Chesterton Tribune

Horizon Bancorp posts solid 2Q: 'We are not afraid to lend'

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Horizon Bancorp is reporting a net income in the second quarter of 2011 of $3.1 million or 83 cents per diluted share, compared to $2.5 million or 65 cents in the year-ago period, an increase of 23 percent.

Net income for the first half of 2011 was $5.9 million or $1.57 per diluted share, compared to $4.3 million or $1.09 in the year-ago period, “the highest first six months of net income in the company’s history,” Horizon said in a statement released on Wednesday.

“Our continuing ability to generate record earnings reflects our commitment to balanced revenue streams and the tremendous dedication and quality of Horizon’s employees,” said Horizon President and CEO Craig Dwight. “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.”

“While a slowdown in residential mortgage lending and refinancing led to lower income from mortgage warehousing, other areas of our diversified and balanced business mix more than offset the decline,” Dwight added. “This is our strategy which is working as designed.”

“The operating efficiencies implemented in the past several years have made us more productive and profitable,” Dwight also said. “Economic recovery is slow, with businesses and consumers remaining cautious and conservative. We have focused on pursuing every quality opportunity available to build and expand banking relationships.”

“An encouraging sign for Horizon and the economy is a measurable reduction of non-accrual loans and a decline in loans that are 30 to 89 days delinquent, which represent the highest risk for requiring additional loan loss reserves or restructuring,” Dwight said.

Other Numbers

•Total deposits surpassed $1 billion on June 30 and increased by $34.8 million since Dec. 31, 2010.

•Borrowings decreased by $30.6 million since Dec. 31.

•Net interest income, after provisions from loan losses, was $19.7 million for the first half of 2011, compared to $15.7 million for the year-ago period.

•Non-performing loans decreased by 6.7 percent in the second quarter of 2011 compared to the year-ago period.

•The provision for loan losses decreased to $2.9 million for the first half of 2011, compared to $6.2 million for the year-ago period.

•The company’s mortgage servicing asset recovered $728,000 of impairment during the first half of 2011 as mortgage loan refinancing activity slowed.

•Horizon’s tangible book value per share rose to $28.76, compared to $25.39 at June 20, 2010.

•The company’s capital ratios “continued to be well above the regulatory standards for well-capitalized banks.”


Total loans decreased during the first half of 2011 by $48.7 million, as a result of decreased financing activity, Horizon said, while residential mortgage loan activity generated $1.3 million of income in the second quarter, down $366,00 from the year-ago period but up $755,000 compared to the first quarter of 2011.

Non-performing loans total $20.6 million on June 30, 2011, down from $22.1 million on March 31, 2011, and from $21.2 million on June 30, 2010. As a percentage of total loans, non-performing loans were 2.44 percent on June 30, 2010, down from 2.71 percent on March 31, 2011, but up from 2.6 percent on June 30, 2010. “The increase from a year ago was due to a decrease in total loans,” Horizon said.

“We have confidence in our credit analysis and risk management capabilities,” Dwight said. “We believe the decrease in total non-performing loans indicates a slowing of financial problems caused by the sluggish economy, challenging employment conditions, and a housing market that continues to struggle with an overload of inventory.”

“We continue to reserve for potential loan losses but we believe the outlook is significantly more encouraging than a year ago,” Dwight said. “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. We are not afraid to lend.”


Horizon Bancorp is a locally owned, independent commercial bank hold company serving Northern Indiana and Southwest Michigan. It also offers mortgage-banking services throughout the Midwest. Its common stock trades on the NASDAQ Global Market under the symbol HBNC.


Posted 7/28/2011