First Merchants Corporation Announces Record Second Quarter 2016 Results

MUNCIE, Ind.--()--First Merchants Corporation (NASDAQ: FRME) reported record second quarter 2016 net income of $20 million, an increase of 11.3 percent, compared to $18 million during the second quarter of 2015. Earnings per share for the period totaled a record $.49 per share, an increase of $.02 per share, or 4.3 percent, over the same period in 2015. Year-to-date net income totaled $37.7 million, compared to $34.1 million during the same period in 2015. Earnings per share for the six months ended June 30, 2016 totaled $.92 per share, an increase of $.02 per share, over same period in 2015.

Michael C. Rechin, President and Chief Executive Officer, stated, “First Merchants focused its 2016 plan on proving our progress after completing several major organizational initiatives. Our accomplishments included closing two and integrating three whole bank acquisitions, divesting our insurance business and completing an on-line banking system upgrade. We are pleased our second quarter 2016 earnings produced such strong and clean results without any non-core extraordinary items. The result is a growing company with a 1.17 percent return on assets, a 57.33 percent efficiency ratio, healthy credit metrics, strong and stable margins, record levels of performance and focus on the road ahead.”

Total assets reached a record $6.9 billion as of quarter-end and loans totaled $4.8 billion, compared to $6.1 billion and $4.2 billion, as of June 30, 2015, representing increases of 12.5 and 13.1 percent, respectively. Total deposits reached $5.4 billion as of June 30, 2016, representing a 12.9 percent increase. Tangible common equity also increased to $633 million, or $15.53 per share.

Net-interest income totaled a record $56 million for the quarter and reported net-interest margin, of 3.86 percent, increased by 5 basis points over the second quarter of 2015 total of 3.81 percent. Yields on earning assets totaled 4.30 percent and the cost of supporting liabilities totaled .44 percent. When adjusted for fair value accretion, net-interest margin totaled 3.65 percent for the quarter, equaling the second quarter of 2015.

Non-interest income totaled $16.4 million for the quarter, down $7.7 million from the second quarter of 2015 total of $24.1 million. The gain on the sale of our insurance subsidiary in the second quarter of 2015 totaled $8.3 million and the loss of $1.8 million in commission income related to the business accounted for all of the decline.

Non-interest expense totaled $44.8 million for the quarter, a decrease of $1.1 million from the second quarter of 2015. The second quarter 2016 non-interest expense has no extraordinary items and is indicative of our core run rate.

The Corporation’s provision expense totaled $790,000 during the quarter as net charge offs totaled $690,000. Non-performing loans now total $37.9 million, the allowance for loan losses totaled $62.2 million and our remaining fair value marks totaled $42.3 million. The allowance is 1.29 percent of total loans and 1.56 percent of non-purchased loans.

As of June 30, 2016, the Corporation’s total risk-based capital ratio equaled 14.67 percent, common equity tier 1 capital ratio equaled 11.39 percent, and the tangible common equity ratio totaled 9.52 percent.

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 2:30 p.m. (ET) on Tuesday, July 26, 2016.

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 26, 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 10087049.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme160726.html during the time of the call. A replay of the web cast will be available until July 26, 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, 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.

   
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands) June 30,
2016 2015
ASSETS
Cash and cash equivalents $ 120,471 $ 105,928
Interest-bearing time deposits 62,533 26,669
Investment securities 1,297,801 1,212,516
Loans held for sale 18,854 8,295
Loans 4,791,429 4,238,205
Less: Allowance for loan losses (62,186 ) (62,550 )

Net loans

4,729,243 4,175,655
Premises and equipment 95,170 84,841
Federal Reserve and Federal Home Loan Bank stock 18,096 34,630
Interest receivable 23,351 19,880
Core deposit intangibles and goodwill 260,821 220,196
Cash surrender value of life insurance 201,417 170,813
Other real estate owned 13,219 19,242
Tax asset, deferred and receivable 32,547 39,622
Other assets 32,895   22,021  
TOTAL ASSETS $ 6,906,418   $ 6,140,308  
LIABILITIES
Deposits:
Noninterest-bearing $ 1,253,747 $ 1,122,688
Interest-bearing 4,153,807   3,666,889  
Total Deposits 5,407,554 4,789,577
Borrowings:
Federal funds purchased 20,000 40,748
Securities sold under repurchase agreements 140,777 137,240
Federal Home Loan Bank advances 268,579 247,687
Subordinated debentures and term loans 127,678   126,882  
Total Borrowings 557,034 552,557
Interest payable 3,051 3,211
Other liabilities 51,229   45,008  
Total Liabilities 6,018,868 5,390,353
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 - 40,772,896 and 37,824,649 shares 5,097 4,728
Additional paid-in capital 505,725 432,294
Retained earnings 369,568 319,298
Accumulated other comprehensive income (loss) 7,035   (6,490 )
Total Stockholders' Equity 887,550   749,955  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,906,418   $ 6,140,308  
 
   
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Six Months Ended
(Dollars In Thousands, Except Per Share Amounts) June 30, June 30,
2016   2015 2016   2015
INTEREST INCOME
Loans receivable:
Taxable $ 52,099 $ 45,320 $ 102,588 $ 88,871
Tax-exempt 1,465 736 2,780 984
Investment securities:
Taxable 4,202 4,425 8,530 9,148
Tax-exempt 4,583 4,231 9,092 8,066
Deposits with financial institutions 122 31 228 68
Federal Reserve and Federal Home Loan Bank stock 233   459   713   1,009
Total Interest Income 62,704   55,202   123,931   108,146
INTEREST EXPENSE
Deposits 4,039 3,686 8,102 7,202
Federal funds purchased 7 19 35 42
Securities sold under repurchase agreements 92 90 192 168
Federal Home Loan Bank advances 818 706 1,614 1,397
Subordinated debentures and term loans 1,786   1,670   3,571   3,330
Total Interest Expense 6,742   6,171   13,514   12,139
NET INTEREST INCOME 55,962 49,031 110,417 96,007
Provision for loan losses 790   417   1,340   417
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 55,172   48,614   109,077   95,590
OTHER INCOME
Service charges on deposit accounts 4,416 4,090 8,561 7,638
Fiduciary activities 2,376 2,309 4,870 4,816
Other customer fees 4,695 4,602 9,754 8,269
Commission income 1,815 4,143
Earnings on cash surrender value of life insurance 1,297 640 2,773 1,387
Net gains and fees on sales of loans 1,717 1,781 3,177 3,270
Net realized gains (losses) on sales of available for sale securities 706 (93 ) 1,703 932
Gain on sale of insurance subsidiary 8,265 8,265
Other income 1,178   697   1,384   785
Total Other Income 16,385   24,106   32,222   39,505
OTHER EXPENSES
Salaries and employee benefits 25,570 26,434 52,907 50,975
Net occupancy 4,059 3,503 8,081 7,293
Equipment 3,243 2,840 6,481 5,406
Marketing 851 951 1,588 1,731
Outside data processing fees 2,025 1,768 4,094 3,485
Printing and office supplies 369 303 733 667
Core deposit amortization 977 729 1,955 1,450
FDIC assessments 1,002 895 1,952 1,758
Other real estate owned and foreclosure expenses 915 845 1,666 1,241
Professional and other outside services 1,478 3,134 3,640 4,625
Other expenses 4,346   4,494   8,213   7,634
Total Other Expenses 44,835   45,896   91,310   86,265
INCOME BEFORE INCOME TAX 26,722 26,824 49,989 48,830
Income tax expense 6,716   8,856   12,290   14,690
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 20,006   $ 17,968   $ 37,699   $ 34,140
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.50 $ 0.47 $ 0.93 $ 0.90
Diluted Net Income Available to Common Stockholders $ 0.49 $ 0.47 $ 0.92 $ 0.90
Cash Dividends Paid $ 0.14 $ 0.11 $ 0.25 $ 0.19
Average Diluted Shares Outstanding (in thousands) 40,969 38,043 40,941 38,022
 
       
FINANCIAL HIGHLIGHTS
(Dollars in thousands) Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
NET CHARGE OFF'S $ 690 $ 668 $ 1,607 $ 1,831
 
AVERAGE BALANCES:
Total Assets $ 6,857,839 $ 6,060,477 $ 6,800,577 $ 5,941,437
Total Loans 4,739,079 4,151,860 4,704,323 4,044,931
Total Earning Assets 6,131,438 5,432,080 6,075,878 5,319,158
Total Deposits 5,440,148 4,797,086 5,368,719 4,701,642
Total Stockholders' Equity 876,116 746,181 868,884 740,378
 
FINANCIAL RATIOS:
Return on Average Assets 1.17 % 1.19 % 1.11 % 1.15 %
Return on Average Stockholders' Equity 9.13 9.63 8.68 9.22
Return on Average Common Stockholders' Equity 9.14 9.63 8.68 9.22
Average Earning Assets to Average Assets 89.41 89.63 89.34 89.53
Allowance for Loan Losses as % of Total Loans 1.29 1.47 1.29 1.47
Net Charge Off's as % of Average Loans (Annualized) 0.06 0.06 0.07 0.09
Average Stockholders' Equity to Average Assets 12.78 12.31 12.78 12.46
Tax Equivalent Yield on Earning Assets 4.30 4.26 4.29 4.25
Cost of Supporting Liabilities 0.44 0.45 0.44 0.46
Net Interest Margin (FTE) on Earning Assets 3.86 3.81 3.85 3.79
Tangible Common Book Value Per Share $ 15.53 $ 14.15 $ 15.53 $ 14.15
 
         
NON-PERFORMING ASSETS
(Dollars In Thousands) June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
Non-Accrual Loans $ 33,565 $ 36,719 $ 31,389 $ 32,597 $ 37,713
Renegotiated Loans 4,299   1,015   1,923   3,823   885  
Non-Performing Loans (NPL) 37,864 37,734 33,312 36,420 38,598
Other Real Estate Owned 13,219   15,626   17,257   14,809   19,242  
Non-Performing Assets (NPA) 51,083 53,360 50,569 51,229 57,840
90+ Days Delinquent 362   963   907   1,947   632  
NPAs & 90 Day Delinquent $ 51,445   $ 54,323   $ 51,476   $ 53,176   $ 58,472  
 
Loan Loss Reserve $ 62,186 $ 62,086 $ 62,453 $ 62,861 $ 62,550
Quarterly Net Charge-off's 690 917 408 (311 ) 668
NPAs / Actual Assets % 0.74 % 0.78 % 0.75 % 0.83 % 0.94 %
NPAs & 90 Day / Actual Assets % 0.74 % 0.80 % 0.76 % 0.86 % 0.95 %
NPAs / Actual Loans and OREO % 1.06 % 1.13 % 1.07 % 1.18 % 1.36 %
Loan Loss Reserves / Actual Loans (%) 1.29 % 1.32 % 1.33 % 1.45 % 1.47 %
Net Charge Off's as % of Average Loans (Annualized) 0.06 % 0.08 % 0.04 % (0.03 )% 0.06 %
 
         
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands) June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
ASSETS
Cash and cash equivalents $ 120,471 $ 85,738 $ 102,170 $ 84,677 $ 105,928
Interest-bearing time deposits 62,533 77,453 32,315 27,111 26,669
Investment securities 1,297,801 1,270,777 1,276,999 1,208,793 1,212,516
Loans held for sale 18,854 3,628 9,894 1,943 8,295
Loans 4,791,429 4,709,907 4,693,822 4,321,715 4,238,205
Less: Allowance for loan losses (62,186 ) (62,086 ) (62,453 ) (62,861 ) (62,550 )
Net loans 4,729,243 4,647,821 4,631,369 4,258,854 4,175,655
Premises and equipment 95,170 96,494 97,648 83,457 84,841
Federal Reserve and Federal Home Loan Bank stock 18,096 37,553 37,633 34,498 34,630
Interest receivable 23,351 22,836 24,415 22,048 19,880
Core deposit intangibles and goodwill 260,821 261,799 259,764 219,503 220,196
Cash surrender value of life insurance 201,417 200,549 200,539 171,530 170,813
Other real estate owned 13,219 15,626 17,257 14,809 19,242
Tax asset, deferred and receivable 32,547 47,982 46,977 38,339 39,622
Other assets 32,895   30,283   24,023   24,235   22,021  
TOTAL ASSETS $ 6,906,418   $ 6,798,539   $ 6,761,003   $ 6,189,797   $ 6,140,308  
LIABILITIES
Deposits:
Noninterest-bearing $ 1,253,747 $ 1,282,462 $ 1,266,027 $ 1,110,905 $ 1,122,688
Interest-bearing 4,153,807   4,028,608   4,023,620   3,703,684   3,666,889  
Total Deposits 5,407,554 5,311,070 5,289,647 4,814,589 4,789,577
Borrowings:
Federal funds purchased 20,000 602 49,721 52,896 40,748
Securities sold under repurchase agreements 140,777 150,134 155,325 153,822 137,240
Federal Home Loan Bank advances 268,579 263,588 235,652 237,856 247,687
Subordinated debentures and term loans 127,678   127,523   127,846   121,936   126,882  
Total Borrowings 557,034 541,847 568,544 566,510 552,557
Interest payable 3,051 3,910 3,092 3,710 3,211
Other liabilities 51,229   74,449   49,211   38,004   45,008  
Total Liabilities 6,018,868 5,931,276 5,910,494 5,422,813 5,390,353
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 5,097 5,094 5,083 4,734 4,728
Additional paid-in capital 505,725 504,661 504,530 433,577 432,294
Retained earnings 369,568 355,317 342,133 332,162 319,298
Accumulated other comprehensive income (loss) 7,035   2,066   (1,362 ) (3,614 ) (6,490 )
Total Stockholders' Equity 887,550   867,263   850,509   766,984   749,955  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,906,418   $ 6,798,539   $ 6,761,003   $ 6,189,797   $ 6,140,308  
 
         
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts) June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
INTEREST INCOME
Loans receivable:
Taxable $ 52,099 $ 50,489 $ 45,897 $ 46,037 $ 45,320
Tax-exempt 1,465 1,315 1,285 1,190 736
Investment securities:
Taxable 4,202 4,328 4,363 4,374 4,425
Tax-exempt 4,583 4,509 4,444 4,412 4,231
Deposits with financial institutions 122 106 67 25 31
Federal Reserve and Federal Home Loan Bank stock 233   480   458   500   459  
Total Interest Income 62,704   61,227   56,514   56,538   55,202  
INTEREST EXPENSE
Deposits 4,039 4,063 3,938 3,715 3,686
Federal funds purchased 7 28 5 27 19
Securities sold under repurchase agreements 92 100 104 96 90
Federal Home Loan Bank advances 818 796 728 711 706
Subordinated debentures and term loans 1,786   1,785   1,665   1,666   1,670  
Total Interest Expense 6,742   6,772   6,440   6,215   6,171  
NET INTEREST INCOME 55,962 54,455 50,074 50,323 49,031
Provision for loan losses 790   550       417  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 55,172   53,905   50,074   50,323   48,614  
OTHER INCOME
Service charges on deposit accounts 4,416 4,145 4,118 4,445 4,090
Fiduciary activities 2,376 2,494 2,138 2,242 2,309
Other customer fees 4,695 5,059 4,534 4,156 4,602
Commission income 4 1,815
Earnings on cash surrender value of life insurance 1,297 1,476 822 710 640
Net gains and fees on sales of loans 1,717 1,460 1,308 1,905 1,781
Net realized gains (losses) on sales of available for sale securities 706 997 623 1,115 (93 )
Gain on sale of insurance subsidiary 8,265
Other income 1,178   206   488   1,755   697  
Total Other Income 16,385   15,837   14,031   16,332   24,106  
OTHER EXPENSES
Salaries and employee benefits 25,570 27,337 25,796 25,137 26,434
Net occupancy 4,059 4,022 3,649 3,726 3,503
Equipment 3,243 3,238 2,683 2,698 2,840
Marketing 851 737 915 847 951
Outside data processing fees 2,025 2,069 1,632 1,992 1,768
Printing and office supplies 369 364 343 343 303
Core deposit amortization 977 978 692 693 729
FDIC assessments 1,002 950 939 958 895
Other real estate owned and foreclosure expenses 915 751 1,040 1,675 845
Professional and other outside services 1,478 2,162 3,544 1,686 3,134
Other expenses 4,346   3,867   4,277   3,276   4,494  
Total Other Expenses 44,835   46,475   45,510   43,031   45,896  
INCOME BEFORE INCOME TAX 26,722 23,267 18,595 23,624 26,824
Income tax expense 6,716   5,574   4,418   6,557   8,856  
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 20,006   $ 17,693   $ 14,177   $ 17,067   $ 17,968  
 
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.50 $ 0.43 $ 0.37 $ 0.46 $ 0.47
Diluted Net Income Available to Common Stockholders $ 0.49 $ 0.43 $ 0.37 $ 0.45 $ 0.47
Cash Dividends Paid $ 0.14 $ 0.11 $ 0.11 $ 0.11 $ 0.11
Average Diluted Shares Outstanding (in thousands) 40,969 40,917 38,191 38,118 38,043
FINANCIAL RATIOS:
Return on Average Assets 1.17 % 1.05 % 0.90 % 1.11 % 1.19 %
Return on Average Stockholders' Equity 9.13 8.21 7.32 8.99 9.63
Return on Average Common Stockholders' Equity 9.14 8.21 7.32 8.99 9.63
Average Earning Assets to Average Assets 89.41 89.28 90.11 89.99 89.63
Allowance for Loan Losses as % of Total Loans 1.29 1.32 1.33 1.45 1.47
Net Charge Off's as % of Average Loans (Annualized) 0.06 0.08 0.04 (0.03 ) 0.06
Average Stockholders' Equity to Average Assets 12.78 12.78 12.29 12.34 12.31
Tax Equivalent Yield on Earning Assets 4.30 4.28 4.20 4.30 4.26
Cost of Supporting Liabilities 0.44 0.45 0.45 0.45 0.45
Net Interest Margin (FTE) on Earning Assets 3.86 3.83 3.75 3.85 3.81
Tangible Common Book Value Per Share $ 15.53 $ 15.02 $ 14.68 $ 14.59 $ 14.15
 
         
LOANS
(Dollars In Thousands) June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
Commercial and industrial loans $ 1,084,890 $ 1,060,559 $ 1,057,075 $ 999,195 $ 984,223
Agricultural production financing and other loans to farmers 95,131 92,137 97,711 91,354 93,695
Real estate loans:

Construction

352,980 391,621 366,704 298,250 256,082
Commercial and farmland 1,869,703 1,806,395 1,802,921 1,695,703 1,705,647
Residential 758,870 769,592 786,105 677,767 689,621
Home Equity 374,159 353,946 348,613 318,949 302,403
Individuals' loans for household and other personal expenditures 75,205 73,622 74,717 71,893 62,785
Lease financing receivables, net of unearned income 388 461 588 614 742
Other commercial loans 180,103   161,574   159,388   167,990   143,007  
Loans 4,791,429 4,709,907 4,693,822 4,321,715 4,238,205
Allowance for loan losses (62,186 ) (62,086 ) (62,453 ) (62,861 ) (62,550 )
NET LOANS $ 4,729,243   $ 4,647,821   $ 4,631,369   $ 4,258,854   $ 4,175,655  
 
         
DEPOSITS
(Dollars In Thousands) June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
Demand deposits $ 2,717,500 $ 2,590,603 $ 2,576,283 $ 2,244,848 $ 2,211,154
Savings deposits 1,551,210 1,549,304 1,518,722 1,460,244 1,439,255
Certificates and other time deposits of $100,000 or more 301,695 304,559 323,698 286,988 295,159
Other certificates and time deposits 517,720 536,120 556,476 499,286 517,153
Brokered deposits 319,429   330,484   314,468   323,223   326,856
TOTAL DEPOSITS $ 5,407,554   $ 5,311,070   $ 5,289,647   $ 4,814,589   $ 4,789,577
 
           
NET INTEREST INCOME
(Dollars in Thousands) For the Three Months Ended
June 30, 2016 June 30, 2015

Average
Balance

Interest
Income /
Expense

Average
Rate

Average
Balance

Interest
Income /
Expense
Average
Rate
Assets:
Interest-bearing time deposits $ 99,735 $ 122 0.49 % $ 59,979 $ 31 0.21 %
Federal Reserve and Federal Home Loan Bank stock 23,442 233 3.98 39,195 459 4.68
Investment Securities: (1)
Taxable 730,179 4,202 2.30 696,505 4,425 2.54
Tax-Exempt (2) 539,004   7,050   5.23 484,541   6,510   5.37
Total Investment Securities 1,269,183   11,252   3.55 1,181,046   10,935   3.70
Loans held for sale 3,664 96 10.48 6,033 146 9.68
Loans: (3)
Commercial 3,501,919 40,501 4.63 3,193,314 35,660 4.47
Real Estate Mortgage 568,746 6,116 4.30 455,470 4,962 4.36
Installment 470,254 5,386 4.58 396,378 4,552 4.59
Tax-Exempt (2) 194,496   2,254   4.64 100,665   1,132   4.49
Total Loans 4,739,079   54,353   4.59 4,151,860   46,452   4.48
Total Earning Assets 6,131,439 65,960   4.30 5,432,080 57,877   4.26
Net unrealized gain on securities available for sale 10,924 12,575
Allowance for loan losses (62,235 ) (62,881 )
Cash and cash equivalents 104,372 97,738
Premises and equipment 96,620 84,359
Other assets 576,719   496,606  
Total Assets $ 6,857,839   $ 6,060,477  
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 1,429,191 $ 637 0.18 % $ 1,088,896 $ 283 0.10 %
Money market deposits 849,270 502 0.24 853,776 446 0.21
Savings deposits 717,044 149 0.08 612,920 166 0.11
Certificates and other time deposits 1,159,247   2,751   0.95 1,148,463   2,791   0.97
Total Interest-bearing Deposits 4,154,752 4,039 0.39 3,704,055 3,686 0.40
Borrowings 476,852   2,703   2.27 471,467   2,485   2.11
Total Interest-bearing Liabilities 4,631,604 6,742 0.58 4,175,522 6,171 0.59
Noninterest-bearing deposits 1,285,396 1,093,031
Other liabilities 64,723   45,743  
Total Liabilities 5,981,723 5,314,296
Stockholders' Equity 876,116     746,181    
Total Liabilities and Stockholders' Equity $ 6,857,839   6,742   0.44 $ 6,060,477   6,171   0.45
Net Interest Income $ 59,218   $ 51,706  
Net Interest Margin 3.86 % 3.81 %
 
(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. Annualized amounts are computed utilizing a 30/360 day basis
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 35 percent for 2016 and 2015. These totals equal $3,256 and $2,675 for the three months ended June 30, 2016 and 2015, 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, 2016 June 30, 2015

Average
Balance

Interest
Income /
Expense
Average
Rate

Average
Balance

Interest
Income /
Expense
Average
Rate
Assets:
Interest-bearing time deposits $ 87,722 $ 228 0.52 % $ 58,452 $ 68 0.23 %
Federal Reserve and Federal Home Loan Bank stock 30,537 713 4.67 40,267 1,009 5.01
Investment Securities: (1)
Taxable 723,333 8,530 2.36 716,331 9,148 2.55
Tax-Exempt (2) 529,963   13,987   5.28 459,177   12,409   5.40
Total Investment Securities 1,253,296   22,517   3.59 1,175,508   21,557   3.67
Loans held for sale 4,956 218 8.80 5,483 256 9.34
Loans: (3)
Commercial 3,475,684 79,365 4.57 3,117,698 69,830 4.48
Real Estate Mortgage 572,006 12,510 4.37 457,620 9,811 4.29
Installment 463,454 10,495 4.53 395,227 8,975 4.54
Tax-Exempt (2) 188,223   4,277   4.54 68,903   1,513   4.39
Total Loans 4,704,323   106,865   4.54 4,044,931   90,385   4.47
Total Earning Assets 6,075,878 130,323   4.29 % 5,319,158 113,019   4.25 %
Net unrealized gain on securities available for sale 10,464 13,522
Allowance for loan losses (62,724 ) (63,154 )
Cash and cash equivalents 103,143 98,262
Premises and equipment 96,659 81,052
Other assets 577,157   492,597  
Total Assets $ 6,800,577   $ 5,941,437  
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 1,364,729 $ 1,181 0.17 % $ 1,059,826 $ 534 0.10 %
Money market deposits 857,601 993 0.23 838,852 858 0.20
Savings deposits 703,174 284 0.08 592,449 326 0.11
Certificates and other time deposits 1,172,852   5,644   0.96 1,137,342   5,484   0.96
Total Interest-bearing Deposits 4,098,356 8,102 0.40 3,628,469 7,202 0.40
Borrowings 498,470   5,412   2.17 454,758   4,937   2.17
Total Interest-bearing Liabilities 4,596,826 13,514   0.59 4,083,227 12,139 0.59
Noninterest-bearing deposits 1,270,363 1,073,173
Other liabilities 64,504   44,659  
Total Liabilities 5,931,693 5,201,059
Stockholders' Equity 868,884     740,378    
Total Liabilities and Stockholders' Equity $ 6,800,577   13,514   0.44 $ 5,941,437   12,139   0.46
Net Interest Income $ 116,809   $ 100,880  
Net Interest Margin 3.85 % 3.79 %
 
(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. Annualized amounts are computed utilizing a 30/360 day basis
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 35 percent for 2016 and 2015. These totals equal $6,392 and $4,873 for the six months ended June 30, 2016 and 2015, respectively.
(3) Non accruing loans have been included in the average balances.

Contacts

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

Contacts

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