Tuesday, April 26, 2022
MUNCIE, Ind., April 26, 2022 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME)
First Quarter 2022 Highlights:
- Net income was $48.6 million and diluted earnings per share totaled $.91, compared to $49.5 million and $.91 in the first quarter of 2021, and $47.7 million and $.89 in the fourth quarter of 2021.
- Diluted earnings per share excluding income on Paycheck Protection Program (“PPP”) loans totaled $.88 for the first quarter of 2022 compared to $.78 in the first quarter of 2021 and $.84 in the fourth quarter of 2021.1
- Total loans, excluding PPP loans, grew $165 million or 7.2% on a linked quarter basis
- Total deposits grew $173.4 million or 5.4% on a linked quarter basis
- Non-accrual loans totaled $42.7 million compared to $43.1 million on a linked quarter basis
- Net interest income totaled $102.3 million, an increase of $1.0 million on a linked quarter basis
- Completed legal closing on the acquisition of Level One Bancorp, LLC on April 1, 2022
Mark Hardwick, Chief Executive Officer, stated, “The Bank’s loan, deposit and earnings growth were in line with expectations and my colleagues are focused on delivering our aspirational 2022 plan. The completion of our merger with Level One on April 1st is a milestone in First Merchants history that will propel our Bank into the future. I am proud of our new teammates and the professional winning attitude they exude.”
First Quarter Financial Results:
First Merchants Corporation (the “Corporation) has reported first quarter 2022 net income of $48.6 million compared to $49.5 million during the same period in 2021. Earnings per share for the period totaled $.91 per share compared to the first quarter of 2021 result of $.91 per share.
Total assets equaled $15.5 billion as of March 31, 2022 and loans totaled $9.4 billion. The Corporation experienced organic loan growth of $730.6 million, or 8.5 percent, during the past twelve months. This was offset by the forgiveness of Paycheck Protection Program (“PPP”) loans of $693.1 million, resulting in net loan growth of $37.5 million. PPP loans accounted for $48.7 million of the period end loan portfolio balance. Investments increased $788.4 million, or 21.3 percent, during the year and now total $4.5 billion. Total deposits equaled $12.9 billion as of quarter-end and increased by $954.2 million, or 8.0 percent over the same period in 2021.
The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $196.0 million as of quarter-end, or 2.09 percent of total loans. Net loan recoveries for the quarter totaled $0.6 million and no provision expense was recorded during the quarter or during the last twelve months. Non-performing assets to total assets were 0.32% for the first quarter of 2022, a decrease of eight basis points compared to 0.40% in the first quarter of 2021.
Net-interest income totaling $102.3 million for the quarter, continued to grow with an increase of $1.0 million, or 4.0 percent, over prior quarter and an increase of $1.9 million, or 1.8 percent compared to the first quarter of 2021. Stated net-interest margin on a tax equivalent basis, totaling 3.03 percent, declined by one basis point compared to the fourth quarter of 2021 and twenty basis points compared to the first quarter of 2021. Net-interest margin excluding the impact of fair value accretion and PPP loans totaled 2.97%, an increase of five basis points compared to 2.92% for the fourth quarter of 2021 and a decline of seven basis points from the first quarter of 2021. During the quarter, net-interest margin expanded nine basis points from growth in the loan and investment portfolios, higher investment portfolio yield and lower funding costs, offset by a decline of four basis points from the impact of a lower day count in the quarter.
Non-interest income, totaling $25.9 million for the quarter, was stable compared to the fourth quarter of 2021 and increased $1.8 million from the first quarter of 2021. Customer-specific line items accounted for $2.3 million of the increase over the first quarter of 2021 driven by higher service charges on deposits, fiduciary and wealth management fees and card payment fees. This was offset by a decline on gains on the sale of loans of $1.8 million driven by lower origination volume.
Non-interest expense totaled $72.3 million for the quarter, a decline of $0.1 million from the fourth quarter of 2021, and an increase of $6.3 million or 9.4% over the first quarter of 2021. The increase over the first quarter of 2021 was primarily due to higher salaries and employee benefits as well as higher FDIC assessments.
The Corporation’s loan to deposit ratio totals 73 percent and loan to asset ratio totals 61 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 13.85 percent, common equity tier 1 capital ratio equaled 11.63 percent, and the tangible common equity ratio totaled 8.31 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.
1 See “Non-GAAP Financial Information” for reconciliation
CONFERENCE CALL
First Merchants Corporation will conduct a first quarter earnings conference call and web cast at 10:00 a.m. (ET) on Tuesday, April 26, 2022.
To participate, dial (Toll Free) 877-806-2932 and reference Conference ID 6838926. International callers please call +1 478-219-0639.
In order to view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/vucpzk7j) during the time of the call. A replay of the webcast will be available until April 26, 2023.
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 has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors and Level One Bank (as divisions of First Merchants Bank).
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.
Forward-Looking Statements
This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These statements include statements of First Merchants’ goals, intentions and expectations; statements regarding the First Merchants’ business plan and growth strategies; statements regarding the asset quality of First Merchants’ loan and investment portfolios; and estimates of First Merchants’ risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit worthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants’ affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity, credit and interest rate risks associated with the First Merchants’ business; and other risks and factors identified in each of First Merchants’ filings with the Securities and Exchange Commission. First Merchants does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this press release. In addition, First Merchants’ past results of operations do not necessarily indicate its anticipated future results.
| CONSOLIDATED BALANCE SHEETS | |||||||
| (Dollars In Thousands) | March 31, | ||||||
| 2022 | 2021 | ||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 148,277 | $ | 187,901 | |||
| Interest-bearing deposits | 395,262 | 392,806 | |||||
| Investment securities, net of allowance for credit losses of $245,000 and $245,000 | 4,489,263 | 3,700,857 | |||||
| Loans held for sale | 3,938 | 4,430 | |||||
| Loans | 9,356,241 | 9,318,228 | |||||
| Less: Allowance for credit losses - loans | (195,984 | ) | (201,082 | ) | |||
| Net loans | 9,160,257 | 9,117,146 | |||||
| Premises and equipment | 105,883 | 109,432 | |||||
| Federal Home Loan Bank stock | 26,422 | 28,736 | |||||
| Interest receivable | 56,081 | 54,662 | |||||
| Goodwill and other intangibles | 569,494 | 571,536 | |||||
| Cash surrender value of life insurance | 291,881 | 293,766 | |||||
| Other real estate owned | 6,271 | 604 | |||||
| Tax asset, deferred and receivable | 73,422 | 40,163 | |||||
| Other assets | 138,807 | 127,027 | |||||
| TOTAL ASSETS | $ | 15,465,258 | $ | 14,629,066 | |||
| LIABILITIES | |||||||
| Deposits: | |||||||
| Noninterest-bearing | $ | 2,745,235 | $ | 2,494,891 | |||
| Interest-bearing | 10,160,718 | 9,456,889 | |||||
| Total Deposits | 12,905,953 | 11,951,780 | |||||
| Borrowings: | |||||||
| Securities sold under repurchase agreements | 169,697 | 185,721 | |||||
| Federal Home Loan Bank advances | 308,960 | 359,337 | |||||
| Subordinated debentures and other borrowings | 118,677 | 118,439 | |||||
| Total Borrowings | 597,334 | 663,497 | |||||
| Interest payable | 3,589 | 4,020 | |||||
| Other liabilities | 150,749 | 203,913 | |||||
| Total Liabilities | 13,657,625 | 12,823,210 | |||||
| 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 -- 100,000,000 shares | |||||||
| Issued and outstanding - 53,424,823 and 53,953,723 shares | 6,678 | 6,744 | |||||
| Additional paid-in capital | 987,404 | 1,007,300 | |||||
| Retained earnings | 897,818 | 755,877 | |||||
| Accumulated other comprehensive income | (84,392 | ) | 35,810 | ||||
| Total Stockholders' Equity | 1,807,633 | 1,805,856 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 15,465,258 | $ | 14,629,066 | |||
| CONSOLIDATED STATEMENTS OF INCOME | Three Months Ended | ||||
| (Dollars In Thousands, Except Per Share Amounts) | March 31, | ||||
| 2022 | 2021 | ||||
| INTEREST INCOME | |||||
| Loans receivable: | |||||
| Taxable | $ | 79,075 | $ | 85,105 | |
| Tax-exempt | 5,704 | 5,339 | |||
| Investment securities: | |||||
| Taxable | 8,510 | 6,695 | |||
| Tax-exempt | 15,875 | 12,385 | |||
| Deposits with financial institutions | 230 | 114 | |||
| Federal Home Loan Bank stock | 146 | 178 | |||
| Total Interest Income | 109,540 | 109,816 | |||
| INTEREST EXPENSE | |||||
| Deposits | 4,294 | 6,200 | |||
| Federal funds purchased | — | 2 | |||
| Securities sold under repurchase agreements | 89 | 87 | |||
| Federal Home Loan Bank advances | 1,218 | 1,442 | |||
| Subordinated debentures and other borrowings | 1,659 | 1,657 | |||
| Total Interest Expense | 7,260 | 9,388 | |||
| NET INTEREST INCOME | 102,280 | 100,428 | |||
| Provision for credit losses - loans | — | — | |||
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 102,280 | 100,428 | |||
| OTHER INCOME | |||||
| Service charges on deposit accounts | 6,419 | 5,264 | |||
| Fiduciary and wealth management fees | 7,332 | 6,422 | |||
| Card payment fees | 5,723 | 4,367 | |||
| Net gains and fees on sales of loans | 2,199 | 3,986 | |||
| Derivative hedge fees | 918 | 317 | |||
| Other customer fees | 410 | 368 | |||
| Earnings on cash surrender value of life insurance | 1,696 | 1,336 | |||
| Net realized gains on sales of available for sale securities | 566 | 1,799 | |||
| Other income | 634 | 232 | |||
| Total Other Income | 25,897 | 24,091 | |||
| OTHER EXPENSES | |||||
| Salaries and employee benefits | 42,519 | 38,811 | |||
| Net occupancy | 6,187 | 6,491 | |||
| Equipment | 5,080 | 5,030 | |||
| Marketing | 736 | 1,124 | |||
| Outside data processing fees | 4,363 | 4,244 | |||
| Printing and office supplies | 345 | 283 | |||
| Intangible asset amortization | 1,366 | 1,357 | |||
| FDIC assessments | 2,192 | 1,368 | |||
| Other real estate owned and foreclosure expenses | 564 | 734 | |||
| Professional and other outside services | 2,953 | 2,543 | |||
| Other expenses | 6,020 | 4,113 | |||
| Total Other Expenses | 72,325 | 66,098 | |||
| INCOME BEFORE INCOME TAX | 55,852 | 58,421 | |||
| Income tax expense | 7,266 | 8,952 | |||
| NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 48,586 | $ | 49,469 | |
| Per Share Data: | |||||
| Basic Net Income Available to Common Stockholders | $ | 0.91 | $ | 0.92 | |
| Diluted Net Income Available to Common Stockholders | $ | 0.91 | $ | 0.91 | |
| Cash Dividends Paid | $ | 0.29 | $ | 0.26 | |
| Average Diluted Shares Outstanding (in thousands) | 53,616 | 54,134 | |||
| FINANCIAL HIGHLIGHTS | |||||||
| (Dollars in thousands) | Three Months Ended | ||||||
| March 31, | |||||||
| 2022 | 2021 | ||||||
| NET CHARGE-OFFS (RECOVERIES) | $ | (587 | ) | $ | 3,621 | ||
| AVERAGE BALANCES: | |||||||
| Total Assets | $ | 15,464,605 | $ | 14,244,739 | |||
| Total Loans | 9,255,928 | 9,236,421 | |||||
| Total Earning Assets | 14,262,777 | 13,023,318 | |||||
| Total Deposits | 12,817,690 | 11,567,918 | |||||
| Total Stockholders' Equity | 1,891,223 | 1,840,432 | |||||
| FINANCIAL RATIOS: | |||||||
| Return on Average Assets | 1.26 | % | 1.39 | % | |||
| Return on Average Stockholders' Equity | 10.28 | 10.75 | |||||
| Return on Average Common Stockholders' Equity | 10.28 | 10.75 | |||||
| Average Earning Assets to Average Assets | 92.23 | 91.43 | |||||
| Allowance for Credit Losses - Loans as % of Total Loans | 2.09 | 2.16 | |||||
| Net Charge-offs as % of Average Loans (Annualized) | (0.03 | ) | 0.16 | ||||
| Average Stockholders' Equity to Average Assets | 12.23 | 12.92 | |||||
| Tax Equivalent Yield on Average Earning Assets | 3.23 | 3.52 | |||||
| Interest Expense/Average Earning Assets | 0.20 | 0.29 | |||||
| Net Interest Margin (FTE) on Average Earning Assets | 3.03 | 3.23 | |||||
| Efficiency Ratio | 52.79 | 50.23 | |||||
| Tangible Common Book Value Per Share | $ | 23.26 | $ | 22.98 | |||
| NON-PERFORMING ASSETS | |||||||||||||||||||
| (Dollars In Thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||
| Non-Accrual Loans | $ | 42,698 | $ | 43,062 | $ | 51,502 | $ | 57,556 | $ | 57,923 | |||||||||
| Renegotiated Loans | 141 | 329 | 439 | 629 | 655 | ||||||||||||||
| Non-Performing Loans (NPL) | 42,839 | 43,391 | 51,941 | 58,185 | 58,578 | ||||||||||||||
| Other Real Estate Owned and Repossessions | 6,271 | 558 | 698 | 601 | 604 | ||||||||||||||
| Non-Performing Assets (NPA) | 49,110 | 43,949 | 52,639 | 58,786 | 59,182 | ||||||||||||||
| 90+ Days Delinquent | 2,085 | 963 | 157 | 183 | 1,093 | ||||||||||||||
| NPAs & 90 Day Delinquent | $ | 51,195 | $ | 44,912 | $ | 52,796 | $ | 58,969 | $ | 60,275 | |||||||||
| Allowance for Credit Losses - Loans | $ | 195,984 | $ | 195,397 | $ | 199,972 | $ | 199,775 | $ | 201,082 | |||||||||
| Quarterly Net Charge-offs (Recoveries) | (587 | ) | 4,575 | (197 | ) | 1,307 | 3,621 | ||||||||||||
| NPAs / Actual Assets % | 0.32 | % | 0.28 | % | 0.35 | % | 0.39 | % | 0.40 | % | |||||||||
| NPAs & 90 Day / Actual Assets % | 0.33 | % | 0.29 | % | 0.35 | % | 0.40 | % | 0.41 | % | |||||||||
| NPAs / Actual Loans and OREO % | 0.52 | % | 0.47 | % | 0.58 | % | 0.64 | % | 0.63 | % | |||||||||
| Allowance for Credit Losses - Loans / Actual Loans (%) | 2.09 | % | 2.11 | % | 2.21 | % | 2.19 | % | 2.16 | % | |||||||||
| Net Charge-offs as % of Average Loans (Annualized) | (0.03 | )% | 0.20 | % | (0.01 | )% | 0.06 | % | 0.16 | % | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||
| (Dollars In Thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 148,277 | $ | 167,146 | $ | 169,261 | $ | 167,596 | $ | 187,901 | |||||||||
| Interest-bearing deposits | 395,262 | 474,154 | 369,447 | 438,863 | 392,806 | ||||||||||||||
| Investment securities, net of allowance for credit losses | 4,489,263 | 4,524,353 | 4,445,516 | 4,148,314 | 3,700,857 | ||||||||||||||
| Loans held for sale | 3,938 | 11,187 | 5,990 | 18,582 | 4,430 | ||||||||||||||
| Loans | 9,356,241 | 9,241,861 | 9,041,576 | 9,121,250 | 9,318,228 | ||||||||||||||
| Less: Allowance for credit losses - loans | (195,984 | ) | (195,397 | ) | (199,972 | ) | (199,775 | ) | (201,082 | ) | |||||||||
| Net loans | 9,160,257 | 9,046,464 | 8,841,604 | 8,921,475 | 9,117,146 | ||||||||||||||
| Premises and equipment | 105,883 | 105,655 | 104,814 | 103,822 | 109,432 | ||||||||||||||
| Federal Home Loan Bank stock | 26,422 | 28,736 | 28,736 | 28,736 | 28,736 | ||||||||||||||
| Interest receivable | 56,081 | 57,187 | 53,079 | 54,173 | 54,662 | ||||||||||||||
| Goodwill and other intangibles | 569,494 | 570,860 | 572,323 | 573,786 | 571,536 | ||||||||||||||
| Cash surrender value of life insurance | 291,881 | 291,041 | 291,825 | 294,462 | 293,766 | ||||||||||||||
| Other real estate owned | 6,271 | 558 | 698 | 601 | 604 | ||||||||||||||
| Tax asset, deferred and receivable | 73,422 | 35,641 | 39,504 | 36,924 | 40,163 | ||||||||||||||
| Other assets | 138,807 | 140,167 | 137,928 | 135,763 | 127,027 | ||||||||||||||
| TOTAL ASSETS | $ | 15,465,258 | $ | 15,453,149 | $ | 15,060,725 | $ | 14,923,097 | $ | 14,629,066 | |||||||||
| LIABILITIES | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing | $ | 2,745,235 | $ | 2,709,646 | $ | 2,554,323 | $ | 2,479,853 | $ | 2,494,891 | |||||||||
| Interest-bearing | 10,160,718 | 10,022,931 | 9,794,366 | 9,723,547 | 9,456,889 | ||||||||||||||
| Total Deposits | 12,905,953 | 12,732,577 | 12,348,689 | 12,203,400 | 11,951,780 | ||||||||||||||
| Borrowings: | |||||||||||||||||||
| Securities sold under repurchase agreements | 169,697 | 181,577 | 183,589 | 146,904 | 185,721 | ||||||||||||||
| Federal Home Loan Bank advances | 308,960 | 334,055 | 334,149 | 334,243 | 359,337 | ||||||||||||||
| Subordinated debentures and other borrowings | 118,677 | 118,618 | 118,558 | 118,498 | 118,439 | ||||||||||||||
| Total Borrowings | 597,334 | 634,250 | 636,296 | 599,645 | 663,497 | ||||||||||||||
| Interest payable | 3,589 | 2,762 | 3,736 | 2,929 | 4,020 | ||||||||||||||
| Other liabilities | 150,749 | 170,989 | 203,914 | 245,323 | 203,913 | ||||||||||||||
| Total Liabilities | 13,657,625 | 13,540,578 | 13,192,635 | 13,051,297 | 12,823,210 | ||||||||||||||
| 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 -- 100,000,000 shares | |||||||||||||||||||
| Issued and outstanding | 6,678 | 6,676 | 6,689 | 6,747 | 6,744 | ||||||||||||||
| Additional paid-in capital | 987,404 | 985,818 | 988,659 | 1,009,182 | 1,007,300 | ||||||||||||||
| Retained earnings | 897,818 | 864,839 | 832,728 | 795,666 | 755,877 | ||||||||||||||
| Accumulated other comprehensive income | (84,392 | ) | 55,113 | 39,889 | 60,080 | 35,810 | |||||||||||||
| Total Stockholders' Equity | 1,807,633 | 1,912,571 | 1,868,090 | 1,871,800 | 1,805,856 | ||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 15,465,258 | $ | 15,453,149 | $ | 15,060,725 | $ | 14,923,097 | $ | 14,629,066 | |||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||
| (Dollars In Thousands, Except Per Share Amounts) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||
| INTEREST INCOME | |||||||||||||||||||
| Loans receivable: | |||||||||||||||||||
| Taxable | $ | 79,075 | $ | 80,583 | $ | 85,319 | $ | 87,002 | $ | 85,105 | |||||||||
| Tax-exempt | 5,704 | 5,635 | 5,591 | 5,545 | 5,339 | ||||||||||||||
| Investment securities: | |||||||||||||||||||
| Taxable | 8,510 | 8,028 | 7,788 | 7,440 | 6,695 | ||||||||||||||
| Tax-exempt | 15,875 | 15,411 | 14,464 | 13,071 | 12,385 | ||||||||||||||
| Deposits with financial institutions | 230 | 173 | 218 | 129 | 114 | ||||||||||||||
| Federal Home Loan Bank stock | 146 | 163 | 168 | 88 | 178 | ||||||||||||||
| Total Interest Income | 109,540 | 109,993 | 113,548 | 113,275 | 109,816 | ||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||
| Deposits | 4,294 | 5,589 | 5,707 | 5,823 | 6,200 | ||||||||||||||
| Federal funds purchased | — | 1 | — | 2 | 2 | ||||||||||||||
| Securities sold under repurchase agreements | 89 | 75 | 77 | 75 | 87 | ||||||||||||||
| Federal Home Loan Bank advances | 1,218 | 1,389 | 1,389 | 1,452 | 1,442 | ||||||||||||||
| Subordinated debentures and other borrowings | 1,659 | 1,666 | 1,660 | 1,659 | 1,657 | ||||||||||||||
| Total Interest Expense | 7,260 | 8,720 | 8,833 | 9,011 | 9,388 | ||||||||||||||
| NET INTEREST INCOME | 102,280 | 101,273 | 104,715 | 104,264 | 100,428 | ||||||||||||||
| Provision for credit losses - loans | — | — | — | — | — | ||||||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 102,280 | 101,273 | 104,715 | 104,264 | 100,428 | ||||||||||||||
| OTHER INCOME | |||||||||||||||||||
| Service charges on deposit accounts | 6,419 | 6,462 | 6,249 | 5,596 | 5,264 | ||||||||||||||
| Fiduciary and wealth management fees | 7,332 | 7,078 | 7,352 | 7,510 | 6,422 | ||||||||||||||
| Card payment fees | 5,723 | 3,937 | 4,156 | 4,159 | 4,367 | ||||||||||||||
| Net gains and fees on sales of loans | 2,199 | 3,423 | 3,955 | 8,325 | 3,986 | ||||||||||||||
| Derivative hedge fees | 918 | 1,562 | 1,028 | 943 | 317 | ||||||||||||||
| Other customer fees | 410 | 361 | 393 | 368 | 368 | ||||||||||||||
| Earnings on cash surrender value of life insurance | 1,696 | 2,051 | 2,468 | 1,205 | 1,336 | ||||||||||||||
| Net realized gains on sales of available for sale securities | 566 | 358 | 1,756 | 1,761 | 1,799 | ||||||||||||||
| Other income | 634 | 615 | 1,144 | 1,017 | 232 | ||||||||||||||
| Total Other Income | 25,897 | 25,847 | 28,501 | 30,884 | 24,091 | ||||||||||||||
| OTHER EXPENSES | |||||||||||||||||||
| Salaries and employee benefits | 42,519 | 42,432 | 43,314 | 42,438 | 38,811 | ||||||||||||||
| Net occupancy | 6,187 | 5,644 | 5,576 | 5,615 | 6,491 | ||||||||||||||
| Equipment | 5,080 | 4,994 | 4,529 | 4,848 | 5,030 | ||||||||||||||
| Marketing | 736 | 1,840 | 1,676 | 1,122 | 1,124 | ||||||||||||||
| Outside data processing fees | 4,363 | 4,581 | 4,794 | 4,698 | 4,244 | ||||||||||||||
| Printing and office supplies | 345 | 356 | 265 | 313 | 283 | ||||||||||||||
| Intangible asset amortization | 1,366 | 1,463 | 1,463 | 1,464 | 1,357 | ||||||||||||||
| FDIC assessments | 2,192 | 1,862 | 1,552 | 1,461 | 1,368 | ||||||||||||||
| Other real estate owned and foreclosure expenses | 564 | 171 | (91 | ) | 178 | 734 | |||||||||||||
| Professional and other outside services | 2,953 | 3,627 | 2,767 | 2,976 | 2,543 | ||||||||||||||
| Other expenses | 6,020 | 5,466 | 5,539 | 4,182 | 4,113 | ||||||||||||||
| Total Other Expenses | 72,325 | 72,436 | 71,384 | 69,295 | 66,098 | ||||||||||||||
| INCOME BEFORE INCOME TAX | 55,852 | 54,684 | 61,832 | 65,853 | 58,421 | ||||||||||||||
| Income tax expense | 7,266 | 6,951 | 9,062 | 10,294 | 8,952 | ||||||||||||||
| NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 48,586 | $ | 47,733 | $ | 52,770 | $ | 55,559 | $ | 49,469 | |||||||||
| Per Share Data: | |||||||||||||||||||
| Basic Net Income Available to Common Stockholders | $ | 0.91 | $ | 0.89 | $ | 0.98 | $ | 1.03 | $ | 0.92 | |||||||||
| Diluted Net Income Available to Common Stockholders | $ | 0.91 | $ | 0.89 | $ | 0.98 | $ | 1.03 | $ | 0.91 | |||||||||
| Cash Dividends Paid | $ | 0.29 | $ | 0.29 | $ | 0.29 | $ | 0.29 | $ | 0.26 | |||||||||
| Average Diluted Shares Outstanding (in thousands) | 53,616 | 53,660 | 53,960 | 54,184 | 54,134 | ||||||||||||||
| FINANCIAL RATIOS: | |||||||||||||||||||
| Return on Average Assets | 1.26 | % | 1.25 | % | 1.41 | % | 1.51 | % | 1.39 | % | |||||||||
| Return on Average Stockholders' Equity | 10.28 | 10.10 | 11.17 | 12.04 | 10.75 | ||||||||||||||
| Return on Average Common Stockholders' Equity | 10.28 | 10.10 | 11.17 | 12.04 | 10.75 | ||||||||||||||
| Average Earning Assets to Average Assets | 92.23 | 91.86 | 91.57 | 91.87 | 91.43 | ||||||||||||||
| Allowance for Credit Losses - Loans as % of Total Loans | 2.09 | 2.11 | 2.21 | 2.19 | 2.16 | ||||||||||||||
| Net Charge-offs (Recoveries) as % of Average Loans (Annualized) | (0.03 | ) | 0.20 | (0.01 | ) | 0.06 | 0.16 | ||||||||||||
| Average Stockholders' Equity to Average Assets | 12.23 | 12.36 | 12.59 | 12.51 | 12.92 | ||||||||||||||
| Tax Equivalent Yield on Average Earning Assets | 3.23 | 3.29 | 3.46 | 3.49 | 3.52 | ||||||||||||||
| Interest Expense/Average Earning Assets | 0.20 | 0.25 | 0.26 | 0.27 | 0.29 | ||||||||||||||
| Net Interest Margin (FTE) on Average Earning Assets | 3.03 | 3.04 | 3.20 | 3.22 | 3.23 | ||||||||||||||
| Efficiency Ratio | 52.79 | 53.49 | 51.18 | 48.91 | 50.23 | ||||||||||||||
| Tangible Common Book Value Per Share | $ | 23.26 | $ | 25.21 | $ | 24.31 | $ | 24.15 | $ | 22.98 | |||||||||
| LOANS | |||||||||||||||||||
| (Dollars In Thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||
| Commercial and industrial loans | $ | 2,826,660 | $ | 2,714,565 | $ | 2,573,615 | $ | 2,671,076 | $ | 2,876,212 | |||||||||
| Agricultural land, production and other loans to farmers | 209,077 | 246,442 | 240,686 | 235,020 | 245,631 | ||||||||||||||
| Real estate loans: | |||||||||||||||||||
| Construction | 552,975 | 523,066 | 521,889 | 491,200 | 541,224 | ||||||||||||||
| Commercial real estate, non-owner occupied | 2,073,197 | 2,135,459 | 2,150,387 | 2,263,497 | 2,178,832 | ||||||||||||||
| Commercial real estate, owner occupied | 974,521 | 986,720 | 952,441 | 953,501 | 950,038 | ||||||||||||||
| Residential | 1,226,695 | 1,159,127 | 1,154,373 | 1,127,442 | 1,239,925 | ||||||||||||||
| Home equity | 512,641 | 523,754 | 531,307 | 489,997 | 482,229 | ||||||||||||||
| Individuals' loans for household and other personal expenditures | 147,593 | 146,092 | 135,093 | 130,819 | 126,387 | ||||||||||||||
| Public finance and other commercial loans | 832,882 | 806,636 | 781,785 | 758,698 | 677,750 | ||||||||||||||
| Loans | 9,356,241 | 9,241,861 | 9,041,576 | 9,121,250 | 9,318,228 | ||||||||||||||
| Allowance for credit losses - loans | (195,984 | ) | (195,397 | ) | (199,972 | ) | (199,775 | ) | (201,082 | ) | |||||||||
| NET LOANS | $ | 9,160,257 | $ | 9,046,464 | $ | 8,841,604 | $ | 8,921,475 | $ | 9,117,146 | |||||||||
| DEPOSITS | |||||||||||||||||||
| (Dollars In Thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||
| Demand deposits | $ | 7,806,033 | $ | 7,704,190 | $ | 7,317,399 | $ | 7,261,603 | $ | 7,245,850 | |||||||||
| Savings deposits | 4,444,417 | 4,334,802 | 4,301,483 | 4,157,552 | 3,857,624 | ||||||||||||||
| Certificates and other time deposits of $100,000 or more | 252,033 | 273,379 | 283,396 | 304,394 | 332,745 | ||||||||||||||
| Other certificates and time deposits | 380,293 | 389,752 | 404,010 | 423,922 | 449,655 | ||||||||||||||
| Brokered deposits | 23,177 | 30,454 | 42,401 | 55,929 | 65,906 | ||||||||||||||
| TOTAL DEPOSITS | $ | 12,905,953 | $ | 12,732,577 | $ | 12,348,689 | $ | 12,203,400 | $ | 11,951,780 | |||||||||
| CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS | |||||||||||||||||
| (Dollars in Thousands) | |||||||||||||||||
| For the Three Months Ended | |||||||||||||||||
| March 31, 2022 | March 31, 2021 | ||||||||||||||||
| Average Balance | Interest Income / Expense | Average Rate | Average Balance | Interest Income / Expense | Average Rate | ||||||||||||
| Assets: | |||||||||||||||||
| Interest-bearing deposits | $ | 484,626 | $ | 230 | 0.19 | % | $ | 441,254 | $ | 114 | 0.10 | % | |||||
| Federal Home Loan Bank stock | 27,914 | 146 | 2.09 | 28,736 | 178 | 2.48 | |||||||||||
| Investment Securities:(1) | |||||||||||||||||
| Taxable | 1,957,675 | 8,510 | 1.74 | 1,494,008 | 6,695 | 1.79 | |||||||||||
| Tax-Exempt(2) | 2,536,634 | 20,095 | 3.17 | 1,822,899 | 15,677 | 3.44 | |||||||||||
| Total Investment Securities | 4,494,309 | 28,605 | 2.55 | 3,316,907 | 22,372 | 2.70 | |||||||||||
| Loans held for sale | 4,352 | 40 | 3.68 | 16,139 | 156 | 3.87 | |||||||||||
| Loans:(3) | |||||||||||||||||
| Commercial | 6,868,438 | 64,679 | 3.77 | 6,876,818 | 69,174 | 4.02 | |||||||||||
| Real Estate Mortgage | 924,268 | 7,840 | 3.39 | 975,262 | 9,286 | 3.81 | |||||||||||
| Installment | 711,038 | 6,516 | 3.67 | 674,307 | 6,489 | 3.85 | |||||||||||
| Tax-Exempt(2) | 747,832 | 7,220 | 3.86 | 693,895 | 6,758 | 3.90 | |||||||||||
| Total Loans | 9,255,928 | 86,295 | 3.73 | 9,236,421 | 91,863 | 3.98 | |||||||||||
| Total Earning Assets | 14,262,777 | 115,276 | 3.23 | % | 13,023,318 | 114,527 | 3.52 | % | |||||||||
| Total Non-Earning Assets | 1,201,828 | 1,221,421 | |||||||||||||||
| Total Assets | $ | 15,464,605 | $ | 14,244,739 | |||||||||||||
| Liabilities: | |||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||
| Interest-bearing deposits | $ | 5,027,466 | $ | 2,408 | 0.19 | % | $ | 4,616,988 | $ | 3,709 | 0.32 | % | |||||
| Money market deposits | 2,514,429 | 872 | 0.14 | 2,086,322 | 835 | 0.16 | |||||||||||
| Savingsdeposits | 1,867,411 | 441 | 0.09 | 1,660,528 | 476 | 0.11 | |||||||||||
| Certificates and other time deposits | 676,661 | 573 | 0.34 | 859,334 | 1,180 | 0.55 | |||||||||||
| Total Interest-bearing Deposits | 10,085,967 | 4,294 | 0.17 | 9,223,172 | 6,200 | 0.27 | |||||||||||
| Borrowings | 616,572 | 2,966 | 1.92 | 675,117 | 3,188 | 1.89 | |||||||||||
| Total Interest-bearing Liabilities | 10,702,539 | 7,260 | 0.27 | 9,898,289 | 9,388 | 0.38 | |||||||||||
| Noninterest-bearing deposits | 2,731,723 | 2,344,746 | |||||||||||||||
| Other liabilities | 139,120 | 161,272 | |||||||||||||||
| Total Liabilities | 13,573,382 | 12,404,307 | |||||||||||||||
| Stockholders' Equity | 1,891,223 | 1,840,432 | |||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 15,464,605 | 7,260 | $ | 14,244,739 | 9,388 | |||||||||||
| Net Interest Income (FTE) | $ | 108,016 | $ | 105,139 | |||||||||||||
| Net Interest Spread (FTE)(4) | 2.96 | % | 3.14 | % | |||||||||||||
| Net Interest Margin (FTE): | |||||||||||||||||
| Interest Income (FTE) / Average Earning Assets | 3.23 | % | 3.52 | % | |||||||||||||
| Interest Expense / Average Earning Assets | 0.20 | % | 0.29 | % | |||||||||||||
| Net Interest Margin (FTE)(5) | 3.03 | % | 3.23 | % | |||||||||||||
| (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. Annualized amounts are computed using a 30/360 day basis. | |||||||||||||||||
| (2)Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2022 and 2021. These totals equal $5,736 and $4,711 for the three months ended March 31, 2022 and 2021, respectively. | |||||||||||||||||
| (3)Non accruing loans have been included in the average balances. | |||||||||||||||||
| (4)Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities. | |||||||||||||||||
| (5)Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets. | |||||||||||||||||
| ADJUSTED EPS EXCLUDING PAYCHECK PROTECTION PROGRAM ("PPP") - NON-GAAP | |||||||||||||||||||
| (Dollars In Thousands, Except Per Share Amounts) | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||
| Net Income Available to Common Shareholders - GAAP | $ | 48,586 | $ | 47,733 | $ | 52,770 | $ | 55,559 | $ | 49,469 | |||||||||
| Adjustments: | |||||||||||||||||||
| PPP loan income | (1,884 | ) | (3,721 | ) | (8,211 | ) | (9,725 | ) | (9,243 | ) | |||||||||
| Tax on adjustment | 462 | 912 | 2,013 | 2,385 | 2,266 | ||||||||||||||
| Adjust Net Income Available to Common Stockholders - Non-GAAP | $ | 47,164 | $ | 44,924 | $ | 46,572 | $ | 48,219 | $ | 42,492 | |||||||||
| Average Diluted Shares Outstanding (in thousands) | 53,616 | 53,660 | 53,960 | 54,184 | 54,134 | ||||||||||||||
| Diluted Earnings Per Share - GAAP | $ | 0.91 | $ | 0.89 | $ | 0.98 | $ | 1.03 | $ | 0.91 | |||||||||
| Adjustments: | |||||||||||||||||||
| PPP loan income | (0.04 | ) | (0.07 | ) | (0.15 | ) | (0.18 | ) | (0.17 | ) | |||||||||
| Tax on adjustment | 0.01 | 0.02 | 0.04 | 0.04 | 0.04 | ||||||||||||||
| Adjusted Diluted Earnings Per Share - Non-GAAP | $ | 0.88 | $ | 0.84 | $ | 0.87 | $ | 0.89 | $ | 0.78 | |||||||||
For more information, contact:
Nicole M. Weaver, Vice President and Director of Corporate Administration
765-521-7619
http://www.firstmerchants.com
