UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): July 28, 2010
Commission File Number 0-17071
FIRST MERCHANTS CORPORATION
(Exact name of registrant as specified in its charter)
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INDIANA
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35-1544218
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(State or other jurisdiction of incorporation)
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(IRS Employer Identification No.)
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200 East Jackson Street
P.O. Box 792
Muncie, IN 47305-2814
(Address of principal executive offices, including zip code)
(765) 747-1500
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 28, 2010 First Merchants Corporation issued a press release to report its financial results for the second quarter ended June 30, 2010. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K, including Exhibit No. 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
Exhibit 99.1 Press Release, dated July 28, 2010, issued by First Merchants Corporation
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
First Merchants Corporation
(Registrant)
By: /s/ Mark K. Hardwick
Mark K. Hardwick
Executive Vice President and Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
Dated: July 28, 2010
EXHIBIT INDEX
Exhibit No.
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99.1
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Description
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Press Release, dated July 28, 2010, issued by First Merchants Corporation
N / E / W / S R / E / L / E / A / S / E
July 28, 2010
FOR IMMEDIATE RELEASE
For more information, contact:
David L. Ortega, First Vice President/Director of Investor Relations
765-378-8937
http://www.firstmerchants.com/
SOURCE: First Merchants Corporation, Muncie, Indiana
FIRST MERCHANTS CORPORATION ANNOUNCES 2nd QUARTER RESULTS AND IMPROVED TANGIBLE CAPITAL
First Merchants Corporation (NASDAQ – FRME) has reported second quarter earnings totaling $.35 per fully diluted common share and net income available to common stockholders of $8.3 million. Year-to-date earnings per fully diluted common share and net income available to common stockholders totaled $.36 and $8.4 million, respectively.
Michael C. Rechin, President and Chief Executive Officer, stated, “Our results for the second quarter reflect continued progress in building our tangible capital, our net interest margin and in expense control. The second quarter of last year was our most difficult period through the recession so it is rewarding to post substantial improvement year over year. We are committed to working through the credit issues that remain in our loan portfolio”. Rechin also stated, “The improvement in the tangible common equity ratio to 5.88 percent provides a stable capital base for the future. Our highest priority continues to be meeting the needs of the communities and customers we serv
e and managing the improvement of our loan portfolio through the balance of the credit cycle.”
Total assets were $4.183 billion as of quarter end and total loans, including loans held for sale, were $3.059 billion as loan demand from our commercial and consumer customers remains soft. The added liquidity produced from growth in the Corporation’s demand deposits of $48 million and loan maturities, throughout the twelve month period, resulted in strategic reductions of higher paying deposit liabilities and borrowings and increases in the Corporation’s bond portfolio. The Corporation’s loan to deposit ratio is now 93.8 percent and its loan to asset ratio totals 73.1 percent.
Net-Interest margin expanded by 26 basis points, compared to the same three month period last year, and remained strong totaling 3.90 percent for the quarter as net interest income totaled just over $36 million, reflecting the strength of our asset yields and funding costs.
Non-interest income totaled $11.0 million for the quarter, after adjusting for gains from the sale of securities totaling $257,000 and other-than-temporary impairment (OTTI) charges of $400,000. The second quarter of 2009 totaled $12.4 million on a comparative basis. Nearly $500,000 of the decline is related to the lower income derived from interest rate floors that expired early in 2009.
Total non-interest expense for the second quarter of 2010 totaled $34.3 million, a decrease of $3.8 million compared to the second quarter 2009 results. Salary and benefit expense declined by $1.7 million, or 8.9 percent, and is the primary cause of the expense reduction.
The Corporation’s pre-tax, pre-provision earnings totaled $12.8 million for the quarter. When normalized for a fully taxable equivalent net interest income and various adjustments, the pre-tax, pre-provision earnings totaled $16.8 million for the second quarter of 2010.
The $10.1 million after-tax gain resulting from favorable accounting treatment attributed to the exchange of designated preferred securities for trust preferred securities as reported on form 8-K on July 2, 2010 was a clear contributor to the Corporation’s strong performance for the quarter.
As of June 30, 2010, the Corporation’s total risk-based capital measured 14.72 percent, Tier 1 risk-based capital totaled 11.88 percent, Tier 1 leverage ratio totaled 9.21 percent, and the tangible common equity ratio totaled 5.88 percent. All regulatory capital ratios exceed the regulatory definitions of “well capitalized”.
CONFERENCE CALL
First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 2:30 p.m. (ET) on Wednesday, July 28, 2010.
To participate, dial (Toll Free) 800-860-2442 and reference First Merchants Corporation’s second quarter earnings release. International callers please call +1 412-858-4600. A replay of the call will be available until August 12, 2010 at 9:00 a.m. (ET). To access a replay of the call, US/Canada participants should dial (Toll Free) 877-344-7529 or for International participants, dial +1 412-317-0088. The replay passcode is 442131.
In order to view the web cast and presentation slides, please go to http://www.talkpoint.com/viewer/starthere.asp?Pres=131510 during the time of the call.
During the call, Forward-Looking Statements about the relative business outlook may be made. These Forward-Looking Statements and all other statements made during the call that do not concern historical facts, are subject to risks and uncertainties that may materially affect actual results.
Specific Forward-Looking Statements include, but are not limited to, any indications regarding the Financial Services industry, the economy and future growth of the balance sheet or income statement.
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 is comprised of First Merchants Bank, N.A., which also operates as Lafayette Bank & Trust, A Division of First Merchants Bank, N.A., Commerce National Bank, A Division of First Merchants Bank, N.A., as well as First Merchants Trust Company, N.A., and First Merchants Insurance Group, a full-service property casualty, personal lines, and healthcare insurance agency.
First Merchants Corporation’s common stock is traded over-the-counter on the NASDAQ National 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 Corporation
2nd Quarter 2010 - Earnings Release
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CONSOLIDATED BALANCE SHEETS
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(Dollars in thousands)
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June 30,
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|||||||
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2010
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2009
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|||||||
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ASSETS
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||||||||
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Cash and due from banks
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$ | 60,223 | $ | 73,668 | ||||
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Federal funds sold
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4,101 | |||||||
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Cash and cash equivalents
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64,324 | 73,668 | ||||||
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Interest-bearing time deposits
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40,823 | 44,595 | ||||||
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Investment securities
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646,185 | 630,958 | ||||||
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Mortgage loans held for sale
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7,600 | 23,070 | ||||||
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Loans
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3,051,346 | 3,554,229 | ||||||
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Less: Allowance for loan losses
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(86,970 | ) | (77,119 | ) | ||||
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Net loans
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2,964,376 | 3,477,110 | ||||||
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Premises and equipment
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53,437 | 58,692 | ||||||
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Federal Reserve and Federal Home Loan Bank stock
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36,218 | 34,441 | ||||||
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Interest receivable
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18,894 | 20,778 | ||||||
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Core deposit intangibles and goodwill
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156,340 | 161,294 | ||||||
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Cash surrender value of life insurance
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95,666 | 93,876 | ||||||
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Other real estate owned
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20,124 | 20,227 | ||||||
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Tax asset, deferred and receivable
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52,839 | 62,183 | ||||||
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Other assets
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26,422 | 16,153 | ||||||
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TOTAL ASSETS
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$ | 4,183,248 | $ | 4,717,045 | ||||
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LIABILITIES
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Deposits:
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Noninterest-bearing
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$ | 516,769 | $ | 512,368 | ||||
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Interest-bearing
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2,744,194 | 3,078,555 | ||||||
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Total Deposits
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3,260,963 | 3,590,923 | ||||||
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Borrowings:
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Federal Funds purchased
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15,042 | |||||||
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Securities sold under repurchase agreements
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107,505 | 115,011 | ||||||
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Federal Home Loan Bank advances
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100,540 | 268,938 | ||||||
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Subordinated debentures, revolving credit lines and term loans
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225,867 | 194,783 | ||||||
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Total Borrowings
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433,912 | 593,774 | ||||||
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Interest payable
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4,911 | 7,351 | ||||||
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Other liabilities
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25,933 | 51,619 | ||||||
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Total Liabilities
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3,725,719 | 4,243,667 | ||||||
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STOCKHOLDERS' EQUITY
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Preferred Stock, no-par value:
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Authorized -- 500,000 shares
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Series A, Issued and outstanding - 69,600 and 116,000 shares
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67,649 | 112,009 | ||||||
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Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
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Authorized -- 600 shares
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Issued and outstanding - 125 shares
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125 | 125 | ||||||
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Common Stock, $.125 stated value:
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Authorized -- 50,000,000 shares
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Issued and outstanding - 25,524,948 and 21,067,477 shares
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3,191 | 2,633 | ||||||
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Additional paid-in capital
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231,372 | 204,403 | ||||||
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Retained earnings
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158,118 | 172,688 | ||||||
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Accumulated other comprehensive loss
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(2,926 | ) | (18,480 | ) | ||||
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Total Stockholders' Equity
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457,529 | 473,378 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 4,183,248 | $ | 4,717,045 | ||||
First Merchants Corporation
2nd Quarter 2010 - Earnings Release
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(Dollars in thousands, except per share amounts)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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|||||||||||||||
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2010
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2009
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2010
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2009
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INTEREST INCOME
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Loans receivable:
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Taxable
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$ | 43,977 | $ | 52,843 | $ | 89,425 | $ | 106,636 | ||||||||
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Tax exempt
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252 | 247 | 529 | 462 | ||||||||||||
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Investment securities:
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Taxable
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3,286 | 3,261 | 6,177 | 7,024 | ||||||||||||
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Tax exempt
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2,548 | 2,362 | 5,194 | 4,131 | ||||||||||||
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Federal funds sold
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3 | 42 | 20 | 54 | ||||||||||||
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Deposits with financial institutions
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95 | 116 | 155 | 218 | ||||||||||||
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Federal Reserve and Federal Home Loan Bank stock
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330 | 199 | 690 | 672 | ||||||||||||
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Total Interest Income
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50,491 | 59,070 | 102,190 | 119,197 | ||||||||||||
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INTEREST EXPENSE
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Deposits
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10,520 | 15,569 | 22,015 | 32,280 | ||||||||||||
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Federal funds purchased
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4 | 4 | 22 | |||||||||||||
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Securities sold under repurchase agreements
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429 | 507 | 928 | 974 | ||||||||||||
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Federal Home Loan Bank advances
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1,440 | 2,447 | 3,004 | 5,396 | ||||||||||||
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Subordinated debentures, revolving credit lines and term loans
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1,919 | 2,113 | 3,845 | 3,592 | ||||||||||||
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Total Interest Expense
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14,312 | 20,636 | 29,796 | 42,264 | ||||||||||||
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NET INTEREST INCOME
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36,179 | 38,434 | 72,394 | 76,933 | ||||||||||||
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Provision for loan losses
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15,015 | 58,995 | 28,884 | 71,916 | ||||||||||||
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NET INTEREST INCOME (LOSS) AFTER PROVISION FOR LOAN LOSSES
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21,164 | (20,561 | ) | 43,510 | 5,017 | |||||||||||
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OTHER INCOME
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Service charges on deposit accounts
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3,506 | 3,888 | 6,768 | 7,430 | ||||||||||||
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Fiduciary activities
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1,978 | 1,680 | 4,038 | 3,739 | ||||||||||||
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Other customer fees
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2,195 | 1,946 | 4,693 | 3,949 | ||||||||||||
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Commission income
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1,487 | 1,698 | 3,476 | 3,757 | ||||||||||||
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Earnings on cash surrender value of life insurance
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526 | 331 | 1,034 | 654 | ||||||||||||
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Net gains and fees on sales of loans
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1,185 | 1,678 | 2,334 | 3,108 | ||||||||||||
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Net realized gains/(losses) on sales of available for sale securities
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257 | 1,154 | 2,099 | 3,946 | ||||||||||||
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Other-than-temporary impairment on available for sale securities
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(400 | ) | (2,045 | ) | (888 | ) | (2,523 | ) | ||||||||
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Other income
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208 | 1,160 | 352 | 1,901 | ||||||||||||
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Total Other Income
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10,942 | 11,490 | 23,906 | 25,961 | ||||||||||||
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OTHER EXPENSES
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Salaries and employee benefits
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17,942 | 19,685 | 35,504 | 39,700 | ||||||||||||
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Net occupancy
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2,058 | 2,443 | 4,909 | 5,012 | ||||||||||||
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Equipment
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1,861 | 1,909 | 3,714 | 3,785 | ||||||||||||
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Marketing
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495 | 564 | 924 | 1,113 | ||||||||||||
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Outside data processing fees
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1,311 | 1,405 | 2,591 | 3,338 | ||||||||||||
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Printing and office supplies
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321 | 397 | 639 | 760 | ||||||||||||
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Core deposit amortization
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1,192 | 1,278 | 2,399 | 2,555 | ||||||||||||
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FDIC assessments
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2,243 | 3,494 | 3,965 | 4,070 | ||||||||||||
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Other expenses
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6,920 | 7,017 | 14,338 | 12,573 | ||||||||||||
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Total Other Expenses
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34,343 | 38,192 | 68,983 | 72,906 | ||||||||||||
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INCOME (LOSS) BEFORE INCOME TAX
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(2,237 | ) | (47,263 | ) | (1,567 | ) | (41,928 | ) | ||||||||
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Income tax expense (benefit)
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(1,894 | ) | (17,534 | ) | (2,810 | ) | (16,316 | ) | ||||||||
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NET INCOME (LOSS)
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(343 | ) | (29,729 | ) | 1,243 | (25,612 | ) | |||||||||
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Gain on exchange of preferred stock for trust preferred debt
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10,052 | 10,052 | ||||||||||||||
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Preferred stock dividends and discount accretion
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(1,443 | ) | (1,450 | ) | (2,893 | ) | (2,078 | ) | ||||||||
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NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS
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$ | 8,266 | $ | (31,179 | ) | $ | 8,402 | $ | (27,690 | ) | ||||||
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Per Share Data:
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Basic Net Income (Loss) Available to Common Stockholders
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$ | 0.35 | $ | (1.49 | ) | $ | 0.36 | $ | (1.32 | ) | ||||||
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Diluted Net Income (Loss) Available to Common Stockholders
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$ | 0.35 | $ | (1.49 | ) | $ | 0.36 | $ | (1.32 | ) | ||||||
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Cash Dividends Paid
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$ | 0.01 | $ | 0.08 | $ | 0.02 | $ | 0.31 | ||||||||
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Average Diluted Shares Outstanding (in thousands)
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25,633 | 21,060 | 23,555 | 21,041 | ||||||||||||
First Merchants Corporation
2nd Quarter 2010 - Earnings Release
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FINANCIAL HIGHLIGHTS
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(Dollars in thousands)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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|||||||||||||||
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2010
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2009
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2010
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2009
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NET CHARGE OFF'S
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$ | 16,613 | $ | 40,378 | $ | 34,045 | $ | 46,380 | ||||||||
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AVERAGE BALANCES:
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Total Assets
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$ | 4,282,299 | $ | 4,813,639 | $ | 4,322,808 | $ | 4,767,145 | ||||||||
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Total Loans
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3,100,249 | 3,636,233 | 3,151,751 | 3,665,989 | ||||||||||||
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Total Earning Assets
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3,868,749 | 4,383,570 | 3,912,442 | 4,341,330 | ||||||||||||
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Total Deposits
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3,332,958 | 3,669,103 | 3,382,122 | 3,653,466 | ||||||||||||
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Total Stockholders' Equity
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491,162 | 507,484 | 479,145 | 479,554 | ||||||||||||
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FINANCIAL RATIOS:
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Return on Average Assets
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0.77 | % | -2.59 | % | 0.39 | % | -1.16 | % | ||||||||
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Return on Average Stockholders' Equity
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6.73 | (24.58 | ) | 3.51 | (11.56 | ) | ||||||||||
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Average Earning Assets to Average Assets
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90.34 | 91.07 | 90.51 | 91.07 | ||||||||||||
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Allowance for Loan Losses as % of Total Loans
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2.84 | 2.16 | 2.84 | 2.16 | ||||||||||||
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Net Charge Off's as % of Average Loans (Annualized)
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2.14 | 4.44 | 2.16 | 2.53 | ||||||||||||
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Dividend Payout Ratio
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3.13 | (5.41 | ) | 5.56 | (23.66 | ) | ||||||||||
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Average Stockholders' Equity to Average Assets
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11.47 | 10.54 | 11.08 | 10.05 | ||||||||||||
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Tax Equivalent Yield on Earning Assets
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5.38 | 5.52 | 5.38 | 5.61 | ||||||||||||
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Cost of Supporting Liabilities
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1.48 | 1.88 | 1.52 | 1.95 | ||||||||||||
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Net Interest Margin (FTE) on Earning Assets
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3.90 | 3.64 | 3.86 | 3.66 | ||||||||||||
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NON-PERFORMING ASSETS
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||||||||||||||||||||
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(Dollars in thousands)
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June 30,
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March 31,
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December 31,
|
September 30,
|
June 30,
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|||||||||||||||
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2010
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2010
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2009
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2009
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2009
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||||||||||||||||
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Non-Accrual Loans
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$ | 120,205 | $ | 122,891 | $ | 118,409 | $ | 123,290 | $ | 112,220 | ||||||||||
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Renegotiated Loans
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1,657 | 859 | 8,833 | 5,595 | 4,216 | |||||||||||||||
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Non-Performing Loans (NPL)
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121,862 | 123,750 | 127,242 | 128,885 | 116,436 | |||||||||||||||
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Real Estate Owned and Repossessed Assets
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20,124 | 18,268 | 14,879 | 21,778 | 20,227 | |||||||||||||||
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Non-Performing Assets (NPA)
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141,986 | 142,018 | 142,121 | 150,663 | 136,663 | |||||||||||||||
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90+ Days Delinquent
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4,537 | 2,600 | 3,967 | 5,422 | 3,596 | |||||||||||||||
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NPAS & 90 Day Delinquent
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$ | 146,523 | $ | 144,618 | $ | 146,088 | $ | 156,085 | $ | 140,259 | ||||||||||
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Loan Loss Reserve
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$ | 86,970 | $ | 88,568 | $ | 92,131 | $ | 86,918 | $ | 77,119 | ||||||||||
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YTD Charge-offs
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34,045 | 17,432 | 81,628 | 60,821 | 46,380 | |||||||||||||||
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NPAs / Actual Assets %
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3.39 | % | 3.25 | % | 3.17 | % | 3.37 | % | 2.90 | % | ||||||||||
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NPAs & 90 Day / Actual Assets %
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3.50 | % | 3.30 | % | 3.26 | % | 3.49 | % | 2.97 | % | ||||||||||
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NPAs / Actual Loans and REO %
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4.61 | % | 4.50 | % | 4.32 | % | 4.37 | % | 3.80 | % | ||||||||||
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Loan Loss Reserves / Actual Loans (%)
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2.84 | % | 2.82 | % | 2.81 | % | 2.54 | % | 2.16 | % | ||||||||||
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NCOs / YTD Average Loans (%)
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1.08 | % | 0.54 | % | 2.30 | % | 1.68 | % | 1.27 | % | ||||||||||
First Merchants Corporation
2nd Quarter 2010 - Earnings Release
|
CONSOLIDATED BALANCE SHEETS
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||||||||||||||||||||
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(Dollars in thousands)
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June 30,
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
|||||||||||||||
|
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
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ASSETS
|
||||||||||||||||||||
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Cash and due from banks
|
$ | 60,223 | $ | 52,679 | $ | 76,801 | $ | 66,887 | $ | 73,668 | ||||||||||
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Federal funds sold
|
4,101 | 7,044 | 102,346 | 52,828 | ||||||||||||||||
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Cash and cash equivalents
|
64,324 | 59,723 | 179,147 | 119,715 | 73,668 | |||||||||||||||
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Interest-bearing time deposits
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40,823 | 157,735 | 74,025 | 44,312 | 44,595 | |||||||||||||||
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Investment securities
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646,185 | 639,081 | 563,117 | 489,010 | 630,958 | |||||||||||||||
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Mortgage loans held for sale
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7,600 | 3,646 | 8,036 | 25,173 | 23,070 | |||||||||||||||
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Loans
|
3,051,346 | 3,134,540 | 3,269,788 | 3,398,722 | 3,554,229 | |||||||||||||||
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Less: Allowance for loan losses
|
(86,970 | ) | (88,568 | ) | (92,131 | ) | (86,918 | ) | (77,119 | ) | ||||||||||
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Net loans
|
2,964,376 | 3,045,972 | 3,177,657 | 3,311,804 | 3,477,110 | |||||||||||||||
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Premises and equipment
|
53,437 | 54,431 | 55,804 | 58,482 | 58,692 | |||||||||||||||
|
Federal Reserve and Federal Home Loan Bank stock
|
36,218 | 36,721 | 38,576 | 38,576 | 34,441 | |||||||||||||||
|
Interest receivable
|
18,894 | 19,532 | 20,818 | 22,359 | 20,778 | |||||||||||||||
|
Core deposit intangibles and goodwill
|
156,340 | 157,532 | 158,740 | 160,017 | 161,294 | |||||||||||||||
|
Cash surrender value of life insurance
|
95,666 | 95,146 | 94,636 | 94,267 | 93,876 | |||||||||||||||
|
Other real estate owned
|
20,124 | 18,268 | 14,879 | 21,778 | 20,227 | |||||||||||||||
|
Tax asset, deferred and refundable
|
52,839 | 59,190 | 64,394 | 59,244 | 62,183 | |||||||||||||||
|
Other assets
|
26,422 | 28,889 | 31,123 | 31,747 | 16,153 | |||||||||||||||
|
TOTAL ASSETS
|
$ | 4,183,248 | $ | 4,375,866 | $ | 4,480,952 | $ | 4,476,484 | $ | 4,717,045 | ||||||||||
|
LIABILITIES
|
||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||
|
Noninterest-bearing
|
$ | 516,769 | $ | 520,551 | $ | 516,487 | $ | 477,040 | $ | 512,368 | ||||||||||
|
Interest-bearing
|
2,744,194 | 2,877,235 | 3,020,049 | 3,035,455 | 3,078,555 | |||||||||||||||
|
Total Deposits
|
3,260,963 | 3,397,786 | 3,536,536 | 3,512,495 | 3,590,923 | |||||||||||||||
|
Borrowings:
|
||||||||||||||||||||
|
Federal funds purchased
|
15,042 | |||||||||||||||||||
|
Securities sold under repurchase agreements
|
107,505 | 112,826 | 125,687 | 125,045 | 115,011 | |||||||||||||||
|
Federal Home Loan Bank advances
|
100,540 | 123,261 | 129,749 | 130,024 | 268,938 | |||||||||||||||
|
Subordinated debentures, revolving credit lines and term loans
|
225,867 | 194,794 | 194,790 | 194,787 | 194,783 | |||||||||||||||
|
Total Borrowings
|
433,912 | 430,881 | 450,226 | 449,856 | 593,774 | |||||||||||||||
|
Interest payable
|
4,911 | 4,812 | 5,711 | 5,722 | 7,351 | |||||||||||||||
|
Other liabilities
|
25,933 | 53,446 | 24,694 | 32,511 | 51,619 | |||||||||||||||
|
Total Liabilities
|
3,725,719 | 3,886,925 | 4,017,167 | 4,000,584 | 4,243,667 | |||||||||||||||
|
STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
|
Preferred Stock, no-par value:
|
||||||||||||||||||||
|
Authorized -- 500,000 shares
|
||||||||||||||||||||
|
Series A, Issued and outstanding - 69,600 and 116,000 shares
|
67,649 | 112,559 | 112,373 | 112,190 | 112,009 | |||||||||||||||
|
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
|
||||||||||||||||||||
|
Authorized -- 600 shares
|
||||||||||||||||||||
|
Issued and outstanding - 125 shares
|
125 | 125 | 125 | 125 | 125 | |||||||||||||||
|
Common Stock, $.125 stated value:
|
||||||||||||||||||||
|
Authorized -- 50,000,000 shares
|
||||||||||||||||||||
|
Issued and outstanding - 25,524,948 and 21,067,477 shares
|
3,191 | 3,187 | 2,653 | 2,648 | 2,633 | |||||||||||||||
|
Additional paid-in capital
|
231,372 | 230,764 | 206,600 | 205,759 | 204,403 | |||||||||||||||
|
Retained earnings
|
158,118 | 150,595 | 150,860 | 164,419 | 172,688 | |||||||||||||||
|
Accumulated other comprehensive loss
|
(2,926 | ) | (8,289 | ) | (8,826 | ) | (9,241 | ) | (18,480 | ) | ||||||||||
|
Total Stockholders' Equity
|
457,529 | 488,941 | 463,785 | 475,900 | 473,378 | |||||||||||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 4,183,248 | $ | 4,375,866 | $ | 4,480,952 | $ | 4,476,484 | $ | 4,717,045 | ||||||||||
First Merchants Corporation
2nd Quarter 2010 - Earnings Release
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
|
(Dollars in thousands, except per share amounts)
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
|||||||||||||||
|
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
|
INTEREST INCOME
|
||||||||||||||||||||
|
Loans receivable:
|
||||||||||||||||||||
|
Taxable
|
$ | 43,977 | $ | 45,448 | $ | 48,297 | $ | 50,683 | $ | 52,843 | ||||||||||
|
Tax exempt
|
252 | 277 | 296 | 280 | 247 | |||||||||||||||
|
Investment securities:
|
||||||||||||||||||||
|
Taxable
|
3,286 | 2,891 | 2,348 | 2,963 | 3,261 | |||||||||||||||
|
Tax exempt
|
2,548 | 2,646 | 2,668 | 2,788 | 2,362 | |||||||||||||||
|
Federal funds sold
|
3 | 17 | 37 | 27 | 42 | |||||||||||||||
|
Deposits with financial institutions
|
95 | 60 | 75 | 73 | 116 | |||||||||||||||
|
Federal Reserve and Federal Home Loan Bank stock
|
330 | 360 | 348 | 359 | 199 | |||||||||||||||
|
Total Interest Income
|
50,491 | 51,699 | 54,069 | 57,173 | 59,070 | |||||||||||||||
|
INTEREST EXPENSE
|
||||||||||||||||||||
|
Deposits
|
10,520 | 11,495 | 12,445 | 13,666 | 15,569 | |||||||||||||||
|
Federal funds purchased
|
4 | 6 | ||||||||||||||||||
|
Securities sold under repurchase agreements
|
429 | 499 | 511 | 512 | 507 | |||||||||||||||
|
Federal Home Loan Bank advances
|
1,440 | 1,564 | 1,627 | 2,209 | 2,447 | |||||||||||||||
|
Subordinated debentures, revolving credit lines and term loans
|
1,919 | 1,926 | 1,921 | 1,932 | 2,113 | |||||||||||||||
|
Total Interest Expense
|
14,312 | 15,484 | 16,504 | 18,325 | 20,636 | |||||||||||||||
|
NET INTEREST INCOME
|
36,179 | 36,215 | 37,565 | 38,848 | 38,434 | |||||||||||||||
|
Provision for loan losses
|
15,015 | 13,869 | 26,020 | 24,240 | 58,995 | |||||||||||||||
|
NET INTEREST INCOME (LOSS) AFTER PROVISION FOR LOAN LOSSES
|
21,164 | 22,346 | 11,545 | 14,608 | (20,561 | ) | ||||||||||||||
|
OTHER INCOME
|
||||||||||||||||||||
|
Service charges on deposit accounts
|
3,506 | 3,262 | 3,735 | 3,963 | 3,888 | |||||||||||||||
|
Fiduciary activities
|
1,978 | 2,060 | 1,826 | 1,844 | 1,680 | |||||||||||||||
|
Other customer fees
|
2,195 | 2,498 | 1,969 | 2,004 | 1,946 | |||||||||||||||
|
Commission income
|
1,487 | 1,989 | 1,181 | 1,459 | 1,698 | |||||||||||||||
|
Earnings on cash surrender value of life insurance
|
526 | 508 | 569 | 391 | 331 | |||||||||||||||
|
Net gains and fees on sales of loans
|
1,185 | 1,149 | 1,744 | 1,997 | 1,678 | |||||||||||||||
|
Net realized and unrealized gains on sales of available for sale securities
|
257 | 1,842 | 1,984 | 5,211 | 1,154 | |||||||||||||||
|
Other-than-temporary impairment on available for sale securities
|
(400 | ) | (488 | ) | (2,979 | ) | (1,227 | ) | (2,045 | ) | ||||||||||
|
Other income
|
208 | 144 | (472 | ) | 41 | 1,160 | ||||||||||||||
|
Total Other Income
|
10,942 | 12,964 | 9,557 | 15,683 | 11,490 | |||||||||||||||
|
OTHER EXPENSES
|
||||||||||||||||||||
|
Salaries and employee benefits
|
17,942 | 17,562 | 18,680 | 17,945 | 19,685 | |||||||||||||||
|
Net occupancy
|
2,058 | 2,851 | 2,816 | 2,422 | 2,443 | |||||||||||||||
|
Equipment
|
1,861 | 1,853 | 1,935 | 1,875 | 1,909 | |||||||||||||||
|
Marketing
|
495 | 429 | 513 | 508 | 564 | |||||||||||||||
|
Outside data processing fees
|
1,311 | 1,280 | 1,488 | 1,360 | 1,405 | |||||||||||||||
|
Printing and office supplies
|
321 | 318 | 359 | 300 | 397 | |||||||||||||||
|
Core deposit amortization
|
1,192 | 1,207 | 1,277 | 1,277 | 1,278 | |||||||||||||||
|
FDIC assessments
|
2,243 | 1,722 | 3,203 | 3,121 | 3,494 | |||||||||||||||
|
Other expenses
|
6,920 | 7,418 | 9,386 | 10,187 | 7,017 | |||||||||||||||
|
Total Other Expenses
|
34,343 | 34,640 | 39,657 | 38,995 | 38,192 | |||||||||||||||
|
INCOME (LOSS) BEFORE INCOME TAX
|
(2,237 | ) | 670 | (18,555 | ) | (8,704 | ) | (47,263 | ) | |||||||||||
|
Income tax expense (benefit)
|
(1,894 | ) | (916 | ) | (8,334 | ) | (3,774 | ) | (17,534 | ) | ||||||||||
|
NET INCOME (LOSS)
|
(343 | ) | 1,586 | (10,221 | ) | (4,930 | ) | (29,729 | ) | |||||||||||
|
Gain on exchange of preferred stock for trust preferred debt
|
10,052 | |||||||||||||||||||
|
Preferred stock dividends and discount accretion
|
(1,443 | ) | (1,450 | ) | (1,451 | ) | (1,450 | ) | (1,450 | ) | ||||||||||
|
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS
|
$ | 8,266 | $ | 136 | $ | (11,672 | ) | $ | (6,380 | ) | $ | (31,179 | ) | |||||||
|
PER SHARE:
|
||||||||||||||||||||
|
Basic Net Income (Loss) Available to Common Stockholders
|
$ | 0.35 | $ | 0.01 | $ | (0.55 | ) | $ | (0.30 | ) | $ | (1.49 | ) | |||||||
|
Diluted Net Income (Loss) Available to Common Stockholders
|
$ | 0.35 | $ | 0.01 | $ | (0.55 | ) | $ | (0.30 | ) | $ | (1.49 | ) | |||||||
|
Cash Dividends Paid
|
$ | 0.01 | $ | 0.01 | $ | 0.08 | $ | 0.08 | $ | 0.08 | ||||||||||
|
Average Diluted Shares Outstanding (in thousands)
|
25,633 | 21,462 | 21,211 | 21,170 | 21,060 | |||||||||||||||
|
FINANCIAL RATIOS:
|
||||||||||||||||||||
|
Return on Average Assets
|
0.77 | % | 0.01 | % | -1.04 | % | -0.55 | % | -2.59 | % | ||||||||||
|
Return on Average Stockholders' Equity
|
6.73 | 0.12 | (9.87 | ) | (5.35 | ) | (24.58 | ) | ||||||||||||
|
Average Earning Assets to Average Assets
|
90.34 | 90.64 | 90.28 | 90.82 | 91.07 | |||||||||||||||
|
Allowance for Loan Losses as % of Total Loans
|
2.84 | 2.82 | 2.81 | 2.54 | 2.16 | |||||||||||||||
|
Net Charge Off's as % of Average Loans (Annualized)
|
2.14 | 2.18 | 2.49 | 1.64 | 4.44 | |||||||||||||||
|
Dividend Payout Ratio
|
3.13 | 100.00 | (14.55 | ) | (26.67 | ) | (5.41 | ) | ||||||||||||
|
Average Stockholders' Equity to Average Assets
|
11.47 | 10.70 | 10.50 | 10.23 | 10.54 | |||||||||||||||
|
Tax Equivalent Yield on Earning Assets
|
5.38 | 5.39 | 5.48 | 5.56 | 5.52 | |||||||||||||||
|
Cost of Supporting Liabilities
|
1.48 | 1.57 | 1.62 | 1.73 | 1.88 | |||||||||||||||
|
Net Interest Margin (FTE) on Earning Assets
|
3.90 | 3.82 | 3.86 | 3.83 | 3.64 | |||||||||||||||
First Merchants Corporation
2nd Quarter 2010 - Earnings Release
|
LOANS
|
||||||||||||||||||||
|
(Dollars in thousands)
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
|||||||||||||||
|
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
|
Commercial and industrial loans
|
$ | 589,157 | $ | 621,591 | $ | 675,860 | $ | 806,289 | $ | 874,671 | ||||||||||
|
Agricultural production financing and other loans to farmers
|
108,439 | 109,457 | 121,031 | 124,601 | 121,361 | |||||||||||||||
|
Real estate loans:
|
||||||||||||||||||||
|
Construction
|
111,070 | 131,548 | 158,725 | 147,343 | 162,765 | |||||||||||||||
|
Commercial and farmland
|
1,251,430 | 1,259,588 | 1,254,115 | 1,228,983 | 1,231,986 | |||||||||||||||
|
Residential
|
816,823 | 821,014 | 841,584 | 855,931 | 930,714 | |||||||||||||||
|
Individuals' loans for household and other personal expenditures
|
129,724 | 142,108 | 154,132 | 177,338 | 174,363 | |||||||||||||||
|
Tax exempt loans
|
18,025 | 23,047 | 22,049 | 23,846 | 23,596 | |||||||||||||||
|
Lease financing receivables, net of unearned income
|
6,143 | 6,396 | 7,135 | 7,797 | 8,095 | |||||||||||||||
|
Other loans
|
20,535 | 19,791 | 35,157 | 26,594 | 26,678 | |||||||||||||||
|
LOANS
|
3,051,346 | 3,134,540 | 3,269,788 | 3,398,722 | 3,554,229 | |||||||||||||||
|
Allowance for loan losses
|
(86,970 | ) | (88,568 | ) | (92,131 | ) | (86,918 | ) | (77,119 | ) | ||||||||||
|
NET LOANS
|
$ | 2,964,376 | $ | 3,045,972 | $ | 3,177,657 | $ | 3,311,804 | $ | 3,477,110 | ||||||||||
|
DEPOSITS
|
||||||||||||||||||||
|
(Dollars in thousands)
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
|||||||||||||||
|
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
|
Demand deposits
|
$ | 1,246,006 | $ | 1,261,305 | $ | 1,308,741 | $ | 1,178,372 | $ | 1,197,646 | ||||||||||
|
Savings deposits
|
730,105 | 738,742 | 733,142 | 726,894 | 740,340 | |||||||||||||||
|
Certificates and other time deposits of $100,000 or more
|
374,016 | 416,113 | 438,264 | 492,875 | 503,971 | |||||||||||||||
|
Other certificates and time deposits
|
715,941 | 750,382 | 781,509 | 803,173 | 835,899 | |||||||||||||||
|
Brokered deposits
|
194,895 | 231,244 | 274,880 | 311,181 | 313,067 | |||||||||||||||
|
TOTAL DEPOSITS
|
$ | 3,260,963 | $ | 3,397,786 | $ | 3,536,536 | $ | 3,512,495 | $ | 3,590,923 | ||||||||||