| Industries |
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| Diversified Financial Services |
| Investment Banking and Brokerage |
| Commercial and Professional Services |
| Diversified Commercial Services |
| Real Estate |
| Real Estate Services |
| Asset Management and Custody Banks |
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| Regime |
| Economic |
| Military |
| Provide |
| Rights |
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| Yield to order |
| Accident |
| Sports contest |
| Military blockade |
| Solicit support |
| Demand |
| Warn |
| Reject |
| Release or return |
| Promise |
| Wiki | Wiki Summary |
|---|---|
| Financial risk | Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financial loss and uncertainty about its extent.A science has evolved around managing market and financial risk under the general title of modern portfolio theory initiated by Dr. |
| Operational risk | Operational risk is "the risk of a change in value caused by the fact that actual losses, incurred for inadequate or failed internal processes, people and systems, or from external events (including legal risk), differ from the expected losses". This definition, adopted by the European Solvency II Directive for insurers, is a variation adopted from the Basel II regulations for banks. |
| Financial risk management | Financial risk management is the practice of protecting economic value in a firm by using financial instruments to manage exposure to financial risk - principally operational risk, credit risk and market risk, with more specific variants as listed aside. \nSimilar to general risk management, financial risk management requires identifying its sources, measuring it, and plans to address them. |
| Interest rate | An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited, or borrowed. |
| Stock market | A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment is usually made with an investment strategy in mind. |
| Financial condition report | In accounting, a financial condition report (FCR) is a report on the solvency condition of an insurance company that takes into account both the current financial status, as reflected in the balance sheet, and an assessment of the ability of the company to survive future risk scenarios. Risk assessment in an FCR involves dynamic solvency testing, a type of dynamic financial analysis that simulates management response to risk scenarios, to test whether a company could remain solvent in the face of deteriorating economic conditions or major disasters. |
| Balance sheet | In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business partnership, a corporation, private limited company or other organization such as government or not-for-profit entity. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. |
| Financial ratio | A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. |
| Financial analysis | Financial analysis (also referred to as financial statement analysis or accounting analysis or Analysis of finance) refers to an assessment of the viability, stability, and profitability of a business, sub-business or project. \nIt is performed by professionals who prepare reports using ratios and other techniques, that make use of information taken from financial statements and other reports. |
| Form 10-K | A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission (SEC), that gives a comprehensive summary of a company's financial performance. Although similarly named, the annual report on Form 10-K is distinct from the often glossy "annual report to shareholders," which a company must send to its shareholders when it holds an annual meeting to elect directors (though some companies combine the annual report and the 10-K into one document). |
| Federal takeover of Fannie Mae and Freddie Mac | In September 2008 the Federal Housing Finance Agency (FHFA) announced that it would take over the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Both government-sponsored enterprises, which finance home mortgages in the United States by issuing bonds, had become illiquid as the market for those bonds collapsed in the subprime mortgage crisis. |
| Operational risk management | The term operational risk management (ORM) is defined as a continual cyclic process which includes risk assessment, risk decision making, and implementation of risk controls, which results in acceptance, mitigation, or avoidance of risk. ORM is the oversight of operational risk, including the risk of loss resulting from inadequate or failed internal processes and systems; human factors; or external events. |
| Non-financial risk | Non-financial risks (NFR) are all of the risks which are not covered by traditional financial risk management. This negative definition resembles the initial definition of operational risk, and it depends on the bank or cooperation whether or not they use the term operational risk synchronously with NFR. Since 2019, the new term NFR became popular in the risk management sector\n\n\n== Examples ==\nNon-financial risks include:\n\nOperational risk (Op risk). |
| The Journal of Operational Risk | Operational risk is "the risk of a change in value caused by the fact that actual losses, incurred for inadequate or failed internal processes, people and systems, or from external events (including legal risk), differ from the expected losses". This definition, adopted by the European Solvency II Directive for insurers, is a variation adopted from the Basel II regulations for banks. |
| Internal control | Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. A broad concept, internal control involves everything that controls risks to an organization. |
| Mortgage loan | A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged. The loan is "secured" on the borrower's property through a process known as mortgage origination. |
| Student loan | A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in school. |
| Boryspil International Airport | Boryspil International Airport (Ukrainian: Міжнародний аеропорт «Бориспіль») (IATA: KBP, ICAO: UKBB) is an international airport in Boryspil, 29 km (18 mi) east of Kyiv, the capital of Ukraine. It is Ukraine's largest airport, serving 65% of its passenger air traffic, including all its intercontinental flights and a majority of international flights. |
| Loan | A man is an adult male human. Prior to adulthood, a male human is referred to as a boy (a male child or adolescent). |
| Bank of America Home Loans | Bank of America Home Loans is the mortgage unit of Bank of America. In 2008, Bank of America purchased the failing Countrywide Financial for $4.1 billion. |
| Loan shark | A loan shark is a person who offers loans at extremely high interest rates, has strict terms of collection upon failure, and generally operates outside the law. Because loan sharks operating illegally cannot reasonably expect to be able to use the legal system to collect such debts, they often resort to enforcing repayment by blackmail and threats of violence. |
| Mortgage-backed security | A mortgage-backed security (MBS) is a type of asset-backed security (an 'instrument') which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals (a government agency or investment bank) that securitizes, or packages, the loans together into a security that investors can buy. |
| Arithmetic | Arithmetic (from Ancient Greek ἀριθμός (arithmós) 'number', and τική [τέχνη] (tikḗ [tékhnē]) 'art, craft') is an elementary part of mathematics that consists of the study of the properties of the traditional operations on numbers—addition, subtraction, multiplication, division, exponentiation, and extraction of roots. In the 19th century, Italian mathematician Giuseppe Peano formalized arithmetic with his Peano axioms, which are highly important to the field of mathematical logic today. |
| Special Activities Center | The Special Activities Center (SAC) is a division of the Central Intelligence Agency responsible for covert operations and paramilitary operations. The unit was named Special Activities Division (SAD) prior to 2015. |
| Operations research | Operations research (British English: operational research), often shortened to the initialism OR, is a discipline that deals with the development and application of advanced analytical methods to improve decision-making. It is sometimes considered to be a subfield of mathematical sciences. |
| Surgery | Surgery is a medical or dental specialty that uses operative manual and instrumental techniques on a person to investigate or treat a pathological condition such as a disease or injury, to help improve bodily function, appearance, or to repair unwanted ruptured areas.\nThe act of performing surgery may be called a surgical procedure, operation, or simply "surgery". |
| Securities fraud | Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of securities laws.Securities fraud can also include outright theft from investors (embezzlement by stockbrokers), stock manipulation, misstatements on a public company's financial reports, and lying to corporate auditors. The term encompasses a wide range of other actions, including insider trading, front running and other illegal acts on the trading floor of a stock or commodity exchange. |
| Ponzi scheme | A Ponzi scheme (, Italian: [ˈpontsi]) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are coming from legitimate business activity (e.g., product sales or successful investments), and they remain unaware that other investors are the source of funds. |
| Short (finance) | In finance, being short in an asset means investing in such a way that the investor will profit if the value of the asset falls. This is the opposite of a more conventional "long" position, where the investor will profit if the value of the asset rises. |
| Currency pair | A currency pair is the dyadic quotation of the relative value of a currency unit against the unit of another currency in the foreign exchange market. The currency that is used as the reference is called the counter currency, quote currency, or currency and the currency that is quoted in relation is called the base currency or transaction currency. |
| Plasmid preparation | A plasmid preparation is a method of DNA extraction and purification for plasmid DNA. Many methods have been developed to purify plasmid DNA from bacteria. These methods invariably involve three steps:\nGrowth of the bacterial culture\nHarvesting and lysis of the bacteria\nPurification of plasmid DNA\n\n\n== Growth of the bacterial culture ==\nPlasmids are almost always purified from liquid bacteria cultures, usually E. coli, which have been transformed and isolated. |
| Outline of food preparation | The following outline is provided as an overview of and topical guide to food preparation:\nFood preparation – art form and applied science that includes but is not limited to cooking.\n\n\n== What is food preparation? == |
| Preparation (principle) | Preparation is a management principle whereby people get ready for a final product or for a successful experience. Preparation means "a substance especially prepared". |
| Risk Factors |
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| HORIZON BANCORP /IN/ ITEM 1A RISK FACTORS As a financial institution, we are subject to a number of types of risks |
| Among the risks we face are the following: • credit risk: the risk that loan customers or other parties will be unable to perform their contractual obligations; • market risk: the risk that changes in market rates and prices will adversely affect our financial condition or results of operation; • liquidity risk: the risk that Horizon or the Bank will have insufficient cash or access to cash to meet its operating needs; and • operational risk: the risk of loss resulting from inadequate or failed internal processes, people and systems, or external events |
| Investors should consider carefully these risks and the other risks and uncertainties described below |
| Any of the following risks could materially adversely affect our business, financial condition or operating results which could cause our stock price to decline |
| The risks and uncertainties described below are not, however, the only ones that we may face |
| Additional risks and uncertainties not currently known to us, or that we currently believe are not material, could also materially adversely affect our business, financial condition or operating results |
| Our financial performance may be adversely impacted if we are unable to continue to grow our commercial and consumer loan portfolios, obtain low-cost funds and compete with other providers of financial services |
| Our ability to maintain our history of record earnings year after year will depend, in large part, on our ability to continue to grow our commercial and consumer loan portfolios and obtain low-cost funds |
| During 2004 and 2005, we focused on increasing commercial and consumer loans, and we intend to continue to emphasize and grow these types of loans in the foreseeable future |
| This represented a shift in our emphasis from 2002 and 2003 when we focused on mortgage banking services, which generated a large portion of our income during those years |
| 13 _________________________________________________________________ We have also funded our growth with low-cost consumer deposits, and our ability to sustain our growth will depend in part on our continued success in attracting such deposits or finding other sources of low-cost funds |
| Another factor in maintaining our history of record earnings will be our ability to expand our scope of available financial services to our customers in an increasingly competitive environment |
| In addition to other banks, our competitors include credit unions, securities dealers, brokers, mortgage bankers, investment advisors, and finance and insurance companies |
| Competition is intense in most of our markets |
| We compete on price and service with our competitors |
| Competition could intensify in the future as a result of industry consolidation, the increasing availability of products and services from non-banks, greater technological developments in the industry, and banking reform |
| Our commercial and consumer loans expose us to increased credit risks |
| We have a large percentage of commercial and consumer loans |
| Commercial loans generally have greater credit risk than residential mortgage loans because repayment of these loans often depends on the successful business operations of the borrowers |
| These loans also typically have much larger loan balances than residential mortgage loans |
| Consumer loans generally involve greater risk than residential mortgage loans because they are unsecured or secured by assets that depreciate in value |
| Although we undertake a variety of underwriting, monitoring and reserving protections with respect to these types of loans, there can be no guarantee that we will not suffer unexpected losses |
| Changes in market interest rates could adversely affect our financial condition and results of operations |
| Our financial condition and result of operations are significantly affected by changes in market interest rates |
| Our results of operations depend substantially on our net interest income, which is the difference between the interest income that we earn on our interest-earning assets and the interest expense that we pay on our interest-bearing liabilities |
| Our profitability depends on our ability to manage our assets and liabilities during periods of changing market interest rates |
| If rates increase rapidly as a result of an improving economy, we may have to increase the rates paid on our deposits and borrowed funds more quickly than loans and investments reprice, resulting in a negative impact on interest spreads and net interest income |
| The impact of rising rates could be compounded if deposit customers move funds from savings accounts to higher rate certificate of deposit accounts |
| Conversely, should market interest rates fall below current levels, our net interest margin could also be negatively affected, as competitive pressures could keep us from further reducing rates on our deposits, and prepayments and curtailments on assets may continue |
| Such movements may cause a decrease in our interest rate spread and net interest margin, and therefore, decrease our profitability |
| We also are subject to reinvestment risk associated with changes in interest rates |
| Increases in interest rates may decrease loan demand and/or may make it more difficult for borrowers to repay adjustable rate loans |
| Decreases in interest rates often result in increased prepayments of loans and mortgage-related securities, as borrowers refinance their loans to reduce borrowing costs |
| Under these circumstances, we are subject to reinvestment risk to the extent that we are unable to reinvest the cash received from such prepayments in loans or other investments that have interest rates that are comparable to the interest rates on existing loans and securities |
| An economic slowdown in Northwestern Indiana and Southwestern Michigan could affect our business |
| Our primary market area for deposits and loans consists of LaPorte and Porter Counties in Northwestern Indiana and Berrien County in Southwestern Michigan |
| An economic slowdown in these areas could hurt our business |
| Possible consequences of such a downturn could include the following: • increases in loan delinquencies and foreclosures; • declines in the value of real estate and other collateral for loans; and • a decline in the demand for our products and services |
| 14 _________________________________________________________________ We are subject to increased regulatory capital requirements |
| As a condition to the approval of our acquisition of Alliance Financial Corporation in 2005, the OCC, our primary regulator, required us to maintain regulatory capital ratios at 100 basis points above the well capitalized minimums |
| This could affect our ability to compete with other financial institutions not required to maintain these higher capital levels by limiting our ability to grow assets |
| The OCC has not told us when these increased capital requirements will be lifted, but as of December 31, 2005, we exceeded these heightened capital requirements |
| If we are required to change the classification of our mortgage warehouse loans for capital purposes, this could restrict the capital we have available for further growth |
| We purchase home mortgages from mortgage companies under warehouse agreements whereby the mortgage company has the right to repurchase the loan |
| We have historically classified these loans as “home mortgage loans” for call report and regulatory capital purposes as opposed to treating them as “other loans |
| ” During the course of a routine, periodic examination by bank regulatory authorities commenced in February 2003, the examination personnel raised the issue of whether our mortgage warehouse loans should be treated as “other loans” for call report purposes |
| We submitted a position statement to the regulators in 2003 substantiating our classification of these loans and had various follow-up conversations with them thereafter |
| The regulatory authorities have never required us to change the classification of these loans, and we believe the matter is resolved; although the regulatory authorities have never told us this matter is settled |
| If we are required to change our treatment of these loans, it will change our calculations for risk-based capital and reduce our risk-based capital ratios which may restrict our ability to grow our assets |
| Because our stock is thinly traded, it may be more difficult for you to sell your shares or buy additional shares when you desire to do so and the price may be volatile |
| Although our common stock has been listed on The Nasdaq Capital Market since December 2001, our common stock is thinly traded |
| Average daily trading volume during 2005 was only 2cmam914 shares |
| The prices of thinly traded stocks, such as ours, are typically more volatile than stocks traded in a large, active public market and can be more easily impacted by sales or purchases of large blocks of stock |
| Thinly traded stocks are also less liquid, and because of the low volume of trades, you may be unable to sell your shares when you desire to do so |
| The preparation of our financial statements requires the use of estimates that may vary from actual results |
| The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make significant estimates that affect the financial statements |
| One of our most critical estimates is the level of the allowance for loan losses |
| Due to the inherent nature of these estimates, we cannot provide absolute assurance that we will not have to increase the allowance for loan losses and/or sustain loan losses that are significantly higher than the provided allowance |
| Our mortgage warehouse and indirect lending operations are subject to a higher fraud risk than our other lending operations |
| We buy loans originated by mortgage bankers and automobile dealers |
| Because we must rely on the mortgage bankers and automobile dealers in making and documenting these loans, there is an increased risk of fraud to us on the part of the third-party originators and the underlying borrowers |
| In order to guard against this increased risk, we perform investigations on the loan originators we do business with, and we review the loan files and loan documents we purchase to attempt to detect any irregularities or legal noncompliance |
| However, there is no guarantee that our procedures will detect all cases of fraud or legal noncompliance |
| 15 _________________________________________________________________ We are subject to extensive regulation and changes in laws, regulations and policies could adversely affect our business |
| Our operations are subject to extensive regulation by federal agencies |
| See “Supervision and Regulation” in the description of our Business in Item 1 above for detailed information on the laws and regulations to which we are subject |
| Changes in applicable laws, regulations or regulator policies could materially affect our business |
| Our inability to continue to accurately process large volumes of transactions could adversely impact our business and financial results |
| In the normal course of business, we process large volumes of transactions |
| If systems of internal control should fail to work as expected, if systems are used in an unauthorized manner, or if employees subvert the system of internal controls, significant losses could result |
| We process large volumes of transactions on a daily basis and are exposed to numerous types of operational risk |
| Operational risk resulting from inadequate or failed internal processes, people, and systems includes the risk of fraud by persons inside or outside the company, the execution of unauthorized transactions by employees, errors relating to transaction processing and systems, and breaches of the internal control system and compliance requirements |
| This risk of loss also includes the potential legal actions that could arise as a result of the operational deficiency or as a result of noncompliance with applicable regulatory standards |
| We establish and maintain systems of internal operational controls that provide us with timely and accurate information about our level of operational risk |
| While not foolproof, these systems have been designed to manage operational risk at appropriate, cost-effective levels |
| Procedures exist that are designed to ensure that policies relating to conduct, ethics, and business practices are followed |
| From time to time, losses from operational risk may occur, including the effects of operational errors |
| While we continually monitor and improve the system of internal controls, data processing systems, and corporate-wide processes and procedures, there can be no assurance that future losses will not occur |