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Area banks log solid profit gains

Tower’s 17% rise steepest among 3

The three months ended June 30 were profitable for three northeast Indiana-based banks.

They released financial results Thursday.

1st Source Bank

1st Source Corp. reported second-quarter earnings of $13.9 million, or 56 cents per diluted common share, an 11 percent increase from the $12.6 million, or 51 cents a share, posted for the same period of 2012.

The South Bend-based holding company for 1st Source Bank set aside $1.29 million during the quarter to cover loan and lease losses. That amount was $762,000 less than what the company set aside for the same purpose during last year’s second quarter.

The company’s reduction in bad loan provisions accounted for more than half of its increase in quarterly profit.

Lake City Bank

Lakeland Financial Corp. reported second-quarter earnings of $9.24 million, or 56 cents per diluted common share, a 5 percent increase from the $8.82 million, or 54 cents a share, posted for the same three months of last year.

The Warsaw-based holding company for Lake City Bank marked record six-month earnings of $18.5 million for the first half of the year.

Increases were posted even after the company set aside $465,000 to offset future lower tax benefits resulting from a change in some state deferred tax items.

Because the economy and various borrowers are starting to thrive, Lakeland didn’t contribute this past quarter to its fund to cover bad loans. The company designated $500,000 for that fund in the second quarter of 2012. That one change more than pays for the $420,000 increase in the company’s quarterly profit.

Lakeland ended the quarter with $50.6 million in its reserves to cover defaulted loans, just 2 percent less than the balance reported for June 30, 2012.

Tower Bank

Tower Financial Corp. on Thursday reported second-quarter earnings of $1.60 million, or 34 cents a share, a 17 percent increase from the $1.36 million, or 28 cents a share, for the same three months of 2012.

The Fort Wayne-based holding company for Tower Bank reported that its capital ratios remain significantly above the well-capitalized levels that regulators require for banks to be considered financially healthy.

Mike Cahill, president and CEO, credited employees for a strong quarter.

“Our efforts to control overhead, expand our fee revenues and work through our non-performing assets has allowed our bottom line to improve during a period of lower loan demand and low interest rates,” he said in a statement. “We continue to add new customers and expand our existing relationship base, which will greatly benefit us as the economy continues to recover.”

sslater@jg.net

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