MainSource Financial Group’s third-quarter net income of $11.7 million, or 48 cents per common share, increased from $9.1 million, or 42 cents per share, during the same period last year.
MainSource, which has its headquarters in Greensburg, also has offices in Columbus, Hope, Edinburgh, North Vernon and Westport.
During the third quarter of 2016, MainSource incurred costs of $601,000 related to its May acquisition of Cheviot Financial Corp. Excluding that charge, the company’s net income would have been $12.1 million, or 50 cents per share.
Archie M. Brown Jr., president and chief executive officer, said adjusting for the acquisition-related charge, net income exceeded $12 million for the first time in the company’s history.
“On a per share basis, operating earnings were 50 cents compared to 43 cents in the same quarter a year year, a 16 percent increase,” Brown said. “The benefits of the Cheviot Financial Corp. acquisition in the second quarter were reflected in our third quarter results. We are very pleased with the merger as it appears so far to have had the impact we expected.”
Loans grew at a 5 percent annualized rate for the quarter and commercial loans grew at a 13 percent annualized rate, Brown said. The company is continuing to experience stable growth in the commercial/industrial and commercial real estate lending, he said.
Non-performing assets declined $2.5 million, or 11 percent, from the second quarter and now represent 0.51 percent of total assets. “We also realized net recoveries of problem loans during the third quarter,” Brown said. “This is the second quarter in a row that we have experienced net recoveries, and, as a result, low loan loss provision expense.”
The company’s board approved an increase to its quarterly common dividend, payable Dec. 15 to shareholders of record as of Dec. 5, increasing from 15 cents per common share to 16 cents per common share.
Net interest income was $31.0 million for the third quarter compared to $26.1 million a year ago. Average earning assets increased year over year by $639 million, with $460 million coming from the Cheviot acquisition, $50 million from the purchase of four Old National branches in the third quarter of 2015 and $129 million from organic growth.
Total assets were $4.0 billion as of Sept. 30 which represents a $677 million increase from a year ago. The total increase in assets was primarily related to acquiring Cheviot and organic loan growth, the company said.