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First Merchants

Financials

Price	38.43	EPS	3
Shares	55	P/E	13
MCap	2,127	P/FCF	16
Net Debt	-202	EBIT	287
TEV	1,925	TEV/EBIT	7
TTM 2019-09-30, in MM, except price, ratios

Filings

10-Q	2020-03-31	Filed 2020-05-08
10-K	2019-12-31	Filed 2020-02-28
10-Q	2019-09-30	Filed 2019-11-08
10-Q	2019-06-30	Filed 2019-08-07
10-Q	2019-03-31	Filed 2019-05-10
10-K	2018-12-31	Filed 2019-02-27
10-Q	2018-09-30	Filed 2018-11-09
10-Q	2018-06-30	Filed 2018-08-09
10-Q	2018-03-31	Filed 2018-05-10
10-K	2017-12-31	Filed 2018-03-01
10-Q	2017-09-30	Filed 2017-11-09
10-Q	2017-06-30	Filed 2017-08-09
10-Q	2017-03-31	Filed 2017-05-10
10-K	2016-12-31	Filed 2017-03-01
10-Q	2016-09-30	Filed 2016-11-09
10-Q	2016-06-30	Filed 2016-08-09
10-Q	2016-03-31	Filed 2016-05-09
10-K	2015-12-31	Filed 2016-02-29
10-Q	2015-09-30	Filed 2015-11-06
10-Q	2015-06-30	Filed 2015-08-07
10-Q	2015-03-31	Filed 2015-05-06
10-K	2014-12-31	Filed 2015-02-27
10-Q	2014-09-30	Filed 2014-11-06
10-Q	2014-06-30	Filed 2014-08-08
10-Q	2014-03-31	Filed 2014-05-09
10-K	2013-12-31	Filed 2014-03-14
10-Q	2013-09-30	Filed 2013-11-08
10-Q	2013-06-30	Filed 2013-08-09
10-Q	2013-03-31	Filed 2013-05-10
10-K	2012-12-31	Filed 2013-03-15
10-Q	2012-09-30	Filed 2012-11-09
10-Q	2012-06-30	Filed 2012-08-09
10-Q	2012-03-31	Filed 2012-05-10
10-K	2011-12-31	Filed 2012-03-15
10-Q	2011-11-09	Filed 2011-11-09
10-Q	2011-08-09	Filed 2011-08-09
10-Q	2011-03-31	Filed 2011-05-10
10-K	2010-12-31	Filed 2011-03-16
10-Q	2010-11-09	Filed 2010-11-09
10-Q	2010-08-09	Filed 2010-08-09
10-Q	2010-05-10	Filed 2010-05-10
10-K	2009-12-31	Filed 2010-03-16

Reports

8-K	2020-05-14	Regulation FD, Exhibits
8-K	2020-05-13	Shareholder Vote
8-K	2020-05-13	Other Events, Exhibits
8-K	2020-04-23	Earnings, Exhibits
8-K	2020-04-23	Earnings, Exhibits
8-K	2020-03-16	Other Events
8-K	2020-02-11	Regulation FD, Exhibits
8-K	2020-02-05	Officers, Exhibits
8-K	2020-02-05	Other Events, Exhibits
8-K	2020-01-30	Earnings, Exhibits
8-K	2020-01-30	Earnings, Exhibits
8-K	2019-11-14	Regulation FD, Exhibits
8-K	2019-11-07	Other Events, Exhibits
8-K	2019-11-07	Officers, Exhibits
8-K	2019-10-24	Earnings, Exhibits
8-K	2019-10-24	Earnings, Exhibits
8-K	2019-09-03	Other Events
8-K	2019-08-30	Other Events, Exhibits
8-K	2019-08-16	Other Events
8-K	2019-08-08	Other Events, Exhibits
8-K	2019-08-08	Officers, Exhibits
8-K	2019-08-02	Regulation FD, Exhibits
8-K	2019-07-25	Earnings, Exhibits
8-K	2019-07-25	Earnings, Exhibits
8-K	2019-06-13	Regulation FD, Other Events, Exhibits
8-K	2019-05-10	Shareholder Vote
8-K	2019-05-09	Officers, Exhibits
8-K	2019-05-09	Other Events, Exhibits
8-K	2019-05-03	Regulation FD, Exhibits
8-K	2019-04-25	Earnings, Exhibits
8-K	2019-04-25	Earnings, Exhibits
8-K	2019-02-11	Regulation FD, Exhibits
8-K	2019-02-05	Other Events, Exhibits
8-K	2019-01-31	Earnings, Exhibits
8-K	2019-01-31	Earnings, Exhibits
8-K	2018-11-07	Other Events, Exhibits
8-K	2018-11-01	Regulation FD, Exhibits
8-K	2018-10-24	Earnings, Exhibits
8-K	2018-10-24	Earnings, Exhibits
8-K	2018-10-10	Enter Agreement, Regulation FD, Exhibits
8-K	2018-08-15	Other Events, Exhibits
8-K	2018-08-10	Regulation FD, Exhibits
8-K	2018-07-26	Earnings, Exhibits
8-K	2018-07-25	Earnings, Exhibits
8-K	2018-05-11	Shareholder Vote
8-K	2018-05-10	Other Events, Exhibits
8-K	2018-05-03	Regulation FD, Exhibits
8-K	2018-04-26	Earnings, Exhibits
8-K	2018-04-25	Earnings, Exhibits
8-K	2018-02-16	Regulation FD, Exhibits
8-K	2018-02-09	Other Events, Exhibits
8-K	2018-01-25	Earnings, Exhibits
8-K	2018-01-25	Earnings, Exhibits
8-K	2018-01-16	Other Events, Exhibits

First Merchants Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow

Document

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______ to _______

Commission File Number 0-17071

FIRST MERCHANTS CORPORATION

(Exact name of registrant as specified in its charter)

Indiana 35-1544218

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

200 East Jackson Street, Muncie, IN 47305-2814

(Address of principal executive offices) (Zip code)

(Registrant’s telephone number, including area code): (765) 747-1500

Not Applicable

(Former name, former address and former fiscal year,

if changed since last report)



Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.125 stated value per share	FRME	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every interactive data file required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer	☒	Accelerated Filer	☐	Non-Accelerated Filer	☐
Smaller Reporting Company	☐	Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 4, 2020, there were 54,115,879 outstanding common shares of the registrant.

Table of Contents

TABLE OF CONTENTS

FIRST MERCHANTS CORPORATION



		Page No.
Glossary of Defined Terms		3

Part I. Financial Information
Item 1.	Financial Statements:
	Consolidated Condensed Balance Sheets	4
	Consolidated Condensed Statements of Income	5
	Consolidated Condensed Statements of Comprehensive Income	6
	Consolidated Condensed Statements of Stockholders' Equity	7
	Consolidated Condensed Statements of Cash Flows	8
	Notes to Consolidated Condensed Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	53

Part II. Other Information
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	56

Signatures		57

Table of Contents

GLOSSARY OF DEFINED TERMS

FIRST MERCHANTS CORPORATION



ASC	Accounting Standards Codification
ASU	Accounting Standards Update
Bank	First Merchants Bank, a wholly-owned subsidiary of the Corporation
CARES Act	Coronavirus Aid, Relief and Economic Security Act
CET1	Common Equity Tier 1
CMT	Constant Maturity Treasury
Corporation	First Merchants Corporation
COVID-19	2019 novel coronavirus disease, which was declared a pandemic by the World Health Organization on March 11, 2020.
ESPP	Employee Stock Purchase Plan
FASB	Financial Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
Federal Reserve	Board of Governors of the Federal Reserve System
FHLB	Federal Home Loan Bank
FOMC	Federal Open Market Committee, the monetary policymaking body of the Federal Reserve System.
FTE	Fully taxable equivalent
GAAP	Generally Accepted Accounting Principles
MBT	MBT Financial Corp., which was acquired by the Corporation on September 1, 2019
OREO	Other real estate owned
RSA	Restricted Stock Awards
TEFRA	Tax Equity and Fiscal Responsibility Act

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED BALANCE SHEETS



	March 31, 2020		December 31, 2019
	(Unaudited)
ASSETS
Cash and cash equivalents	$	127,731	$	177,201
Interest-bearing time deposits	132,944		118,263
Investment securities available for sale	1,815,775		1,790,025
Investment securities held to maturity (fair value of $920,178 and $827,566)	882,179		806,038
Loans held for sale	5,039		9,037
Loans, net of allowance for loan losses of $99,454 and $80,284	8,507,395		8,379,026
Premises and equipment	114,045		113,055
Federal Home Loan Bank stock	28,736		28,736
Interest receivable	47,489		48,901
Goodwill	543,918		543,918
Other intangibles	33,448		34,962
Cash surrender value of life insurance	289,574		288,206
Other real estate owned	7,972		7,527
Tax asset, deferred and receivable	9,497		12,165
Other assets	147,776		100,194
TOTAL ASSETS	$	12,693,518	$	12,457,254
LIABILITIES
Deposits:
Noninterest-bearing	$	1,688,205	$	1,736,396
Interest-bearing	8,182,279		8,103,560
Total Deposits	9,870,484		9,839,956
Borrowings:
Federal funds purchased	47,000		55,000
Securities sold under repurchase agreements	183,317		187,946
Federal Home Loan Bank advances	480,995		351,072
Subordinated debentures and term loans	128,741		138,685
Total Borrowings	840,053		732,703
Interest payable	7,746		6,754
Other liabilities	197,275		91,404
Total Liabilities	10,915,558		10,670,817
COMMITMENTS AND CONTINGENT LIABILITIES
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 - 53,754,137 and 55,368,482 shares	6,719		6,921
Additional paid-in capital	1,000,942		1,054,997
Retained earnings	716,518		696,520
Accumulated other comprehensive income	53,656		27,874
Total Stockholders' Equity	1,777,960		1,786,437
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	12,693,518	$	12,457,254

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)



	Three Months Ended March 31,
	2020		2019
INTEREST INCOME
Loans receivable:
Taxable	$	96,652	$	90,481
Tax exempt	5,315		4,153
Investment securities:
Taxable	7,631		6,095
Tax exempt	9,335		6,871
Deposits with financial institutions	575		875
Federal Home Loan Bank stock	299		338
Total Interest Income	119,807		108,813
INTEREST EXPENSE
Deposits	21,748		19,594
Federal funds purchased	111		93
Securities sold under repurchase agreements	352		330
Federal Home Loan Bank advances	1,774		1,814
Subordinated debentures and term loans	1,945		2,116
Total Interest Expense	25,930		23,947
NET INTEREST INCOME	93,877		84,866
Provision for loan losses	19,752		1,200
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	74,125		83,666
OTHER INCOME
Service charges on deposit accounts	5,970		5,095
Fiduciary and wealth management fees	5,985		3,818
Card payment fees	5,907		4,826
Net gains and fees on sales of loans	3,363		1,295
Derivative hedge fees	1,939		781
Other customer fees	398		439
Increase in cash surrender value of life insurance	1,360		989
Net realized gains on sales of available for sale securities	4,612		1,140
Other income	265		330
Total Other Income	29,799		18,713
OTHER EXPENSES
Salaries and employee benefits	39,243		33,028
Net occupancy	5,801		5,027
Equipment	4,344		3,642
Marketing	1,443		1,074
Outside data processing fees	4,199		3,684
Printing and office supplies	387		315
Intangible asset amortization	1,514		1,528
FDIC assessments	1,523		707
Other real estate owned and foreclosure expenses	505		1,165
Professional and other outside services	2,258		1,884
Other expenses	4,954		4,567
Total Other Expenses	66,171		56,621
INCOME BEFORE INCOME TAX	37,753		45,758
Income tax expense	3,490		6,941
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	34,263	$	38,817
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.63	$	0.79
Diluted Net Income Available to Common Stockholders	$	0.62	$	0.78
Cash Dividends Paid	$	0.26	$	0.22
Average Diluted Shares Outstanding (in thousands)	54,918		49,541

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31,
	2020			2019
Net income	$	34,263		$	38,817
Other comprehensive income (loss), net of tax:
Unrealized holding gain (loss) on securities available for sale arising during the period, net of tax of $8,071 and $5,580	30,364			20,990
Unrealized gain (loss) on cash flow hedges arising during the period, net of tax of $276 and $82	(1,038		)	(309		)
Reclassification adjustment for net gains included in net income, net of tax of $943 and $227	(3,544		)	(854		)
Total other comprehensive income, net of tax	25,782			19,827
Comprehensive income	$	60,045		$	58,644

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)



	Three Months Ended March 31, 2020
	Preferred			Common Stock					Additional						Accumulated Other
	Shares	Amount		Shares		Amount			Paid in Capital			Retained Earnings			Comprehensive Income		Total
Balances, December 31, 2019	125	$	125	55,368,482		$	6,921		$	1,054,997		$	696,520		$	27,874	$	1,786,437
Comprehensive income:
Net income	—	—		—		—			—			34,263			—		34,263
Other comprehensive income, net of tax	—	—		—		—			—			—			25,782		25,782
Cash dividends on common stock ($.26 per share)	—	—		—		—			—			(14,265		)	—		(14,265		)
Repurchases of common stock	—	—		(1,634,437	)	(204		)	(55,708		)	—			—		(55,912		)
Share-based compensation	—	—		3,332		—			1,220			—			—		1,220
Stock issued under dividend reinvestment and stock purchase plan	—	—		15,710		2			426			—			—		428
Stock options exercised	—	—		1,050		—			7			—			—		7
Balances, March 31, 2020	125	$	125	53,754,137		$	6,719		$	1,000,942		$	716,518		$	53,656	$	1,777,960



	Three Months Ended March 31, 2019
	Preferred			Common Stock					Additional						Accumulated Other
	Shares	Amount		Shares		Amount			Paid in Capital			Retained Earnings			Comprehensive Loss			Total
Balances, December 31, 2018	125	$	125	49,349,800		$	6,169		$	840,052		$	583,336		$	(21,422	)	$	1,408,260
Comprehensive income:
Net income	—	—		—		—			—			38,817			—			38,817
Other comprehensive income, net of tax	—	—		—		—			—			—			19,827			19,827
Cash dividends on common stock ($.22 per share)	—	—		—		—			—			(10,933		)	—			(10,933		)
Share-based compensation	—	—		103,660		13			968			—			—			981
Stock issued under employee benefit plans	—	—		5,339		1			173			—			—			174
Stock issued under dividend reinvestment and stock purchase plan	—	—		8,508		1			339			—			—			340
Stock options exercised	—	—		3,700		—			40			—			—			40
Restricted shares withheld for taxes	—	—		(42,539	)	(5		)	(1,653		)	—			—			(1,658		)
Balances, March 31, 2019	125	$	125	49,428,468		$	6,179		$	839,919		$	611,220		$	(1,595	)	$	1,455,848

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)



	Three Months Ended
	March 31, 2020			March 31, 2019
Cash Flow From Operating Activities:
Net income	$	34,263		$	38,817
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	19,752			1,200
Depreciation and amortization	2,674			2,209
Change in deferred taxes	(7,662		)	740
Share-based compensation	1,220			981
Loans originated for sale	(163,378		)	(67,596		)
Proceeds from sales of loans held for sale	170,307			69,940
Gains on sales of loans held for sale	(2,931		)

EX-31.1	exhibit31110q2020q1.htm
EX-31.2	exhibit31210q2020q1.htm
EX-32	exhibit3210q2020q1.htm

FRME 10Q Quarterly Report

First Merchants Earnings 2020-03-31