BELLINGHAM, Wash., June 26, 2008 (PRIME NEWSWIRE) -- Horizon Financial Corp. ("Horizon") (Nasdaq:HRZB) today announced its Board of Directors has declared a quarterly cash dividend of $0.135 per share. The dividend will be paid on August 1, 2008, to shareholders of record as of close of business July 11, 2008. Horizon also reported that it anticipates significant increases in its non-performing loans and net charge-offs for the fiscal first quarter of 2009, ended June 30, 2008.
"With our current capital position, we are able to maintain our cash dividend payment this quarter despite higher levels of non-performing loans and net charge-offs," said Rich Jacobson, Chief Executive Officer. "While we have not completed the quarter-end portfolio review, we expect non-performing assets to increase to approximately $39 million at June 30, 2008 and charge-offs for the quarter of approximately $3.0 million. Construction and land development loans in Pierce and Snohomish counties are the primary source of these problem loans, and we are working closely with our customers to resolve these issues as quickly as possible. Consequently, our provision for loan losses is expected to remain at elevated levels for at least the next few quarters."
At March 31, 2008, Horizon had non-performing assets of $12.3 million, or 0.88% of total assets. In the fourth quarter of fiscal 2008, Horizon had a $2.0 million provision for loan losses, bringing the allowance for loan losses to $19.1 million, or 1.60% of net loans receivable at March 31, 2008. Tangible book value at March 31, 2008 was $10.72, equity to assets was 9.22% and risk-based capital was 11.02% at that date.
Horizon also announced that it has reactivated its search for a new Chief Financial Officer, following the promotion of Rich Jacobson to Chief Executive Officer earlier this year. "We had identified a strong banking professional and had expected him to begin his employment with Horizon this summer following the completion of a merger involving his current bank," said Jacobson. "However, that merger agreement has since been terminated, requiring him to change his plans. As a result, we are reinitiating our search for an experienced financial professional." Until a new candidate is hired, Jacobson will continue to serve as both CFO and CEO of Horizon Financial Corp. and Horizon Bank.
Annual Meeting and Conference Call Information
Management will host its annual meeting of shareholders on July 22, 2008, at 1:00 p.m. at Fox Hall in Bellingham. Horizon will also release its fiscal 2009 first quarter results at 1:00 p.m. on July 22, 2008 and will host a conference call on July 23, 2008, at 9:00 am PDT (12:00 pm EDT) to discuss the quarterly results. The live call can be accessed by dialing (303) 262-2137 or on the web at www.horizonbank.com. The replay, which will be available for a month beginning shortly after the call concludes, can be heard at (303) 590-3000 using access code 11116240# or on the web at www.horizonbank.com.
Horizon Financial Corp. is a $1.4 billion, bank holding company headquartered in Bellingham, Washington. Its primary subsidiary, Horizon Bank, is a state-chartered commercial bank that operates 19 full-service offices, four commercial loan centers and four real estate loan centers throughout Whatcom, Skagit, Snohomish and Pierce counties, Washington.
Safe Harbor Statement: Except for the historical information in this news release, the matters described herein are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs, results of examinations by our banking regulators, our ability to manage loan delinquency rates, the ability to successfully expand existing relationships, deposit pricing and the ability to gather low-cost deposits, success in new markets and expansion plans, expense management and the efficiency ratio, expanding or maintaining the net interest margin, interest rate risk, the local and national economic environment, and other risks and uncertainties discussed from time to time in Horizon Financial's filings with the Securities and Exchange Commission ("SEC"). Accordingly, undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this release. Horizon undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Investors are encouraged to read the SEC report of Horizon, particularly its Form 10-K for the fiscal year ended March 31, 2008, for meaningful cautionary language discussion why actual results may vary from those anticipated by management.