Chesterton Tribune

Horizon Bancorp posts record earnings in 2009

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Horizon Bancorp is reporting a tenth consecutive year of record earnings in 2009.

According to a statement released on Monday, Horizon posted a net income last year of $9.14 million or $2.37 diluted earnings per share, compared to $8.97 million or $2.75 diluted earnings per share in 2008.

“We are extremely pleased with Horizon’s performance in 2009, especially given the current economic environment, the increase in credit costs, and the increase in FDIC insurance premiums,” Horizon Bancorp Craig Dwight said. “Horizon’s talented team was able to achieve record earnings for the tenth consecutive year, due to hard work, investing our resources in counter-cyclical business lines, and preparing for the future.”

“The future looks very promising for well run and profitable banks,” Dwight added. “Horizon is well positioned to capitalize on these opportunities. Horizon is safe, strong, and still growing.”

Net income in the fourth quarter was $2.08 million or 53 cents diluted earnings per share, compared to $2.12 or 64 cents diluted earnings per share in the year-ago period.

Diluted earnings per share were reduced by 43 cents for the year and 11 cents for the fourth quarter due to preferred stock dividends and the accretion of the discount on preferred stock, the statement said.

Net interest increased $7.4 million for the year and $1.7 million for the fourth quarter, “primarily due to an increase in interest-earning assets and a decrease in the cost of funds,” the statement said.

Other Numbers

•The provision for loan losses was $3.7 million in the fourth quarter, compared to $2.2 million in the year-ago period. “Consumer loan charge-offs continue to require quarterly provisions for loan losses but appear to be stabilizing as the amount of consumer charge-offs has been decreasing over the last three quarters,” the statement said.

•On Dec. 31 non-performing loans total $17.1 million or 1.92 percent of total loans, compared to $16.5 percent or 1.87 percent on Sept. 30 and $7.9 million or 0.89 percent on Dec. 31, 2008. “Horizon’s non-performing loan statistics, while having increased from the prior quarter, still compare favorably to national and State of Indiana peer bank averages of 4.48 percent and 2.71 percent of total loans as of Sept. 30, 2009,” the statement said.

Horizon Bancorp noted that the increase in non-performing loans over the last quarter is due to an increase of consumer installment borrowers under Chapter 13 bankruptcy repayment plans. “The majority of consumer installment borrowers under Chapter 13 repayment plans are paying as agreed but these loans remain on non-accrual status until six payments are made under the plan,” the statement said.

•Non-accrual loans totaled $15.4 million on Dec. 31, down slightly from $15.5 million on Sept. 30 but up from $7 million on Dec. 31, 2008. Non-accrual loans to restaurant operators totaled $2.6 million on Dec. 31, the same as on Sept. 30; to home builders and land developers, $2.2 million on Dec. 31, compared to $2.7 million on Sept. 30.

•Loans 90 days delinquent but still accruing interest totaled $1.7 million on Dec. 31, compared to $856,000 on Sept. 30 and $833,000 on Dec. 31, 2008. “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,” the statement said.

•Other Real Estate Owned (OREO) totaled $1.7 million on Dec. 31, the same as on Sept. 30 and down from $2.9 million on Dec. 31, 2008. On Dec. 31, OREO was comprised of 32 properties. Of these 32, 31 totaling $1.6 million were residential and the balance was commercial real estate.

•Repossessed property total $23,000 on Dec. 31, down from $142,000 on Sept. 30. Repossessed property consists mostly of vehicles.

•Residential loan activity “continued to be steady through the fourth quarter as evidenced by volumes higher than the prior year in both the conventional residential mortgage and mortgage warehouse business lines,” the statement said. Conventional residential mortgage refinancing activity increased the gain on sale of loans by $3.1 million in 2009 compared to 2008.

•Salaries and benefits increased by $2.5 million in 2009 “primarily due to branch expansion, annual merit increases, and commissions paid to the Mortgage Loan Division, as the primary cost to originate residential mortgage loans is the commissions paid to mortgage originators,” the statement said.

•FDIC expense totaled $2.1 million in 2009, compared to $546,000 in 2008, “due to higher assessment rates and a special assessment paid in 2009,” the statement said.

Horizon Bancorp is a locally owned, independent commercial bank holding company serving Northern Indiana and Southwest Michigan. It trades on the NASDAQ under the symbol HBNC.



Posted 3/2/2010