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First Merchants Corporation Announces First Quarter 2022 Earnings Per Share

04/26/2022

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 INCOMEThree 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 
Savings deposits 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


  • First Merchants Corporation

    200 East Jackson Street
    P.O. Box 792
    Muncie, IN 47305-2814

    (765) 747-1500

  • Investor Relations Contact

    Nicole M. Weaver
    765.521.7619 or
    800.262.4261, Ext. 47619

    nweaver@firstmerchants.com

  • Shareholder Relations Contact

    Cindy Holaday
    765.741.7278 or
    800.262.4261, Ext. 27278

    shareholderrelations
    @firstmerchants.com

  • Transfer Agent

    Broadridge
    PO Box 1342
    Brentwood, NY 11717-0718
    (888) 401-4448

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