HORIZON BANCORP, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Table Dollar
Amounts in Thousands, Except Per Share Data)
FASB Accounting Standards Updates No. 2016-02,
Leases
(Topic 842)
The FASB has issued Accounting Standards Update (ASU) No. 2016-02,
Leases.
Under the new guidance, lessees will be required to recognize the
following for all leases, with the exception of short-term leases, at the commencement date: (1) a lease liability, which is a lessees obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a
right-of-use asset, which is an asset that represents the lessees right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. The amendments in this update become
effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. Based on leases outstanding as of December 31, 2017, we do not expect the new standard to have a material impact on our balance sheet or
income statement.
Note 15 General Litigation
The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or
ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operation and cash flows of the Company.
Note 16 Business Combinations
On October 29,
2018, Horizon entered into an Agreement and Plan of Merger (the Merger Agreement) providing for Horizons acquisition of Salin Bancshares, Inc. (Salin). Pursuant to the Merger Agreement, Salin will merge with and into
Horizon, with Horizon surviving the merger (the Merger), and Salin Bank and Trust Company, a wholly-owned subsidiary of Salin, will merge with and into Horizon Bank, with Horizon Bank as the surviving bank.
The boards of directors of each of Horizon and Salin have approved the Merger and the Merger Agreement. Subject to the approval of the Merger by Salin
shareholders, regulatory approvals and other closing conditions, the parties anticipate completing the Merger during the first quarter of 2019.
In
connection with the Merger, shareholders of Salin will receive fixed consideration of 23,907.5 shares of Horizon common stock and $84,417.17 in cash for each share of Salin common stock. Based on the closing price of Horizons common stock on
October 26, 2018 of $16.95 per share, the transaction value for the shares of common stock is approximately $135.3 million.
The Merger Agreement also
provides for certain termination rights for both Horizon and Salin, and further provides that upon termination of the Merger Agreement under certain circumstances, Salin will be obligated to pay Horizon a termination fee.
As of September 30, 2018, Salin had total assets of approximately $918.4 million and total deposits of approximately $752.1 million and total loans of
approximately $595.7 million.
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