First Merchants Corporation (NASDAQ - FRME) has reported fourth quarter 2018 net income of $41.7 million, an increase of 71 percent, compared to $24.4 million during the same period in 2017. Earnings per share for the period totaled a record $.85 per share, an increase of 73 percent, compared to the fourth quarter of 2017 result of $.49 per share. Net income for the year ended December 31, 2018 totaled $159.1 million, compared to $96.1 million during the same period in 2017. Year-to-date earnings per share was $3.22, a record level as we celebrated the Corporation’s 125th anniversary. The result was an increase of $1.10 per share, or 52 percent, over the same period in 2017.
Total assets equaled $9.9 billion as of year-end and loans totaled $7.2 billion. The Corporation’s loan portfolio increased by $471 million, or 7 percent, during the past twelve months. Total deposits equaled $7.8 billion as of year-end and increased by $582 million, or 8 percent.
Michael C. Rechin, President and Chief Executive Officer, stated, “I am proud of our team for running through the tape in 2018 by posting a strong and balanced organic growth quarter. Quality low cost funding, loan growth and sound asset quality all contributed prominently in our record quarter capping off our record year. Our teammates connect with the needs of the marketplace and our communities while our execution produces results and efficiency.” Rechin also added, “We look forward to 2019 and extending our franchise into Michigan through our merger with Monroe Bank & Trust. We look to continue their tradition of superior service to Monroe’s communities through the combination of their skilled bankers and First Merchants’ delivery capabilities.”
Net-interest income totaled $338.9 million for the year, an increase of $61.6 million, or 22 percent. Net-interest margin for the year totaled 4.00 percent, down 2 basis points and includes a reduction of 13 basis points related to tax reform. Yield on earning assets totaled 4.79 percent and the cost of supporting liabilities totaled .79 percent. Non-interest income totaled $76.5 million for the year, a $5.5 million increase over 2017. Non-interest expense totaled $220 million up from the 2017 total of $205.6 million.
Tax expense for 2018 totaled $29 million, or just 15.4 percent of pre-tax net income. In addition to the lower statutory tax rate as a result of tax reform, tax expense for the fourth quarter and year were less than normal by $1.8 million due to an increase in the Bank’s Indiana state tax liability offset by the release of a valuation allowance on state deferred tax assets.
The Corporation’s 2018 provision expense totaled $7.2 million due to loan growth. Net charge-offs totaled $1.7 million for the year. The allowance for loan losses totaled $80.6 million as of December 31, 2018, up from $75 million at the end of 2017. Non-performing assets totaled $29.4 million as of year-end and the allowance is 1.11 percent of total loans.
As of December 31, 2018, the Corporation’s total risk-based capital ratio equaled 14.61 percent, common equity tier 1 capital ratio equaled 11.98 percent, and the tangible common equity ratio totaled 9.97 percent.
First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, January 31, 2019. 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 March 2, 2019. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529, Canada participants should dial 855-669-9658, or for International participants, dial +1 412-317-0088. The replay access code is 10127190.
In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme190131.html during the time of the call. A replay of the web cast will be available until January 31, 2020.
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 has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank).
First Merchants Corporation’s common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company’s Internet web page (http://www.firstmerchants.com).
FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.