First Merchants Corporation (NASDAQ - FRME) has reported first quarter 2019 net income of $38.8 million, an increase of 5.8 percent, compared to $36.7 million during the same period in 2018. Earnings per share for the period totaled $.78 per share, an increase of 5.4 percent, compared to the first quarter of 2018 result of $.74 per share.
Total assets equaled $10.2 billion as of quarter-end and loans totaled $7.3 billion. The Corporation’s loan portfolio increased by $397 million, or 5.7 percent, during the past twelve months. Investments increased $319 million, or 20.7 percent, during the same period and now total $1.9 billion. Total deposits equaled $8.0 billion as of quarter-end and increased by $720 million, or 9.8 percent, while borrowings, totaling $615 million, declined during the period by $161 million, or 20.8 percent. As a result, the loan-to-deposit ratio now totals 90.7 percent and loan-to-asset ratio totals 71.5 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 14.71 percent, common equity tier 1 capital ratio equaled 12.12 percent, and the tangible common equity ratio totaled 10.14 percent.
Michael C. Rechin, President and Chief Executive Officer, stated, “We are excited to begin 2019 with a solid quarter of operating results. Our focus on the marketplace produced strong deposit growth and liquidity for our balance sheet. The loan pipeline continues to reflect an expanding Midwest economy with healthy asset quality throughout the portfolio. Our primary financial ratios and related key performance indicators continue to reflect the results of a high performing company.”
Rechin continued, “We now have shareholder, Indiana Department of Financial Institutions and the Federal Deposit Insurance Corporation approvals in hand regarding our merger with Monroe Bank & Trust. We continue to anticipate our holding company’s approval from the Federal Reserve Bank and a legal closing in the current quarter. Our integration activities and re-branding efforts are planned for the third quarter.”
Net-interest income totaled $84.9 million for the quarter, an increase of $5 million, or 6.3 percent, over the same period in 2018. Net-interest margin, totaling 3.84 percent, declined by 8 basis points. Yields on earning assets increased by 32 basis points and totaled 4.89 percent, while the cost of supporting liabilities increased by 40 basis points and totaled 1.05 percent. Fair value accretion negatively impacted yields as it declined from 15 basis points in first quarter of 2018 to 9 basis points in 2019.
Non-interest income totaled $18.7 million for the quarter, an $848,000 decrease from the first quarter of 2018. Gains from the sale of loans accounted for $526,000 of the decline, as approximately one-half of the quarter’s production was added to the balance sheet versus being sold into the secondary market. Non-interest expense totaled $56.6 million, up from the 2018 total of $53.7 million. Of the $2.9 million increase, salary and benefits accounted for $802,000, other real estate and foreclosure expense accounted for $763,000 and outside data processing accounted for $720,000.
The Corporation’s provision expense totaled $1.2 million due to loan growth, while net charge offs totaled $850,000. The allowance for loan losses totaled $80.9 million as of March 31, 2019, up from $76.4 million as of March 31, 2018. Non-accrual loans totaled $27.9 million as of quarter-end and the allowance is 1.11 percent of total loans and 1.24 percent of non-purchased loans.
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About First Merchants Corporation
First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service 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).
FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.
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.