Total assets grew to $7.3 billion as of quarter-end and loans totaled $5.3 billion. The Corporation’s loan portfolio increased by $565 million or 12 percent, during the past twelve months. Total deposits equaled $5.6 billion as of quarter-end and increased by $324 million, or 6 percent, during the same twelve-month period.
Michael C. Rechin, President and Chief Executive Officer, stated, “The first quarter of 2017 is our fourth consecutive quarter without any meaningful merger and acquisition expense, providing a clean review of our high performance results. Our management team is pleased with our execution in driving organic loan and deposit growth, earnings growth and operating leverage. We are also enthusiastic about our pending acquisitions of The Arlington Bank in Columbus, Ohio and iAB Bank in Ft. Wayne, Indiana which are expected to close in the second and third quarters of 2017, respectively. The acquisitions bring additional franchise value in terms of their historical earnings performance, market attractiveness and management leadership.”
Net-interest income totaled $61 million for the quarter, an increase of $6.5 million, or 12 percent. Net-interest margin improved over last year by 15 basis points totaling 3.98 percent, as yields on earning assets totaled 4.42 percent and the cost of supporting liabilities totaled .44 percent. When adjusted for fair value accretion, core net-interest margin also increased over last year by 6 basis points totaling 3.72 percent.
Non-interest income totaled $14.8 million for the quarter, a $1 million decline from the first quarter of 2016. The decline in non-interest income was more than offset by a $3.4 million decrease in non-interest expense as the Corporation continues its focus on efficiency. Total non-interest expense was $43.1 million for the first quarter of 2017 compared to $46.5 million in 2016.
Tax expense for the first quarter of 2017 totaled $7.2 million, or 23.6 percent of pre-tax net income. Due to the required adoption of FASB Accounting Standards Update (ASU) 2016-09, the Corporation’s tax expense was reduced by $772,000. The first quarter ASU 2016-09 impact improved earnings per share by $.02.
The Corporation’s provision expense totaled $2.4 million primarily due to loan growth as net charge-offs totaled just $197,000. The allowance for loan losses totaled $68.2 million as of March 31, 2017, up from $62.1 million as of March 31, 2016. Non-accrual loans totaled $27.9 million as of quarter-end, down from $36.7 million a year ago. The allowance is 1.29 percent of total loans and 1.46 percent of non-purchased loans.
As of March 31, 2017, the Corporation’s total risk-based capital equaled 14.24 percent, common equity tier 1 risk-based capital equaled 11.16 percent, and tangible common equity ratio totaled 9.5 percent.