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 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
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

News Release Details

First Merchants Corporation Announces First Quarter 2022 Earnings Per Share

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