<PAGE>
Form 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
450 5th Street N.W.
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1995 - commission file number 0-10792
HORIZON BANCORP
(Exact name of registrant as specified in its charter)
Indiana 35-1562417
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
515 Franklin Square, Michigan City, Indiana 46360
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219)879-0211
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
(Title of class)
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
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date:
747,363 at July 27, 1995
<PAGE>
Part I - Financial Information
ITEM 1. FINANCIAL INFORMATION REQUIRED BY RULE 10-01 OF
REGULATION S-X IS INCLUDED IN THIS FORM 10-Q AS REFERENCED BELOW
<TABLE>
<S> <C>
Financial Statements Page
Consolidated Balance Sheet (Unaudited) 3 - 4
Consolidated Statement of Income (Unaudited) 5 - 6
Condensed Consolidated Statement of Changes
in Stockholders' Equity (Unaudited) 7
Consolidated Statement of Cash Flows
(Unaudited) 8 - 9
Notes to the Consolidated Financial Statements
(Unaudited) 10 -15
<PAGE>
CONSOLIDATED BALANCE SHEET (UNAUDITED)
(Thousands, except per share data)
</TABLE>
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
ASSETS
<S> <C> <C>
Cash and cash equivalents
Cash and due from banks $12,172 $ 23,821
Money market investment 827 1,063
Federal funds sold 3,250
------ ------
Total cash and cash equivalents 12,999 28,134
Short-term investments-
Interest-bearing balances in banks 100 100
Investment securities available for sale,
net (Note 2) 77,937 83,142
Investment securities held to maturity,
net (Note 2)(Estimated market value of
$15,445 at June 30, 1995 and
$15,225 at December 31, 1994) 15,482 15,475
Loans
Total loans (Note 3) 223,488 225,016
Deferred loan fees (463) (462)
Unearned income (837) (932)
Allowance for loan losses (Note 4) (2,784) (2,555)
------- -------
Net loans 219,404 221,067
Premises and equipment, net 10,696 10,445
Accrued interest receivable 2,841 2,807
Other assets 6,338 8,300
Total assets $ 345,797 $ 369,470
======= =======
</TABLE>
- Continued -
<PAGE>
CONSOLIDATED BALANCE SHEET (UNAUDITED (CONTINUED)
(Thousands, except per share data)
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
<S> <C> <C>
LIABILITIES
Deposits
Noninterest-bearing $ 42,192 $ 40,686
Interest-bearing 244,000 255,098
------- -------
Total deposits 286,192 295,784
Short-term borrowings 8,663 24,693
Federal Home Loan Bank Advances 17,400 18,400
Obligation to employee stock
ownership plan 298
Accrued interest payable 588 466
Other liabilities 2,138 2,416
------- -------
Total liabilities 314,981 342,057
Commitments, off-balance sheet risk and contingencies
STOCKHOLDERS' EQUITY
Common stock: $1 stated value, 5,000,000
shares authorized; 1,027,531 shares issued 1,027 1,027
Additional paid-in capital 17,317 17,293
Retained earnings 20,347 18,961
Valuation allowance for securities available
for sale (net of tax) (Note 2) (287) (2,327)
Total before treasury stock and obligation
to employee stock ownership plan 38,404 34,954
Less treasury stock, at cost - 106,904 shares at
June 30, 1995 and 93,745 shares at
December 31, 1994 (2,689) (2,243)
Unearned Compensation (4,899) (5,000)
Less obligation under employee stock ownership
plan (298)
Total stockholder' equity 30,816 27,413
Total liabilities and stockholders' equity 345,797 369,470
======= =======
</TABLE>
- Continued -
<PAGE>
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 4,896 $ 4,451 $ 9,701 $ 9,022
Interest on balances in banks 1 1
Interest on Federal funds sold 17 2 19 41
Interest and dividends on investment:
Taxable 1,397 1,172 2,818 2,250
Nontaxable 153 165 296 307
----- ----- ------ ------
Total interest income 6,463 5,791 12,834 11,621
INTEREST EXPENSE
Interest on deposit 2,339 1,860 4,524 3,638
Interest on Federal funds purchased
and securities sold under agreement
to repurchase 234 92 479 175
Interest on Federal Home Loan Bank
Advances 236 274 463 541
----- ----- ----- -----
Total interest expense 2,809 2,226 5,466 4,354
NET INTEREST INCOME 3,654 3,565 7,368 7,267
PROVISON FOR LOAN LOSSES(NOTE 4) 165
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 3,654 3,565 7,368 7,102
NONINTEREST INCOME
Service charges on deposits 360 319 695 622
Trust departments income 460 440 877 844
Security gains 273
Gain on sale of other real estate owned 45 45
Other income 34 94 389 159
---- ---- ---- ----
Total other income 899 853 2,006 1,898
NONINTEREST EXPENSE
Salaries and employee benefits 1,947 1,750 3,897 3,566
Occupancy expense of Company
premises, net of rental income 234 247 496 527
Data processing and equipment expense 454 394 842 764
Loss on real estate owned 252 117 313 210
Other expenses 1,138 1,011 2,181 1,935
----- ----- ----- -----
Total other expense 4,025 3,519 7,729 7,002
</TABLE>
-continued-
<PAGE>
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (CONTINUED)
(Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INCOME BEFORE INCOME TAXES $ 528 $ 899 $1,645 $ 1,998
PROVISION(BENEFIT FOR INCOME TAXES) 713
NET INCOME $ 444 $ 549 $ 1,942 $ 1,285
Average number of shares outstanding 752,567 768,406 755,675 768,409
Earnings per common share $ .59 $ .71 $2.57 $ 1.67
</TABLE>
Earnings per common share have been calculated using the average
See notes to the consolidated financial statements.
<PAGE>
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
(In Thousands)
Three Months Six Months
Ended June 30 Ended June 30
1995 1994 1995 1994
<S> <C> <S> <C> <C> <C> <C>
Balance, beginning of period $29,874 $28,555 $27,413 $27,759
Net income 444 549 1,942 1,285
Cash dividends ($.60 for the six
months ended June 30, 1995 and 1994) (276) (231) (556) (461)
Reduction in ESOP obligation 298 298
Purchase of Treasury Stock (315) (12) (446) (12)
Amortization of unearned compensation
expense 51 101
Increase in additional paid-in capital
from amortization of unearned
compensation expense 12 24
Change in unrealized gain(loss)
on securities available for sale 1,026 (881) 2,040 (895)
Tax benefit of ESOP dividend deduction 11 17
------- ------- ------- -------
Balance, June 30 $30,816 $27,991 $30,816 $27,991
======= ======= ======= =======
</TABLE>
See notes to the consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(In Thousands)
Six months ended June 30
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,942 $1,285
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation 417 335
Net amortization 78 142
Amortization of unearned compensation 101
Reserve for security (gains)/losses (3,305) 1,574
Provision for loan losses 165
Security Gains (273)
Loss on disposal of fixed assets 21
Loss on other real estate owned 239 59
Benefit of deferred taxes 170 (1,212)
Increase/(decrease) in deferred loan fees 1 (34)
Decrease in unearned income (95) (338)
Decrease in interest receivable (34) 27
Increase in interest payable 122 30
(Increase)/decrease in other assets 3,618 (383)
Decrease in other liabilities (278) (3,095)
------ ------
Net cash provided by activities 2,997 (1,718)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investment securities-
available for sale 14,859
Proceeds from maturities, calls and principal
repayments of investment securities-available for sale 9,442 9,751
Proceeds from maturities, calls and principal
repayments of investment securities-held to maturity 2,290 3,540
Purchase of investment securities-available for sale (1,006) (23,309)
Purchase of investment securities-held to maturity (2,303) (5,282)
Net decrease in loans 2,047 399
Purchase of loans (954) (640)
Proceeds from sales of loans 353 1,984
Recoveries on loans previously charged off 311 214
Premises and equipment expenditures (716) (860)
Proceeds from disposal of premises and equipment 28
------ ------
Net cash provided by (used in) investing activities 9,492 656
</TABLE>
See notes to the consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)(UNAUDITED)
<TABLE>
<CAPTION>
(Thousands)
Six months ended June 30
1995 1994
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in deposits $ (9,592) $ (4,210)
Dividends paid (556) (461)
Net increase/(decrease) in short-term
borrowings (16,030) 6,869
Purchase of Treasury stock (1,000) (12)
Increase in Federal Home Loan Bank Advances (446)
------- -------
Net cash provided by(used in) financing activities (27,624) 2,186
NET CHANGE IN CASH AND CASH EQUIVALENTS (15,135) 1,124
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 28,134 25,055
CASH AND CASH EQUIVALENTS AT END OF QUARTER $ 12,999 $ 26,179
CASH PAID DURING THE YEAR FOR:
Interest $ 5,588 $ 4,324
Income taxes 750 908
</TABLE>
See notes to the consolidated financial statements.
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of Horizon Bancorp ("Horizon") and its wholly-owned
subsidiary, First Citizens Bank, N.A. ("Bank"). All
intercompany balances and transactions have been eliminated.
The results of operations for the period ended June 30, 1995 and
June 30, 1994 are not necessarily indicative of the operating
results for the full year of 1995 or 1994. These interim
financial statements are prepared without audit and reflect all
adjustments (consisting of normal recurring adjustments) which,
in the opinion of management, are necessary to present fairly
the consolidated position of Horizon Bancorp at June 30 1995 and
its results of operations and cash flows for the periods
presented. The accompanying consolidated financial statements
do not purport to contain all the necessary financial disclosure
required by generally accepted accounting principals that might
otherwise be necessary in the circumstances and should be read
in conjunction with the 1994 Horizon Bancorp consolidated
financial statements and related notes thereto included in its
Annual Report for the year ended December 31, 1994.
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
NOTE 2 - INVESTMENT SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY
The amortized cost and estimated fair value of investment
securities available for sale and held to maturity at June 30,
1995 are as follows:
<TABLE>
<CAPTION>
(Thousands)
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
AVAILABLE FOR SALE:
<S> <C> <C> <C> <C>
U.S. Treasury and U.S.
Government agency securities $ 14,028 $ 7 $ (10) $ 14,025
Other Securities 1,060 (26) 1,034
-------- ----- ------ --------
Subtotal 15,088 7 (36) 15,059
FHLMC 26,438 208 (195) 26,451
FNMA 23,800 93 (234) 23,659
GNMA 9,741 46 (98) 9,689
-------- ----- ------ --------
Total mortgage-backed securities 59,979 347 (527) 59,799
Total debt securities 75,067 354 (563) 74,858
Equity securities 3,246 (167) 3,079
-------- ----- ------ --------
Total investment securities
available for sale $ 78,313 $ 354 $ (730) $ 77,937
======= ==== ===== =======
HELD TO MATURITY:
U.S. Government agency securities $ 3,384 $ 2 $ 3,386
Obligations of states and
political subdivisions 12,098 31 (70) 12,059
-------- ----- ----- -------
Total debt securities 15,482 33 (70) 15,445
Total debt securities, held
to maturity $ 15,482 $ 33 $ (70) $ 15,445
======= ==== ===== =======
</TABLE>
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
NOTE 2 - INVESTMENT SECURITIES AVAILABLE FOR SALE AND HELD TO
MATURITY (CONTINUED)
The amortized cost and estimated fair value of debt securities
at June 30, 1995, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
(Thousands)
Amortized Fair
Cost Value
AVAILABLE FOR SALE:
<S> <C> <C>
Due in one year or less $ 8,999 $ 8,992
Due after one year through five years 6,089 6,067
------- -------
Subtotal 15,088 15,059
Mortgage-backed securities 59,979 59,799
------- ------
Total debt securities available for sale $75,067 $74,858
HELD TO MATURITY:
Due in one year or less $ 4,327 $ 4,324
Due after one year through five years 6,947 6,895
Due after five years through ten years 4,208 4,226
------- -------
Total debt securities held to maturity $15,482 $15,445
</TABLE>
(CONTINUED)
<PAGE>
NOTE 2 - INVESTMENT SECURITIES AVAILABLE FOR SALE AND HELD TO
MATURITY (CONTINUED)
The amortized cost and estimated fair value of investment
securities at December 31, 1994 are as follows:
<TABLE>
<CAPTION>
(Thousands)
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
AVAILABLE FOR SALE:
<S> <C> <C> <C> <C>
U.S. Treasury and U.S.
Government agency securities $ 18,034 $ $ (289) $ 17,745
Other Securities 2,078 (92) 1,986
--------- ------- ------- -------
Subtotal 20,112 (381) 19,731
FHLMC 28,067 (1,471) 26,596
FNMA 25,637 (1,180) 24,457
GNMA 10,000 (724) 9,276
--------- ------- ------- ------
Total mortgage-backed
securities 63,704 (3,375) 60,329
Total debt securities 83,816 (3,756) 80,060
Equity securities 3,249 (167) 3,082
Total investment securities
available for sale $ 87,065 $ $(3,923) $ 83,142
======= ====== ======= =======
HELD TO MATURITY:
U.S. Government agency securities $ 3,521 $ 3,521
Obligations of states and
political subdivisions 11,954 3 (253) 11,704
Total debt securities 15,475 3 (253) 15,225
Total debt securities, held
to maturity $ 15,475 $ 3 $ (253) $ 15,225
======= ==== ===== =======
</TABLE>
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
NOTE 3 - TOTAL LOANS
Total loans are comprised of the following classifications:
<TABLE>
<CAPTION>
(In Thousands)
June 30 December 31
1995 1994
<S> <C> <C>
Commercial $ 62,705 $ 67,177
Real estate mortgage 109,066 105,974
Installment 51,717 51,865
-------- --------
Total loans $223,488 $225,016
======== ========
</TABLE>
NOTE 4 - ALLOWANCE FOR LOAN LOSSES
The following is an analysis of the activity in the allowance
for loan losses account:
<TABLE>
<CAPTION>
(In Thousands)
June 30 December 31
1995 1994
<S> <C> <C>
Balance, beginning of period $2,555 $2,310
Provision charged to expense 165
Recoveries 311 301
Loan charge-offs (82) (221)
------ ------
Balance, end of period $2,784 $2,555
====== ======
</TABLE>
<PAGE>
NOTE 5 - NONPERFORMING ASSETS:
The following is a summary of nonperforming loans and Other Real
Estate Owned(OREO).
OREO is presented before the allowance for OREO losses:
<TABLE>
<CAPTION>
(In Thousands)
June 30 December 31
1995 1994
<S> <C> <C>
Nonperforming Loans $2,704 $3,268
OREO before allowance for OREO losses 4,070 5,730
------ ------
Total nonperforming assets $6,774 $8,998
====== ======
</TABLE>
The following is an analysis of the activity in the allowance
for OREO account:
<TABLE>
<CAPTION>
(In Thousands)
June 30 December 31
1995 1994
<S> <C> <C>
Balance at beginning of period $ 1,801 $ 1,988
Losses on OREO charged to expense 24 59
Losses charged to the allowance (774) (246)
------- -------
Balance at end of period $ 1,051 $ 1,801
======= =======
</TABLE>
Horizon adopted Statement of Financial Accounting Standards FAS
114 "Accounting by Creditors for Impairment of a Loan" as of
January 1, 1995. At June 30, 1995 impaired loans outstanding
totaled $1,376,000 and average outstanding totaled $1,406,000,
the reserves related to these loans totaled $484,000. There
was no adjustment to the provision or reserve for these loans.
Payments received on an impaired loan are applied toward
principal unless full recovery of principal and interest is not
in doubt and the loan is well secured, then payments may be
applied to interest.
<PAGE>
FOR THE QUARTER ENDED JUNE 30, 1995
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
------------
The purpose of this discussion is to focus on the Company's
financial condition, changes in financial condition and the
results of operations in order to provide a better understanding
of the consolidated financial statements included elsewhere
herein. This discussion should be read in conjunction with the
consolidated financial statements and the related notes.
FINANCIAL CONDITION
-------------------
LIQUIDITY
In managing its liquidity, the Company's objective is to
maintain the ability to continuously meet its cash flow needs
and those of its customers. A major source of liquidity is the
investment portfolio, as well as money market investments and
interest-bearing balances in banks. At June 30, 1995, securities
available for sale and held to maturity with a maturity of one
year or less were $13.3 million, 14.2% of the portfolio,
compared to $13.6 million or 13.8% at December 31, 1994.
Federal funds sold, money market investments and
interest-bearing balances with other banks added an additional
$.9 million in funds maturing within one year at June 30, 1995
compared to $4.4 million at December 31, 1994. These
investments which are short-term in nature, are expected to
provide adequate liquidity to fund loan growth and any possible
deposit fluctuations. The Company's loan-to-deposit ratio,
another indication of overall liquidity increased to 77.6% at
June 30, 1995 from 75.6% at year end 1994. The Company's
subsidiary bank joined The Federal Home Loan Bank of
Indianapolis in 1991 through the purchase of $2.4 million in
Federal Home Loan Bank stock. Members are entitled to advances
for the purpose of funding mortgage lending activities. Bank
considers this membership another source of liquidity for future
balance sheet growth. There were $17.4 million in outstanding
borrowings at June 30, 1995 as a result of this membership. In
addition to these borrowings at June 30, 1995, Bank has
available approximately $37 million in unused credit lines with
various money center banks.
There have been no other material changes in the liquidity of
the Company from December 31, 1994 to June 30, 1995.
<PAGE>
CAPITAL RESOURCES
Stockholders' equity at June 30, 1995 totaled $30.8 million up
12.4 % compared to $27.4 million December 31, 1994. This
increase is primarily the result of a decline in the valuation
allowance for securities available for sale as well as year to
date 1995 net income retained (net of dividends paid).
As of June 30, 1995, management is not aware of any current
recommendation by banking regulatory authorities which, if there
were to be implemented, would have or are reasonably likely to
have a material effect on Horizon's liquidity, capital resources
or operations.
As previously disclosed in the Company's third quarter 1993
Form 10-Q, the Compensation Committee of the Board initially
discussed the continuation of the Company's employee retirement
benefit program in early 1993, which is maintained as an
Employee Stock Ownership Plan. In August of 1993, the Board of
Directors approved the continuation of this plan and authorized
the transfer of 172,414 shares of the Company's stock into the
Employee Stock Ownership Trust for future allocation to employee
retirement accounts. This transfer will be made upon payment to
the Company by the Employee Stock Ownership Trust of $5 million
which represents a price of $29 per share, the market value of
the stock at the time the transaction was approved. Under
Federal regulations, the Employee Stock Ownership Trust may pay
a value equal to or less than market value for acquired shares,
but not more. Upon approval by all the required regulatory
agencies, the Company issued 172,414 shares of stock to the
Employee Stock Ownership Trust on August 26, 1994. Under
Statement of Position 93-6 "Employers Accounting for Employee
Stock Ownership Plans" issued by the Accounting Standards
Division of the American Institute of Certified Public
Accountants, these shares are not included in outstanding shares
for the purposes of computing earnings per share and book value
per share until they are committed-to-be-released for allocation
to employee retirement accounts.
Horizon has selectively purchased shares that became available
in the market form time to time. During the first six months of
1995, management purchased 13,159 shares at a cost of $446
thousand.
There have been no other material changes in the Company's
capital resources from December 31, 1994 to June 30, 1995.
MATERIAL CHANGES IN FINANCIAL CONDITION - JUNE 30, 1995 COMPARED
TO DECEMBER 31, 1994
Because of the nature of its activities, Horizon is subject to
pending and threatened legal actions that arise in the normal
course of business. In management's opinion, after consultation
with counsel, none of the litigation to which Horizon or any of
its subsidiaries is a party will have a material effect on the
consolidated financial position or results of operations of the
Corporation.
<PAGE>
Horizon's deposits declined to $286.2 million at June 30, 1995
compared to $295.8 million at December 31, 1994. This decline
is primarily the result of seasonal increases in demand deposits
of public fund accounts at December 31, 1994 that subsequently
declined.
Short-term borrowings declined to $8.663 million at June 30,
1995 from $24.693 million at December 31, 1994. This decline is
the result of declines in federal funds purchased.
There have been no other material changes in the financial
condition of the Company from December 31, 1994 to June 30, 1995.
RESULTS OF OPERATIONS
---------------------
MATERIAL CHANGES IN RESULTS OF OPERATIONS - JUNE 30, 1995
COMPARED TO JUNE 30, 1994.
Net interest income was $7.368 million for the first six
months of 1995 compared to $7.267 million for the same period
1994. This increase is primarily the result of higher average
earning assets offset by lower year to date net interest margin
of 4.38% compared to 4.42% for the same period 1994.
Provision for loan losses was zero for the first six months of
1995 compared to $165 thousand for the same period 1994.
Horizon has year to date net loan recoveries at June 30, 1995 of
$229 thousand compared to $87 thousand for the same period last
year. These recoveries increased Horizon's allowance for loan
losses to $2.784 million at June 30, 1995 from $2.555 million at
December 31, 1994.
Other noninterest income net of nonrecurring portfolio gains,
nonrecurring gain on sale of other real estate owned, and
nonrecurring interest received on Federal Income Tax refunds was
$1.663 million for the first six months of 1995 compared to
$1.625 million for the same period last year. This increase is
primarily the result of an increase in service charges on
deposit accounts and trust department income.
Horizon's operating expense's year to date 1995, net of
nonrecurring Loss on Other Real Estate Owned expenses, increased
to $7.4 million from $6.8 million for the same period 1994.
This increase is the result of increased salaries, employee
group health care expenses, investments in technology and owner
employee training.
Horizon recorded a $252 thousand loss on sale of other real
estate owned for the quarter ended June 30, 1995. This loss was
primarily the result of the sale of one hotel property.
Horizon received a federal income tax refund during the first
quarter totaling $1.190 million including interest of $298
thousand. In 1993, Horizon filed several amended tax returns to
obtain refunds of federal taxes paid in prior periods. The
original returns were filed by our previous accounting firm,
dating back to 1985. The receipt of this refund increased
earnings per share $1.25 for the first quarter.
<PAGE>
Horizon Bancorp has experienced a decline in quarterly net income
due to higher non-interest expenses associated with investments in
technology, the expansion of its branch delivery system to new markets,
and the training of it's owner employees in intensive internal and
external management training programs. Horizon expects an improvement in
it's product market share, competitive position and customer service
quality in existing and new markets as a result of these investments.
These investments will also create re-engineering opportunities that
will ultimately increase Horizon's efficiency. Horizon anticipates that
future net income will be positively impacted as a result of these
investments.
There have been no other material changes in the results of
operations of the Company from December 31, 1994 to June 30,
1995.
<PAGE>
PART II - OTHER INFORMATION
---------------------------
For the quarter ended June 30, 1995
ITEM 1. LEGAL PROCEEDINGS
See Management's Discussion and Analysis
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. January 17, 1995 - Significant matters to shareholders
b. March 23, 1995 - Horizon receives $1.190 million income tax refund
<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 BANCORP
BY: Larry E. Reed
Chairman and Chief Executive Officer
Date: August 11, 1995
BY: J. Michael Smith
Vice President and Chief Financial Officer
Date: August 11, 1995
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 12,172
<INT-BEARING-DEPOSITS> 244,000
<FED-FUNDS-SOLD> 0
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<ALLOWANCE> (2,784)
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<DEPOSITS> 286,192
<SHORT-TERM> 8,663
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<LONG-TERM> 17,400
<COMMON> 1,027
0
0
<OTHER-SE> 29,789
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<INTEREST-LOAN> 9,701
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<INTEREST-TOTAL> 12,834
<INTEREST-DEPOSIT> 4,524
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<LOAN-LOSSES> 0
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<CHANGES> 0
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<EPS-PRIMARY> 2.57
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<YIELD-ACTUAL> 7.94
<LOANS-NON> 2,377
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<ALLOWANCE-CLOSE> 2,784
<ALLOWANCE-DOMESTIC> 2,784
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 725
</TABLE>
