First Merchants Corporation Announces Third Quarter 2021 Earnings Per Share

Source: Nasdaq GlobeNewswire / 26 Oct 2021 07:00:04 America/Chicago

MUNCIE, Ind., Oct. 26, 2021 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME) has reported third quarter 2021 net income of $52.8 million compared to $36.2 million during the same period in 2020, an increase of 45.7 percent. Earnings per share for the period totaled $.98 per share compared to the third quarter of 2020 result of $.67 per share. Year-to-date net income totaled $157.8 million compared to $103.5 million during the nine months ended September 30, 2020, an increase of 52.5 percent. Year-to-date earnings per share totaled $2.92 compared to $1.91 during the same period in 2020.

Total assets equaled $15.1 billion as of September 30, 2021 and loans totaled $9.0 billion. The Corporation experienced organic loan growth of $503.9 million, or 6.0 percent during the last twelve months, offset by the forgiveness of Paycheck Protection Program (“PPP”) loans which accounted for a decline of $703.3 million. As a result, the loan portfolio decreased by $199.5 million, or 2.2 percent, during that period. Organic loan growth, on an annualized basis, was 5.8 percent in the third quarter 2021. Investments increased $1.5 billion, or 51.6 percent, during the last twelve months and now total $4.4 billion. Total deposits equaled $12.3 billion as of quarter-end and increased by $1.4 billion, or 13.2 percent, from the same period in 2020.

The Corporation’s Allowance for Credit Losses – Loans totaled $200.0 million as of quarter-end, or 2.21 percent of total loans. Net recoveries for the quarter totaled $0.2 million and no provision expense was recorded. Provision expense taken during the three and nine months ended September 30, 2020 of $12.5 million and $54.2 million, respectively, reflected our view of increased credit risk related to the COVID-19 pandemic. Non-accrual loans totaled $51.5 million as of quarter-end.

Mark Hardwick, Chief Executive Officer, stated, “We are having a record year powered by strong balance sheet growth and high levels of profitability. We remain optimistic about the remainder of 2021 and our ability to deliver high levels of performance in 2022.”

Net-interest income for the quarter totaled $104.7 million, an increase of $11.8 million from the third quarter of 2020, or 12.7 percent. Net interest margin, on a tax equivalent basis, totaling 3.20 percent, increased by 5 basis points compared to the third quarter of 2020. Yields on earning assets for the third quarter totaled 3.46 percent and cost of supporting liabilities totaled 26 basis points. Fair value accretion contributed less to margin as it accounted for 4 basis points in the third quarter of 2021, compared to 10 basis points in the third quarter of 2020. PPP loans contributed 17 basis points to margin during the third quarter of 2021 but subtracted 7 basis points from margin in the same quarter of 2020.

Non-interest income totaled $28.5 million for the quarter, a $2.3 million increase over the third quarter of 2020. Increases in service charges on deposit accounts, fiduciary and wealth management fees and earnings on cash surrender value of life insurance were somewhat offset by a decline in gains on the sale of mortgage loans. Non-interest expense totaled $71.4 million for the quarter compared to $64.7 million in the third quarter of 2020, an increase primarily due to higher salaries and employee benefits.

The loan to deposit ratio now totals 73.3 percent and the loan to asset ratio totals 60.1 percent. As of September 30, 2021, the Corporation’s total risk-based capital ratio equaled 14.02 percent, the common equity tier 1 capital ratio equaled 11.75 percent, and the tangible common equity ratio totaled 8.94 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

CONFERENCE CALL

First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 2:30 p.m. (ET) on Tuesday, October 26, 2021.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's third quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until November 26, 2021. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529, Canada participants should dial 855-669-9658, or for International participants, dial +1 412-317-0088. The replay access code is 10160141.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme211021.html during the time of the call. A replay of the web cast will be available until October 26, 2022.

Detailed financial results are reported on the attached pages.

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank).

First Merchants Corporation’s common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company’s Internet web page (http://www.firstmerchants.com).

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.

Forward-Looking Statements

This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These statements include statements of First Merchants’ goals, intentions and expectations; statements regarding the First Merchants’ business plan and growth strategies; statements regarding the asset quality of First Merchants’ loan and investment portfolios; and estimates of First Merchants’ risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit worthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants’ affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity, credit and interest rate risks associated with the First Merchants’ business; and other risks and factors identified in each of First Merchants’ filings with the Securities and Exchange Commission. First Merchants does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this press release. In addition, First Merchants’ past results of operations do not necessarily indicate its anticipated future results.


CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	September 30,
	2021			2020
ASSETS
Cash and cash equivalents	$	169,261		$	164,632
Interest-bearing deposits	369,447			273,936
Investment securities, net of allowance for credit losses of $245,000 and $0	4,445,516			2,933,286
Loans held for sale	5,990			3,183
Loans	9,041,576			9,243,833
Less: Allowance for credit losses - loans	(199,972		)	(126,726		)
Net loans	8,841,604			9,117,107
Premises and equipment	104,814			112,959
Federal Home Loan Bank stock	28,736			28,736
Interest receivable	53,079			52,992
Goodwill and other intangibles	572,323			574,369
Cash surrender value of life insurance	291,825			291,543
Other real estate owned	698			6,942
Tax asset, deferred and receivable	39,504			21,762
Other assets	137,928			155,903
TOTAL ASSETS	$	15,060,725		$	13,737,350
LIABILITIES
Deposits:
Noninterest-bearing	$	2,554,323		$	2,187,607
Interest-bearing	9,794,366			8,718,546
Total Deposits	12,348,689			10,906,153
Borrowings:
Federal funds purchased	—			80,000
Securities sold under repurchase agreements	183,589			187,732
Federal Home Loan Bank advances	334,149			399,522
Subordinated debentures and other borrowings	118,558			118,320
Total Borrowings	636,296			785,574
Interest payable	3,736			5,038
Other liabilities	203,914			206,929
Total Liabilities	13,192,635			11,903,694
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 - 53,510,745 and 53,891,733 shares	6,689			6,736
Additional paid-in capital	988,659			1,003,777
Retained earnings	832,728			757,550
Accumulated other comprehensive income	39,889			65,468
Total Stockholders' Equity	1,868,090			1,833,656
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	15,060,725		$	13,737,350

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended					Nine Months Ended
(Dollars In Thousands, Except Per Share Amounts)	September 30,					September 30,
	2021			2020		2021		2020
INTEREST INCOME
Loans receivable:
Taxable	$	85,319		$	84,162	$	257,426	$	268,126
Tax-exempt	5,591			5,395		16,475		16,069
Investment securities:
Taxable	7,788			5,399		21,923		19,177
Tax-exempt	14,464			10,931		39,920		30,285
Deposits with financial institutions	218			90		461		799
Federal Home Loan Bank stock	168			248		434		828
Total Interest Income	113,548			106,225		336,639		335,284
INTEREST EXPENSE
Deposits	5,707			9,776		17,730		44,231
Federal funds purchased	—			5		4		118
Securities sold under repurchase agreements	77			83		239		527
Federal Home Loan Bank advances	1,389			1,749		4,283		5,317
Subordinated debentures and other borrowings	1,660			1,691		4,976		5,275
Total Interest Expense	8,833			13,304		27,232		55,468
NET INTEREST INCOME	104,715			92,921		309,407		279,816
Provision for credit losses - loans	—			12,544		—		54,191
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	104,715			80,377		309,407		225,625
OTHER INCOME
Service charges on deposit accounts	6,249			5,209		17,109		15,491
Fiduciary and wealth management fees	7,352			5,910		21,284		17,496
Card payment fees	4,156			3,996		12,682		16,000
Net gains and fees on sales of loans	3,955			5,841		16,266		12,878
Derivative hedge fees	1,028			1,715		2,288		4,696
Other customer fees	393			372		1,129		1,103
Earnings on cash surrender value of life insurance	2,468			1,171		5,009		3,857
Net realized gains on sales of available for sale securities	1,756			1,817		5,316		9,497
Other income	1,144			132		2,393		1,425
Total Other Income	28,501			26,163		83,476		82,443
OTHER EXPENSES
Salaries and employee benefits	43,314			39,187		124,563		114,128
Net occupancy	5,576			5,855		17,682		17,103
Equipment	4,529			4,956		14,407		13,789
Marketing	1,676			1,311		3,922		4,846
Outside data processing fees	4,794			3,776		13,736		10,593
Printing and office supplies	265			331		861		997
Intangible asset amortization	1,463			1,486		4,284		4,511
FDIC assessments	1,552			1,249		4,381		4,244
Other real estate owned and foreclosure expenses	(91		)	717		821		1,906
Professional and other outside services	2,767			2,254		8,286		6,065
Other expenses	5,539			3,587		13,834		12,687
Total Other Expenses	71,384			64,709		206,777		190,869
INCOME BEFORE INCOME TAX	61,832			41,831		186,106		117,199
Income tax expense	9,062			5,621		28,308		13,734
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	52,770		$	36,210	$	157,798	$	103,465

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.98		$	0.67	$	2.93	$	1.91
Diluted Net Income Available to Common Stockholders	$	0.98		$	0.67	$	2.92	$	1.91
Cash Dividends Paid	$	0.29		$	0.26	$	0.84	$	0.78
Average Diluted Shares Outstanding (in thousands)	53,960			53,971		54,093		54,278

FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
NET CHARGE-OFFS	$	(197	)	$	6,937		$	4,731		$	7,749

AVERAGE BALANCES:
Total Assets	$	15,006,087		$	13,660,818		$	14,672,596		$	13,297,789
Total Loans	9,089,648			9,252,839			9,202,327			8,987,645
Total Earning Assets	13,741,196			12,341,257			13,419,310			11,941,839
Total Deposits	12,350,336			10,944,721			12,017,335			10,541,777
Total Stockholders' Equity	1,889,037			1,831,300			1,858,680			1,814,471

FINANCIAL RATIOS:
Return on Average Assets	1.41		%	1.06		%	1.43		%	1.04		%
Return on Average Stockholders' Equity	11.17			7.91			11.32			7.60
Return on Average Common Stockholders' Equity	11.17			7.91			11.32			7.60
Average Earning Assets to Average Assets	91.57			90.34			91.46			89.80
Allowance for Credit Losses - Loans as % of Total Loans	2.21			1.37			2.21			1.37
Net Charge-offs as % of Average Loans (Annualized)	(0.01		)	0.30			0.07			0.11
Average Stockholders' Equity to Average Assets	12.59			13.41			12.67			13.64
Tax Equivalent Yield on Average Earning Assets	3.46			3.58			3.49			3.88
Interest Expense/Average Earning Assets	0.26			0.43			0.27			0.62
Net Interest Margin (FTE) on Average Earning Assets	3.20			3.15			3.22			3.26
Efficiency Ratio	51.18			51.40			50.10			50.52
Tangible Common Book Value Per Share	$	24.31		$	23.48		$	24.31		$	23.48

NON-PERFORMING ASSETS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2021			2021			2021			2020			2020
Non-Accrual Loans	$	51,502		$	57,556		$	57,923		$	61,471		$	56,739
Renegotiated Loans	439			629			655			3,240			2,677
Non-Performing Loans (NPL)	51,941			58,185			58,578			64,711			59,416
Other Real Estate Owned and Repossessions	698			601			604			940			6,984
Non-Performing Assets (NPA)	52,639			58,786			59,182			65,651			66,400
90+ Days Delinquent	157			183			1,093			746			1,330
NPAs & 90 Day Delinquent	$	52,796		$	58,969		$	60,275		$	66,397		$	67,730

Allowance for Credit Losses - Loans	$	199,972		$	199,775		$	201,082		$	130,648		$	126,726
Quarterly Net Charge-offs	(197		)	1,307			3,621			560			6,937
NPAs / Actual Assets %	0.35		%	0.39		%	0.40		%	0.47		%	0.48		%
NPAs & 90 Day / Actual Assets %	0.35		%	0.40		%	0.41		%	0.47		%	0.49		%
NPAs / Actual Loans and OREO %	0.58		%	0.64		%	0.63		%	0.71		%	0.72		%
Allowance for Credit Losses - Loans / Actual Loans (%)	2.21		%	2.19		%	2.16		%	1.41		%	1.37		%
Net Charge-offs as % of Average Loans (Annualized)	(0.01		)%	0.06		%	0.16		%	0.02		%	0.30		%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2021			2021			2021			2020			2020
ASSETS
Cash and cash equivalents	$	169,261		$	167,596		$	187,901		$	192,896		$	164,632
Interest-bearing deposits	369,447			438,863			392,806			392,305			273,936
Investment securities, net of allowance for credit losses	4,445,516			4,148,314			3,700,857			3,146,787			2,933,286
Loans held for sale	5,990			18,582			4,430			3,966			3,183
Loans	9,041,576			9,121,250			9,318,228			9,243,174			9,243,833
Less: Allowance for credit losses - loans	(199,972		)	(199,775		)	(201,082		)	(130,648		)	(126,726		)
Net loans	8,841,604			8,921,475			9,117,146			9,112,526			9,117,107
Premises and equipment	104,814			103,822			109,432			111,062			112,959
Federal Home Loan Bank stock	28,736			28,736			28,736			28,736			28,736
Interest receivable	53,079			54,173			54,662			53,948			52,992
Goodwill and other intangibles	572,323			573,786			571,536			572,893			574,369
Cash surrender value of life insurance	291,825			294,462			293,766			292,745			291,543
Other real estate owned	698			601			604			940			6,942
Tax asset, deferred and receivable	39,504			36,924			40,163			12,340			21,762
Other assets	137,928			135,763			127,027			146,066			155,903
TOTAL ASSETS	$	15,060,725		$	14,923,097		$	14,629,066		$	14,067,210		$	13,737,350
LIABILITIES
Deposits:
Noninterest-bearing	$	2,554,323		$	2,479,853		$	2,494,891		$	2,298,138		$	2,187,607
Interest-bearing	9,794,366			9,723,547			9,456,889			9,063,472			8,718,546
Total Deposits	12,348,689			12,203,400			11,951,780			11,361,610			10,906,153
Borrowings:
Federal funds purchased	—			—			—			—			80,000
Securities sold under repurchase agreements	183,589			146,904			185,721			177,102			187,732
Federal Home Loan Bank advances	334,149			334,243			359,337			389,430			399,522
Subordinated debentures and other borrowings	118,558			118,498			118,439			118,380			118,320
Total Borrowings	636,296			599,645			663,497			684,912			785,574
Interest payable	3,736			2,929			4,020			3,287			5,038
Other liabilities	203,914			245,323			203,913			141,756			206,929
Total Liabilities	13,192,635			13,051,297			12,823,210			12,191,565			11,903,694
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	6,689			6,747			6,744			6,740			6,736
Additional paid-in capital	988,659			1,009,182			1,007,300			1,005,366			1,003,777
Retained earnings	832,728			795,666			755,877			788,578			757,550
Accumulated other comprehensive income	39,889			60,080			35,810			74,836			65,468
Total Stockholders' Equity	1,868,090			1,871,800			1,805,856			1,875,645			1,833,656
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	15,060,725		$	14,923,097		$	14,629,066		$	14,067,210		$	13,737,350

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	September 30			June 30			March 31,			December 31,			September 30,
	2021			2021			2021			2020			2020
INTEREST INCOME
Loans receivable:
Taxable	$	85,319		$	87,002		$	85,105		$	90,138		$	84,162
Tax-exempt	5,591			5,545			5,339			5,414			5,395
Investment securities:
Taxable	7,788			7,440			6,695			5,263			5,399
Tax-exempt	14,464			13,071			12,385			12,056			10,931
Deposits with financial institutions	218			129			114			139			90
Federal Home Loan Bank stock	168			88			178			214			248
Total Interest Income	113,548			113,275			109,816			113,224			106,225
INTEREST EXPENSE
Deposits	5,707			5,823			6,200			7,509			9,776
Federal funds purchased	—			2			2			2			5
Securities sold under repurchase agreements	77			75			87			77			83
Federal Home Loan Bank advances	1,389			1,452			1,442			1,656			1,749
Subordinated debentures and other borrowings	1,660			1,659			1,657			1,669			1,691
Total Interest Expense	8,833			9,011			9,388			10,913			13,304
NET INTEREST INCOME	104,715			104,264			100,428			102,311			92,921
Provision for credit losses - loans	—			—			—			4,482			12,544
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	104,715			104,264			100,428			97,829			80,377
OTHER INCOME
Service charges on deposit accounts	6,249			5,596			5,264			5,508			5,209
Fiduciary and wealth management fees	7,352			7,510			6,422			6,251			5,910
Card payment fees	4,156			4,159			4,367			3,502			3,996
Net gains and fees on sales of loans	3,955			8,325			3,986			5,393			5,841
Derivative hedge fees	1,028			943			317			2,281			1,715
Other customer fees	393			368			368			394			372
Earnings on cash surrender value of life insurance	2,468			1,205			1,336			1,283			1,171
Net realized gains on sales of available for sale securities	1,756			1,761			1,799			2,398			1,817
Other income	1,144			1,017			232			473			132
Total Other Income	28,501			30,884			24,091			27,483			26,163
OTHER EXPENSES
Salaries and employee benefits	43,314			42,438			38,811			41,809			39,187
Net occupancy	5,576			5,615			6,491			9,653			5,855
Equipment	4,529			4,848			5,030			5,555			4,956
Marketing	1,676			1,122			1,124			1,763			1,311
Outside data processing fees	4,794			4,698			4,244			3,839			3,776
Printing and office supplies	265			313			283			307			331
Intangible asset amortization	1,463			1,464			1,357			1,476			1,486
FDIC assessments	1,552			1,461			1,368			1,560			1,249
Other real estate owned and foreclosure expenses	(91		)	178			734			(1,576		)	717
Professional and other outside services	2,767			2,976			2,543			2,836			2,254
Other expenses	5,539			4,182			4,113			5,314			3,587
Total Other Expenses	71,384			69,295			66,098			72,536			64,709
INCOME BEFORE INCOME TAX	61,832			65,853			58,421			52,776			41,831
Income tax expense	9,062			10,294			8,952			7,641			5,621
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	52,770		$	55,559		$	49,469		$	45,135		$	36,210

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.98		$	1.03		$	0.92		$	0.83		$	0.67
Diluted Net Income Available to Common Stockholders	$	0.98		$	1.03		$	0.91		$	0.83		$	0.67
Cash Dividends Paid	$	0.29		$	0.29		$	0.26		$	0.26		$	0.26
Average Diluted Shares Outstanding (in thousands)	53,960			54,184			54,134			54,050			53,971
FINANCIAL RATIOS:
Return on Average Assets	1.41		%	1.51		%	1.39		%	1.29		%	1.06		%
Return on Average Stockholders' Equity	11.17			12.04			10.75			9.72			7.91
Return on Average Common Stockholders' Equity	11.17			12.04			10.75			9.72			7.91
Average Earning Assets to Average Assets	91.57			91.87			91.43			90.66			90.34
Allowance for Credit Losses - Loans as % of Total Loans	2.21			2.19			2.16			1.41			1.37
Net Charge-offs as % of Average Loans (Annualized)	(0.01		)	0.06			0.16			0.02			0.30
Average Stockholders' Equity to Average Assets	12.59			12.51			12.92			13.29			13.41
Tax Equivalent Yield on Average Earning Assets	3.46			3.49			3.52			3.72			3.58
Interest Expense/Average Earning Assets	0.26			0.27			0.29			0.34			0.43
Net Interest Margin (FTE) on Average Earning Assets	3.20			3.22			3.23			3.38			3.15
Efficiency Ratio	51.18			48.91			50.23			55.01			51.40
Tangible Common Book Value Per Share	$	24.31		$	24.15		$	22.98		$	24.27		$	23.48

LOANS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2021			2021			2021			2020			2020
Commercial and industrial loans	$	2,573,615		$	2,671,076		$	2,876,212		$	2,776,699		$	2,875,331
Agricultural land, production and other loans to farmers	240,686			235,020			245,631			281,884			301,192
Real estate loans:
Construction	521,889			491,200			541,224			484,723			622,084
Commercial real estate, non-owner occupied	2,150,387			2,263,497			2,178,832			2,220,949			2,098,589
Commercial real estate, owner occupied	952,441			953,501			950,038			958,501			931,815
Residential	1,154,373			1,127,442			1,239,925			1,234,741			1,146,406
Home equity	531,307			489,997			482,229			508,259			527,458
Individuals' loans for household and other personal expenditures	135,093			130,819			126,387			129,479			125,411
Public finance and other commercial loans	781,785			758,698			677,750			647,939			615,547
Loans	9,041,576			9,121,250			9,318,228			9,243,174			9,243,833
Allowance for credit losses - loans	(199,972		)	(199,775		)	(201,082		)	(130,648		)	(126,726		)
NET LOANS	$	8,841,604		$	8,921,475		$	9,117,146		$	9,112,526		$	9,117,107

DEPOSITS
(Dollars In Thousands)	September 30,		June 30,		March 31,		December 31,		September 30,
	2021		2021		2021		2020		2020
Demand deposits	$	7,317,399	$	7,261,603	$	7,245,850	$	6,821,152	$	6,279,554
Savings deposits	4,301,483		4,157,552		3,857,624		3,661,713		3,518,286
Certificates and other time deposits of $100,000 or more	283,396		304,394		332,745		346,194		467,610
Other certificates and time deposits	404,010		423,922		449,655		459,168		542,919
Brokered deposits	42,401		55,929		65,906		73,383		97,784
TOTAL DEPOSITS	$	12,348,689	$	12,203,400	$	11,951,780	$	11,361,610	$	10,906,153

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	September 30, 2021						September 30, 2020
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:
Interest-bearing deposits	$	539,377	$	218	0.16	%	$	301,529	$	90	0.12	%
Federal Home Loan Bank stock	28,736		168		2.34		28,736		248		3.45
Investment Securities: ⁽¹⁾
Taxable	1,843,026		7,788		1.69		1,258,690		5,399		1.72
Tax-Exempt ⁽²⁾	2,240,409		18,309		3.27		1,499,463		13,837		3.69
Total Investment Securities	4,083,435		26,097		2.56		2,758,153		19,236		2.79
Loans held for sale	17,426		158		3.63		24,705		257		4.16
Loans: ⁽³⁾
Commercial	6,745,303		70,442		4.18		6,965,837		66,826		3.84
Real Estate Mortgage	886,469		8,142		3.67		887,661		9,996		4.50
Installment	690,093		6,576		3.81		693,363		7,083		4.09
Tax-Exempt ⁽²⁾	750,357		7,078		3.77		681,273		6,829		4.01
Total Loans	9,089,648		92,396		4.07		9,252,839		90,991		3.93
Total Earning Assets	13,741,196		118,879		3.46	%	12,341,257		110,565		3.58	%
Total Non-Earning Assets	1,264,891						1,319,561
Total Assets	$	15,006,087					$	13,660,818
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	4,799,624	$	3,606	0.30	%	$	4,098,017	$	3,890	0.38	%
Money market deposits	2,459,205		764		0.12		1,813,392		1,167		0.26
Savings deposits	1,788,281		486		0.11		1,574,700		583		0.15
Certificates and other time deposits	758,565		851		0.45		1,267,152		4,136		1.31
Total Interest-bearing Deposits	9,805,675		5,707		0.23		8,753,261		9,776		0.45
Borrowings	619,768		3,126		2.02		733,757		3,528		1.92
Total Interest-bearing Liabilities	10,425,443		8,833		0.34		9,487,018		13,304		0.56
Noninterest-bearing deposits	2,544,661						2,191,460
Other liabilities	146,946						151,040
Total Liabilities	13,117,050						11,829,518
Stockholders' Equity	1,889,037						1,831,300
Total Liabilities and Stockholders' Equity	$	15,006,087	8,833				$	13,660,818	13,304
Net Interest Income (FTE)			$	110,046					$	97,261
Net Interest Spread (FTE) ⁽⁴⁾					3.12	%					3.02	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					3.46	%					3.58	%
Interest Expense / Average Earning Assets					0.26	%					0.43	%
Net Interest Margin (FTE) ⁽⁵⁾					3.20	%					3.15	%

⁽¹⁾ Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
⁽²⁾Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2021 and 2020. These totals equal $5,331 and $4,340 for the three months ended September 30, 2021 and 2020, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.
⁽⁴⁾ Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
⁽⁵⁾ Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Nine Months Ended
	September 30, 2021						September 30, 2020
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:
Interest-bearing deposits	$	509,153	$	461	0.12	%	$	280,038	$	799	0.38	%
Federal Home Loan Bank stock	28,736		434		2.01		28,736		828		3.84
Investment Securities: ⁽¹⁾
Taxable	1,689,697		21,923		1.73		1,302,943		19,177		1.96
Tax-Exempt ⁽²⁾	1,989,397		50,532		3.39		1,342,477		38,335		3.81
Total Investment Securities	3,679,094		72,455		2.63		2,645,420		57,512		2.90
Loans held for sale	19,360		551		3.79		17,175		581		4.51
Loans: ⁽³⁾
Commercial	6,857,968		210,502		4.09		6,698,042		213,241		4.24
Real Estate Mortgage	924,652		26,917		3.88		882,911		30,520		4.61
Installment	674,696		19,456		3.84		725,596		23,784		4.37
Tax-Exempt ⁽²⁾	725,651		20,854		3.83		663,921		20,341		4.09
Total Loans	9,202,327		278,280		4.03		8,987,645		288,467		4.28
Total Earning Assets	13,419,310		351,630		3.49	%	11,941,839		347,606		3.88	%
Total Non-Earning Assets	1,253,286						1,355,950
Total Assets	$	14,672,596					$	13,297,789
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	4,721,267	$	10,875	0.31	%	$	3,880,489	$	16,351	0.56	%
Money market deposits	2,295,589		2,395		0.14		1,674,622		6,647		0.53
Savings deposits	1,730,149		1,424		0.11		1,507,269		3,007		0.27
Certificates and other time deposits	809,721		3,036		0.50		1,476,499		18,226		1.65
Total Interest-bearing Deposits	9,556,726		17,730		0.25		8,538,879		44,231		0.69
Borrowings	646,326		9,502		1.96		796,836		11,237		1.88
Total Interest-bearing Liabilities	10,203,052		27,232		0.36		9,335,715		55,468		0.79
Noninterest-bearing deposits	2,460,609						2,002,898
Other liabilities	150,255						144,705
Total Liabilities	12,813,916						11,483,318
Stockholders' Equity	1,858,680						1,814,471
Total Liabilities and Stockholders' Equity	$	14,672,596	27,232				$	13,297,789	55,468
Net Interest Income (FTE)			$	324,398					$	292,138
Net Interest Spread (FTE) ⁽⁴⁾					3.13	%					3.09	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					3.49	%					3.88	%
Interest Expense / Average Earning Assets					0.27	%					0.62	%
Net Interest Margin (FTE) ⁽⁵⁾					3.22	%					3.26	%

⁽¹⁾ Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
⁽²⁾ Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2021 and 2020. These totals equal $14,991 and $12,322 for the nine months ended September 30, 2021 and 2020, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.
⁽⁴⁾Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
⁽⁵⁾ Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.

For more information, contact:
Nicole M. Weaver, Vice President and Director of Corporate Administration
765-521-7619
http://www.firstmerchants.com

First Merchants Corporation Announces Third Quarter 2021 Earnings Per Share

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