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Michigan City-based Horizon Bank pulls in record $20.5 million profit

Horizon Bank headquarters in Michigan City. 

Horizon Bank pulled in a record $20.5 million in profit in the third quarter, the most in its 146-year history.

The Michigan City-based bank boosted profits by 56% as compared to a $13.1 million net income in the third quarter of 2018. Horizon Bank earned 46 cents in earnings per share, as compared to 34 cents per share a year earlier.

"Horizon’s 2019 third quarter and year-to-date performance resulted in record earnings and demonstrate that our long-range strategic plan to improve efficiency through an increase in mass and scale is working," Horizon Bank Chairman and CEO Craig Dwight said. 

The bank has earned a record $48 million through Sept. 30, up from $40 million during the first nine months of 2018 and also the most in the history of the bank that dates back to 1873. Year-to-date earnings per share were $1.11, as compared to $1.04 through the first three quarters of 2018.

"Horizon’s growth story continues with total assets now reaching approximately $5.2 billion at Sept. 30, 2019," Dwight said. "In addition to the loans acquired from our acquisition of Salin Bank and Trust Company during the first quarter of 2019, which totaled approximately $568.9 million, we continue to experience year-to-date loan growth of $118.3 million from the markets of Fort Wayne, Grand Rapids, Indianapolis and Kalamazoo."

The bank, which has locations across Indiana and Michigan, had a net interest margin of 3.82% in the third quarter and a 1.6% return on average assets, up from 1.26% for the third quarter of 2018. Horizon's tangible book value increased from $9.04 per share a year ago to $10.31 per share in the third quarter, which is the highest tangible book value in company history.

Horizon Bank, which is the third largest bank in Northwest Indiana by market share, is buying back up to 2.25 million shares from investors through a stock repurchase program. So far, it has bought 99,407 shares at an average price of $16.04 per share.

“Horizon continues to maximize operational leverage through an increase in mass and scale as evident by the decrease in our adjusted efficiency ratio," Dwight said. "Horizon’s adjusted efficiency ratio, excluding merger expenses, loss on sale of investment securities and death benefit on bank-owned life insurance decreased to 54.89% for the third quarter of 2019 compared to 57.62% for the second quarter of 2019 and 60.17% for the third quarter of 2018."

Horizon's annualized non-interest expense to average assets fell to 2.34% in the third quarter, as compared to 2.39% in the second quarter of 2019 and 2.48% at the same time a year ago.

"Our team continues to leverage new technologies and develop operational efficiencies," Dwight said. "In addition, Horizon consolidated its two Midland, Michigan full-service branches into one location on September 6, 2019 in our continued efforts to improve branch efficiencies."

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.