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First Merchants profits fall

First Merchants Bank branch in Munster.

First Merchants Bank profits fell 10.4% year over year in the third quarter, largely as the result of $11.2 million in one-time charges related to the acquisition of Monroe Bank & Trust.

The Muncie-based bank, which has 18 branches in Northwest Indiana and Northeast Illinois, made $36.8 million in profit in the third quarter, as compared to a net income of $41.1 million during the third quarter of 2018. It made $0.71 per share, down from $0.83 per share in the third quarter of last year.

“First Merchants posted strong financial results as our local economies continue to flourish and our clients look to our bank for growth solutions," First Merchants President and CEO Michael Rechin said. "The signature event for the quarter was the legal closing of the Monroe Bank & Trust transaction. The merger extends our franchise with a community bank that enjoys a dominant market share position."

The bank now has $12.3 billion in assets and $8.3 billion in loans. It grew loans by $1.2 billion, or 17.1% over the past 12 months, including $731 million in loans from Monroe Bank & Trust in southeast Michigan near Detroit.

Monroe Bank & Trust also added $1.1 billion in deposits to First Merchants' coffers. The bank entered the Northwest Indiana market when it acquired Munster's Citizens Financial Bank in 2013 and now has $9.8 billion in deposits.

"Our plan to operationally integrate Monroe Bank & Trust into First Merchants next month will accelerate our marketplace momentum into 2020 to include a reduction in our overall funding costs,” Rechin said. 

Net interest income totaled $88.9 million in the third quarter, an increase of $2.4 million as compared to the same period last year. Non-interest income rose 13.3% to $22.1 million in the third quarter, a $2.6 million increase year-over-year.

First Merchants loan to deposit ratio now stands at 85.1%.

The bank has branches across Northwest Indiana, including in Crown Point, Munster, Hammond, East Chicago, Highland and Griffith.

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.