A 12 percent increase in net interest income and a 61 percent reduction in income tax expense contributed to 71 percent fourth-quarter earnings growth for First Merchants Corp.
The Muncie-based parent company of First Merchants Bank reported fourth-quarter earnings of $41.7 million, or 85 cents per share, up from $24.4 million, or 49 cents per share, for the same period in 2017.
Its income tax expense fell to $5.9 million from $15.2 million and its loan loss provision fell to $1.7 million from $1.8 million.
The company’s fourth-quarter net interest income rose to $87.9 million from $78.8 million a year earlier as its other income grew 1 percent to $19.2 million from $19.1 million.
“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,” Michael Rechin, president and CEO, said in a statement.
“Our teammates connect with the needs of the marketplace and our communities while our execution produces results and efficiency,” Rechin said.
“We look forward to 2019 and extending our franchise into Michigan through our merger with Monroe Bank & Trust,” he said. “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.”
First Merchants reported 2018 earnings of $159.1 million, or $3.22 per share, up 66 percent from $96.1 million, or $2.12 per share, for 2017.
In other news with the company, First Merchants placed second on the “America’s Best Banks” list published each year by Forbes magazine. The 2019 list had it up two places from its 2018 spot in the ranking.
“The $10 billion bank ranked strongly across the board, including return on average assets (1.5 percent) and ROATCE (17.4 percent). Its reserves are nearly four times its total nonperforming loans,” the magazine reported. ROATCE stands for return on average tangible common equity.
“We are extremely proud of this achievement as it speaks to the financial strength of First Merchants clients and vitality of the communities we serve,” Rechin said in a statement.
“We are successful when our clients are successful, and every single one our 1,700 employees plays a key role in making that happen. My teammates deserve all the credit.”
The company’s board declared a dividend of 22 cents per share payable March 15 to shareholders of record on March 1.
Horizon earnings grow 72 percent
An increase in its net interest income and reduction in its income tax expense and loan loss provision were the biggest factors contributing to 72 percent fourth quarter earnings growth for Horizon Bancorp.
The Michigan City-based parent company of Horizon Bank reported fourth quarter earnings of $13.1 million, or 34 cents per share, up from $7.7 million, or 20 cents per share, for the same period in 2017.
Its income tax expense fell to $2.5 million from $5.8 million and its loan loss provision fell to $528,000 from $1.1 million.
The company’s net interest income rose 8 percent to $33.8 million from $31.5 million a year earlier as its noninterest income fell to $8.5 million from $9.3 million.
Horizon agreed in October to acquire Indianapolis-based Salin Bancshares and its Salin Bank and Trust Co. subsidiary in a cash and stock deal expected to close this month, subject to regulatory and Salin shareholder approval.
“We are excited about the pending merger with Salin, as it provides entry into the attractive growth markets of Fort Wayne and Columbus, Indiana while also complementing our current Indiana locations,” Craig Dwight, chairman and CEO, said in a statement.
“Salin Bank’s presence in the dynamic markets of Indianapolis and Lafayette, Indiana will add to Horizon’s current footprint. In addition, Salin has a talented team who will add depth and experience to our current sales network,” he said.
“Horizon’s strategic plan calls for continued expansion in the states of Indiana and Michigan with an emphasis on strong core deposit growth, investment in growth markets and to add mass and scale to gain additional efficiencies. Horizon’s pending merger with Salin is in alignment with our strategic plan.”
Increased mass and scale achieved through investment in growth markets contributed to the company setting an earnings record last year, Dwight said. It reported 2018 net income of $53.1 million, or $1.38 per share, up 61 percent from $33.1 million, or 95 cents per share.
NIB net income nearly doubles
A 73 percent reduction in income tax expense, 41 percent increase in noninterest income and 9 percent growth in net interest income came close to doubling fourth-quarter earnings for Northeast Indiana Bancorp.
The Huntington-based parent company of First Federal Savings Bank reported fourth-quarter earnings of $1 million, or 84 cents per share, up 98 percent from $509,000, or 42 cents per share for the prior-year quarter.
Its income tax expense fell to $171,151 from $626,847. It took a loan loss provision of $175,000 after not taking one for the 2017 fourth quarter.
The company’s fourth-quarter noninterest income rose to $916,886 from $650,497 a year earlier as its net interest income grew to $2.8 million from $2.6 million.
“2018 was another record earnings year for First Federal Savings Bank. We’ve maintained our consistent loan and deposit growth while continuing to invest in the talent and technology that we need for the future,” Michael Zahn, CEO, said in a statement.
“For the fourth year in a row, we have rewarded our shareholders with a special dividend in addition to raising our normal dividend for the 24th consecutive year.”
The company’s 2018 earnings climbed 22 percent to $4.2 million, or $3.49 per share, from $3.4 million, or $2.84 per share for 2017.
Eller succeeds Siebenmorgen at Farmers & Merchants
Lars Eller has succeeded Paul Siebenmorgen as president and CEO of Farmers & Merchants Bancorp, Inc. following the retirement of Siebenmorgen, who will remain a director of the parent company for Farmers & Merchants State Bank.
Eller had joined Archbold, Ohio-based F&M last September as president and CEO of the bank.
“Paul has done a tremendous job creating value for our employees, customers, communities, and shareholders,” Jack Johnson, who chairs the company’s board, said in a statement.
“Since joining the company in June 2004, F&M’s footprint has increased from 14 offices to 30 offices today, our asset size almost doubled, and full year net income is up 174.31 percent through the end of December 2018,” Johnson said.
“We also listed on the Nasdaq stock market and completed the transformative acquisition of Limberlost Bancshares, Inc. These are incredible achievements and on behalf of everyone at F&M, I’d like to thank Paul for his more than 14 years of service. I look forward to Paul’s continued leadership as a director of the company and wish him well on his retirement.”
Eller became a valuable part of the company’s leadership team soon after joining the company last year, Johnson said.
“I am extremely honored by my appointment as president and chief executive officer of F&M. This is an exciting time at the company as we focus on integrating the Limberlost acquisition, continuing our geographic expansion, and investing in new ways to engage with and provide value for our customers,” Eller said in the statement.
“F&M is a strong and growing community bank, with multiple opportunities to create long-term value for our employees, customers, communities and shareholders.”
Siebenmorgen said he had enjoyed working with the bank’s employees, customers and shareholders and looked forward to continued service on its board.