Accounting Policies

6 Months Ended

Jun. 30, 2011

Accounting Policies [Abstract]

Accounting Policies

Note 1 — Accounting Policies

The accompanying condensed consolidated financial statements include the accounts of Horizon Bancorp (“Horizon” or the “Company”) and its wholly-owned subsidiaries, including Horizon Bank, N.A. (“Bank”). All inter-company balances and transactions have been eliminated. The results of operations for the periods ended June 30, 2011 and June 30, 2010 are not necessarily indicative of the operating results for the full year of 2011 or 2010. The accompanying unaudited condensed consolidated financial statements reflect all adjustments that are, in the opinion of Horizon’s management, necessary to fairly present the financial position, results of operations and cash flows of Horizon for the periods presented. Those adjustments consist only of normal recurring adjustments.

Certain information and note disclosures normally included in Horizon’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Horizon’s Annual Report on Form 10-K for 2010 filed with the Securities and Exchange Commission on March 11, 2011. The consolidated condensed balance sheet of Horizon as of December 31, 2010 has been derived from the audited balance sheet of Horizon as of that date.

Basic earnings per share is computed by dividing net income available to common shareholders (net income less dividend requirements for preferred stock and accretion of preferred stock discount) by the weighted-average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The following table shows computation of basic and diluted earnings per share.

	Three months ended				Six months ended
	June 30				June 30
	2011		2010		2011		2010
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	3,093	$	2,515	$	5,858	$	4,306
Less: Preferred stock dividends and accretion of discount		277		352		553		704
Net income available to common shareholders	$	2,816	$	2,163	$	5,305	$	3,602
Weighted average common shares outstanding		3,291,833		3,278,392		3,287,258		3,274,327
Basic earnings per share	$	0.86	$	0.66	$	1.61	$	1.10
Diluted earnings per share
Net income available to common shareholders	$	2,816	$	2,163	$	5,305	$	3,602
Weighted average common shares outstanding		3,291,833		3,278,392		3,287,258		3,274,327
Effect of dilutive securities:
Warrants		73,673		41,250		75,479		26,135
Restricted stock		4,759		12,738		9,806		12,220
Stock options		6,704		1,388		6,915		3,989
Weighted average shares outstanding		3,376,969		3,333,768		3,379,458		3,316,671
Diluted earnings per share	$	0.83	$	0.65	$	1.57	$	1.09

At June 30, 2011 and 2010, there were 34,117 shares and 39,000 shares that were not included in the computation of diluted earnings per share because they were non-dilutive.

Horizon has share-based employee compensation plans, which are described in the notes to the financial statements included in the December 31, 2010 Annual Report on Form 10-K.

Reclassifications

Certain reclassifications have been made to the 2010 consolidated financial statements to be comparable to 2011. These reclassifications had no effect on net income.