Muncie-based First Merchants Corp. said Monday afternoon that its losses resulting from bad loans are dropping, but still contributed to an overall loss of $6.4 million in the third quarter.
The quarterly loss amounted to $1.62 per share. The company had a profit of $5.7 million, or $1.13 per share, in the same period a year earlier.
First Merchants' loan charge-offs for the quarter totaled $14.4 million. Commercial real estate and commercial and industrial loans accounted for much of the charge-offs.
The bank said its allowance for loan losses grew to $87 million through September, a $52 million increase from the first nine months of last year.
“The level of credit costs suggests that the bottom of the cycle occurred in the second quarter, although evidence of weakness in our franchise footprint remains,” First Merchants CEO Michael C. Rechin said in a prepared statement.
Total assets in the third quarter rose 14 percent over the year-ago period, to $4.4 billion. Deposits grew 17 percent, to $3.5 billion, in the same period.
Much of the growth can be attributed to First Merchant's acquisition of Plainfield-based Lincoln Bancorp late last year. The purchase expanded First Merchants' share of the Indianapolis market.
With the purchase, First Merchants acquired Lincoln branches in Avon, Brownsburg, Plainfield, Bargersville, Franklin, Greenwood and Trafalgar.