Horizon Reports 43% Decline in Warehouse Balances

Horizon Bancorp, Michigan City, Ind., said that in 1Q13 mortgage warehouse loans outstanding decreased by approximately 43% or almost $108 million. This was part of the bank holding company’s quarterly results release, which added net income for the period was a record $5.3 million in large part because of the acquisition of Heartland Bancshares Inc.

President and CEO Craig M. Dwight noted the slowdown in the mortgage warehousing business reflected interest rate movements, seasonality and the decline in the demand for mortgage refinance business.

At the end of 1Q13, Horizon had $143.6 million of mortgage warehouse loans on its balance sheet. For 4Q12, it had $251.4 million while in 1Q12 it had $213.2 million.

Meanwhile, residential mortgage lending activity at Horizon in 1Q13 generated $3.1 million in income, representing an increase of $832,000 from the same period in 2012 and a decrease of $896,000 from the fourth quarter of 2012. This is attributed to the gain on sale of mortgage loans.

“The quality of the loans we are originating has consistently facilitated the sale of longer-term, lower-interest fixed-rate mortgages to the secondary market,” noted Dwight. “This has driven valuable non-interest income and enabled us to manage the risk profile of our loan portfolio.”

Horizon also had mortgage servicing income net of impairment of $163 million for the period, up from $90 million one year prior.