First Merchants Corporation Announces 2012 Record Net Income of More Than $40 Million Dollars

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First Merchants Corporation Announces 2012 Record Net Income of More Than $40 Million Dollars

MUNCIE, Ind.--(BUSINESS WIRE)-- First Merchants Corporation (NAS: FRME) has reported full year 2012 record net income available to common shareholders of $40.6 million compared to $9.0 million earned in 2011.

Michael C. Rechin, President and Chief Executive Officer, stated, "Our 2012 results represent a return to high performance banking. Our Board of Directors, management team and dedicated employees are very pleased to have established record high net income results for our shareholders. Beyond the level of net income, our highlights for 2012 include a successful closing of an immediately accretive in-market acquisition, an increase in the rate of organic loan growth and an increase in the level of our common dividend." Rechin also stated, "our team is encouraged by the momentum we take into 2013 despite the challenging low interest rate environment."


Year-to-date earnings per share totaled $1.41, a $1.07 per share increase over the prior year total of $.34 per share. Within the $1.41 earnings per share, $.21 is related to the one-time gain on the Corporation's FDIC purchase and assumption agreement with SCB Bank in Shelbyville, Indiana, during the first quarter of 2012. The balance of our 2012 results represent increased levels of earnings from our relationship-driven banking model that produced higher levels of revenue from multiple income sources.

Fourth quarter 2012 earnings per share of $.32 compared to $.24 per share during the same period in 2011. Net income available to common shareholders totaled $9.2 million for the quarter, a $2.7 million increase over the fourth quarter of 2011.

Total assets equaled $4.3 billion, as loans and investments totaled $2.9 billion and $874 million, respectively. Loans increased for the fifth consecutive quarter due to the addition of calling officers and economic improvements in our marketplace. The Corporation's loan-to-deposit ratio and loan-to-asset ratio remained steady at 87 percent and 67 percent, respectively.

Net-interest income totaled $38.3 million for the fourth quarter of 2012 and net-interest margin remained strong totaling 4.10 percent as yields on earning assets totaled 4.58 percent and the cost of supporting liabilities totaled .48 percent. Discount accretion resulting from the SCB transaction added $1.3 million, or 13 basis points, to net-interest income and net-interest margin for the fourth quarter of 2012. YTD net-interest income totaled $152.3 million, an increase of $9.0 million over 2011.

Non-interest income totaled $14.2 million for the fourth quarter of 2012 and $64.3 million year-to-date. After normalizing for bond gains and the first quarter 2012 FDIC gain, non-interest income for 2012 improved by $5.7 million, or 12 percent over 2011. Gains from the sale of mortgage loans accounted for $3.2 million of the increase as our investment in mortgage origination and fulfillment maximized the advantageous mortgage rate environment. Total non-interest expenses of $137.1 million increased by $1.2 million, or less than 1 percent, during 2012.

Provision expense totaled $4.5 million for the fourth quarter 2012 and $18.5 million year-to-date, compared to $5.9 million and $22.6 million in 2011. Net charge-offs were $4.6 million for the fourth quarter of 2012 and $20.1 million year-to-date, compared to $8.0 million and $34.7 million in 2011. The allowance for loan losses is $69.4 million, or 2.37 percent of total loans and 130 percent of non-accrual loans, the highest coverage ratio since 2006.

As of December 31, 2012, the Corporation's total risk-based capital equaled 16.34 percent, Tier 1 common risk-based capital equaled 9.62 percent, and tangible common equity ratio totaled 7.55 percent. As of December 31, 2011 the Corporation's total risk-based capital equaled 16.54 percent, Tier 1 common risk-based capital equaled 8.83 percent, and tangible common equity ratio totaled 6.84 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 24, 2013.

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 24, 2014. 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 10023446.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme130124.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).

  
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)December 31,
20122011
ASSETS
Cash and cash equivalents$101,460$73,312
Interest-bearing time deposits38,44352,851
Investment securities874,363946,400
Mortgage loans held for sale22,30017,864
Loans2,902,2092,713,415
Less: Allowance for loan losses (69,366) (70,898)
Net loans2,832,8432,642,517
Premises and equipment52,74951,013
Federal Reserve and Federal Home Loan Bank stock32,78531,270
Interest receivable16,36717,723
Core deposit intangibles and goodwill149,529150,471
Cash surrender value of life insurance125,397124,329
Other real estate owned13,26316,289
Tax asset, deferred and receivable30,86736,424
Other assets 14,455 12,613
TOTAL ASSETS$4,304,821$4,173,076
LIABILITIES
Deposits:
Noninterest-bearing$801,597$646,508
Interest-bearing 2,544,786 2,488,147
Total Deposits3,346,3833,134,655
Borrowings:
Federal funds purchased18,862
Securities sold under repurchase agreements141,828156,305
Federal Home Loan Bank advances94,238138,095
Subordinated debentures and term loans 112,161 194,974
Total Borrowings367,089489,374
Interest payable1,8412,925
Other liabilities 37,272 31,655
Total Liabilities3,752,5853,658,609
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 - 90,782.94 shares90,78390,783
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares125125
Common Stock, $.125 stated value:
Authorized -- 50,000,000 shares
Issued and outstanding - 28,692,616 and 28,559,707 shares3,5873,570
Additional paid-in capital256,843254,874
Retained earnings206,397168,717
Accumulated other comprehensive loss (5,499) (3,602)
Total Stockholders' Equity 552,236 514,467
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$4,304,821$4,173,076
 
  
CONSOLIDATED STATEMENTS OF INCOMEThree Months EndedTwelve Months Ended
(Dollars In Thousands, Except Per Share Amounts)December 31,December 31,
2012 20112012 2011
INTEREST INCOME
Loans receivable:
Taxable$36,085$36,497$146,745$149,716
Tax-exempt12293480528
Investment securities:
Taxable3,8094,56517,02719,230
Tax-exempt2,5442,55010,18910,167
Federal funds sold3
Deposits with financial institutions3154100282
Federal Reserve and Federal Home Loan Bank stock 373 314 1,408 1,319
Total Interest Income 42,964 44,073 175,949 181,245
INTEREST EXPENSE
Deposits3,2344,50514,80022,281
Federal funds purchased736925
Securities sold under repurchase agreements2043639071,511
Federal Home Loan Bank advances5011,1142,6244,181
Subordinated debentures and term loans 753 1,908 5,213 9,892
Total Interest Expense 4,699 7,893 23,613 37,890
NET INTEREST INCOME38,26536,180152,336143,355
Provision for loan losses 4,505 5,855 18,534 22,630
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES  Read Full Story

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