Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Accounting Policies

Note 1 – Accounting Policies

The accompanying condensed consolidated financial statements include the accounts of Horizon Bancorp (“Horizon” or the “Company”) and its wholly-owned subsidiaries, including Horizon Bank, N.A. (“Bank”). All inter-company balances and transactions have been eliminated. The results of operations for the periods ended September 30, 2012 and September 30, 2011 are not necessarily indicative of the operating results for the full year of 2012 or 2011. The accompanying unaudited condensed consolidated financial statements reflect all adjustments that are, in the opinion of Horizon’s management, necessary to fairly present the financial position, results of operations and cash flows of Horizon for the periods presented. Those adjustments consist only of normal recurring adjustments.

Certain information and note disclosures normally included in Horizon’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Horizon’s Annual Report on Form 10-K for 2011 filed with the Securities and Exchange Commission on March 12, 2012. The consolidated condensed balance sheet of Horizon as of December 31, 2011 has been derived from the audited balance sheet as of that date.

Basic earnings per share is computed by dividing net income available to common shareholders (net income less dividend requirements for preferred stock and accretion of preferred stock discount) by the weighted-average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The following table shows computation of basic and diluted earnings per share.

	Three months ended September 30				Nine months ended September 30
	2012		2011		2012		2011
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share
Net income	$	4,850	$	3,417	$	14,373	$	9,275
Less: Preferred stock dividends and accretion of discount		63		710		325		1,263
Net income available to common shareholders	$	4,787	$	2,707	$	14,048	$	8,012
Weighted average common shares outstanding (1)(2)		8,503,475		7,414,043		7,758,537		7,402,300
Basic earnings per share	$	0.56	$	0.37	$	1.81	$	1.08
Diluted earnings per share
Net income available to common shareholders	$	4,787	$	2,707	$	14,048	$	8,012
Weighted average common shares outstanding (1)(2)		8,503,475		7,414,043		7,758,537		7,402,300
Effect of dilutive securities:
Warrants		269,432		163,325		231,038		167,668
Restricted stock		30,971		4,399		19,317		13,676
Stock options		34,782		14,803		26,105		15,307
Weighted average shares outstanding		8,838,659		7,596,569		8,034,996		7,598,950
Diluted earnings per share	$	0.54	$	0.36	$	1.75	$	1.05

⁽¹⁾  Adjusted for 3:2 stock split announced on October 16, 2012 payable November 9, 2012

⁽²⁾  Includes average shares issued for the Heartland acquisition for the three and nine months ending September 30, 2012

At September 30, 2012 and 2011, there were no shares and 66,551 for the three months ended and 12,750 shares and 73,359 shares for the nine months ended, respectively that were not included in the computation of diluted earnings per share because they were non-dilutive.

Horizon has share-based employee compensation plans, which are described in the notes to the financial statements included in the December 31, 2011 Annual Report on Form 10-K.

Reclassifications

Certain reclassifications have been made to the 2011 consolidated financial statements to be comparable to 2012. These reclassifications had no effect on net income.