Pg. 2 cont. Horizon Bancorp Announces an Increase in Third Quarter Earnings

Craig M. Dwight, Chairman and CEO, commented: "Horizon's momentum continued into the third quarter of 2014 with core loan growth, excluding mortgage warehouse loans, of 4.6% for the three months ended September 30, 2014 or 18.1% on an annualized basis. Core loan growth for the nine months ended September 30, 2014 equaled 27.5% or 36.8% on an annualized basis.  Horizon's third quarter and year to date loan growth highlights our investments in people, technology, and larger markets paying off.  With additional capacity for future growth and an improving economic picture, we believe Horizon is well positioned to create additional operating leverage in the future."

The following tables present the amount and growth rate of loans by product type for the three and nine months ended September 30, 2014.

 

 

Loan Growth by Type
Three Months Ended September 30, 2014
(Dollars in Thousands)
																		Annualized
		September 30				June 30				Amount				Percent				Percent
		2014				2014				Change				Change				Change
		(Unaudited)				(Unaudited)
Commercial loans		$	677,349			$	648,202			$	29,147				4.5%				17.8%
Residential mortgage loans			251,739				235,523				16,216				6.9%				27.3%
Consumer loans			308,800				296,873				11,927				4.0%				15.9%
Held for sale loans			4,167				7,286				(3,119	)			-42.8%				-169.8%
Subtotal			1,242,055				1,187,884				54,171				4.6%				18.1%
Mortgage warehouse loans			105,133				140,896				(35,763	)			-25.4%				-100.7%
Total loans		$	1,347,188			$	1,328,780			$	18,408				1.4%				5.5%
Loan Growth by Type
Nine Months Ended September 30, 2014
(Dollars in Thousands)
																		Annualized
		September 30				December 31				Amount				Percent				Percent
			2014				2013			Change				Change				Change
		(Unaudited)
Commercial loans		$	677,349			$	505,189			$	172,160				34.1%				45.6%
Residential mortgage loans			251,739				185,958				65,781				35.4%				47.3%
Consumer loans			308,800				279,525				29,275				10.5%				14.0%
Held for sale loans			4,167				3,281				886				27.0%				36.1%
Subtotal			1,242,055				973,953				268,102				27.5%				36.8%
Mortgage warehouse loans			105,133				98,156				6,977				7.1%				9.5%
Total loans		$	1,347,188			$	1,072,109			$	275,079				25.7%				34.3%

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Pg. 3 cont. Horizon Bancorp Announces an Increase in Third Quarter Earnings

"The loan growth we have achieved has been a vital component in combating industry-wide net interest margin pressure as well as lower accretion income from acquisition-related purchase accounting adjustments," Dwight commented.  "Excluding accretion income related to purchase accounting adjustments Horizon's third quarter of 2014 net interest income increased $2.3 million or 17.2% compared to the same period of 2013."

Dwight explained the increase in provision for loan losses in the third quarter of 2014 to $1.7 million from $104,000 in the same period of 2013 by stating, "The increase in provision for loan losses was predominantly related to a $1.0 million charge-off associated with one commercial credit during the quarter.  Additionally, the higher provision expense takes into account recent loan growth.  Horizon's disciplined credit culture has and will continue to guide us as we continue to make loan growth a priority moving forward."

Horizon's loan loss reserve ratio, excluding loans with credit-related purchase accounting adjustments, stood at 1.32% as of September 30, 2014. The table below details Horizon's loan loss reserve ratio composition as of September 30, 2014.

 

Allowance for Loan and Lease Loss Detail
As of September 30, 2014
(Dollars in Thousands, Unaudited)
		Horizon
		Legacy				Heartland				Summit				Total
Pre-discount loan balance		$	1,204,653			$	40,067			$	106,432			$	1,351,152
Allowance for loan losses (ALLL)			15,955				205				-				16,160
Loan discount			N/	A			3,179				4,952				8,131
Total ALLL+loan discount		$	15,955			$	3,384			$	4,952			$	24,291
Loans, net		$	1,188,698			$	36,683			$	101,480			$	1,326,861
ALLL/ pre-discount loan balance			1.32	%			0.51	%			0.00	%			1.20	%
Loan discount/ pre-discount loan balance			N/	A			7.93	%			4.65	%			0.60	%
Total ALLL+loan discount/ pre-discount loan balance			1.32	%			8.45	%			4.65	%			1.80	%

Emerging Issues

Dwight noted the progress being made on the construction of Horizon's Carmel, Indiana branch expected to open in the first quarter of 2015.  Dwight concluded, "This new location will provide both tremendous retail and commercial opportunities for our team.  Additionally, it will strengthen Horizon's Central Indiana presence and provide a platform to deliver 'Exceptional Service and Sensible Advice' to consumers and businesses north of Indianapolis."

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Pg. 4 cont. Horizon Bancorp Announces an Increase in Third Quarter Earnings

Income Statement Highlights

Net income for the third quarter of 2014 was $5.0 million or $.51 diluted earnings per share compared to $4.8 million or $.52 diluted earnings per share in the third quarter of 2013.  The increase in net income from the previous year reflects an increase in interest income primarily due to loan growth and an increase in noninterest income related to an increase in gain on sale of investment securities and gain on sale of loans.  Horizon incurred a gain on the sale of securities of $988,000 during the third quarter as a result of an analysis that determined market conditions provided the opportunity to add gains to capital without negatively impacting long-term earnings.  The sale of securities was also used to fund loan growth. These increases to net income were partially offset by an increase in provision expense and an increase in salaries and net occupancy expenses due to company growth. The decrease in diluted earnings per share reflects the increase in shares outstanding due to the shares issued to Summit shareholders as part of the transaction.  Excluding transaction expenses related to the Summit acquisition of $124,000, net income would have been $5.0 million or $.52 diluted earnings per share for the third quarter of 2014.

Net income for the nine months ended September 30, 2014 was $13.2 million or $1.39 diluted earnings per share compared to $15.8 million or $1.72 diluted earnings per share for the nine months ended September 30, 2013.  Excluding transaction expenses related to the Summit acquisition of $1.3 million, net income would have been $14.0 million or $1.48 diluted earnings per share for the first nine months of 2014.

Horizon's net interest margin was 3.59% during the third quarter of 2014, down from 3.78% for the prior quarter and 3.78% for same period of 2013.  The decrease in net interest margin compared to the prior quarter and the same period of the prior year was primarily due to lower yields on new loans and re-pricing earning assets and a decrease in interest income from acquisition-related purchase accounting adjustments.  Excluding purchase accounting adjustments related to the 2012 Heartland Bancshares, Inc. and the 2014 Summit acquisitions, the margin would have been 3.50% for the third quarter of 2014 compared to 3.52% for the previous quarter and 3.52% for the same period of the prior year.  Interest income from acquisition-related purchase accounting adjustments was $438,000, $1.2 million and $1.0 million for the three months ended September 30, 2014, June 30, 2014 and September 30, 2013, respectively.

Horizon's net interest margin was 3.62% for the nine months ending September 30, 2014, down from 4.06% for same period of 2013.  Excluding interest income from acquisition-related purchase accounting adjustments, the margin would have been 3.47% for the nine months ending September 30, 2014 compared to 3.61% for same period of 2013. Interest income from acquisition-related purchase accounting adjustments was $2.0 million and $5.4 million for the nine months ended September 30, 2014 and September 30, 2013, respectively.

Residential mortgage lending activity during the third quarter of 2014 generated $2.2 million in income from the gain on sale of mortgage loans, a decrease of $384,000 from the previous quarter and an increase of $486,000 from the third quarter of 2013.  Total origination volume in the third quarter of 2014, including loans placed into portfolio, totaled $102.2 million, representing an increase of 24.0% from the previous quarter of $82.4 million and a decrease of 3.1% from the third quarter of 2013 of $105.4 million.

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Pg. 5 cont. Horizon Bancorp Announces an Increase in Third Quarter Earnings

Purchase money mortgage originations during the third quarter of 2014 represented 77.6% of total originations compared to 77.5% of originations during the previous quarter and 69.5% during the third quarter of 2013.

Lending Activity

Total loans increased $275.1 million from December 31, 2013 to $1.3 billion at September 30, 2014 as mortgage warehouse loans increased by $7.0 million, residential mortgage loans increased by $65.8 million and consumer loans increased by $29.3 million.  Commercial loans increased $172.2 million or 34.1% from $505.2 million at December 31, 2013 to $677.3 million at September 30, 2014.

Total loan balances in the Kalamazoo and Indianapolis markets continued to grow during the third quarter of 2014 to $134.4 million and $120.3 million, respectively, as of September 30, 2014. Kalamazoo's aggregate loan balances increased $7.2 million or 5.7% and Indianapolis' aggregate loan balances increased $18.6 million or 18.3% during the third quarter of 2014.

The provision for loan losses was $1.7 million for the third quarter of 2014 compared to $104,000 for the same period of 2013.  The higher provision for loan losses in the third quarter of 2014 compared to the same period of the previous year was predominantly due to a $1.0 million charge-off associated with one commercial credit during the quarter.  The provision for loan losses was $2.1 million the first nine months of 2014 compared to $2.9 million for the same period of 2013.  The lower provision for the first nine months of 2014 compared to the same period of 2013 was due to a decrease in net charge-offs from $3.3 million for the first nine months of 2013 to $1.9 million for the first nine months of 2014.

The ratio of the allowance for loan losses to total loans decreased to 1.20% as of September 30, 2014 from 1.49% as of December 31, 2013 due to the increase in total loans from both organic growth and the Summit acquisition, partially offset by an increase in allowance for loan losses from $16.0 million as of December 31, 2013 to $16.2 million as of September 30, 2014.  The ratio of the allowance for loan losses to total loans, excluding loans with credit-related purchase accounting adjustments, was 1.32% as of September 30, 2014.

Non-performing loans totaled $19.8 million as of September 30, 2014, up from $18.3 million as of December 31, 2013.  Compared to December 31, 2013, non-performing commercial loans and real estate loans increased by $1.9 million and $167,000, respectively, partially offset by a decrease of $507,000 in non-performing consumer loans.  The increase in non-performing commercial loans was due to the Summit acquisition as well as two commercial and industrial loans totaling $1.2 million that were moved to nonaccrual status.  As a percentage of total loans, non-performing loans were 1.47% at September 30, 2014, down 23 basis points from 1.70% at December 31, 2013.  At September 30, 2014, loans acquired in the Summit acquisition represented $1.2 million in non-performing, $2.5 million in substandard and $4,000 in delinquent loans.

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Pg. 6 cont. Horizon Bancorp Announces an Increase in Third Quarter Earnings

Expense Management

Total non-interest expense was $3.4 million higher in the first nine months of 2014 compared to the first nine months of 2013.  The increase in non-interest expense was primarily related to an increase in salaries of $1.3 million and Summit acquisition expenses of $1.3 million as well as overall company growth.

Use of Non-GAAP Financial Measures

Certain information set forth in this press release refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non-GAAP financial measures of the net interest margin excluding the impact of acquisition-related purchase accounting adjustments and net income and diluted earnings per share excluding the impact of one-time costs related to the Summit acquisition. Horizon believes that these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to the purchase accounting impacts and one-time costs of acquisitions, although these measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure.

 

Non-GAAP Reconciliation of Net Interest Margin
(Dollar Amounts in Thousands, Unaudited)
		Three Months Ended												Nine Months Ended
		September 30				June 30				September 30				September 30
		2014				2014				2013				2014				2013
Net Interest Margin As Reported
Net interest income		$	16,400			$	16,788			$	14,669			$	46,460			$	47,254
Average interest-earning assets			1,877,066				1,832,576				1,607,801				1,770,187				1,617,169
Net interest income as a percent of average interest earning assets			3.59	%			3.78	%			3.78	%			3.62	%			4.06	%
Impact of Acquisitions
Interest income from acquisition-related purchase accounting
adjustments		$	(438	)		$	(1,199	)		$	(1,044	)		$	(2,027	)		$	(5,364	)
Net Interest Margin Excluding Impact of Acquisitions
Net interest income		$	15,962			$	15,599			$	13,625			$	44,433			$	41,890
Average interest-earning assets			1,877,066				1,832,576				1,607,801				1,770,187				1,617,169
Net interest income as a percent of average interest earning assets			3.50	%			3.52	%			3.52	%			3.47	%			3.61	%

 

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Pg. 7 cont. Horizon Bancorp Announces an Increase in Third Quarter Earnings

 

Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share
(Dollar Amounts in Thousands Except per Share Data, Unaudited)
		Three Months Ended								Nine Months Ended
		September 30								September 30
		2014				2013				2014				2013
Non-GAAP Reconciliation of Net Income
Net income as reported		$	4,958			$	4,785			$	13,153			$	15,761
Summit expenses			124				-				1,335				-
Tax Effect			(43	)			-				(467	)			-
Net income excluding Summit expenses		$	5,039			$	4,785			$	14,021			$	15,761
Non-GAAP Reconciliation of Diluted Earnings per Share
Diluted earnings per share as reported		$	0.51			$	0.52			$	1.39			$	1.72
Summit expenses			0.01				-				0.14				-
Tax Effect			(0.00	)			-				(0.05	)			-
Diluted earnings per share excluding Summit expenses		$	0.52			$	0.52			$	1.48			$	1.72

 

 

 

About Horizon

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern and Central Indiana and Southwest and Central 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.horizonbank.com. Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

Forward Looking Statements

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 its Form 10-K.  Undue reliance should not be placed on the forward-looking statements, which speak

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Pg. 8 cont. Horizon Bancorp Announces an Increase in Third Quarter Earnings

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

 

 

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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
		2014				2014				2014				2013				2013
Balance sheet:
Total assets		$	2,037,045			$	2,073,251			$	1,806,583			$	1,758,276			$	1,781,024
Investment securities			495,941				537,618				529,340				518,501				524,054
Commercial loans			677,349				648,202				528,635				505,189				499,584
Mortgage warehouse loans			105,133				140,896				102,146				98,156				113,591
Residential mortgage loans			251,739				235,523				189,893				185,958				189,254
Consumer loans			308,800				296,873				280,120				279,525				278,990
Earning assets			1,860,041				1,882,724				1,649,653				1,604,794				1,624,251
Non-interest bearing deposit accounts			278,527				270,023				238,499				231,096				223,354
Interest bearing transaction accounts			881,299				919,024				840,258				779,966				816,167
Time deposits			289,837				310,056				276,814				280,458				288,799
Borrowings			350,113				340,201				236,043				256,296				242,505
Subordinated debentures			32,603				32,564				32,525				32,486				32,448
Common stockholders' equity			177,280				174,836				157,283				152,020				150,959
Total stockholders' equity			189,780				187,336				169,783				164,520				163,459
Income statement:		Three months ended
Net interest income		$	16,400			$	16,788			$	13,272			$	14,129			$	14,669
Provision for loan losses			1,741				339				-				(997	)			104
Non-interest income			7,390				6,627				5,522				5,687				5,910
Non-interest expenses			15,353				16,408				14,514				15,610				14,061
Income tax expense			1,738				1,890				863				1,088				1,629
Net income			4,958				4,778				3,417				4,115				4,785
Preferred stock dividend			(40	)			(31	)			(31	)			(63	)			(66)
Net income available to common shareholders		$	4,918			$	4,747			$	3,386			$	4,052			$	4,719
Per share data:
Basic earnings per share		$	0.53			$	0.52			$	0.39			$	0.47			$	0.55
Diluted earnings per share			0.51				0.50				0.38				0.45				0.52
Cash dividends declared per common share			0.13				0.13				0.11				0.11				0.11
Book value per common share			19.25				19.00				18.22				17.64				17.52
Tangible book value per common share			15.75				15.47				15.52				14.97				14.82
Market value - high			23.67				22.58				24.91				26.09				25.04
Market value - low		$	20.65			$	19.57			$	20.27			$	21.07			$	20.74
Weighted average shares outstanding - Basic			9,208,707				9,182,986				8,630,966				8,623,360				8,618,969
Weighted average shares outstanding - Diluted			9,588,332				9,560,939				9,021,786				9,020,289				9,019,211
Key ratios:
Return on average assets			0.96	%			0.97	%			0.79	%			0.93	%			1.09%
Return on average common stockholders' equity			10.95				11.82				8.81				10.44				12.60
Net interest margin			3.59				3.78				3.48				3.60				3.78
Loan loss reserve to total loans			1.20				1.18				1.46				1.49				1.64
Non-performing loans to loans			1.47				1.41				1.59				1.70				2.09
Average equity to average assets			9.33				8.79				9.65				9.46				9.22
Bank only capital ratios:
Tier 1 capital to average assets			8.63				8.78				9.11				9.18				9.00
Tier 1 capital to risk weighted assets			12.13				11.47				12.87				13.42				13.17
Total capital to risk weighted assets			13.26				12.53				14.12				14.67				14.42
Loan data:
Substandard loans		$	35,023			$	35,495			$	32,648			$	34,721			$	44,420
30 to 89 days delinquent			3,310				3,671				2,613				3,452				2,692
90 days and greater delinquent - accruing interest		$	62			$	42			$	202			$	48			$	2
Trouble debt restructures - accruing interest			5,838				5,614				4,997				5,053				3,507
Trouble debt restructures - non-accrual			3,061				3,178				3,662				3,427				5,986
Non-accrual loans			10,828				9,844				8,775				9,749				12,986
Total non-performing loans		$	19,789			$	18,678			$	17,636			$	18,277			$	22,481

 

 

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HORIZON BANCORP

Financial Highlights

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

		September 30				September 30
		2014				2013
Balance sheet:
Total assets		$	2,037,045			$	1,781,024
Investment securities			495,941				524,054
Commercial loans			677,349				499,584
Mortgage warehouse loans			105,133				113,591
Residential mortgage loans			251,739				189,254
Consumer loans			308,800				278,990
Earning assets			1,860,041				1,624,251
Non-interest bearing deposit accounts			278,527				223,354
Interest bearing transaction accounts			881,299				816,167
Time deposits			289,837				288,799
Borrowings			350,113				242,505
Subordinated debentures			32,603				32,448
Common stockholders' equity			177,280				150,959
Total stockholders' equity			189,780				163,459
Income statement:		Nine Months Ended
Net interest income		$	46,460			$	47,254
Provision for loan losses			2,080				2,917
Non-interest income			19,539				20,219
Non-interest expenses			46,275				42,835
Income tax expense			4,491				5,960
Net income			13,153				15,761
Preferred stock dividend			(102	)			(308)
Net income available to common shareholders		$	13,051			$	15,453
Per share data:
Basic earnings per share		$	1.45			$	1.79
Diluted earnings per share			1.39				1.72
Cash dividends declared per common share			0.37				0.31
Book value per common share			19.25				17.52
Tangible book value per common share			15.75				14.82
Market value - high			24.91				25.04
Market value - low		$	19.57			$	18.97
Weighted average shares outstanding - Basic			9,009,663				8,617,972
Weighted average shares outstanding - Diluted			9,389,359				8,998,628
Key ratios:
Return on average assets			0.92	%			1.20%
Return on average common stockholders' equity			10.56				13.69
Net interest margin			3.62				4.06
Loan loss reserve to total loans			1.20				1.64
Non-performing loans to loans			1.47				2.07
Average equity to average assets			9.25				9.31
Bank only capital ratios:
Tier 1 capital to average assets			8.63				9.00
Tier 1 capital to risk weighted assets			12.13				13.17
Total capital to risk weighted assets			13.26				14.42
Loan data:
Substandard loans		$	35,023			$	44,420
30 to 89 days delinquent			3,310				2,692
90 days and greater delinquent - accruing interest		$	62			$	2
Trouble debt restructures - accruing interest			5,838				3,507
Trouble debt restructures - non-accrual			3,061				5,986
Non-accrual loans			10,828				12,986
Total non-performing loans		$	19,789			$	22,481

 

 

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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
		2014				2014				2013				2013				2013
Commercial		$	7,515			$	6,958			$	7,236			$	6,663			$	7,663
Real estate			3,304				2,367				2,813				3,462				3,238
Mortgage warehousing			1,300				1,559				1,665				1,638				1,686
Consumer			4,041				4,776				4,388				4,229				5,261
Unallocated			-				-				-				-				-
Total		$	16,160			$	15,660			$	16,102			$	15,992			$	17,848

 

Net Charge-offs (Recoveries)

(Dollars in Thousands, Unaudited)

 

		Three months ended
		September 30				June 30				March 31				December 31				September 30
		2014				2014				2013				2013				2013
Commercial		$	1,006			$	185			$	(361	)		$	214			$	604
Real estate			19				169				18				350				40
Mortgage warehousing			-				-				-				-				-
Consumer			217				426				233				295				492
Total		$	1,242			$	780			$	(110	)		$	859			$	1,136

 

 

 

Total Non-performing Loans

(Dollars in Thousands, Unaudited)

 

		September 30				June 30				March 31				December 31				September 30
		2014				2014				2013				2013				2013
Commercial		$	9,323			$	8,243			$	7,313			$	7,471			$	7,887
Real estate			6,312				6,672				6,357				6,145				8,093
Mortgage warehousing			-				-				-				-				-
Consumer			4,154				3,763				3,966				4,661				6,501
Total		$	19,789			$	18,678			$	17,636			$	18,277			$	22,481

 

 

Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands, Unaudited)

 

		September 30				June 30				March 31				December 31				September 30
		2014				2014				2013				2013				2013
Commercial		$	376			$	452			$	812			$	830			$	954
Real estate			875				752				867				1,277				385
Mortgage warehousing			-				-				-				-				-
Consumer			3				23				39				14				44
Total		$	1,254			$	1,227			$	1,718			$	2,121			$	1,383

 

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HORIZON BANCORP AND SUBSIDIARIES

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

 

		Three Months Ended												Three Months Ended
		September 30, 2014												September 30, 2013
		Average								Average				Average								Average
		Balance				Interest				Rate				Balance				Interest				Rate
ASSETS
Interest-earning assets
Federal funds sold		$	4,033			$	5				0.49	%		$	10,140			$	6				0.23%
Interest-earning deposits			5,941				4				0.27	%			6,834				2				0.12%
Investment securities - taxable			394,954				2,330				2.34	%			356,275				2,076				2.31%
Investment securities - non-taxable (1)			146,513				1,109				4.48	%			146,622				1,114				4.71%
Loans receivable (2)(3)			1,325,625				16,403				4.92	%			1,087,930				14,843				5.42%
Total interest-earning assets (1)			1,877,066				19,851				4.32	%			1,607,801				18,041				4.61%
Noninterest-earning assets
Cash and due from banks			27,188												24,619
Allowance for loan losses			(15,706	)											(18,910	)
Other assets			155,021												133,890
		$	2,043,569											$	1,747,400
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits		$	1,204,122			$	1,352				0.45	%		$	1,081,256			$	1,395				0.51%
Borrowings			320,676				1,593				1.97	%			236,071				1,465				2.46%
Subordinated debentures			32,580				506				6.16	%			32,425				512				6.26%
Total interest-bearing liabilities			1,557,378				3,451				0.88	%			1,349,752				3,372				0.99%
Noninterest-bearing liabilities
Demand deposits			282,494												224,622
Accrued interest payable and
other liabilities			12,979												11,904
Shareholders' equity			190,718												161,122
		$	2,043,569											$	1,747,400
Net interest income/spread						$	16,400				3.44	%						$	14,669				3.62%
Net interest income as a percent
of average interest earning assets (1)											3.59	%											3.78%

 

 

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HORIZON BANCORP AND SUBSIDIARIES

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

 

		Nine Months Ended												Nine Months Ended
		September 30, 2014												September 30, 2013
		Average								Average				Average								Average
		Balance				Interest				Rate				Balance				Interest				Rate
ASSETS
Interest-earning assets
Federal funds sold		$	6,559			$	9				0.18	%		$	9,480			$	11				0.16%
Interest-earning deposits			6,547				7				0.14	%			8,186				5				0.08%
Investment securities - taxable			395,255				7,108				2.40	%			365,569				6,137				2.24%
Investment securities - non-taxable (1)			146,643				3,328				4.33	%			133,011				3,105				4.88%
Loans receivable (2)(3)			1,215,183				45,988				5.07	%			1,100,923				48,189				5.86%
Total interest-earning assets (1)			1,770,187				56,440				4.37	%			1,617,169				57,447				4.90%
Noninterest-earning assets
Cash and due from banks			26,736												24,588
Allowance for loan losses			(15,892	)											(18,980	)
Other assets			140,698												133,544
		$	1,921,729											$	1,756,321
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits		$	1,171,343			$	3,984				0.45	%		$	1,091,635			$	4,320				0.53%
Borrowings			274,322				4,493				2.19	%			239,323				4,369				2.44%
Subordinated debentures			32,541				1,503				6.18	%			32,386				1,504				6.21%
Total interest-bearing liabilities			1,478,206				9,980				0.90	%			1,363,344				10,193				1.00%
Noninterest-bearing liabilities
Demand deposits			253,331												215,869
Accrued interest payable and
other liabilities			12,454												13,657
Shareholders' equity			177,738												163,451
		$	1,921,729											$	1,756,321
Net interest income/spread						$	46,460				3.47	%						$	47,254				3.90%
Net interest income as a percent
of average interest earning assets (1)											3.62	%											4.06%

 

 

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HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

 

		September 30				December 31
		2014				2013
		(Unaudited)
Assets
Cash and due from banks			37,318			$	31,721
Investment securities, available for sale			323,492				508,591
Investment securities, held to maturity (fair value of $175,838 and $9,910)			172,449				9,910
Loans held for sale			4,167				3,281
Loans, net of allowance for loan losses of $16,160 and $15,992			1,326,861				1,052,836
Premises and equipment, net			50,945				46,194
Federal Reserve and Federal Home Loan Bank stock			16,912				14,184
Goodwill			28,034				19,748
Other intangible assets			4,193				3,288
Interest receivable			8,411				7,501
Cash value life insurance			39,120				36,190
Other assets			25,143				24,832
Total assets		$	2,037,045			$	1,758,276
Liabilities
Deposits
Non-interest bearing		$	278,527			$	231,096
Interest bearing			1,171,136				1,060,424
Total deposits			1,449,663				1,291,520
Borrowings			350,113				256,296
Subordinated debentures			32,603				32,486
Interest payable			477				506
Other liabilities			14,409				12,948
Total liabilities			1,847,265				1,593,756
Commitments and contingent liabilities
Stockholders' Equity
Preferred stock, Authorized, 1,000,000 shares
Series B shares $.01 par value, $1,000 liquidation value
Issued 12,500 shares			12,500				12,500
Common stock, no par value
Authorized, 22,500,000 shares
Issued, 9,280,041 and 8,706,971 shares
Outstanding, 9,210,786 and 8,630,966 shares			-				-
Additional paid-in capital			45,729				32,496
Retained earnings			130,864				121,253
Accumulated other comprehensive income (loss)			687				(1,729	)
Total stockholders' equity			189,780				164,520
Total liabilities and stockholders' equity		$	2,037,045			$	1,758,276