Michigan City-based Horizon Bancorp, the parent company of Horizon Bank, is reporting the highest full-year profit in its history.
Horizon pulled in nearly $20 million in 2013, a 1.7 increase over the previous year. The net income of $19.9 million surpassed $19.5 million earned the prior year, marking the biggest profit in the bank's 141-year history of serving Northern Indiana and Southwest Michigan.
The bank's fourth-quarter profit however dropped 20 percent because of lower income from residential lending, including mortgage warehousing. Net income fell to $4.1 million from $5.2 million in the last three months of 2012.
"We are extremely pleased to announce record 2013 earnings for the 14th consecutive year," said Craig M. Dwight, chairman and CEO. "This feat was accomplished despite a significant slowdown in residential mortgage activity during the second half of 2013. Our balanced approach of focusing on all four core banking revenue sources – business banking, retail banking, residential mortgage lending and investment management – proved invaluable to achieving these record results and will continue to be a critical component of our future success."
Commercial loan growth helped offset lower mortgage warehouse income. The net interest income, after loan loss provisions, rose to $59.5 million from $54.7 million a year prior. Loan losses fell to $1.9 million for the year, compared to $3.5 million in 2013.
"As anticipated, the rise in interest rates slowed residential mortgage lending activity during the second half of 2013, affecting both our residential mortgage origination and mortgage warehouse revenue Dwight said. "Despite this slowdown, we made significant strides growing our commercial loan portfolio, low cost deposits and assets under management reached $899 million as of Dec. 31, 2013. In addition, we reduced our non-performing loans by $4.2 million, or 18.7 percent, in the fourth quarter of 2013 allowing us to realize a negative provision for the quarter of $997,000."
Horizon's return of average common equity was 10.44 percent for the fourth quarter and 12.86 percent for the year.
The bank is expanding in Michigan by buying out East Lansing, Mich.-based Summit Community Bank and building a loan production team in Grand Rapids. Horizon also will grow in Indiana by opening a full-service bank in downtown Indianapolis and a new high school branch in Michigan City that will employ local students to teach them about career paths in banking.
"Throughout 2013, we continued to operate in a sluggish economy with highly competitive dynamics for quality asset growth," Dwight said. "Given the environment, we aggressively sought ways to maximize growth opportunities while remaining disciplined and vigilant in our approach. By investing in good people, entering new markets and seeking strategic partnerships we continued to lay the foundation for future success while attaining record financial performance in the process."