First Merchants Corporation (NASDAQ - FRME) reported record second quarter 2017 net income of $24.1 million, compared to $20 million during the second quarter of 2016. Earnings per share for the period totaled a record $.57 per share, an increase of $.08 per share, or 16.3 percent, over the same period in 2016. Year-to-date net income totaled a record $47.3 million, compared to $37.7 million during the same period in 2016. Earnings per share for the six months ended June 30, 2017 totaled a record $1.13 per share, an increase of $.21 per share, or 22.8 percent, over the same period in 2016.
Michael C. Rechin, President and Chief Executive Officer, stated, “First Merchants produced record earnings for the second quarter of 2017. Integrated within our second quarter financial statements was the addition of The Arlington Bank on May 19th to include $232 million of total loans, $253 million of deposits and $2.5 million of one-time acquisition expenses. We are also pleased to have completed the closing of our acquisition of Independent Alliance Banks, Inc. on July 14th.” Rechin added, “Our momentum in organic growth and franchise expansion through acquisitions is very fulfilling. The quarter was very productive, including margin expansion, efficiency gains and leadership team additions. Our focus for the remainder of the year includes successful execution of our two upcoming integrations and welcoming new First Merchants’ clients to the same level of excellent service that our client base has come to expect.”
Total assets reached $7.8 billion as of quarter-end and loans totaled a record $5.6 billion, compared to $6.9 billion and $4.8 billion, as of June 30, 2016, representing increases of 13 and 17.2 percent, respectively. Total deposits reached record levels as well, totaling $6 billion as of June 30, 2017, representing an 11.3 percent increase. Of the increase in total loans and total deposits, The Arlington Bank acquisition represented 4.8 and 4.7 percent, respectively. Tangible common equity also increased to $732 million, or $16.97 per share, compared to $633 million or $15.53 per share as of June 30, 2016.
Net-interest income totaled a record $63.1 million for the quarter and reported net-interest margin increased by 9 basis points over the second quarter of 2016, totaling 3.95 percent. Yields on earning assets totaled 4.44 percent and the cost of supporting liabilities totaled .49 percent. When adjusted for fair value accretion, net-interest margin totaled 3.81 percent for the quarter, an increase of 16 basis points over the second quarter of 2016 and 9 basis points over the first quarter of 2017.
Non-interest income totaled $18.4 million for the quarter, up $2 million from the second quarter of 2016 total of $16.4 million. Earnings on the cash surrender value of life insurance accounted for $1.7 million of the increase.
Non-interest expense totaled $47.3 million for the quarter, an increase of $2.5 million from the second quarter of 2016. The increase was fully attributable to one-time merger related expenses.
The Corporation’s provision expense totaled $2.9 million compared to $790,000 during the same period in 2016. The increase in provision expense provided allowance coverage for organic loan growth. The allowance for loan losses now totals $70.5 million as of June 30, 2017, up from $62.2 million as of June 30, 2016. Non-accrual loans totaled $27.3 million as of quarter-end, down from $33.6 million a year ago. The allowance is 1.25 percent of total loans and 1.45 percent of non-purchased loans.
As of June 30, 2017, the Corporation’s total risk-based capital ratio equaled 14.01 percent, common equity tier 1 capital ratio equaled 11.11 percent, and the tangible common equity ratio totaled 9.68 percent.
CONFERENCE CALL
First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, July 27, 2017.
To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's second quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until August 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 10107738.
In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme170727.html during the time of the call. A replay of the web cast will be available until July 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, The Arlington Bank and iAB Financial Bank 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) | June 30, | |||||||||
| 2017 | 2016 | |||||||||
| ASSETS | ||||||||||
| Cash and cash equivalents | $ | 142,650 | $ | 120,471 | ||||||
| Interest-bearing time deposits | 48,305 | 62,533 | ||||||||
| Investment securities | 1,343,323 | 1,297,801 | ||||||||
| Loans held for sale | 4,036 | 18,854 | ||||||||
| Loans | 5,613,144 | 4,791,429 | ||||||||
| Less: Allowance for loan losses | (70,471 | ) | (62,186 | ) | ||||||
| Net loans | 5,542,673 | 4,729,243 | ||||||||
| Premises and equipment | 92,637 | 95,170 | ||||||||
| Federal Home Loan Bank stock | 19,015 | 18,096 | ||||||||
| Interest receivable | 27,597 | 23,351 | ||||||||
| Core deposit intangibles and goodwill | 309,686 | 260,821 | ||||||||
| Cash surrender value of life insurance | 200,125 | 201,417 | ||||||||
| Other real estate owned | 11,893 | 13,219 | ||||||||
| Tax asset, deferred and receivable | 27,331 | 32,547 | ||||||||
| Other assets | 35,758 | 32,895 | ||||||||
| TOTAL ASSETS | $ | 7,805,029 | $ | 6,906,418 | ||||||
| LIABILITIES | ||||||||||
| Deposits: | ||||||||||
| Noninterest-bearing | $ | 1,398,237 | $ | 1,253,747 | ||||||
| Interest-bearing | 4,618,867 | 4,153,807 | ||||||||
| Total Deposits | 6,017,104 | 5,407,554 | ||||||||
| Borrowings: | ||||||||||
| Federal funds purchased | 134,608 | 20,000 | ||||||||
| Securities sold under repurchase agreements | 127,884 | 140,777 | ||||||||
| Federal Home Loan Bank advances | 312,715 | 268,579 | ||||||||
| Subordinated debentures and term loans | 128,742 | 127,678 | ||||||||
| Total Borrowings | 703,949 | 557,034 | ||||||||
| Interest payable | 3,477 | 3,051 | ||||||||
| Other liabilities | 45,383 | 51,229 | ||||||||
| Total Liabilities | 6,769,913 | 6,018,868 | ||||||||
| 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 -- 100,000,000 and 50,000,000 shares (1) | ||||||||||
| Issued and outstanding - 43,153,509 and 40,772,896 shares | 5,394 | 5,097 | ||||||||
| Additional paid-in capital | 593,904 | 505,725 | ||||||||
| Retained earnings | 434,309 | 369,568 | ||||||||
| Accumulated other comprehensive loss | 1,384 | 7,035 | ||||||||
| Total Stockholders' Equity | 1,035,116 | 887,550 | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 7,805,029 | $ | 6,906,418 | ||||||
(1) On May 1, 2017, the shareholders of First Merchants Corporation approved an amendment to the Articles of Incorporation to increase the number of shares of common stock authorized to issue from 50,000,000 to 100,000,000 shares.
| CONSOLIDATED STATEMENTS OF INCOME | Three Months Ended | Six Months Ended | |||||||||||||
| (Dollars In Thousands, Except Per Share Amounts) | June 30, | June 30, | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| INTEREST INCOME | |||||||||||||||
| Loans receivable: | |||||||||||||||
| Taxable | $ | 59,386 | $ | 52,099 | $ | 115,743 | $ | 102,588 | |||||||
| Tax-exempt | 2,492 | 1,465 | 4,825 | 2,780 | |||||||||||
| Investment securities: | |||||||||||||||
| Taxable | 4,180 | 4,202 | 8,488 | 8,530 | |||||||||||
| Tax-exempt | 5,091 | 4,583 | 10,094 | 9,092 | |||||||||||
| Deposits with financial institutions | 114 | 122 | 158 | 228 | |||||||||||
| Federal Reserve and Federal Home Loan Bank stock | 204 | 233 | 393 | 713 | |||||||||||
| Total Interest Income | 71,467 | 62,704 | 139,701 | 123,931 | |||||||||||
| INTEREST EXPENSE | |||||||||||||||
| Deposits | 5,137 | 4,039 | 9,261 | 8,102 | |||||||||||
| Federal funds purchased | 103 | 7 | 331 | 35 | |||||||||||
| Securities sold under repurchase agreements | 110 | 92 | 198 | 192 | |||||||||||
| Federal Home Loan Bank advances | 1,177 | 818 | 2,155 | 1,614 | |||||||||||
| Subordinated debentures and term loans | 1,840 | 1,786 | 3,657 | 3,571 | |||||||||||
| Total Interest Expense | 8,367 | 6,742 | 15,602 | 13,514 | |||||||||||
| NET INTEREST INCOME | 63,100 | 55,962 | 124,099 | 110,417 | |||||||||||
| Provision for loan losses | 2,875 | 790 | 5,260 | 1,340 | |||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 60,225 | 55,172 | 118,839 | 109,077 | |||||||||||
| OTHER INCOME | |||||||||||||||
| Service charges on deposit accounts | 4,438 | 4,416 | 8,612 | 8,561 | |||||||||||
| Fiduciary activities | 2,609 | 2,376 | 5,249 | 4,870 | |||||||||||
| Other customer fees | 5,406 | 4,695 | 10,269 | 9,754 | |||||||||||
| Earnings on cash surrender value of life insurance | 2,971 | 1,297 | 3,869 | 2,773 | |||||||||||
| Net gains and fees on sales of loans | 1,617 | 1,717 | 2,892 | 3,177 | |||||||||||
| Net realized gains on sales of available for sale securities | 567 | 706 | 1,165 | 1,703 | |||||||||||
| Other income | 826 | 1,178 | 1,224 | 1,384 | |||||||||||
| Total Other Income | 18,434 | 16,385 | 33,280 | 32,222 | |||||||||||
| OTHER EXPENSES | |||||||||||||||
| Salaries and employee benefits | 27,076 | 25,570 | 52,808 | 52,907 | |||||||||||
| Net occupancy | 3,965 | 4,059 | 8,181 | 8,081 | |||||||||||
| Equipment | 2,907 | 3,243 | 5,714 | 6,481 | |||||||||||
| Marketing | 792 | 851 | 1,357 | 1,588 | |||||||||||
| Outside data processing fees | 3,086 | 2,025 | 5,702 | 4,094 | |||||||||||
| Printing and office supplies | 275 | 369 | 539 | 733 | |||||||||||
| Core deposit amortization | 991 | 977 | 1,894 | 1,955 | |||||||||||
| FDIC assessments | 579 | 1,002 | 1,149 | 1,952 | |||||||||||
| Other real estate owned and foreclosure expenses | 731 | 915 | 1,262 | 1,666 | |||||||||||
| Professional and other outside services | 3,266 | 1,478 | 5,000 | 3,640 | |||||||||||
| Other expenses | 3,648 | 4,346 | 6,809 | 8,213 | |||||||||||
| Total Other Expenses | 47,316 | 44,835 | 90,415 | 91,310 | |||||||||||
| INCOME BEFORE INCOME TAX | 31,343 | 26,722 | 61,704 | 49,989 | |||||||||||
| Income tax expense | 7,207 | 6,716 | 14,375 | 12,290 | |||||||||||
| NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 24,136 | $ | 20,006 | $ | 47,329 | $ | 37,699 | |||||||
| Per Share Data: | |||||||||||||||
| Basic Net Income Available to Common Stockholders | $ | 0.57 | $ | 0.50 | $ | 1.14 | $ | 0.93 | |||||||
| Diluted Net Income Available to Common Stockholders | $ | 0.57 | $ | 0.49 | $ | 1.13 | $ | 0.92 | |||||||
| Cash Dividends Paid | $ | 0.18 | $ | 0.14 | $ | 0.33 | $ | 0.25 | |||||||
| Average Diluted Shares Outstanding (in thousands) | 42,244 | 40,969 | 41,735 | 40,941 | |||||||||||
| FINANCIAL HIGHLIGHTS | ||||||||||||||||
| (Dollars in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| NET CHARGE-OFFS | $ | 629 | $ | 690 | $ | 826 | $ | 1,607 | ||||||||
| AVERAGE BALANCES: | ||||||||||||||||
| Total Assets | $ | 7,571,789 | $ | 6,857,839 | $ | 7,395,450 | $ | 6,800,577 | ||||||||
| Total Loans | 5,436,961 | 4,739,079 | 5,309,311 | 4,704,323 | ||||||||||||
| Total Earning Assets | 6,812,451 | 6,131,438 | 6,670,358 | 6,075,878 | ||||||||||||
| Total Deposits | 5,930,532 | 5,440,148 | 5,761,384 | 5,368,719 | ||||||||||||
| Total Stockholders' Equity | 983,096 | 876,116 | 948,769 | 868,884 | ||||||||||||
| FINANCIAL RATIOS: | ||||||||||||||||
| Return on Average Assets | 1.28 | % | 1.17 | % | 1.28 | % | 1.11 | % | ||||||||
| Return on Average Stockholders' Equity | 9.82 | 9.13 | 9.98 | 8.68 | ||||||||||||
| Return on Average Common Stockholders' Equity | 9.82 | 9.14 | 9.98 | 8.68 | ||||||||||||
| Average Earning Assets to Average Assets | 89.97 | 89.41 | 90.20 | 89.34 | ||||||||||||
| Allowance for Loan Losses as % of Total Loans | 1.25 | 1.29 | 1.25 | 1.29 | ||||||||||||
| Net Charge-offs as % of Average Loans (Annualized) | 0.05 | 0.06 | 0.03 | 0.07 | ||||||||||||
| Average Stockholders' Equity to Average Assets | 12.98 | 12.78 | 12.83 | 12.78 | ||||||||||||
| Tax Equivalent Yield on Earning Assets | 4.44 | 4.30 | 4.43 | 4.29 | ||||||||||||
| Cost of Supporting Liabilities | 0.49 | 0.44 | 0.47 | 0.44 | ||||||||||||
| Net Interest Margin (FTE) on Earning Assets | 3.95 | 3.86 | 3.96 | 3.85 | ||||||||||||
| Efficiency Ratio | 53.61 | 57.33 | 53.13 | 59.52 | ||||||||||||
| Tangible Common Book Value Per Share | $ | 16.97 | $ | 15.53 | $ | 16.97 | $ | 15.53 | ||||||||
| NON-PERFORMING ASSETS | ||||||||||||||||||||
| (Dollars In Thousands) | June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Non-Accrual Loans | $ | 27,347 | $ | 27,920 | $ | 29,998 | $ | 34,105 | $ | 33,565 | ||||||||||
| Renegotiated Loans | 384 | 876 | 4,747 | 3,940 | 4,299 | |||||||||||||||
| Non-Performing Loans (NPL) | 27,731 | 28,796 | 34,745 | 38,045 | 37,864 | |||||||||||||||
| Other Real Estate Owned | 11,893 | 8,293 | 8,966 | 10,242 | 13,219 | |||||||||||||||
| Non-Performing Assets (NPA) | 39,624 | 37,089 | 43,711 | 48,287 | 51,083 | |||||||||||||||
| 90+ Days Delinquent | 634 | 123 | 112 | 1,625 | 362 | |||||||||||||||
| NPAs & 90 Day Delinquent | $ | 40,258 | $ | 37,212 | $ | 43,823 | $ | 49,912 | $ | 51,445 | ||||||||||
| Allowance for Loan Losses | $ | 70,471 | $ | 68,225 | $ | 66,037 | $ | 63,456 | $ | 62,186 | ||||||||||
| Quarterly Net Charge-offs | 629 | 197 | (164 | ) | 630 | 690 | ||||||||||||||
| NPAs / Actual Assets % | 0.51 | % | 0.51 | % | 0.61 | % | 0.69 | % | 0.74 | % | ||||||||||
| NPAs & 90 Day / Actual Assets % | 0.52 | % | 0.51 | % | 0.61 | % | 0.71 | % | 0.74 | % | ||||||||||
| NPAs / Actual Loans and OREO % | 0.70 | % | 0.70 | % | 0.85 | % | 0.97 | % | 1.06 | % | ||||||||||
| Allowance for Loan Losses / Actual Loans (%) | 1.25 | % | 1.29 | % | 1.28 | % | 1.28 | % | 1.29 | % | ||||||||||
| Net Charge-offs as % of Average Loans (Annualized) | 0.05 | % | 0.02 | % | (0.01 | )% | 0.05 | % | 0.06 | % | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
| (Dollars In Thousands) | June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and cash equivalents | $ | 142,650 | $ | 104,247 | $ | 127,927 | $ | 99,602 | $ | 120,471 | ||||||||||
| Interest-bearing time deposits | 48,305 | 20,439 | 24,459 | 33,803 | 62,533 | |||||||||||||||
| Investment securities | 1,343,323 | 1,327,217 | 1,304,505 | 1,300,428 | 1,297,801 | |||||||||||||||
| Loans held for sale | 4,036 | 1,262 | 2,929 | 1,482 | 18,854 | |||||||||||||||
| Loans | 5,613,144 | 5,274,909 | 5,139,645 | 4,973,844 | 4,791,429 | |||||||||||||||
| Less: Allowance for loan losses | (70,471 | ) | (68,225 | ) | (66,037 | ) | (63,456 | ) | (62,186 | ) | ||||||||||
| Net loans | 5,542,673 | 5,206,684 | 5,073,608 | 4,910,388 | 4,729,243 | |||||||||||||||
| Premises and equipment | 92,637 | 91,311 | 94,432 | 95,540 | 95,170 | |||||||||||||||
| Federal Home Loan Bank stock | 19,015 | 17,964 | 17,964 | 18,044 | 18,096 | |||||||||||||||
| Interest receivable | 27,597 | 25,174 | 26,194 | 23,652 | 23,351 | |||||||||||||||
| Core deposit intangibles and goodwill | 309,686 | 257,963 | 258,866 | 259,844 | 260,821 | |||||||||||||||
| Cash surrender value of life insurance | 200,125 | 202,574 | 201,671 | 201,856 | 201,417 | |||||||||||||||
| Other real estate owned | 11,893 | 8,293 | 8,966 | 10,242 | 13,219 | |||||||||||||||
| Tax asset, deferred and receivable | 27,331 | 32,074 | 39,384 | 31,779 | 32,547 | |||||||||||||||
| Other assets | 35,758 | 30,991 | 30,706 | 35,692 | 32,895 | |||||||||||||||
| TOTAL ASSETS | $ | 7,805,029 | $ | 7,326,193 | $ | 7,211,611 | $ | 7,022,352 | $ | 6,906,418 | ||||||||||
| LIABILITIES | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing | $ | 1,398,237 | $ | 1,373,778 | $ | 1,348,267 | $ | 1,307,886 | $ | 1,253,747 | ||||||||||
| Interest-bearing | 4,618,867 | 4,261,531 | 4,208,231 | 4,136,354 | 4,153,807 | |||||||||||||||
| Total Deposits | 6,017,104 | 5,635,309 | 5,556,498 | 5,444,240 | 5,407,554 | |||||||||||||||
| Borrowings: | ||||||||||||||||||||
| Federal funds purchased | 134,608 | 102,000 | 120,349 | 58,358 | 20,000 | |||||||||||||||
| Securities sold under repurchase agreements | 127,884 | 139,007 | 146,480 | 138,671 | 140,777 | |||||||||||||||
| Federal Home Loan Bank advances | 312,715 | 338,919 | 298,923 | 297,022 | 268,579 | |||||||||||||||
| Subordinated debentures and term loans | 128,742 | 128,862 | 128,445 | 128,288 | 127,678 | |||||||||||||||
| Total Borrowings | 703,949 | 708,788 | 694,197 | 622,339 | 557,034 | |||||||||||||||
| Interest payable | 3,477 | 3,875 | 3,110 | 3,733 | 3,051 | |||||||||||||||
| Other liabilities | 45,383 | 48,751 | 56,149 | 51,175 | 51,229 | |||||||||||||||
| Total Liabilities | 6,769,913 | 6,396,723 | 6,309,954 | 6,121,487 | 6,018,868 | |||||||||||||||
| 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 -- 100,000,000 and 50,000,000 shares (1) | ||||||||||||||||||||
| Issued and outstanding | 5,394 | 5,131 | 5,114 | 5,100 | 5,097 | |||||||||||||||
| Additional paid-in capital | 593,904 | 509,953 | 509,018 | 506,848 | 505,725 | |||||||||||||||
| Retained earnings | 434,309 | 417,983 | 400,981 | 384,868 | 369,568 | |||||||||||||||
| Accumulated other comprehensive income (loss) | 1,384 | (3,722 | ) | (13,581 | ) | 3,924 | 7,035 | |||||||||||||
| Total Stockholders' Equity | 1,035,116 | 929,470 | 901,657 | 900,865 | 887,550 | |||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 7,805,029 | $ | 7,326,193 | $ | 7,211,611 | $ | 7,022,352 | $ | 6,906,418 | ||||||||||
(1) On May 1, 2017, the shareholders of First Merchants Corporation approved an amendment to the Articles of Incorporation to increase the number of shares of common stock authorized to issue from 50,000,000 to 100,000,000 shares.
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
| (Dollars In Thousands, Except Per Share Amounts) | June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||
| Loans receivable: | ||||||||||||||||||||
| Taxable | $ | 59,386 | $ | 56,357 | $ | 53,895 | $ | 53,819 | $ | 52,099 | ||||||||||
| Tax-exempt | 2,492 | 2,333 | 2,096 | 1,649 | 1,465 | |||||||||||||||
| Investment securities: | ||||||||||||||||||||
| Taxable | 4,180 | 4,308 | 3,893 | 3,992 | 4,202 | |||||||||||||||
| Tax-exempt | 5,091 | 5,003 | 4,862 | 4,668 | 4,583 | |||||||||||||||
| Deposits with financial institutions | 114 | 44 | 67 | 55 | 122 | |||||||||||||||
| Federal Reserve and Federal Home Loan Bank stock | 204 | 189 | 192 | 193 | 233 | |||||||||||||||
| Total Interest Income | 71,467 | 68,234 | 65,005 | 64,376 | 62,704 | |||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||
| Deposits | 5,137 | 4,124 | 3,886 | 3,926 | 4,039 | |||||||||||||||
| Federal funds purchased | 103 | 228 | 40 | 27 | 7 | |||||||||||||||
| Securities sold under repurchase agreements | 110 | 88 | 91 | 91 | 92 | |||||||||||||||
| Federal Home Loan Bank advances | 1,177 | 978 | 797 | 853 | 818 | |||||||||||||||
| Subordinated debentures and term loans | 1,840 | 1,817 | 1,817 | 1,797 | 1,786 | |||||||||||||||
| Total Interest Expense | 8,367 | 7,235 | 6,631 | 6,694 | 6,742 | |||||||||||||||
| NET INTEREST INCOME | 63,100 | 60,999 | 58,374 | 57,682 | 55,962 | |||||||||||||||
| Provision for loan losses | 2,875 | 2,385 | 2,417 | 1,900 | 790 | |||||||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 60,225 | 58,614 | 55,957 | 55,782 | 55,172 | |||||||||||||||
| OTHER INCOME | ||||||||||||||||||||
| Service charges on deposit accounts | 4,438 | 4,174 | 4,534 | 4,667 | 4,416 | |||||||||||||||
| Fiduciary activities | 2,609 | 2,640 | 2,500 | 2,448 | 2,376 | |||||||||||||||
| Other customer fees | 5,406 | 4,863 | 4,784 | 4,777 | 4,695 | |||||||||||||||
| Earnings on cash surrender value of life insurance | 2,971 | 898 | 886 | 614 | 1,297 | |||||||||||||||
| Net gains and fees on sales of loans | 1,617 | 1,275 | 1,886 | 1,989 | 1,717 | |||||||||||||||
| Net realized gains on sales of available for sale securities | 567 | 598 | 847 | 839 | 706 | |||||||||||||||
| Other income | 826 | 398 | 683 | 1,527 | 1,178 | |||||||||||||||
| Total Other Income | 18,434 | 14,846 | 16,120 | 16,861 | 16,385 | |||||||||||||||
| OTHER EXPENSES | ||||||||||||||||||||
| Salaries and employee benefits | 27,076 | 25,732 | 22,994 | 26,651 | 25,570 | |||||||||||||||
| Net occupancy | 3,965 | 4,216 | 4,568 | 4,348 | 4,059 | |||||||||||||||
| Equipment | 2,907 | 2,807 | 3,069 | 2,947 | 3,243 | |||||||||||||||
| Marketing | 792 | 565 | 790 | 630 | 851 | |||||||||||||||
| Outside data processing fees | 3,086 | 2,616 | 2,672 | 2,382 | 2,025 | |||||||||||||||
| Printing and office supplies | 275 | 264 | 301 | 314 | 369 | |||||||||||||||
| Core deposit amortization | 991 | 903 | 977 | 978 | 977 | |||||||||||||||
| FDIC assessments | 579 | 570 | 550 | 534 | 1,002 | |||||||||||||||
| Other real estate owned and foreclosure expenses | 731 | 531 | 574 | 637 | 915 | |||||||||||||||
| Professional and other outside services | 3,266 | 1,734 | 1,634 | 1,242 | 1,478 | |||||||||||||||
| Other expenses | 3,648 | 3,161 | 3,805 | 3,452 | 4,346 | |||||||||||||||
| Total Other Expenses | 47,316 | 43,099 | 41,934 | 44,115 | 44,835 | |||||||||||||||
| INCOME BEFORE INCOME TAX | 31,343 | 30,361 | 30,143 | 28,528 | 26,722 | |||||||||||||||
| Income tax expense | 7,207 | 7,168 | 7,850 | 7,469 | 6,716 | |||||||||||||||
| NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 24,136 | $ | 23,193 | $ | 22,293 | $ | 21,059 | $ | 20,006 | ||||||||||
| Per Share Data: | ||||||||||||||||||||
| Basic Net Income Available to Common Stockholders | $ | 0.57 | $ | 0.57 | $ | 0.55 | $ | 0.51 | $ | 0.50 | ||||||||||
| Diluted Net Income Available to Common Stockholders | $ | 0.57 | $ | 0.56 | $ | 0.55 | $ | 0.51 | $ | 0.49 | ||||||||||
| Cash Dividends Paid | $ | 0.18 | $ | 0.15 | $ | 0.15 | $ | 0.14 | $ | 0.14 | ||||||||||
| Average Diluted Shares Outstanding (in thousands) | 42,244 | 41,221 | 41,124 | 41,026 | 40,969 | |||||||||||||||
| FINANCIAL RATIOS: | ||||||||||||||||||||
| Return on Average Assets | 1.28 | % | 1.29 | % | 1.26 | % | 1.22 | % | 1.17 | % | ||||||||||
| Return on Average Stockholders' Equity | 9.82 | 10.15 | 9.87 | 9.39 | 9.13 | |||||||||||||||
| Return on Average Common Stockholders' Equity | 9.82 | 10.15 | 9.87 | 9.39 | 9.14 | |||||||||||||||
| Average Earning Assets to Average Assets | 89.97 | 90.43 | 89.86 | 89.73 | 89.41 | |||||||||||||||
| Allowance for Loan Losses as % of Total Loans | 1.25 | 1.29 | 1.28 | 1.28 | 1.29 | |||||||||||||||
| Net Charge-offs as % of Average Loans (Annualized) | 0.05 | 0.02 | (0.01 | ) | 0.05 | 0.06 | ||||||||||||||
| Average Stockholders' Equity to Average Assets | 12.98 | 12.67 | 12.75 | 12.99 | 12.78 | |||||||||||||||
| Tax Equivalent Yield on Earning Assets | 4.44 | 4.42 | 4.32 | 4.37 | 4.30 | |||||||||||||||
| Cost of Supporting Liabilities | 0.49 | 0.44 | 0.42 | 0.43 | 0.44 | |||||||||||||||
| Net Interest Margin (FTE) on Earning Assets | 3.95 | 3.98 | 3.90 | 3.94 | 3.86 | |||||||||||||||
| Efficiency Ratio | 53.61 | 52.61 | 52.18 | 55.12 | 57.33 | |||||||||||||||
| Tangible Common Book Value Per Share | $ | 16.97 | $ | 16.49 | $ | 15.85 | $ | 15.86 | $ | 15.53 | ||||||||||
| LOANS | ||||||||||||||||||||
| (Dollars In Thousands) | June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Commercial and industrial loans | $ | 1,289,884 | $ | 1,258,840 | $ | 1,194,646 | $ | 1,146,538 | $ | 1,084,890 | ||||||||||
| Agricultural production financing and other loans to farmers | 75,746 | 77,021 | 79,689 | 93,169 | 95,131 | |||||||||||||||
| Real estate loans: | ||||||||||||||||||||
| Construction | 442,389 | 336,931 | 418,703 | 368,241 | 352,980 | |||||||||||||||
| Commercial and farmland | 2,167,729 | 2,118,431 | 1,953,062 | 1,941,739 | 1,869,703 | |||||||||||||||
| Residential | 847,580 | 737,918 | 739,169 | 739,855 | 758,870 | |||||||||||||||
| Home equity | 436,038 | 423,708 | 418,525 | 398,837 | 374,159 | |||||||||||||||
| Individuals' loans for household and other personal expenditures | 79,887 | 77,590 | 77,479 | 76,497 | 75,205 | |||||||||||||||
| Lease financing receivables, net of unearned income | 232 | 261 | 311 | 380 | 388 | |||||||||||||||
| Other commercial loans | 273,659 | 244,209 | 258,061 | 208,588 | 180,103 | |||||||||||||||
| Loans | 5,613,144 | 5,274,909 | 5,139,645 | 4,973,844 | 4,791,429 | |||||||||||||||
| Allowance for loan losses | (70,471 | ) | (68,225 | ) | (66,037 | ) | (63,456 | ) | (62,186 | ) | ||||||||||
| NET LOANS | $ | 5,542,673 | $ | 5,206,684 | $ | 5,073,608 | $ | 4,910,388 | $ | 4,729,243 | ||||||||||
| DEPOSITS | |||||||||||||||||||
| (Dollars In Thousands) | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | |||||||||||||||
| Demand deposits | $ | 3,015,846 | $ | 2,861,384 | $ | 2,866,853 | $ | 2,745,028 | $ | 2,717,500 | |||||||||
| Savings deposits | 1,708,478 | 1,565,174 | 1,560,752 | 1,545,372 | 1,551,210 | ||||||||||||||
| Certificates and other time deposits of $100,000 or more | 362,589 | 312,327 | 276,274 | 296,838 | 301,695 | ||||||||||||||
| Other certificates and time deposits | 511,935 | 476,741 | 471,247 | 498,203 | 517,720 | ||||||||||||||
| Brokered deposits | 418,256 | 419,683 | 381,372 | 358,799 | 319,429 | ||||||||||||||
| TOTAL DEPOSITS | $ | 6,017,104 | $ | 5,635,309 | $ | 5,556,498 | $ | 5,444,240 | $ | 5,407,554 | |||||||||
| NET INTEREST INCOME | |||||||||||||||||||||||
| (Dollars in Thousands) | For the Three Months Ended | ||||||||||||||||||||||
| June 30, 2017 | June 30, 2016 | ||||||||||||||||||||||
| Interest | Interest | ||||||||||||||||||||||
| Average | Income / | Average | Average | Income / | Average | ||||||||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Interest-bearing time deposits | $ | 42,794 | $ | 114 | 1.07 | % | $ | 99,734 | $ | 122 | 0.49 | % | |||||||||||
| Federal Reserve and Federal Home Loan Bank stock | 18,655 | 204 | 4.37 | 23,442 | 233 | 3.98 | |||||||||||||||||
| Investment Securities: (1) | |||||||||||||||||||||||
| Taxable | 717,818 | 4,180 | 2.33 | 730,179 | 4,202 | 2.30 | |||||||||||||||||
| Tax-Exempt (2) | 596,223 | 7,832 | 5.25 | 539,004 | 7,050 | 5.23 | |||||||||||||||||
| Total Investment Securities | 1,314,041 | 12,012 | 3.66 | 1,269,183 | 11,252 | 3.55 | |||||||||||||||||
| Loans held for sale | 3,791 | 65 | 6.86 | 3,664 | 96 | 10.48 | |||||||||||||||||
| Loans: (3) | |||||||||||||||||||||||
| Commercial | 3,911,477 | 45,400 | 4.64 | 3,501,919 | 40,501 | 4.63 | |||||||||||||||||
| Real Estate Mortgage | 647,032 | 7,229 | 4.47 | 568,746 | 6,116 | 4.30 | |||||||||||||||||
| Installment | 546,339 | 6,692 | 4.90 | 470,254 | 5,386 | 4.58 | |||||||||||||||||
| Tax-Exempt (2) | 328,322 | 3,834 | 4.67 | 194,496 | 2,254 | 4.64 | |||||||||||||||||
| Total Loans | 5,436,961 | 63,220 | 4.65 | 4,739,079 | 54,353 | 4.59 | |||||||||||||||||
| Total Earning Assets | 6,812,451 | 75,550 | 4.44 | 6,131,438 | 65,960 | 4.30 | |||||||||||||||||
| Net unrealized gain on securities available for sale | 4,908 | 10,924 | |||||||||||||||||||||
| Allowance for loan losses | (69,068 | ) | (62,235 | ) | |||||||||||||||||||
| Cash and cash equivalents | 153,247 | 104,372 | |||||||||||||||||||||
| Premises and equipment | 92,026 | 96,620 | |||||||||||||||||||||
| Other assets | 578,225 | 576,720 | |||||||||||||||||||||
| Total Assets | $ | 7,571,789 | $ | 6,857,839 | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||
| Interest-bearing NOW deposits | $ | 1,596,182 | $ | 1,089 | 0.27 | % | $ | 1,429,191 | $ | 637 | 0.18 | % | |||||||||||
| Money market deposits | 901,077 | 600 | 0.27 | 849,270 | 502 | 0.24 | |||||||||||||||||
| Savings deposits | 791,464 | 161 | 0.08 | 717,044 | 149 | 0.08 | |||||||||||||||||
| Certificates and other time deposits | 1,281,132 | 3,287 | 1.03 | 1,159,247 | 2,751 | 0.95 | |||||||||||||||||
| Total Interest-bearing Deposits | 4,569,855 | 5,137 | 0.45 | 4,154,752 | 4,039 | 0.39 | |||||||||||||||||
| Borrowings | 618,335 | 3,230 | 2.09 | 476,852 | 2,703 | 2.27 | |||||||||||||||||
| Total Interest-bearing Liabilities | 5,188,190 | 8,367 | 0.65 | 4,631,604 | 6,742 | 0.58 | |||||||||||||||||
| Noninterest-bearing deposits | 1,360,677 | 1,285,396 | |||||||||||||||||||||
| Other liabilities | 39,826 | 64,723 | |||||||||||||||||||||
| Total Liabilities | 6,588,693 | 5,981,723 | |||||||||||||||||||||
| Stockholders' Equity | 983,096 | 876,116 | |||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 7,571,789 | 8,367 | 0.49 | $ | 6,857,839 | 6,742 | 0.44 | |||||||||||||||
| Net Interest Income | $ | 67,183 | $ | 59,218 | |||||||||||||||||||
| Net Interest Margin | 3.95 | % | 3.86 | % | |||||||||||||||||||
| (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 $4,083 and $3,256 for the three months ended June 30, 2017 and 2016, respectively. |
| (3) Non accruing loans have been included in the average balances. |
| NET INTEREST INCOME | ||||||||||||||||||||||
| (Dollars in Thousands) | For the Six Months Ended | |||||||||||||||||||||
| June 30, 2017 | June 30, 2016 | |||||||||||||||||||||
| Interest | Interest | |||||||||||||||||||||
| Average | Income / | Average | Average | Income / | Average | |||||||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||
| Assets: | ||||||||||||||||||||||
| Interest-bearing time deposits | $ | 36,662 | $ | 158 | 0.86 | % | $ | 87,722 | $ | 228 | 0.52 | % | ||||||||||
| Federal Reserve and Federal Home Loan Bank stock | 18,312 | 393 | 4.29 | 30,537 | 713 | 4.67 | ||||||||||||||||
| Investment Securities: (1) | ||||||||||||||||||||||
| Taxable | 714,672 | 8,488 | 2.38 | 723,333 | 8,530 | 2.36 | ||||||||||||||||
| Tax-Exempt (2) | 591,401 | 15,529 | 5.25 | 529,963 | 13,987 | 5.28 | ||||||||||||||||
| Total Investment Securities | 1,306,073 | 24,017 | 3.68 | 1,253,296 | 22,517 | 3.59 | ||||||||||||||||
| Loans held for sale | 3,197 | 109 | 6.82 | 4,956 | 218 | 8.80 | ||||||||||||||||
| Loans: (3) | ||||||||||||||||||||||
| Commercial | 3,846,622 | 89,494 | 4.65 | 3,475,684 | 79,365 | 4.57 | ||||||||||||||||
| Real Estate Mortgage | 596,990 | 13,350 | 4.47 | 572,006 | 12,510 | 4.37 | ||||||||||||||||
| Installment | 539,272 | 12,790 | 4.74 | 463,454 | 10,495 | 4.53 | ||||||||||||||||
| Tax-Exempt (2) | 323,230 | 7,423 | 4.59 | 188,223 | 4,277 | 4.54 | ||||||||||||||||
| Total Loans | 5,309,311 | 123,166 | 4.64 | 4,704,323 | 106,865 | 4.54 | ||||||||||||||||
| Total Earning Assets | 6,670,358 | 147,734 | 4.43 | % | 6,075,878 | 130,323 | 4.29 | % | ||||||||||||||
| Net unrealized gain on securities available for sale | 2,762 | 10,464 | ||||||||||||||||||||
| Allowance for loan losses | (68,007 | ) | (62,724 | ) | ||||||||||||||||||
| Cash and cash equivalents | 128,768 | 103,143 | ||||||||||||||||||||
| Premises and equipment | 92,519 | 96,659 | ||||||||||||||||||||
| Other assets | 569,050 | 577,157 | ||||||||||||||||||||
| Total Assets | $ | 7,395,450 | $ | 6,800,577 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||
| Interest-bearing NOW deposits | $ | 1,554,740 | $ | 1,926 | 0.25 | % | $ | 1,364,729 | $ | 1,181 | 0.17 | % | ||||||||||
| Money market deposits | 845,536 | 941 | 0.22 | 857,601 | 993 | 0.23 | ||||||||||||||||
| Savings deposits | 784,033 | 317 | 0.08 | 703,174 | 284 | 0.08 | ||||||||||||||||
| Certificates and other time deposits | 1,223,426 | 6,077 | 0.99 | 1,172,852 | 5,644 | 0.96 | ||||||||||||||||
| Total Interest-bearing Deposits | 4,407,735 | 9,261 | 0.42 | 4,098,356 | 8,102 | 0.40 | ||||||||||||||||
| Borrowings | 641,499 | 6,341 | 1.98 | 498,470 | 5,412 | 2.17 | ||||||||||||||||
| Total Interest-bearing Liabilities | 5,049,234 | 15,602 | 0.62 | 4,596,826 | 13,514 | 0.59 | ||||||||||||||||
| Noninterest-bearing deposits | 1,353,649 | 1,270,363 | ||||||||||||||||||||
| Other liabilities | 43,798 | 64,504 | ||||||||||||||||||||
| Total Liabilities | 6,446,681 | 5,931,693 | ||||||||||||||||||||
| Stockholders' Equity | 948,769 | 868,884 | ||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 7,395,450 | 15,602 | 0.47 | $ | 6,800,577 | 13,514 | 0.44 | ||||||||||||||
| Net Interest Income | $ | 132,132 | $ | 116,809 | ||||||||||||||||||
| Net Interest Margin | 3.96 | % | 3.85 | % | ||||||||||||||||||
| (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 $8,033 and $6,392 for the six months ended June 30, 2017 and 2016, respectively. |
| (3) Non accruing loans have been included in the average balances. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170727005888/en/
Contacts:
David L. Ortega, First Vice
President/Director of Investor Relations, 765-378-8937
http://www.firstmerchants.com
