Local banks have been posting record profits and reaching new heights in total assets as the economy hums along with Gross Domestic Product growth of 4.1 percent in the second quarter.
Michigan City-based Horizon Bank surpassed $4 billion in assets in the second quarter while earning a record $14.1 million, the highest amount in its 145-year history. South Bend-based 1st Source, which has a huge footprint in LaPorte and Porter Counties, pulled in a record $21.96 million, the most in its 155-year history.
Wintrust, which has branches in Dyer, Lansing and across the south suburbs, turned a record profit for the 10th straight quarter after pulling in $89.6 million in net earnings.
All three banks, which have been growing in scale in recent years by opening new branches or through acquisition, had just turned record profits during the first quarter.
And Merrillville-based Centier, the largest privately owned bank in the state, surpassed the $4 billion in assets threshold in May, just a year after passing the $3.5 billion in assets mark.
The global credit rating agency DBRS reported that U.S. banks, many of which are seeing a large savings because of the corporate tax cut from 35 percent to 21 percent and benefiting from a strong housing market, increased their net income by 4.5 percent from the previous quarter, with an average return on assets of 1.3 percent, up from 1.25 percent in the previous quarter.
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"Importantly, balance sheet fundamentals remained strong, with trends largely consistent with those experienced in recent periods," DBRS said in a press release. "DBRS expects modest upward ratings migration during the remainder of 2018."
Commercial loans rebounded after a sluggish first quarter and leveraged lending volumes climbed to a record $1.6 trillion last year.
Banks also approved a record number of small loans in July, according to Biz2Credit Small Business Lending Index.
“The Fed rated the economy as strong this month, and the Jobs Report found that the economy keeps adding jobs in many sectors. In addition, there is optimism among small business owners. All of these factors create an atmosphere that is ripe for small business lending,” said Biz2Credit CEO Rohit Arora, who oversees the index. “Business owners continue to invest in their firms and are finding success in securing capital, according to our latest figures.”
Small banks approved 49.7 percent of loan applications in July, the most since December 2014, and credit unions approved 40.3 percent of loans.
“Small banks continue to approve SBA loan applications, which enable younger, growing companies to secure financing because government backing helps reduce lenders’ exposure to risk,” Arora explained. “Smaller banks are a good source of capital for startups and companies with less than stellar credit ratings. Overall, July 2018 was a strong month for small business lending approvals across all categories of lenders."