | 3.84 | |||||||||||||||
|
Loan loss reserve to total loans
|
2.04 | 2.20 | 2.34 | 2.11 | 1.85 | |||||||||||||||
|
Non-performing loans to loans
|
2.52 | 2.44 | 2.71 | 2.38 | 2.22 | |||||||||||||||
|
Average equity to average assets
|
8.60 | 8.51 | 8.14 | 8.22 | 8.32 | |||||||||||||||
|
Bank only capital ratios:
|
||||||||||||||||||||
|
Tier 1 capital to average assets
|
8.90 | 9.03 | 8.83 | 8.60 | 8.53 | |||||||||||||||
|
Tier 1 capital to risk weighted assets
|
12.37 | 13.62 | 13.56 | 12.70 | 11.69 | |||||||||||||||
|
Total capital to risk weighted assets
|
13.62 | 14.88 | 14.79 | 13.96 | 12.94 | |||||||||||||||
|
Loan data:
|
||||||||||||||||||||
|
30 to 89 days delinquent
|
$ | 4,240 | $ | 4,903 | $ | 6,948 | $ | 5,907 | $ | 9,084 | ||||||||||
|
90 days and greater delinquent - accruing interest
|
$ | 97 | $ | 55 | $ | 57 | $ | 358 | $ | 833 | ||||||||||
|
Trouble debt restructures - accruing interest
|
4,016 | 4,227 | 4,014 | 4,119 | 3,445 | |||||||||||||||
|
Trouble debt restructures - non-accrual
|
1,699 | 1,912 | 682 | 278 | 463 | |||||||||||||||
|
Non-accrual loans
|
17,799 | 14,430 | 17,359 | 16,673 | 16,939 | |||||||||||||||
|
Total non-performing loans
|
$ | 23,611 | $ | 20,624 | $ | 22,112 | $ | 21,428 | $ | 21,680 | ||||||||||
HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)
|
September 30
|
September 30
|
|||||||
|
2011
|
2010
|
|||||||
|
Balance sheet:
|
||||||||
|
Total assets
|
$ | 1,490,810 | $ | 1,485,058 | ||||
|
Investment securities
|
441,334 | 397,694 | ||||||
|
Commercial loans
|
345,366 | 329,230 | ||||||
|
Mortgage warehouse loans
|
151,111 | 193,848 | ||||||
|
Residential mortgage loans
|
165,429 | 165,234 | ||||||
|
Installment loans
|
263,934 | 270,503 | ||||||
|
Earning assets
|
1,391,864 | 1,387,594 | ||||||
|
Non-interest bearing deposit accounts
|
121,483 | 105,376 | ||||||
|
Interest bearing transaction accounts
|
551,597 | 506,031 | ||||||
|
Time deposits
|
316,669 | 388,076 | ||||||
|
Borrowings
|
336,095 | 318,516 | ||||||
|
Subordinated debentures
|
30,653 | 30,562 | ||||||
|
Common stockholders' equity
|
106,180 | 95,686 | ||||||
|
Total stockholders’ equity
|
118,680 | 120,112 | ||||||
|
Income statement:
|
Nine months ended
|
|||||||
|
Net interest income
|
$ | 34,521 | $ | 34,541 | ||||
|
Provision for loan losses
|
4,444 | 8,890 | ||||||
|
Other income
|
15,300 | 14,945 | ||||||
|
Other expenses
|
33,058 | 30,995 | ||||||
|
Income tax expense
|
3,044 | 2,016 | ||||||
|
Net income
|
9,275 | 7,585 | ||||||
|
Preferred stock dividend
|
(1,263 | ) | (1,057 | ) | ||||
|
Net income available to common shareholders
|
$ | 8,012 | $ | 6,528 | ||||
|
Per share data:
|
||||||||
|
Basic earnings per share
|
$ | 2.44 | $ | 1.99 | ||||
|
Diluted earnings per share
|
2.37 | 1.96 | ||||||
|
Cash dividends declared per common share
|
0.52 | 0.51 | ||||||
|
Book value per common share
|
32.20 | 29.21 | ||||||
|
Tangible book value per common share
|
29.68 | 26.53 | ||||||
|
Market value - high
|
29.19 | 22.81 | ||||||
|
Market value - low
|
$ | 25.97 | $ | 16.44 | ||||
|
Weighted average shares outstanding - Basic
|
3,289,911 | 3,275,969 | ||||||
|
Weighted average shares outstanding - Diluted
|
3,377,311 | 3,323,830 | ||||||
|
Key ratios:
|
||||||||
|
Return on average assets
|
0.88 | % | 0.74 | % | ||||
|
Return on average common stockholders' equity
|
10.64 | 9.33 | ||||||
|
Net interest margin
|
3.67 | 3.72 | ||||||
|
Loan loss reserve to total loans
|
2.04 | 1.85 | ||||||
|
Non-performing loans to loans
|
2.52 | 2.22 | ||||||
|
Average equity to average assets
|
8.43 | 8.56 | ||||||
|
Bank only capital ratios:
|
||||||||
|
Tier 1 capital to average assets
|
8.90 | 8.53 | ||||||
|
Tier 1 capital to risk weighted assets
|
12.37 | 11.69 | ||||||
|
Total capital to risk weighted assets
|
13.62 | 12.94 | ||||||
|
Loan data:
|
||||||||
|
30 to 89 days delinquent
|
$ | 4,240 | $ | 9,084 | ||||
|
90 days and greater delinquent - accruing interest
|
$ | 97 | $ | 833 | ||||
|
Trouble debt restructures - accruing interest
|
4,016 | 3,445 | ||||||
|
Trouble debt restructures - non-accrual
|
1,699 | 463 | ||||||
|
Non-accrual loans
|
17,799 | 16,939 | ||||||
|
Total non-performing loans
|
$ | 23,611 | $ | 21,680 | ||||
HORIZON BANCORP
Allocation of the Allowance for Loan and Lease Losses
(Dollars in Thousands, Unaudited)
|
September 30
|
June 30
|
March 31
|
December 31
|
September 30
|
||||||||||||||||
|
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
|
Commercial
|
$ | 8,151 | $ | 7,078 | $ | 8,609 | $ | 7,554 | $ | 7,029 | ||||||||||
|
Real estate
|
2,457 | 1,710 | 2,357 | 2,379 | 1,957 | |||||||||||||||
|
Mortgage warehousing
|
1,477 | 1,516 | 1,421 | 1,435 | 1,441 | |||||||||||||||
|
Consumer
|
7,025 | 8,282 | 6,703 | 7,696 | 7,603 | |||||||||||||||
|
Unallocated
|
- | - | - | - | - | |||||||||||||||
|
Total
|
$ | 19,110 | $ | 18,586 | $ | 19,090 | $ | 19,064 | $ | 18,030 | ||||||||||
|
Net Charge-offs
(Dollars in Thousands, Unaudited)
|
||||||||||||||||||||
|
Three months ended
|
||||||||||||||||||||
|
September 30
|
June 30
|
March 31
|
December 31
|
September 30
|
||||||||||||||||
| 2011 | 2011 | 2011 | 2010 | 2010 | ||||||||||||||||
|
Commercial
|
$ | 269 | $ | 366 | $ | 59 | $ | 426 | $ | 485 | ||||||||||
|
Real estate
|
86 | 659 | 82 | 128 | 86 | |||||||||||||||
|
Mortgage warehousing
|
- | - | - | - | - | |||||||||||||||
|
Consumer
|
685 | 811 | 1,380 | 1,076 | 599 | |||||||||||||||
|
Total
|
$ | 1,040 | $ | 1,836 | $ | 1,521 | $ | 1,630 | $ | 1,170 | ||||||||||
|
Total Non-performing Loans
(Dollars in Thousands, Unaudited)
|
||||||||||||||||||||
|
September 30
|
June 30
|
March 31
|
December 31
|
September 30
|
||||||||||||||||
| 2011 | 2011 | 2011 | 2010 | 2010 | ||||||||||||||||
|
Commercial
|
$ | 12,094 | $ | 9,613 | $ | 9,428 | $ | 8,082 | $ | 8,855 | ||||||||||
|
Real estate
|
7,201 | 6,983 | 8,744 | 9,326 | 8,467 | |||||||||||||||
|
Mortgage warehousing
|
- | - | - | - | - | |||||||||||||||
|
Consumer
|
4,316 | 4,028 | 3,940 | 4,020 | 4,358 | |||||||||||||||
|
Total
|
$ | 23,611 | $ | 20,624 | $ | 22,112 | $ | 21,428 | $ | 21,680 | ||||||||||
|
Other Real Estate Owned and Repossessed Assets
(Dollars in Thousands, Unaudited)
|
||||||||||||||||||||
|
September 30
|
June 30
|
March 31
|
December 31
|
September 30
|
||||||||||||||||
| 2011 | 2011 | 2011 | 2010 | 2010 | ||||||||||||||||
|
Commercial
|
$ | 1,087 | $ | 1,414 | $ | 1,443 | $ | 1,622 | $ | 2,751 | ||||||||||
|
Real estate
|
2,478 | 2,679 | 839 | 1,042 | 1,283 | |||||||||||||||
|
Mortgage warehousing
|
- | - | - | - | - | |||||||||||||||
|
Consumer
|
90 | 16 | 8 | - | 107 | |||||||||||||||
|
Total
|
$ | 3,655 | $ | 4,109 | $ | 2,290 | $ | 2,664 | $ | 4,141 | ||||||||||
HORIZON BANCORP
Loan Portfolio Detail
|
Non-
|
Percent
|
Specific
|
Percent of
|
|||||||||||||||||
|
Loan
|
Performing
|
of
|
Reserves on Non -
|
Non-performing
|
||||||||||||||||
|
September 30, 2011 (Unaudited)
|
Balance
|
Loans
|
Loans
|
Performing Loans
|
Loans
|
|||||||||||||||
|
Owner occupied real estate
|
$ | 128,724 | $ | 2,734 | 2.12 | % | $ | 460 | 16.83 | % | ||||||||||
|
Non owner occupied real estate
|
141,727 | 7,902 | 5.58 | % | 996 | 12.60 | % | |||||||||||||
|
Residential development
|
10,146 | 90 | 0.89 | % | 125 | 138.89 | % | |||||||||||||
|
Commercial and industrial
|
64,769 | 1,368 | 2.11 | % | 200 | 14.62 | % | |||||||||||||
|
Total commercial
|
345,366 | 12,094 | 3.50 | % | 1,781 | 14.73 | % | |||||||||||||
|
Residential mortgage (1)
|
170,234 | 6,766 | 3.97 | % | 202 | 2.99 | % | |||||||||||||
|
Residential construction
|
7,495 | 435 | 5.80 | % | 62 | 14.25 | % | |||||||||||||
|
Mortgage warehouse
|
151,111 | - | 0.00 | % | - | 0.00 | % | |||||||||||||
|
Total real estate
|
328,840 | 7,201 | 2.19 | % | 264 | 3.67 | % | |||||||||||||
|
Direct installment
|
24,737 | 354 | 1.43 | % | 18 | 5.08 | % | |||||||||||||
|
Indirect installment
|
127,666 | 1,173 | 0.92 | % | 7 | 0.60 | % | |||||||||||||
|
Home equity
|
111,531 | 2,789 | 2.50 | % | 906 | 32.48 | % | |||||||||||||
|
Total consumer
|
263,934 | 4,316 | 1.64 | % | 931 | 21.57 | % | |||||||||||||
|
Total loans
|
938,140 | 23,611 | 2.52 | % | 2,976 | 12.60 | % | |||||||||||||
|
Allowance for loan losses
|
(19,110 | ) | ||||||||||||||||||
|
Net loans
|
$ | 919,030 | $ | 23,611 | 2.57 | % | $ | 2,976 | ||||||||||||
|
(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
|
|||||||||||||||||||||||
|
September 30, 2011
|
September 30, 2010
|
|||||||||||||||||||||||
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
|
ASSETS
|
||||||||||||||||||||||||
|
Interest-earning assets
|
||||||||||||||||||||||||
|
Federal funds sold
|
$ | 2,265 | $ | 1 | 0.18 | % | $ | 12,273 | $ | 4 | 0.13 | % | ||||||||||||
|
Interest-earning deposits
|
14,868 | 1 | 0.03 | % | 15,349 | 4 | 0.10 | % | ||||||||||||||||
|
Investment securities - taxable
|
336,027 | 2,540 | 3.00 | % | 298,152 | 2,423 | 3.22 | % | ||||||||||||||||
|
Investment securities - non-taxable (1)
|
109,875 | 988 | 5.41 | % | 102,885 | 979 | 5.32 | % | ||||||||||||||||
|
Loans receivable (2)
|
855,938 | 12,481 | 5.79 | % | 918,930 | 14,466 | 6.25 | % | ||||||||||||||||
|
Total interest-earning assets (1)
|
1,318,973 | 16,011 | 4.97 | % | 1,347,589 | 17,876 | 5.39 | % | ||||||||||||||||
|
Noninterest-earning assets
|
||||||||||||||||||||||||
|
Cash and due from banks
|
17,169 | 16,518 | ||||||||||||||||||||||
|
Allowance for loan losses
|
(18,823 | ) | (17,137 | ) | ||||||||||||||||||||
|
Other assets
|
99,560 | 97,460 | ||||||||||||||||||||||
| $ | 1,416,879 | $ | 1,444,430 | |||||||||||||||||||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||
|
Interest-bearing liabilities
|
||||||||||||||||||||||||
|
Interest-bearing deposits
|
$ | 871,621 | $ | 1,978 | 0.90 | % | $ | 913,473 | $ | 2,769 | 1.20 | % | ||||||||||||
|
Borrowings
|
259,783 | 1,583 | 2.42 | % | 258,476 | 2,026 | 3.11 | % | ||||||||||||||||
|
Subordinated debentures
|
31,446 | 459 | 5.79 | % | 34,946 | 461 | 5.23 | % | ||||||||||||||||
|
Total interest-bearing liabilities
|
1,162,850 | 4,020 | 1.37 | % | 1,206,895 | 5,256 | 1.73 | % | ||||||||||||||||
|
Noninterest-bearing liabilities
|
||||||||||||||||||||||||
|
Demand deposits
|
121,034 | 106,152 | ||||||||||||||||||||||
|
Accrued interest payable and
|
||||||||||||||||||||||||
|
other liabilities
|
11,158 | 11,204 | ||||||||||||||||||||||
|
Shareholders' equity
|
121,837 | 120,179 | ||||||||||||||||||||||
| $ | 1,416,879 | $ | 1,444,430 | |||||||||||||||||||||
|
Net interest income/spread
|
$ | 11,991 | 3.60 | % | $ | 12,620 | 3.66 | % | ||||||||||||||||
|
Net interest income as a percent
|
||||||||||||||||||||||||
|
of average interest earning assets (1)
|
3.76 | % | 3.84 | % | ||||||||||||||||||||
(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)
|
Nine Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
|
September 30, 2011
|
September 30, 2010
|
|||||||||||||||||||||||
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
|
ASSETS
|
||||||||||||||||||||||||
|
Interest-earning assets
|
||||||||||||||||||||||||
|
Federal funds sold
|
$ | 26,448 | $ | 49 | 0.25 | % | $ | 30,279 | $ | 13 | 0.06 | % | ||||||||||||
|
Interest-earning deposits
|
8,837 | 2 | 0.03 | % | 9,213 | 38 | 0.55 | % | ||||||||||||||||
|
Investment securities - taxable
|
329,903 | 7,777 | 3.15 | % | 278,790 | 7,343 | 3.52 | % | ||||||||||||||||
|
Investment securities - non-taxable (1)
|
112,133 | 3,066 | 5.22 | % | 108,666 | 3,138 | 5.36 | % | ||||||||||||||||
|
Loans receivable (2)
|
830,432 | 36,260 | 5.85 | % | 860,253 | 40,283 | 6.27 | % | ||||||||||||||||
|
Total interest-earning assets (1)
|
1,307,753 | 47,154 | 4.96 | % | 1,287,201 | 50,815 | 5.41 | % | ||||||||||||||||
|
Noninterest-earning assets
|
||||||||||||||||||||||||
|
Cash and due from banks
|
15,756 | 15,101 | ||||||||||||||||||||||
|
Allowance for loan losses
|
(18,992 | ) | (16,625 | ) | ||||||||||||||||||||
|
Other assets
|
97,540 | 91,630 | ||||||||||||||||||||||
| $ | 1,402,057 | $ | 1,377,307 | |||||||||||||||||||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||
|
Interest-bearing liabilities
|
||||||||||||||||||||||||
|
Interest-bearing deposits
|
$ | 889,531 | $ | 6,510 | 0.98 | % | $ | 861,296 | $ | 8,238 | 1.28 | % | ||||||||||||
|
Borrowings
|
237,491 | 4,760 | 2.68 | % | 264,333 | 6,807 | 3.44 | % | ||||||||||||||||
|
Subordinated debentures
|
31,446 | 1,363 | 5.80 | % | 31,014 | 1,229 | 5.30 | % | ||||||||||||||||
|
Total interest-bearing liabilities
|
1,158,468 | 12,633 | 1.46 | % | 1,156,643 | 16,274 | 1.88 | % | ||||||||||||||||
|
Noninterest-bearing liabilities
|
||||||||||||||||||||||||
|
Demand deposits
|
115,454 | 93,123 | ||||||||||||||||||||||
|
Accrued interest payable and
|
||||||||||||||||||||||||
|
other liabilities
|
9,989 | 9,627 | ||||||||||||||||||||||
|
Shareholders' equity
|
118,146 | 117,914 | ||||||||||||||||||||||
| $ | 1,402,057 | $ | 1,377,307 | |||||||||||||||||||||
|
Net interest income/spread
|
$ | 34,521 | 3.50 | % | $ | 34,541 | 3.53 | % | ||||||||||||||||
|
Net interest income as a percent
|
||||||||||||||||||||||||
|
of average interest earning assets (1)
|
3.67 | % | 3.72 | % | ||||||||||||||||||||
(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)
|
September 30
|
December 31
|
|||||||
|
2011
|
2010
|
|||||||
|
(Unaudited)
|
||||||||
|
Assets
|
||||||||
|
Cash and due from banks
|
$ | 18,462 | $ | 15,683 | ||||
|
Investment securities, available for sale
|
430,702 | 382,344 | ||||||
|
Investment securities, held to maturity
|
10,632 | 9,595 | ||||||
|
Loans held for sale
|
12,300 | 18,833 | ||||||
|
Loans, net of allowance for loan losses of $19,110 and $19,064
|
906,730 | 863,813 | ||||||
|
Premises and equipment
|
34,289 | 34,194 | ||||||
|
Federal Reserve and Federal Home Loan Bank stock
|
12,390 | 13,664 | ||||||
|
Goodwill
|
5,910 | 5,910 | ||||||
|
Other intangible assets
|
2,403 | 2,741 | ||||||
|
Interest receivable
|
6,651 | 6,519 | ||||||
|
Cash value life insurance
|
29,959 | 27,195 | ||||||
|
Other assets
|
20,382 | 20,428 | ||||||
|
Total assets
|
$ | 1,490,810 | $ | 1,400,919 | ||||
|
Liabilities
|
||||||||
|
Deposits
|
||||||||
|
Non-interest bearing
|
$ | 121,483 | $ | 107,606 | ||||
|
Interest bearing
|
868,266 | 877,892 | ||||||
|
Total deposits
|
989,749 | 985,498 | ||||||
|
Borrowings
|
336,095 | 260,741 | ||||||
|
Subordinated debentures
|
30,653 | 30,584 | ||||||
|
Interest payable
|
582 | 781 | ||||||
|
Other liabilities
|
15,051 | 11,032 | ||||||
|
Total liabilities
|
1,372,130 | 1,288,636 | ||||||
|
Commitments and contingent liabilities
|
||||||||
|
Stockholders’ Equity
|
||||||||
|
Preferred stock, no par value, $1,000 liquidation value
|
||||||||
|
Authorized, 1,000,000 shares
|
||||||||
|
Issued 12,500 and 18,750 shares
|
12,500 | 18,217 | ||||||
|
Common stock, $.2222 stated value
|
||||||||
|
Authorized, 22,500,000 shares
|
||||||||
|
Issued, 3,309,512 and 3,300,659 shares
|
1,126 | 1,122 | ||||||
|
Additional paid-in capital
|
10,579 | 10,356 | ||||||
|
Retained earnings
|
86,524 | 80,240 | ||||||
|
Accumulated other comprehensive income
|
7,951 | 2,348 | ||||||
|
Total stockholders’ equity
|
118,680 | 112,283 | ||||||
|
Total liabilities and stockholders’ equity
|
$ | 1,490,810 | $ | 1,400,919 | ||||
HORIZON BANCORP AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollar Amounts in Thousands, Except Per Share Data)
|
Three Months Ended September 30
|
Nine Months Ended September 30
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
|
Interest Income
|
||||||||||||||||
|
Loans receivable
|
$ | 12,481 | $ | 14,466 | $ | 36,260 | $ | 40,283 | ||||||||
|
Investment securities
|
||||||||||||||||
|
Taxable
|
2,542 | 2,431 | 7,828 | 7,394 | ||||||||||||
|
Tax exempt
|
988 | 979 | 3,066 | 3,138 | ||||||||||||
|
Total interest income
|
16,011 | 17,876 | 47,154 | 50,815 | ||||||||||||
|
Interest Expense
|
||||||||||||||||
|
Deposits
|
1,978 | 2,769 | 6,510 | 8,238 | ||||||||||||
|
Borrowed funds
|
1,583 | 2,026 | 4,760 | 6,807 | ||||||||||||
|
Subordinated debentures
|
459 | 461 | 1,363 | 1,229 | ||||||||||||
|
Total interest expense
|
4,020 | 5,256 | 12,633 | 16,274 | ||||||||||||
|
Net Interest Income
|
11,991 | 12,620 | 34,521 | 34,541 | ||||||||||||
|
Provision for loan losses
|
1,564 | 2,657 | 4,444 | 8,890 | ||||||||||||
|
Net Interest Income after Provision for Loan Losses
|
10,427 | 9,963 | 30,077 | 25,651 | ||||||||||||
|
Other Income
|
||||||||||||||||
|
Service charges on deposit accounts
|
802 | 921 | 2,422 | 2,750 | ||||||||||||
|
Wire transfer fees
|
167 | 211 | 412 | 536 | ||||||||||||
|
Interchange fees
|
721 | 649 | 1,905 | 1,663 | ||||||||||||
|
Fiduciary activities
|
1,016 | 934 | 2,911 | 2,936 | ||||||||||||
|
Gain on sale of securities
|
1,115 | 336 | 1,754 | 467 | ||||||||||||
|
Gain on sale of mortgage loans
|
2,145 | 2,473 | 3,986 | 5,529 | ||||||||||||
|
Mortgage servicing income net of impairment
|
(172 | ) | (331 | ) | 691 | (363 | ) | |||||||||
|
Increase in cash surrender value of bank owned life insurance
|
245 | 246 | 661 | 599 | ||||||||||||
|
Death benefit on officer life insurance
|
453 | - | 453 | - | ||||||||||||
|
Other income
|
46 | 209 | 105 | 828 | ||||||||||||
|
Total other income
|
6,538 | 5,648 | 15,300 | 14,945 | ||||||||||||
|
Other Expenses
|
||||||||||||||||
|
Salaries and employee benefits
|
6,081 | 5,985 | 16,912 | 15,973 | ||||||||||||
|
Net occupancy expenses
|
1,056 | 1,036 | 3,176 | 3,077 | ||||||||||||
|
Data processing
|
549 | 502 | 1,450 | 1,474 | ||||||||||||
|
Professional fees
|
359 | 417 | 1,039 | 1,418 | ||||||||||||
|
Outside services and consultants
|
454 | 374 | 1,221 | 1,163 | ||||||||||||
|
Loan expense
|
820 | 855 | 2,276 | 2,376 | ||||||||||||
|
FDIC insurance expense
|
254 | 423 | 944 | 1,219 | ||||||||||||
|
Other losses
|
1,088 | 143 | 1,365 | 180 | ||||||||||||
|
Other expenses
|
1,652 | 1,522 | 4,675 | 4,115 | ||||||||||||
|
Total other expenses
|
12,313 | 11,257 | 33,058 | 30,995 | ||||||||||||
|
Income Before Income Tax
|
4,652 | 4,354 | 12,319 | 9,601 | ||||||||||||
|
Income tax expense
|
1,235 | 1,075 | 3,044 | 2,016 | ||||||||||||
|
Net Income
|
3,417 | 3,279 | 9,275 | 7,585 | ||||||||||||
|
Preferred stock dividend and discount accretion
|
(710 | ) | (353 | ) | (1,263 | ) | (1,057 | ) | ||||||||
|
Net Income Available to Common Shareholders
|
$ | 2,707 | $ | 2,926 | $ | 8,012 | $ | 6,528 | ||||||||
|
Basic Earnings Per Share
|
$ | 0.82 | $ | 0.89 | $ | 2.44 | $ | 1.99 | ||||||||
|
Diluted Earnings Per Share
|
0.80 | 0.88 | 2.37 | 1.96 | ||||||||||||