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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	2021-03-31	Filed 2021-05-10
10-K	2020-12-31	Filed 2021-03-01
10-Q	2020-09-30	Filed 2020-11-09
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	2021-02-09
8-K	2021-02-09
8-K	2021-02-09
8-K	2021-01-28
8-K	2021-01-28
8-K	2021-01-27
8-K	2020-12-17
8-K	2020-11-10
8-K	2020-11-09
8-K	2020-11-06
8-K	2020-10-28
8-K	2020-10-28
8-K	2020-09-25
8-K	2020-09-24
8-K	2020-08-12
8-K	2020-08-06
8-K	2020-07-23
8-K	2020-07-23
8-K	2020-07-17
8-K	2020-06-30
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 2021-03-31

Balance Sheet	Income Statement	Cash Flow

frme-20210331

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, 2021

☐ 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)

Securities registered pursuant to Section 12(b) of the Act:


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 3, 2021, there were 54,371,549 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	38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 4.	Controls and Procedures	54

Part II. Other Information
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
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




ACL			Allowance for Credit Losses
Ameribor			The American interbank offered rate, a potential replacement for LIBOR, is a benchmark interest rate calculated as a volume-weighted average of the daily transactions in overnight unsecured loans on the American Financial Exchange, LLC, a self-regulated electronic exchange for direct lending by American banks and financial institutions.
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
CECL			Current expected credit losses
CET1			Common Equity Tier 1




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			U.S. Generally Accepted Accounting Principles
IRS			Internal Revenue Service



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.
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, 2021		December 31, 2020
	(Unaudited)
ASSETS
Cash and cash equivalents	$	187,901	$	192,896
Interest-bearing deposits	392,806		392,305
Investment securities available for sale	2,405,568		1,919,119
Investment securities held to maturity, net of allowance for credit losses of $245 and $0 (fair value of $1,318,780 and $1,280,293)	1,295,289		1,227,668
Loans held for sale	4,430		3,966
Loans	9,318,228		9,243,174
Less: Allowance for credit losses - loans 1	(201,082)		(130,648)
Net loans	9,117,146		9,112,526
Premises and equipment	109,432		111,062
Federal Home Loan Bank stock	28,736		28,736
Interest receivable	54,662		53,948

Goodwill	543,918		543,918
Other intangibles	27,618		28,975
Cash surrender value of life insurance	293,766		292,745
Other real estate owned	604		940
Tax asset, deferred and receivable	40,163		12,340
Other assets	127,027		146,066
TOTAL ASSETS	$	14,629,066	$	14,067,210
LIABILITIES
Deposits:
Noninterest-bearing	$	2,494,891	$	2,298,138
Interest-bearing	9,456,889		9,063,472
Total Deposits	11,951,780		11,361,610
Borrowings:

Securities sold under repurchase agreements	185,721		177,102
Federal Home Loan Bank advances	359,337		389,430
Subordinated debentures and other borrowings	118,439		118,380
Total Borrowings	663,497		684,912
Interest payable	4,020		3,287
Other liabilities	203,913		141,756
Total Liabilities	12,823,210		12,191,565
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, $0.125 stated value:
Authorized - 100,000,000 shares
Issued and outstanding - 53,953,723 and 53,922,359 shares	6,744		6,740
Additional paid-in capital	1,007,300		1,005,366
Retained earnings	755,877		788,578
Accumulated other comprehensive income	35,810		74,836
Total Stockholders' Equity	1,805,856		1,875,645
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	14,629,066	$	14,067,210

1 Beginning January 1, 2021, the calculation is based on the current expected credit loss methodology. Prior to January 1, 2021, the calculation is based on the incurred loss methodology. See additional details in NOTE 1. GENERAL of these Notes to Consolidated Condensed Financial Statement.

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,
	2021		2020
INTEREST INCOME
Loans receivable:
Taxable	$	85,105	$	96,652
Tax exempt	5,339		5,315
Investment securities:
Taxable	6,695		7,631
Tax exempt	12,385		9,335

Deposits with financial institutions	114		575
Federal Home Loan Bank stock	178		299
Total Interest Income	109,816		119,807
INTEREST EXPENSE
Deposits	6,200		21,748
Federal funds purchased	2		111
Securities sold under repurchase agreements	87		352
Federal Home Loan Bank advances	1,442		1,774
Subordinated debentures and other borrowings	1,657		1,945
Total Interest Expense	9,388		25,930
NET INTEREST INCOME	100,428		93,877
Provision for credit losses - loans	—		19,752
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	100,428		74,125
OTHER INCOME
Service charges on deposit accounts	5,264		5,970
Fiduciary and wealth management fees	6,422		5,985
Card payment fees	4,367		5,907
Net gains and fees on sales of loans	3,986		3,363
Derivative hedge fees	317		1,939
Other customer fees	368		398
Increase in cash surrender value of life insurance	1,189		1,360
Gains on life insurance benefits	147		—
Net realized gains on sales of available for sale securities	1,799		4,612
Other income	232		265
Total Other Income	24,091		29,799
OTHER EXPENSES
Salaries and employee benefits	38,811		39,243
Net occupancy	6,491		5,801
Equipment	5,030		4,344
Marketing	1,124		1,443
Outside data processing fees	4,244		4,199
Printing and office supplies	283		387
Intangible asset amortization	1,357		1,514
FDIC assessments	1,368		1,523
Other real estate owned and foreclosure expenses	734		505
Professional and other outside services	2,543		2,258
Other expenses	4,113		4,954
Total Other Expenses	66,098		66,171
INCOME BEFORE INCOME TAX	58,421		37,753
Income tax expense	8,952		3,490
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	49,469	$	34,263


Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.92	$	0.63
Diluted Net Income Available to Common Stockholders	$	0.91	$	0.62
Cash Dividends Paid	$	0.26	$	0.26
Average Diluted Shares Outstanding (in thousands)	54,134		54,918

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,
	2021		2020
Net income	$	49,469	$	34,263
Other comprehensive income (loss):
Unrealized gains/losses on securities available-for-sale:
Unrealized holding gain (loss) arising during the period	(47,911)		38,435
Reclassification adjustment for losses (gains) included in net income	(1,799)		(4,612)
Tax effect	10,439		(7,102)
Net of tax	(39,271)		26,721

Unrealized gain/loss on cash flow hedges:
Unrealized holding gain (loss) arising during the period	58		(1,314)
Reclassification adjustment for losses (gains) included in net income	252		125
Tax effect	(65)		250
Net of tax	245		(939)






Total other comprehensive income (loss), net of tax	(39,026)		25,782
Comprehensive income	$	10,443	$	60,045

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, 2021
	Preferred			Common Stock			Additional					Accumulated Other
	Shares	Amount		Shares	Amount		Paid in Capital			Retained Earnings		Comprehensive Income		Total
Balances, December 31, 2020	125	$	125	53,922,359	$	6,740	$	1,005,366		$	788,578	$	74,836	$	1,875,645
Cumulative effect of ASC 326 adoption										(68,040)				(68,040)
Balance, January 1, 2021	125	$	125	53,922,359	$	6,740	$	1,005,366	1005366	$	720,538	$	74,836	$	1,807,605
Comprehensive income:
Net income	—	—		—	—		—			49,469		—		49,469
Other comprehensive loss, net of tax	—	—		—	—		—			—		(39,026)		(39,026)
Cash dividends on common stock ($.26 per share)	—	—		—	—		—			(14,130)		—		(14,130)



Share-based compensation	—	—		4,285	1		1,189			—		—		1,190
Stock issued under employee benefit plans	—	—		3,929	—		144			—		—		144
Stock issued under dividend reinvestment and stock purchase plan	—	—		9,117	1		442			—		—		443
Stock options exercised	—	—		14,300	2		169			—		—		171
Restricted shares withheld for taxes	—	—		(267)	—		(10)			—		—		(10)
Balances, March 31, 2021	125	$	125	53,953,723	$	6,744	$	1,007,300		$	755,877	$	35,810	$	1,805,856


	Three Months Ended March 31, 2020
	Preferred			Common Stock			Additional				Accumulated Other
	Shares	Amount		Shares	Amount		Paid in Capital		Retained Earnings		Comprehensive Loss		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

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

EX-10.1	exhibit10110q2021q1.htm
EX-31.1	exhibit31110q2021q1.htm
EX-31.2	exhibit31210q2021q1.htm
EX-32.1	exhibit3210q2021q1.htm

FRME 10Q Quarterly Report

First Merchants Earnings 2021-03-31