ICNB Sees Modest Gains


    IONIA — ICNB Financial Corp., the holding company for Ionia County National Bank and Austin Mortgage Co., saw profits jump 9.5 percent in 2005.

    For the fourth quarter ending Dec. 31, the firm’s net income rose 5.6 percent to $459,000, or 38 cents per share, from $438,000 (36 cents per share) in the year-ago quarter. For the year, net income rose 9.5 percent, or $2.02 million, from $1.85 million.

    This reflects October’s 5 percent stock dividend, the company’s fourth consecutive annual stock dividend of that amount.

    Net interest income was off fractionally for both the year and quarter, reflecting smaller margins and an increased cost of funds, the company said in a press release — the result primarily of seven interest rates hikes by the Federal Reserve, as well as soft market conditions that prevented lenders from passing increases to borrowers.

    Non-interest income also was off, reflecting industry-wide fallout in the mortgage sector and the bank’s exit from the wholesale mortgage business in 2005. Despite the downturn in the mortgage section, Austin Mortgage Co. contributed solidly to overall profitability.

    “Community banks across Michigan have had a challenging year because our economy relies heavily on the depressed domestic auto sector,” said James Fast, president and CEO.

    “As a consequence, both commercial and consumer lending are below normal levels. Mortgage activity is also light, having been affected by interest-rate increases. Interest-rate margins are under pressure.”

    Fast said he is hopeful for 2006, and he is seeing positive signs already. Several national retailers are opening new stores in Ionia in 2006, which should create both construction and permanent employment.

    The bank also is generating commercial lending in nearby Hastings, he said, and plans to expand its Hastings loan production office into a full-service branch office in the first quarter.     

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