Horizon Financial Declares Cash Dividend, Authorizes Share Repurchase Plan, and Schedules Year-End Fiscal 2006 Conference Call.

BELLINGHAM, Wash. -- Horizon Financial Corp. (NASDAQ:HRZB) announced that at its March 28, 2006 Board of Directors meeting, the company declared a $.145 quarterly cash dividend and authorized a new stock repurchase program.

The quarterly cash dividend, which has been increased four times in the last two years, will be paid on May 2, 2006 to shareholders of record on April 6, 2006. The stock repurchase program runs for one year ending March 31, 2007, and authorizes the repurchase of up to 500,000 shares of HRZB stock, or approximately 5% of shares outstanding. This repurchase plan, which runs concurrent with the Corporation's fiscal year 2007, replaces the program approved a year ago, under which the Corporation repurchased and retired 212,852 shares.

Horizon also announced the earnings release date and dial-in information for management's upcoming earnings conference call. The holding company for Northwestern Washington-based Horizon Bank expects to report results for the fourth quarter and fiscal year ending March 31, 2006 before the market opens on Thursday, April 27, 2006. Management will host a conference call to discuss results at 1:30 pm PDT (4:30 pm EDT) on that same day. The live call can be accessed by dialing 303-262-2211. The replay, which will be available for a month beginning shortly after the call concludes, can be heard at 303-590-3000 using access code 11056594#.

Horizon Financial Corp. is a $1.1 billion, state-chartered bank holding company headquartered in Bellingham, Washington. Its primary subsidiary, Horizon Bank, is a state-chartered commercial bank that operates 18 full-service offices, four commercial loan centers and four real estate loan centers throughout Whatcom, Skagit, Snohomish and Pierce Counties.

Safe Harbor Statement: Except for the historical information in this news release, the matters described herein are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include: continuing to pay cash dividends, the ability to increase such dividends, successfully targeting new commercial business and expand existing relationships, deposit pricing and the ability to gather core deposits, success in new markets, expense management, expanding or maintaining the net interest margin, interest rate risk, loan quality and the loss levels expected on non-performing loans, the local and national economic environment, and other risks and uncertainties discussed from time to time in Horizon Financial's SEC filings. These forward-looking statements speak only as of the date of this release. Horizon undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.