First Merchants Corporation (NASDAQ: FRME) has reported full year 2013 record net income available to common shareholders of $42.2 million compared to $40.6 million earned in 2012. Full-year 2013 earnings per share totaled $1.41 equaling 2012. Included in the full year results are $5.4 million, or $.12 per share, of acquisition expenses related to the CFS Bancorp (CFS) merger. By contrast, 2012 results include a one-time gain from the FDIC purchase of SCB Bank totaling $9.1 million, or $.21 per share. Fourth quarter 2013 earnings per share totaled $.34 compared to $.32 in 2012. Net income available to common stockholders totaled $11.2 million, a $2 million increase over the $9.2 million reported in the fourth quarter of 2012.
Michael C. Rechin, President and Chief Executive Officer, stated, "Our teams are energized by the closing of the CFS merger on November 12th 2013, and we are looking forward to capturing the full earnings impact in our 2014 results." Rechin also added, "2013 was a highly successful year for us by many measures, including record net income of $42.2 million, healthy organic loan growth and the addition of CFS with its $1.1 billion balance sheet. In addition, we optimized our capital structure and increased First Merchants market capitalization by more than 90 percent to over $800 million. Our employees take pride in our continued progress and our merger that caps 2013 and propels us into 2014."
Total assets equaled $5.4 billion, as loans and investments totaled $3.6 billion and $1.1 billion, respectively. Total loans increased by $730 million during the year, including $133 million of organic growth and $597 million related to the acquisition of CFS. Investments increased by $222 million during the year primarily due to the acquisition of CFS as deposits exceed loan balances by $359 million.
Net-interest income totaled $154.3 million in 2013, an increase of $2 million. Net-interest margin remained strong totaling 3.99 percent, down from 4.12 percent in 2012, as yields on earning assets declined by 34 basis points and the cost of supporting liabilities declined by 21 basis points. Net-interest income totaled $41.1 million for the fourth quarter of 2013 compared to $38.3 million during the same period of 2012.
Non-interest income totaled $54.8 million in 2013 and $64.3 million in 2012, which included the one-time gain from the FDIC purchase of SCB Bank totaling $9.1 million. Fourth quarter non-interest income increased by $867,000 over the prior year, and totaled $15.1 million. Non-interest expense totaled $137.1 million in 2012 and $143.2 million in 2013, which included acquisition expenses of $5.4 million. During the quarter, non-interest expense totaled $40.6 million and included $4.5 million of the $5.4 million in acquisition expenses.
Provision expense totaled $6.6 million for the year, down from $18.5 million in 2012. Net charge-offs totaled $8.1 million during the year, also down from $20.1 million in 2012. CFS loan marks totaled nearly $40 million or 6.2 percent of purchased loans as of year-end. NPA's increased by $31.4 million, which includes CFS; however, our pre-merger NPA's declined by 42 percent resulting in a lower total allowance for loan losses totaling $67.9 million, or 2.24 percent of loans excluding CFS.
As of December 31, 2013, the Corporation's total risk-based capital equaled 14.54 percent, Tier 1 common risk-based capital equaled 10.37 percent, and tangible common equity ratio totaled 8.34 percent. During the quarter, the Corporation refinanced $50 million of sub-debt and redeemed $34 million of Small Business Lending Fund shares through a new $65 million, 15-year term no call 10, sub-debt instrument with a fixed coupon rate of 6.75 percent.
Mark K. Hardwick, Executive Vice President and Chief Financial Officer, stated, "The optimization of our capital structure and the repayment of the SBLF is rewarding and completes a journey that started in 2009 during the financial crisis." Hardwick also added, "The increase in our tangible book value per share from $11.56 as of September 30, 2013 to $12.17 as of year-end is better than our earlier forecasts and market expectations. Net Income and other comprehensive income accounted for $.74 of the improvement which was offset by $.08 dilution from the acquisition and our fourth quarter dividend payment of $.05 per share. The dilution resulting from our acquisition of $.08 has an estimated one-year earn back, meaningfully shorter than our May 2013 announcement projecting three years."
CONFERENCE CALL
First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 2:30 p.m. (ET) on Tuesday, January 28, 2014.
To participate, dial (Toll Free) 888-317-6016 and reference First Merchants Corporation's fourth quarter earnings release. International callers please call +1 412-317-6016. A replay of the call will be available until January 28, 2015. 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 10037877.
In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme140128.html during the time of the call.
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, Commerce National Bank, and First Merchants Trust Company as divisions of First Merchants Bank, N.A. First Merchants Corporation also operates First Merchants Insurance Group, a full-service property casualty, personal lines, and healthcare insurance agency.
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, | |||||||
2013 | 2012 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 109,434 | $ | 101,460 | ||||
Interest-bearing time deposits | 55,069 | 38,443 | ||||||
Investment securities | 1,095,579 | 874,363 | ||||||
Mortgage loans held for sale | 5,331 | 22,300 | ||||||
Loans | 3,632,409 | 2,902,209 | ||||||
Less: Allowance for loan losses | (67,870 | ) | (69,366 | ) | ||||
Net loans | 3,564,539 | 2,832,843 | ||||||
Premises and equipment | 74,454 | 52,749 | ||||||
Federal Reserve and Federal Home Loan Bank stock | 38,990 | 32,785 | ||||||
Interest receivable | 18,672 | 16,367 | ||||||
Core deposit intangibles and goodwill | 202,767 | 149,529 | ||||||
Cash surrender value of life insurance | 164,571 | 125,397 | ||||||
Other real estate owned | 22,246 | 13,263 | ||||||
Tax asset, deferred and receivable | 56,614 | 30,867 | ||||||
Other assets | 28,996 | 14,455 | ||||||
TOTAL ASSETS | $ | 5,437,262 | $ | 4,304,821 | ||||
LIABILITIES | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 930,772 | $ | 801,597 | ||||
Interest-bearing | 3,300,696 | 2,544,786 | ||||||
Total Deposits | 4,231,468 | 3,346,383 | ||||||
Borrowings: | ||||||||
Federal funds purchased | 125,645 | 18,862 | ||||||
Securities sold under repurchase agreements | 148,672 | 141,828 | ||||||
Federal Home Loan Bank advances | 122,140 | 94,238 | ||||||
Subordinated debentures and term loans | 126,807 | 112,161 | ||||||
Total Borrowings | 523,264 | 367,089 | ||||||
Interest payable | 1,771 | 1,841 | ||||||
Other liabilities | 45,836 | 37,272 | ||||||
Total Liabilities | 4,802,339 | 3,752,585 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred Stock, no-par value, $1,000 liquidation value: | ||||||||
Authorized -- 500,000 shares | ||||||||
Senior Non-Cumulative Perpetual Preferred Stock, Series B | ||||||||
Issued and outstanding - 0 and 90,782.94 shares | 90,783 | |||||||
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 - 35,921,761 and 28,692,616 shares | 4,490 | 3,587 | ||||||
Additional paid-in capital | 380,390 | 256,843 | ||||||
Retained earnings | 256,328 | 206,397 | ||||||
Accumulated other comprehensive loss | (6,410 | ) | (5,499 | ) | ||||
Total Stockholders' Equity | 634,923 | 552,236 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 5,437,262 | $ | 4,304,821 | ||||
CONSOLIDATED STATEMENTS OF INCOME | Three Months Ended | Twelve Months Ended | ||||||||||||||
(Dollars In Thousands, Except Per Share Amounts) | December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
INTEREST INCOME | ||||||||||||||||
Loans receivable: | ||||||||||||||||
Taxable | $ | 38,027 | $ | 36,085 | $ | 142,752 | $ | 146,745 | ||||||||
Tax-exempt | 78 | 122 | 393 | 480 | ||||||||||||
Investment securities: | ||||||||||||||||
Taxable | 4,143 | 3,809 | 15,214 | 17,027 | ||||||||||||
Tax-exempt | 3,020 | 2,544 | 10,829 | 10,189 | ||||||||||||
Deposits with financial institutions | 59 | 31 | 158 | 100 | ||||||||||||
Federal Reserve and Federal Home Loan Bank stock | 380 | 373 | 1,488 | 1,408 | ||||||||||||
Total Interest Income | 45,707 | 42,964 | 170,834 | 175,949 | ||||||||||||
INTEREST EXPENSE | ||||||||||||||||
Deposits | 2,350 | 3,234 | 10,053 | 14,800 | ||||||||||||
Federal funds purchased | 18 | 7 | 102 | 69 | ||||||||||||
Securities sold under repurchase agreements | 193 | 204 | 787 | 907 | ||||||||||||
Federal Home Loan Bank advances | 669 | 501 | 2,096 | 2,624 | ||||||||||||
Subordinated debentures and term loans | 1,342 | 753 | 3,531 | 5,213 | ||||||||||||
Total Interest Expense | 4,572 | 4,699 | 16,569 | 23,613 | ||||||||||||
NET INTEREST INCOME | 41,135 | 38,265 | 154,265 | 152,336 | ||||||||||||
Provision for loan losses | 1,016 | 4,505 | 6,648 | 18,534 | ||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 40,119 | 33,760 | 147,617 | 133,802 | ||||||||||||
OTHER INCOME | ||||||||||||||||
Service charges on deposit accounts | 3,639 | 2,962 | 12,400 | 11,587 | ||||||||||||
Fiduciary activities | 2,237 | 1,984 | 8,594 | 7,891 | ||||||||||||
Other customer fees | 3,371 | 2,757 | 11,866 | 11,233 | ||||||||||||
Commission income | 1,585 | 1,454 | 7,141 | 6,224 | ||||||||||||
Earnings on cash surrender value of life insurance | 692 | 693 | 2,613 | 3,418 | ||||||||||||
Net gains and fees on sales of loans | 1,003 | 3,513 | 7,511 | 10,628 | ||||||||||||
Net realized gains on sales of available for sale securities | 255 | 487 | 2,389 | |||||||||||||
Gain on FDIC modified whole bank transaction | 9,124 | |||||||||||||||
Other income | 2,546 | 588 | 4,197 | 1,808 | ||||||||||||
Total Other Income | 15,073 | 14,206 | 54,809 | 64,302 | ||||||||||||
OTHER EXPENSES | ||||||||||||||||
Salaries and employee benefits | 23,470 | 20,320 | 85,413 | 79,398 | ||||||||||||
Net occupancy | 2,992 | 2,494 | 10,291 | 10,186 | ||||||||||||
Equipment | 2,369 | 1,942 | 7,737 | 7,201 | ||||||||||||
Marketing | 675 | 616 | 2,236 | 2,158 | ||||||||||||
Outside data processing fees | 1,205 | 1,361 | 5,591 | 5,656 | ||||||||||||
Printing and office supplies | 378 | 321 | 1,340 | 1,169 | ||||||||||||
Core deposit amortization | 496 | 489 | 1,649 | 1,927 | ||||||||||||
FDIC assessments | 767 | 738 | 2,862 | 3,509 | ||||||||||||
Other real estate owned and credit-related expenses | 1,668 | 1,766 | 6,661 | 8,178 | ||||||||||||
Other expenses | 6,538 | 4,456 | 19,439 | 17,733 | ||||||||||||
Total Other Expenses | 40,558 | 34,503 | 143,219 | 137,115 | ||||||||||||
INCOME BEFORE INCOME TAX | 14,634 | 13,463 | 59,207 | 60,989 | ||||||||||||
Income tax expense | 3,187 | 3,153 | 14,677 | 15,867 | ||||||||||||
NET INCOME | 11,447 | 10,310 | 44,530 | 45,122 | ||||||||||||
Preferred stock dividends | (241 | ) | (1,135 | ) | (2,380 | ) | (4,539 | ) | ||||||||
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 11,206 | $ | 9,175 | $ | 42,150 | $ | 40,583 | ||||||||
Per Share Data: | ||||||||||||||||
Basic Net Income Available to Common Stockholders | $ | 0.34 | $ | 0.32 | $ | 1.42 | $ | 1.42 | ||||||||
Diluted Net Income Available to Common Stockholders | $ | 0.34 | $ | 0.32 | $ | 1.41 | $ | 1.41 | ||||||||
Cash Dividends Paid | $ | 0.05 | $ | 0.03 | $ | 0.18 | $ | 0.10 | ||||||||
Average Diluted Shares Outstanding (in thousands) | 32,913 | 28,930 | 30,008 | 28,847 | ||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||
(Dollars in thousands) | Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
NET CHARGE OFF'S | $ | (630 | ) | $ | 4,632 | $ | 8,144 | $ | 20,066 | |||||||
AVERAGE BALANCES: | ||||||||||||||||
Total Assets | $ | 4,950,274 | $ | 4,293,082 | $ | 4,455,411 | $ | 4,245,996 | ||||||||
Total Loans | 3,292,993 | 2,867,793 | 3,008,555 | 2,819,816 | ||||||||||||
Total Earning Assets | 4,409,496 | 3,875,969 | 4,017,247 | 3,833,174 | ||||||||||||
Total Deposits | 3,860,452 | 3,321,997 | 3,465,640 | 3,263,020 | ||||||||||||
Total Stockholders' Equity | 576,157 | 551,414 | 540,255 | 535,497 | ||||||||||||
FINANCIAL RATIOS: | ||||||||||||||||
Return on Average Assets | 0.91 | % | 0.85 | % | 0.95 | % | 0.96 | % | ||||||||
Return on Average Stockholders' Equity | 7.78 | 6.66 | 7.80 | 7.58 | ||||||||||||
Return on Average Common Stockholders' Equity | 8.05 | 7.97 | 8.55 | 9.13 | ||||||||||||
Average Earning Assets to Average Assets | 89.08 | 90.28 | 90.17 | 90.28 | ||||||||||||
Allowance for Loan Losses as % of Total Loans | 1.87 | 2.37 | 1.87 | 2.37 | ||||||||||||
Net Charge Off's as % of Average Loans (Annualized) | (0.08 | ) | 0.65 | 0.27 | 0.71 | |||||||||||
Average Stockholders' Equity to Average Assets | 11.64 | 12.84 | 12.13 | 12.61 | ||||||||||||
Tax Equivalent Yield on Earning Assets | 4.30 | 4.58 | 4.40 | 4.74 | ||||||||||||
Cost of Supporting Liabilities | 0.41 | 0.48 | 0.41 | 0.62 | ||||||||||||
Net Interest Margin (FTE) on Earning Assets | 3.89 | 4.10 | 3.99 | 4.12 | ||||||||||||
Tangible Book Value Per Share | $ | 12.17 | $ | 10.95 | $ | 12.17 | $ | 10.95 | ||||||||
NON-PERFORMING ASSETS | ||||||||||||||||||||
(Dollars In Thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | ||||||||||||||||
Non-Accrual Loans | $ | 56,402 | $ | 34,992 | $ | 38,971 | $ | 46,761 | $ | 53,399 | ||||||||||
Renegotiated Loans | 3,048 | 3,269 | 4,407 | 5,445 | 12,681 | |||||||||||||||
Non-Performing Loans (NPL) | 59,450 | 38,261 | 43,378 | 52,206 | 66,080 | |||||||||||||||
Other Real Estate Owned | 22,246 | 12,052 | 11,765 | 13,130 | 13,263 | |||||||||||||||
Non-Performing Assets (NPA) | 81,696 | 50,313 | 55,143 | 65,336 | 79,343 | |||||||||||||||
90+ Days Delinquent | 1,350 | 837 | 1,072 | 959 | 2,037 | |||||||||||||||
NPAS & 90 Day Delinquent | $ | 83,046 | $ | 51,150 | $ | 56,215 | $ | 66,295 | $ | 81,380 | ||||||||||
Loan Loss Reserve | $ | 67,870 | $ | 66,224 | $ | 68,202 | $ | 68,537 | $ | 69,366 | ||||||||||
Quarterly Net Charge-offs | (630 | ) | 3,511 | 2,332 | 2,931 | 4,632 | ||||||||||||||
NPAs / Actual Assets % | 1.50 | % | 1.16 | % | 1.27 | % | 1.54 | % | 1.84 | % | ||||||||||
NPAs & 90 Day / Actual Assets % | 1.53 | % | 1.18 | % | 1.30 | % | 1.56 | % | 1.89 | % | ||||||||||
NPAs / Actual Loans and OREO % | 2.23 | % | 1.71 | % | 1.87 | % | 2.24 | % | 2.70 | % | ||||||||||
Loan Loss Reserves / Actual Loans (%) | 1.87 | % | 2.26 | % | 2.32 | % | 2.36 | % | 2.37 | % | ||||||||||
Net Charge Off's as % of Average Loans (Annualized) | (0.08 | )% | 0.48 | % | 0.32 | % | 0.40 | % | 0.65 | % | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
(Dollars In Thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | 109,434 | $ | 92,341 | $ | 69,404 | $ | 51,592 | $ | 101,460 | ||||||||||
Interest-bearing time deposits | 55,069 | 18,875 | 59,898 | 60,407 | 38,443 | |||||||||||||||
Investment securities | 1,095,579 | 914,135 | 908,992 | 869,563 | 874,363 | |||||||||||||||
Mortgage loans held for sale | 5,331 | 5,312 | 14,531 | 26,555 | 22,300 | |||||||||||||||
Loans | 3,632,409 | 2,925,457 | 2,920,080 | 2,879,542 | 2,902,209 | |||||||||||||||
Less: Allowance for loan losses | (67,870 | ) | (66,224 | ) | (68,202 | ) | (68,537 | ) | (69,366 | ) | ||||||||||
Net loans | 3,564,539 | 2,859,233 | 2,851,878 | 2,811,005 | 2,832,843 | |||||||||||||||
Premises and equipment | 74,454 | 54,386 | 54,165 | 53,762 | 52,749 | |||||||||||||||
Federal Reserve and Federal Home Loan Bank stock | 38,990 | 32,790 | 32,790 | 32,777 | 32,785 | |||||||||||||||
Interest receivable | 18,672 | 16,171 | 15,186 | 15,346 | 16,367 | |||||||||||||||
Core deposit intangibles and goodwill | 202,767 | 148,376 | 148,759 | 149,142 | 149,529 | |||||||||||||||
Cash surrender value of life insurance | 164,571 | 127,322 | 126,710 | 126,098 | 125,397 | |||||||||||||||
Other real estate owned | 22,246 | 12,052 | 11,765 | 13,130 | 13,263 | |||||||||||||||
Tax asset, deferred and receivable | 56,614 | 31,385 | 30,959 | 27,597 | 30,867 | |||||||||||||||
Other assets | 28,996 | 13,533 | 13,227 | 15,856 | 14,455 | |||||||||||||||
TOTAL ASSETS | $ | 5,437,262 | $ | 4,325,911 | $ | 4,338,264 | $ | 4,252,830 | $ | 4,304,821 | ||||||||||
LIABILITIES | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing | 930,772 | 790,174 | $ | 741,095 | $ | 763,965 | $ | 801,597 | ||||||||||||
Interest-bearing | 3,300,696 | 2,465,672 | 2,591,698 | 2,546,843 | 2,544,786 | |||||||||||||||
Total Deposits | 4,231,468 | 3,255,846 | 3,332,793 | 3,310,808 | 3,346,383 | |||||||||||||||
Borrowings: | ||||||||||||||||||||
Federal funds purchased | 125,645 | 115,938 | 57,085 | 18,862 | ||||||||||||||||
Securities sold under repurchase agreements | 148,672 | 123,935 | 161,779 | 161,813 | 141,828 | |||||||||||||||
Federal Home Loan Bank advances | 122,140 | 172,292 | 92,743 | 93,169 | 94,238 | |||||||||||||||
Subordinated debentures and term loans | 126,807 | 111,849 | 111,778 | 111,778 | 112,161 | |||||||||||||||
Total Borrowings | 523,264 | 524,014 | 423,385 | 366,760 | 367,089 | |||||||||||||||
Interest payable | 1,771 | 1,155 | 1,150 | 1,348 | 1,841 | |||||||||||||||
Other liabilities | 45,836 | 31,427 | 41,643 | 35,356 | 37,272 | |||||||||||||||
Total Liabilities | 4,802,339 | 3,812,442 | 3,798,971 | 3,714,272 | 3,752,585 | |||||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Preferred Stock, no-par value, $1,000 liquidation value: | ||||||||||||||||||||
Authorized -- 500,000 shares | ||||||||||||||||||||
Senior Non-Cumulative Perpetual Preferred Stock, Series B | ||||||||||||||||||||
Issued and outstanding | 34,043 | 68,087 | 68,087 | 90,783 | ||||||||||||||||
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 | 4,490 | 3,603 | 3,600 | 3,598 | 3,587 | |||||||||||||||
Additional paid-in capital | 380,390 | 258,350 | 257,626 | 256,966 | 256,843 | |||||||||||||||
Retained earnings | 256,328 | 233,546 | 225,034 | 216,530 | 206,397 | |||||||||||||||
Accumulated other comprehensive loss | (6,410 | ) | (16,198 | ) | (15,179 | ) | (6,748 | ) | (5,499 | ) | ||||||||||
Total Stockholders' Equity | 634,923 | 513,469 | 539,293 | 538,558 | 552,236 | |||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 5,437,262 | $ | 4,325,911 | $ | 4,338,264 | $ | 4,252,830 | $ | 4,304,821 | ||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
(Dollars In Thousands, Except Per Share Amounts) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||
Loans receivable: | ||||||||||||||||||||
Taxable | $ | 38,027 | $ | 33,548 | $ | 34,018 | $ | 37,159 | $ | 36,085 | ||||||||||
Tax-exempt | 78 | 85 | 113 | 117 | 122 | |||||||||||||||
Investment securities: | ||||||||||||||||||||
Taxable | 4,143 | 3,876 | 3,577 | 3,618 | 3,809 | |||||||||||||||
Tax-exempt | 3,020 | 2,840 | 2,515 | 2,454 | 2,544 | |||||||||||||||
Deposits with financial institutions | 59 | 18 | 62 | 19 | 31 | |||||||||||||||
Federal Reserve and Federal Home Loan Bank stock | 380 | 369 | 368 | 371 | 373 | |||||||||||||||
Total Interest Income | 45,707 | 40,736 | 40,653 | 43,738 | 42,964 | |||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Deposits | 2,350 | 2,213 | 2,599 | 2,891 | 3,234 | |||||||||||||||
Federal funds purchased | 18 | 72 | 1 | 11 | 7 | |||||||||||||||
Securities sold under repurchase agreements | 193 | 192 | 208 | 194 | 204 | |||||||||||||||
Federal Home Loan Bank advances | 669 | 506 | 462 | 459 | 501 | |||||||||||||||
Subordinated debentures and term loans | 1,342 | 731 | 733 | 725 | 753 | |||||||||||||||
Total Interest Expense | 4,572 | 3,714 | 4,003 | 4,280 | 4,699 | |||||||||||||||
NET INTEREST INCOME | 41,135 | 37,022 | 36,650 | 39,458 | 38,265 | |||||||||||||||
Provision for loan losses | 1,016 | 1,533 | 1,997 | 2,102 | 4,505 | |||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 40,119 | 35,489 | 34,653 | 37,356 | 33,760 | |||||||||||||||
OTHER INCOME | ||||||||||||||||||||
Service charges on deposit accounts | 3,639 | 3,120 | 2,912 | 2,729 | 2,962 | |||||||||||||||
Fiduciary activities | 2,237 | 1,986 | 2,264 | 2,107 | 1,984 | |||||||||||||||
Other customer fees | 3,371 | 2,899 | 2,816 | 2,780 | 2,757 | |||||||||||||||
Commission income | 1,585 | 1,636 | 1,748 | 2,172 | 1,454 | |||||||||||||||
Earnings on cash surrender value of life insurance | 692 | 611 | 610 | 700 | 693 | |||||||||||||||
Net gains and fees on sales of loans | 1,003 | 1,673 | 2,457 | 2,378 | 3,513 | |||||||||||||||
Net realized gains on sales of available for sale securities | 239 | 248 | 255 | |||||||||||||||||
Other income | 2,546 | (125 | ) | 1,013 | 763 | 588 | ||||||||||||||
Total Other Income | 15,073 | 11,800 | 14,059 | 13,877 | 14,206 | |||||||||||||||
OTHER EXPENSES | ||||||||||||||||||||
Salaries and employee benefits | 23,470 | 20,616 | 20,536 | 20,791 | 20,320 | |||||||||||||||
Net occupancy | 2,992 | 2,430 | 2,267 | 2,602 | 2,494 | |||||||||||||||
Equipment | 2,369 | 1,852 | 1,742 | 1,774 | 1,942 | |||||||||||||||
Marketing | 675 | 559 | 535 | 467 | 616 | |||||||||||||||
Outside data processing fees | 1,205 | 1,515 | 1,391 | 1,480 | 1,361 | |||||||||||||||
Printing and office supplies | 378 | 320 | 311 | 331 | 321 | |||||||||||||||
Core deposit amortization | 496 | 383 | 383 | 387 | 489 | |||||||||||||||
FDIC assessments | 767 | 677 | 674 | 744 | 738 | |||||||||||||||
Other real estate owned and credit-related expenses | 1,668 | 1,648 | 1,479 | 1,866 | 1,766 | |||||||||||||||
Other expenses | 6,538 | 4,219 | 4,424 | 4,258 | 4,456 | |||||||||||||||
Total Other Expenses | 40,558 | 34,219 | 33,742 | 34,700 | 34,503 | |||||||||||||||
INCOME BEFORE INCOME TAX | 14,634 | 13,070 | 14,970 | 16,533 | 13,463 | |||||||||||||||
Income tax expense | 3,187 | 2,667 | 4,155 | 4,668 | 3,153 | |||||||||||||||
NET INCOME | 11,447 | 10,403 | 10,815 | 11,865 | 10,310 | |||||||||||||||
Preferred stock dividends | (241 | ) | (430 | ) | (852 | ) | (857 | ) | (1,135 | ) | ||||||||||
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 11,206 | $ | 9,973 | $ | 9,963 | $ | 11,008 | $ | 9,175 | ||||||||||
Per Share Data: | ||||||||||||||||||||
Basic Net Income Available to Common Stockholders | $ | 0.34 | $ | 0.35 | $ | 0.35 | $ | 0.38 | $ | 0.32 | ||||||||||
Diluted Net Income Available to Common Stockholders | $ | 0.34 | $ | 0.35 | $ | 0.34 | $ | 0.38 | $ | 0.32 | ||||||||||
Cash Dividends Paid | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.03 | $ | 0.03 | ||||||||||
Average Diluted Shares Outstanding (in thousands) | 32,913 | 29,081 | 29,024 | 28,971 | 28,930 | |||||||||||||||
FINANCIAL RATIOS: | ||||||||||||||||||||
Return on Average Assets | 0.91 | % | 0.93 | % | 0.92 | % | 1.04 | % | 0.85 | % | ||||||||||
Return on Average Stockholders' Equity | 7.78 | 7.85 | 7.34 | 8.25 | 6.66 | |||||||||||||||
Return on Average Common Stockholders' Equity | 8.05 | 8.42 | 8.40 | 9.47 | 7.97 | |||||||||||||||
Average Earning Assets to Average Assets | 89.08 | 90.71 | 90.59 | 90.46 | 90.28 | |||||||||||||||
Allowance for Loan Losses as % of Total Loans | 1.87 | 2.26 | 2.32 | 2.36 | 2.37 | |||||||||||||||
Net Charge Off's as % of Average Loans (Annualized) | (0.08 | ) | 0.48 | 0.32 | 0.40 | 0.65 | ||||||||||||||
Average Stockholders' Equity to Average Assets | 11.64 | 11.85 | 12.54 | 12.56 | 12.84 | |||||||||||||||
Tax Equivalent Yield on Earning Assets | 4.30 | 4.35 | 4.29 | 4.70 | 4.58 | |||||||||||||||
Cost of Supporting Liabilities | 0.41 | 0.38 | 0.41 | 0.45 | 0.48 | |||||||||||||||
Net Interest Margin (FTE) on Earning Assets | 3.89 | 3.97 | 3.88 | 4.25 | 4.10 | |||||||||||||||
Tangible Book Value Per Share | $ | 12.17 | $ | 11.56 | $ | 11.27 | $ | 11.24 | $ | 10.95 | ||||||||||
LOANS | ||||||||||||||||||||
(Dollars In Thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | ||||||||||||||||
Commercial and industrial loans | $ | 761,705 | $ | 652,356 | $ | 657,764 | $ | 637,952 | $ | 622,579 | ||||||||||
Agricultural production financing and other loans to farmers | 114,348 | 98,489 | 105,175 | 104,284 | 112,527 | |||||||||||||||
Real estate loans: | ||||||||||||||||||||
Construction | 177,082 | 149,875 | 101,909 | 75,877 | 98,639 | |||||||||||||||
Commercial and farmland | 1,611,809 | 1,264,180 | 1,272,761 | 1,280,611 | 1,266,682 | |||||||||||||||
Residential | 616,385 | 452,277 | 460,108 | 467,629 | 473,537 | |||||||||||||||
Home Equity | 255,223 | 206,816 | 203,788 | 201,767 | 203,406 | |||||||||||||||
Individuals' loans for household and other personal expenditures | 69,783 | 70,380 | 79,258 | 73,314 | 75,748 | |||||||||||||||
Lease financing receivables, net of unearned income | 1,545 | 1,815 | 1,828 | 2,013 | 2,590 | |||||||||||||||
Other loans | 24,529 | 29,269 | 37,489 | 36,095 | 46,501 | |||||||||||||||
Loans | 3,632,409 | 2,925,457 | 2,920,080 | 2,879,542 | 2,902,209 | |||||||||||||||
Allowance for loan losses | (67,870 | ) | (66,224 | ) | (68,202 | ) | (68,537 | ) | (69,366 | ) | ||||||||||
NET LOANS | $ | 3,564,539 | $ | 2,859,233 | $ | 2,851,878 | $ | 2,811,005 | $ | 2,832,843 | ||||||||||
DEPOSITS | |||||||||||||||||||
(Dollars In Thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | |||||||||||||||
Demand deposits | $ | 2,018,650 | $ | 1,610,662 | $ | 1,648,712 | $ | 1,590,709 | $ | 1,646,756 | |||||||||
Savings deposits | 1,257,994 | 937,521 | 916,481 | 891,061 | 831,952 | ||||||||||||||
Certificates and other time deposits of $100,000 or more | 272,660 | 190,866 | 205,467 | 224,505 | 236,470 | ||||||||||||||
Other certificates and time deposits | 595,110 | 422,151 | 448,885 | 481,446 | 502,927 | ||||||||||||||
Brokered deposits | 87,054 | 94,646 | 113,248 | 123,087 | 128,278 | ||||||||||||||
TOTAL DEPOSITS | $ | 4,231,468 | $ | 3,255,846 | $ | 3,332,793 | $ | 3,310,808 | $ | 3,346,383 | |||||||||
CONSOLIDATED BALANCE SHEETS (AVERAGE) | ||||||||||||||||||||
(Dollars In Thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | 91,121 | $ | 69,974 | $ | 69,045 | $ | 62,221 | $ | 70,817 | ||||||||||
Interest-bearing time deposits | 116,839 | 24,497 | 109,522 | 48,807 | 83,309 | |||||||||||||||
Investment securities | 963,478 | 908,419 | 880,241 | 865,255 | 908,788 | |||||||||||||||
Mortgage loans held for sale | 5,069 | 11,063 | 17,489 | 31,271 | 23,155 | |||||||||||||||
Loans | 3,287,924 | 2,907,144 | 2,892,199 | 2,878,845 | 2,844,638 | |||||||||||||||
Less: Allowance for loan losses | (66,949 | ) | (69,117 | ) | (69,296 | ) | (69,890 | ) | (70,382 | ) | ||||||||||
Net loans | 3,220,975 | 2,838,027 | 2,822,903 | 2,808,955 | 2,774,256 | |||||||||||||||
Premises and equipment | 66,383 | 54,757 | 53,896 | 53,763 | 51,868 | |||||||||||||||
Federal Reserve and Federal Home Loan Bank stock | 36,095 | 32,790 | 32,789 | 32,782 | 32,821 | |||||||||||||||
Interest receivable | 17,359 | 14,026 | 13,864 | 13,885 | 16,252 | |||||||||||||||
Core deposit intangibles and goodwill | 177,518 | 148,571 | 148,954 | 149,340 | 149,776 | |||||||||||||||
Cash surrender value of life insurance | 152,972 | 126,922 | 126,315 | 125,646 | 124,916 | |||||||||||||||
Other real estate owned | 16,557 | 11,669 | 12,202 | 14,073 | 13,512 | |||||||||||||||
Tax asset, deferred and receivable | 49,525 | 32,484 | 27,676 | 28,605 | 28,748 | |||||||||||||||
Other assets | 36,383 | 13,783 | 14,683 | 14,352 | 14,864 | |||||||||||||||
TOTAL ASSETS | $ | 4,950,274 | $ | 4,286,982 | $ | 4,329,579 | $ | 4,248,955 | $ | 4,293,082 | ||||||||||
LIABILITIES | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing | 883,044 | 775,545 | 753,695 | 776,527 | 737,611 | |||||||||||||||
Interest-bearing | 2,977,408 | 2,519,824 | 2,632,227 | 2,540,184 | 2,584,386 | |||||||||||||||
Total Deposits | 3,860,452 | 3,295,369 | 3,385,922 | 3,316,711 | 3,321,997 | |||||||||||||||
Borrowings: | ||||||||||||||||||||
Federal funds purchased | 21,367 | 68,236 | 2,267 | 14,757 | 7,991 | |||||||||||||||
Securities sold under repurchase agreements | 135,697 | 126,938 | 158,377 | 139,780 | 150,319 | |||||||||||||||
Federal Home Loan Bank advances | 149,278 | 139,941 | 93,014 | 93,916 | 110,361 | |||||||||||||||
Subordinated debentures and term loans | 121,795 | 111,779 | 111,778 | 112,149 | 112,168 | |||||||||||||||
Total Borrowings | 428,137 | 446,894 | 365,436 | 360,602 | 380,839 | |||||||||||||||
Interest payable | 1,811 | 1,592 | 1,808 | 2,074 | 2,262 | |||||||||||||||
Other liabilities | 83,717 | 35,093 | 33,492 | 35,771 | 36,570 | |||||||||||||||
Total Liabilities | 4,374,117 | 3,778,948 | 3,786,658 | 3,715,158 | 3,741,668 | |||||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Preferred Stock, no-par value, $1,000 liquidation value: | ||||||||||||||||||||
Authorized -- 500,000 shares | ||||||||||||||||||||
Senior Non-Cumulative Perpetual Preferred Stock, Series B | ||||||||||||||||||||
Issued and outstanding | 19,242 | 34,413 | 68,087 | 68,591 | 90,783 | |||||||||||||||
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 | 4,075 | 3,601 | 3,598 | 3,587 | 3,584 | |||||||||||||||
Additional paid-in capital | 323,196 | 257,847 | 257,147 | 256,682 | 256,445 | |||||||||||||||
Retained earnings | 245,083 | 230,077 | 221,606 | 210,550 | 202,921 | |||||||||||||||
Accumulated other comprehensive loss | (15,564 | ) | (18,029 | ) | (7,642 | ) | (5,738 | ) | (2,444 | ) | ||||||||||
Total Stockholders' Equity | 576,157 | 508,034 | 542,921 | 533,797 | 551,414 | |||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 4,950,274 | $ | 4,286,982 | $ | 4,329,579 | $ | 4,248,955 | $ | 4,293,082 | ||||||||||
First Merchants Corporation
David L. Ortega, First Vice
President/Director of Investor Relations, 765-378-8937
http://www.firstmerchants.com