1 UNITED STATES 2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from Commission file number 0-10792 ---------- ______HORIZON BANCORP_______ (Exact name of registrant as specified in its charter) INDIANA 35-1562417 - ------------------------------ -------------------- State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 515 Franklin St., Michigan City, Indiana 46360 ---------------------------------------- ------------------ Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 219-879-0211 ------------- Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered None - ------------------- ------------------------------------------ Securities registered pursuant to Section 12(g) of the Act: Common stock, no par value, 897,311 shares outstanding at March 11, 1997 ------------------------------------------------------------------------ (Title of class) Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K X. --- The aggregate market value of the registrant's common stock held by nonaffiliates of the registrant, based on the bid price of such stock on March 11, 1997 was $27,059,000.
2 Documents Incorporated by Reference ----------------------------------- Part of Form 10-K into which Document portion of document is incorporated -------- ----------------------------------- Portions of the Registrant's 1996 I, II, VI annual report to shareholders Portions of the Registrant's III proxy statement to be filed for its May 29,1997 annual meeting of shareholders Except as provided in Part I, Part II and Part III, no part of the Registrant's 1996 annual report to shareholders or proxy statement shall be deemed incorporated herein by this reference or to be filed with the Securities and Exchange Commission for any purposes. 2
3 PART I ITEM 1. BUSINESS (a) General Development of Business - ----------------------------------- Horizon Bancorp, a registered bank holding company organized under the laws of the State of Indiana on April 26, 1983, (Registrant), became the parent corporation and sole shareholder of The First Merchants National Bank of Michigan City pursuant to a plan of reorganization effective October 31, 1983. Prior to October 31, 1983, the Registrant conducted no business and had only nominal assets necessary to complete the plan of reorganization. On October 1, 1986 the Registrant issued 399,340 shares of its common stock in exchange for all of the common stock of Citizens Michiana Financial Corporation in connection with mergers of such companies and their subsidiaries. Subsequent to the merger, the Registrant remains a one-bank holding company with a wholly-owned subsidiary, Horizon Bank, N.A., formerly known as First Citizens Bank, N.A. (Bank) and Bank's wholly-owned subsidiary, IMS Investment Management, N.A. (IMS) and non-bank subsidiaries, HBC Insurance Group (Insurance Company) and The Loan Store, Inc., (Loan Store). (b) Financial Information About Industry Segments - ------------------------------------------------- The Registrant, Bank and its subsidiaries are engaged in the commercial and retail banking business, investment management services, retail lending and insurance credit life sales. Refer to Item 1(e) and Item 6 for information pertaining to Registrant's banking business. (c) Narrative Description of Business - ------------------------------------- The Registrant's business is that incident to its 100% ownership of Bank, Loan Store and the Insurance Company. The main source of funds for the Registrant is dividends from Bank. Bank was chartered as a national bank association in 1873 and has operated continuously since that time. Bank, whose deposits are insured by the Federal Deposit Insurance Corporation to the extent provided by law, is a full-service commercial bank offering a broad range of commercial and retail banking services, corporate and individual trust and agency services, and other services incident to banking. Bank maintains five facilities located exclusively within LaPorte County, Indiana and three facilities located in Porter County, Indiana. At December 31, 1996, Bank had total assets of $382,038,000 and total deposits of $289,180,000. Aside from the stock of Bank, Insurance Company and Loan Store, the Registrant's only other significant assets are cash and cash equivalents totaling approximately $712,000, investment securities totaling approximately $1,404,000 and taxes receivable of approximately $1,188,000 at December 31, 1996. The business of the Registrant, Bank, IMS, Insurance Company and Loan Store is not seasonal to any material degree. No material part of the Registrant's business is dependent upon a single or small group of customers, the loss of any one or more of whom would have a materially adverse effect on the business of the Registrant. Revenues from loans accounted for 68% in 1996, 67% in 1995, and 66% in 1994 of the total consolidated revenue. Revenues from investment securities accounted for 15% in 1996, 20% in 1995 and 20% in 1994 of total consolidated revenue. The Registrant has no employees and there are approximately 170 full and part-time persons employed by Bank, IMS and Loan Store as of December 31, 1996. A high degree of competition exists in all major areas where the Registrant engages in business. Bank's primary market consists of LaPorte County, Indiana, portions of Porter County, Indiana, and Berrien County, Michigan. Bank competes with commercial banks located in the home county and contiguous counties in Indiana and Michigan, as well as with savings and loan associations, consumer finance companies, and credit unions located therein. To a more moderate extent, Bank competes with Chicago money center banks, mortgage banking companies, insurance companies, brokerage houses, other institutions engaged in money market financial services, and certain government agencies. 3
4 The Insurance Company offers credit life and accident and health insurance. The Loan Store, Inc. is engaged in the business of retail lending and operates three facilities in Indiana. The net income generated from the Insurance Company and the Loan Store are not significant to the overall operations of the Registrant. Regulation ---------- The earnings and growth of the banking industry and the Registrant are affected not only by the general economic conditions, but also by the credit policies of monetary authorities, particularly the Federal Reserve System. An important function of the Federal Reserve System is to regulate the national supply of bank credit in order to contest recessionary trends and curb inflationary pressures. Among the instruments of monetary policy used by the Federal Reserve System to implement these objectives are open market operations in U.S. Government securities, changes in the discount rate on member bank borrowings, and changes in reserve requirements against member bank deposits. These means are used in varying combinations to influence overall growth of bank loans, investments and deposits and may also affect interest rates charged on loans or paid on deposits. The monetary policies of the Federal Reserve System have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. Because of changing conditions in the national and international economy and the money markets, and as a result of actions by monetary and fiscal authorities, including the Federal Reserve System, interest rates, credit availability and deposit levels may change due to circumstances beyond the control of the Registrant or Bank. The Registrant, as a bank holding company, is subject to regulation under the Bank Holding Company Act of 1956, as amended (Act), and is registered with the Board of Governors of the Federal Reserve System (Board of Governors). Under the Act, the Registrant is required to obtain prior approval of the Board of Governors before acquiring direct ownership or control of more than 5% of the voting shares of any bank. With certain exceptions, the Act precludes the Registrant from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company which is not a bank and from engaging in any business other than that of banking, managing and controlling banks, or furnishing services to its subsidiary. The Registrant may engage in, and may own shares of companies engaged in, certain activities found by the Board of Governors to be so closely related to banking as to be a proper incident thereto. The Registrant is required to file annual reports of its operations with the Board of Governors and such additional information as they may require pursuant to the Act, and the Registrant and Bank are subject to examination by the Board of Governors. Further, the Registrant and Bank are prohibited from engaging in certain tie-in arrangements with respect to any extension of credit or provision of property or services. The Board of Governors also possesses the authority through cease and desist powers to regulate parent holding company and nonbank subsidiaries where action of a parent holding company or its nonbank subsidiaries constitutes a serious threat to the safety, soundness or stability of a subsidiary bank. Federal bank regulatory agencies also have the power to regulate debt obligations issued by bank holding companies. Included in these powers is the authority to impose interest ceilings and reserve requirements on such debt obligations. The acquisition of banking subsidiaries by bank holding companies is subject to the jurisdiction of, and requires the prior approval of, the Federal Reserve and, for institutions resident in Indiana, the Indiana Department of Financial Institutions. Bank holding companies located in Indiana are permitted to acquire banking subsidiaries throughout the state, subject to limitations based upon the percentage of total state deposits of the holding company's subsidiary banks. Further, Indiana law permits interstate bank holding company acquisitions on a reciprocal basis, subject to certain limitations. Beginning July 1, 1992, Indiana law permits the Registrant to acquire banks, and be acquired by bank holding companies, located in any state in the country which permits reciprocal entry by Indiana bank holding companies. The Registrant, Bank, IMS, Insurance Company and Loan Store are "affiliates" within the meaning of the Federal Reserve Act. The Federal Reserve Act and the Federal Deposit Insurance Act limit the amount of the Bank's loans or extensions of credit to affiliates, its investments in the stock or other securities thereof, and its taking of such stock or securities as collateral for loans to any borrower. 4
5 Bank, as a national bank, is regulated and regularly examined by the Office of the Comptroller of the Currency (OCC). In addition to certain statutory limitations on the payment of dividends, approval of the OCC is required for any dividend to the Registrant by Bank if the total of all dividends, including any proposed dividend, declared by Bank in any calendar year exceeds the total of its net profits (as defined by the OCC) for that year combined with its retained net profits for the preceding two years, less any required transfers to surplus. The Federal Reserve Board implemented risk-based capital requirements for banks and bank holding companies in December, 1988. The risk-based capital requirements have little effect on the Registrant because existing capital is in excess of the requirements. (See additional discussion in Management's Discussion and Analysis in Registrant's Annual Report to Shareholders, Exhibit 13.) (d) Financial Information about Foreign and Domestic Operations and - ------------------------------------------------------------------- Export Sales ------------ None (e) Statistical Disclosures - --------------------------- I. DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL Information required by this section of Securities Act Industry Guide 3 is presented in Management 's Discussion and Analysis Section of the Corporation's 1996 Annual Report to Shareholders, II. INVESTMENT PORTFOLIO (A) The following is a schedule of the book value of investment securities available for sale and held to maturity at December 31, 1996, 1995 and 1994. <TABLE> <CAPTION> 1996 1995 1994 <S> <C> <C> <C> AVAILABLE FOR SALE U.S. Treasury and U.S. Government agencies and corporations $ 4,965 $ 7,165 $18,034 Mortgage-backed securities 49,683 62,717 Other securities 4,248 4,281 Unrealized gain/(loss) 145 779 ------- ------- ------- Total investment securities available for sale $59,041 $74,942 $18,034 ======= ======= ======= HELD TO MATURITY U.S. Treasury and U.S. Government agencies and corporations $ 2,793 $ 3,164 $ 3,521 Obligations of states and political subdivisions 10,017 9,003 11,954 Mortgage-backed securities Other securities Unrealized gain/(loss) 0 0 ------- ------- ------- Total investment securities held to maturity $12,810 $12,167 $15,475 ======= ======= ======= Toal investment securities for sale and held to maturity $ 71,851 $87,109 $33,509 ======== ======= ======= </TABLE> 5
6 (B) The following is a schedule of maturities of each category of debt securities and the related weighted average yield of such securities as of December 31, 1996: <TABLE> <CAPTION> One year or less After one year After five years After ten years through five years through ten years (Thousands) Amount Yield Amount Yield Amount Yield Amount Yield ----------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> <C> <C> <C> AVAILABLE FOR SALE U.S. Treasury and U.S. Government $ 1,001 6.20% $ 3,964 6.79% agency securities(1) Other securities 4,248 7.12% Mortgage-backed securities (2) 1,182 7.05% 48,502 7.21% ----------------------------------------------------------------------------- Total $ 5,249 6.94% $ 5,146 6.85% $ 0 0.00% $48,502 7.21% HELD TO MATURITY U.S. Government agency securities $ 2,793 7.38% Obligations of states and political 2,057 4.17% 3,680 4.44% 3,753 5.04% 527 5.00% subdivisions ----------------------------------------------------------------------------- Total $ 4,850 6.02% $ 3,680 4.44% $ 3,753 5.04% $ 527 5.00% Total investment securities $10,099 6.50% $ 8,826 5.85% $ 3,753 5.04% $49,029 7.19% available for sale and held to maturity <FN> (1) Amortized cost is based on contractual maturity or call date where a call option exists (2) Maturity based upon maturity date </TABLE> The weighted average interest rates are based on coupon rates for securities purchased at par value and on effective interest rates considering amortization or accretion if the securities were purchased at a premium or discount. Yields are not presented on a tax-equivalent basis. (C) Excluding those holdings of the investment portfolio in U.S. Treasury securities and other agencies and corporations of the U.S. Government, there were no investments in securities of any one issuer which exceeded 10% of the consolidated stockholders' equity of the Registrant at December 31, 1996. III. LOAN PORTFOLIO (A) Types of Loans - Total loans on the balance sheet are comprised of the following classifications at December 31 for the years indicated. <TABLE> <CAPTION> (Thousands) 1996 1995 1994 1993 1992 ---------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> Commercial, financial, agricultural and $ 75,460 $ 66,125 $ 67,177 $ 64,645 $ 67,074 commercial tax-exempt loans Real estate mortgage loans 133,739 119,739 105,512 103,693 102,398 Installment loans 62,277 55,798 50,933 52,880 48,896 ---------------------------------------------------------------------------- Total loans $271,476 $241,662 $223,622 $221,218 $218,368 ============================================================================= </TABLE> 6
7 B) Maturities and Sensitivities of Loans to Changes in Interest Rates - The following is a schedule of maturities and sensitivities of loans to changes in interest rates, excluding real estate mortgage and installment loans, as of December 31, 1996: <TABLE> <CAPTION> Maturing or repricing (thousands) One year or One through After five Total less five years years ----------------------------------------------------------- <S> <C> <C> <C> <C> Commercial, financial, agricultural and $33,125 $26,900 $15,435 $75,460 commercial tax-exempt loans </TABLE> The following is a schedule of fixed-rate and variable-rate commercial, financial, agricultural and commercial tax-exempt loans due after one year. (Variable-rate loans are those loans with floating or adjustable interest rates.) <TABLE> <CAPTION> (Thousands) Fixed Rate Variable Rate -------------------------------- <S> <C> <C> Total commercial, financial, $31,551 $10,984 agricultural, and commercial tax-exempt loans due after one year </TABLE> (C) Risk Elements 1. Nonaccrual, Past Due and Restructured Loans - The following schedule summarizes nonaccrual, past due and restructured loans. <TABLE> <CAPTION> December 31 (thousands) 1996 1995 1994 1993 1992 --------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> (a) Loans accounted for on a nonaccrual basis $316 $668 $2,794 $1,687 $2,054 (b) Accruing loans which are contractually past due 90 days or more 682 533 474 481 205 as to interest and principal payments (c) Loans not included in (a) or (b) which are "Troubled Debt Restructuring's" as defined by SFAS No. 15 ---------------------------------------------------------------------------- Totals $998 $1,201 $3,268 $2,168 $2,259 ============================================================================ </TABLE> The decrease in nonaccrual loans in 1995 is primarily due to three loans which were returned to an accruing basis. These loans had sustained required payment performance over the last six months or longer. The increase in nonaccrual loans in 1994 is due primarily to three loans for approximately $1,500,000, secured by real estate and having common ownership. These loans were placed on nonaccrual in April and May of 1994. 7
8 III. LOAN PORTFOLIO (Continued) <TABLE> <CAPTION> (Thousands) <S> <C> <C> Gross interest income that would have $36 $55 been recorded on nonaccrual loans out standing as of December 31, 1996 in the period if the loans had been current, in accordance with their original terms and had been outstanding throughout the period or since origination if held for part of the period Interest income actually recorded on 0 0 nonaccrual loans outstanding as of December 31, 1996 and included in net income for the period Interest income not recognized during the $36 $55 period on nonaccrual loans outstanding as of December 31, 1996 </TABLE> Discussion of Nonaccrual Policy From time to time, the Bank obtains information which may lead management to believe that the collection of interest may be doubtful on a particular loan. In recognition of such, it is management's policy to convert the loan from an "earning asset" to a nonaccruing loan. Further, it is management's policy to place a commercial loan on a nonaccrual status when delinquent in excess of 90 days, unless the Loan Committee approves otherwise. All loans placed on nonaccrual status must be reviewed by the officer responsible for the loan, the senior lending officer and the loan review officer. The loan review officer monitors the loan portfolio for any potential problem loans. 2. Potential Problem Loans Loans where there are serious doubts as to the ability of the borrower to comply with present loan repayment terms, and not included in Section 1 above, amount to $124,000 at December 31, 1996. Loan customers included in this category are having financial difficulties at the present time and may need adjustments in their repayment terms. Payments are anticipated or collateral or guarantees are available to reduce any possible loss. These loans and potential loss exposure have been considered in management's analysis of the adequacy of the allowance for loan losses. Consideration was given to loans classified for regulatory purposes as loss, doubtful, substandard or special mention that have not been disclosed in Section 1 above. Management believes that these loans do not represent or result from trends or uncertainties which management reasonably expects will materially impact future operating results, liquidity or capital resources, or management believes that these loans do not represent material credits about which management is aware of any information which causes management to have serious doubts as to the ability of such borrowers to comply with the loan repayment terms. 3. Foreign outstandings None 4. Loan Concentrations As of December 31, 1996 there are no significant concentrations of loans exceeding 10% of total loans other than those disclosed in Item III above. 8
9 III. LOAN PORTFOLIO (Continued) (D) Other Interest-Bearing Assets Other than $349,000 held as other real estate owned, net of allowance, there are no other interest-bearing assets as of December 31, 1996 which would be required to be disclosed under Item III C.1 or 2 if such assets were loans. IV. SUMMARY OF LOAN LOSS EXPERIENCE (A) The following schedule presents an analysis of the allowance for loan losses, average loan data and related ratios for the years ended December 31: <TABLE> <CAPTION> (Thousands) 1996 1995 1994 1993 1992 ------------------------------------------------------------------------------- LOANS <S> <C> <C> <C> <C> <C> Loans outstanding at the end of the $ 271,476 $ 241,662 $ 223,622 $ 219,139 $ 215,649 period (1) Average loans outstanding during the $ 256,580 $ 226,198 $ 218,053 $ 214,033 $ 208,615 period (1) (1) Net of unearned income and deferred loan fees ALLOWANCE FOR LOAN LOSSES Balance at beginning of the period $ 2,777 $ 2,555 $ 2,310 $ 1,997 $ 2,479 Loans charged-off: Commercial and agricultural loans (11) (45) (213) (1,625) Real estate mortgage loans (14) (17) Installment loans (532) (231) (221) (343) (515) --------- --------- --------- --------- --------- Total loans charged-off (557) (293) (221) (556) (2,140) Recoveries of loans previously charged-off: Commercial and agricultural loans 27 358 143 339 229 Real estate mortgage loans 8 Installment loans 122 149 158 254 228 --------- --------- --------- --------- --------- Total loan recoveries 149 515 301 593 457 --------- --------- --------- --------- --------- Net loans charged-off (408) 222 80 37 (1,683) --------- --------- --------- --------- --------- Provision charged to operating expense 66 165 276 1,201 ------------------------------------------------------------------------------- Balance at the end of the period $ 2,435 $ 2,777 $ 2,555 $ 2,310 $ 1,997 ================================================================================ Ratio of net charge-offs (recoveries) to .16% (.10)% (.04)% (.02)% .81% average loans outstanding for the period </TABLE> 9
10 IV. SUMMARY OF LOAN LOSS EXPERIENCE (Continued) The allowance for loan losses balance and the provision charged to expense are judgmentally determined by management based upon the periodic reviews of the loan portfolio. In 1995, nonperforming loans decreased due primarily to the three loans returned to an accruing basis. In 1994, the bank experienced an increase in nonperforming loans which was due principally to the loans to a single borrower. As of December 31, 1994, the allowance for possible loan losses increased over 1993 both in terms of amount and percentage of outstanding loans. The provision for possible loan losses was lower in 1994 than 1993 in part because the bank experienced net loan recoveries. The provision for loan losses continues to decrease in 1994, not withstanding the increase in nonperforming loans, due to the availability of excess reserves within the allowance. The 1993 provision reflects both the decrease in charge-offs and nonperforming loans. Management also considered the varying charge-off and recovery levels relative to the installment loan portfolio as well as varying levels of charge-offs on commercial loans in determining an adequate allowance for loan losses for the periods presented. See also Note 5 of the notes to the consolidated financial statements. Estimating the risk of loss and the amount of loss is necessarily subjective. Accordingly, the allowance is maintained by management at a level considered adequate to cover possible losses that are currently anticipated based on past loss experience, general economic conditions, information about specific borrower situations including their financial position and collateral values and other factors and estimates which are subject to change over time. (B) The following schedule is a breakdown of the allowance for loan losses allocated by type of loan and the percentage of loans in each category to total loans. Allocation of the Allowance for Loan Losses at December 31. (thousands) <TABLE> <CAPTION> 1996 1995 1994 1993 1992 ------------------------------------------------------------------------------------------------------------------------ Allowance % of Total Allowance % of Total Allowance % of Total Allowance % of Total Allowance % of Total Amount Loans Amount Loans Amount Loans Amount Loans Amount Loans ------------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> Commercial, $576 0.2% $733 0.3% $1,434 0.6% $1,064 0.5% $1,192 0.6% financial and agricultural Real estate 102 0.0% 139 0.1% 111 0.0% 171 0.1% 185 0.1% mortgage Installment 1,075 0.4% 655 0.3% 407 0.2% 514 0.2% 389 0.2% Unallocated 682 1,250 603 561 231 ------------------------------------------------------------------------------------------------------------------- Total $2,435 0.9% $2,777 1.1% $2,555 0.9% $2,310 1.1% $1,997 0.9% =================================================================================================================== </TABLE> The increase in the reserve allocation for installment loans from 1995 to 1996 is primarily the result of the change in methodology for the historical portion of the allowance callculation. In 1996, the Bank began using the industry average charge-off rate instead of the Bank's historical charge-off rate which was used in previous years. This change in methodolgy resulted in a $325 increase in the portion of the allowance allocated to installment loans. While management's periodic analysis of the adequacy of the allowance for loan losses may allocate portions of allowance for specific problem loan situations, the entire allowance is available for any loan charge-offs that occur. During 1997, charge-offs are expected to remain consistant with amounts net charge-offs in each category. 10
11 V. DEPOSITS Information required by this section is incorporated by reference to the information appearing under the caption "Summary of Selected Financial Data" on page 62 of the Registrant's Annual Report to Shareholders, Exhibit 13. VI. RETURN ON EQUITY AND ASSETS Information required by this section is incorporated by reference to the information appearing under the caption "Summary of Selected Financial Data" on page 62 of the Registrant's Annual Report to Shareholders, Exhibit 13. VII. SHORT-TERM BORROWINGS The following is a schedule of statistical information relative to securities sold under agreements to repurchase which are secured by U.S. Treasury and U.S. Government agency securities and mature within one year. There were no other categories of short-term borrowings for which the average balance outstanding during the period was 30 percent or more of shareholders' equity at the end of the period. <TABLE> <CAPTION> (Thousands) 1996 1995 1994 ----------------------------------------------- <S> <C> <C> <C> Outstanding at year end $11,562 $9,558 $6,693 Approximate weighted average interest 5.14% 5.52% 6.39% rate at year-end Highest amount outstanding as of any $14,822 $16,446 $7,980 month-end during the year Approximate average outstanding during $10,961 $8,196 $6,525 the year Approximate weighted average interest 5.07% 5.65% 4.11% rate during the year </TABLE> ITEM 2. PROPERTIES - ------------------- The main office of the Registrant and Bank is located at 515 Franklin Square, Michigan City, Indiana. The building located adjacent to the main office of the Registrant and Bank, at 502 Franklin Square, houses the credit administration, operations and micro-computer departments of Bank. In addition to these principal facilities, the Bank has eight sales offices located at: 5477 Johnson Road, Michigan City, Indiana 3600 South Franklin Street, Michigan City, Indiana 117 E First St., Wanatah, Indiana 1410 Lincolnway, LaPorte, Indiana 754 Indian Boundary Road, Chesterton, Indiana 3125 N. Calumet, Valparaiso, Indiana 6504 U.S. Highway 6, Portage, Indiana 265 U.S. Highway 30, Valparaiso, Indiana The Loan Store has sales offices at the following locations: 200 W 80th Place, Suite C, Merriville, Indiana 8343 Indianapolis Blvd. , Highland, Indiana 6313 University Commons, South Bend, Indiana 11
12 ITEM 3. LEGAL PROCEEDINGS - -------------------------- The information required under this Item is incorporated by reference to the information appearing under the caption "Note 18 - Commitments, Off-Balance Sheet Risk and Contingencies" on page 59 of the registrants Annual Report to Shareholders, Exhibit 13. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ No matters were submitted to a vote of the Registrant's stockholders during the fourth quarter of the 1996 fiscal year. PART II ------- ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS - ------------------------------------------------------------------------------- The information required under this item is incorporated by reference to the information appearing under the caption "Market for Horizon's Common Stock and Related Stockholder Matters" on page 63 of the Registrant's Annual Report to Shareholders, Exhibit 13. ITEM 6. SELECTED FINANCIAL DATA - -------------------------------- The information required under this item is incorporated by reference to the information appearing under the caption "Summary of Selected Financial Data" on page 62 of the Registrant's Annual Report to Shareholders, Exhibit 13. ITEM 7. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND - ------------------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- Management's discussion and analysis of financial condition and results of operations appears on pages 13 through 34 in the 1996 Annual report to Shareholders, Exhibit 13 and is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ---------------------------------------------------- The consolidated financial statements and supplementary data required under this item are incorporated herein by reference to the Annual Report to Shareholders, pages 35 through 63, Exhibit 13. The Registrant is not required to furnish the supplementary financial information specified by Item 302 of Regulation S-K. Consolidated Balance Sheets, December 31, 1996 and 1995 Consolidated Statements of Income for the years ended December 31, 1996, 1995 and 1994 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31,1996, 1995 and 1994 Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994 Notes to the Consolidated Financial Statements Report of Independent Public Accountants ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND - ------------------------------------------------------------------------ FINANCIAL DISCLOSURE -------------------- The disclosures required under this item are incorporated by reference to the Registrant's Forms 8-K, Exhibit 16. PART III -------- Information relating to the following items will be included in the Registrant's definitive proxy statement for the annual meeting of shareholders to be held May 29, 1997 ("1997 Proxy Statement"). The 1997 Proxy Statement will be filed with the Commission within one hundred twenty days of the close of the Registrant's last fiscal year and is in part incorporated into this Form 10-K Annual Report by reference. 12
13 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - ------------------------------------------------------------ ITEM 11. EXECUTIVE COMPENSATION - -------------------------------- ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - ------------------------------------------------------------------------ ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - -------------------------------------------------------- ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K - ----------------------------------------------------------------------- (a) 1. Financial Statements The following consolidated financial statements of the Registrant appear in the 1996 annual report to shareholders on the pages referenced and are specifically incorporated by reference under Item 8 of this Form 10-K: <TABLE> <CAPTION> Annual Report Page Number -------------- <S> <C> Consolidated Balance Sheets 35 Consolidated Statements of Income 36 Consolidated Statements of Changes in Stockholders' Equity 37 Consolidated Statements of Cash Flows 38 Notes to the Consolidated Financial Statements 39 - 59 Report of Independent Public Accountants 60 </TABLE> (a) 2. Financial Statement Schedules ----------------------------- Financial statement schedules are omitted for the reason that they are not required or are not applicable, or the required information is included in the financial statements. (a) 3. Exhibits -------- Reference is made to the Exhibit Index which is found on page 16 of this Form 10-K. (b) Reports on Form 8-K ------------------- None Exhibits - -------- (c) Reference is made to the Exhibit Index which is found on page 16 of this Form 10-K. (d) Financial Statement Schedules ----------------------------- Financial statement schedules are omitted for the reason that they are not required or are not applicable, or the required information is included in the financial statements. 13
14 SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HORIZON BANCORP --------------------------------------------- (Registrant) Date March 28, 1997 /s/ Larry E. Reed ----------------------- ----------------------------------------------- Larry E. Reed Chairman & Chief Executive Officer Date March 28, 1997 /s/ Thomas P. McCormick ----------------------- ---------------------------------------------- Thomas P. McCormick President Date March 28, 1997 /s/ Diana E. Taylor ----------------------- ---------------------------------------------- Diana E. Taylor Chief Financial Officer/Secretary/Treasurer 14
15 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Date Signature and Title ---- ------------------- March 28, 1997 /s/ Dale W. Alspaugh - ------------------ ----------------------------------- Dale W. Alspaugh, Director March 28, 1997 /s/ Russell L. Arndt - ------------------ ----------------------------------- Russell L. Arndt, Director March 28, 1997 /s/ George R. Averitt - ------------------ ----------------------------------- George R. Averitt, Director March 28, 1997 /s/ James D. Brown - ------------------ ----------------------------------- James D. Brown, Director March 28, 1997 /s/ Robert C. Dabagia - ------------------ ----------------------------------- Robert C. Dabagia, Director March 28, 1997 /s/ Myles J. Kerrigan - ------------------ ----------------------------------- Myles J. Kerrigan, Director March 28, 1997 /s/ Donald J. Manaher - ------------------ ----------------------------------- Donald J. Manaher, Director March 28, 1997 /s/ Robert E. McBride - ------------------ ----------------------------------- Robert E. McBride, Director March 28, 1997 /s/ Thomas P. McCormick - ------------------ ----------------------------------- Thomas P. McCormick, Director President March 28, 1997 /s/ Boyd W. Phelps - ------------------ ----------------------------------- Boyd W. Phelps, Director March 28, 1997 /s/ Larry E. Reed - ------------------ ----------------------------------- Larry E. Reed, Director Chairman & Chief Executive Officer March 28, 1997 /s/ Gene L. Rice - ------------------ ----------------------------------- Gene L. Rice, Director March 28, 1997 /s/ Susan D. Sterger - ------------------ ----------------------------------- Susan D. Sterger, Director 15
16 EXHIBIT INDEX ------------- The following exhibits are included in this Form 10-K or are incorporated by reference as noted in the following table: <TABLE> <CAPTION> EXHIBIT SEQUENTIAL NUMBER DESCRIPTION PAGE NUMBERS - ------ ----------- ------------ <S> <C> <C> 3.1 ARTICLES OF INCORPORATION OF HORIZON BANCORP INCORPORATED BY REFERENCE TO 12/31/89 FORM 10-K 3.2 BY-LAWS OF HORIZON BANCORP INCORPORATED BY REFERENCE TO 12/31/91 FORM 10-K 10.1 MATERIAL CONTRACTS-AGREEMENT REGARDING INCORPORATED BY REFERENCE EMPLOYMENT CONTRACTS TO 12/31/87 FORM 10-K 10.2 MATERIAL CONTRACTS-1987 STOCK OPTION AND INCORPORATED BY REFERENCE STOCK APPRECIATION RIGHTS PLAN OF HORIZON TO 12/31/86 FORM 10-K BANCORP 10.3 MATERIAL CONTRACTS-NONQUALIFIED STOCK OPTION INCORPORATED BY REFERENCE AND STOCK APPRECIATION RIGHTS AGREEMENT TO 12/31/86 FORM 10-K 10.4 MATERIAL CONTRACTS-AMENDED NONQUALIFIED INCORPORATED BY REFERENCE DIRECTORS DEFERRED COMPENSATION PLAN TO 12/31/89 FORM 10-K 10.5 MATERIAL CONTRACTS-SUPPLEMENTAL EMPLOYEE INCORPORATED HEREIN RETIREMENT PLAN PAGES 17 - 34 10.6 MATERIAL CONTRACTS-FIRST AMENDMENT TO INCORPORATED HEREIN SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN PAGES 35 - 36 10.7 MATERIAL CONTRACTS-SECOND AMENDMENT TO INCORPORATED HEREIN SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN PAGES 37 - 38 10.8 MATERIAL CONTRACTS - AGREEMENT REGARDING INCORPORATED HEREIN EMPLOYMENT CONTRACTS PAGES 39 - 47 11 STATEMENT REGARDING COMPUTATION OF PER SHARE ANNUAL REPORT ATTACHED EARNINGS-REFER TO ANNUAL REPORT PAGE 41 FOOTNOTE 1 (EXHIBIT 13) 13 REGISTRANT'S ANNUAL REPORT TO SHAREHOLDERS ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1996 ATTACHED (NOT DEEMED FILED EXCEPT FOR PORTIONS THEREOF WHICH ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THIS FORM 10-K) 21 SUBSIDIARIES OF THE REGISTRANT INCORPORATED HEREIN PAGE 48 </TABLE> 16