UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

(Mark One)

xþ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year endedDecember 31, 20032004

Commission file number0-10792

Horizon Bancorp

Registrant’s telephone number, including area code:219-879-0211

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, no par value

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. Yesxþ No¨o

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-Kx

Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yeso No¨þ    Nox

The aggregate market value of the registrant’s common stock held by nonaffiliates of the registrant, based on the average bid price of such stock as of June 30, 2003,2004, the last day of the registrant’s most recently completed second fiscal quarter, was approximately $46,064,638.

$53,976,331.

As of March 17, 2004,2005, the registrant had 2,995,014shares3,090,259 shares of Common Stock outstanding.

Documents Incorporated by Reference

Horizon Bancorp

2003

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PART I

ITEM 1. BUSINESS

General

Horizon Bancorp (“Horizon”) is a registered bank holding company incorporated in Indiana and headquartered in Michigan City, Indiana. Horizon provides a broad range of banking services in northernNorthwestern Indiana and southwesternSouthwestern Michigan through its bank subsidiary, Horizon Bank, N.A. (the “Bank”). Horizon’s Common Stock is traded on the Nasdaq SmallCap Market under the symbol HBNC.

The Bank was chartered as a national bank association in 1873 and has operated continuously since that time. The Bank is a full-service commercial bank offering commercial and retail banking services, corporate and individual trust and agency services personal property and casualty insurance services and other services incident to banking. The Bank opened a newsecond office in St. Joseph, Berrien County, Michigan in 2003.2004. The Bank also has four offices in La Porte County, Indiana, three offices in Porter County, Indiana, and one office in Lake County, Indiana, one office in Elkhart County, Indiana and one office in St. Joseph County, Indiana. At December 31, 2003,2004, the Bank had total assets of $754,892,000$911 million and total deposits of $547,090,000.$613 million. The Bank has twothree wholly owned subsidiaries: Horizon Trust & Investment Management, N.A. (“Horizon Trust”), Horizon Investments, Inc. (“Horizon Investments”) and Horizon Insurance Services, Inc. (“Horizon Insurance”).

Horizon has twohad one nonbank subsidiaries,subsidiary, HBC Insurance Group, Inc. (the “Insurance Company”) and Horizon Statutory Trust 1 (“Horizon Trust”).The. The Insurance Company offerspreviously offered credit life and accident and health insurance.insurance and was liquidated during 2004. The net income generated from the Insurance Company iswas not significant to the overall operations of Horizon.

Horizon formed Horizon Statutory Trust is a statutory business trust that was formedI in 2002 to issueand Horizon Bancorp Capital Trust II in 2004 for the purpose of participating in Pooled Trust Preferred Capital Securities.Stock offerings. See Note 9 of the consolidated financial statements for further discussion regarding these previously consolidated entities that are now reported separately. The business of Horizon, the Bank, Horizon Trust I and II, and Horizon Insurance and Insurance Company is not seasonal to any material degree.

No material part of Horizon’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 Horizon. In 2003,2004, revenues from loans accounted for 66%62% of the total consolidated revenue. For the same year, revenues from investment securities accounted for 13%18% of total consolidated revenue.

Employees

The Bank, Horizon Trust and Horizon Insurance employed approximately 238247 full and part-time persons as of December 31, 2003.2004. Horizon does not have any employees.

Competition

A high degree of competition exists in all major areas where Horizon engages in business. The Bank’s primary market consists of La Porte and Porter County,Counties, Indiana, and Berrien County, Michigan. The 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. To a more moderate extent, the 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.

Based on deposits as of June 30, 2003,2004, the Bank was the largest of the 1112 bank and thrift institutions with offices in La Porte County with 31.1%34.9% of the deposits and the fifth largest of the 1415 institutions with offices in Porter County with 5.9%6.9% of deposits. Horizon opened its first office in Berrien County, Michigan in 2003 and as of June 30, 2003,2004, was the smallestninth largest of the 11 bank and thrift deposits in that county with less than 1%1.9%. (Source: FDIC Summary of Deposits Market Share Reports, available at www.fdic.gov).

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Supervision and Regulation

Horizon is registered as a bank holding company and is subject to the supervision of, and regulation by, the Board of Governors of the Federal Reserve System (“Federal Reserve”) under the Bank Holding Company Act of 1956, as amended (“BHC Act”). The Federal Reserve has issued regulations under the BHC Act requiring a bank holding company to serve as a source of financial and managerial strength to its subsidiary banks. It is the policy of the Federal Reserve that, pursuant to this requirement, a bank holding company should stand ready to use its resources to provide adequate capital funds to its subsidiary banks during periods of financial stress or adversity.

The BHC Act requires the prior approval of the Federal Reserve to acquire more than a 5% voting interest of any bank or bank holding company. Additionally, the BHC Act restricts Horizon’s nonbanking activities to those which are determined by the Federal Reserve to be closely related to banking and a proper incident thereto.

Under the Federal Deposit Insurance Corporation Improvement Act of 1991 (the “FDICIA”), a bank holding company is required to guarantee the compliance of any insured depository institution subsidiary that may become “undercapitalized” (as defined in FDICIA) with the terms of any capital restoration plan filed by such subsidiary with its appropriate federal bank regulatory agency.

Bank holding companies are required to comply with the Federal Reserve’s risk-based capital guidelines. The Federal Deposit Insurance Corporation (the “FDIC”) and the Office of the Comptroller of the Currency (the “OCC”) have adopted risk-based capital ratio guidelines to which depository institutions under their respective supervision are subject. The guidelines establish a systematic analytical framework that makes regulatory capital requirements more sensitive to differences in risk profiles among banking organizations. Risk-based capital ratios are determined by allocating assets and specified off-balance sheet commitments to four risk weighted categories, with higher levels of capital being required for the categories perceived as representing greater risk. The Bank exceeded the risk-based capital requirements of the FDIC and OCC as of December 31, 2003.2004. For Horizon’s regulatory capital ratios and regulatory requirements as of December 31, 2003,2004, see the information in Management’s Discussion and Analysis of Financial Condition and Results of Operation in Item 7 below, which is incorporated herein by reference.

The Bank is (i) subject to the provisions of the National Bank Act; (ii) supervised, regulated, and examined by the OCC; and (iii) subject to the rules and regulations of the OCC, Federal Reserve, and the FDIC. The Bank’s deposits are insured up to $100,000 per insured account by the Bank Insurance Fund, which is administered by the FDIC.

Both federal and state law extensively regulates various aspects of the banking business, such as reserve requirements, truth-in-lending and truth-in-savings disclosures, equal credit opportunity, fair credit reporting, trading in securities, and other aspects of banking operations. Branching by the Bank is subject to the jurisdiction and requires notice to or the prior approval of the OCC.

Horizon and the Bank are subject to the Federal Reserve Act, which restricts financial transactions between banks and affiliated companies. The statute limits credit transactions between banks, affiliated companies and its executive officers and its affiliates. The statute prescribes terms and conditions for bank affiliate transactions deemed to be consistent with safe and sound banking practices, and restricts the types of collateral security permitted in connection with a bank’s extension of credit to an affiliate.

The FDICIA accomplished a number of sweeping changes in the regulation of depository institutions and their holding companies. The FDICIA requires, among other things, federal bank regulatory authorities to take “prompt corrective action” with respect to banks that do not meet minimum capital requirements. The FDICIA further directs that each federal banking agency prescribe standards for depository institutions and depository institution holding companies relating to internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, management compensation, a maximum ratio of classified assets to capital,

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minimum earnings sufficient to absorb losses, a minimum ratio of market value to book value of publicly traded shares, and such other standards as the agency deems appropriate.

On November 12, 1999, the President signed into law comprehensive legislation that modernizes the financial services industry for the first time in decades. The Gramm-Leach-Bliley Act (“GLBA”) permits bank holding companies to conduct essentially unlimited securities and insurance activities, in addition to other activities determined by the Federal Reserve to be related to financial services. As a result of the GLBA, Horizon may underwrite and sell securities and insurance. It may acquire, or be acquired by, brokerage firms and insurance underwriters. Horizon does not anticipate significant changes in its products or services as a result of the GLBA.

On October 26, 2001, President Bush signed the USA Patriot Act of 2001 (the “Patriot Act”). The Patriot Act is intended to strengthen the ability of U.S. Law Enforcement to combat terrorism on a variety of fronts. The potential impact of the Patriot Act on financial institutions is significant and wide-ranging. The Patriot Act contains sweeping anti-money laundering and financial transparency laws and requires financial institutions to implement additional policies and procedures with respect to, or additional measures designed to address, any or all the following matters, among others: money laundering, suspicious activities and currency transaction reporting, and currency crimes.

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). The Sarbanes-Oxley Act represents a comprehensive revision of laws affecting corporate governance, accounting obligations and corporate reporting. The Sarbanes-Oxley Act is applicable to all companies with equity or debt securities registered under the Securities Exchange Act of 1934 (the “1934 Act”). In particular, the Sarbanes-Oxley Act establishes: (i) new requirements for audit committees, including independence, expertise, and responsibilities; (ii) additional responsibilities regarding financial statements for the Chief Executive Officer and Chief Financial Officer of the reporting company; (iii) new standards for auditors and regulation of audits; (iv) increased disclosure and reporting obligations for the reporting company and their directors and executive officers; and (v) new and increased civil and criminal penalties for violation of the securities laws. Management expects that significant additional efforts and expense will continue to be required to comply with the provisions of the Sarbanes-Oxley Act.

The Fair and Accurate Credit Transactions Act of 2003 (the “FACT Act”) was signed into law by President Bush on December 4, 2003. The FACT Act amends the Fair Credit Reporting Act and makes permanent certain federal preemptions that form the basis for a national credit reporting system. The FACT Act is also intended to (i) address identity theft, (ii) increase access to credit information, (iii) enhance the accuracy of credit reporting, (iv) facilitate the opt-out by consumers from certain marketing solicitations, (v) protect medical information, and (vi) promote financial literacy. The statute will affect credit reporting agencies (commonly referred to as “credit bureaus”), financial institutions, other users of credit reports and those who furnish information to credit bureaus. Management does not anticipate that this legislation will have a significant adverse effect on our business.

In addition to the matters discussed above, Horizon’s affiliate bank is subject to additional regulation of its activities, including a variety of consumer protection regulations affecting its lending, deposit, and collection activities and regulations affecting secondary mortgage market activities. The earnings of financial institutions are also affected by general economic conditions and prevailing interest rates, both domestic and foreign, and by the monetary and fiscal policies of the United States government and its various agencies, particularly the Federal Reserve.

Additional legislative and administrative actions affecting the banking industry may be considered by the United States Congress, state legislatures, and various regulatory agencies, including those referred to above. It cannot be predicted with certainty whether such legislative or administrative action will be enacted or the extent to which the banking industry in general or Horizon and its affiliate bank in particular would be affected.

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BANK HOLDING COMPANY STATISTICAL DISCLOSURES

Information required by this section of Securities Act Industry Guide 3 is presented in Management ‘s Discussion and Analysis as set forth in item 7 below, herein incorporated by reference.

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 that exceeded 10% of the consolidated stockholders’ equity of Horizon at December 31, 2004.

III.

LOAN PORTFOLIO

$340 thousand. The decrease in nonaccrual loans in 2001 is primarily due to a decrease in nonaccrual mortgage loans of $637 thousand. The increase in nonaccrual loans in 2000 is primarily due to the increase in nonaccrual mortgage loans of $842 thousand and increase in nonaccrual commercial loans of $321 thousand.

III.

III.

SUMMARY OF LOAN LOSS EXPERIENCE

In 1999, Horizon began a mortgage warehousing program. This program is described in Management’s Discussion and Analysis of Financial Condition and Results of Operation in Item 7 below and in the Notes to the Financial Statements in Item 8 below, which are incorporated herein by reference. The greatest risk related to these loans is transaction and fraud risk. During 20032004 Horizon processed an average of almost $20over $14 million per day in mortgage warehouse loans. During 20032004 the lines of credit granted to customers increaseddecreased from $438 million at December 31, 2002 to $459 million at December 31, 2003.2003 to $388 million at December 31, 2004. Also with thethere was a decline in refinance activity a higher percentagethe percent of the mortgage warehouse portfolio which was sub-prime. Sub-prime loans are sub-prime which are assigned a higher reserve.

Information required by this section is found in Management’s Discussion and Analysis of Financial Condition and Results of Operation in Item 7 below and in the Consolidated Financial Statements and related notes in Item 8 below, which are incorporated herein by reference.

Information required by this section is found in Management’s Discussion and Analysis of Financial Condition and Results of Operation in Item 7 below and in the Consolidated Financial Statements and related notes in Item 8 below, which are incorporated herein by reference.

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.

December 31 (thousands)		2003				2002
Outstanding at year end		$	15,241			$	22,259
Approximate weighted average interest rate at year-end			0.52	%			0.88	%
Highest amount outstanding as of any month-end during the year		$	46,353			$	22,379
Approximate average outstanding during the year		$	28,257			$	18,095
Approximate weighted average interest during the year			0.84	%			1.23	%

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

A cautionary note about forward-looking statements: In its oral and written statements, Horizon from time to time includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can include statements about estimated cost savings, plans and objectives for future operations and expectations about Horizon’s financial and business performance as well as economic and market conditions. They often can be identified by the use of words like “expect,” “may,” “could,” “intend,” “project,” “estimate,” “believe,” or “anticipate.”

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Horizon may include forward-looking statements in filings with the Securities and Exchange Commission (“SEC”), such as this Form 10-K, in other written materials, and in oral statements made by senior management to analysts, investors, representatives of the media, and others. It is intended that these forward-looking statements speak only as of the date they are made, and Horizon undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the forward-looking statement is made or to reflect the occurrence of unanticipated events.

By their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. You are cautioned that actual results may differ materially from those contained in the forward-looking statement. The discussion in Management’s Discussion and Analysis of Financial Condition and Results of Operation in Item 7 of this Form 10-K lists some of the factors that could cause Horizon’s actual results to vary materially from those expressed in or implied by any forward-looking statements. Your attention is directed to this discussion.

Other risks and uncertainties that could affect Horizon’s future performance include the effects of competition; technological changes; regulatory developments; changes in fiscal, monetary and tax policies; market, economic, operational, liquidity, credit and interest rate risks associated with Horizon’s business; inflation; competition in the financial services industry; changes in general economic conditions, either nationally or regionally, resulting in, among other things, credit quality deterioration; and changes in the securities markets. A decline in mortgage loan volume could also affect the performance of Horizon.

ITEM 2. PROPERTIES

The main office of Horizon and the Bank is located at 515 Franklin Square, Michigan City, Indiana. The building located adjacent toacross the street from the main office of Horizon and the Bank, at 502 Franklin Square, houses the credit administration, operations and information technology departments of the Bank. In addition to these principal facilities, the Bank has ten11 sales offices located at:

3631 South Franklin Street, Michigan City, Indiana

115
     113 W. First St., Wanatah, Indiana

1500 W. Lincolnway, LaPorte, Indiana

423 South Roosevelt Street, Chesterton, Indiana

4208 N. Calumet, Valparaiso, Indiana

2650 Willowcreek Road, Portage, Indiana

2450 West Lincoln Highway, Merrillville, Indiana

811 Ship Street, St Joseph, Michigan

     2608 Niles Road, St Joseph, Michigan
     105 East Jefferson Blvd, South Bend, Indiana
1808 East Bristol Street, Suite K, Elkhart, Indiana

Horizon owns all of the facilities, except for the South Bend, Elkhart, Portage Merrillville and ElkhartMerrillville, Indiana offices, which are leased from third parties.

ITEM 3. LEGAL PROCEEDINGS

No material pending legal proceedings, other than ordinary routine litigation incidental to the business to which Horizon or any of its subsidiaries is a party or of which any of their property is subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of Horizon’s stockholders during the fourth quarter of the 20032004 fiscal year.

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SPECIAL ITEM: EXECUTIVE OFFICERS OF REGISTRANT

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

There were no purchases by the Company of its common stock during the fourth quarter.

The other information regarding Horizon’s common stock is included under the caption “Horizon’s Common Stock and Related Stockholders’ Matters” in Item 8 below, which is incorporated by reference.

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” in Item 8 of this Form 10-K.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Horizon Bancorp and Subsidiaries

HORIZON BANCORPAND SUBSIDIARIES

Management’s Discussion and Analysis of

Overview

Overview

Horizon benefited inDuring 2004, the first three quarters of 2003emphasis shifted from a very activeresidential mortgage refinance market. The benefit came primarily in two areas:lending to more traditional commercial banking functions. As residential mortgage loan originationrefinance activity slowed, Horizon was able to diversify its revenue streams. Commercial loans grew 34% to over $200 million and mortgage warehouse loans. Horizon originates mortgageconsumer loans for saleincreased by 40% to over $140 million. An improving local economy, strong sales effort and the addition of experienced lenders fueled the commercial growth. The southwest Michigan market continued to have its strong growth pattern. Consumer loans grew as a result of additional home equity lending in all markets and expansion of indirect lending into southwest Michigan.

To leverage the secondary market, generating a gain on sale. Refinancing activity created higher than normal volume of loans processedadditional regulatory capital raised through the mortgage warehouse area generating interestTrust Preferred offering completed in October of 2004, the investment portfolio increased by over 30%.

Funding of this increase in earning assets was accomplished through a 12% increase in deposits and fee income on those loans. Numerous short term funding sources were utilized throughout the year to cover this abnormally high level of mortgage warehouse activity including FHLB debt, repurchase agreements and brokered certificates of deposit.a 54% increase in borrowed funds.

Total loans declined for the year due to fourth quarter fall-off in mortgage refinance activity and the related decline in mortgage warehouse loans. However, Horizon was successful in growing its core lending in local markets and in the newly developed Southwest Michigan market which generated almost one-half of the commercial loan growth.

Core deposits grew at a steady rate throughout the year particularly in certificates of deposit.

Critical Accounting Policies

Horizon has established various accounting policies, which govern the application of accounting principles generally accepted in the United States in the preparation the Company’s financial statements. The significant accounting policies of the Company are described in the notes to the consolidated financial statements included in Part II, Item 8 on Form 10-K. Certain of these policies are important to the portrayal of the Company’s financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Management has identified the allowance for loan losses as a critical accounting

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policy. Additional discussion regarding the allowance for loan loss is included in the following Analysis of Financial Condition and the notes to the consolidated financial statements.

Analysis of Financial Condition

Investment Securities

Horizon maintains a high quality investment portfolio with low credit risk. Investment securities totaled $215,695$281.282 million at December 31, 20032004 and consisted of U. S. Treasury and Government Agency securities of $66.772$85.626 million (31.0)(30.4)%; Municipal securities of $60.230$57.327 million (27.9)(20.4)%; Mortgage-Backed securities of $73.546$124.308 million (34.1)(44.2)%; collateralized mortgage obligations of $14.488$13.338 million (6.7)(4.7)%; and corporate securities of $659$683 thousand (0.3)(0.2)%.

As indicated above, 40.8%48.9% of the investment portfolio consists of mortgage-backed securities and collateralized mortgage obligations. These instruments are secured by residential mortgages of varying maturities. Principal and interest payments are received monthly as the underlying mortgages are repaid. These payments also include prepayments of mortgage balances as borrowers either sell their homes or refinance their mortgages. Therefore, mortgage-backed securities and collateralized mortgage obligations have maturities that are stated in terms of average life. The average life is the average amount of time that each dollar of principal is expected to be outstanding. As of December 31, 2003,2004, the mortgage-backed securities and collateralized mortgage obligations in the investment portfolio had an average life of 5.285.45 years. Securities that have interest rates above current market rates are purchased at a premium. These securities may experience a significant increase in prepayments when lower market interest rates create an incentive for the borrower to refinance the underlying mortgage. This may result in a decrease of current income, however, this risk is mitigated by a shorter average life. Management currently believes that prepayment risk on these securities is nominal.

At December 31, 20032004 and 2002,2003, all investment securities were classified as available for sale. Securities classified as available for sale are carried at their fair value, with both unrealized gains and losses added or subtracted, net of tax, directly to stockholders’ equity. This accounting method adds potential volatility to stockholders’ equity, but net income is not affected unless securities are sold. Net appreciation on these securities totaled $3.191$1.375 million, which resulted in a $2.075 million$894 thousand addition, net of tax, to stockholders’ equity at December 31, 2003.2004. This compared to a $2.671$2.075 million, net of tax, addition in stockholders’ equity at December 31, 2002.

2003.

As a member of the Federal Reserve and Federal Home Loan Bank system, Horizon is required to maintain an investment in the common stock of each entity. The investment in common stock is based on a predetermined formula. At December 31, 2003,2004, Horizon has investments in the common stock of the Federal Reserve and Federal Home Loan Bank totaling $10.853$11.279 million compared to $8.329$10.853 million at December 31, 2002.

2003.

At December 31, 2003,2004, Horizon does not maintain a trading account and is not using any derivative products for hedging or other purposes.

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Loans

Total loans, the principal earning asset of the Bank, were $447.718$564.042 million at December 31, 2003.2004. The current level of loans is a decreasean increase of 16.4%25.98% from the December 31, 20022003 level of $535.793$447.718 million. As the table below indicates, the decreaseincrease is related to a declinegrowth in mortgage warehousecommercial and consumer loans.