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HORIZON BANK REPORTS SOLID SECOND QUARTER EARNINGS

 BELLINGHAM, Wash., Oct. 19 /PRNewswire/ -- V. Lawrence Evans, president of Horizon Bank (NASDAQ: HRZB), announced solid earnings gains and increased performance for the second quarter and first half of the fiscal year ended Sept. 30, 1993.
 Net income for the quarter rose to $2.0 million, or 34 cents per share, up from $1.80 million and 31 cents per share for the same quarter one year ago. Net income for the six months rose to $3.94 million, or 68 cents per share, up from $2.70 million and 47 cents per share. Note that prior year earnings have been restated to reflect the change in accounting required by the Financial Accounting Standards Board (FAS) ruling No. 109. Previously reported earnings figures were as follows: Net income for the three months ended Sept. 30, 1992 was $1.74 million, or 30 cents per share. Net income for the six months was $3.39 million, or 59 cents per share.
 Total revenue for the quarter was $8.75 million, down slightly from $8.83 million one year ago, including interest income of $8.26 million versus $8.45 million, respectively. Total revenue for the six months was $17.47 million, even with the year ago revenues of $17.47 million, including interest income of $16.57 million versus $16.75 million, respectively.
 "Declining interest rates have had a very positive impact on the bank's interest expense," commented Evans. "This translates to a decrease in the bank's cost of funds, and a corresponding increase in net interest income." For the six months ended Sept. 30, the bank's net interest income rose to $8.93 million, up from $8.29 million one year ago.
 Total loan volume for the past quarter was $35.14 million, down slightly from $38.53 million for the comparable quarter one year ago. However, total loan volume for the six months increased 21 percent to $82.35 million, up from $68.27 million for the same period one year ago. Loan refinance activity continues to be a significant percentage of the bank's business as homeowners take advantage of low mortgage rates.
 Commenting on this activity, Evans said, "After two years of record refinance activity, we believe the refinance market is beginning to slow down. Consequently, we expect to see loan volume return to more normal levels in future quarters."
 Profitability at the bank remains high. Driven largely by the current low interest rate environment, the bank's interest rate spread for the quarter increased to 4.06 percent, up from 4.02 percent one year ago. With interest rates stabilizing, however, the bank expects the interest rate spread to begin to narrow to a more normal level sometime in the future.
 During the quarter, the bank's board of directors declared an 8-cent per share cash dividend, payable Oct. 29 to stockholders of record Oct. 11, 1993.
 Horizon Bank is a $405 million, state-chartered, FDIC-insured, savings bank based in the northwestern corner of Washington state. The bank operates nine full-service offices in the contiguous Whatcom, Skagit and Snohomish county market.
 HORIZON BANK
 SELECTED FINANCIAL HIGHLIGHTS
 3 months ended 6 months ended
 Sept. 30 Sept. 30
 1993 1992 1993 1992
 Interest income $8,264,316 $8,454,077 $16,573,133 16,750,455
 Interest expense 3,804,582 4,218,581 7,647,978 8,459,936
 Net interest
 income 4,459,734 4,235,496 8,925,155 8,290,519
 Provision for loan
 losses 17,269 13,885 106,431 13,885
 Net interest income
 after provision for
 loan losses 4,442,465 4,221,611 8,818,724 8,276,634
 Non-interest
 income 480,793 371,574 896,169 716,245
 Non-interest
 expense 1,882,129 1,922,562 3,684,402 3,668,408
 Income before
 provision for
 income taxes 3,041,129 2,670,623 6,030,491 5,324,471
 Provision for
 income taxes 1,037,252 870,145 2,087,175 1,734,824
 Net income before
 cumulative effect
 of change in
 accounting 2,003,877 1,800,478 3,943,316 3,589,647
 Cumulative effect
 of change in
 accounting 0 0 0 889,000
 Net income 2,003,877 1,800,478(B) 3,943,316 2,700,647(B)
 Earnings per share
 before change $0.34 $0.31(A)(B) $0.68 $0.63(A)(B)
 Earnings per share
 after change $0.34 $0.31(A)(B) $0.68 $0.47(A)(B)
 Weighted average
 shares
 outstanding 5,847,804 5,717,730(A) 5,834,304 5,716,541(A)
 (in percent)
 Return on assets 1.99 1.92 1.97 1.45
 Return on equity 12.99 12.99 12.96 9.87
 Interest rate spread 4.06 4.02 4.05 3.94
 Net interest margin 4.64 4.69 4.67 4.66
 At Sept. 30, At March 31,
 1993 1993
 Assets $405,128,773 $394,167,986
 Loans Receivable, net 327,514,451 314,540,381
 Nonperforming loans 64,781 0
 Loan loss reserve 2,732,779 2,626,348
 Deposits 335,410,404 328,051,576
 Stockholders' equity 62,557,442 59,164,320
 Stockholders'
 equity-to-assets
 (in percent) 15.44 15.01
 Stockholders'
 equity-to-deposits
 (in percent) 18.65 18.04
 Total shares outstanding 5,853,422 5,804,744 (A)
 Book value per share $10.69 $10.19 (A)
 (A) Restated for 5-for-4 stock dividend declared June 23, 1992, and 15 percent stock dividend declared March 23, 1993.
 (B) Amount previously reported has been restated to reflect change in accounting.
 -0- 10/19/93
 /CONTACT: V. Lawrence Evans, president, or David Eldred, Investor Relations, 206-733-3050, of Horizon Bank/
 (HRZB)


CO: Horizon Bank ST: Washington IN: FIN SU: ERN

IC -- SE003 -- 3769 10/19/93 08:59 EDT
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