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CONTACTS:Rich Jacobson,
CEO
Greg Spear, CFO
360.733.3050
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NEWS RELEASE | |
Horizon Financial Reports Fiscal 2009
Results
BELLINGHAM, WA – April 30, 2009 – Horizon Financial Corp. (NASDAQ
GS:HRZB) the bank holding company
for Horizon Bank (“Bank”), today reported that a $40.0 million provision for
loan losses contributed to a net loss of $25.7 million, or $2.15 per share, for
the fiscal fourth quarter ended March 31, 2009. The net loss totaled
$33.4 million, or $2.79 per share, including a $65.0 million loan loss provision
for the year ended March 31, 2009.
“Fiscal
2009 was one of the most challenging years on record, and the regional and
national recession is likely to continue to present challenges to our asset
quality. We continue to make significant progress in de-leveraging
our balance sheet, diversifying our loan portfolio and maintaining strong
liquidity,” said Rich Jacobson, Chief Executive Officer. “Despite the difficult
environment, we generated net revenues (net-interest income plus non-interest
income) in excess of non-interest expenses, resulting in pre-tax, pre-provision
income of $11.1 million for the fiscal year ended March 31, 2009.
“The
recent increase in home sales in most of our markets during the quarter ended
March 31, 2009, was a positive sign. We believe residential real
estate values, however, will likely test the market as the excess inventory of
newly built homes, including those owned by other regional banks, come onto the
market in the coming months,” said Jacobson. “As a result
of our impairment analysis of our loan portfolio and measurement of the
accounting estimate for probable losses, we charged off $26.3 million in loans
during the fourth quarter and recorded a $40.0 million provision for loan
losses. We continue to work diligently with our borrowers to complete
those projects in process and we do not expect to fund new construction or
development projects until region-wide housing inventories
decline. Net commercial real estate loans in our portfolio have
declined more than $100.0 million in the past year, with construction and land
development loans balances down $77.7 million.”
Net loans
receivable declined $63.5 million during the fourth quarter of fiscal 2009,
following a $52.5 million decrease in net loans receivable in the immediate
prior quarter. “The decline in loan totals was a direct result of our
efforts to de-leverage our balance sheet by aggressively selling loans and
charging off the appropriate amount of each loan that we do not expect to
recover,” Jacobson noted.
Capital
Ratios, Liquidity and Credit Quality
Horizon
Bank was adequately capitalized by regulatory standards as of March 31, 2009,
with both its tangible common equity to assets and leverage ratios at
6.34%. Tier 1 capital to risk adjusted assets was 7.29% and the total
risk-based capital ratio was 8.58% at March 31, 2009. “We intend to
improve our capital levels to comply with our recent agreement with our
regulators by continuing to de-leverage our balance sheet. In
addition, we anticipate returning to the equity markets for additional capital
when market conditions improve,” said Jacobson.
“We
continue to maintain strong liquidity with a sound mix of funding sources,
including growth in core deposits, potential sale of investments and loans, and
our lines of credit with the Federal Home Loan Bank and Federal Reserve Bank,”
Jacobson noted. “The extension of FDIC insurance to all non-interest
bearing deposits and the increased limit to $250,000 from $100,000 per account
has brought insurance coverage to the vast majority of our
deposits.”
Total
non-performing assets were $104.7 million, or 7.13% of total assets at March 31,
2009, up from $83.7 million, or 5.69% of total assets at December 31, 2008, and
$12.3 million, or 0.88% of total assets at March 31, 2008. Non-performing loans
increased to $85.4 million, or 7.35% of gross loans at March 31, 2009, from
$66.9 million, or 5.52% of gross loans at December 31, 2008, and $11.6 million,
or 0.97% of gross loans at March 31, 2008.
“The
increase in non-performing assets was primarily related to commercial land
development loans in Snohomish and Pierce Counties,” said Greg Spear, Chief
Financial Officer. “While we believe the majority of our builders
have sound financial foundations and are committing additional resources to
their development projects, the downturn in the housing market has significantly
affected our customers. We are working with these customers to reduce housing
inventories, using a variety of options, including short
sales. Together with our capital position and the increased allowance
for loan losses, we believe we have the flexibility to aggressively address our
non-performing assets.”
The following information was filed by Horizon Financial Corp on Thursday, April 30, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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Horizon Financial Corp provided additional information to their SEC Filing as exhibits
SEC Filing Exhibit
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CIK: 1002682
Form Type: 10-K Annual Report
Accession Number: 0000939057-09-000171
Submitted to the SEC: Mon Jun 15 2009 1:01:51 PM EST
Accepted by the SEC: Mon Jun 15 2009
Period: Tuesday, March 31, 2009
Industry: State Commercial Banks
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