Another regional bank is facing mortgage problems: Indiana-based Horizon Bancorp said Wednesday that it increased loan loss reserves by $1.4 million in December to address problems in both its wholesale mortgage and indirect auto loan portfolios. HW reported on December 26 that the effects of the credit crunch were reaching beyond national banks and into smaller, more local operations. Citing "credit quality deterioration" in a press statement, Horizon said that its total loss provisions for the fourth quarter are expected to be $1.77 million, compared to a provision of $550 thousand in the third quarter. Horizon's wholesale mortgage portfolio, $8.9 million at the end of December, represents approximately 1 percent of its total loan portfolio of approximately $889 million. The bank said it exited wholesale mortgage origination in June 2007. Horizon also said that its auto portfolio has suffered as the bank "has experienced an increasing trend in repossessions and voluntary surrenders of vehicles." (So-called 'jingle mail' isn't just for houses, apparently). Despite the additional charge, Horizon said that it anticipated to report 2007 earnings that bested 2006's total. Disclosure: The author held no positions in HBNC as of when this post was published.