First Merchants Corporation Reports Consolidated Earnings Results for the Fourth Quarter and Year Ended December 31, 2017; Announces Net Charge Offs for the Fourth Quarter of 2017: Provides Earnings Guidance for the Year 2018
January 25, 2018 at 10:03 am EST
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First Merchants Corporation reported consolidated earnings results for the fourth quarter and year ended December 31, 2017. For the quarter, the company reported net income available to common stockholders of $24.4 million, compared to $22.3 million during the fourth quarter of 2016. Earnings per diluted share for the period totaled $0.49 per share compared to $0.55 during the same period in 2016. Total interest income was $90,348,000 compared with $65,005,000 for the fourth quarter of 2016. Net interest income was $78,765,000 compared with $58,374,000 for the fourth quarter of 2016. Income before income tax was $39,593,000 compared with $30,143,000 for the fourth quarter of 2016. Return on average assets was 1.06% compared with 1.26% for the fourth quarter of 2016. Return on average equity was 7.53% compared with 9.87% for the fourth quarter of 2016. Fourth quarter results included the impact of the recently enacted Tax Cuts and Jobs Act. Specifically, federal income tax expense was elevated by $5.1 million, or $0.10 per share due to deferred tax asset write-downs. Net interest income after provision for loan losses was $76,965,000 against $55,957,000 a year ago. Net interest income, which benefited both from strong volumes and margin.
For the year, the company reported net income available to common stockholders of $96.1 million, compared to $81.1 million during the same period in 2016. Earnings per diluted share totaled $2.12, an increase of $0.14 per share, or 7.1%, over the $1.98 per share 2016. Total interest income was $314,896,000 compared with $253,312,000 in 2016. Net interest income was $277,284,000 compared with $226,473,000 in 2016. Income before income tax was $133,594,000 compared with $108,660,000 in 2016. Return on average assets was 1.17% compared with 1.17% in 2016. Return on average equity was 8.65% compared with 9.16% in 2016. Net interest income after provision for loan losses was $268,141,000 against $220,816,000 a year ago. Tangible common book value per share as at December 31, 2017 was $16.96 against $15.85 as at December 31, 2016.
The company announced net charge offs of $0.1 million for the fourth quarter of 2017.
In 2018, net interest margin on a fully equivalent basis will reflect the impact of reduced tax rates, causing approximately 12 basis point - a 12 basis point decline in reported margins. But obviously, the bank will be significantly more profitable as a result of tax reform as net interest margins and efficiency ratios are negatively impacted. And ratio is like EPS, ROA and ROE improve significantly.
First Merchants Corporation is a financial holding company. The Company conducts banking activities through its wholly owned subsidiary, First Merchants Bank (the Bank). The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank). Through the Bank, the Company offers a broad range of financial services, including accepting time, savings, and demand deposits; making consumer, commercial, agri-business and real estate mortgage loans; providing personal and corporate trust services; offering full-service brokerage and private wealth management; and providing letters of credit, repurchase agreements and other corporate services. The Company operates through a community banking segment. The Bank includes 116 banking locations in Indiana, Ohio, Michigan, and Illinois. In addition to its branch network, the Company offers comprehensive electronic and mobile delivery channels to its customers.
First Merchants Corporation Reports Consolidated Earnings Results for the Fourth Quarter and Year Ended December 31, 2017; Announces Net Charge Offs for the Fourth Quarter of 2017: Provides Earnings Guidance for the Year 2018