First Merchants Corporation Announces 30 Percent Increase in First Quarter 2017 Earnings Per Share
First Merchants Corporation (NASDAQ - FRME) reported first quarter 2017 net income of $23.2 million, an increase of 31 percent,
compared to $17.7 million during the same period in 2016. Earnings per share for the period totaled $.56 per share, an increase of
30 percent, compared to the first quarter of 2016 result of $.43 per share.
Total assets grew to $7.3 billion as of quarter-end and loans totaled $5.3 billion. The Corporation’s loan portfolio increased
by $565 million or 12 percent, during the past twelve months. Total deposits equaled $5.6 billion as of quarter-end and increased
by $324 million, or 6 percent, during the same twelve-month period.
Michael C. Rechin, President and Chief Executive Officer, stated, “The first quarter of 2017 is our fourth consecutive quarter
without any meaningful merger and acquisition expense, providing a clean review of our high performance results. Our management
team is pleased with our execution in driving organic loan and deposit growth, earnings growth and operating leverage. We are also
enthusiastic about our pending acquisitions of The Arlington Bank in Columbus, Ohio and iAB Bank in Ft. Wayne, Indiana which are
expected to close in the second and third quarters of 2017, respectively. The acquisitions bring additional franchise value in
terms of their historical earnings performance, market attractiveness and management leadership.”
Net-interest income totaled $61 million for the quarter, an increase of $6.5 million, or 12 percent. Net-interest margin
improved over last year by 15 basis points totaling 3.98 percent, as yields on earning assets totaled 4.42 percent and the cost of
supporting liabilities totaled .44 percent. When adjusted for fair value accretion, core net-interest margin also increased over
last year by 6 basis points totaling 3.72 percent.
Non-interest income totaled $14.8 million for the quarter, a $1 million decline from the first quarter of 2016. The decline in
non-interest income was more than offset by a $3.4 million decrease in non-interest expense as the Corporation continues its focus
on efficiency. Total non-interest expense was $43.1 million for the first quarter of 2017 compared to $46.5 million in 2016.
Tax expense for the first quarter of 2017 totaled $7.2 million, or 23.6 percent of pre-tax net income. Due to the required
adoption of FASB Accounting Standards Update (ASU) 2016-09, the Corporation’s tax expense was reduced by $772,000. The first
quarter ASU 2016-09 impact improved earnings per share by $.02.
The Corporation’s provision expense totaled $2.4 million primarily due to loan growth as net charge-offs totaled just $197,000.
The allowance for loan losses totaled $68.2 million as of March 31, 2017, up from $62.1 million as of March 31, 2016. Non-accrual
loans totaled $27.9 million as of quarter-end, down from $36.7 million a year ago. The allowance is 1.29 percent of total loans and
1.46 percent of non-purchased loans.
As of March 31, 2017, the Corporation’s total risk-based capital equaled 14.24 percent, common equity tier 1 risk-based capital
equaled 11.16 percent, and tangible common equity ratio totaled 9.5 percent.
CONFERENCE CALL
First Merchants Corporation will conduct a first quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday,
April 27, 2017.
To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's first quarter earnings release.
International callers please call +1 412-317-1073. A replay of the call will be available until May 27, 2017. To access a replay of
the call, US participants should dial (Toll Free) 877-344-7529 or for International participants, dial +1 412-317-0088. The replay
passcode is 10104098.
In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme170427.html during the time of the call. A replay of the web cast will
be available until April 27, 2018.
Detailed financial results are reported on the attached pages.
About First Merchants Corporation
First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation is comprised of
First Merchants Bank, which also operates as Lafayette Bank & Trust, and First Merchants Private Wealth Advisors which operates
as a division of First Merchants Bank.
First Merchants Corporation’s common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations
are carried in daily newspapers and can be found on the company’s Internet web page ( http://www.firstmerchants.com ).
FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.
Forward-Looking Statements
This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like
“believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or
conditional verbs such as “will”, would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These statements
include statements of First Merchants’ goals, intentions and expectations; statements regarding the First Merchants’ business plan
and growth strategies; statements regarding the asset quality of First Merchants’ loan and investment portfolios; and estimates of
First Merchants’ risks and future costs and benefits. These forward-looking statements are subject to significant risks,
assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements,
including, among other things: possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing
restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases;
possible changes in the credit worthiness of customers and the possible impairment of collectability of loans; fluctuations in
market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory
requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants’ affiliate bank;
continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in
market, economic, operational, liquidity, credit and interest rate risks associated with the First Merchants’ business; and other
risks and factors identified in each of First Merchants’ filings with the Securities and Exchange Commission. First Merchants does
not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in
this press release. In addition, First Merchants’ past results of operations do not necessarily indicate its anticipated future
results.
|
|
|
|
|
| CONSOLIDATED BALANCE SHEETS |
|
|
|
|
| (Dollars In Thousands) |
|
March 31, |
|
|
2017 |
|
2016 |
| ASSETS |
|
|
|
|
| Cash and cash equivalents |
|
$ |
104,247 |
|
|
$ |
85,738 |
|
| Interest-bearing time deposits |
|
20,439 |
|
|
77,453 |
|
| Investment securities |
|
1,327,217 |
|
|
1,270,777 |
|
| Loans held for sale |
|
1,262 |
|
|
3,628 |
|
| Loans |
|
5,274,909 |
|
|
4,709,907 |
|
| Less: Allowance for loan losses |
|
(68,225 |
) |
|
(62,086 |
) |
| Net loans |
|
5,206,684 |
|
|
4,647,821 |
|
| Premises and equipment |
|
91,311 |
|
|
96,494 |
|
| Federal Reserve and Federal Home Loan Bank stock |
|
17,964 |
|
|
37,553 |
|
| Interest receivable |
|
25,174 |
|
|
22,836 |
|
| Core deposit intangibles and goodwill |
|
257,963 |
|
|
261,799 |
|
| Cash surrender value of life insurance |
|
202,574 |
|
|
200,549 |
|
| Other real estate owned |
|
8,293 |
|
|
15,626 |
|
| Tax asset, deferred and receivable |
|
32,074 |
|
|
47,982 |
|
| Other assets |
|
30,991 |
|
|
30,283 |
|
| TOTAL ASSETS |
|
$ |
7,326,193 |
|
|
$ |
6,798,539 |
|
| LIABILITIES |
|
|
|
|
| Deposits: |
|
|
|
|
| Noninterest-bearing |
|
$ |
1,373,778 |
|
|
$ |
1,282,462 |
|
| Interest-bearing |
|
4,261,531 |
|
|
4,028,608 |
|
| Total Deposits |
|
5,635,309 |
|
|
5,311,070 |
|
| Borrowings: |
|
|
|
|
| Federal funds purchased |
|
102,000 |
|
|
602 |
|
| Securities sold under repurchase agreements |
|
139,007 |
|
|
150,134 |
|
| Federal Home Loan Bank advances |
|
338,919 |
|
|
263,588 |
|
| Subordinated debentures and term loans |
|
128,862 |
|
|
127,523 |
|
| Total Borrowings |
|
708,788 |
|
|
541,847 |
|
| Interest payable |
|
3,875 |
|
|
3,910 |
|
| Other liabilities |
|
48,751 |
|
|
74,449 |
|
| Total Liabilities |
|
6,396,723 |
|
|
5,931,276 |
|
| STOCKHOLDERS' EQUITY |
|
|
|
|
| Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value: |
|
|
|
|
| Authorized -- 600 shares |
|
|
|
|
| Issued and outstanding - 125 shares |
|
125 |
|
|
125 |
|
| Common Stock, $.125 stated value: |
|
|
|
|
| Authorized -- 50,000,000 shares |
|
|
|
|
| Issued and outstanding - 41,047,543 and 40,749,340 shares |
|
5,131 |
|
|
5,094 |
|
| Additional paid-in capital |
|
509,953 |
|
|
504,661 |
|
| Retained earnings |
|
417,983 |
|
|
355,317 |
|
| Accumulated other comprehensive loss |
|
(3,722 |
) |
|
2,066 |
|
| Total Stockholders' Equity |
|
929,470 |
|
|
867,263 |
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
7,326,193 |
|
|
$ |
6,798,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| CONSOLIDATED STATEMENTS OF INCOME |
|
Three Months Ended |
| (Dollars In Thousands, Except Per Share Amounts) |
|
March 31, |
|
|
2017 |
|
2016 |
| INTEREST INCOME |
|
|
|
|
| Loans receivable: |
|
|
|
|
| Taxable |
|
$ |
56,357 |
|
|
$ |
50,489 |
| Tax-exempt |
|
2,333 |
|
|
1,315 |
| Investment securities: |
|
|
|
|
| Taxable |
|
4,308 |
|
|
4,328 |
| Tax-exempt |
|
5,003 |
|
|
4,509 |
| Deposits with financial institutions |
|
44 |
|
|
106 |
| Federal Reserve and Federal Home Loan Bank stock |
|
189 |
|
|
480 |
| Total Interest Income |
|
68,234 |
|
|
61,227 |
| INTEREST EXPENSE |
|
|
|
|
| Deposits |
|
4,124 |
|
|
4,063 |
| Federal funds purchased |
|
228 |
|
|
28 |
| Securities sold under repurchase agreements |
|
88 |
|
|
100 |
| Federal Home Loan Bank advances |
|
978 |
|
|
796 |
| Subordinated debentures and term loans |
|
1,817 |
|
|
1,785 |
| Total Interest Expense |
|
7,235 |
|
|
6,772 |
| NET INTEREST INCOME |
|
60,999 |
|
|
54,455 |
| Provision for loan losses |
|
2,385 |
|
|
550 |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
|
58,614 |
|
|
53,905 |
| OTHER INCOME |
|
|
|
|
| Service charges on deposit accounts |
|
4,174 |
|
|
4,145 |
| Fiduciary activities |
|
2,640 |
|
|
2,494 |
| Other customer fees |
|
4,863 |
|
|
5,059 |
| Earnings on cash surrender value of life insurance |
|
898 |
|
|
1,476 |
| Net gains and fees on sales of loans |
|
1,275 |
|
|
1,460 |
| Net realized gains on sales of available for sale securities |
|
598 |
|
|
997 |
| Other income |
|
398 |
|
|
206 |
| Total Other Income |
|
14,846 |
|
|
15,837 |
| OTHER EXPENSES |
|
|
|
|
| Salaries and employee benefits |
|
25,732 |
|
|
27,337 |
| Net occupancy |
|
4,216 |
|
|
4,022 |
| Equipment |
|
2,807 |
|
|
3,238 |
| Marketing |
|
565 |
|
|
737 |
| Outside data processing fees |
|
2,616 |
|
|
2,069 |
| Printing and office supplies |
|
264 |
|
|
364 |
| Core deposit amortization |
|
903 |
|
|
978 |
| FDIC assessments |
|
570 |
|
|
950 |
| Other real estate owned and foreclosure expenses |
|
531 |
|
|
751 |
| Professional and other outside services |
|
1,734 |
|
|
2,162 |
| Other expenses |
|
3,161 |
|
|
3,867 |
| Total Other Expenses |
|
43,099 |
|
|
46,475 |
| INCOME BEFORE INCOME TAX |
|
30,361 |
|
|
23,267 |
| Income tax expense |
|
7,168 |
|
|
5,574 |
| NET INCOME AVAILABLE TO COMMON STOCKHOLDERS |
|
$ |
23,193 |
|
|
$ |
17,693 |
| Per Share Data: |
|
|
|
|
| Basic Net Income Available to Common Stockholders |
|
$ |
0.57 |
|
|
$ |
0.43 |
| Diluted Net Income Available to Common Stockholders |
|
$ |
0.56 |
|
|
$ |
0.43 |
| Cash Dividends Paid |
|
$ |
0.15 |
|
|
$ |
0.11 |
| Average Diluted Shares Outstanding (in thousands) |
|
41,221 |
|
|
40,917 |
|
|
|
|
|
|
|
|
|
|
|
| FINANCIAL HIGHLIGHTS |
|
|
|
|
| (Dollars in thousands) |
|
Three Months Ended |
|
|
March 31, |
|
|
2017 |
|
2016 |
| NET CHARGE-OFFS |
|
$ |
197 |
|
|
$ |
917 |
|
|
|
|
|
|
| AVERAGE BALANCES: |
|
|
|
|
| Total Assets |
|
$ |
7,217,151 |
|
|
$ |
6,743,315 |
|
| Total Loans |
|
5,180,243 |
|
|
4,669,568 |
|
| Total Earning Assets |
|
6,526,685 |
|
|
6,020,317 |
|
| Total Deposits |
|
5,590,357 |
|
|
5,297,289 |
|
| Total Stockholders' Equity |
|
914,062 |
|
|
861,652 |
|
|
|
|
|
|
| FINANCIAL RATIOS: |
|
|
|
|
| Return on Average Assets |
|
1.29 |
% |
|
1.05 |
% |
| Return on Average Stockholders' Equity |
|
10.15 |
|
|
8.21 |
|
| Return on Average Common Stockholders' Equity |
|
10.15 |
|
|
8.21 |
|
| Average Earning Assets to Average Assets |
|
90.43 |
|
|
89.28 |
|
| Allowance for Loan Losses as % of Total Loans |
|
1.29 |
|
|
1.32 |
|
| Net Charge-offs as % of Average Loans (Annualized) |
|
0.02 |
|
|
0.08 |
|
| Average Stockholders' Equity to Average Assets |
|
12.67 |
|
|
12.78 |
|
| Tax Equivalent Yield on Earning Assets |
|
4.42 |
|
|
4.28 |
|
| Cost of Supporting Liabilities |
|
0.44 |
|
|
0.45 |
|
| Net Interest Margin (FTE) on Earning Assets |
|
3.98 |
|
|
3.83 |
|
| Efficiency Ratio |
|
52.61 |
|
|
61.78 |
|
| Tangible Common Book Value Per Share |
|
$ |
16.49 |
|
|
$ |
15.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NON-PERFORMING ASSETS |
|
|
|
|
|
|
|
|
|
|
| (Dollars In Thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
2016 |
| Non-Accrual Loans |
|
$ |
27,920 |
|
|
$ |
29,998 |
|
|
$ |
34,105 |
|
|
$ |
33,565 |
|
|
$ |
36,719 |
|
| Renegotiated Loans |
|
876 |
|
|
4,747 |
|
|
3,940 |
|
|
4,299 |
|
|
1,015 |
|
| Non-Performing Loans (NPL) |
|
28,796 |
|
|
34,745 |
|
|
38,045 |
|
|
37,864 |
|
|
37,734 |
|
| Other Real Estate Owned |
|
8,293 |
|
|
8,966 |
|
|
10,242 |
|
|
13,219 |
|
|
15,626 |
|
| Non-Performing Assets (NPA) |
|
37,089 |
|
|
43,711 |
|
|
48,287 |
|
|
51,083 |
|
|
53,360 |
|
| 90+ Days Delinquent |
|
123 |
|
|
112 |
|
|
1,625 |
|
|
362 |
|
|
963 |
|
| NPAs & 90 Day Delinquent |
|
$ |
37,212 |
|
|
$ |
43,823 |
|
|
$ |
49,912 |
|
|
$ |
51,445 |
|
|
$ |
54,323 |
|
|
|
|
|
|
|
|
|
|
|
|
| Allowance for Loan Losses |
|
$ |
68,225 |
|
|
$ |
66,037 |
|
|
$ |
63,456 |
|
|
$ |
62,186 |
|
|
$ |
62,086 |
|
| Quarterly Net Charge-offs |
|
197 |
|
|
(164 |
) |
|
630 |
|
|
690 |
|
|
917 |
|
| NPAs / Actual Assets % |
|
0.51 |
% |
|
0.61 |
% |
|
0.69 |
% |
|
0.74 |
% |
|
0.78 |
% |
| NPAs & 90 Day / Actual Assets % |
|
0.51 |
% |
|
0.61 |
% |
|
0.71 |
% |
|
0.74 |
% |
|
0.80 |
% |
| NPAs / Actual Loans and OREO % |
|
0.70 |
% |
|
0.85 |
% |
|
0.97 |
% |
|
1.06 |
% |
|
1.13 |
% |
| Allowance for Loan Losses / Actual Loans (%) |
|
1.29 |
% |
|
1.28 |
% |
|
1.28 |
% |
|
1.29 |
% |
|
1.32 |
% |
| Net Charge-offs as % of Average Loans (Annualized) |
|
0.02 |
% |
|
(0.01 |
)% |
|
0.05 |
% |
|
0.06 |
% |
|
0.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
| (Dollars In Thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
2016 |
| ASSETS |
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
104,247 |
|
|
$ |
127,927 |
|
|
$ |
99,602 |
|
|
$ |
120,471 |
|
|
$ |
85,738 |
|
| Interest-bearing time deposits |
|
20,439 |
|
|
24,459 |
|
|
33,803 |
|
|
62,533 |
|
|
77,453 |
|
| Investment securities |
|
1,327,217 |
|
|
1,304,505 |
|
|
1,300,428 |
|
|
1,297,801 |
|
|
1,270,777 |
|
| Loans held for sale |
|
1,262 |
|
|
2,929 |
|
|
1,482 |
|
|
18,854 |
|
|
3,628 |
|
| Loans |
|
5,274,909 |
|
|
5,139,645 |
|
|
4,973,844 |
|
|
4,791,429 |
|
|
4,709,907 |
|
| Less: Allowance for loan losses |
|
(68,225 |
) |
|
(66,037 |
) |
|
(63,456 |
) |
|
(62,186 |
) |
|
(62,086 |
) |
| Net loans |
|
5,206,684 |
|
|
5,073,608 |
|
|
4,910,388 |
|
|
4,729,243 |
|
|
4,647,821 |
|
| Premises and equipment |
|
91,311 |
|
|
94,432 |
|
|
95,540 |
|
|
95,170 |
|
|
96,494 |
|
| Federal Reserve and Federal Home Loan Bank stock |
|
17,964 |
|
|
17,964 |
|
|
18,044 |
|
|
18,096 |
|
|
37,553 |
|
| Interest receivable |
|
25,174 |
|
|
26,194 |
|
|
23,652 |
|
|
23,351 |
|
|
22,836 |
|
| Core deposit intangibles and goodwill |
|
257,963 |
|
|
258,866 |
|
|
259,844 |
|
|
260,821 |
|
|
261,799 |
|
| Cash surrender value of life insurance |
|
202,574 |
|
|
201,671 |
|
|
201,856 |
|
|
201,417 |
|
|
200,549 |
|
| Other real estate owned |
|
8,293 |
|
|
8,966 |
|
|
10,242 |
|
|
13,219 |
|
|
15,626 |
|
| Tax asset, deferred and receivable |
|
32,074 |
|
|
39,384 |
|
|
31,779 |
|
|
32,547 |
|
|
47,982 |
|
| Other assets |
|
30,991 |
|
|
30,706 |
|
|
35,692 |
|
|
32,895 |
|
|
30,283 |
|
| TOTAL ASSETS |
|
$ |
7,326,193 |
|
|
$ |
7,211,611 |
|
|
$ |
7,022,352 |
|
|
$ |
6,906,418 |
|
|
$ |
6,798,539 |
|
| LIABILITIES |
|
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
| Noninterest-bearing |
|
$ |
1,373,778 |
|
|
$ |
1,348,267 |
|
|
$ |
1,307,886 |
|
|
$ |
1,253,747 |
|
|
$ |
1,282,462 |
|
| Interest-bearing |
|
4,261,531 |
|
|
4,208,231 |
|
|
4,136,354 |
|
|
4,153,807 |
|
|
4,028,608 |
|
| Total Deposits |
|
5,635,309 |
|
|
5,556,498 |
|
|
5,444,240 |
|
|
5,407,554 |
|
|
5,311,070 |
|
| Borrowings: |
|
|
|
|
|
|
|
|
|
|
| Federal funds purchased |
|
102,000 |
|
|
120,349 |
|
|
58,358 |
|
|
20,000 |
|
|
602 |
|
| Securities sold under repurchase agreements |
|
139,007 |
|
|
146,480 |
|
|
138,671 |
|
|
140,777 |
|
|
150,134 |
|
| Federal Home Loan Bank advances |
|
338,919 |
|
|
298,923 |
|
|
297,022 |
|
|
268,579 |
|
|
263,588 |
|
| Subordinated debentures and term loans |
|
128,862 |
|
|
128,445 |
|
|
128,288 |
|
|
127,678 |
|
|
127,523 |
|
| Total Borrowings |
|
708,788 |
|
|
694,197 |
|
|
622,339 |
|
|
557,034 |
|
|
541,847 |
|
| Interest payable |
|
3,875 |
|
|
3,110 |
|
|
3,733 |
|
|
3,051 |
|
|
3,910 |
|
| Other liabilities |
|
48,751 |
|
|
56,149 |
|
|
51,175 |
|
|
51,229 |
|
|
74,449 |
|
| Total Liabilities |
|
6,396,723 |
|
|
6,309,954 |
|
|
6,121,487 |
|
|
6,018,868 |
|
|
5,931,276 |
|
| STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
| Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value: |
|
|
|
|
|
|
|
|
|
|
| Authorized -- 600 shares |
|
|
|
|
|
|
|
|
|
|
| Issued and outstanding |
|
125 |
|
|
125 |
|
|
125 |
|
|
125 |
|
|
125 |
|
| Common Stock, $.125 stated value: |
|
|
|
|
|
|
|
|
|
|
| Authorized -- 50,000,000 shares |
|
|
|
|
|
|
|
|
|
|
| Issued and outstanding |
|
5,131 |
|
|
5,114 |
|
|
5,100 |
|
|
5,097 |
|
|
5,094 |
|
| Additional paid-in capital |
|
509,953 |
|
|
509,018 |
|
|
506,848 |
|
|
505,725 |
|
|
504,661 |
|
| Retained earnings |
|
417,983 |
|
|
400,981 |
|
|
384,868 |
|
|
369,568 |
|
|
355,317 |
|
| Accumulated other comprehensive income (loss) |
|
(3,722 |
) |
|
(13,581 |
) |
|
3,924 |
|
|
7,035 |
|
|
2,066 |
|
| Total Stockholders' Equity |
|
929,470 |
|
|
901,657 |
|
|
900,865 |
|
|
887,550 |
|
|
867,263 |
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
7,326,193 |
|
|
$ |
7,211,611 |
|
|
$ |
7,022,352 |
|
|
$ |
6,906,418 |
|
|
$ |
6,798,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
|
|
|
|
|
|
|
| (Dollars In Thousands, Except Per Share Amounts) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
2016 |
| INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
| Loans receivable: |
|
|
|
|
|
|
|
|
|
|
| Taxable |
|
$ |
56,357 |
|
|
$ |
53,895 |
|
|
$ |
53,819 |
|
|
$ |
52,099 |
|
|
$ |
50,489 |
|
| Tax-exempt |
|
2,333 |
|
|
2,096 |
|
|
1,649 |
|
|
1,465 |
|
|
1,315 |
|
| Investment securities: |
|
|
|
|
|
|
|
|
|
|
| Taxable |
|
4,308 |
|
|
3,893 |
|
|
3,992 |
|
|
4,202 |
|
|
4,328 |
|
| Tax-exempt |
|
5,003 |
|
|
4,862 |
|
|
4,668 |
|
|
4,583 |
|
|
4,509 |
|
| Deposits with financial institutions |
|
44 |
|
|
67 |
|
|
55 |
|
|
122 |
|
|
106 |
|
| Federal Reserve and Federal Home Loan Bank stock |
|
189 |
|
|
192 |
|
|
193 |
|
|
233 |
|
|
480 |
|
| Total Interest Income |
|
68,234 |
|
|
65,005 |
|
|
64,376 |
|
|
62,704 |
|
|
61,227 |
|
| INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
| Deposits |
|
4,124 |
|
|
3,886 |
|
|
3,926 |
|
|
4,039 |
|
|
4,063 |
|
| Federal funds purchased |
|
228 |
|
|
40 |
|
|
27 |
|
|
7 |
|
|
28 |
|
| Securities sold under repurchase agreements |
|
88 |
|
|
91 |
|
|
91 |
|
|
92 |
|
|
100 |
|
| Federal Home Loan Bank advances |
|
978 |
|
|
797 |
|
|
853 |
|
|
818 |
|
|
796 |
|
| Subordinated debentures and term loans |
|
1,817 |
|
|
1,817 |
|
|
1,797 |
|
|
1,786 |
|
|
1,785 |
|
| Total Interest Expense |
|
7,235 |
|
|
6,631 |
|
|
6,694 |
|
|
6,742 |
|
|
6,772 |
|
| NET INTEREST INCOME |
|
60,999 |
|
|
58,374 |
|
|
57,682 |
|
|
55,962 |
|
|
54,455 |
|
| Provision for loan losses |
|
2,385 |
|
|
2,417 |
|
|
1,900 |
|
|
790 |
|
|
550 |
|
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
|
58,614 |
|
|
55,957 |
|
|
55,782 |
|
|
55,172 |
|
|
53,905 |
|
| OTHER INCOME |
|
|
|
|
|
|
|
|
|
|
| Service charges on deposit accounts |
|
4,174 |
|
|
4,534 |
|
|
4,667 |
|
|
4,416 |
|
|
4,145 |
|
| Fiduciary activities |
|
2,640 |
|
|
2,500 |
|
|
2,448 |
|
|
2,376 |
|
|
2,494 |
|
| Other customer fees |
|
4,863 |
|
|
4,784 |
|
|
4,777 |
|
|
4,695 |
|
|
5,059 |
|
| Earnings on cash surrender value of life insurance |
|
898 |
|
|
886 |
|
|
614 |
|
|
1,297 |
|
|
1,476 |
|
| Net gains and fees on sales of loans |
|
1,275 |
|
|
1,886 |
|
|
1,989 |
|
|
1,717 |
|
|
1,460 |
|
| Net realized gains on sales of available for sale securities |
|
598 |
|
|
847 |
|
|
839 |
|
|
706 |
|
|
997 |
|
| Other income |
|
398 |
|
|
683 |
|
|
1,527 |
|
|
1,178 |
|
|
206 |
|
| Total Other Income |
|
14,846 |
|
|
16,120 |
|
|
16,861 |
|
|
16,385 |
|
|
15,837 |
|
| OTHER EXPENSES |
|
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
|
25,732 |
|
|
22,994 |
|
|
26,651 |
|
|
25,570 |
|
|
27,337 |
|
| Net occupancy |
|
4,216 |
|
|
4,568 |
|
|
4,348 |
|
|
4,059 |
|
|
4,022 |
|
| Equipment |
|
2,807 |
|
|
3,069 |
|
|
2,947 |
|
|
3,243 |
|
|
3,238 |
|
| Marketing |
|
565 |
|
|
790 |
|
|
630 |
|
|
851 |
|
|
737 |
|
| Outside data processing fees |
|
2,616 |
|
|
2,672 |
|
|
2,382 |
|
|
2,025 |
|
|
2,069 |
|
| Printing and office supplies |
|
264 |
|
|
301 |
|
|
314 |
|
|
369 |
|
|
364 |
|
| Core deposit amortization |
|
903 |
|
|
977 |
|
|
978 |
|
|
977 |
|
|
978 |
|
| FDIC assessments |
|
570 |
|
|
550 |
|
|
534 |
|
|
1,002 |
|
|
950 |
|
| Other real estate owned and foreclosure expenses |
|
531 |
|
|
574 |
|
|
637 |
|
|
915 |
|
|
751 |
|
| Professional and other outside services |
|
1,734 |
|
|
1,634 |
|
|
1,242 |
|
|
1,478 |
|
|
2,162 |
|
| Other expenses |
|
3,161 |
|
|
3,805 |
|
|
3,452 |
|
|
4,346 |
|
|
3,867 |
|
| Total Other Expenses |
|
43,099 |
|
|
41,934 |
|
|
44,115 |
|
|
44,835 |
|
|
46,475 |
|
| INCOME BEFORE INCOME TAX |
|
30,361 |
|
|
30,143 |
|
|
28,528 |
|
|
26,722 |
|
|
23,267 |
|
| Income tax expense |
|
7,168 |
|
|
7,850 |
|
|
7,469 |
|
|
6,716 |
|
|
5,574 |
|
| NET INCOME AVAILABLE TO COMMON STOCKHOLDERS |
|
$ |
23,193 |
|
|
$ |
22,293 |
|
|
$ |
21,059 |
|
|
$ |
20,006 |
|
|
$ |
17,693 |
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Data: |
|
|
|
|
|
|
|
|
|
|
| Basic Net Income Available to Common Stockholders |
|
$ |
0.57 |
|
|
$ |
0.55 |
|
|
$ |
0.51 |
|
|
$ |
0.50 |
|
|
$ |
0.43 |
|
| Diluted Net Income Available to Common Stockholders |
|
$ |
0.56 |
|
|
$ |
0.55 |
|
|
$ |
0.51 |
|
|
$ |
0.49 |
|
|
$ |
0.43 |
|
| Cash Dividends Paid |
|
$ |
0.15 |
|
|
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.14 |
|
|
$ |
0.11 |
|
| Average Diluted Shares Outstanding (in thousands) |
|
41,221 |
|
|
41,124 |
|
|
41,026 |
|
|
40,969 |
|
|
40,917 |
|
| FINANCIAL RATIOS: |
|
|
|
|
|
|
|
|
|
|
| Return on Average Assets |
|
1.29 |
% |
|
1.26 |
% |
|
1.22 |
% |
|
1.17 |
% |
|
1.05 |
% |
| Return on Average Stockholders' Equity |
|
10.15 |
|
|
9.87 |
|
|
9.39 |
|
|
9.13 |
|
|
8.21 |
|
| Return on Average Common Stockholders' Equity |
|
10.15 |
|
|
9.87 |
|
|
9.39 |
|
|
9.14 |
|
|
8.21 |
|
| Average Earning Assets to Average Assets |
|
90.43 |
|
|
89.86 |
|
|
89.73 |
|
|
89.41 |
|
|
89.28 |
|
| Allowance for Loan Losses as % of Total Loans |
|
1.29 |
|
|
1.28 |
|
|
1.28 |
|
|
1.29 |
|
|
1.32 |
|
| Net Charge-offs as % of Average Loans (Annualized) |
|
0.02 |
|
|
(0.01 |
) |
|
0.05 |
|
|
0.06 |
|
|
0.08 |
|
| Average Stockholders' Equity to Average Assets |
|
12.67 |
|
|
12.75 |
|
|
12.99 |
|
|
12.78 |
|
|
12.78 |
|
| Tax Equivalent Yield on Earning Assets |
|
4.42 |
|
|
4.32 |
|
|
4.37 |
|
|
4.30 |
|
|
4.28 |
|
| Cost of Supporting Liabilities |
|
0.44 |
|
|
0.42 |
|
|
0.43 |
|
|
0.44 |
|
|
0.45 |
|
| Net Interest Margin (FTE) on Earning Assets |
|
3.98 |
|
|
3.90 |
|
|
3.94 |
|
|
3.86 |
|
|
3.83 |
|
| Efficiency Ratio |
|
52.61 |
|
|
52.18 |
|
|
55.12 |
|
|
57.33 |
|
|
61.78 |
|
| Tangible Common Book Value Per Share |
|
$ |
16.49 |
|
|
$ |
15.85 |
|
|
$ |
15.86 |
|
|
$ |
15.53 |
|
|
$ |
15.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LOANS |
|
|
|
|
|
|
|
|
|
| (Dollars In Thousands) |
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
2016 |
| Commercial and industrial loans |
$ |
1,258,840 |
|
|
$ |
1,194,646 |
|
|
$ |
1,146,538 |
|
|
$ |
1,084,890 |
|
|
$ |
1,060,559 |
|
| Agricultural production financing and other loans to farmers |
77,021 |
|
|
79,689 |
|
|
93,169 |
|
|
95,131 |
|
|
92,137 |
|
| Real estate loans: |
|
|
|
|
|
|
|
|
|
| Construction |
336,931 |
|
|
418,703 |
|
|
368,241 |
|
|
352,980 |
|
|
391,621 |
|
| Commercial and farmland |
2,118,431 |
|
|
1,953,062 |
|
|
1,941,739 |
|
|
1,869,703 |
|
|
1,806,395 |
|
| Residential |
737,918 |
|
|
739,169 |
|
|
739,855 |
|
|
758,870 |
|
|
769,592 |
|
| Home equity |
423,708 |
|
|
418,525 |
|
|
398,837 |
|
|
374,159 |
|
|
353,946 |
|
| Individuals' loans for household and other personal expenditures |
77,590 |
|
|
77,479 |
|
|
76,497 |
|
|
75,205 |
|
|
73,622 |
|
| Lease financing receivables, net of unearned income |
261 |
|
|
311 |
|
|
380 |
|
|
388 |
|
|
461 |
|
| Other commercial loans |
244,209 |
|
|
258,061 |
|
|
208,588 |
|
|
180,103 |
|
|
161,574 |
|
| Loans |
5,274,909 |
|
|
5,139,645 |
|
|
4,973,844 |
|
|
4,791,429 |
|
|
4,709,907 |
|
| Allowance for loan losses |
(68,225 |
) |
|
(66,037 |
) |
|
(63,456 |
) |
|
(62,186 |
) |
|
(62,086 |
) |
| NET LOANS |
$ |
5,206,684 |
|
|
$ |
5,073,608 |
|
|
$ |
4,910,388 |
|
|
$ |
4,729,243 |
|
|
$ |
4,647,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| DEPOSITS |
|
|
|
|
|
|
|
|
|
|
| (Dollars In Thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
2016 |
| Demand deposits |
|
$ |
2,861,384 |
|
|
$ |
2,866,853 |
|
|
$ |
2,745,028 |
|
|
$ |
2,717,500 |
|
|
$ |
2,590,603 |
| Savings deposits |
|
1,565,174 |
|
|
1,560,752 |
|
|
1,545,372 |
|
|
1,551,210 |
|
|
1,549,304 |
| Certificates and other time deposits of $100,000 or more |
|
312,327 |
|
|
276,274 |
|
|
296,838 |
|
|
301,695 |
|
|
304,559 |
| Other certificates and time deposits |
|
476,741 |
|
|
471,247 |
|
|
498,203 |
|
|
517,720 |
|
|
536,120 |
| Brokered deposits |
|
419,683 |
|
|
381,372 |
|
|
358,799 |
|
|
319,429 |
|
|
330,484 |
| TOTAL DEPOSITS |
|
$ |
5,635,309 |
|
|
$ |
5,556,498 |
|
|
$ |
5,444,240 |
|
|
$ |
5,407,554 |
|
|
$ |
5,311,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NET INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in Thousands) |
|
For the Three Months Ended |
|
|
March 31, 2017 |
|
March 31, 2016 |
|
|
Average
Balance
|
|
Interest
Income /
Expense
|
|
Average
Rate
|
|
Average
Balance
|
|
Interest
Income /
Expense |
|
Average
Rate |
| Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing time deposits |
|
$ |
30,463 |
|
|
$ |
45 |
|
|
0.59 |
% |
|
$ |
75,709 |
|
|
$ |
106 |
|
|
0.56 |
% |
| Federal Reserve and Federal Home Loan Bank stock |
|
17,964 |
|
|
189 |
|
|
4.21 |
|
|
37,632 |
|
|
480 |
|
|
5.10 |
|
| Investment Securities: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
| Taxable |
|
711,490 |
|
|
4,308 |
|
|
2.42 |
|
|
716,486 |
|
|
4,328 |
|
|
2.42 |
|
| Tax-Exempt (2) |
|
586,525 |
|
|
7,697 |
|
|
5.25 |
|
|
520,922 |
|
|
6,937 |
|
|
5.33 |
|
| Total Investment Securities |
|
1,298,015 |
|
|
12,005 |
|
|
3.70 |
|
|
1,237,408 |
|
|
11,265 |
|
|
3.64 |
|
| Loans held for sale |
|
840 |
|
|
45 |
|
|
21.43 |
|
|
6,247 |
|
|
122 |
|
|
7.81 |
|
| Loans: (3) |
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial |
|
3,781,045 |
|
|
44,092 |
|
|
4.66 |
|
|
3,449,451 |
|
|
38,864 |
|
|
4.51 |
|
| Real Estate Mortgage |
|
548,148 |
|
|
6,121 |
|
|
4.47 |
|
|
575,266 |
|
|
6,394 |
|
|
4.45 |
|
| Installment |
|
532,128 |
|
|
6,098 |
|
|
4.58 |
|
|
456,654 |
|
|
5,109 |
|
|
4.48 |
|
| Tax-Exempt (2) |
|
318,082 |
|
|
3,589 |
|
|
4.51 |
|
|
181,950 |
|
|
2,023 |
|
|
4.45 |
|
| Total Loans |
|
5,180,243 |
|
|
59,945 |
|
|
4.63 |
|
|
4,669,568 |
|
|
52,512 |
|
|
4.50 |
|
| Total Earning Assets |
|
6,526,685 |
|
|
72,184 |
|
|
4.42 |
|
|
6,020,317 |
|
|
64,363 |
|
|
4.28 |
|
| Net unrealized gain on securities available for sale |
|
593 |
|
|
|
|
|
|
10,005 |
|
|
|
|
|
| Allowance for loan losses |
|
(66,933 |
) |
|
|
|
|
|
(63,213 |
) |
|
|
|
|
| Cash and cash equivalents |
|
104,017 |
|
|
|
|
|
|
101,913 |
|
|
|
|
|
| Premises and equipment |
|
93,018 |
|
|
|
|
|
|
96,698 |
|
|
|
|
|
| Other assets |
|
559,771 |
|
|
|
|
|
|
577,595 |
|
|
|
|
|
| Total Assets |
|
$ |
7,217,151 |
|
|
|
|
|
|
$ |
6,743,315 |
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing NOW deposits |
|
$ |
1,512,839 |
|
|
$ |
838 |
|
|
0.22 |
% |
|
$ |
1,300,266 |
|
|
$ |
544 |
|
|
0.17 |
% |
| Money market deposits |
|
789,378 |
|
|
341 |
|
|
0.17 |
|
|
865,932 |
|
|
491 |
|
|
0.23 |
|
| Savings deposits |
|
776,519 |
|
|
156 |
|
|
0.08 |
|
|
689,305 |
|
|
135 |
|
|
0.08 |
|
| Certificates and other time deposits |
|
1,165,079 |
|
|
2,789 |
|
|
0.96 |
|
|
1,186,458 |
|
|
2,893 |
|
|
0.98 |
|
| Total Interest-bearing Deposits |
|
4,243,815 |
|
|
4,124 |
|
|
0.39 |
|
|
4,041,961 |
|
|
4,063 |
|
|
0.40 |
|
| Borrowings |
|
664,921 |
|
|
3,111 |
|
|
1.87 |
|
|
520,087 |
|
|
2,709 |
|
|
2.08 |
|
| Total Interest-bearing Liabilities |
|
4,908,736 |
|
|
7,235 |
|
|
0.59 |
|
|
4,562,048 |
|
|
6,772 |
|
|
0.59 |
|
| Noninterest-bearing deposits |
|
1,346,542 |
|
|
|
|
|
|
1,255,328 |
|
|
|
|
|
| Other liabilities |
|
47,811 |
|
|
|
|
|
|
64,287 |
|
|
|
|
|
| Total Liabilities |
|
6,303,089 |
|
|
|
|
|
|
5,881,663 |
|
|
|
|
|
| Stockholders' Equity |
|
914,062 |
|
|
|
|
|
|
861,652 |
|
|
|
|
|
| Total Liabilities and Stockholders' Equity |
|
$ |
7,217,151 |
|
|
7,235 |
|
|
0.44 |
|
|
$ |
6,743,315 |
|
|
6,772 |
|
|
0.45 |
|
| Net Interest Income |
|
|
|
$ |
64,949 |
|
|
|
|
|
|
$ |
57,591 |
|
|
|
| Net Interest Margin |
|
|
|
|
|
3.98 |
% |
|
|
|
|
|
3.83 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) Average balance of securities is computed based on the average of the
historical amortized cost balances without the effects of the fair value adjustments. |
| (2) Tax-exempt securities and loans are presented on a fully taxable
equivalent basis, using a marginal tax rate of 35 percent for 2017 and 2016. These totals equal $3,950 and $3,136 for the three
months ended March 31, 2017 and 2016, respectively. |
| (3) Non accruing loans have been included in the average balances. |
First Merchants Corporation
David L. Ortega, 765-378-8937
First Vice President/Director of Investor Relations
http://www.firstmerchants.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20170427005974/en/