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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	2020-06-30	Filed 2020-08-07
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	2020-08-12	Regulation FD, Exhibits
8-K	2020-08-06	Other Events, Exhibits
8-K	2020-07-23	Earnings, Exhibits
8-K	2020-07-23	Earnings, Exhibits
8-K	2020-07-17	Regulation FD, Exhibits
8-K	2020-06-30	Other Events, Exhibits
8-K	2020-05-14
8-K	2020-05-13
8-K	2020-05-13
8-K	2020-04-23
8-K	2020-04-23
8-K	2020-03-16
8-K	2020-02-11
8-K	2020-02-05
8-K	2020-02-05
8-K	2020-01-30
8-K	2020-01-30
8-K	2019-11-14
8-K	2019-11-07
8-K	2019-11-07
8-K	2019-10-24
8-K	2019-10-24
8-K	2019-09-03
8-K	2019-08-30
8-K	2019-08-16
8-K	2019-08-08
8-K	2019-08-08
8-K	2019-08-02
8-K	2019-07-25
8-K	2019-07-25
8-K	2019-06-13
8-K	2019-05-10
8-K	2019-05-09
8-K	2019-05-09
8-K	2019-05-03
8-K	2019-04-25
8-K	2019-04-25
8-K	2019-02-11
8-K	2019-02-05
8-K	2019-01-31
8-K	2019-01-31
8-K	2018-11-07
8-K	2018-11-01
8-K	2018-10-24
8-K	2018-10-24
8-K	2018-10-10
8-K	2018-08-15
8-K	2018-08-10
8-K	2018-07-26
8-K	2018-07-25
8-K	2018-05-11
8-K	2018-05-10
8-K	2018-05-03
8-K	2018-04-26
8-K	2018-04-25
8-K	2018-02-16
8-K	2018-02-09
8-K	2018-01-25
8-K	2018-01-25
8-K	2018-01-16

First Merchants Earnings 2020-06-30

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 June 30, 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 August 4, 2020, there were 54,124,467 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	9
	Notes to Consolidated Condensed Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	60
Item 4.	Controls and Procedures	61

Part II. Other Information
Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3.	Defaults Upon Senior Securities	63
Item 4.	Mine Safety Disclosures	63
Item 5.	Other Information	63
Item 6.	Exhibits	64

Signatures		65

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.
Economic Impact Payments	Economic stimulus payments of up to $1,200 per adult and $500 per child, subject to eligibility requirements and certain limitations, as established under the CARES Act and distributed by the IRS.
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
IRS	Internal Revenue Service
MBT	MBT Financial Corp., which was acquired by the Corporation on September 1, 2019
OREO	Other real estate owned
PPP	Paycheck Protection Program, which was established by the CARES Act and implemented by the Small Business Administration to provide small business loans.
PPPL Facility	Paycheck Protection Program Liquidity Facility, which was established by the Federal Reserve.
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



	June 30, 2020		December 31, 2019
	(Unaudited)
ASSETS
Cash and cash equivalents	$	229,759	$	177,201
Interest-bearing time deposits	380,021		118,263
Investment securities available for sale	1,890,593		1,790,025
Investment securities held to maturity (fair value of $941,426 and $827,566)	898,786		806,038
Loans held for sale	901		9,037
Loans, net of allowance for loan losses of $121,119 and $80,284	9,177,422		8,379,026
Premises and equipment	112,548		113,055
Federal Home Loan Bank stock	28,736		28,736
Interest receivable	57,063		48,901
Goodwill	543,918		543,918
Other intangibles	31,937		34,962
Cash surrender value of life insurance	290,715		288,206
Other real estate owned	7,367		7,527
Tax asset, deferred and receivable	13,126		12,165
Other assets	156,486		100,194
TOTAL ASSETS	$	13,819,378	$	12,457,254
LIABILITIES
Deposits:
Noninterest-bearing	$	2,260,351	$	1,736,396
Interest-bearing	8,705,637		8,103,560
Total Deposits	10,965,988		9,839,956
Borrowings:
Federal funds purchased	—		55,000
Securities sold under repurchase agreements	181,150		187,946
Federal Home Loan Bank advances	400,817		351,072
Subordinated debentures and other borrowings	285,197		138,685
Total Borrowings	867,164		732,703
Interest payable	5,587		6,754
Other liabilities	171,544		91,404
Total Liabilities	12,010,283		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 - 53,795,500 and 55,368,482 shares	6,724		6,921
Additional paid-in capital	1,002,962		1,054,997
Retained earnings	735,439		696,520
Accumulated other comprehensive income	63,845		27,874
Total Stockholders' Equity	1,809,095		1,786,437
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	13,819,378	$	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 June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
INTEREST INCOME
Loans receivable:
Taxable	$	87,312	$	92,824	$	183,964	$	183,305
Tax exempt	5,359		4,244		10,674		8,397
Investment securities:
Taxable	6,147		6,998		13,778		13,093
Tax exempt	10,019		7,454		19,354		14,325
Deposits with financial institutions	134		784		709		1,659
Federal Home Loan Bank stock	281		335		580		673
Total Interest Income	109,252		112,639		229,059		221,452
INTEREST EXPENSE
Deposits	12,707		23,087		34,455		42,681
Federal funds purchased	2		117		113		210
Securities sold under repurchase agreements	92		342		444		672
Federal Home Loan Bank advances	1,794		1,692		3,568		3,506
Subordinated debentures and other borrowings	1,639		2,123		3,584		4,239
Total Interest Expense	16,234		27,361		42,164		51,308
NET INTEREST INCOME	93,018		85,278		186,895		170,144
Provision for loan losses	21,895		500		41,647		1,700
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	71,123		84,778		145,248		168,444
OTHER INCOME
Service charges on deposit accounts	4,312		5,437		10,282		10,532
Fiduciary and wealth management fees	5,601		3,931		11,586		7,749
Card payment fees	6,097		4,829		12,004		9,655
Net gains and fees on sales of loans	3,674		1,736		7,037		3,031
Derivative hedge fees	1,042		1,487		2,981		2,268
Other customer fees	333		341		731		780
Increase in cash surrender value of life insurance	1,231		927		2,591		1,916
Gains on life insurance benefits	95		19		95		19
Net realized gains on sales of available for sale securities	3,068		1,843		7,680		2,983
Other income	1,028		1,064		1,293		1,394
Total Other Income	26,481		21,614		56,280		40,327
OTHER EXPENSES
Salaries and employee benefits	35,698		32,709		74,941		65,737
Net occupancy	5,447		4,469		11,248		9,496
Equipment	4,489		4,117		8,833		7,759
Marketing	2,092		2,752		3,535		3,826
Outside data processing fees	2,618		3,929		6,817		7,613
Printing and office supplies	279		334		666		649
Intangible asset amortization	1,511		1,520		3,025		3,048
FDIC assessments	1,472		678		2,995		1,385
Other real estate owned and foreclosure expenses	684		903		1,189		2,068
Professional and other outside services	1,553		2,376		3,811		4,260
Other expenses	4,146		3,800		9,100		8,367
Total Other Expenses	59,989		57,587		126,160		114,208
INCOME BEFORE INCOME TAX	37,615		48,805		75,368		94,563
Income tax expense	4,623		7,749		8,113		14,690
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	32,992	$	41,056	$	67,255	$	79,873
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.62	$	0.83	$	1.24	$	1.62
Diluted Net Income Available to Common Stockholders	$	0.62	$	0.83	$	1.24	$	1.61
Cash Dividends Paid	$	0.26	$	0.26	$	0.52	$	0.48
Average Diluted Shares Outstanding (in thousands)	53,943		49,550		54,430		49,545

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 June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Net income	$	32,992	$	41,056	$	67,255	$	79,873
Other comprehensive income (loss), net of tax:

EX-31.1	exhibit31110q2020q2.htm
EX-31.2	exhibit31210q2020q2.htm
EX-32.1	exhibit3210q2020q2.htm

FRME 10Q Quarterly Report

First Merchants Earnings 2020-06-30