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HORIZON BANK REPORTS HIGHER FIRST QUARTER EARNINGS AND NEW OFFICE LOCATIONS

 BELLINGHAM, Wash., July 20 /PRNewswire/ -- Horizon Bank (NASDAQ: HRZB) announced first quarter results for the period ended June 30 with strong earnings gains, increased loan demand, and improved profitability. The bank also announced the expansion of several of its office locations.
 Net income for the quarter rose to $1.94 million, or 33 cents per share, up from $0.90 million and 16 cents per share for the same quarter one year ago. Please note that prior year earnings have been restated to reflect the change in accounting required by the Financial Accounting Standards Board (FASB) ruling No. 109, as well as the 25 percent and 15 percent stock dividends declared June 23, 1992 and March 23, 1993, respectively. Before the effect of the change in accounting, Horizon Bank's net income for the quarter ended June 30, 1992, was $1.79 million, or 31 cents per share. Total revenue for the quarter was $8.72 million, up from $8.64 million, including interest income of $8.31 million versus $8.30 million.
 Loan demand in the bank's three-county market was strong. Total loan volume for the quarter increased 59 percent to 47.20 million, up from $29.74 million one year ago. Loan refinance activity continues to be a large percentage of the bank's business as homeowners take advantage of the low interest rate environment.
 At the same time, the bank had only one nonperforming loan of $51,706, or 0.01 percent of assets. This extremely low rate compares quite favorably with the Washington State and national thrift averages of 1.11 percent and 3.49 percent, respectively, as published in the June 1993 edition of The SNL Quarterly Thrift Digest. Assets, deposits and stockholders' equity all rose during the quarter. Stockholders' equity increased to $60.90 million, or 15.23 percent of total assets.
 The favorable interest rate environment continued to increase the bank's profitability, affecting both interest rate spread and return on assets (ROA). As of June 30, the bank's interest rate spread increased to 4.04 percent, up from 3.87 percent for the same quarter one year ago and ROA increased to 1.95 percent, up from 0.99 percent one year ago. Again, the previous year's ROA has been restated to reflect the change in accounting required by FASB No. 109. Before the change, the bank's ROA for June 30, 1992 was 1.81 percent.
 Commenting on the bank's performance, V. Lawrence Evans, president, said, "The bank continues to experience good profitability, in large part due to the continued steepness of the interest rate yield curve, good loan volume and our extremely low rate of nonperforming loans." Horizon Bank is also pleased to announce the expansion of several of its offices and locations. The new construction of the bank's existing Anacortes office is nearly complete and is scheduled to open in late September. Also, the bank will convert its Everett Home Loan Center to a full-service office beginning in late October. In addition, the bank has purchased pad space in the new Burlington Fred Meyer mall development, and has scheduled this new location to open in late 1994. The bank's existing Ferndale office will also be remodeled and expanded, and should be completed in November 1993.
 "We are very excited about the prospects these new additions hold for the bank," commented Evans. "The bank has been operating in Mt. Vernon and Anacortes for over 20 years and the new Burlington office will increase our presence in Skagit County. Our Everett Home Loan Center has exceeded its loan goals since it was opened, and we look forward to serving our customers in that area with a full-service office."
 Horizon Bank is a $400 million, state-chartered, FDIC-insured savings bank located in the northwestern corner of Washington state. The bank operates eight full-service offices and one loan office in the contiguous Whatcom, Skagit and Snohomish county area.
 HORIZON BANK
 SELECTED FINANCIAL HIGHLIGHTS
 3-Months Ended June 30 1993 1992
 Interest income $8,308,817 $8,296,378
 Interest expense 3,843,396 4,241,355
 Net interest income 4,465,421 4,055,023
 Provision for loan losses 89,162 0
 Net interest income after
 provision for loan losses 4,376,259 4,055,023
 Non-interest income 415,376 344,671
 Non-interest expense 1,802,273 1,745,846
 Income before provision for
 income taxes 2,989,362 2,653,848
 Provision for income taxes 1,049,923 864,679
 Net income before cumulative
 effect of change in accounting 1,939,439 1,789,169
 Cumulative effect of change
 in accounting 0 889,000
 Net income 1,939,439 900,169 (b)
 Earnings per share before change $0.33 $0.31 (a)
 Earnings per share after change 0.33 0.16 (a),(b)
 Weighted average
 shares outstanding 5,820,655 5,790,050 (a)
 Return on assets 1.95 pct. 0.99 pct.(b)
 Return on equity 12.92 pct. 6.66 pct.(b)
 Interest rate spread 4.04 pct. 3.87 pct.
 Net interest margin 4.69 pct. 4.65 pct.
 At June 30, At March 31,
 1993 1993
 Assets $399,775,158 $394,167,986
 Loans Receivable, net 322,563,187 314,540,381
 Nonperforming loans 51,706 0
 Loan loss reserve 2,715,510 2,626,348
 Deposits 331,928,577 328,051,576
 Stockholders' equity 60,900,511 59,164,320
 Stockholders' equity-to-assets 15.23 pct. 15.01 pct.
 Stockholders' equity-to-deposits 18.35 pct. 18.04 pct.
 Total shares outstanding 5,841,094 5,804,744(a)
 Book value per share $ 10.43 $ 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- 7/20/93
 /CONTACTS: V. Lawrence Evans, president, or David Eldred, Investor Relations, both of Horizon Bank, 206-733-3050/
 (HRZB)


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

JH -- SE002 -- 6584 07/20/93 08:51 EDT
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Date:Jul 20, 1993
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