SECURITIES AND EXCHANGE COMMISION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM
____ TO ____
FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
-----------------------------------------------------
Full title of the plan and the address of the plan,
if different from that of the issuer named below:
FIRST MERCHANTS CORPORATION
200 EAST JACKSON
MUNCIE, IN 47305
-----------------------------------------------------
Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office
First Merchants Corporation
Retirement Savings Plan
Table of Contents
Page
- ----------------------------------------------------------------------------------------------------------------------------
Independent Accountants' Report 1
Financial Statements
Statement of net assets available for benefits 2
Statement of changes in net assets available for benefits 3
Notes to financial statements 4
Supplemental Schedules
Schedule H, line 4i-Schedule of assets held for investment purposes at end of year 8
Schedule H, line 4j-Schedule of reportable transactions 9
Exhibit
Exhibit 23, Consent of Independent Accountants 10
Independent Accountants' Report
Administrative Committee
First Merchants Corporation
Retirement Savings Plan
Indianapolis, Indiana
We have audited the accompanying statement of net assets available for benefits
of First Merchants Corporation Retirement Savings Plan as of December 31, 2000
and 1999, and the related statement of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of First Merchants
Corporation Retirement Savings Plan at December 31, 2000 and 1999, and the
changes in its net assets available for benefits for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes at end of year and reportable transactions referred to
as "supplemental information," are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental information is the responsibility of the
Plan's management. The supplemental information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
BKD,LLP
Indianapolis, Indiana
June 7, 2001
First Merchants Corporation
Retirement Savings Plan
Statement of Net Assets Available for Benefits
December 31 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------
Assets
Investments, at fair value
Temporary deposit funds $ 415,194 $ 482,379
Collective investment funds 10,232,468 9,606,458
Mutual funds 681,184 662,901
-----------------------------------------
Total investments 11,328,846 10,751,738
Employee contributions receivable 24,673
Employer contributions receivable 27,739 28,143
Accrued income receivable 2,372 19,550
Cash 2,762
-----------------------------------------
Total assets 11,383,630 10,802,193
Liabilities
Cash overdraft 68,203
-----------------------------------------
Net Assets Available for Benefits $11,315,427 $10,802,193
=========================================
See notes to financial statements.
First Merchants Corporation
Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------
Additions
Investment income
Net appreciation in fair value of investments $ 98,238 $ 1,219,064
Interest and dividends 68,532 63,825
---------------------------------------
166,770 1,282,889
Employee contributions 798,722 1,032,407
Employer contributions 124,756 109,837
Transfers from other plans 1,374,720
---------------------------------------
Total additions 1,090,248 3,799,853
Deductions--benefits paid to participants 577,014 310,279
---------------------------------------
Net Increase 513,234 3,489,574
Net Assets Available for Benefits, Beginning of Year 10,802,193 7,312,619
---------------------------------------
Net Assets Available for Benefits, End of Year $11,315,427 $10,802,193
=======================================
See notes to financial statements.
First Merchants Corporation
Retirement Savings Plan
Notes to Financial Statements
Note 1 - Description of Plan
The following description of First Merchants Corporation Retirement Savings Plan
(Plan) provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined-contribution plan sponsored by First Merchants Corporation
(Corporation) for the benefit of all employees who have completed one year of
service, worked at least 1000 hours, and are age twenty-one or older. As of
January 1, 2001, the eligibility age was lowered to age 18. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA). First
Merchants Bank, N.A. (Bank) is the trustee of the Plan.
Contributions
The Plan permits eligible employees through a salary deferral election to have
the Corporation make annual contributions of up to 15% of eligible compensation.
Employee rollover contributions are also permitted. The Corporation makes
matching contributions of its employees' salary deferral amounts of 25% of the
first 5% of employees' eligible compensation. Forfeitures are used to reduce the
Corporation's contributions.
Participant Investment Account Options
Investment account options available include a managed, fixed value, bond,
stock, international equity and small cap fund, and as of January 1, 2001, a
Corporation stock fund. Each participant has the option of directing his
contributions into any of the separate investment accounts and may change the
allocation quarterly.
Participant Accounts
Each participant's account is credited with the participant's contribution,
allocation of the Corporation contribution and Plan earnings. Allocations of
Plan earnings are based on participant account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from the
participant's account.
Vesting
Participants are immediately vested in their salary deferral and rollover
contribution accounts plus actual earnings thereon. Vesting in the remainder of
their accounts is based on years of continuous service. A participant is 100%
vested after five years of credited service.
Payment of Benefits
Upon termination of service, participants may elect to receive a lump-sum amount
or installments equal to the value of their accounts. Withdrawals other than for
termination are permitted under circumstances provided by the Plan.
Plan Termination
Although it has not expressed any intent to do so, the Corporation has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
First Merchants Corporation
Retirement Savings Plan
Notes to Financial Statements
Note 2 - Summary of Significant Accounting Policies
Method of Accounting
The accompanying financial statements are prepared on the accrual method of
accounting.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of net assets and changes in net assets available
for benefits. Actual results could differ from those estimates.
Investments
Investments are valued at estimated fair value. Temporary deposit funds are
valued at cost, which approximates market. Purchases and sales of securities are
recorded on a trade-date basis.
Payment of Benefits Benefits are recorded when paid.
Administrative Expenses
Administrative expenses may be paid by the Corporation or the Plan, at the
Corporation's discretion.
Note 3 - Investments
The Plan's investments are held by a bank-administered trust fund. The Plan's
investments (including investments bought, sold, and held during the year)
appreciated in fair value as follows:
2000
-----------------------------------------
Net
Appreciation
(Depreciated) Fair Value
in Fair Value at End
Year Ended December 31 During Year of Year
- ----------------------------------------------------------------------------------------------------------------------------
Investments at estimated fair value as determined by quoted prices in an active
market
Mutual funds $(101,887) $ 681,184
Investments at estimated fair value and cost which approximates market
Temporary deposit funds 415,194
Collective investment funds 200,125 10,232,468
-----------------------------------------
$ 98,238 $11,328,846
=========================================
First Merchants Corporation
Retirement Savings Plan
Notes to Financial Statements
1999
-----------------------------------------
Net
Appreciation Fair Value
in Fair Value at End
Year Ended December 31 During Year of Year
- ----------------------------------------------------------------------------------------------------------------------------
Investments at estimated fair value as determined by quoted prices in an active
market
Mutual funds $ 136,012 $ 662,901
Investments at estimated fair value and cost which approximates market
Temporary deposit funds 482,379
Collective investment funds 1,083,052 9,606,458
-----------------------------------------
$1,219,064 $10,751,738
=========================================
The fair values of individual investments that represented 5% or more of the
Plan's assets were as follows:
December 31 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------
First Merchants Bank, N.A. Intermediate Growth Fund for Tax Exempt Accounts $8,206,877 $7,816,447
First Merchants Bank, N.A. Intermediate Term Income Fund for Tax Exempt Accounts 2,025,591 1,790,011
Note 4 - Party-in-Interest Transactions
Party-in-interest transactions include those with fiduciaries or employees of
the Plan, any person who provides services to the Plan, an employer whose
employees are covered by the Plan, an employee organization whose members are
covered by the Plan, a person who owns 50 percent or more of such an employer or
employee association, or relatives of such persons.
The Plan invests in First Merchants Bank, N.A. Temporary Fund II, Intermediate
Growth Fund for Tax Exempt Accounts and Intermediate Term Income Fund for Tax
Exempt Accounts.
First Merchants Corporation
Retirement Savings Plan
Notes to Financial Statements
Activity at fair value was as follows:
First Merchants
First Merchants Bank, N.A.
First Merchants Bank, N.A. Intermediate Term
Bank, N.A. Intermediate Growth Income Fund for
Temporary Fund for Tax Exempt Tax Exempt
Deposit Fund Accounts Accounts
- ----------------------------------------------------------------------------------------------------------------------------
Balance, January 1, 1998 $258,195 $5,337,817 $1,328,591
Changes 219,774 2,478,630 461,420
--------------------------------------------------------------------------------
Balance, December 31, 1999 477,969 7,816,447 1,790,011
Changes (62,775) 390,430 235,580
--------------------------------------------------------------------------------
Balance, December 31, 2000 $415,194 $8,206,877 $2,025,591
================================================================================
The Corporation provides certain administrative services at no cost to the Plan.
Note 5 - Tax Status
The Internal Revenue Service has advised that the Plan constitutes a qualified
plan under Section 401 of the Internal Revenue Code and that the trust
established under the Plan is therefore exempt from federal income taxes. The
Plan has been restated since receiving the determination letter. However, the
Plan administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal Revenue
Code and that the Plan was qualified and the related trust was tax exempt as of
the financial statement date.
Note 6 - Plan Changes and Restatement
During 1999, the Plan added employees of The First National Bank of Portland
(The First National Bank 401(k) Plan) and Madison Community Bank (Anderson
Community Bank Salary Savings Plan) to the Plan. Assets of previous plans for
these employees totaled $1,374,720 that were transferred into the Plan in 1999.
Effective January 1, 2001, employees of Decatur Bank and Trust Company (Decatur
Bank and Trust Company 401(k) Profit Sharing Plan) were added to the Plan, and
assets of approximately $2,337,000 were transferred into the Plan.
The Plan was restated effective January 1, 1998. As of January 1, 2001, a
Corporation stock fund was added as an investment account option, and the Plan
eligibility age was lowered to age 18.
Supplemental Schedules
First Merchants Corporation
Retirement Savings Plan
Schedule H, line 4i--Schedule of Assets Held for Investment Purposes
at End of Year
December 31, 2000
Employer Identification Number: 35-1544218 Plan Number: 002
(a) (b) (c) (e)
Identity of Issue, Description of Investment
Borrower, Lessor, or Including Par or Current
Similar Party Maturity Value Value
- ----------------------------------------------------------------------------------------------------------------------------
Temporary Deposit Funds
*First Merchants Bank, N.A. Temporary Fund II $415,194 $ 415,194
-----------------
Collective Investment Funds
*First Merchants Bank, N.A. Intermediate Growth Fund for Tax Exempt
Accounts 345,639 shares 8,206,877
*First Merchants Bank, N.A. Intermediate Term Income Fund for Tax
Exempt Accounts 254,752 shares 2,025,591
-----------------
10,232,468
-----------------
Mutual Funds
T. Rowe Price International Fund 4,944 shares 71,791
Scudder International Fund 1,453 shares 73,076
Franklin Templeton Foreign Fund 7,909 shares 81,783
Vanguard International Fund 3,862 shares 72,868
Franklin Small Cap Growth Fund 3,737 shares 147,821
Managers Special Equity Fund 1,583 shares 121,611
T. Rowe Price Small Cap Value Fund 5,814 shares 111,288
Franklin Templeton Developing Markets 89 shares 946
-----------------
681,184
-----------------
$11,328,846
=================
*Party-in-interest
First Merchants Corporation
Retirement Savings Plan
Schedule H, line 4j--Schedule of Reportable Transactions
(Transactions in Excess of 5% of Plan Assets at Beginning of Year)
Year Ended December 31, 2000
Employer Identification Number: 35-1544218 Plan Number: 002
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Current Value
Expenses of Asset on
Identity of Party Description of Purchase Selling Lease Incurred With Cost of Transaction Net Gain
Involved Assets Price Price Rental Transaction Asset Date or (Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
Issuer First Merchants Bank, N.A.
Temporary
Fund 11
Purchases $961,935 $ 961,935 $ 961,935
Sales $1,017,614 1,017,614 1,017,614
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in a Registration Statement
on Form S-8 (File Number 333-50484) of our report dated June 7, 2001, with
respect to the financial statements of the First Merchants Corporation
Retirement Savings Plan included in its Annual Report on Form 11-K for the year
ended December 31, 2000.
BKD, LLP
Indianapolis, Indiana
June 25, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: 06/07/01 By: /s/ Kimberly J. Ellington
-------- -------------------------
Kimberly J. Ellington
First Merchants Corporation
Retirement Savings Plan