8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):   October 23, 2008
Horizon Bancorp
(Exact Name of Registrant as Specified in Its Charter)
Indiana	000-10792	35-1562417
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
515 Franklin Square, Michigan City, Indiana		46360
(Address of Principal Executive Offices)		(Zip Code)
(219) 879-0211
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition

This Current Report on Form 8-K is being filed to furnish the earnings release issued by the Registrant on October 23, 2008. A copy of the press release is attached as Exhibit 99.1 to this Current Report. The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

Item 9.01  Financial Statements and Exhibits

(d)  Exhibits
Exhibit No.	Description
99.1	Press Release issued October 23, 2008

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

Date: October 23, 2008	Horizon Bancorp
	By:	/s/ James H. Foglesong
		James H. Foglesong, Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description	Location
99.1	Press Release issued October 23, 2008	Attached

EX-99.1

Exhibit 99.1

Contact: James H. Foglesong

Chief Financial Officer

Phone: (219) 873-2608

Fax: (219) 874-9280

Date:  October 23, 2008

FOR IMMEDIATE RELEASE

Horizon Bancorp Announces Third Quarter and Year-to-Date Earnings

Michigan City, Indiana (NASDAQ-GM: HBNC) – Horizon Bancorp today announced its unaudited financial results for the quarter and nine months ended September 30, 2008. Net income for the third quarter of 2008 was $1.3 million or $.41 per fully diluted share.  This compares to $2.3 million or $.70 per fully diluted share for the same quarter of the prior year.  Year-to-date net income was $6.85 million or $2.11 per fully diluted share compared to $6.13 million or $1.89 per fully diluted share for the same period of the prior year. This represents an 11.7% increase in year-to-date net income.

Craig M. Dwight, Horizon’s Chief Executive Officer stated, “Given the volatile markets and rising unemployment rates, Horizon is extremely proud to report year-to-date earnings ahead of prior year.  In addition, Horizon Bank, NA continues to maintain its capital ratios above the regulatory definition for well capitalized banks.  Profitable banks with good capital ratios, such as Horizon, are positioned well to take advantage of future opportunities.”

Net interest income for the quarter and nine months ended September 30, 2008 was $9.4 million and $27.7 million, respectively. These represent increases of $1.1 million or 13.9% for the quarter and $3.7 million or 15.6% for the first nine months when compared to the same prior year periods. These increases resulted from an improvement in the net interest margin of 44 basis points to 3.45% for the quarter and 33 basis points to 3.31% for the nine-month period. The improvement resulted primarily from reductions in funding costs that exceeded declines in yields on earning assets. Horizon’s cost of funds has dropped approximately 109 basis points since the third quarter of 2007 while the yield on earning assets declined only 65 basis points. Horizon reduced rates on NOW and money market accounts in line with short-term rate decreases put in place by the Federal Open Market Committee. In addition, a large amount of Certificates of Deposit (CDs) matured during the first half of 2008 and were reinvested at lower rates.

Horizon assesses the adequacy of its Allowance for Loan and Lease Losses (“ALLL”) by regularly reviewing the performance of all of its loan portfolios.  As a result of its most recent review, Horizon determined that there had been recent deterioration in the commercial and indirect loan portfolios. As a result, a provision for loan losses of $3.1 million was taken for the third quarter of 2008.  This compares to a provision of $1.5 million for the second quarter of 2008 and $550 thousand for the third quarter of 2007. This increase is primarily due to the deterioration of three commercial loans. In addition, Horizon has experienced increased repossessions and voluntary surrenders of vehicles in its indirect loan portfolio.As a result, Horizon has adjusted the historical ratios used to determine the ALLL to reflect these recent trends.

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Pg. 2 Cont.  Horizon Announces 3rd Quarter Earnings

For the third quarter of 2008, Horizon’s non-performing loans of approximately $6.6 million were level with the second quarter but increased from the September 30, 2007 level of $2.3 million.  Total non-performing loans as of September 30, 2008 were approximately 0.77% of total loans.  This compares favorably to national1 and State of Indiana2  bank averages for the same ratio as of June 30, 2008 of 1.73% and 1.62 %, respectively. Net charge-offs for the quarter were $2.4 million compared to $392 thousand for the same quarter of 2007. The current quarter charge-offs related to an increase in commercial and indirect loans. Additionally, Horizon has $1.4 million of other real estate owned, which represent an increase from June 30, 2008 of $724 thousand. Management feels that the total ALLL of $10.525 million or 1.22% of total loans is adequate to absorb probable losses contained in the loan portfolio.

Non-interest income increased $221 thousand or 7.1% from the third quarter of 2007 and has increased $1.5 million or 16.5% for the first nine months of 2008.  The quarterly increase relates to an increase in non-sufficient check charges implemented in the first quarter of 2008. Also improving year to date non-interest income was, (a) an increase in fiduciary income due to additional revenue from Horizon’s ESOP management line of business, (b) an increase in gain on sale of loans resulting from an increase in the dollar amount of loans sold and (c) a death benefit received on a bank owned life insurance policy.

Non-interest expense increased $540 thousand or 7.0% from the third quarter of 2007 and $977 thousand or 4.1% for the first nine months. Salaries and benefits decreased due to the staff reduction, which occurred during the third quarter of 2007. Loan expense increased from the prior year due to higher collection expense and less deferred costs on new loans.

The effective tax rate declined to 0% for the third quarter of 2008 compared to 26.7% in the third quarter of 2007. Pre-tax income was almost entirely offset by tax-exempt interest income generated from tax-exempt loans and investments as well as the increase in cash surrender value of officer life insurance. Also during the current quarter, Horizon realized $47 thousand from amended returns filed to claim additional tax benefits related to Horizon’s investment subsidiary.

On September 30, 2008, Horizon’s total assets were $1.189 billion, compared to $1.259 billion on December 31, 2007. Loans declined $32 million since December 31, 2007. The decline was related to the sale of $37 million of adjustable rate mortgage loans. The mortgage loans were sold to reduce Horizon’s reliance on non-core funding and improve bank capital ratios. Commercial and installment loans were down slightly from the previous year-end. These decreases were partially offset by an increase in mortgage warehouse loans.

Deposits declined $144 million since the end of 2007. The decrease came in both negotiable and high cost, short-term consumer CDs. The deposit fall off was funded by a decline in assets of $70 million, additional borrowings of $70 million, which were at lower rates than the maturing CDs, and an increase of $4 million in equity.

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1 National peer group: Consists of all insured commercial banks having assets between $1 Billion and $3 Billion as reported by the Uniform Bank Performance Report as of June 30, 2008 

2 Indiana peer group: Consists of 22 publicly traded banks all head quartered in the State of Indiana as reported by the Uniform Bank Performance Reports as of June 30, 2008.

Pg. 3 Cont.  Horizon Announces 3rd Quarter Earnings

Stockholders' equity totaled $75.1 million at September 30, 2008 compared to $70.6 million at December 31, 2007. The increase in stockholders’ equity during the period was the result of net income, offset by a decrease in market value of available for sale securities and dividends declared. At September 30, 2008, the ratio of stockholders' equity to total assets was 6.32% compared to 5.61% at December 31, 2007. Book value per common share at September 30, 2008 was $23.39 compared to $22.04 at December 31, 2007. Horizon’s capital ratios exceed the regulatory well-capitalized minimums.

Other items

Horizon opened its 17th full service office on July 14, 2008. The branch is located at 8590 Broadway, Merrillville, Lake County, Indiana 46410. This is Horizon’s first full service branch location in Lake County.

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern Indiana and Southwest Michigan.  Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached on the World Wide Web at www.accesshorizon.com.  Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

Statements in this press release which express “belief,” “intention,” “expectation,” and similar expressions, identify forward-looking statements.  Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by, and information currently available to, such management.  Such statements are inherently uncertain and there can be no assurance that the underlying assumptions will prove to be accurate.  Actual results could differ materially from those contemplated by the forward-looking statements.  Any forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Contact:	Horizon Bancorp
	James H. Foglesong
	Chief Financial Officer
	(219) 873 - 2608
	Fax: (219) 874-9280

#  #  #

HORIZON BANCORP

Financial Highlights

(Unaudited – dollars in thousands except share and per share data and ratios)

(In thousands except per share data and ratios)

	Three Months Ended:									Nine Months Ended:
	Sept. 30,			June 30,			Sept. 30,			Sept. 30,			Sept. 30,
	2008			2008			2007			2008			2007
End of period balances:
Total assets	$	1,188,631		$	1,194,447		$	1,194,246		$	1,188,631		$	1,194,246
Short term investments		1,186			1,378			120			1,186			120
Investment securities		230,837			252,791			230,631			230,837			230,631
Commercial loans		304,997			303,179			305,502			304,997			305,502
Mortgage warehouse loans		101,992			82,865			52,539			101,992			52,539
Real estate loans		168,058			168,940			217,716			168,058			217,716
Installment loans		282,900			283,430			277,552			282,900			277,552
Earning assets		1,107,428			1,115,240			1,114,616			1,107,428			1,114,616
Non-interest bearing deposit accounts		86,093			81,212			79,034			86,093			79,034
Interest bearing transaction accounts		334,121			349,737			333,069			334,121			333,069
Time deposits		329,208			361,307			383,741			329,208			383,741
Borrowings		328,442			293,423			266,626			328,442			266,626
Subordinated debentures		27,837			27,837			27,837			27,837			27,837
Stockholder’s equity		75,072			73,613			67,666			75,072			67,666
Average balances :
Total assets	$	1,179,045		$	1,190,134		$	1,194,146		$	1,209,188		$	1,174,861
Short term investments		3,682			14,519			6,472			6,780			2,005
Investment securities		239,304			251,433			225,541			242,118			227,109
Commercial loans		301,810			301,710			301,255			303,669			287,342
Mortgage warehouse loans		85,230			77,144			61,170			78,070			75,900
Real estate loans		167,793			169,780			219,966			178,531			224,010
Installment loans		283,669			281,948			259,862			283,485			246,430
Earning assets		1,101,002			1,119,467			110,521			1,133,142			1,096,742
Non-interest bearing deposit accounts		80,762			76,802			78,073			76,940			76,288
Interest bearing transaction accounts		340,012			362,087			346,535			363,445			348,644
Time deposits		351,888			370,390			401,247			383,727			405,816
Borrowings		296,280			270,171			258,722			275,011			214,171
Subordinated debentures		27,837			27,837			27,837			27,837			27,837
Stockholder’s equity		76,027			76,708			65,628			75,446			64,901
Per share data:
Basic earnings per share	$	0.42		$	0.93		$	0.63		$	2.14		$	1.92
Diluted earnings per share		0.41			0.92			0.62			2.11			1.89
Cash dividends declared per common share		0.17			0.17			0.15			0.49			0.44
Book value per common share		23.39			22.94			19.77			23.39			21.13
Market value - high		25.87			23.99			28.05			25.87			28.10
Market value - low		16.36			17.53			26.80			16.36			26.60
Basic average common shares outstanding		3,209,482			3,208,419			3,200,259			3,208,362			3,198,999
Diluted average common shares outstanding		3,255,409			3,238,331			3,243,537			3,246,208			3,241,991
Key ratios:
Return on average assets		0.45	%		1.00	%		0.76	%		0.76	%		0.70	%
Return on average equity		7.01			15.59			13.84			12.13			12.63
Net interest margin		3.45			3.40			3.01			3.31			2.98
Loan loss reserve to loans		1.22			1.17			1.03			1.22			1.03
Non-performing loans to loans		0.77			.67			0.27			0.77			0.27
Average equity to average assets		6.45			6.45			5.50			6.24			5.52
Bank only capital ratios:
Tier 1 capital to average assets		7.65	%		7.55	%		7.20	%		7.65	%		7.20	%
Tier 1 capital to risk weighted assets		10.04			10.13			9.76			10.04			9.76
Total capital to risk weighted assets		11.22			11.24			10.77			11.22			10.77

Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands)

		9-30-2008		6-30-2008		9-30-2007		12-31-2007
Commercial	$	2,659	$	2,686	$	2,579	$	2,656
Real estate		1,115		878		750		779
Mortgage warehousing		1,341		1,329		1,417		1,309
Installment		5,410		4,919		3,769		5,047
Unallocated		-0-		-0-		308		-0-
Total	$	10,525	$	9,812	$	8,823	$	9,791

Net Charge-offs

	Three months ended 9/30/2008			Three months ended 6-30-2008		Three months ended 9-30-2007			Year ended 12-31-2007
Commercial	$	1,275		$	32	$	(21	)	$	(48	)
Real estate		(50	)		224		-0-			36
Mortgage warehousing		-0-			-0-		-0-			-0-
Installment		1,198			1,103		413			2,027
Total	$	2,423		$	1,359	$	392		$	2,015

Horizon Bancorp and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

	September 30,  2008 (Unaudited)			December 31, 2007
Assets
Cash and due from banks	$	20,527		$	19,714
Interest-bearing demand deposits		1			1
Federal funds sold		-0-			35,314
Cash and cash equivalents		20,528			55,029
Interest-bearing deposits		1,186			249
Investment securities, available for sale		230,107			234,675
Investment securities, held to maturity		730			-0-
Loans held for sale		4,834			8,413
Loans, net of allowance for loan losses of $10,525 and $9,791		847,422			879,061
Premises and equipment		26,424			24,607
Federal Reserve and Federal Home Loan Bank stock		12,625			12,625
Goodwill		5,787			5,787
Other intangible assets		1,829			2,068
Interest receivable		5,518			5,897
Cash value life insurance		22,232			22,931
Deferred tax asset		2,739			2,638
Other assets		6,670			4,894
Total assets	$	1,188,631		$	1,258,874
Liabilities
Deposits
Non-interest bearing	$	86,093		$	84,097
Interest bearing		663,329			809,567
Total deposits		749,422			893,664
Borrowings		328,442			258,852
Subordinated debentures		27,837			27,837
Interest payable		1,949			2,439
Other liabilities		5,909			5,437
Total liabilities		1,113,559			1,188,229
Commitments and Contingent Liabilities
Stockholders’ Equity
Preferred stock, no par value
Authorized, 1,000,000 shares
No shares issued
Common stock, $.2222 stated value
Authorized, 22,500,000 shares
Issued, 5,013,906 and 5,011,656 shares		1,114			1,114
Additional paid-in capital		25,884			25,638
Retained earnings		66,239			60,982
Accumulated other comprehensive income (loss)		(1,013	)		63
Less treasury stock, at cost, 1,759,424 shares		(17,152	)		(17,152	)
Total stockholders’ equity		75,072			70,645
Total liabilities and stockholders’ equity	$	1,188,631		$	1,258,874

Horizon Bancorp and Subsidiaries

Condensed Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Per Share Data)

	Three Months Ended September 30				Nine Months Ended September 30
	2008 (Unaudited)		2007 (Unaudited)		2008 (Unaudited)			2007 (Unaudited)
Interest Income
Loans receivable	$	14,202	$	16,330	$	43,763		$	47,088
Investment securities
Taxable		2,172		1,979		6,934			6,017
Tax exempt		791		864		2,490			2,582
Total interest income		17,165		19,173		53,187			55,687
Interest Expense
Deposits		4,261		7,296		15,552			21,677
Borrowed funds		3,108		3,096		8,782			8,273
Subordinated debentures		393		522		1,192			1,800
Total interest expense		7,762		10,914		25,526			31,750
Net Interest Income		9,403		8,259		27,661			23,937
Provision for loan losses		3,137		550		5,405			1,140
Net Interest Income after Provision for Loan Losses		6,266		7,709		22,256			22,797
Other Income
Service charges on deposit accounts		1,065		896		2,975			2,515
Wire transfer fees		155		81		382			266
Fiduciary activities		911		905		2,817			2,600
Gain on sale of loans		657		658		2,122			1,808
Increase in cash surrender value of Bank owned life insurance		252		233		701			696
Death benefit officer life insurance		-0-		-0-		538			-0-
Loss on sale of securities		-0-		-0-		(15	)		-0-
Other income		311		357		942			1,098
Total other income		3,351		3,130		10,462			8,983
Other Expenses
Salaries and employee benefits		4,203		4,277		12,698			13,147
Net occupancy expenses		655		606		1,944			1,777
Data processing and equipment expenses		462		648		1,745			1,913
Professional fees		263		214		803			955
Outside services and consultants		287		254		821			730
Loan expense		791		273		2,110			820
Other expenses		1,622		1,471		4,428			4,230
Total other expenses		8,283		7,743		24,549			23,572
Income Before Income Tax		1,334		3,096		8,169			8,208
Income tax expense		2		826		1,319			2,078
Net Income	$	1,332	$	2,270	$	6,850		$	6,130
Basic Earnings Per Share	$	.42	$	.71	$	2.14		$	1.92
Diluted Earnings Per Share	$	.41	$	.70	$	2.11		$	1.89