8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):   April 24, 2009
Horizon Bancorp
(Exact Name of Registrant as Specified in Its Charter)
Indiana	000-10792	35-1562417
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
515 Franklin Square, Michigan City, Indiana		46360
(Address of Principal Executive Offices)		(Zip Code)
(219) 879-0211
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition

This Current Report on Form 8-K is being filed to furnish the earnings release issued by the Registrant on April 24, 2009. A copy of the press release is attached as Exhibit 99.1 to this Current Report. The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

Item 9.01  Financial Statements and Exhibits

(d)  Exhibits
Exhibit No.	Description
99.1	Press Release issued April 24, 2009

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 hereto duly authorized.

Date: April 24, 2009	Horizon Bancorp
	By:	/s/ Mark E. Secor
		Mark E. Secor, Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description	Location
99.1	Press Release issued April 24, 2009	Attached

EX-99.1

Exhibit 99.1

Contact: Mark E. Secor

Chief Financial Officer

Phone: (219) 873-2611

Fax: (219) 874-9280

Date:  April 24, 2009

FOR IMMEDIATE RELEASE

Horizon Bancorp Announces an Increase in First Quarter Earnings

Michigan City, Indiana (NASDAQ GM: HBNC) – Horizon Bancorp today announced its unaudited financial results for the quarter ended March 31, 2009.  Net income for the first quarter of 2009 was $2.6 million or $.70 diluted earnings per share.  This compares to $2.5 million or $.78 per diluted earnings per share for the same quarter of the prior year.  The net income for the first quarter represents a 4.2% increase from the first quarter of the prior year.  Diluted earnings per share at March 31, 2009 were $.08 per share less than for the same period ending March 31, 2008.  Diluted earnings per share were reduced by $.11 per share resulting from the accrual of the preferred stock dividends and the accretion of the discount on preferred stock, which is not available to common stockholders.  The preferred stock was issued in the fourth quarter of 2008 and therefore did not impact the first quarter of 2008.

Craig M. Dwight, President and Chief Executive Officer commented, “Horizon’s first quarter earnings performance is a direct result of our efforts to balance revenues from multiple business units, manage overhead and improve net interest margin over the prior year.  Like most banks, Horizon incurred higher loan losses in the first quarter due to further deterioration in the local economy.  However, Horizon’s increase in revenues more than offset the higher loan losses.”  In addition, Mr. Dwight stated, “We are seeing the big banks in our local market area take drastic action to cut staff, which is creating a disruption in the quality of service they deliver to their customers.  Given the national media’s negative focus on the big banks we believe good performing community banks, such as Horizon, have a great opportunity to pick-up additional market share.”

Net interest income for the quarter ended March 31, 2009 was $11.4 million, an increase of $2.5 million, or a 27.9% increase from the first quarter of 2008.  The net interest margin improved 68 basis points from the first quarter of 2008 to 3.78% and improved 21 basis points from the fourth quarter of 2008.  The lower cost of deposits due to the decline in interest rates has significantly contributed to the increase in the net interest margin.  In addition, asset yields have not declined at the same pace as deposit rates due to interest rate floors that are in place on approximately $368.2 million out of $532.8 million of the Company’s adjustable rate loans along with the ability to get higher spreads on new and renewed loans than in the same period last year.

Horizon assesses the adequacy of its Allowance for Loan and Lease Losses (ALLL) by regularly reviewing the performance of its loan portfolios.  During the first quarter of 2009 a provision for loan losses of $3.2 million was required to adequately fund the ALLL compared to a provision of $778,000 for the first quarter of 2008 and $2.2 million for the fourth quarter of 2008.  The provision

for the first quarter resulted from continued losses primarily in the commercial and installment loan portfolios due to current economic pressures.  Non-performing loans at March 31, 2009 increased to $10.5 million or 1.11% of total loans compared to $3.1 million or 0.36% at March 31, 2008 and $7.9 million or 0.89% at December 31, 2008.  When compared to non-performing loans at year-end the increase came from each of the commercial, real estate, and consumer loan portfolios.  Horizon’s non-performing loan statistics, while having increased from the prior quarter, still compare favorably to National1 and State of Indiana2 bank averages for the same ratio as of December 31, 2008 of 2.50% and 2.68%.  Management believes the total allowance of $11.6 million or 1.23% of total loans is adequate to absorb probable incurred losses contained in the loan portfolios.

Non-interest income increased $1.3 million or 39.9% from the first quarter of 2008.  The gain on sale of mortgage loans contributed $1.1 million to the increase in non-interest income due to the $1.9 million of gain on sale of loans in the first quarter of 2009 compared to $804,000 during the same period last year.  As mortgage interest rates declined the Company’s mortgage loan division had the ability to increase mortgage loan production and was able to provide customers with the needed service to lower their mortgage interest rates.  During the first quarter of 2009 the Company originated approximately $100.4 million of mortgage loans to be sold on the secondary market compared to $35.7 million for the same period last year.  Interchange fees and wire transfer fees contributed $342,000 to the increase in non-interest income.  These increases were offset by a decrease in mortgage servicing income of $110,000 due to impairment charges in the Company’s mortgage servicing asset.  In addition, the income recorded for the increase in the cash surrender value of bank owned life insurance was $72,000 less than the same period last year due to a reduction in the returns on the underlying assets of the insurance products.

Non-interest expense increased $1.4 million or 17.1% from the first quarter of 2008.  Salaries and benefits increased $556,000 primarily due to commissions paid to the mortgage loan division based on the higher mortgage volume.  Loan expense was up from the first quarter of the prior year due to increased collection expense related to problem loans.  Also, professional fees are higher compared to last year due to increasing rules and regulations requiring professional assistance from legal and accounting professionals.  FDIC deposit insurance costs have increased and will continue to increase during the year based on the FDIC’s rate increases that are required to replenish the insurance fund due to failed banks and related financial problems.  Other losses for the first three months of 2009 included a one-time charge of $210,000 for a wire transfer fraud perpetrated on the bank during the first quarter and $65,000 in other real estate owned write-downs.

Income tax expense was impacted in the first quarter of 2009 by a $100,000 income tax refund related to amended returns filed for prior years.

On March 31, 2009, Horizon’s total assets were $1.4 billion, compared to $1.3 billion on December 31, 2008.  Cash and cash equivalents increased $52.9 million since year end primarily due to a $50.0 million fixed rate long term corporate repurchase agreement entered into on March 31, 2009 as part of the Company’s strategy to extend the duration of its liabilities in this low interest rate environment.

1 National peer group: Consists of all insured commercial banks having assets between $1 Billion and $3 Billion as reported by the Uniform Bank Performance Report as of December 31, 2008

2 Indiana peer group: Consists of 22 publicly traded banks all headquartered in the State of Indiana as reported by the Uniform Bank Performance Reports as of December 31, 2008.

Investment securities increased by approximately $24.0 million compared to the end of 2008.  This growth was continued from the fourth quarter as additional investment securities were purchased to leverage the capital raised through the U.S. Department of Treasury’s Capital Purchase Program which is part of the Economic Emergency Stabilization Act approved by Congress during the fourth quarter of 2008.  The intent was to purchase a total of approximately $125.0 million of investment securities and using the cash flows from the repayment of mortgage backed securities to fund new loan growth.  Approximately $105.0 million in investment securities were purchased and $20.0 million of the remaining leverage strategy was used to fund loan growth during the first quarter.

Net loans increased $52.0 million since December 31, 2008.  This increase is almost entirely related to the growth in the Company’s mortgage warehouse business line as its customers utilized their warehouse lines.  Commercial loans increased slightly and both real estate and consumer loans decreased.

Total deposits increased $136.3 million during the first quarter.  Growth came in both interest-bearing transaction accounts totaling $60.7 million and time deposits totaling $78.2 million.  The Company’s borrowings decreased slightly during the first quarter.  These results were from two major funding initiatives that were implemented during the quarter.  The first initiative was to reduce short-term borrowings, which would increase short-term daily liquidity, and the second initiative was to continue to take steps to extend the duration of liabilities in a low interest rate environment.  The short-term borrowings of $52.2 million at year-end were replaced with a $50.0 million fixed rate long-term corporate repurchase agreement leaving the balance of borrowings steady and extending its duration.  The Company also added $33.6 million of long-term brokered certificates of deposit to help in extending the duration of deposits.  The remaining growth in total deposits was primarily from municipal money market accounts and short-term certificates of deposit.  This short-term funding was designed to match the growth of short-term assets in the mortgage warehouse business line and provide additional liquidity without utilizing asset based collateral borrowings or federal fund lines.  The Company will continue to look for opportunities to extend the duration of liabilities as long-term rates remain low.

Stockholders' equity totaled $106.4 million at March 31, 2009 compared to $103.4 million at December 31, 2008.  The increase in stockholders' equity during the quarter was the result of net income and an increase in the market value of investment securities available for sale, reduced by dividends declared.  At March 31, 2009, the ratio of average stockholders' equity to average assets was 7.94% compared to 6.65% at December 31, 2008.  Book value per common share at March 31, 2009 increased to $25.62 compared to $24.60 at December 31, 2008.

Other items

Horizon will hold its annual shareholders’ meeting on Thursday, May 7, 2009, 6:00 p.m. (local time; registration will begin at 5:30 p.m.), at the Clarion Inn (formerly Holiday Inn), 5820 South Franklin Street, Michigan City, Indiana.

Horizon opened a full service branch in Goshen, Indiana on April 6, 2009 and has received regulatory approval to open a full service branch in Munster, Indiana.  Construction is underway on the Munster branch and it is scheduled to open in June of 2009.

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern Indiana and Southwest Michigan.  Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached on the World Wide Web at

www.accesshorizon.com.  Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

Statements in this press release which express “belief,” “intention,” “expectation,” and similar expressions, identify forward-looking statements.  Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by, and information currently available to, such management.  Such statements are inherently uncertain and there can be no assurance that the underlying assumptions will prove to be accurate.  Actual results could differ materially from those contemplated by the forward-looking statements.  Any forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Contact:	Horizon Bancorp
	Mark E. Secor
	Chief Financial Officer
	(219) 873-2611
	Fax: (219) 874-9280

#  #  #

Exhibit 99.1

HORIZON BANCORP

Financial Highlights

(Unaudited – dollars in thousands except share and per share data and ratios)

	Three months ended
	March 31,			December 31,			March 31,
	2009			2008			2008
End of period balances:
Total assets	$	1,442,851		$	1,306,857		$	1,249,676
Short term investments		6,444			2,679			3,230
Investment securities		327,289			303,268			238,993
Commercial loans		313,840			310,842			305,490
Mortgage warehouse loans		186,058			123,287			88,483
Real estate loans		160,478			167,766			172,427
Installment loans		273,728			280,072			282,025
Earning assets		1,288,214			1,206,493			1,110,918
Non-interest bearing deposit accounts		81,000			83,642			74,757
Interest bearing transaction accounts		489,699			428,931			403,784
Time deposits		406,790			328,596			404,189
Borrowings		320,956			324,383			255,974
Long-term borrowings		27,837			27,837			27,837
Common stockholders’ equity		82,236			78,945			74,671
Total stockholders’ equity		106,427			103,350			74,671
Average balances :
Total assets	$	1,347,879		$	1,196,513		$	1,258,716
Short term investments		4,550			6,687			14,885
Investment securities		322,017			240,390			236,544
Commercial loans		313,611			309,465			307,506
Mortgage warehouse loans		156,154			74,175			71,756
Real estate loans		171,138			167,049			198,137
Installment loans		276,663			281,708			284,150
Earning assets		1,267,734			1,107,360			1,179,310
Non-interest bearing deposit accounts		79,785			79,567			73,214
Interest bearing transaction accounts		411,310			354,478			388,492
Time deposits		373,481			339,769			429,253
Borrowings		339,417			294,574			260,300
Long-term borrowings		27,837			27,837			27,837
Common stockholders’ equity		82,891			78,738			73,596
Total stockholders’ equity		107,058			79,605			73,596
Per share data:
Basic earnings per share	$	0.71		$	0.64		$	0.79
Diluted earnings per share		0.70			0.64			0.78
Cash dividends declared per common share		0.17			0.17			0.15
Book value per common share		25.62			24.60			23.28
Market value - high		13.21			24.52			24.50
Market value - low		10.50			12.00			20.86
Basic common shares outstanding		3,209,482			3,209,482			3,207,232
Diluted  common shares outstanding		3,250,424			3,246,664			3,242,471
Key ratios:
Return on average assets		0.79	%		0.71	%		0.81	%
Return on average common stockholders’ equity		11.18			10.49			13.82
Net interest margin		3.78			3.57			3.10
Loan loss reserve to loans		1.23			1.29			1.13
Non-performing loans to loans		1.11			0.89			0.36
Average equity to average assets		7.94			6.65			5.85
Bank only capital ratios:
Tier 1 capital to average assets		8.52			9.44			6.94
Tier 1 capital to risk weighted assets		11.46			11.89			9.76
Total capital to risk weighted assets		12.62			13.11			10.84

HORIZON BANCORP

Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands)

	March 31, 2009 (Unaudited)		December 31, 2008
Commercial	$	2,441	$	3,202
Real estate		1,038		973
Mortgage warehousing		1,428		1,354
Installment		6,682		5,881
Unallocated		-		-
Total	$	11,589	$	11,410

Net Charge-offs

(Dollars in Thousands)

	Three months ended March 31, 2009 (Unaudited)		Three months ended December 31, 2008 (Unaudited)			Three months ended March 31, 2008 (Unaudited)
Commercial	$	1,076	$	(5	)	$	41
Real estate		50		26			100
Mortgage warehousing		-		-			-
Installment		1,892		1,257			747
Total	$	3,018	$	1,278		$	888

Total Non-performing Loans

(Dollars in Thousands)

	March 31, 2009 (Unaudited)		December 31, 2008
Commercial	$	6,474	$	5,167
Real estate		2,446		1,904
Mortgage warehousing		-		-
Installment		1,549		792
Total	$	10,469	$	7,863

Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands)

	March 31, 2009 (Unaudited)		December 31, 2008
Commercial	$	-	$	-
Real estate		2,492		2,874
Mortgage warehousing		-		-
Installment		204		207
Total	$	2,692	$	3,081

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

	March 31, 2009 (Unaudited)			December 31, 2008
Assets
Cash and due from banks	$	13,311		$	36,001
Federal Reserve and fed funds sold		75,568			-
Cash and cash equivalents		88,879			36,001
Interest-bearing deposits		6,444			2,679
Investment securities, available for sale		325,219			301,638
Investment securities, held to maturity		2,070			1,630
Loans held for sale		7,752			5,955
Loans, net of allowance for loan losses of $ 11,589 and $ 11,410		922,515			870,557
Premises and equipment		29,548			28,280
Federal Reserve and Federal Home Loan Bank stock		12,625			12,625
Goodwill		5,787			5,787
Other intangible assets		1,674			1,751
Interest receivable		6,038			5,708
Cash value life insurance		22,607			22,451
Deferred tax asset		1,727			2,580
Other assets		9,966			9,215
Total assets	$	1,442,851		$	1,306,857
Liabilities
Deposits
Non-interest bearing	$	81,000		$	83,642
Interest bearing		896,489			757,527
Total deposits		977,489			841,169
Borrowings		320,956			324,383
Subordinated debentures		27,837			27,837
Interest payable		1,849			1,910
Other liabilities		8,293			8,208
Total liabilities		1,336,424			1,203,507
Commitments and Contingent Liabilities
Stockholders’ Equity
Preferred stock, no par value
Authorized, 1,000,000 shares
Issued 25,000 shares		24,191			24,154
Common stock, $.2222 stated value
Authorized, 22,500,000 shares
Issued,  5,013,906 shares		1,114			1,114
Additional paid-in capital		26,869			26,802
Retained earnings		69,654			67,804
Accumulated other comprehensive income		1,751			628
Less treasury stock, at cost, 1,759,424 shares		(17,152	)		(17,152	)
Total stockholders’ equity		106,427			103,350
Total liabilities and stockholders’ equity	$	1,442,851		$	1,306,857

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Per Share Data)

	Three Months Ended March 31
	2009 (Unaudited)			2008 (Unaudited)
Interest Income
Loans receivable	$	14,905		$	15,367
Investment securities:
Taxable		2,849			2,548
Tax exempt		920			837
Total interest income		18,674			18,752
Interest Expense
Deposits		3,996			6,594
Borrowed funds		2,892			2,828
Subordinated debentures		370			407
Total interest expense		7,258			9,829
Net Interest Income		11,416			8,923
Provision for loan losses		3,197			778
Net Interest Income after Provision for Loan Losses		8,219			8,145
Other Income
Service charges on deposit accounts		934			921
Wire transfer fees		247			105
Interchange fees		388			188
Fiduciary activities		917			885
Gain on sale of loans		1,913			804
Mortgage servicing net of impairment		(134	)		(24	)
Increase in cash surrender value of bank owned life insurance		156			228
Other income		73			106
Total other income		4,494			3,213
Other Expenses
Salaries and employee benefits		4,831			4,275
Net occupancy expenses		1,032			972
Data processing		379			332
Professional fees		395			249
Outside services and consultants		326			304
Loan expense		566			458
FDIC deposit insurance		292			116
Other losses		385			101
Other expenses		1,191			1,220
Total other expenses		9,397			8,027
Income Before Income Tax		3,316			3,331
Income tax expense		681			803
Net Income		2,635			2,528
Preferred stock dividends and discount accretion		(350	)		(45	)
Net Income Available to Common Shareholders	$	2,285		$	2,483
Basic Earnings Per Share	$	.71		$	.79
Diluted Earnings Per Share	$	.70		$	.78