Horizon Bancorp is reporting a net income in the first quarter of 2010 of
$1.8 million or 44 cents diluted earnings per share, compared to a net
income in the year-ago period of $2.6 million or 71 cents diluted earnings
Diluted earnings per share were reduced by 11 cents in both the first
quarter of 2010 and that of 2009 by preferred stock dividends and the
accretion of discount of the preferred stock.
“We are proud to report a continuation of quarterly profits given the
economic challenges and stress on loan portfolios throughout the industry,”
Horizon CEO Craig Dwight said in a statement released on Thursday.
“Horizon’s success is a result of the cumulative effort of our dedicated
team and their ability to accomplish goals and seek new opportunities.”
Net interest income decreased $863,000 in the first quarter from the
year-ago period due to lower interest income from lower interest earning
assets, partially offset by a decrease in the cost of funds, the statement
The net interest margin decreased to 3.55 percent in the first quarter from
3.78 percent in the year-ago period, the result of maintaining a high
average balance of cash and cash equivalents during the quarter, producing a
low yield along with a decrease in the yields on interest earning assets
which exceeded the decrease for the rates paid on interest bearing
The provision for loan losses was $3.2 million in the first quarter, roughly
the same as in the year-ago period and lower than those in the second,
third, and fourth quarters of 2009, the statement said. “Consumer loan
charge-offs continue to require quarterly provisions for loan losses but
appear to be stabilizing as the amount of consumer charge-offs leveled off
over the past two quarters.
However, the increase in commercial charge-offs during the first quarter of
2010 and the level of non-performing loans required continued provision
expense for anticipated loan losses.”
Non-performing loans totaled $16.4 million on March 31, down from $17.1
million on Dec. 31, 2009, but up from $10.5 million on March 31, 2009, the
statement said. As a percentage of total loans, it was 1.98 percent on March
31, up slightly from 1.92 percent on Dec. 31, 2009, and up somewhat more
from 1.11 percent on March 31, 2009.
“The slight increase in the company’s non-performing loans over the past
year can be attributed to the continued national and local economic
problems, including continued high unemployment causing lower business
revenues and increased consumer bankruptcies,” the statement said.
Nevertheless, Horizon’s non-performing loan numbers compare favorably to the
national and state peer averages of 4.66 percent and 2.71 percent
respectively as of Dec. 31, 2009.
Residential mortgage loan activity continued to be steady through the first
quarter of 2010 with $1.4 million from gain on sale of mortgage loans, up
from $1.2 million in the fourth quarter of 2009 but down from $1.9 million
in the year-ago period.
Total other expenses were $157,000 higher in the first quarter of 2010 than
in the year-ago period, the statement said.
“Loan collection costs, which are included in loan expense and FDIC
insurance, contributed to the increase,” as did $109,000 recognized during
the first quarter related to the anticipated purchase and assumption of
American Trust & Savings Bank.
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.