First Merchants Announces 8.9% Increase in Cash Earnings Per Share
First Merchants Corporation (NASDAQ - FRME) has reported that 2001 third quarter cash basisdiluted earnings per share increased 8.9% to $.49, up from $.45 in the prior year. GAAP basis diluted earnings per share amounted to $.47, 9.3% above the same quarter in 2000 at $.43.
Year to date cash basis diluted earnings reached $1.42 per share compared to $1.31 in 2000, an 8.4% increase. GAAP basis diluted earnings per share amounted to $1.35, 6.3% ahead of $1.27 reported in 2000.
Prior period per share earnings have been restated for the 5% stock dividend paid in September, 2001.
Michael L. Cox, President and Chief Executive Officer commented that, "interest margins continued to improve in the 3rd quarter," but that "going forward, our industry will be challenged to achieve margin growth in this interest rate environment." Cox added, "all of our banks have committed themselves to serving our customers well in these trying political and economic times. We will continue to strive to provide the very best in community banking services." The company also reported that revenues from mortgage banking activities reached $823,000, a 256% increase over the prior year.
Detailed financial results are reported on the attached pages.
First Merchants Corporation is an East Central Indiana Financial Holding Company. Its subsidiaries include First Merchants Bank in Delaware County and Hamilton Counties, the Madison Community Bank in Madison County, First United Bank in Henry County, Union County National Bank, The Randolph County Bank, the First National Bank of Portland in Jay County, Decatur Bank & Trust Company in Adams County, and Frances Slocum Bank in Wabash. The Corporation also operates First Merchants Insurance Services, a full-service property casualty, personal lines and healthcare insurer, headquartered in Muncie, Indiana.
The corporation recently announced the acquisition of Lafayette Bancorporation. Upon completion of the merger, Lafayette Bank and Trust Company ($750 million in assets) will continue to operate as the largest community bank in the greater Lafayette area.
First Merchants Corporation common stock is traded over-the-counter on the NASDAQ National Market System under the symbol FRME and is rated A+ by Standard and Poor's Corporation. Quotations are carried in daily newspapers and can be found on the company's Internet Web page. (http://firstmerchants.com). Nine brokerage firms make a market in First Merchants Corporation stock: Herzog, Heine, Geduld, Inc.; Howe Barnes Investments, Inc.; Keefe, Bruyette & Woods, Inc.; Knight Securities L.P.; Midwest Research First Tennessee; Natcity Investments Inc.; Sandler O'Neill & Partners; Sherwood Securities Corp.; and Spear, Leeds & Kellogg.
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CONSOLIDATED BALANCE SHEET
(in thousands) September 30,
2001 2000
Assets
Cash and due from banks $ 46,149 $ 43,473
Federal funds sold 18,525 750
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Cash and cash equivalents 64,674 44,223
Interest-bearing time deposits 3,119 1,251
Investment securities 250,022 318,488
Mortgage loans held for sale
Loans, net of allowance for loan losses of $14,907 and $12,232 1,347,561 1,153,198
Premises and equipment 27,184 23,810
Federal Reserve and Federal Home Loan Bank stock 7,856 7,189
Interest receivable 13,556 13,353
Core deposit intangibles and goodwill 32,795 21,218
Cash surrender value of life insurance 6,387 6,221
Other assets 8,517 11,987
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Total assets $ 1,761,671 $ 1,600,938
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Liabilities
Deposits
Noninterest-bearing $ 163,689 $ 143,542
Interest-bearing 1,224,881 1,097,579
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Total deposits 1,388,570 1,241,121
Borrowings 182,455 195,652
Interest payable 6,593 6,062
Other liabilities 6,468 5,233
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Total liabilities 1,584,086 1,448,068
Stockholders' equity
Preferred stock, no-par value
Authorized and unissued -- 500,000 shares
Common stock, $.125 stated value
Authorized -- 50,000,000 shares
Issued and outstanding - 12,700,322 and 12,269,181 shares 1,584 1,461
Additional paid-in capital 50,817 43,332
Retained earnings 121,711 111,089
Accumulated other comprehensive income 3,473 (3,012)
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Total stockholders' equity 177,585 152,870
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Total liabilities and stockholders' equity $ 1,761,671 $ 1,600,938
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FINANCIAL HIGHLIGHTS
Three Months Ended Nine Months Ended
(In thousands) September 30, September 30,
2001 2000 2001 2000
NET CHARGE OFF'S $ 706 $ 542 $ 2,003 $ 1,057
AVERAGE BALANCES
Total Assets $1,778,372 $1,625,776 $1,655,135 $1,519,355
Total Loans 1,348,373 1,152,981 1,243,778 1,079,618
Total Deposits 1,401,622 1,237,549 1,300,405 1,184,036
Total Stockholders' Equity 168,372 150,041 162,977 137,792
FINANCIAL RATIOS Return on Average Assets 1.35% 1.30% 1.35% 1.32% Return on Avg. Shareholders' Equity 14.30 14.06 13.66 14.61 Avg. Earning Assets to Avg. Assets 92.91 95.27 93.40 95.00 Allowance for Loan Losses as % Of Total Loans 1.09 1.06 1.09 1.06 Net Charge Off's as % Of Avg. Loans (Annualized) .21 .15 .21 .18 Dividend Payout Ratio 48.94 51.11 49.63 50.00 Avg. Stockholders' Equity to Avg. Assets 9.47 9.23 9.85 9.07 Tax Equivalent Yield on Earning Assets 7.79 8.20 8.00 8.10 Cost of Supporting Liabilities 3.46 4.24 3.77 4.07 Net Int. Margin (FTE) on Earning Assets 4.33 3.96 4.23 4.03
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except share data) Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Interest income
Loans receivable
Taxable $ 27,152 $ 25,522 $ 77,322 $ 69,870
Tax exempt 106 76 310 224
Investment securities
Taxable 3,027 3,623 9,343 11,001
Tax exempt 1,032 1,175 3,083 3,444
Federal funds sold 109 28 404 276
Deposits with financial institutions 12 28 32 61
Federal Reserve and Federal Home Loan Bank stock 120 164 419 411
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Total interest income 31,558 30,616 90,913 85,287
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Interest expense
Deposits 11,670 13,028 35,817 35,713
Securities sold under repurchase agreements 817 1,129 2,665 3,181
Federal Home Loan Bank advances 1,715 1,691 4,836 3,662
Other borrowings 94 1,354 373 1,254
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Total interest expense 14,296 16,202 43,691 43,810
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Net interest income 17,262 14,414 47,222 41,477
Provision for loan losses 1,023 603 2,371 1,747
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Net interest income
after provision for loan losses 16,239 13,811 44,851 39,730
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Other income
Fiduciary activities 1,347 1,244 4,117 3,750
Service charges on deposit accounts 1,503 1,236 4,106 3,483
Other customer fees 840 964 2,462 2,664
Net realized gains (losses) on
sales of available-for-sale securities (167) 5 (167) (180)
Commission income 519 608 1,465 1,543
Other income 589 322 1,659 923
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Total other income 4,631 4,379 13,642 12,183
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Other expenses
Salaries and employee benefits 6,450 5,430 18,094 16,073
Net occupancy expenses 721 621 2,037 1,806
Equipment expenses 1,141 1,085 3,282 3,072
Marketing expense 287 250 760 754
Deposit insurance expense 76 63 216 178
Outside data processing fees 480 505 1,255 1,246
Printing and office supplies 288 288 799 849
Goodwill and core deposit amortization 480 347 1,181 563
Other expenses 2,057 1,604 5,335 4,940
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Total other expenses 11,980 10,193 32,959 29,481
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Income before income tax 8,890 7,997 25,534 22,432
Income tax expense 2,870 2,722 8,834 7,334
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Net income $ 6,020 $ 5,275 $ 16,700 $ 15,098
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Per Share Data
Diluted Cash Earnings $ .49 $ .45 $ 1.42 $ 1.31 Basic Net Income .48 .43 1.36 1.28 Diluted Net Income .47 .43 1.35 1.27 Cash Dividends Paid .23 .22 .67 .64
For more information, contact: James L. Thrash, Senior Vice President/Chief Financial Officer, 765-747-1390 http://firstmerchants.com