BELLINGHAM, Wash., Nov. 7, 2008 (GLOBE NEWSWIRE) -- Horizon Financial Corp. (Nasdaq:HRZB) today announced a strategic staff reduction as part of ongoing efforts to reduce operating expenses in this challenging operating environment. These reductions in personnel, along with strategic reductions in other noninterest expense areas, are expected to result in over $3 million in expense savings on an annualized basis.
"Because of the challenges in the Pacific Northwest housing markets, we anticipate further pressure on our net interest margin, asset quality and profitability," said Rich Jacobson, Chief Executive Officer. "For these reasons, we have been evaluating expense reductions within our control and have determined the need to make organizational changes resulting in staff reductions of 27 full-time positions from all levels, from line personnel to senior management."
"These reductions are in addition to several positions that recently became vacant due to normal attrition and which will remain unfilled," continued Jacobson. "We are also making appropriate organizational changes to accommodate our revised staffing levels so that we will maintain our quality service levels across our franchise. We believe that these cost-reduction measures are important to preserve capital while we weather this economic cycle."
In connection with the workforce reduction, Horizon will incur an estimated one-time severance charge of approximately $135,000 in its fiscal third quarter of 2009, ending December 31, 2008. Horizon Financial reported that its subsidiary, Horizon Bank, remains well-capitalized according to regulatory guidelines.
Horizon Financial Corp. is a $1.45 billion, state-chartered 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.
This press release contains statements that the Company believes are "forward-looking statements." These statements relate to the Company's financial condition, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially include, but are not limited to, the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas; results of examinations of us by the Board of Governors of the Federal Reserve System and our bank subsidiaries by the Federal Deposit Insurance Corporation, the Washington State Department of Financial Institutions, Division of Banks or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses or to write-down assets; our ability to control operating costs and expenses; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we have acquired or may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; our ability to manage loan delinquency rates; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; legislative or regulatory changes that adversely affect our business; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board; war or terrorist activities; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and other risks detailed in Horizon's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended March 31, 2008.