First Merchants Corporation Announces 2021 Record Results
MUNCIE, Ind., Jan. 27, 2022 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME) has reported fourth quarter 2021 net income of $47.7 million compared to $45.1 million during the same period in 2020. Earnings per share for the period totaled $.89 per share compared to the fourth quarter 2020 result of $.83 per share. Net income for the year ended December 31, 2021 totaled $205.5 million, compared to $148.6 million during the same period in 2020. Year-to-date earnings per share totaled $3.81 compared to $2.74 in 2020.
Total assets equaled $15.5 billion as of year-end and loans totaled $9.3 billion. The Corporation experienced organic loan growth of $566 million, or 6.6 percent, during 2021. This was offset by the forgiveness of Paycheck Protection Program (“PPP”) loans of $560 million, resulting in net loan growth of $6 million. Investments increased $1.4 billion, or 43.8 percent, during the year and now total $4.5 billion. Total deposits equaled $12.7 billion as of year-end and increased by $1.4 billion, or 12.1 percent, during 2021.
The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $195.4 million as of year-end, or 2.11 percent of total loans. Net charge-offs for the quarter totaled $4.6 million and no provision expense was recorded during the quarter or during the year ended 2021. Provision expense taken during the three and twelve months ended December 31, 2020 of $4.5 million and $58.7 million, respectively, reflected our view of increased credit risk in 2020 related to the COVID-19 pandemic. An increase of $74.1 million in the ACL was also recorded on January 1, 2021 reflecting the adoption of the current expected credit losses (CECL) model. Non-accrual loans totaled $43.1 million as of year-end.
Mark Hardwick, Chief Executive Officer, stated, “2021 proved to be a record year on many levels, including total assets, loans, deposits, net income and earnings per share. Our employees, customers and communities showed an incredible amount of toughness, determination, teamwork and compassion for one another during a difficult year. First Merchants’ future is bright because of this special combination of heart and grit.” Hardwick also added, “It’s an honor to lead this First Merchants team and to be part of the dynamic markets that we serve.”
Net-interest income totaled $410.7 million for the year, an increase of $28.6 million or 7.5 percent, in the face of a net-interest margin decline of 11 basis points to 3.18 percent, reflecting an asset sensitive balance sheet. Yield on earning assets declined by 40 basis points totaling 3.44 percent offset by a decline of 29 basis points in the cost of supporting liabilities, which totaled 26 basis points for the year-ended 2021. Yield on earning assets for the fourth quarter totaled 3.29 percent with cost of supporting liabilities totaling 25 basis points, resulting in a margin of 3.04 percent. PPP loans contributed 8 basis points to margin during the fourth quarter of 2021, which was a decline of 9 basis points from the third quarter 2021 and a decline of 8 basis points from the fourth quarter of 2020, as the pace of PPP loan forgiveness slowed.
Non-interest income totaled $109.3 million for the year, a $0.6 million decline from 2020. Customer-related line items accounted for an increase of $2.6 million, or 3 percent, and was offset by a decline of $6.2 million on the gains on sales of securities. Fiduciary and wealth management fees hit a record high of $28.4 million for 2021, which included an increase of $1 million from the acquisition of Hoosier Trust Company. This was offset by the headwinds of the full year impact of the Durbin Amendment adoption on card payment fees which was effective July of 2020.
Non-interest expense totaled $279.2 million for the year ended 2021, a $15.8 million increase from 2020. The increase is primarily due to higher salaries, incentives, and employee benefits costs.
The Corporation’s loan to deposit ratio now totals 73 percent and loan to asset ratio totals 60 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 13.92 percent, common equity tier 1 capital ratio equaled 11.68 percent, and the tangible common equity ratio totaled 9.01 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.
CONFERENCE CALL
First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, January 27, 2022.
To participate, dial (Toll Free) 877-806-2932 and reference Conference ID 2169777. 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/i8985qq2 during the time of the call. A replay of the webcast will be available until January 27, 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 (as a division 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.
SOURCE: First Merchants Corporation, Muncie, Indiana
For more information, contact:
Nicole M. Weaver, Vice President and Director of Corporate Administration
765-521-7619
http://www.firstmerchants.com
CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars In Thousands) | December 31, | ||||||
2021 | 2020 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 167,146 | $ | 192,896 | |||
Interest-bearing deposits | 474,154 | 392,305 | |||||
Investment securities, net of allowance for credit losses of $245,000 and $0 | 4,524,353 | 3,146,787 | |||||
Loans held for sale | 11,187 | 3,966 | |||||
Loans | 9,241,861 | 9,243,174 | |||||
Less: Allowance for credit losses - loans | (195,397 | ) | (130,648 | ) | |||
Net loans | 9,046,464 | 9,112,526 | |||||
Premises and equipment | 105,655 | 111,062 | |||||
Federal Home Loan Bank stock | 28,736 | 28,736 | |||||
Interest receivable | 57,187 | 53,948 | |||||
Goodwill and other intangibles | 570,860 | 572,893 | |||||
Cash surrender value of life insurance | 291,041 | 292,745 | |||||
Other real estate owned | 558 | 940 | |||||
Tax asset, deferred and receivable | 35,641 | 12,340 | |||||
Other assets | 140,167 | 146,066 | |||||
TOTAL ASSETS | $ | 15,453,149 | $ | 14,067,210 | |||
LIABILITIES | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 2,709,646 | $ | 2,298,138 | |||
Interest-bearing | 10,022,931 | 9,063,472 | |||||
Total Deposits | 12,732,577 | 11,361,610 | |||||
Borrowings: | |||||||
Securities sold under repurchase agreements | 181,577 | 177,102 | |||||
Federal Home Loan Bank advances | 334,055 | 389,430 | |||||
Subordinated debentures and other borrowings | 118,618 | 118,380 | |||||
Total Borrowings | 634,250 | 684,912 | |||||
Interest payable | 2,762 | 3,287 | |||||
Other liabilities | 170,989 | 141,756 | |||||
Total Liabilities | 13,540,578 | 12,191,565 | |||||
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 - 53,410,411 and 53,922,359 shares | 6,676 | 6,740 | |||||
Additional paid-in capital | 985,818 | 1,005,366 | |||||
Retained earnings | 864,839 | 788,578 | |||||
Accumulated other comprehensive income | 55,113 | 74,836 | |||||
Total Stockholders' Equity | 1,912,571 | 1,875,645 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 15,453,149 | $ | 14,067,210 |
CONSOLIDATED STATEMENTS OF INCOME | Three Months Ended | Twelve Months Ended | ||||||||||
(Dollars In Thousands, Except Per Share Amounts) | December 31, | December 31, | ||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
INTEREST INCOME | ||||||||||||
Loans receivable: | ||||||||||||
Taxable | $ | 80,583 | $ | 90,138 | $ | 338,009 | $ | 358,264 | ||||
Tax-exempt | 5,635 | 5,414 | 22,110 | 21,483 | ||||||||
Investment securities: | ||||||||||||
Taxable | 8,028 | 5,263 | 29,951 | 24,440 | ||||||||
Tax-exempt | 15,411 | 12,056 | 55,331 | 42,341 | ||||||||
Deposits with financial institutions | 173 | 139 | 634 | 938 | ||||||||
Federal Home Loan Bank stock | 163 | 214 | 597 | 1,042 | ||||||||
Total Interest Income | 109,993 | 113,224 | 446,632 | 448,508 | ||||||||
INTEREST EXPENSE | ||||||||||||
Deposits | 5,589 | 7,509 | 23,319 | 51,740 | ||||||||
Federal funds purchased | 1 | 2 | 5 | 120 | ||||||||
Securities sold under repurchase agreements | 75 | 77 | 314 | 604 | ||||||||
Federal Home Loan Bank advances | 1,389 | 1,656 | 5,672 | 6,973 | ||||||||
Subordinated debentures and other borrowings | 1,666 | 1,669 | 6,642 | 6,944 | ||||||||
Total Interest Expense | 8,720 | 10,913 | 35,952 | 66,381 | ||||||||
NET INTEREST INCOME | 101,273 | 102,311 | 410,680 | 382,127 | ||||||||
Provision for credit losses - loans | — | 4,482 | — | 58,673 | ||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 101,273 | 97,829 | 410,680 | 323,454 | ||||||||
OTHER INCOME | ||||||||||||
Service charges on deposit accounts | 6,462 | 5,508 | 23,571 | 20,999 | ||||||||
Fiduciary and wealth management fees | 7,078 | 6,251 | 28,362 | 23,747 | ||||||||
Card payment fees | 3,937 | 3,502 | 16,619 | 19,502 | ||||||||
Net gains and fees on sales of loans | 3,423 | 5,393 | 19,689 | 18,271 | ||||||||
Derivative hedge fees | 1,562 | 2,281 | 3,850 | 6,977 | ||||||||
Other customer fees | 361 | 394 | 1,490 | 1,497 | ||||||||
Earnings on cash surrender value of life insurance | 2,051 | 1,283 | 7,060 | 5,140 | ||||||||
Net realized gains on sales of available for sale securities | 358 | 2,398 | 5,674 | 11,895 | ||||||||
Other income | 615 | 473 | 3,008 | 1,898 | ||||||||
Total Other Income | 25,847 | 27,483 | 109,323 | 109,926 | ||||||||
OTHER EXPENSES | ||||||||||||
Salaries and employee benefits | 42,432 | 41,809 | 166,995 | 155,937 | ||||||||
Net occupancy | 5,644 | 9,653 | 23,326 | 26,756 | ||||||||
Equipment | 4,994 | 5,555 | 19,401 | 19,344 | ||||||||
Marketing | 1,840 | 1,763 | 5,762 | 6,609 | ||||||||
Outside data processing fees | 4,581 | 3,839 | 18,317 | 14,432 | ||||||||
Printing and office supplies | 356 | 307 | 1,217 | 1,304 | ||||||||
Intangible asset amortization | 1,463 | 1,476 | 5,747 | 5,987 | ||||||||
FDIC assessments | 1,862 | 1,560 | 6,243 | 5,804 | ||||||||
Other real estate owned and foreclosure expenses | 171 | (1,576 | ) | 992 | 330 | |||||||
Professional and other outside services | 3,627 | 2,836 | 11,913 | 8,901 | ||||||||
Other expenses | 5,466 | 5,314 | 19,300 | 18,001 | ||||||||
Total Other Expenses | 72,436 | 72,536 | 279,213 | 263,405 | ||||||||
INCOME BEFORE INCOME TAX | 54,684 | 52,776 | 240,790 | 169,975 | ||||||||
Income tax expense | 6,951 | 7,641 | 35,259 | 21,375 | ||||||||
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 47,733 | $ | 45,135 | $ | 205,531 | $ | 148,600 | ||||
Per Share Data: | ||||||||||||
Basic Net Income Available to Common Stockholders | $ | 0.89 | $ | 0.83 | $ | 3.82 | $ | 2.75 | ||||
Diluted Net Income Available to Common Stockholders | $ | 0.89 | $ | 0.83 | $ | 3.81 | $ | 2.74 | ||||
Cash Dividends Paid | $ | 0.29 | $ | 0.26 | $ | 1.13 | $ | 1.04 | ||||
Average Diluted Shares Outstanding (in thousands) | 53,660 | 54,050 | 53,984 | 54,220 |
FINANCIAL HIGHLIGHTS | |||||||||||||||
(Dollars in thousands) | Three Months Ended | Twelve Months Ended | |||||||||||||
December 31, | December 31, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
NET CHARGE-OFFS | $ | 4,575 | $ | 560 | $ | 9,306 | $ | 8,309 | |||||||
AVERAGE BALANCES: | |||||||||||||||
Total Assets | $ | 15,298,655 | $ | 13,968,047 | $ | 14,830,397 | $ | 13,466,269 | |||||||
Total Loans | 9,076,652 | 9,240,304 | 9,170,650 | 9,051,155 | |||||||||||
Total Earning Assets | 14,053,310 | 12,663,803 | 13,579,113 | 12,123,317 | |||||||||||
Total Deposits | 12,647,737 | 11,283,040 | 12,176,231 | 10,728,106 | |||||||||||
Total Stockholders' Equity | 1,890,229 | 1,856,896 | 1,866,632 | 1,825,135 | |||||||||||
FINANCIAL RATIOS: | |||||||||||||||
Return on Average Assets | 1.25 | % | 1.29 | % | 1.39 | % | 1.10 | % | |||||||
Return on Average Stockholders' Equity | 10.10 | 9.72 | 11.01 | 8.14 | |||||||||||
Return on Average Common Stockholders' Equity | 10.10 | 9.72 | 11.01 | 8.14 | |||||||||||
Average Earning Assets to Average Assets | 91.86 | 90.66 | 91.56 | 90.03 | |||||||||||
Allowance for Credit Losses - Loans as % of Total Loans | 2.11 | 1.41 | 2.11 | 1.41 | |||||||||||
Net Charge-offs as % of Average Loans (Annualized) | 0.20 | 0.02 | 0.10 | 0.09 | |||||||||||
Average Stockholders' Equity to Average Assets | 12.36 | 13.29 | 12.59 | 13.55 | |||||||||||
Tax Equivalent Yield on Average Earning Assets | 3.29 | 3.72 | 3.44 | 3.84 | |||||||||||
Interest Expense/Average Earning Assets | 0.25 | 0.34 | 0.26 | 0.55 | |||||||||||
Net Interest Margin (FTE) on Average Earning Assets | 3.04 | 3.38 | 3.18 | 3.29 | |||||||||||
Efficiency Ratio | 53.49 | 55.01 | 50.94 | 51.71 | |||||||||||
Tangible Common Book Value Per Share | $ | 25.21 | $ | 24.27 | $ | 25.21 | $ | 24.27 |
NON-PERFORMING ASSETS | |||||||||||||||||||
(Dollars In Thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||
2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
Non-Accrual Loans | $ | 43,062 | $ | 51,502 | $ | 57,556 | $ | 57,923 | $ | 61,471 | |||||||||
Renegotiated Loans | 329 | 439 | 629 | 655 | 3,240 | ||||||||||||||
Non-Performing Loans (NPL) | 43,391 | 51,941 | 58,185 | 58,578 | 64,711 | ||||||||||||||
Other Real Estate Owned and Repossessions | 558 | 698 | 601 | 604 | 940 | ||||||||||||||
Non-Performing Assets (NPA) | 43,949 | 52,639 | 58,786 | 59,182 | 65,651 | ||||||||||||||
90+ Days Delinquent | 963 | 157 | 183 | 1,093 | 746 | ||||||||||||||
NPAs & 90 Day Delinquent | $ | 44,912 | $ | 52,796 | $ | 58,969 | $ | 60,275 | $ | 66,397 | |||||||||
Allowance for Credit Losses - Loans | $ | 195,397 | $ | 199,972 | $ | 199,775 | $ | 201,082 | $ | 130,648 | |||||||||
Quarterly Net Charge-offs | 4,575 | (197 | ) | 1,307 | 3,621 | 560 | |||||||||||||
NPAs / Actual Assets % | 0.28 | % | 0.35 | % | 0.39 | % | 0.40 | % | 0.47 | % | |||||||||
NPAs & 90 Day / Actual Assets % | 0.29 | % | 0.35 | % | 0.40 | % | 0.41 | % | 0.47 | % | |||||||||
NPAs / Actual Loans and OREO % | 0.47 | % | 0.58 | % | 0.64 | % | 0.63 | % | 0.71 | % | |||||||||
Allowance for Credit Losses - Loans / Actual Loans (%) | 2.11 | % | 2.21 | % | 2.19 | % | 2.16 | % | 1.41 | % | |||||||||
Net Charge-offs as % of Average Loans (Annualized) | 0.20 | % | (0.01 | )% | 0.06 | % | 0.16 | % | 0.02 | % |
CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||
(Dollars In Thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||
2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 167,146 | $ | 169,261 | $ | 167,596 | $ | 187,901 | $ | 192,896 | |||||||||
Interest-bearing deposits | 474,154 | 369,447 | 438,863 | 392,806 | 392,305 | ||||||||||||||
Investment securities, net of allowance for credit losses | 4,524,353 | 4,445,516 | 4,148,314 | 3,700,857 | 3,146,787 | ||||||||||||||
Loans held for sale | 11,187 | 5,990 | 18,582 | 4,430 | 3,966 | ||||||||||||||
Loans | 9,241,861 | 9,041,576 | 9,121,250 | 9,318,228 | 9,243,174 | ||||||||||||||
Less: Allowance for credit losses - loans | (195,397 | ) | (199,972 | ) | (199,775 | ) | (201,082 | ) | (130,648 | ) | |||||||||
Net loans | 9,046,464 | 8,841,604 | 8,921,475 | 9,117,146 | 9,112,526 | ||||||||||||||
Premises and equipment | 105,655 | 104,814 | 103,822 | 109,432 | 111,062 | ||||||||||||||
Federal Home Loan Bank stock | 28,736 | 28,736 | 28,736 | 28,736 | 28,736 | ||||||||||||||
Interest receivable | 57,187 | 53,079 | 54,173 | 54,662 | 53,948 | ||||||||||||||
Goodwill and other intangibles | 570,860 | 572,323 | 573,786 | 571,536 | 572,893 | ||||||||||||||
Cash surrender value of life insurance | 291,041 | 291,825 | 294,462 | 293,766 | 292,745 | ||||||||||||||
Other real estate owned | 558 | 698 | 601 | 604 | 940 | ||||||||||||||
Tax asset, deferred and receivable | 35,641 | 39,504 | 36,924 | 40,163 | 12,340 | ||||||||||||||
Other assets | 140,167 | 137,928 | 135,763 | 127,027 | 146,066 | ||||||||||||||
TOTAL ASSETS | $ | 15,453,149 | $ | 15,060,725 | $ | 14,923,097 | $ | 14,629,066 | $ | 14,067,210 | |||||||||
LIABILITIES | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Noninterest-bearing | $ | 2,709,646 | $ | 2,554,323 | $ | 2,479,853 | $ | 2,494,891 | $ | 2,298,138 | |||||||||
Interest-bearing | 10,022,931 | 9,794,366 | 9,723,547 | 9,456,889 | 9,063,472 | ||||||||||||||
Total Deposits | 12,732,577 | 12,348,689 | 12,203,400 | 11,951,780 | 11,361,610 | ||||||||||||||
Borrowings: | |||||||||||||||||||
Securities sold under repurchase agreements | 181,577 | 183,589 | 146,904 | 185,721 | 177,102 | ||||||||||||||
Federal Home Loan Bank advances | 334,055 | 334,149 | 334,243 | 359,337 | 389,430 | ||||||||||||||
Subordinated debentures and other borrowings | 118,618 | 118,558 | 118,498 | 118,439 | 118,380 | ||||||||||||||
Total Borrowings | 634,250 | 636,296 | 599,645 | 663,497 | 684,912 | ||||||||||||||
Interest payable | 2,762 | 3,736 | 2,929 | 4,020 | 3,287 | ||||||||||||||
Other liabilities | 170,989 | 203,914 | 245,323 | 203,913 | 141,756 | ||||||||||||||
Total Liabilities | 13,540,578 | 13,192,635 | 13,051,297 | 12,823,210 | 12,191,565 | ||||||||||||||
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 | 6,676 | 6,689 | 6,747 | 6,744 | 6,740 | ||||||||||||||
Additional paid-in capital | 985,818 | 988,659 | 1,009,182 | 1,007,300 | 1,005,366 | ||||||||||||||
Retained earnings | 864,839 | 832,728 | 795,666 | 755,877 | 788,578 | ||||||||||||||
Accumulated other comprehensive income | 55,113 | 39,889 | 60,080 | 35,810 | 74,836 | ||||||||||||||
Total Stockholders' Equity | 1,912,571 | 1,868,090 | 1,871,800 | 1,805,856 | 1,875,645 | ||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 15,453,149 | $ | 15,060,725 | $ | 14,923,097 | $ | 14,629,066 | $ | 14,067,210 | |||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||
(Dollars In Thousands, Except Per Share Amounts) | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||
2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
INTEREST INCOME | |||||||||||||||||||
Loans receivable: | |||||||||||||||||||
Taxable | $ | 80,583 | $ | 85,319 | $ | 87,002 | $ | 85,105 | $ | 90,138 | |||||||||
Tax-exempt | 5,635 | 5,591 | 5,545 | 5,339 | 5,414 | ||||||||||||||
Investment securities: | |||||||||||||||||||
Taxable | 8,028 | 7,788 | 7,440 | 6,695 | 5,263 | ||||||||||||||
Tax-exempt | 15,411 | 14,464 | 13,071 | 12,385 | 12,056 | ||||||||||||||
Deposits with financial institutions | 173 | 218 | 129 | 114 | 139 | ||||||||||||||
Federal Home Loan Bank stock | 163 | 168 | 88 | 178 | 214 | ||||||||||||||
Total Interest Income | 109,993 | 113,548 | 113,275 | 109,816 | 113,224 | ||||||||||||||
INTEREST EXPENSE | |||||||||||||||||||
Deposits | 5,589 | 5,707 | 5,823 | 6,200 | 7,509 | ||||||||||||||
Federal funds purchased | 1 | — | 2 | 2 | 2 | ||||||||||||||
Securities sold under repurchase agreements | 75 | 77 | 75 | 87 | 77 | ||||||||||||||
Federal Home Loan Bank advances | 1,389 | 1,389 | 1,452 | 1,442 | 1,656 | ||||||||||||||
Subordinated debentures and other borrowings | 1,666 | 1,660 | 1,659 | 1,657 | 1,669 | ||||||||||||||
Total Interest Expense | 8,720 | 8,833 | 9,011 | 9,388 | 10,913 | ||||||||||||||
NET INTEREST INCOME | 101,273 | 104,715 | 104,264 | 100,428 | 102,311 | ||||||||||||||
Provision for credit losses - loans | — | — | — | — | 4,482 | ||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 101,273 | 104,715 | 104,264 | 100,428 | 97,829 | ||||||||||||||
OTHER INCOME | |||||||||||||||||||
Service charges on deposit accounts | 6,462 | 6,249 | 5,596 | 5,264 | 5,508 | ||||||||||||||
Fiduciary and wealth management fees | 7,078 | 7,352 | 7,510 | 6,422 | 6,251 | ||||||||||||||
Card payment fees | 3,937 | 4,156 | 4,159 | 4,367 | 3,502 | ||||||||||||||
Net gains and fees on sales of loans | 3,423 | 3,955 | 8,325 | 3,986 | 5,393 | ||||||||||||||
Derivative hedge fees | 1,562 | 1,028 | 943 | 317 | 2,281 | ||||||||||||||
Other customer fees | 361 | 393 | 368 | 368 | 394 | ||||||||||||||
Earnings on cash surrender value of life insurance | 2,051 | 2,468 | 1,205 | 1,336 | 1,283 | ||||||||||||||
Net realized gains on sales of available for sale securities | 358 | 1,756 | 1,761 | 1,799 | 2,398 | ||||||||||||||
Other income | 615 | 1,144 | 1,017 | 232 | 473 | ||||||||||||||
Total Other Income | 25,847 | 28,501 | 30,884 | 24,091 | 27,483 | ||||||||||||||
OTHER EXPENSES | |||||||||||||||||||
Salaries and employee benefits | 42,432 | 43,314 | 42,438 | 38,811 | 41,809 | ||||||||||||||
Net occupancy | 5,644 | 5,576 | 5,615 | 6,491 | 9,653 | ||||||||||||||
Equipment | 4,994 | 4,529 | 4,848 | 5,030 | 5,555 | ||||||||||||||
Marketing | 1,840 | 1,676 | 1,122 | 1,124 | 1,763 | ||||||||||||||
Outside data processing fees | 4,581 | 4,794 | 4,698 | 4,244 | 3,839 | ||||||||||||||
Printing and office supplies | 356 | 265 | 313 | 283 | 307 | ||||||||||||||
Intangible asset amortization | 1,463 | 1,463 | 1,464 | 1,357 | 1,476 | ||||||||||||||
FDIC assessments | 1,862 | 1,552 | 1,461 | 1,368 | 1,560 | ||||||||||||||
Other real estate owned and foreclosure expenses | 171 | (91 | ) | 178 | 734 | (1,576 | ) | ||||||||||||
Professional and other outside services | 3,627 | 2,767 | 2,976 | 2,543 | 2,836 | ||||||||||||||
Other expenses | 5,466 | 5,539 | 4,182 | 4,113 | 5,314 | ||||||||||||||
Total Other Expenses | 72,436 | 71,384 | 69,295 | 66,098 | 72,536 | ||||||||||||||
INCOME BEFORE INCOME TAX | 54,684 | 61,832 | 65,853 | 58,421 | 52,776 | ||||||||||||||
Income tax expense | 6,951 | 9,062 | 10,294 | 8,952 | 7,641 | ||||||||||||||
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 47,733 | $ | 52,770 | $ | 55,559 | $ | 49,469 | $ | 45,135 | |||||||||
Per Share Data: | |||||||||||||||||||
Basic Net Income Available to Common Stockholders | $ | 0.89 | $ | 0.98 | $ | 1.03 | $ | 0.92 | $ | 0.83 | |||||||||
Diluted Net Income Available to Common Stockholders | $ | 0.89 | $ | 0.98 | $ | 1.03 | $ | 0.91 | $ | 0.83 | |||||||||
Cash Dividends Paid | $ | 0.29 | $ | 0.29 | $ | 0.29 | $ | 0.26 | $ | 0.26 | |||||||||
Average Diluted Shares Outstanding (in thousands) | 53,660 | 53,960 | 54,184 | 54,134 | 54,050 | ||||||||||||||
FINANCIAL RATIOS: | |||||||||||||||||||
Return on Average Assets | 1.25 | % | 1.41 | % | 1.51 | % | 1.39 | % | 1.29 | % | |||||||||
Return on Average Stockholders' Equity | 10.10 | 11.17 | 12.04 | 10.75 | 9.72 | ||||||||||||||
Return on Average Common Stockholders' Equity | 10.10 | 11.17 | 12.04 | 10.75 | 9.72 | ||||||||||||||
Average Earning Assets to Average Assets | 91.86 | 91.57 | 91.87 | 91.43 | 90.66 | ||||||||||||||
Allowance for Credit Losses - Loans as % of Total Loans | 2.11 | 2.21 | 2.19 | 2.16 | 1.41 | ||||||||||||||
Net Charge-offs as % of Average Loans (Annualized) | 0.20 | (0.01 | ) | 0.06 | 0.16 | 0.02 | |||||||||||||
Average Stockholders' Equity to Average Assets | 12.36 | 12.59 | 12.51 | 12.92 | 13.29 | ||||||||||||||
Tax Equivalent Yield on Average Earning Assets | 3.29 | 3.46 | 3.49 | 3.52 | 3.72 | ||||||||||||||
Interest Expense/Average Earning Assets | 0.25 | 0.26 | 0.27 | 0.29 | 0.34 | ||||||||||||||
Net Interest Margin (FTE) on Average Earning Assets | 3.04 | 3.20 | 3.22 | 3.23 | 3.38 | ||||||||||||||
Efficiency Ratio | 53.49 | 51.18 | 48.91 | 50.23 | 55.01 | ||||||||||||||
Tangible Common Book Value Per Share | $ | 25.21 | $ | 24.31 | $ | 24.15 | $ | 22.98 | $ | 24.27 |
LOANS | |||||||||||||||||||
(Dollars In Thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||
2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
Commercial and industrial loans | $ | 2,714,565 | $ | 2,573,615 | $ | 2,671,076 | $ | 2,876,212 | $ | 2,776,699 | |||||||||
Agricultural land, production and other loans to farmers | 246,442 | 240,686 | 235,020 | 245,631 | 281,884 | ||||||||||||||
Real estate loans: | |||||||||||||||||||
Construction | 523,066 | 521,889 | 491,200 | 541,224 | 484,723 | ||||||||||||||
Commercial real estate, non-owner occupied | 2,135,459 | 2,150,387 | 2,263,497 | 2,178,832 | 2,220,949 | ||||||||||||||
Commercial real estate, owner occupied | 986,720 | 952,441 | 953,501 | 950,038 | 958,501 | ||||||||||||||
Residential | 1,159,127 | 1,154,373 | 1,127,442 | 1,239,925 | 1,234,741 | ||||||||||||||
Home equity | 523,754 | 531,307 | 489,997 | 482,229 | 508,259 | ||||||||||||||
Individuals' loans for household and other personal expenditures | 146,092 | 135,093 | 130,819 | 126,387 | 129,479 | ||||||||||||||
Public finance and other commercial loans | 806,636 | 781,785 | 758,698 | 677,750 | 647,939 | ||||||||||||||
Loans | 9,241,861 | 9,041,576 | 9,121,250 | 9,318,228 | 9,243,174 | ||||||||||||||
Allowance for credit losses - loans | (195,397 | ) | (199,972 | ) | (199,775 | ) | (201,082 | ) | (130,648 | ) | |||||||||
NET LOANS | $ | 9,046,464 | $ | 8,841,604 | $ | 8,921,475 | $ | 9,117,146 | $ | 9,112,526 |
DEPOSITS | ||||||||||||||
(Dollars In Thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||
2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||
Demand deposits | $ | 7,704,190 | $ | 7,317,399 | $ | 7,261,603 | $ | 7,245,850 | $ | 6,821,152 | ||||
Savings deposits | 4,334,802 | 4,301,483 | 4,157,552 | 3,857,624 | 3,661,713 | |||||||||
Certificates and other time deposits of $100,000 or more | 273,379 | 283,396 | 304,394 | 332,745 | 346,194 | |||||||||
Other certificates and time deposits | 389,752 | 404,010 | 423,922 | 449,655 | 459,168 | |||||||||
Brokered deposits | 30,454 | 42,401 | 55,929 | 65,906 | 73,383 | |||||||||
TOTAL DEPOSITS | $ | 12,732,577 | $ | 12,348,689 | $ | 12,203,400 | $ | 11,951,780 | $ | 11,361,610 |
CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS | |||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
For the Three Months Ended | |||||||||||||||||
December 31, 2021 | December 31, 2020 | ||||||||||||||||
Average Balance | Interest Income / Expense | Average Rate | Average Balance | Interest Income / Expense | Average Rate | ||||||||||||
Assets: | |||||||||||||||||
Interest-bearing deposits | $ | 558,677 | $ | 173 | 0.12 | % | $ | 437,766 | $ | 139 | 0.13 | % | |||||
Federal Home Loan Bank stock | 28,736 | 163 | 2.27 | 28,736 | 214 | 2.98 | |||||||||||
Investment Securities: (1) | |||||||||||||||||
Taxable | 1,936,519 | 8,028 | 1.66 | 1,222,916 | 5,263 | 1.72 | |||||||||||
Tax-Exempt (2) | 2,452,726 | 19,508 | 3.18 | 1,734,081 | 15,261 | 3.52 | |||||||||||
Total Investment Securities | 4,389,245 | 27,536 | 2.51 | 2,956,997 | 20,524 | 2.78 | |||||||||||
Loans held for sale | 20,688 | 196 | 3.79 | 19,103 | 200 | 4.19 | |||||||||||
Loans: (3) | |||||||||||||||||
Commercial | 6,703,241 | 65,867 | 3.93 | 6,925,491 | 73,530 | 4.25 | |||||||||||
Real Estate Mortgage | 889,571 | 7,866 | 3.54 | 911,042 | 9,482 | 4.16 | |||||||||||
Installment | 711,309 | 6,654 | 3.74 | 698,619 | 6,925 | 3.96 | |||||||||||
Tax-Exempt (2) | 751,843 | 7,133 | 3.79 | 686,049 | 6,854 | 4.00 | |||||||||||
Total Loans | 9,076,652 | 87,716 | 3.87 | 9,240,304 | 96,991 | 4.20 | |||||||||||
Total Earning Assets | 14,053,310 | 115,588 | 3.29 | % | 12,663,803 | 117,868 | 3.72 | % | |||||||||
Total Non-Earning Assets | 1,245,345 | 1,304,244 | |||||||||||||||
Total Assets | $ | 15,298,655 | $ | 13,968,047 | |||||||||||||
Liabilities: | |||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||
Interest-bearing deposits | $ | 4,912,556 | $ | 3,637 | 0.30 | % | $ | 4,393,991 | $ | 3,888 | 0.35 | % | |||||
Money market deposits | 2,518,612 | 809 | 0.13 | 2,051,985 | 1,164 | 0.23 | |||||||||||
Savings deposits | 1,828,631 | 461 | 0.10 | 1,613,886 | 634 | 0.16 | |||||||||||
Certificates and other time deposits | 706,617 | 682 | 0.39 | 961,187 | 1,823 | 0.76 | |||||||||||
Total Interest-bearing Deposits | 9,966,416 | 5,589 | 0.22 | 9,021,049 | 7,509 | 0.33 | |||||||||||
Borrowings | 620,398 | 3,131 | 2.02 | 683,068 | 3,404 | 1.99 | |||||||||||
Total Interest-bearing Liabilities | 10,586,814 | 8,720 | 0.33 | 9,704,117 | 10,913 | 0.45 | |||||||||||
Noninterest-bearing deposits | 2,681,321 | 2,261,991 | |||||||||||||||
Other liabilities | 140,291 | 145,043 | |||||||||||||||
Total Liabilities | 13,408,426 | 12,111,151 | |||||||||||||||
Stockholders' Equity | 1,890,229 | 1,856,896 | |||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 15,298,655 | 8,720 | $ | 13,968,047 | 10,913 | |||||||||||
Net Interest Income (FTE) | $ | 106,868 | $ | 106,955 | |||||||||||||
Net Interest Spread (FTE) (4) | 2.96 | % | 3.27 | % | |||||||||||||
Net Interest Margin (FTE): | |||||||||||||||||
Interest Income (FTE) / Average Earning Assets | 3.29 | % | 3.72 | % | |||||||||||||
Interest Expense / Average Earning Assets | 0.25 | % | 0.34 | % | |||||||||||||
Net Interest Margin (FTE) (5) | 3.04 | % | 3.38 | % | |||||||||||||
(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 2021 and 2020. These totals equal $5,595 and $4,644 for the three months ended December 31, 2021 and 2020, 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. |
CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS | |||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
For the Twelve Months Ended | |||||||||||||||||
December 31, 2021 | December 31, 2020 | ||||||||||||||||
Average Balance | Interest Income / Expense | Average Rate | Average Balance | Interest Income / Expense | Average Rate | ||||||||||||
Assets: | |||||||||||||||||
Interest-bearing deposits | $ | 521,637 | $ | 634 | 0.12 | % | $ | 319,686 | $ | 938 | 0.29 | % | |||||
Federal Home Loan Bank stock | 28,736 | 597 | 2.08 | 28,736 | 1,042 | 3.63 | |||||||||||
Investment Securities: (1) | |||||||||||||||||
Taxable | 1,751,910 | 29,951 | 1.71 | 1,282,827 | 24,440 | 1.91 | |||||||||||
Tax-Exempt (2) | 2,106,180 | 70,039 | 3.33 | 1,440,913 | 53,596 | 3.72 | |||||||||||
Total Investment Securities | 3,858,090 | 99,990 | 2.59 | 2,723,740 | 78,036 | 2.87 | |||||||||||
Loans held for sale | 19,190 | 747 | 3.89 | 18,559 | 781 | 4.21 | |||||||||||
Loans: (3) | |||||||||||||||||
Commercial | 6,818,968 | 276,368 | 4.05 | 6,755,215 | 286,773 | 4.25 | |||||||||||
Real Estate Mortgage | 916,314 | 34,783 | 3.80 | 889,083 | 40,002 | 4.50 | |||||||||||
Installment | 683,925 | 26,111 | 3.82 | 718,815 | 30,708 | 4.27 | |||||||||||
Tax-Exempt (2) | 732,253 | 27,987 | 3.82 | 669,483 | 27,194 | 4.06 | |||||||||||
Total Loans | 9,170,650 | 365,996 | 3.99 | 9,051,155 | 385,458 | 4.26 | |||||||||||
Total Earning Assets | 13,579,113 | 467,217 | 3.44 | % | 12,123,317 | 465,474 | 3.84 | % | |||||||||
Total Non-Earning Assets | 1,251,284 | 1,342,952 | |||||||||||||||
Total Assets | $ | 14,830,397 | $ | 13,466,269 | |||||||||||||
Liabilities: | |||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||
Interest-bearing deposits | $ | 4,769,482 | $ | 14,512 | 0.30 | % | $ | 4,009,566 | $ | 20,239 | 0.50 | % | |||||
Money market deposits | 2,351,803 | 3,203 | 0.14 | 1,769,478 | 7,810 | 0.44 | |||||||||||
Savings deposits | 1,754,972 | 1,886 | 0.11 | 1,534,069 | 3,641 | 0.24 | |||||||||||
Certificates and other time deposits | 783,733 | 3,718 | 0.47 | 1,346,967 | 20,050 | 1.49 | |||||||||||
Total Interest-bearing Deposits | 9,659,990 | 23,319 | 0.24 | 8,660,080 | 51,740 | 0.60 | |||||||||||
Borrowings | 639,791 | 12,633 | 1.97 | 768,238 | 14,641 | 1.91 | |||||||||||
Total Interest-bearing Liabilities | 10,299,781 | 35,952 | 0.35 | 9,428,318 | 66,381 | 0.70 | |||||||||||
Noninterest-bearing deposits | 2,516,241 | 2,068,026 | |||||||||||||||
Other liabilities | 147,743 | 144,790 | |||||||||||||||
Total Liabilities | 12,963,765 | 11,641,134 | |||||||||||||||
Stockholders' Equity | 1,866,632 | 1,825,135 | |||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 14,830,397 | 35,952 | $ | 13,466,269 | 66,381 | |||||||||||
Net Interest Income (FTE) | $ | 431,265 | $ | 399,093 | |||||||||||||
Net Interest Spread (FTE) (4) | 3.09 | % | 3.14 | % | |||||||||||||
Net Interest Margin (FTE): | |||||||||||||||||
Interest Income (FTE) / Average Earning Assets | 3.44 | % | 3.84 | % | |||||||||||||
Interest Expense / Average Earning Assets | 0.26 | % | 0.55 | % | |||||||||||||
Net Interest Margin (FTE) (5) | 3.18 | % | 3.29 | % | |||||||||||||
(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 2021 and 2020. These totals equal $20,585 and $16,966 for the twelve months ended December 31, 2021 and 2020, 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. |
![](https://ml.globenewswire.com/media/MmU2MjkyNTgtYTk1NC00OGViLWI3N2QtYzMwMTZmNGQ0MmFmLTEwOTc5MjA=/tiny/First-Merchants-Corporation.png)