FIRST MERCHANTS CORP - FORM 8-K - EX-99.1 - 1ST QTR 2016 EARNINGS RELEASE

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8-K - 8-K 1ST QTR 2016 EARNINGS RELEASE - FIRST MERCHANTS CORP	f8k1q2016earningsrelease.htm

N / E / W / S R / E / L / E / A / S / E

April 26, 2016

FOR IMMEDIATE RELEASE

For more information, contact:

David L. Ortega, First Vice President/Director of Investor Relations

765-378-8937

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES FIRST QUARTER 2016 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME) has reported first quarter 2016 net income of $17.7 million, compared to $16.2 million during the same period in 2015. Earnings per share for the period totaled $.43 per share, equaling the first quarter of 2015. Integration expenses related to the acquisition of Ameriana Bank totaling $1.9 million, or $.03 per share, were recorded during the first quarter of 2016.

Total assets equaled $6.8 billion as of quarter-end and loans were $4.7 billion. The Corporation’s loan portfolio increased, by $744 million, during the past twelve months. Of the increase, $316 million or 8.0 percent was the result of organic growth and $428 million resulted from the acquisition of Cooper State Bank in Columbus, Ohio in April of 2015 and Ameriana Bank in December of 2015. Total deposits equaled $5.3 billion at quarter-end and increased by $663 million. Organic deposit growth totaled $174 million, or 3.7 percent, and $489 million resulted from acquisition activity in 2015.

Michael C. Rechin, President and Chief Executive Officer, stated, “We are excited about our progress in 2016 and the foundation it provides for the balance of the year. We successfully integrated Ameriana bank just prior to quarter end which was our fastest acquisition integration ever and we are now serving their clients our wider core product offerings. With recent merger expenses behind us, next quarter will demonstrate the lower operating expense levels we’ve targeted. Our net interest margin expanded and in combination with our larger balance sheet, produced a nice lift in net interest income and net income. Looking forward we intend for our commercial loan pipeline to continue our sequential net interest income growth and provide an even stronger base for non-interest income.”

Net-interest income totaled $54.5 million for the quarter, an increase of $7.5 million. Net-interest margin improved over last year by 5 basis points totaling 3.83 percent, as yields on earning assets totaled 4.28 percent and the cost of supporting liabilities totaled .45 percent. When adjusted for fair value accretion, core net-interest margin also increased over last year by 5 basis points totaling 3.66 percent.

Non-interest income totaled $16.3 million for the quarter, an increase of $89,000 from the first quarter of 2015. The sale of our insurance business in 2015 resulted in a year-over-year decline of $2.3 million. Core performance and acquisition activity improved core banking fee income to account for the increase.

Non-interest expense totaled $46.9 million, an increase of $5.7 million over the prior year. The sale of our insurance business saved $1.5 million of expense but investments in our core business primarily through bank acquisitions drove the increase. Nonrecurring expenses totaled $1.9 million, and when excluded from the quarter’s results, produce an efficiency ratio of 58.8 percent.

The Corporation’s provision expense totaled $550,000 during the quarter, as net charge-offs totaled $917,000. The allowance for loan losses totaled $62.1 million, or 1.32 percent of total loans and 2.29 percent of non-purchased loans. Non-performing assets totaled $53.4 million as of quarter-end, down from $64.7 million a year ago.

As of March 31, 2015, the Corporation’s total risk-based capital equaled 14.79 percent, Tier 1 common risk-based capital equaled 11.42 percent, and tangible common equity ratio totaled 9.35 percent.

CONFERENCE CALL

First Merchants Corporation will conduct a first quarter earnings conference call and web cast at 2:30 p.m. (ET) on Tuesday, April 26, 2016.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's first quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until May 26, 2016. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529 or for International participants, dial +1 412-317-0088. The replay passcode is 10083247.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme160426.html during the time of the call. A replay of the web cast will be available until April 26, 2017.

During the call, Forward-Looking Statements about the relative business outlook may be made. These Forward-Looking Statements and all other statements made during the call that do not concern historical facts, are subject to risks and uncertainties that may materially affect actual results.

Specific Forward-Looking Statements include, but are not limited to, any indications regarding the Financial Services industry, the economy and future growth of the balance sheet or income statement.

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 is comprised of First Merchants Bank, N.A., which also operates as Lafayette Bank & Trust and First Merchants Trust Company as divisions of First Merchants Bank, N.A.

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.

* * * *



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	March 31,
	2016			2015
ASSETS
Cash and cash equivalents	$	85,738		$	89,243
Interest-bearing time deposits	77,453			83,228
Investment securities	1,270,777			1,189,473
Loans held for sale	3,628			6,392
Loans	4,709,907			3,965,532
Less: Allowance for loan losses	(62,086		)	(62,801		)
Net loans	4,647,821			3,902,731
Premises and equipment	96,494			77,468
Federal Reserve and Federal Home Loan Bank stock	37,553			41,273
Interest receivable	22,836			19,557
Core deposit intangibles and goodwill	261,799			218,034
Cash surrender value of life insurance	200,549			170,172
Other real estate owned	15,626			19,073
Tax asset, deferred and receivable	47,982			38,695
Other assets	30,283			22,182
TOTAL ASSETS	$	6,798,539		$	5,877,521
LIABILITIES
Deposits:
Noninterest-bearing	$	1,282,462		$	1,100,397
Interest-bearing	4,028,608			3,547,678
Total Deposits	5,311,070			4,648,075
Borrowings:
Federal funds purchased	602
Securities sold under repurchase agreements	150,134			134,023
Federal Home Loan Bank advances	263,588			166,326
Subordinated debentures and term loans	127,523			126,875
Total Borrowings	541,847			427,224
Interest payable	3,910			3,685
Other liabilities	74,449			58,879
Total Liabilities	5,931,276			5,137,863
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares	125			125
Common Stock, $.125 stated value:
Authorized -- 50,000,000 shares
Issued and outstanding - 40,749,340 and 37,781,488 shares	5,094			4,723
Additional paid-in capital	504,661			431,199
Retained earnings	355,317			305,526
Accumulated other comprehensive income (loss)	2,066			(1,915		)
Total Stockholders' Equity	867,263			739,658
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,798,539		$	5,877,521



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended
(Dollars In Thousands, Except Per Share Amounts)	March 31,
	2016		2015
INTEREST INCOME
Loans receivable:
Taxable	$	50,489	$	43,551
Tax-exempt	1,315		248
Investment securities:
Taxable	4,328		4,723
Tax-exempt	4,509		3,835
Deposits with financial institutions	106		37
Federal Reserve and Federal Home Loan Bank stock	480		550
Total Interest Income	61,227		52,944
INTEREST EXPENSE
Deposits	4,063		3,516
Federal funds purchased	28		23
Securities sold under repurchase agreements	100		78
Federal Home Loan Bank advances	796		691
Subordinated debentures and term loans	1,785		1,660
Total Interest Expense	6,772		5,968
NET INTEREST INCOME	54,455		46,976
Provision for loan losses	550
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	53,905		46,976
OTHER INCOME
Service charges on deposit accounts	4,145		3,548
Fiduciary activities	2,494		2,507
Other customer fees	5,059		3,667
Commission income			2,328
Earnings on cash surrender value of life insurance	1,476		747
Net gains and fees on sales of loans	1,460		1,489
Net realized gains (losses) on sales of available for sale securities	997		1,025
Other income	690		921
Total Other Income	16,321		16,232
OTHER EXPENSES
Salaries and employee benefits	27,337		24,541
Net occupancy	4,022		3,790
Equipment	3,238		2,566
Marketing	737		780
Outside data processing fees	2,069		1,717
Printing and office supplies	364		364
Core deposit amortization	978		721
FDIC assessments	950		863
Other real estate owned and foreclosure expenses	1,235		1,229
Professional and other outside services	2,162		1,491
Other expenses	3,867		3,140
Total Other Expenses	46,959		41,202
INCOME BEFORE INCOME TAX	23,267		22,006
Income tax expense	5,574		5,834
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	17,693	$	16,172
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.43	$	0.43
Diluted Net Income Available to Common Stockholders	$	0.43	$	0.43
Cash Dividends Paid	$	0.11	$	0.08
Average Diluted Shares Outstanding (in thousands)	40,917		38,000



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended
	March 31,
	2016			2015
NET CHARGE OFF'S	$	917		$	1,163

AVERAGE BALANCES:
Total Assets	$	6,743,315		$	5,821,074
Total Loans	4,669,568			3,936,814
Total Earning Assets	6,020,317			5,204,981
Total Deposits	5,297,289			4,605,138
Total Stockholders' Equity	861,652			734,511

FINANCIAL RATIOS:
Return on Average Assets	1.05		%	1.11		%
Return on Average Stockholders' Equity	8.21			8.81
Return on Average Common Stockholders' Equity	8.21			8.81
Average Earning Assets to Average Assets	89.28			89.42
Allowance for Loan Losses as % of Total Loans	1.32			1.58
Net Charge Off's as % of Average Loans (Annualized)	0.08			0.12
Average Stockholders' Equity to Average Assets	12.78			12.62
Tax Equivalent Yield on Earning Assets	4.28			4.24
Cost of Supporting Liabilities	0.45			0.46
Net Interest Margin (FTE) on Earning Assets	3.83			3.78
Tangible Book Value Per Share	$	15.02		$	13.96



NON-PERFORMING ASSETS
(Dollars In Thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
Non-Accrual Loans	$	36,719		$	31,389		$	32,597		$	37,713		$	44,321
Renegotiated Loans	1,015			1,923			3,823			885			1,326
Non-Performing Loans (NPL)	37,734			33,312			36,420			38,598			45,647
Other Real Estate Owned	15,626			17,257			14,809			19,242			19,073
Non-Performing Assets (NPA)	53,360			50,569			51,229			57,840			64,720
90+ Days Delinquent	963			907			1,947			632			1,655
NPAs & 90 Day Delinquent	$	54,323		$	51,476		$	53,176		$	58,472		$	66,375

Loan Loss Reserve	$	62,086		$	62,453		$	62,861		$	62,550		$	62,801
Quarterly Net Charge-off's	917			408			(311		)	668			1,163
NPAs / Actual Assets %	0.78		%	0.75		%	0.83		%	0.94		%	1.10		%
NPAs & 90 Day / Actual Assets %	0.80		%	0.76		%	0.86		%	0.95		%	1.13		%
NPAs / Actual Loans and OREO %	1.13		%	1.07		%	1.18		%	1.36		%	1.62		%
Loan Loss Reserves / Actual Loans (%)	1.32		%	1.33		%	1.45		%	1.47		%	1.58		%
Net Charge Off's as % of Average Loans (Annualized)	0.08		%	0.04		%	(0.03		)%	0.06		%	0.12		%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
ASSETS
Cash and cash equivalents	$	85,738		$	102,170		$	84,677		$	105,928		$	89,243
Interest-bearing time deposits	77,453			32,315			27,111			26,669			83,228
Investment securities	1,270,777			1,276,999			1,208,793			1,212,516			1,189,473
Loans held for sale	3,628			9,894			1,943			8,295			6,392
Loans	4,709,907			4,693,822			4,321,715			4,238,205			3,965,532
Less: Allowance for loan losses	(62,086		)	(62,453		)	(62,861		)	(62,550		)	(62,801		)
Net loans	4,647,821			4,631,369			4,258,854			4,175,655			3,902,731
Premises and equipment	96,494			97,648			83,457			84,841			77,468
Federal Reserve and Federal Home Loan Bank stock	37,553			37,633			34,498			34,630			41,273
Interest receivable	22,836			24,415			22,048			19,880			19,557
Core deposit intangibles and goodwill	261,799			259,764			219,503			220,196			218,034
Cash surrender value of life insurance	200,549			200,539			171,530			170,813			170,172
Other real estate owned	15,626			17,257			14,809			19,242			19,073
Tax asset, deferred and receivable	47,982			46,977			38,339			39,622			38,695
Other assets	30,283			24,023			24,235			22,021			22,182
TOTAL ASSETS	$	6,798,539		$	6,761,003		$	6,189,797		$	6,140,308		$	5,877,521
LIABILITIES
Deposits:
Noninterest-bearing	$	1,282,462		$	1,266,027		$	1,110,905		$	1,122,688		$	1,100,397
Interest-bearing	4,028,608			4,023,620			3,703,684			3,666,889			3,547,678
Total Deposits	5,311,070			5,289,647			4,814,589			4,789,577			4,648,075
Borrowings:
Federal funds purchased	602			49,721			52,896			40,748
Securities sold under repurchase agreements	150,134			155,325			153,822			137,240			134,023
Federal Home Loan Bank advances	263,588			235,652			237,856			247,687			166,326
Subordinated debentures and term loans	127,523			127,846			121,936			126,882			126,875
Total Borrowings	541,847			568,544			566,510			552,557			427,224
Interest payable	3,910			3,092			3,710			3,211			3,685
Other liabilities	74,449			49,211			38,004			45,008			58,879
Total Liabilities	5,931,276			5,910,494			5,422,813			5,390,353			5,137,863
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding	125			125			125			125			125
Common Stock, $.125 stated value:
Authorized -- 50,000,000 shares
Issued and outstanding	5,094			5,083			4,734			4,728			4,723
Additional paid-in capital	504,661			504,530			433,577			432,294			431,199
Retained earnings	355,317			342,133			332,162			319,298			305,526
Accumulated other comprehensive income (loss)	2,066			(1,362		)	(3,614		)	(6,490		)	(1,915		)
Total Stockholders' Equity	867,263			850,509			766,984			749,955			739,658
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,798,539		$	6,761,003		$	6,189,797		$	6,140,308		$	5,877,521



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
INTEREST INCOME
Loans receivable:
Taxable	$	50,489		$	45,897		$	46,037		$	45,320		$	43,551
Tax-exempt	1,315			1,285			1,190			736			248
Investment securities:
Taxable	4,328			4,363			4,374			4,425			4,723
Tax-exempt	4,509			4,444			4,412			4,231			3,835
Deposits with financial institutions	106			67			25			31			37
Federal Reserve and Federal Home Loan Bank stock	480			458			500			459			550
Total Interest Income	61,227			56,514			56,538			55,202			52,944
INTEREST EXPENSE
Deposits	4,063			3,938			3,715			3,686			3,516
Federal funds purchased	28			5			27			19			23
Securities sold under repurchase agreements	100			104			96			90			78
Federal Home Loan Bank advances	796			728			711			706			691
Subordinated debentures and term loans	1,785			1,665			1,666			1,670			1,660
Total Interest Expense	6,772			6,440			6,215			6,171			5,968
NET INTEREST INCOME	54,455			50,074			50,323			49,031			46,976
Provision for loan losses	550									417
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	53,905			50,074			50,323			48,614			46,976
OTHER INCOME
Service charges on deposit accounts	4,145			4,118			4,445			4,090			3,548
Fiduciary activities	2,494			2,138			2,242			2,309			2,507
Other customer fees	5,059			4,534			4,156			4,602			3,667
Commission income							4			1,815			2,328
Earnings on cash surrender value of life insurance	1,476			822			710			640			747
Net gains and fees on sales of loans	1,460			1,308			1,905			1,781			1,489
Net realized gains (losses) on sales of available for sale securities	997			623			1,115			(93		)	1,025
Gain on sale of insurance subsidiary										8,265
Other income	690			1,224			2,322			1,224			921
Total Other Income	16,321			14,767			16,899			24,633			16,232
OTHER EXPENSES
Salaries and employee benefits	27,337			25,796			25,137			26,434			24,541
Net occupancy	4,022			3,649			3,726			3,503			3,790
Equipment	3,238			2,683			2,698			2,840			2,566
Marketing	737			915			847			951			780
Outside data processing fees	2,069			1,632			1,992			1,768			1,717
Printing and office supplies	364			343			343			303			364
Core deposit amortization	978			692			693			729			721
FDIC assessments	950			939			958			895			863
Other real estate owned and foreclosure expenses	1,235			1,701			1,835			1,372			1,229
Professional and other outside services	2,162			3,544			1,686			3,134			1,491
Other expenses	3,867			4,352			3,683			4,494			3,140
Total Other Expenses	46,959			46,246			43,598			46,423			41,202
INCOME BEFORE INCOME TAX	23,267			18,595			23,624			26,824			22,006
Income tax expense	5,574			4,418			6,557			8,856			5,834
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	17,693		$	14,177		$	17,067		$	17,968		$	16,172

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.43		$	0.37		$	0.46		$	0.47		$	0.43
Diluted Net Income Available to Common Stockholders	$	0.43		$	0.37		$	0.45		$	0.47		$	0.43
Cash Dividends Paid	$	0.11		$	0.11		$	0.11		$	0.11		$	0.08
Average Diluted Shares Outstanding (in thousands)	40,917			38,191			38,118			38,043			38,000
FINANCIAL RATIOS:
Return on Average Assets	1.05		%	0.90		%	1.11		%	1.19		%	1.11		%
Return on Average Stockholders' Equity	8.21			7.32			8.99			9.63			8.81
Return on Average Common Stockholders' Equity	8.21			7.32			8.99			9.63			8.81
Average Earning Assets to Average Assets	89.28			90.11			89.99			89.63			89.42
Allowance for Loan Losses as % of Total Loans	1.32			1.33			1.45			1.47			1.58
Net Charge Off's as % of Average Loans (Annualized)	0.08			0.04			(0.03		)	0.06			0.12
Average Stockholders' Equity to Average Assets	12.78			12.29			12.34			12.31			12.62
Tax Equivalent Yield on Earning Assets	4.28			4.20			4.30			4.26			4.24
Cost of Supporting Liabilities	0.45			0.45			0.45			0.45			0.46
Net Interest Margin (FTE) on Earning Assets	3.83			3.75			3.85			3.81			3.78
Tangible Book Value Per Share	$	15.02		$	14.68		$	14.59		$	14.15		$	13.96



LOANS
(Dollars In Thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
Commercial and industrial loans	$	1,060,559		$	1,057,075		$	999,195		$	984,223		$	938,937
Agricultural production financing and other loans to farmers	92,137			97,711			91,354			93,695			95,652
Real estate loans:
Construction	391,621			366,704			298,250			256,082			237,036
Commercial and farmland	1,806,395			1,802,921			1,695,703			1,705,647			1,646,418
Residential	769,592			786,105			677,767			689,621			640,451
Home Equity	353,946			348,613			318,949			302,403			286,914
Individuals' loans for household and other personal expenditures	73,622			74,717			71,893			62,785			70,223
Lease financing receivables, net of unearned income	461			588			614			742			853
Other commercial loans	161,574			159,388			167,990			143,007			49,048
Loans	4,709,907			4,693,822			4,321,715			4,238,205			3,965,532
Allowance for loan losses	(62,086		)	(62,453		)	(62,861		)	(62,550		)	(62,801		)
NET LOANS	$	4,647,821		$	4,631,369		$	4,258,854		$	4,175,655		$	3,902,731



DEPOSITS
(Dollars In Thousands)	March 31,		December 31,		September 30,		June 30,		March 31,
	2016		2015		2015		2015		2015
Demand deposits	$	2,590,603	$	2,576,283	$	2,244,848	$	2,211,154	$	2,116,135
Savings deposits	1,549,304		1,518,722		1,460,244		1,439,255		1,402,421
Certificates and other time deposits of $100,000 or more	304,559		323,698		286,988		295,159		283,313
Other certificates and time deposits	536,120		556,476		499,286		517,153		516,500
Brokered deposits	330,484		314,468		323,223		326,856		329,706
TOTAL DEPOSITS	$	5,311,070	$	5,289,647	$	4,814,589	$	4,789,577	$	4,648,075



NET INTEREST INCOME
(Dollars in Thousands)	For the Three Months Ended
	March 31, 2016							March 31, 2015
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	75,709		$	106	0.56	%	$	56,907		$	36	0.25	%
Federal Reserve and Federal Home Loan Bank stock	37,632			480		5.10		41,351			550		5.32
Investment Securities: ⁽¹⁾
Taxable	716,486			4,328		2.42		736,378			4,723		2.57
Tax-Exempt ⁽²⁾	520,922			6,937		5.33		433,531			5,899		5.44
Total Investment Securities	1,237,408			11,265		3.64		1,169,909			10,622		3.63
Loans held for sale	6,247			122		7.81		4,927			110		8.93
Loans: ⁽³⁾
Commercial	3,449,451			38,864		4.51		3,041,242			34,169		4.49
Real Estate Mortgage	575,266			6,394		4.45		459,794			4,849		4.22
Installment	456,654			5,109		4.48		394,063			4,424		4.49
Tax-Exempt ⁽²⁾	181,950			2,023		4.45		36,788			382		4.15
Total Loans	4,669,568			52,512		4.50		3,936,814			43,934		4.46
Total Earning Assets	6,020,317			64,363		4.28		5,204,981			55,142		4.24
Net unrealized gain on securities available for sale	10,005							14,480
Allowance for loan losses	(63,213		)					(63,429		)
Cash and cash equivalents	101,913							98,791
Premises and equipment	96,698							77,707
Other assets	577,595							488,544
Total Assets	$	6,743,315						$	5,821,074
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,300,266		$	544	0.17	%	$	1,030,433		$	252	0.10	%
Money market deposits	865,932			491		0.23		823,761			412		0.20
Savings deposits	689,305			135		0.08		571,751			159		0.11
Certificates and other time deposits	1,186,458			2,893		0.98		1,126,098			2,693		0.96
Total Interest-bearing Deposits	4,041,961			4,063		0.40		3,552,043			3,516		0.40
Borrowings	520,087			2,709		2.08		437,864			2,452		2.24
Total Interest-bearing Liabilities	4,562,048			6,772		0.59		3,989,907			5,968		0.60
Noninterest-bearing deposits	1,255,328							1,053,095
Other liabilities	64,287							43,561
Total Liabilities	5,881,663							5,086,563
Stockholders' Equity	861,652							734,511
Total Liabilities and Stockholders' Equity	$	6,743,315		6,772		0.45		$	5,821,074		5,968		0.46
Net Interest Income				$	57,591						$	49,174
Net Interest Margin						3.83	%						3.78	%


⁽¹⁾ Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments.
⁽²⁾ Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 35 percent for 2016 and 2015. These totals equal $3,136 and $2,198 for the three months ended March 31, 2016 and 2015, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.

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