First Merchants Corporation Announces Record 2015 Net Income

MUNCIE, Ind.--()--First Merchants Corporation (NASDAQ:FRME) has recorded 2015 record net income of $65.4 million, an increase of $5.2 million over 2014 net income of $60.2 million. Earnings per share totaled $1.72, an increase of $.07 and 4.2 percent over 2014 earnings per share of $1.65.

Net income in the 4th quarter of 2015 totaled $14.2 million compared to $15.3 million in the 4th quarter of 2014. Earnings per share for the 4th quarter of 2015 declined by $.04 totaling $.37, compared to $.41 per share in the 4th quarter of 2014. Included in the 4th quarter 2015 results were $.07 of one-time expenses related to the closing of our Ameriana Bancorp acquisition on December 31, 2015.

Michael C. Rechin, President and Chief Executive Officer, stated, “Our 2015 was very active, productive, and successful. Beyond strong core operating results, our franchise grew through two acquisitions, and we increased our digital banking capacity with a mid-year online banking upgrade providing an enhanced customer experience. We are pleased to have recorded earnings per share of $1.72, after recording $.17 of merger, integration and system conversion expenses during the year.” Rechin also added, “We look forward to completing the Ameriana system conversion on March 11, 2016, and proving our progress through reported numbers in the second quarter of 2016.”

Total assets equaled $6.8 billion as of year-end and increased by $937 million, or 16.1 percent, over 2014. Total loans equaled $4.7 billion, an increase of $769 million, or 19.6 percent, over the same period in 2014. Of the loan increase, $339 million, or 9 percent, was the result of organic growth and $430 million, or 11 percent, resulted from the acquisition of Cooper State Bank in Columbus, Ohio in April of 2015 and Ameriana Bank in December of 2015.

Total deposits equaled $5.3 billion as of year-end and increased by $649 million, or 14 percent, as Cooper State Bank accounted for $105 million and Ameriana Bank accounted for $383 million of the growth in 2015. Tangible equity increased by $82.9 million, or 16.1 percent, and tangible book value per share increased by $1.03, or 7.5 percent, to $14.68 per share as of year-end 2015.

Net-interest income totaled $196.4 million in 2015 and net-interest margin totaled 3.80 percent as yields on earning assets totaled 4.25 percent offset by the cost of supporting liabilities which totaled .45 percent. When normalized for fair value accretion income of $8.3 million in 2015, net interest margin totaled 3.65 percent.

Non-interest income totaled $72.5 million in 2015 compared to $66.4 million in 2014. Included in the non-interest income increase was an $8.3 million gain on the sale of First Merchants Insurance Group and a $1.3 million gain on the cancellation of trust preferred debt, which accounted for $.11 of non-recurring income. Non-interest expense totaled $177.5 million in 2015 compared to $168.6 million in 2014. Merger, integration and system conversion expenses totaled $9.8 million dollars or $.17 per share for the year.

Provision expense totaled $417,000 in 2015 and net charge-offs totaled $1.9 million. In 2014, provision expense totaled $2.6 million and net charge-offs totaled $6.5 million. The December 31, 2015 allowance for loan losses totaled $62.5 million and our remaining fair value mark totals $47 million, including $13.6 million related to our 2015 acquisitions. The December 31, 2014 allowance for loan losses totaled $64 million and our remaining fair value mark totaled $43.2 million.

Non-performing assets and 90 days delinquent declined from $74.7 million in 2014 to $51.5 million including the addition of $8.6 million related to 2015 acquisitions.

As of December 31, 2015, the Corporation's total risk-based capital equaled 14.94 percent, common equity tier 1 risk-based capital equaled 11.49 percent and tangible common equity ratio totaled 9.17 percent.

CONFERENCE CALL

First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, January 28, 2016.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's fourth quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until February 28, 2016. 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 10078427.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme160128.html during the time of the call. A replay of the web cast will be available until January 28, 2017.

During the call, Forward-Looking Statements about the relative business outlook may be made. These Forward-Looking Statements and all other statements made during the call that do not concern historical facts, are subject to risks and uncertainties that may materially affect actual results.

Specific Forward-Looking Statements include, but are not limited to, any indications regarding the Financial Services industry, the economy and future growth of the balance sheet or income statement.

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, N.A., which also operates as Lafayette Bank & Trust and First Merchants Trust Company as divisions of First Merchants Bank, N.A.

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.

CONSOLIDATED BALANCE SHEETS    
(Dollars In Thousands) December 31,
2015 2014
ASSETS
Cash and cash equivalents $ 102,170 $ 118,616
Interest-bearing time deposits 32,315 47,520
Investment securities 1,276,999 1,180,631
Loans held for sale 9,894 7,235
Loans 4,693,822 3,924,865
Less: Allowance for loan losses (62,453 ) (63,964 )
Net loans 4,631,369 3,860,901
Premises and equipment 97,648 77,691
Federal Reserve and Federal Home Loan Bank stock 37,633 41,353
Interest receivable 24,415 19,984
Core deposit intangibles and goodwill 259,764 218,755
Cash surrender value of life insurance 200,539 169,424
Other real estate owned 17,257 19,293
Tax asset, deferred and receivable 46,977 41,960
Other assets 24,023   20,764  
TOTAL ASSETS $ 6,761,003   $ 5,824,127  
LIABILITIES
Deposits:
Noninterest-bearing $ 1,266,027 $ 1,070,859
Interest-bearing 4,023,620   3,569,835  
Total Deposits 5,289,647 4,640,694
Borrowings:
Federal funds purchased 49,721 15,381
Securities sold under repurchase agreements 155,325 124,539
Federal Home Loan Bank advances 235,652 145,264
Subordinated debentures and term loans 127,846   126,810  
Total Borrowings 568,544 411,994
Interest payable 3,092 3,201
Other liabilities 49,211   41,411  
Total Liabilities 5,910,494 5,097,300
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 - 40,664,259 and 37,669,948 shares 5,083 4,709
Additional paid-in capital 504,530 431,220
Retained earnings 342,133 292,403
Accumulated other comprehensive loss (1,362 ) (1,630 )
Total Stockholders' Equity 850,509   726,827  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,761,003   $ 5,824,127  
 
CONSOLIDATED STATEMENTS OF INCOME   Three Months Ended   Twelve Months Ended
(Dollars In Thousands, Except Per Share Amounts) December 31, December 31,
2015   2014 2015   2014
INTEREST INCOME
Loans receivable:
Taxable $ 45,897 $ 43,710 $ 180,805 $ 172,039
Tax-exempt 1,285 147 3,459 327
Investment securities:
Taxable 4,363 4,980 17,885 19,882
Tax-exempt 4,444 3,692 16,922 14,383
Deposits with financial institutions 67 48 160 124
Federal Reserve and Federal Home Loan Bank stock 458   476   1,967   2,124
Total Interest Income 56,514   53,053   221,198   208,879
INTEREST EXPENSE
Deposits 3,938 3,402 14,855 11,678
Federal funds purchased 5 3 74 177
Securities sold under repurchase agreements 104 72 368 529
Federal Home Loan Bank advances 728 750 2,836 2,842
Subordinated debentures and term loans 1,665   1,666   6,661   6,616
Total Interest Expense 6,440   5,893   24,794   21,842
NET INTEREST INCOME 50,074 47,160 196,404 187,037
Provision for loan losses   960   417   2,560
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 50,074   46,200   195,987   184,477
OTHER INCOME
Service charges on deposit accounts 4,118 3,979 16,201 15,747
Fiduciary activities 2,138 2,242 9,196 8,966
Other customer fees 4,534 3,926 16,959 15,699
Commission income 1,534 4,147 7,411
Earnings on cash surrender value of life insurance 822 734 2,919 3,659
Net gains and fees on sales of loans 1,308 1,559 6,483 4,899
Net realized gains (losses) on sales of available for sale securities 623 1,246 2,670 3,581
Gain on sale of insurance subsidiary 8,265
Other income 1,224   1,155   5,691   6,438
Total Other Income 14,767   16,375   72,531   66,400
OTHER EXPENSES
Salaries and employee benefits 25,796 23,595 101,908 96,499
Net occupancy 3,649 3,288 14,668 13,831
Equipment 2,683 2,315 10,787 9,337
Marketing 915 836 3,493 3,464
Outside data processing fees 1,632 1,592 7,109 7,315
Printing and office supplies 343 364 1,353 1,565
Core deposit amortization 692 669 2,835 2,445
FDIC assessments 939 895 3,655 3,738
Other real estate owned and foreclosure expenses 1,701 1,055 6,137 8,043
Professional and other outside services 3,544 3,633 9,855 8,116
Other expenses 4,352   3,435   15,669   14,239
Total Other Expenses 46,246   41,677   177,469   168,592
INCOME BEFORE INCOME TAX 18,595 20,898 91,049 82,285
Income tax expense 4,418   5,638   25,665   22,123
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 14,177   $ 15,260   $ 65,384   $ 60,162
 
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.37 $ 0.41 $ 1.73 $ 1.66
Diluted Net Income Available to Common Stockholders $ 0.37 $ 0.41 $ 1.72 $ 1.65
Cash Dividends Paid $ 0.11 $ 0.08 $ 0.41 $ 0.29
Average Diluted Shares Outstanding (in thousands) 38,191 37,323 38,088 36,555
 
FINANCIAL HIGHLIGHTS        
(Dollars in thousands) Three Months Ended Twelve Months Ended
December 31, December 31,
2015 2014 2015 2014
NET CHARGE OFF'S $ 408 $ 2,592 $ 1,928 $ 6,466
 
AVERAGE BALANCES:
Total Assets $ 6,301,222 $ 5,782,257 $ 6,085,687 $ 5,571,354
Total Loans 4,351,621 3,867,009 4,179,839 3,730,080
Total Earning Assets 5,678,050 5,175,943 5,464,829 4,985,338
Total Deposits 4,994,624 4,582,944 4,806,503 4,363,955
Total Stockholders' Equity 774,560 713,533 753,724 675,295
 
FINANCIAL RATIOS:
Return on Average Assets 0.90 % 1.06 % 1.07 % 1.08 %
Return on Average Stockholders' Equity 7.32 8.55 8.67 8.91
Return on Average Common Stockholders' Equity 7.32 8.56 8.68 8.91
Average Earning Assets to Average Assets 90.11 89.51 89.80 89.48
Allowance for Loan Losses as % of Total Loans 1.33 1.63 1.33 1.63
Net Charge Off's as % of Average Loans (Annualized) 0.04 0.27 0.05 0.17
Average Stockholders' Equity to Average Assets 12.29 12.34 12.39 12.12
Tax Equivalent Yield on Earning Assets 4.20 4.26 4.25 4.35
Cost of Supporting Liabilities 0.45 0.46 0.45 0.44
Net Interest Margin (FTE) on Earning Assets 3.75 3.80 3.80 3.91
Tangible Book Value Per Share $ 14.68 $ 13.65 $ 14.68 $ 13.65
 
NON-PERFORMING ASSETS          
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
Non-Accrual Loans $ 31,389 $ 32,597 $ 37,713 $ 44,321 $ 48,789
Renegotiated Loans 1,923   3,823   885   1,326   1,992  
Non-Performing Loans (NPL) 33,312 36,420 38,598 45,647 50,781
Other Real Estate Owned 17,257   14,809   19,242   19,073   19,293  
Non-Performing Assets (NPA) 50,569 51,229 57,840 64,720 70,074
90+ Days Delinquent 907   1,947   632   1,655   4,663  
NPAs & 90 Day Delinquent $ 51,476   $ 53,176   $ 58,472   $ 66,375   $ 74,737  
 
Loan Loss Reserve $ 62,453 $ 62,861 $ 62,550 $ 62,801 $ 63,964
Quarterly Net Charge-off's 408 (311 ) 668 1,163 2,592
NPAs / Actual Assets % 0.75 % 0.83

 %

0.94 % 1.10 % 1.20 %
NPAs & 90 Day / Actual Assets % 0.76 % 0.86

 %

0.95 % 1.13 % 1.28 %
NPAs / Actual Loans and OREO % 1.07 % 1.18

 %

1.36 % 1.62 % 1.77 %
Loan Loss Reserves / Actual Loans (%) 1.33 % 1.45

 %

1.47 % 1.58 % 1.63 %
Net Charge Off's as % of Average Loans (Annualized) 0.04 % (0.03

)%

0.06 % 0.12 % 0.27 %
 
CONSOLIDATED BALANCE SHEETS          
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
ASSETS
Cash and cash equivalents $ 102,170 $ 84,677 $ 105,928 $ 89,243 $ 118,616
Interest-bearing time deposits 32,315 27,111 26,669 83,228 47,520
Investment securities 1,276,999 1,208,793 1,212,516 1,189,473 1,180,631
Loans held for sale 9,894 1,943 8,295 6,392 7,235
Loans 4,693,822 4,321,715 4,238,205 3,965,532 3,924,865
Less: Allowance for loan losses (62,453 ) (62,861 ) (62,550 ) (62,801 ) (63,964 )
Net loans 4,631,369 4,258,854 4,175,655 3,902,731 3,860,901
Premises and equipment 97,648 83,457 84,841 77,468 77,691
Federal Reserve and Federal Home Loan Bank stock 37,633 34,498 34,630 41,273 41,353
Interest receivable 24,415 22,048 19,880 19,557 19,984
Core deposit intangibles and goodwill 259,764 219,503 220,196 218,034 218,755
Cash surrender value of life insurance 200,539 171,530 170,813 170,172 169,424
Other real estate owned 17,257 14,809 19,242 19,073 19,293
Tax asset, deferred and receivable 46,977 38,339 39,622 38,695 41,960
Other assets 24,023   24,235   22,021   22,182   20,764  
TOTAL ASSETS $ 6,761,003   $ 6,189,797   $ 6,140,308   $ 5,877,521   $ 5,824,127  
LIABILITIES
Deposits:
Noninterest-bearing $ 1,266,027 $ 1,110,905 $ 1,122,688 $ 1,100,397 $ 1,070,859
Interest-bearing 4,023,620   3,703,684   3,666,889   3,547,678   3,569,835  
Total Deposits 5,289,647 4,814,589 4,789,577 4,648,075 4,640,694
Borrowings:
Federal funds purchased 49,721 52,896 40,748 15,381
Securities sold under repurchase agreements 155,325 153,822 137,240 134,023 124,539
Federal Home Loan Bank advances 235,652 237,856 247,687 166,326 145,264
Subordinated debentures and term loans 127,846   121,936   126,882   126,875   126,810  
Total Borrowings 568,544 566,510 552,557 427,224 411,994
Interest payable 3,092 3,710 3,211 3,685 3,201
Other liabilities 49,211   38,004   45,008   58,879   41,411  
Total Liabilities 5,910,494 5,422,813 5,390,353 5,137,863 5,097,300
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 5,083 4,734 4,728 4,723 4,709
Additional paid-in capital 504,530 433,577 432,294 431,199 431,220
Retained earnings 342,133 332,162 319,298 305,526 292,403
Accumulated other comprehensive loss (1,362 ) (3,614 ) (6,490 ) (1,915 ) (1,630 )
Total Stockholders' Equity 850,509   766,984   749,955   739,658   726,827  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,761,003   $ 6,189,797   $ 6,140,308   $ 5,877,521   $ 5,824,127  
 
CONSOLIDATED STATEMENTS OF INCOME          
(Dollars In Thousands, Except Per Share Amounts) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
INTEREST INCOME
Loans receivable:
Taxable $ 45,897 $ 46,037 $ 45,320 $ 43,551 $ 43,710
Tax-exempt 1,285 1,190 736 248 147
Investment securities:
Taxable 4,363 4,374 4,425 4,723 4,980
Tax-exempt 4,444 4,412 4,231 3,835 3,692
Deposits with financial institutions 67 25 31 37 48
Federal Reserve and Federal Home Loan Bank stock 458   500   459   550   476  
Total Interest Income 56,514   56,538   55,202   52,944   53,053  
INTEREST EXPENSE
Deposits 3,938 3,715 3,686 3,516 3,402
Federal funds purchased 5 27 19 23 3
Securities sold under repurchase agreements 104 96 90 78 72
Federal Home Loan Bank advances 728 711 706 691 750
Subordinated debentures and term loans 1,665   1,666   1,670   1,660   1,666  
Total Interest Expense 6,440   6,215   6,171   5,968   5,893  
NET INTEREST INCOME 50,074 50,323 49,031 46,976 47,160
Provision for loan losses     417     960  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 50,074   50,323   48,614   46,976   46,200  
OTHER INCOME
Service charges on deposit accounts 4,118 4,445 4,090 3,548 3,979
Fiduciary activities 2,138 2,242 2,309 2,507 2,242
Other customer fees 4,534 4,156 4,602 3,667 3,926
Commission income 4 1,815 2,328 1,534
Earnings on cash surrender value of life insurance 822 710 640 747 734
Net gains and fees on sales of loans 1,308 1,905 1,781 1,489 1,559
Net realized gains (losses) on sales of available for sale securities 623 1,115 (93 ) 1,025 1,246
Gain on sale of insurance subsidiary 8,265
Other income 1,224   2,322   1,224   921   1,155  
Total Other Income 14,767   16,899   24,633   16,232   16,375  
OTHER EXPENSES
Salaries and employee benefits 25,796 25,137 26,434 24,541 23,595
Net occupancy 3,649 3,726 3,503 3,790 3,288
Equipment 2,683 2,698 2,840 2,566 2,315
Marketing 915 847 951 780 836
Outside data processing fees 1,632 1,992 1,768 1,717 1,592
Printing and office supplies 343 343 303 364 364
Core deposit amortization 692 693 729 721 669
FDIC assessments 939 958 895 863 895
Other real estate owned and foreclosure expenses 1,701 1,835 1,372 1,229 1,055
Professional and other outside services 3,544 1,686 3,134 1,491 3,633
Other expenses 4,352   3,683   4,494   3,140   3,435  
Total Other Expenses 46,246   43,598   46,423   41,202   41,677  
INCOME BEFORE INCOME TAX 18,595 23,624 26,824 22,006 20,898
Income tax expense 4,418   6,557   8,856   5,834   5,638  
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 14,177   $ 17,067   $ 17,968   $ 16,172   $ 15,260  
 
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.37 $ 0.46 $ 0.47 $ 0.43 $ 0.41
Diluted Net Income Available to Common Stockholders $ 0.37 $ 0.45 $ 0.47 $ 0.43 $ 0.41
Cash Dividends Paid $ 0.11 $ 0.11 $ 0.11 $ 0.08 $ 0.08
Average Diluted Shares Outstanding (in thousands) 38,191 38,118 38,043 38,000 37,323
FINANCIAL RATIOS:
Return on Average Assets 0.90 % 1.11 % 1.19 % 1.11 % 1.06 %
Return on Average Stockholders' Equity 7.32 8.99 9.63 8.81 8.55
Return on Average Common Stockholders' Equity 7.32 8.99 9.63 8.81 8.56
Average Earning Assets to Average Assets 90.11 89.99 89.63 89.42 89.51
Allowance for Loan Losses as % of Total Loans 1.33 1.45 1.47 1.58 1.63
Net Charge Off's as % of Average Loans (Annualized) 0.04 (0.03 ) 0.06 0.12 0.27
Average Stockholders' Equity to Average Assets 12.29 12.34 12.31 12.62 12.34
Tax Equivalent Yield on Earning Assets 4.20 4.30 4.26 4.24 4.26
Cost of Supporting Liabilities 0.45 0.45 0.45 0.46 0.46
Net Interest Margin (FTE) on Earning Assets 3.75 3.85 3.81 3.78 3.80
Tangible Book Value Per Share $ 14.68 $ 14.59 $ 14.15 $ 13.96 $ 13.65
 
LOANS          
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2015 2015   2015   2015 2014
Commercial and industrial loans $ 1,057,075 $ 999,195 $ 984,223 $ 938,937 $ 896,688
Agricultural production financing and other loans to farmers 97,711 91,354 93,695 95,652 104,927
Real estate loans:
Construction 366,704 298,250 256,082 237,036 207,221
Commercial and farmland 1,802,921 1,695,703 1,705,647 1,646,418 1,672,661
Residential 786,105 677,767 689,621 640,451 647,315
Home Equity 348,613 318,949 302,403 286,914 286,529
Individuals' loans for household and other personal expenditures 74,717 71,893 62,785 70,223 73,400
Lease financing receivables, net of unearned income 588 614 742 853 1,106
Other commercial loans 159,388   167,990     143,007     49,048   35,018  
Loans 4,693,822 4,321,715 4,238,205 3,965,532 3,924,865
Allowance for loan losses (62,453 ) (62,861 )   (62,550 )   (62,801 ) (63,964 )
NET LOANS $ 4,631,369   $ 4,258,854     $ 4,175,655     $ 3,902,731   $ 3,860,901  
 
DEPOSITS          
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
Demand deposits $ 2,576,283 $ 2,244,848 $ 2,211,154 $ 2,116,135 $ 2,146,492
Savings deposits 1,518,722 1,460,244 1,439,255 1,402,421 1,376,707
Certificates and other time deposits of $100,000 or more 323,698 286,988 295,159 283,313 260,685
Other certificates and time deposits 556,476 499,286 517,153 516,500 523,010
Brokered deposits 314,468   323,223   326,856   329,706   333,800
TOTAL DEPOSITS $ 5,289,647   $ 4,814,589   $ 4,789,577   $ 4,648,075   $ 4,640,694
 
NET INTEREST INCOME            
(Dollars in Thousands) For the Three Months Ended
December 31, 2015 December 31, 2014

Average
Balance

Interest
Income /
Expense
Average
Rate

Average
Balance

Interest
Income /
Expense
Average
Rate
Assets:
Interest-bearing time deposits $ 94,150 $ 67 0.28 % $ 80,901 $ 48 0.24 %
Federal Reserve and Federal Home Loan Bank stock 34,909 458 5.25 43,580 476 4.37
Investment Securities: (1)
Taxable 687,265 4,363 2.54 767,980 4,980 2.59
Tax-Exempt (2) 510,105   6,837   5.36 416,473   5,680   5.46
Total Investment Securities 1,197,370   11,200   3.74 1,184,453   10,660   3.60
Loans held for sale 1,829 93 20.34 6,208 129 8.31
Loans: (3)
Commercial 3,263,959 36,284 4.45 2,993,498 33,882 4.53
Real Estate Mortgage 465,097 4,844 4.17 463,465 5,162 4.46
Installment 430,440 4,675 4.34 386,818 4,537 4.69
Tax-Exempt (2) 190,296   1,978   4.16 17,020   227   5.33
Total Loans 4,351,621   47,874   4.40 3,867,009   43,937   4.54
Total Earning Assets 5,678,050 59,599   4.20 5,175,943 55,121   4.26
Net unrealized gain on securities available for sale 9,832 11,864
Allowance for loan losses (63,077 ) (65,790 )
Cash and cash equivalents 102,144 98,373
Premises and equipment 83,800 76,594
Other assets 490,473   485,273  
Total Assets $ 6,301,222   $ 5,782,257  
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 1,205,874 $ 481 0.16 % $ 1,080,171 $ 282 0.10 %
Money market deposits 844,629 463 0.22 840,852 436 0.21
Savings deposits 645,057 191 0.12 550,687 159 0.12
Certificates and other time deposits 1,089,465   2,803   1.03 1,106,324   2,525   0.91
Total Interest-bearing Deposits 3,785,025 3,938 0.42 3,578,034 3,402 0.38
Borrowings 488,997   2,502   2.05 442,088   2,491   2.25
Total Interest-bearing Liabilities 4,274,022 6,440 0.60 4,020,122 5,893 0.59
Noninterest-bearing deposits 1,209,599 1,004,910
Other liabilities 43,041   43,692  
Total Liabilities 5,526,662 5,068,724
Stockholders' Equity 774,560     713,533    
Total Liabilities and Stockholders' Equity $ 6,301,222   6,440   0.45 $ 5,782,257   5,893   0.46
Net Interest Income $ 53,159   $ 49,228  
Net Interest Margin 3.75 % 3.80 %
 

(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 2015 and 2014. These totals equal $3,085 and $2,068 for the three months ended December 31, 2015 and 2014, respectively.

 

(3)

Non accruing loans have been included in the average balances.
 
NET INTEREST INCOME            
(Dollars in Thousands) For the Twelve Months Ended
December 31, 2015 December 31, 2014

Average
Balance

Interest
Income /
Expense
Average
Rate
Average Balance Interest
Income /
Expense
Average
Rate
Assets:
Interest-bearing time deposits $ 61,373 $ 160 0.26 % $ 53,231 $ 124 0.23 %
Federal Reserve and Federal Home Loan Bank stock 37,495 1,967 5.25 42,142 2,124 5.04
Investment Securities: (1)
Taxable 703,019 17,885 2.54 763,450 19,882 2.60
Tax-Exempt (2) 483,103   26,034   5.39 396,435   22,127   5.58
Total Investment Securities 1,186,122   43,919   3.70 1,159,885   42,009   3.62
Loans held for sale 3,725 475 12.75 6,681 485 7.26
Loans: (3)
Commercial 3,187,239 142,696 4.48 2,919,020 133,567 4.58
Real Estate Mortgage 457,013 19,457 4.26 429,384 19,812 4.61
Installment 406,163 18,177 4.48 361,484 18,175 5.03
Tax-Exempt (2) 125,699   5,322   4.23 13,511   504   3.73
Total Loans 4,179,839   186,127   4.45 3,730,080   172,543   4.63
Total Earning Assets 5,464,829 232,173   4.25 % 4,985,338 216,800   4.35 %
Net unrealized gain on securities available for sale 11,800 8,921
Allowance for loan losses (62,975 ) (67,969 )
Cash and cash equivalents 98,051 87,068
Premises and equipment 82,710 75,202
Other assets 491,272   482,794  
Total Assets $ 6,085,687   $ 5,571,354  
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 1,109,829 $ 1,374 0.12 % $ 1,066,402 $ 1,110 0.10 %
Money market deposits 840,084 1,768 0.21 776,712 1,572 0.20
Savings deposits 614,675 672 0.11 533,080 619 0.12
Certificates and other time deposits 1,121,651   11,041   0.98 1,042,539   8,377   0.80
Total Interest-bearing Deposits 3,686,239 14,855 0.40 3,418,733 11,678 0.34
Borrowings 480,794   9,939   2.07 492,128   10,164   2.07
Total Interest-bearing Liabilities 4,167,033 24,794 0.60 3,910,861 21,842 0.56
Noninterest-bearing deposits 1,120,264 945,222
Other liabilities 44,666   39,976  
Total Liabilities 5,331,963 4,896,059
Stockholders' Equity 753,724     675,295    
Total Liabilities and Stockholders' Equity $ 6,085,687   24,794   0.45 $ 5,571,354   21,842   0.44
Net Interest Income $ 207,379   $ 194,958  
Net Interest Margin 3.80 % 3.91 %
 
(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 2015 and 2014. These totals equal $10,975 and $7,921 for the twelve months ended December 31, 2015 and 2014, respectively.
 
(3) Non accruing loans have been included in the average balances.

Contacts

First Merchants Corporation
David L. Ortega, First Vice President/Director of Investor Relations, 765-378-8937
http://www.firstmerchants.com

Contacts

First Merchants Corporation
David L. Ortega, First Vice President/Director of Investor Relations, 765-378-8937
http://www.firstmerchants.com