• First Merchants Corporation Announces Third Quarter 2022 Earnings Per Share

    Source: Nasdaq GlobeNewswire / 25 Oct 2022 08:00:46   America/New_York

    MUNCIE, Ind., Oct. 25, 2022 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME)

    Third Quarter 2022 Highlights:

    • Net income available to common stockholders was $63.3 million and diluted earnings per common share totaled $1.08, compared to $52.8 million and $.98 in the third quarter of 2021, and $38.5 million and $.63 in the second quarter of 2022.
    • Completed system integration for the acquisition of Level One Bancorp, Inc. (“Level One”) during the quarter.
    • Adjusted net income available to common stockholders1 for the third quarter was $65.6 million and adjusted diluted earnings per common share1 totaled $1.12, compared to $46.6 million and $.87 in the third quarter of 2021, and $60.0 million and $1.01 in the second quarter of 2022.
    • Total loans grew $290.6 million, or 10.2% annualized on a linked quarter basis, excluding the forgiveness of $21.7 million in Paycheck Protection Program (“PPP”) loans.
    • Total deposits declined $136.0 million, or 3.7% annualized on a linked quarter basis.
    • Nonaccrual loans totaled $43.5 million compared to $46.0 million on a linked quarter basis
    • Net interest income totaled $140.3 million, an increase of $11.6 million, or 9.0% on a linked quarter basis

    Mark Hardwick, Chief Executive Officer, stated, “Despite high inflation and volatility in both the bond and stock markets, our performance continues to be steady and strong. Margins are expanding, loan growth continues, and asset quality metrics remain at historical lows. We believe our balance sheet mix, allowance coverage and capital levels are well positioned for an uncertain economic environment.”

    Third Quarter Financial Results

    First Merchants Corporation (the “Corporation) has reported third quarter 2022 net income available to common stockholders of $63.3 million compared to $52.8 million during the same period in 2021. Diluted earnings per common share for the period totaled $1.08 per share compared to the third quarter of 2021 result of $.98 per share. Current quarter results included integration costs from the acquisition of Level One and severance expense totaling $4.0 million.

    Total assets equaled $17.7 billion as of quarter-end and loans totaled $11.7 billion. Total loans increased $2.6 billion during the past twelve months. The acquisition of Level One contributed $1.6 billion of loans. Excluding acquired loans, the Corporation experienced organic loan growth of $1.2 billion, or 13.8 percent, during the past twelve months. This was offset by the forgiveness of PPP loans of $230.3 million. PPP loans accounted for $11.2 million of the period end loan portfolio balance. Investments decreased $150.7 million, or 3.4 percent, during the last twelve months and now total $4.3 billion.

    Total deposits equaled $14.4 billion as of quarter-end and increased by $2.1 billion over the past twelve months. The acquisition of Level One contributed $1.9 billion in deposits resulting in $155.3 million or 1.3% in organic deposit growth. The balance sheet growth mix resulted in an increase in the loan to deposit ratio of 7.6% over the past twelve months with the current quarter ratio ending at 80.9 percent.

    The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $226.7 million as of quarter-end, or 1.94 percent of total loans, an increase of $26.7 million over prior year due to the acquisition of Level One. Net loan recoveries for the quarter totaled $0.4 million. No provision expense was recorded during the quarter or during the last twelve months other than CECL Day 1 expense of $16.8 million due to the acquisition of Level One. Non-performing assets to total assets were 0.28% for the third quarter of 2022, a decrease of seven basis points compared to 0.35% in the third quarter of 2021.

    Net-interest income totaling $140.3 million for the quarter, continued to grow with an increase of $11.6 million, or 9 percent, over prior quarter, and an increase of $35.6 million, or 34 percent compared to the third quarter of 2021. Stated net-interest margin on a tax equivalent basis, totaling 3.55 percent, increased by 27 basis points compared to the second quarter of 2022 and 35 basis points compared to the third quarter of 2021. Net-interest margin excluding the impact of fair value accretion and PPP loans totaled 3.47%, an increase of 28 basis points compared to 3.19% for the second quarter of 2022 and an increase of 48 basis points from the third quarter of 2021. During the quarter, the yield on earning assets expanded 53 basis points from higher loan and investment portfolio yields as well as organic loan growth, offset by a 26 basis point increase in funding costs.

    Non-interest income, totaling $29.6 million for the quarter, increased $1.3 million or 4.7% compared to the second quarter of 2022. The increase was driven by higher earnings on cash surrender value of life insurance offset by lower customer related fees and other income. Non-interest income increased $1.1 million from the third quarter of 2021 also due to higher earnings on cash surrender value of life insurance offset by lower gains on the sale of securities and other income. The decline in other income was due to a write-down of an equity investment of $1.9 million.

    Non-interest expense totaled $96.4 million for the quarter, a decrease of $0.9 million from the second quarter of 2022, and an increase of $25.0 million over the third quarter of 2021. Integration costs and severance expense totaling $4.0 million were incurred during the quarter.

    The Corporation’s total risk-based capital ratio equaled 12.84 percent, common equity tier 1 capital ratio equaled 10.40 percent, and the tangible common equity ratio totaled 6.66 percent. These ratios continue to reflect the Corporation’s strong capital position.

    1 See “Non-GAAP Financial Information” for reconciliation

    CONFERENCE CALL

    First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 10:30 a.m. (ET) on Tuesday, October 25, 2022.

    To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: (https://register.vevent.com/register/BI33d38f63624949c49527aaa096d2e146)

    In order to view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/988gy9uu) during the time of the call. A replay of the webcast will be available until October 25, 2023.

    Detailed financial results are reported on the attached pages.

    About First Merchants Corporation

    First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (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,
      2022   2021 
    ASSETS   
    Cash and due from banks$119,532  $169,261 
    Interest-bearing deposits 179,593   369,447 
    Investment securities, net of allowance for credit losses of $245,000 and $245,000 4,294,768   4,445,516 
    Loans held for sale 25,394   5,990 
    Loans 11,650,002   9,041,576 
    Less: Allowance for credit losses - loans (226,702)  (199,972)
    Net loans 11,423,300   8,841,604 
    Premises and equipment 116,306   104,814 
    Federal Home Loan Bank stock 38,056   28,736 
    Interest receivable 71,605   53,079 
    Goodwill and other intangibles 750,713   572,323 
    Cash surrender value of life insurance 306,932   291,825 
    Other real estate owned 6,454   698 
    Tax asset, deferred and receivable 142,110   39,504 
    Other assets 244,222   137,928 
    TOTAL ASSETS$17,718,985  $15,060,725 
    LIABILITIES   
    Deposits:   
    Noninterest-bearing$3,356,651  $2,554,323 
    Interest-bearing 11,078,174   9,794,366 
    Total Deposits 14,434,825   12,348,689 
    Borrowings:   
    Federal funds purchased 185,000   — 
    Securities sold under repurchase agreements 194,482   183,589 
    Federal Home Loan Bank advances 643,769   334,149 
    Subordinated debentures and other borrowings 151,301   118,558 
    Total Borrowings 1,174,552   636,296 
    Interest payable 4,971   3,736 
    Other liabilities 197,971   203,914 
    Total Liabilities 15,812,319   13,192,635 
    STOCKHOLDERS' EQUITY   
    Preferred Stock, $1,000 par value, $1,000 liquidation value:   
    Authorized -- 600 cumulative shares   
    Issued and outstanding - 125 cumulative shares 125   125 
    Preferred Stock, Series A, no par value, $2,500 liquidation preference:   
    Authorized -- 10,000 non-cumulative perpetual shares   
    Issued and outstanding - 10,000 non-cumulative perpetual shares 25,000   — 
    Common Stock, $.125 stated value:   
    Authorized -- 100,000,000 shares   
    Issued and outstanding - 59,145,414 and 53,510,745 shares 7,393   6,689 
    Additional paid-in capital 1,226,695   988,659 
    Retained earnings 961,542   832,728 
    Accumulated other comprehensive income (loss) (314,089)  39,889 
    Total Stockholders' Equity 1,906,666   1,868,090 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$17,718,985  $15,060,725 
     


    CONSOLIDATED STATEMENTS OF INCOMEThree Months Ended Nine Months Ended
    (Dollars In Thousands, Except Per Share Amounts)September 30, September 30,
      2022   2021   2022  2021
    INTEREST INCOME       
    Loans receivable:       
    Taxable$128,504  $85,319  $314,366 $257,426
    Tax-exempt 6,500   5,591   18,194  16,475
    Investment securities:       
    Taxable 10,055   7,788   28,937  21,923
    Tax-exempt 17,261   14,464   50,348  39,920
    Deposits with financial institutions 704   218   1,544  461
    Federal Home Loan Bank stock 314   168   635  434
    Total Interest Income 163,338   113,548   414,024  336,639
    INTEREST EXPENSE       
    Deposits 16,644   5,707   29,423  17,730
    Federal funds purchased 418   —   494  4
    Securities sold under repurchase agreements 372   77   595  239
    Federal Home Loan Bank advances 3,493   1,389   6,485  4,283
    Subordinated debentures and other borrowings 2,105   1,660   5,780  4,976
    Total Interest Expense 23,032   8,833   42,777  27,232
    NET INTEREST INCOME 140,306   104,715   371,247  309,407
    Provision for credit losses - loans —   —   16,755  —
    NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 140,306   104,715   354,492  309,407
    NON-INTEREST INCOME       
    Service charges on deposit accounts 7,165   6,249   21,274  17,109
    Fiduciary and wealth management fees 7,221   7,352   22,187  21,284
    Card payment fees 4,776   4,156   15,674  12,682
    Net gains and fees on sales of loans 2,543   3,955   7,968  16,266
    Derivative hedge fees 700   1,028   3,062  2,288
    Other customer fees 501   393   1,573  1,129
    Earnings on cash surrender value of life insurance 6,655   2,468   9,659  5,009
    Net realized gains on sales of available for sale securities 481   1,756   1,137  5,316
    Other income (loss) (425)  1,144   1,257  2,393
    Total Non-Interest Income 29,617   28,501   83,791  83,476
    NON-INTEREST EXPENSES       
    Salaries and employee benefits 56,002   43,314   154,562  124,563
    Net occupancy 6,738   5,576   19,573  17,682
    Equipment 5,997   4,529   17,797  14,407
    Marketing 2,401   1,676   4,551  3,922
    Outside data processing fees 6,827   4,794   16,071  13,736
    Printing and office supplies 472   265   1,198  861
    Intangible asset amortization 2,303   1,463   5,972  4,284
    FDIC assessments 2,824   1,552   7,940  4,381
    Other real estate owned and foreclosure expenses 328   (91)  626  821
    Professional and other outside services 4,461   2,767   17,681  8,286
    Other expenses 8,025   5,539   20,045  13,834
    Total Non-Interest Expenses 96,378   71,384   266,016  206,777
    INCOME BEFORE INCOME TAX 73,545   61,832   172,267  186,106
    Income tax expense 9,793   9,062   20,938  28,308
    NET INCOME 63,752   52,770   151,329  157,798
    Preferred stock dividends 469   —   938  —
    NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$63,283  $52,770  $150,391 $157,798
    Per Share Data:       
    Basic Net Income Available to Common Stockholders$1.08  $0.98  $2.63 $2.93
    Diluted Net Income Available to Common Stockholders$1.08  $0.98  $2.62 $2.92
    Cash Dividends Paid to Common Stockholders$0.32  $0.29  $0.93 $0.84
    Average Diluted Common Shares Outstanding (in thousands) 59,339   53,960   57,468  54,093


    FINANCIAL HIGHLIGHTS       
    (Dollars in thousands)Three Months Ended Nine Months Ended
     September 30, September 30,
     2022
    		 2021
    		 2022
    		 2021
    NET CHARGE-OFFS (RECOVERIES)$(427) $(197) $(751) $4,731 
            
    AVERAGE BALANCES:       
    Total Assets$17,770,623  $15,006,087  $17,012,930  $14,672,596 
    Total Loans 11,488,203   9,089,648   10,647,950   9,202,327 
    Total Earning Assets 16,508,914   13,741,196   15,744,040   13,419,310 
    Total Deposits 14,577,532   12,350,336   14,074,696   12,017,335 
    Total Stockholders' Equity 2,018,156   1,889,037   1,977,299   1,858,680 
            
    FINANCIAL RATIOS:       
    Return on Average Assets 1.43%  1.41%  1.19%  1.43%
    Return on Average Stockholders' Equity 12.54   11.17   10.14   11.32 
    Return on Average Common Stockholders' Equity 12.70   11.17   10.23   11.32 
    Average Earning Assets to Average Assets 92.90   91.57   92.54   91.46 
    Allowance for Credit Losses - Loans as % of Total Loans 1.94   2.21   1.94   2.21 
    Net Charge-offs as % of Average Loans (Annualized) (0.01)  (0.01)  (0.01)  0.07 
    Average Stockholders' Equity to Average Assets 11.36   12.59   11.62   12.67 
    Tax Equivalent Yield on Average Earning Assets 4.11   3.46   3.66   3.49 
    Interest Expense/Average Earning Assets 0.56   0.26   0.36   0.27 
    Net Interest Margin (FTE) on Average Earning Assets 3.55   3.20   3.30   3.22 
    Efficiency Ratio 53.34   51.18   54.95   50.10 
    Tangible Common Book Value Per Share$19.26  $24.31  $19.26  $24.31 


    NON-PERFORMING ASSETS         
    (Dollars In Thousands)September 30, June 30, March 31, December 31, September 30,
      2022   2022   2022   2021   2021 
    Non-Accrual Loans$43,508  $45,970  $42,698  $43,062  $51,502 
    Renegotiated Loans 195   233   141   329   439 
    Non-Performing Loans (NPL) 43,703   46,203   42,839   43,391   51,941 
    Other Real Estate Owned and Repossessions 6,454   6,521   6,271   558   698 
    Non-Performing Assets (NPA) 50,157   52,724   49,110   43,949   52,639 
    90+ Days Delinquent 764   592   2,085   963   157 
    NPAs & 90 Day Delinquent$50,921  $53,316  $51,195  $44,912  $52,796 
              
    Allowance for Credit Losses - Loans$226,702  $226,275  $195,984  $195,397  $199,972 
    Quarterly Net Charge-offs (Recoveries) (427)  263   (587)  4,575   (197)
    NPAs / Actual Assets % 0.28%  0.30%  0.32%  0.28%  0.35%
    NPAs & 90 Day / Actual Assets % 0.29%  0.30%  0.33%  0.29%  0.35%
    NPAs / Actual Loans and OREO % 0.43%  0.46%  0.52%  0.47%  0.58%
    Allowance for Credit Losses - Loans / Actual Loans (%) 1.94%  1.98%  2.09%  2.11%  2.21%
    Net Charge-offs as % of Average Loans (Annualized) (0.01)%  0.01%  (0.03)%  0.20%  (0.01)%


    CONSOLIDATED BALANCE SHEETS         
    (Dollars In Thousands)September 30, June 30, March 31, December 31, September 30,
      2022   2022   2022   2021   2021 
    ASSETS         
    Cash and due from banks$119,532  $212,559  $148,277  $167,146  $169,261 
    Interest-bearing deposits 179,593   136,702   395,262   474,154   369,447 
    Investment securities, net of allowance for credit losses 4,294,768   4,630,030   4,489,263   4,524,353   4,445,516 
    Loans held for sale 25,394   9,060   3,938   11,187   5,990 
    Loans 11,650,002   11,397,417   9,356,241   9,241,861   9,041,576 
    Less: Allowance for credit losses - loans (226,702)  (226,275)  (195,984)  (195,397)  (199,972)
    Net loans 11,423,300   11,171,142   9,160,257   9,046,464   8,841,604 
    Premises and equipment 116,306   117,757   105,883   105,655   104,814 
    Federal Home Loan Bank stock 38,056   38,111   26,422   28,736   28,736 
    Interest receivable 71,605   68,728   56,081   57,187   53,079 
    Goodwill and other intangibles 750,713   753,649   569,494   570,860   572,323 
    Cash surrender value of life insurance 306,932   323,013   291,881   291,041   291,825 
    Other real estate owned 6,454   6,521   6,271   558   698 
    Tax asset, deferred and receivable 142,110   114,965   73,422   35,641   39,504 
    Other assets 244,222   198,255   138,807   140,167   137,928 
    TOTAL ASSETS$17,718,985  $17,780,492  $15,465,258  $15,453,149  $15,060,725 
    LIABILITIES         
    Deposits:         
    Noninterest-bearing$3,356,651  $3,435,331  $2,745,235  $2,709,646  $2,554,323 
    Interest-bearing 11,078,174   11,135,538   10,160,718   10,022,931   9,794,366 
    Total Deposits 14,434,825   14,570,869   12,905,953   12,732,577   12,348,689 
    Borrowings:         
    Federal funds purchased 185,000   100,000   —   —   — 
    Securities sold under repurchase agreements 194,482   186,468   169,697   181,577   183,589 
    Federal Home Loan Bank advances 643,769   598,865   308,960   334,055   334,149 
    Subordinated debentures and other borrowings 151,301   151,299   118,677   118,618   118,558 
    Total Borrowings 1,174,552   1,036,632   597,334   634,250   636,296 
    Interest payable 4,971   2,978   3,589   2,762   3,736 
    Other liabilities 197,971   192,372   150,749   170,989   203,914 
    Total Liabilities 15,812,319   15,802,851   13,657,625   13,540,578   13,192,635 
    STOCKHOLDERS' EQUITY         
    Preferred Stock, $1,000 par value, $1,000 liquidation value:         
    Authorized -- 600 cumulative shares         
    Issued and outstanding - 125 cumulative shares 125   125   125   125   125 
    Preferred Stock, Series A, no par value, $2,500 liquidation preference:         
    Authorized -- 10,000 non-cumulative perpetual shares         
    Issued and outstanding - 10,000 non-cumulative perpetual shares 25,000   25,000   —   —   — 
    Common Stock, $.125 stated value:         
    Authorized -- 100,000,000 shares         
    Issued and outstanding 7,393   7,383   6,678   6,676   6,689 
    Additional paid-in capital 1,226,695   1,226,378   987,404   985,818   988,659 
    Retained earnings 961,542   917,311   897,818   864,839   832,728 
    Accumulated other comprehensive income (loss) (314,089)  (198,556)  (84,392)  55,113   39,889 
    Total Stockholders' Equity 1,906,666   1,977,641   1,807,633   1,912,571   1,868,090 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$17,718,985  $17,780,492  $15,465,258  $15,453,149  $15,060,725 
              


    CONSOLIDATED STATEMENTS OF INCOME         
    (Dollars In Thousands, Except Per Share Amounts)September 30, June 30, March 31, December 31, September 30,
      2022   2022   2022   2021   2021 
    INTEREST INCOME         
    Loans receivable:         
    Taxable$128,504  $106,787  $79,075  $80,583  $85,319 
    Tax-exempt 6,500   5,990   5,704   5,635   5,591 
    Investment securities:         
    Taxable 10,055   10,372   8,510   8,028   7,788 
    Tax-exempt 17,261   17,212   15,875   15,411   14,464 
    Deposits with financial institutions 704   610   230   173   218 
    Federal Home Loan Bank stock 314   175   146   163   168 
    Total Interest Income 163,338   141,146   109,540   109,993   113,548 
    INTEREST EXPENSE         
    Deposits 16,644   8,485   4,294   5,589   5,707 
    Federal funds purchased 418   76   —   1   — 
    Securities sold under repurchase agreements 372   134   89   75   77 
    Federal Home Loan Bank advances 3,493   1,774   1,218   1,389   1,389 
    Subordinated debentures and other borrowings 2,105   2,016   1,659   1,666   1,660 
    Total Interest Expense 23,032   12,485   7,260   8,720   8,833 
    NET INTEREST INCOME 140,306   128,661   102,280   101,273   104,715 
    Provision for credit losses - loans —   16,755   —   —   — 
    NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 140,306   111,906   102,280   101,273   104,715 
    NON-INTEREST INCOME         
    Service charges on deposit accounts 7,165   7,690   6,419   6,462   6,249 
    Fiduciary and wealth management fees 7,221   7,634   7,332   7,078   7,352 
    Card payment fees 4,776   5,175   5,723   3,937   4,156 
    Net gains and fees on sales of loans 2,543   3,226   2,199   3,423   3,955 
    Derivative hedge fees 700   1,444   918   1,562   1,028 
    Other customer fees 501   662   410   361   393 
    Earnings on cash surrender value of life insurance 6,655   1,308   1,696   2,051   2,468 
    Net realized gains on sales of available for sale securities 481   90   566   358   1,756 
    Other income (loss) (425)  1,048   634   615   1,144 
    Total Non-Interest Income 29,617   28,277   25,897   25,847   28,501 
    NON-INTEREST EXPENSES         
    Salaries and employee benefits 56,002   56,041   42,519   42,432   43,314 
    Net occupancy 6,738   6,648   6,187   5,644   5,576 
    Equipment 5,997   6,720   5,080   4,994   4,529 
    Marketing 2,401   1,414   736   1,840   1,676 
    Outside data processing fees 6,827   4,881   4,363   4,581   4,794 
    Printing and office supplies 472   381   345   356   265 
    Intangible asset amortization 2,303   2,303   1,366   1,463   1,463 
    FDIC assessments 2,824   2,924   2,192   1,862   1,552 
    Other real estate owned and foreclosure expenses 328   (266)  564   171   (91)
    Professional and other outside services 4,461   10,267   2,953   3,627   2,767 
    Other expenses 8,025   6,000   6,020   5,466   5,539 
    Total Non-Interest Expenses 96,378   97,313   72,325   72,436   71,384 
    INCOME BEFORE INCOME TAX 73,545   42,870   55,852   54,684   61,832 
    Income tax expense 9,793   3,879   7,266   6,951   9,062 
    NET INCOME 63,752   38,991   48,586   47,733   52,770 
    Preferred stock dividends 469   469   —   —   — 
    NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$63,283  $38,522  $48,586  $47,733  $52,770 
    Per Share Data:         
    Basic Net Income Available to Common Stockholders$1.08  $0.64  $0.91  $0.89  $0.98 
    Diluted Net Income Available to Common Stockholders$1.08  $0.63  $0.91  $0.89  $0.98 
    Cash Dividends Paid to Common Stockholders$0.32  $0.32  $0.29  $0.29  $0.29 
    Average Diluted Common Shares Outstanding (in thousands) 59,339   59,308   53,616   53,660   53,960 
    FINANCIAL RATIOS:         
    Return on Average Assets 1.43%  0.88%  1.26%  1.25%  1.41%
    Return on Average Stockholders' Equity 12.54   7.62   10.28   10.10   11.17 
    Return on Average Common Stockholders' Equity 12.70   7.72   10.28   10.10   11.17 
    Average Earning Assets to Average Assets 92.90   92.45   92.23   91.86   91.57 
    Allowance for Credit Losses - Loans as % of Total Loans 1.94   1.98   2.09   2.11   2.21 
    Net Charge-offs (Recoveries) as % of Average Loans (Annualized) (0.01)  0.01   (0.03)  0.20   (0.01)
    Average Stockholders' Equity to Average Assets 11.36   11.37   12.23   12.36   12.59 
    Tax Equivalent Yield on Average Earning Assets 4.11   3.58   3.23   3.29   3.46 
    Interest Expense/Average Earning Assets 0.56   0.30   0.20   0.25   0.26 
    Net Interest Margin (FTE) on Average Earning Assets 3.55   3.28   3.03   3.04   3.20 
    Efficiency Ratio 53.34   58.45   52.79   53.49   51.18 
    Tangible Common Book Value Per Share$19.26  $20.45  $23.26  $25.21  $24.31 


    LOANS         
    (Dollars In Thousands)September 30, June 30, March 31, December 31, September 30,
      2022   2022   2022   2021   2021 
    Commercial and industrial loans$3,330,529  $3,297,477  $2,826,660  $2,714,565  $2,573,615 
    Agricultural land, production and other loans to farmers 221,954   214,904   209,077   246,442   240,686 
    Real estate loans:         
    Construction 828,923   745,983   552,975   523,066   521,889 
    Commercial real estate, non-owner occupied 2,299,272   2,423,185   2,073,197   2,135,459   2,150,387 
    Commercial real estate, owner occupied 1,268,567   1,264,563   974,521   986,720   952,441 
    Residential 1,990,668   1,813,297   1,226,695   1,159,127   1,154,373 
    Home equity 621,619   586,108   512,641   523,754   531,307 
    Individuals' loans for household and other personal expenditures 173,225   157,264   147,593   146,092   135,093 
    Public finance and other commercial loans 915,245   894,636   832,882   806,636   781,785 
    Loans 11,650,002   11,397,417   9,356,241   9,241,861   9,041,576 
    Allowance for credit losses - loans (226,702)  (226,275)  (195,984)  (195,397)  (199,972)
    NET LOANS$11,423,300  $11,171,142  $9,160,257  $9,046,464  $8,841,604 


    DEPOSITS         
    (Dollars In Thousands)September 30, June 30, March 31, December 31, September 30,
      2022  2022  2022  2021  2021
    Demand deposits$8,534,950 $8,785,889 $7,806,033 $7,704,190 $7,317,399
    Savings deposits 5,054,490  4,875,880  4,444,417  4,334,802  4,301,483
    Certificates and other time deposits of $100,000 or more 443,588  436,942  252,033  273,379  283,396
    Other certificates and time deposits 381,365  446,973  380,293  389,752  404,010
    Brokered deposits 20,432  25,185  23,177  30,454  42,401
    TOTAL DEPOSITS$14,434,825 $14,570,869 $12,905,953 $12,732,577 $12,348,689


    CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS      
    (Dollars in Thousands)           
     For the Three Months Ended
     September 30, 2022 September 30, 2021
     Average Balance Interest
     Income /
    Expense    		 Average
    Rate    		 Average Balance Interest
     Income /
    Expense    		 Average
    Rate
    Assets:           
    Interest-bearing deposits$190,434 $704 1.48% $539,377 $218 0.16%
    Federal Home Loan Bank stock 38,089  314 3.30   28,736  168 2.34 
    Investment Securities: (1)           
    Taxable 2,091,608  10,055 1.92   1,843,026  7,788 1.69 
    Tax-Exempt (2) 2,700,580  21,849 3.24   2,240,409  18,309 3.27 
    Total Investment Securities 4,792,188  31,904 2.66   4,083,435  26,097 2.56 
    Loans held for sale 20,039  266 5.74   17,426  158 3.63 
    Loans: (3)           
    Commercial 8,177,895  103,227 5.05   6,745,303  70,442 4.18 
    Real Estate Mortgage 1,666,173  14,701 3.53   886,469  8,142 3.67 
    Installment 813,112  10,310 5.07   690,093  6,576 3.81 
    Tax-Exempt (2) 810,984  8,228 4.06   750,357  7,078 3.77 
    Total Loans 11,488,203  136,732 4.76   9,089,648  92,396 4.07 
    Total Earning Assets 16,508,914  169,654 4.11%  13,741,196  118,879 3.46%
    Total Non-Earning Assets 1,261,709      1,264,891    
    Total Assets$17,770,623     $15,006,087    
    Liabilities:           
    Interest-bearing deposits:           
    Interest-bearing deposits$5,184,087 $8,723 0.67% $4,799,624 $3,606 0.30%
    Money market deposits 3,096,423  5,390 0.70   2,459,205  764 0.12 
    Savings deposits 1,978,596  1,538 0.31   1,788,281  486 0.11 
    Certificates and other time deposits 857,033  993 0.46   758,565  851 0.45 
    Total Interest-bearing Deposits 11,116,139  16,644 0.60   9,805,675  5,707 0.23 
    Borrowings 1,013,893  6,388 2.52   619,768  3,126 2.02 
    Total Interest-bearing Liabilities 12,130,032  23,032 0.76   10,425,443  8,833 0.34 
    Noninterest-bearing deposits 3,461,393      2,544,661    
    Other liabilities 161,042      146,946    
    Total Liabilities 15,752,467      13,117,050    
    Stockholders' Equity 2,018,156      1,889,037    
    Total Liabilities and Stockholders' Equity$17,770,623  23,032   $15,006,087  8,833  
    Net Interest Income (FTE)  $146,622     $110,046  
    Net Interest Spread (FTE) (4)    3.35%     3.12%
                
    Net Interest Margin (FTE):           
    Interest Income (FTE) / Average Earning Assets    4.11%     3.46%
    Interest Expense / Average Earning Assets    0.56%     0.26%
    Net Interest Margin (FTE) (5)    3.55%     3.20%
                
    (1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
    (2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2022 and 2021. These totals equal $6,316 and $5,331 for the three months ended September 30, 2022 and 2021, respectively.
    (3) Non accruing loans have been included in the average balances.
    (4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
    (5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.


                
    CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
    (Dollars in Thousands)           
     For the Nine Months Ended
     September 30, 2022 September 30, 2021
     Average Balance Interest
     Income /
    Expense    		 Average
    Rate    		 Average Balance Interest
     Income /
    Expense    		 Average
    Rate
    Assets:           
    Interest-bearing deposits$333,818 $1,544 0.62% $509,153 $461 0.12%
    Federal Home Loan Bank stock 34,742  635 2.44   28,736  434 2.01 
    Investment Securities: (1)           
    Taxable 2,079,983  28,937 1.85   1,689,697  21,923 1.73 
    Tax-Exempt (2) 2,647,547  63,732 3.21   1,989,397  50,532 3.39 
    Total Investment Securities 4,727,530  92,669 2.61   3,679,094  72,455 2.63 
    Loans held for sale 19,020  622 4.36   19,360  551 3.79 
    Loans: (3)           
    Commercial 7,731,591  253,770 4.38   6,857,968  210,502 4.09 
    Real Estate Mortgage 1,350,969  35,199 3.47   924,652  26,917 3.88 
    Installment 765,960  24,775 4.31   674,696  19,456 3.84 
    Tax-Exempt (2) 780,410  23,030 3.93   725,651  20,854 3.83 
    Total Loans 10,647,950  337,396 4.22   9,202,327  278,280 4.03 
    Total Earning Assets 15,744,040  432,244 3.66%  13,419,310  351,630 3.49%
    Total Non-Earning Assets 1,268,890      1,253,286    
    Total Assets$17,012,930     $14,672,596    
    Liabilities:           
    Interest-bearing deposits:           
    Interest-bearing deposits$5,195,249 $15,699 0.40% $4,721,267 $10,875 0.31%
    Money market deposits 2,880,603  8,392 0.39   2,295,589  2,395 0.14 
    Savings deposits 1,937,761  2,895 0.20   1,730,149  1,424 0.11 
    Certificates and other time deposits 828,158  2,437 0.39   809,721  3,036 0.50 
    Total Interest-bearing Deposits 10,841,771  29,423 0.36   9,556,726  17,730 0.25 
    Borrowings 817,894  13,354 2.18   646,326  9,502 1.96 
    Total Interest-bearing Liabilities 11,659,665  42,777 0.49   10,203,052  27,232 0.36 
    Noninterest-bearing deposits 3,232,925      2,460,609    
    Other liabilities 143,041      150,255    
    Total Liabilities 15,035,631      12,813,916    
    Stockholders' Equity 1,977,299      1,858,680    
    Total Liabilities and Stockholders' Equity$17,012,930  42,777   $14,672,596  27,232  
    Net Interest Income (FTE)  $389,467     $324,398  
    Net Interest Spread (FTE) (4)    3.17%     3.13%
                
    Net Interest Margin (FTE):           
    Interest Income (FTE) / Average Earning Assets    3.66%     3.49%
    Interest Expense / Average Earning Assets    0.36%     0.27%
    Net Interest Margin (FTE) (5)    3.30%     3.22%
                
    (1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
    (2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2022 and 2021. These totals equal $18,220 and $14,991 for the nine months ended September 30, 2022 and 2021, respectively.
    (3) Non accruing loans have been included in the average balances.           
    (4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
    (5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.


    ADJUSTED EPS EXCLUDING PAYCHECK PROTECTION PROGRAM ("PPP") AND ACQUISITION-RELATED EXPENSES - NON-GAAP
    (Dollars In Thousands, Except Per Share Amounts)Three Months Ended Nine Months Ended
     September 30, June 30, March 31, December 31, September 30, September 30, September 30,
      2022   2022   2022   2021   2021   2022   2021 
    Net Income Available to Common Stockholders - GAAP$63,283  $38,522  $48,586  $47,733  $52,770  $150,391  $157,798 
    Adjustments:             
    PPP loan income (323)  (891)  (1,884)  (3,721)  (8,211)  (3,098)  (27,179)
    Acquisition-related expenses 3,417   12,549   152   —   —   16,118   — 
    Acquisition-related provision expense —   16,755   —   —   —   16,755   — 
    Tax on adjustment (759)  (6,967)  425   912   2,013   (7,301)  6,664 
    Adjusted Net Income Available to Common Stockholders - Non-GAAP$65,618  $59,968  $47,279  $44,924  $46,572  $172,865  $137,283 
                  
    Average Diluted Common Shares Outstanding (in thousands) 59,339   59,308   53,616   53,660   53,960   57,468   54,093 
                  
    Diluted Earnings Per Common Share - GAAP$1.08  $0.63  $0.91  $0.89  $0.98  $2.62  $2.92 
    Adjustments:             
    PPP loan income —   (0.01)  (0.04)  (0.07)  (0.15)  (0.05)  (0.50)
    Acquisition-related expenses 0.05   0.22   —   —   —   0.27   — 
    Acquisition-related provision expense —   0.30   —   —   —   0.30   — 
    Tax on adjustment (0.01)  -0.13   0.01   0.02   0.04   (0.13)  0.12 
    Adjusted Diluted Earnings Per Common Share - Non-GAAP$1.12  $1.01  $0.88  $0.84  $0.87  $3.01  $2.54 
                  

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


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