Quarterly profit slid at First Merchants Corp (FRME) in Muncie, Ind., as interest income and revenue from loan sales fell.
The $4.3 billion-asset company earned $10.4 million in the third quarter, a 7% decline from the third quarter of 2012, it announced Thursday. Earnings per share were 35 cents, meeting the forecasts of analysts polled by Bloomberg.
First Merchants' net interest income was 7% lower, at $37 million, as its net interest margin declined by 35 basis points. Other income dropped by 17%, to $11.8 million, as revenue from loan sales fell 43%, to $1.7 million. Expenses fell by less than 1%, to $34.2 million, as costs related to First Merchants' real estate holdings declined.
The company's asset quality improved, as net chargeoffs fell by 34%, to $3.5 million.
The company announced in May that it is acquiring CFS Bancorp (CITZ) in Munster, Ind., for about $115 million. The deal, expected to close next month, would give First Merchants a presence in the Chicago market.