Aided by solid loan growth, Chemical Financial Corp. in Midland, Mich., and Lakeland Financial Corp. in Warsaw, Ind., reported sharp increases in profits for the quarter that ended Sept. 30.
The $5.4 billion-asset Chemical said Tuesday that its net income rose 31% from the same period last year, to $11.6 million, while the $2.8 billion-asset Lakeland reported a 30% year-over-year increase, to a record $8.4 million.
Chemical’s chief executive, David B. Ramaker, said that loans increased despite the fact that demand for business loans remained sluggish. Chemical reported a 3.3% jump in loans, to $3.8 billion, which it attributed largely to a decision to keep residential real estate loans in its portfolio instead of selling them in the secondary market. “Our loan growth this year has been a direct result of initiatives designed to expand market share,” Ramaker said in a statement.
Lakeland’s total loans grew 6.2%, to $2.2 billion, though its net interest margin fell 22 basis points from a year earlier, to 3.48%. The parent of Lake City Bank attributed the drop to reduced yields in both its investment and commercial loan portfolios.
David M. Findlay, Lakeland's president and chief financial officer, said that since the end of last year, the company has increased loans by $91 million and has seen loan growth in every Indiana market it serves
However, Findlay did sound a note of caution about the Indiana economy, saying that “the economic recovery in our markets, while evident, is neither robust nor widespread.”