Buoyed by stronger credit quality and higher mortgage banking income, Lakeland Financial (LKFN) of Warsaw, Ind., reported record first-quarter income of $8.6 million, up 45% from a year earlier.

The $2.9 billion-asset company said Wednesday that earnings per share totaled 52 cents, beating analysts’ estimates by three cents, according to Thomson Reuters.

Lower net chargeoffs, adequate reserve coverage for nonperforming loans and continued signs of the economy stabilizing led to the company's provision for loan losses falling almost 86%, to $799,000, from a year earlier.

Lakeland's noninterest income rose 21%, to $5.9 million, year over year, as mortgage banking income, wealth advisory fees and investment brokerage fees all increased. The bank's mortgage banking income was aided by a larger pipeline of refinanced loans stemming from low interest rates.

Net loans totaled $2.2 billion, up more than 5% from a year earlier. This growth was driven by a 13% increase in commercial and industrial loans. David M. Findlay, president and chief financial officer at Lakeland, said in a news release that he expects loan growth to be moderate as the economic recovery in the bank’s markets continued.

The company's net interest income fell 4%, to $22.5 million, year over year, as interest and dividends on securities declined.

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