SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the quarterly period ended June 30, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the transition period from ______________ to _______________
Commission file number 0-27062
Horizon Financial Corp.
(Exact name of registrant as specified in its charter)
Chartered by the State of Washington
(State or other jurisdiction of incorporation or organization)
91-1695422
(IRS Employer Identification No.)
1500 Cornwall Avenue
Bellingham, Washington
(Address of principal executive offices)
98225
(Zip Code)
Registrant's telephone number including area code: (360) 733-3050
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
As of August 13, 1998, 7,497,775 common shares, $1.00 par value, were
outstanding.
<PAGE>
HORIZON FINANCIAL CORP.
INDEX PAGE
PART 1 FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Statements of Financial Condition 1
Consolidated Statements of Operations 2
Consolidated Statements of Stockholders' Equity 3
Consolidated Statements of Cash Flow 4-5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-11
PART II OTHER INFORMATION
Item 1 Legal Proceedings 12
Item 2 Changes in Securities 12
Item 3 Defaults Upon Senior Securities 12
Item 4 Submission of Matters to a Vote of Security Holders 12
Item 5 Other Information 12
Item 6 Exhibits and Reports on Form 8-K 12
SIGNATURES
<PAGE>
HORIZON FINANCIAL CORP.
Consolidated Statements of Financial Condition
June 30, March 31,
1998 1998
(unaudited)
ASSETS:
Cash and Due from Banks $ 6,560,667 $ 6,878,615
Interest-Bearing Deposits 2,686,516 9,980,349
Investment Securities - Available
for Sale 29,833,305 33,813,752
Investment Securities-Held to Maturity 989,777 1,985,941
Mortgage-Backed Securities - Available
for Sale 44,072,534 33,352,267
Mortgage-Backed Securities - Held to
Maturity 14,382,005 15,488,523
Loans Receivable 442,050,968 433,697,267
Accrued Interest and Dividends
Receivable 3,466,942 3,678,614
Property and Equipment, Net 6,637,128 6,046,468
Other Assets 2,383,585 2,224,500
Total Assets $553,063,427 $547,146,296
LIABILITIES:
Deposits $451,573,186 $450,125,058
Borrowings 4,940,000 -0-
Accounts Payable and Other
Liabilities 5,322,393 7,925,825
Advances by Borrowers for Taxes
and Insurance 465,050 920,995
Deferred Compensation 1,271,274 1,275,000
Net Deferred Income Tax Liabilities 2,883,506 2,879,728
Federal income Tax Payable 1,225,984 124,893
Total Liabilities 467,681,393 463,251,499
STOCKHOLDERS' EQUITY:
Serial Preferred Stock, $1.00 Par Value,
10,000,000 Shares Authorized;
None Issued or Outstanding
Common Stock, $1.00 Par Value,
30,000,000 Shares Authorized;
7,737,041 and 7,726,762 Issued
and Outstanding 7,737,041 7,726,762
Paid-in Capital 53,971,680 53,821,396
Retained Earnings 23,828,935 22,509,593
Accumulated Other Comprehensive Income 3,143,009 3,135,677
Debt Related to ESOP (400,000) (400,000)
Treasury Stock-249,090 and 249,090 Held (2,898,631) (2,898,631)
Total Stockholders' Equity 85,382,034 83,894,797
Total Liabilities and Stockholders'
Equity $553,063,427 $547,146,296
(See Notes to Financial Statements)
<PAGE>
HORIZON FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
3 Months Ended
June 30
1998 1997
INTEREST INCOME:
Interest on Loans $ 9,191,085 $ 8,412,847
Interest and Dividends on Investment
and Mortgage-Backed Securities 1,418,037 1,529,766
Total Interest Income 10,609,122 9,942,613
INTEREST EXPENSE:
Interest on Deposits 5,702,980 5,387,132
Interest on Borrowings 51,305 -0-
Total Interest Expense 5,754,285 5,387,132
Net Interest Income 4,854,837 4,555,481
Provision for Loan Losses 320,000 30,000
Net Interest Income After
Provision for Loan Losses 4,534,837 4,525,481
NON-INTEREST INCOME:
Service Fees 409,033 293,313
Net Gain(Loss) on Sale of Loans (114,712) (85,250)
Net Gain(Loss) on Sale of Investments 301,836 23,925
Other 66,765 50,014
Total Non-Interest Income 662,922 282,002
NON-INTEREST EXPENSE:
Compensation and Employee Benefits 973,734 995,028
Building Occupancy 298,898 290,534
FDIC Insurance 13,735 13,436
Data Processing 124,259 105,493
Advertising 101,031 78,110
Other Expenses 441,935 312,575
Total Non-Interest Expense 1,953,592 1,795,176
Income Before Provision for
Income Taxes 3,244,167 3,012,307
Provision for Income Taxes 1,101,091 1,021,259
Net Income 2,143,076 1,991,048
EARNINGS PER SHARE:
Basic earnings per share $ .29 $ .27
Diluted earnings per share $ .28 $ .27
(See Notes to Financial Statements)
<PAGE>
<TABLE>
HORIZON FINANCIAL CORP.
Consolidated Statements of Changes in Stockholder's Equity
3 Months Ended June 30, 1998 and 1997
(unaudited)
Net Unrealized
Common Stock Additional Gains(Losses) Debt
Number Paid-In Retained on Related Treasury
of Shares at Par Capital Earnings Securities to ESOP Stock Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at 3/31/97 6,650,340 $6,650,340 $40,063,678 $ 34,518,794 $ 624,833 $(450,000) $(2,898,631) $78,509,014
Cash div on common stk
at $.10 per share (741,712) (741,712)
Stock opts exercised 11,484 11,484 42,252 53,736
DRIP 6,111 6,111 86,317 92,428
Net change in other
comprehensive income 1,015,305 1,015,305
15% stock dividend 997,952 997,952 13,035,748 (14,033,700) -0-
Cash paid for
fractional shares (8,934) (8,934)
Net income 1,991,048 1,991,048
Balance at 6/30/97 7,665,887 $7,665,887 $53,227,995 $ 21,725,496 $1,640,138 $(450,000) $(2,898,631) $80,910,885
Balance at 3/31/98 7,726,762 $7,726,762 $53,821,396 $ 22,509,593 $3,135,677 $(400,000) $(2,898,631) $83,894,797
Cash div on common
stock at $.11 per sh. (823,734) (823,734)
Stock opts. exercised 2,923 2,923 25,696 28,619
DRIP 7,356 7,356 124,588 131,944
Net change in other
comprehensive income 7,332 7,332
Net income 2,143,076 2,143,076
Balance at 6/30/98 7,737,041 $7,737,041 $53,971,680 $ 23,828,935 $3,143,009 $(400,000) $(2,898,631) $85,382,034
(See Notes to Financial Statements)
</TABLE>
<PAGE>
HORIZON FINANCIAL CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
3 Months Ended
June 30,
1998 1997
Cash Flows from Operating Activities:
Net Income $ 2,143,076 $ 1,991,048
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Depreciation 121,520 111,600
Amortization and Deferrals, Net 9,381 (39,582)
Provision for Loan Losses 320,000 30,000
Changes in Assets and Liabilities:
Interest & Dividends Receivable 211,672 118,029
Interest Payable 20,362 (45,926)
Federal Income Taxes (Rec)/Payable 1,101,091 724,067
Other Assets (159,085) (98,985)
Other Liabilities (3,083,465) (3,942,336)
Net Cash Flows from Operating Activities 684,552 (854,793)
Cash Flows From Investing Activities:
Change in Interest-Bearing Deposits, Net $ 7,293,833 $ 998,237
Purchases of Investment Securities - AFS -0- (1,246,719)
Proceeds from Sales and Maturities of
Investment Securities - AFS 3,813,249 2,971,648
Purchases of Investment Securities - HTM -0- -0-
Proceeds from Sales and Maturities of
Investment Securities - HTM 996,164 (4,429)
Purchases of Mtge Backed Sec - AFS -0- -0-
Purchases of Mtge Backed Sec - HTM -0- -0-
Proceeds from Mat of Mtge Backed Sec - AFS 7,415,266 534,325
Proceeds from Mat of Mtge Backed Sec - HTM 1,106,518 725,933
Proceeds from borrowings 10,005,000 -0-
Payments on borrowings (5,065,000) -0-
Proceeds from Sale of Loans 11,316,432 9,304,402
Principal Payments on Loans 30,462,266 18,081,333
Originations and Purchases of Loans (68,419,005) (33,232,705)
Purchases of Bank Premises and
Equipment (712,180) (61,106)
Net Cash Flows From Investing
Activities $(1,787,457) $(1,929,081)
(See Notes to Financial Statements)
<PAGE>
HORIZON FINANCIAL CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
3 Months Ended
June 30,
1998 1997
Cash Flows From Financing Activities:
Change in Checking and
Savings Accounts, Net 400,234 (2,154,046)
Proceeds From Issuance of Time Deposits 34,063,887 44,476,284
Payments for Maturing Time Deposits (33,015,993) (38,662,903)
Common Stock Issued, Net 160,563 137,229
Cash Dividends Paid (823,734) (741,712)
Net Cash Flows from Financing
Activities 784,957 3,054,852
Net Change in Cash and Cash Equivalents (317,948) 270,978
Cash and Cash Equivalents,
Beginning of Year 6,878,615 4,416,862
Cash and Cash Equivalents,
End of Year $6,650,667 $4,687,840
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Cash Paid During the Period for:
Interest Expense $5,687,980 $5,433,058
Income Taxes $ -0- $ -0-
<PAGE>
HORIZON FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED JUNE 30, 1998
(unaudited)
NOTE A - Basis of Presentation
The unaudited consolidated financial statements have been prepared in
accordance with general accepted accounting principles for interim financial
information and with the instructions to the Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation are reflected in the interim financial statements. The results
of operations for the periods ended June 30, 1998 and 1997 are not
necessarily indicative of the operating results for the full year. The
March 31, 1998, consolidated statement of financial condition presented with
the interim financial statements was audited and received an unqualified
opinion. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Bank's annual report for
the year ended March 31, 1998.
On October 13, 1995, Horizon Bank, a savings bank, ("Bank") reorganized into
the holding company form of ownership ("Reorganization"), resulting in
the Registrant becoming the sole stockholder of the Bank. Each outstanding
share of common stock of the Bank and options to acquire shares of common
stock of the Bank, became outstanding shares of common stock of the
Registrant and options to acquire shares of common stock of the Registrant,
respectively, as a result of the Reorganization. The consolidated financial
statements for the three months ended June 30, 1998, include the accounts of
Horizon Financial Corp., the Bank and other subsidiaries of the Bank.
Significant intercompany balances and transactions have been eliminated in
consolidation.
Prior to Reorganization, Horizon Financial Corp. had no material assets or
liabilities and engaged in no business activity. Subsequent to the
acquisition of the bank, Horizon Financial Corp. has engaged in no
significant activity other than holding the stock of the Bank.
NOTE B - Net Income Per Share
Earnings per share for the three months ended June 30, 1998 and 1997 are
calculated on the basis of 7,484,156 and 7,407,760 weighted average shares
outstanding, respectively. Diluted earnings per share for the three months
ended June 30, 1998 and 1997 are calculated on the basis of 7,525,985 and
7,503,211 weighted average shares outstanding, respectively. Diluted EPS
amounts are computed by determining the number of additional shares that
are deemed outstanding due to the stock options under the treasury stock
method.
NOTE C - Reclassification
Certain reclassifications have been made to prior financial statements to
conform with current presentation. Such reclassifications have no effect on
net income.
<PAGE>
HORIZON FINANCIAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
General
Horizon Financial Corp. was formed under Washington law on May 22, 1995,
and became the holding company for Horizon Bank, effective October 13, 1995.
The Corporation, as a bank holding company, has a number of additional options
and operating advantages over the Bank. These include, but are not limited to:
expanded business diversification options; flexibility in acquisitions; and
the ability to repurchase its own stock without incurring the adverse tax
consequences of recapturing portions of the Bank's bad debt reserve.
The Bank was organized in 1922 as a Washington state-chartered mutual savings
and loan association and converted to a federal mutual savings and loan
association in 1934. In 1979, the Bank converted to a Washington state-
chartered mutual savings bank, the deposits of which are insured by the
Federal Deposit Insurance Corporation ("FDIC"). On August 12, 1986, the Bank
then converted to a state-chartered stock savings bank. The primary business
of the Bank is to acquire funds in the form of savings deposits and to use
the funds to make loans secured by residential and commercial properties in
the Bank's primary market area. The Bank's operations are conducted through
twelve full-service office facilities, located in Whatcom, Skagit and
Snohomish counties in northwest Washington.
At its March 26, 1996, meeting, the Board of Directors authorized the
repurchase of up to 10% (approximately 655,000 shares) of the Corporation's
outstanding common stock over a 24-month period. This authorization ended in
March of 1998. At its March 19, 1998 meeting, the Board of
Directors authorized the repurchase of up to 10% (approximately 747,000 shares)
of the Corporation's outstanding common stock over the subsequent 24 month
period. During the quarter ended June 30, 1998, the Corporation repurchased
no shares of its common stock.
On April 22, 1997, the Corporation declared a 15% stock dividend. The
appropriate historical figures presented herein have been restated to reflect
this stock dividend.
Financial Condition
Total consolidated assets for the Corporation as of June 30, 1998, were
$553,063,427, an increase of 1.08% from the March 31, 1998, level of
$547,146,296. This increase in assets was due primarily to the growth in
loans receivable, which increased 1.93% to $442,050,968 at June 30, 1998,
from $433,697,267 at March 31, 1998.
Total liabilities increased .96% to $467,681,393 at June 30, 1998, from
$463,251,499 at March 31, 1998. The increase in liabilities was due
primarily to the addition of $4,940,000 in borrowings to the balance sheet
in the form of repurchase agreements. The Bank intends to utilize borrowed
funds as a strategy to supplement the liability side of the balance sheet as
the opportunity presents itself.
Total stockholders' equity increased 1.77% to $85,382,034 at June 30, 1998,
from $83,894,797 at March 31, 1998.
Liquidity and Capital Resources
The Bank maintains liquid assets in the form of cash and short-term
investments to provide a source to fund loans, savings withdrawals and other
short-term cash requirements. At June 30, 1998, the Bank had liquid assets
(cash and marketable securities with maturities of one year or less) with a
book value of $19,448,342.
As of June 30, 1998, the total amortized cost of investments and
mortgage-backed securities was $84,515,487 compared to a market value of
$89,608,650 , resulting in an unrealized gain of $5,093,163. On March 31,
1998, the amortized cost of investments and mortgage-backed securities was
$79,889,458 compared to a market value of $84,958,025, resulting in an
unrealized gain of $5,068,567.
The Bank's primary sources of funds are cash flow from operations, which
consist primarily of mortgage loan repayments; deposit increases; loan sales;
and cash received from the maturity or sale of investment securities. These
funds are primarily used to originate mortgage loans on real estate.
The Bank's liquidity fluctuates with the supply of funds, and management
believes that the current level of liquidity is adequate at this time. If
additional liquidity is needed, the Bank's options include, but are not
necessarily limited to: (1) selling additional loans in the secondary market;
(2) reverse repurchase agreements; (3) accepting additional jumbo and/or
public funds deposits; or (4) accessing the discount window of the Federal
Reserve Bank of San Francisco.
Stockholders' equity to total assets was 15.44% as of June 30, 1998, well in
excess of the 5.0% minimum required by the FDIC in order to be considered
well capitalized.
<PAGE>
Comparative Results of Operations
For the Three Months Ended
June 30, 1998 and 1997
Net Interest Income
Net interest income for the three months ended June 30, 1998, increased 6.57%
to $4,854,837 from $4,555,481 in the same time period of the previous year.
Interest on loans for the quarter ended June 30, 1998, increased 9.25% to
$9,191,085 from $8,412,847. This increase was due to an active quarter for
loan originations and loan sales, which resulted in increased recognition of
loan fee income during the quarter. Interest and dividends on investments and
and mortgage-backed securities decreased 7.30% to $1,418,037 from $1,529,766
for the comparable quarter a year ago. This is primarily due to the lower
level of interest rates and the lack of significant growth in the Bank's
security portfolio between the two periods, as available funds were used
primarily to fund mortgages during the quarter, instead of purchasing
investments for the investment portfolio.
Total interest income increased 6.70% to $10,609,122 from $9,942,613. This
increase is primarily attributable to an overall increase in interest earning
assets over the prior period. Total interest paid on deposits increased
5.86% to $5,702,980 from $5,387,132. This increase in interest expense is due
to the overall deposit growth of the Bank, along with increasing competition
facing the Bank in attracting deposits. Interest on borrowings increased to
$51,305 during the quarter, compared to -0- for the comparable period one year
ago. During the quarter, the Bank borrowed funds in the wholesale markets
using repurchase agreements. The Bank's management intends to futher utilize
wholesale funding in the future, as appropriate opportunities arise.
The weighted average yield on all earning assets for the quarter ended
June 30, 1998, increased 4 basis points to 8.06% from 8.02% for the quarter
ended June 30, 1997. The weighted average yield on loans increased 2 basis
points to 8.38% from 8.36%, and the weighted average yield on investments
decreased 8 basis points to 6.47% from 6.55%.
The Bank's cost of funds for the quarter ended June 30, 1998, was unchanged
from the quarter ended June 30, 1997 at 5.09%. Therefore, the Bank's interest
rate spread increased 4 basis points to 2.97% for the quarter ended June 30,
1998, compared to 2.93% for the prior period, due to the increase in the
interest earning asset yield.
Net interest income for the three months ended June 30, 1998, after provision
for loan losses, increased .21% to $4,534,837 from $4,525,481. Provisions
for loan losses increased to $320,000 during the quarter ended June 30, 1998,
compared to $30,000 for the same period one year ago. While the Bank had only
three loans totaling $117,347 over 90 days delinquent at June 30, 1998,
management considered it to be a prudent practice to make these additions to
its loan loss reserves.
Non Interest Income
Non interest income for the three months ended June 30, 1998, increased 135%
to $662,922 from $282,002 for the same time period a year ago. Service fee
income increased 39.45% to $409,033 from $293,313. This increase at June 30,
1998 was primarily due to increased appraisal and escrow fees recognized during
an active quarter for loan originations. The net gain/loss on the sale of
loans showed a loss of $114,712 during the quarter, compared to a loss of
$85,250 in the comparable period one year ago. These losses were due primarily
to the sale of approximately $11 million in long-term fixed rate mortgage loans
during the quarter. When the Bank sells loans, the remaining outstanding fees
associated with these mortgages flow to the income statement as interest
income. Therefore, even when the sale of loans generate an overall profit to
the Bank (including the recognition of the fee income), the non-interest
portion of the sale reflects a loss, due to the pricing of the loans at the
time of the sale. The net gain/loss on sales of investment securities
increased significantly to $301,836 for the quarter ended June 30, 1998 from
$23,925 for the comparable period one year ago. This increase was due primarily
to the sale of selected common stocks and mortgage-backed securities from the
Bank's investment portfolio during the quarter. Other non-interest income for
the quarter increased 33.49% to $66,765 from $50,014. This increase was
primarily due to an increase in Visa debit card fees received by the Bank.
Non Interest Expense
Non interest expense for the three months ended June 30, 1998, increased
8.82% to $1,953,592 from $1,795,176. Compensation and employee benefits
decreased 2.14% during the period, to $973,734 from $995,028. Building
occupancy for the quarter ended June 30, 1998 increased 2.88% to $298,898
from $290,534. The Bank's FDIC insurance expense for the quarter ended
June 30, 1998, was little changed at $13,735, compared to $13,436 for the
same period one year ago. Data processing expenses increased 17.79% to
$124,259 for the quarter ended June 30, 1998, from $105,493. This increase
is primarily due to recognition of expenses relating to the upgrading of most
of the Bank's personal computers, along with preparations to implement a wide
area network at the Bank. Advertising expenses increased 29.34% to $101,031
for the quarter, from $78,110. The Bank recently changed marketing/advertising
agencies and this increase in expenses is largely due to the development of
new advertising and marketing campaigns. Other non interest expenses increased
41.39% to $441,935 from $312,575. This increase was primarily due to an
addition to the Bank's contingency loss reserve during the quarter, along with
increases in items such as telephone and postage expenses, due to the overall
growth of the Bank and increased direct mail marketing activity.
Year 2000 Compliance
The Year 2000 computer problem involves the way in which a computer will
interpret the Year 2000 when expressed as "00". Many computer systems, if
left unchanged, will interpret "00" as the year 1900, rather than as the Year
2000. This problem could affect you in many ways. We want you to understand
what Horizon Bank is doing to address this issue.
First, Horizon is working hard at testing its computers and software programs
for compliance with the Year 2000. Second, we are working with our data
processor, Fiserv, as well as our other vendors, to make sure that all of their
computers and software programs have been tested for the Year 2000. Lastly,
we are working with our banking regulators to complete the mandatory testing
of our systems well in advance of the change of the century.
In addition, over the next several months, the Bank is replacing or upgrading
most of its personal computers, which should assist in the Year 2000 compliance
efforts since computers with older BIOS chips are more likely to be
susceptible to Year 2000 issues than newer machines. The Bank has decided,
however, that even the new personal computers being purchased will be tested
for Year 2000 compliance.
Given the amount of media attention that has been focused on the Year 2000
computer problem, we understand that this is an emotional and upsetting issue
for many people. It is important, however, to realize that this is not the
first time Horizon has had to deal with the Year 2000 computer problem.
Horizon, and its data processor, first had to deal with the issue in 1970 when
the Bank was originating 30-year mortgages that would mature in the Year 2000
and beyond. And again, in 1990, the Bank dealt with the issue when it offered
10-year certificates of deposit that would mature in the Year 2000. In each
case, the issue was resolved successfully.
While there can be no guarantee of total Year 2000 compliance, please be
assured that Horizon Bank is taking this issue very seriously and is working
diligently to minimize potential impacts to its customers and shareholders as
a result of the turn of the century.
Forward Looking Statements
In this document, Horizon has included certain "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
This statement is for the express purpose of availing Horizon of the
protections of such safe harbor with respect to all "forward looking
statements". Horizon has used "forward looking statements" to describe future
plans and strategies, including expectations of Horizon's potential future
financial results. Management's ability to predict results or the effect of
future plans and strategies is inherently uncertain. Factors that could
effect results include, but are not limited to: the future level of interest
rates, industry trends, general economic conditions, loan delinquency rates,
and changes in state and federal regulations. These factors should be
considered when evaluating the "forward looking statements" and undue reliance
should not be placed on such statements.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Horizon Financial Corporation has certain litigation and/or
negotiations in progress resulting from activities arising from
normal operations. In the opinion of management, none of these
matters is likely to have a materially adverse affect on the
Corporation's financial position or results of operation.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HORIZON FINANCIAL CORP.
By: /s/ V. Lawrence Evans
V. Lawrence Evans
President and Chief Executive Officer
By: /s/ Richard P. Jacobson
Richard P. Jacobson
Chief Financial Officer
Dated: August 13, 1998
<PAGE>
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<ALLOWANCE-CLOSE> 3931150
<ALLOWANCE-DOMESTIC> 1039750
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<ALLOWANCE-UNALLOCATED> 2891400
</TABLE>
