By: First Merchants Corporation—
Muncie, IN—First Merchants Corporation (NASDAQ – FRME) has reported third quarter 2019 net income of $36.8 million compared to $41.1 million during the same period in 2018. Earnings per share for the period totaled $.71 per share compared to third quarter 2018 results of $.83 per share. Included in the third quarter results are $11.2 million, or $.17 per share, of one-time charges related to the closing of our acquisition of Monroe Bank & Trust on September 1, 2019.
Total assets equaled $12.3 billion as of quarter-end and loans totaled $8.3 billion. The Corporation’s loan portfolio increased by $1.2 billion, or 17.1 percent, during the past twelve months. Investments increased $864 million, or 53.2 percent, during the same period and now total $2.5 billion. The acquisition of Monroe Bank & Trust accounted for $731 million of the increase in loans. Total deposits equaled $9.8 billion as of quarter-end and increased by $2.1 billion, or 27.9 percent, since September 30, 2018. Of the increase, Monroe Bank & Trust accounted for $1.1 billion.
The Corporation’s loan to deposit ratio now totals 85.1 percent and loan to asset ratio totals 67.4 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 14.37 percent, common equity tier 1 capital ratio equaled 12.14 percent, and the tangible common equity ratio totaled 9.95 percent.
Michael C. Rechin, President and Chief Executive Officer, stated, “First Merchants posted strong financial results as our local economies continue to flourish and our clients look to our bank for growth solutions. The signature event for the quarter was the legal closing of the Monroe Bank & Trust transaction. The merger extends our franchise with a community bank that enjoys a dominant market share position. Our plan to operationally integrate Monroe Bank & Trust into First Merchants next month will accelerate our marketplace momentum into 2020 to include a reduction in our overall funding costs.” Net-interest income for the quarter totaled $88.9 million, an increase of $2.4 million from third quarter 2018, even as netinterest margin declined by 43 basis points totaling 3.62 percent. Yields on earning assets totaled 4.77 percent, a decline of 11 basis points of which nearly half was due to lower fair value accretion. The cost of supporting liabilities increased by 32 basis points and totaled 1.15 percent.
Non-interest income totaled $22.1 million for the quarter, a $2.6 million, or 13.3 percent increase from the third quarter of 2018. Customer specific line items accounted for $3.1 million of the increase, with derivative hedge income accounting for $909,000 of the growth. Non-interest expense totaled $67.4 million up from the 2018 total of $55 million. Of the $12.4 million increase from the third quarter of 2018, merger related expenses accounted for $11.2 million. The Corporation’s provision expense for the quarter totaled $600,000 and net charge-offs were $1.3 million. The allowance for loan losses reached $80.6 million as of September 30, 2019, up from $78.4 million as of September 30, 2018. Nonaccrual loans declined to $22.7 million as of quarter-end and the allowance is .97 percent of total loans and 1.16 percent of non-purchased loans.
About First Merchants Corporation
First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one fullservice bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (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).