For release on August 29, 2000
For more information
Robert W. DeCook, CEO
or
Sharon McCrea, Controller
(641)673-8328
Horizon Financial Services Corporation Reports
fourth quarter and fiscal year end 1999-2000 results
And Announces Annual Meeting Date
Oskaloosa, Iowa -- Horizon Financial Services Corporation, NASDAQ Small Cap
(HZFS), the parent company of Horizon Federal Savings Bank, reported a net
profit of $164,164 or $0.19 per share, for the quarter ended June 30, 2000,
compared to a net loss of $196,254 or ($ .23) per share, for the quarter ended
June 30, 1999.
The increase in net earnings for the quarter is primarily attributable to the
fact that the Company had a large loss on the sale of securities in the quarter
ended June 30, 1999. The Company also had more net interest income mainly due to
more interest income on loans.
The Company also reported results for its fiscal year which ended June 30, 2000.
The Company reported net profit of $486,000 or $0.56 per share, fully diluted,
for the year ended June 30, 2000 compared to a net loss of $772,000 or ($0.90),
fully diluted, for the fiscal year ended June 30, 1999.
The large gain for the fiscal year is primarily attributable to a large loss on
the sale of securities available for sale for the fiscal year ended June 30,
1999. The Company also had more net interest income for the fiscal year ended
June 30, 2000.
At June 30, 2000, Horizon Financial Services Corporation had assets of $83.2
million and stockholders' equity of $8.3 million, or $9.58 per Share of common
stock. Horizon Financial Services Corporation and its subsidiary, Horizon
Federal Savings Bank, provide a wide range of financial products and services
through three offices in two counties in southeast Iowa.
The annual meeting record date is September 8, 2000, and the annual meeting will
be held October 26, 2000.
<PAGE>
FORWARD-LOOKING STATEMENTS
The Company may from time to time make "forward-looking statements,"
including statements contained in the Company's filings with the Securities and
Exchange Commission (the "SEC"), in its reports to shareholders and in other
communications by the Company, which are made in good faith by the Company and
the Banks pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995.
These forward-looking statements include statements with respect to the
Company's beliefs, expectations, estimates, and intentions, that are subject to
significant risks and uncertainties, and are subject to change based on various
factors (some of which are beyond the Company's control). Those risks and
uncertainties could cause the Company's financial performance to differ
materially from the expectations, estimates, and intentions expressed in such
forward-looking statements.
The Company does not undertake, and expressly disclaims any intent or
obligation, to update any forward-looking statement, whether written or oral,
that may be made from time to time by or on behalf of the Company.
<PAGE>
HORIZON FINANCIAL SERVICES CORPORATION and SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
Assets June 30, June 30,
------ 2000 1999
----------- ---------
<S> <C> <C>
Cash and cash equivalents $ 1,981,511 $ 7,917,020
Securities available-for-sale 15,670,119 17,096,985
Loans receivable, net 62,417,395 56,066,399
Real estate 248,951 270,779
Stock in Federal Home Loan Bank, at cost 702,500 1,202,500
Office property and equipment, net 1,049,821 1,089,053
Accrued interest receivable 602,765 522,121
Deferred tax asset 380,300 254,000
Income tax receivable - - - 522,699
Prepaid expenses and other assets 130,718 81,646
------------ ------------
Total assets $ 83,184,080 $ 85,023,202
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Deposits 64,761,224 $ 59,576,232
Advances from Federal Home Loan Bank 9,014,199 16,606,176
Advance payments by borrowers for taxes and 410,555 399,830
insurance
Accrued income taxes 201,950 - - -
Accrued expenses and other liabilities 530,145 380,617
------------ ------------
Total liabilities 74,918,073 76,962,855
------------ ------------
Stockholders' equity
--------------------
Preferred stock,$.01 par value,
authorized 250,000 shares, none issued - - - - - -
Common stock,$.01 par value, l,500,000 shares
authorized, issued and outstanding 1,046,198 10,462 10,462
shares
Additional paid-in capital 5,020,361 4,996,761
Retained earnings, substantially restricted 5,135,636 4,804,455
Treasury stock, at cost (1,314,197) (1,229,571)
Unearned employee stock ownership plan shares (5,593) (65,503)
Unrealized losses on securities available for sale (580,662) (456,257)
------------ ------------
Total stockholders' equity 8,266,007 8,060,347
------------ ------------
Total liabilities and stockholders' equity $ 83,184,080 $ 85,023,202
============ ============
</TABLE>
<PAGE>
HORIZON FINANCIAL SERVICES CORPORATION and SUBSIDIARIES
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income:
Loans $ 1,272,009 $ 1,140,301 $ 4,851,413 $ 4,597,470
Investment securities available-for-sale 266,434 271,527 1,072,849 1,339,629
Other investment income 21,448 88,308 246,441 255,272
----------- ----------- ----------- -----------
Total interest income 1,559,891 1,500,136 6,170,703 6,192,371
----------- ----------- ----------- -----------
Interest expense:
Deposits 716,006 649,489 2,709,550 2,636,943
Advance from Federal Home Loan Bank 160,498 230,875 738,089 1,005,569
----------- ----------- ----------- -----------
Total interest expense 876,504 880,364 3,447,639 3,642,512
----------- ----------- ----------- -----------
Net interest income 683,387 619,772 2,723,064 2,549,859
Allowance for losses on loans 24,000 66,540 96,000 138,540
----------- ----------- ----------- -----------
Net interest income after allowance
for losses on loans 659,387 553,232 2,627,064 2,411,319
----------- ----------- ----------- -----------
Noninterest income:
Fees, service charges and commissions 119,474 122,917 470,009 497,012
Loss on sale of securities, net (8,875) (441,374) (233,976) (2,038,667)
Other (250) - - - - - - 8,573
----------- ----------- ----------- -----------
Total noninterest income 110,349 (318,457) 236,033 (1,533,082)
----------- ----------- ----------- -----------
Noninterest expense:
Compensation, payroll taxes, and
employee benefits 298,368 285,728 1,165,315 1,210,041
Advertising 18,949 25,646 97,440 71,750
Office property and equipment 86,377 94,939 317,303 333,336
Federal insurance premiums 7,733 13,135 41,431 44,197
Data processing services 44,473 42,666 169,557 155,169
Other real estate expense 7,914 29,312 21,232 35,317
Other 57,658 64,545 326,187 266,798
----------- ----------- ----------- -----------
Total noninterest expense 521,472 555,971 2,138,465 2,116,608
----------- ----------- ----------- -----------
Earnings (loss) before taxes on income 248,264 (321,196) 724,632 (1,238,371)
Taxes on income (benefit) 84,100 (124,942) 239,100 (466,600)
----------- ----------- ----------- -----------
Net earnings (loss) $ 164,164 ($ 196,254) $ 485,532 ($ 771,771)
=========== =========== =========== ===========
Basic earnings (loss) per common share $ 0.19 ($ 0.23) $ 0.56 ($ 0.90)
Diluted earnings (loss) per common share $ 0.19 ($ 0.23) $ 0.56 ($ 0.90)
=========== =========== =========== ===========
</TABLE>
