A lower loan loss provision with increases of 19% in net interest income and 25% in noninterest income contributed to 25% earnings growth last year for Horizon Bancorp.
The Michigan City-based parent company of Horizon Bank reported 2019 net income of $66.5 million, or $1.53 per share, up from $53.1 million, or $1.38 per share, for 2018. Its loan loss provision fell to $2 million from $2.9 million.
For the fourth quarter, the company reported earnings of $18.5 million, or 41 cents per share, up 41% from $13.1 million, or 34 cents per share, for the same period the prior year.
“I am pleased to announce another record year of earnings for Horizon,” Craig Dwight, chairman and CEO, said in its year-end earnings report.
“The 2019 results are attributed to the hard work and dedication of our entire team and their focus on the customer and executing a smooth integration of Salin Bancshares, Inc. and its wholly owned subsidiary Salin Bank and Trust Co.,” he said.
“As a result of this acquisition and organic growth, Horizon’s operational leverage and efficiency ratio continued to exhibit improvement, which is evidence that our mass and scale strategy is working.”
Horizon’s 2019 net interest income grew to $160.8 million from $134.6 million the year before as its noninterest income rose to $43.1 million from $34.4 million.
At Dec. 31, Horizon’s assets of $5.2 billion were up $997.7 million from a year earlier.
“In addition to the loans acquired from Salin Bank during the first quarter of 2019, which totaled approximately $568.9 million, Horizon continued to experience loan growth of $153.3 million from our key growth markets in Indiana and Michigan,” Dwight said.
Horizon also saw its non-interest expense, excluding merger expenses, decrease as a percentage of average assets, to 2.36% on Dec. 31 from 2.51% a year earlier, he said.
“Horizon improved branch efficiencies during 2019 by closing four full-service branches and one loan production office, and consolidating five full-service branches acquired from Salin,” Dwight said.
In Allen County, Horizon went from a branch and a loan production office prior to the acquisition, to two branches.
Horizon closed a loan production office last April on Auburn Park Drive in Fort Wayne on the day of the Salin data conversion. One of the branches the bank closed was in Woodburn. One of the Salin branches it consolidated was on State Boulevard in Fort Wayne.
The Salin branch on State Boulevard was consolidated into two remaining Fort Wayne Salin locations, downtown at 110 W. Main St. and on the city’s north side at 9835 Lima Road.
Lakeland net income grows 8%; dividend 30 cents
Halving its loan loss provision while boosting its net interest income 2% and its noninterest income 12% contributed to 8% earnings growth last year for Lakeland Financial Corp.
The Warsaw-based parent company of Lake City Bank reported 2019 net income of $87 million, or $3.38 per share, up from $80.4 million, or $3.13 per share for 2018. Its loan loss provision fell to $3.2 million from $6.4 million.
Lakeland’s fourth-quarter earnings of $22.2 million, or 86 cents per share, were up 4% from $21.4 million, or 83 cents per share for the prior-year period.
“2019 represents the tenth consecutive year of reporting record net income and earnings per share performance. In addition, we have reported record net income in 30 of the last 31 years,” David Findlay, president and CEO, said in report on the company’s financial performance last year.
“We are proud of the Lake City Bank team’s ability to produce consistently strong performance over the last three decades. It’s a reflection of our unwavering commitment to our team, our communities and our clients and an affirmation of our execution-driven culture.”
Lakeland’s 2019 net interest income grew to $155 million, up from $151.3 million the prior year as its noninterest income rose to $45 million from $40.3 million.
“The strength of our capital structure provides us with foundation for continued growth. Our strong profitability metrics reflect our ability to manage our capital structure conservatively while at the same time producing healthy returns for our shareholders,” Findlay said.
The company’s board approved a fourth-quarter dividend of 30 cents per share payable on Feb. 5 to shareholders of record on Jan. 25.
It also recently authorized the purchase of up to $30 million worth of Lakeland shares, or 2.4% of the total outstanding.
1st Source sees 12% increase
in its earnings
A lower provision for loan and lease losses and increases of 5% for net interest income and 4% for noninterest income contributed to 12% earnings growth last year for 1st Source Corp.
The South Bend-based parent company of 1st Source Bank reported 2019 net income of $92 million, or $3.57 per share, up from $82.4 million, or $3.16 per share, for 2018. Its provision for loan and lease losses fell to $15.8 million from $19.5 million.
The company’s fourth quarter earnings of $21.9 million, or 86 cents per share, were up 2% from $21.5 million, or 82 cents per share, for the same period the prior year.
“1st Source Corp. again achieved record earnings in 2019 and it was our 32nd consecutive year of dividend growth,” Christopher Murphy III, chairman and CEO, said in a report on its 2019 and fourth-quarter financial performance.
“Sustained organic growth in average loans and leases and deposits combined with pragmatic and disciplined credit quality decisions continue to yield positive results. Early in the year, we benefited from higher net interest margins,” he said.
“However, due to several Federal Reserve reductions in interest rates during 2019, these margins decreased in the latter part of the year due to lower loan rates and continued competitive rate pressure on deposits.”
Net interest income at 1st Source grew to $224.6 million last year from $214.7 million the year before as its noninterest income rose to $101.1 million from $97.1 million.
The company’s board approved a dividend of 29 cents per share, payable on Feb. 14 to shareholders of record on Feb. 4.
First Defiance, United merger approved
Defiance, Ohio-based First Defiance Financial Corp.‘s plan to acquire Youngstown, Ohio-based United Community Financial Corp. in an all-stock transaction valued at $473 million has received approval from the Federal Reserve, the Federal Deposit Insurance Corp. and the Ohio Division of Financial Institutions.
First Defiance is the parent company of First Federal Bank of the Midwest and United is the parent company of Home Savings Bank. First Defiance shareholders will own 52.5% of the combined company.
Terms of the agreement announced Sept. 9 call for United shareholders to receive 0.3715 shares of First Defiance for each share of United. The deal’s value was based on a First Defiance closing price of $26.32 on Sept. 6.
To prepare for the merger, First Defiance will convert from a unitary thrift holding company to a bank holding company just before the acquisition closes while First Federal converts from a federal savings association to an Ohio-chartered commercial bank.
“We are pleased to have received all necessary shareholder approvals in mid-December and now to have received all required approvals from the regulatory authorities. We are progressing as planned,” Donald Hileman, First Defiance president and CEO, said in an announcement.
“We are excited to bring together two organizations as a premier community bank with enhanced products, services and technology while honoring our commitment to superior customer service, personalized financial solutions and unwavering community support.”
The deal was expected to close by the end of January. The new financial holding company’s board was to consist of five former United directors and six First Defiance directors.
Both parties to the agreement have said they expect the larger size of the pro forma company to produce efficiencies, strengthen operating leverage and improve shareholder value.