First Merchants Corporation Announces First Quarter 2022 Earnings Per Share

Rhea-AI Summary

First Merchants Corporation (NASDAQ: FRME) reported a net income of $48.6 million for Q1 2022, consistent with $49.5 million in Q1 2021, with diluted earnings per share of $0.91. Total loans, excluding PPP loans, grew by $165 million (7.2%) and deposits increased by $173.4 million (5.4%) from the previous quarter. The bank completed its acquisition of Level One Bancorp on April 1, 2022. Non-interest income rose to $25.9 million, while non-interest expense increased 9.4% to $72.3 million. The loan to deposit ratio is 73%, and total assets reached $15.5 billion as of March 31, 2022.

Positive

• Net income stable at $48.6 million, consistent earnings per share of $0.91.
• Loan growth of $165 million or 7.2% on a linked quarter basis.
• Deposit growth of $173.4 million or 5.4% on a linked quarter basis.
• Acquisition of Level One Bancorp completed on April 1, 2022.
• Non-interest income increased by $1.8 million year-over-year.

Negative

• Net loan growth only $37.5 million due to PPP loan forgiveness of $693.1 million.
• Non-interest expenses increased by 9.4% year-over-year, primarily due to higher salaries.

MUNCIE, Ind., April 26, 2022 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME)

First Quarter 2022 Highlights:

• Net income was $48.6 million and diluted earnings per share totaled $.91, compared to $49.5 million and $.91 in the first quarter of 2021, and $47.7 million and $.89 in the fourth quarter of 2021.
• Diluted earnings per share excluding income on Paycheck Protection Program (“PPP”) loans totaled $.88 for the first quarter of 2022 compared to $.78 in the first quarter of 2021 and $.84 in the fourth quarter of 2021.¹
  
• Total loans, excluding PPP loans, grew $165 million or 7.2% on a linked quarter basis
  
• Total deposits grew $173.4 million or 5.4% on a linked quarter basis
  
• Non-accrual loans totaled $42.7 million compared to $43.1 million on a linked quarter basis
  
• Net interest income totaled $102.3 million, an increase of $1.0 million on a linked quarter basis
  
• Completed legal closing on the acquisition of Level One Bancorp, LLC on April 1, 2022

Mark Hardwick, Chief Executive Officer, stated, “The Bank’s loan, deposit and earnings growth were in line with expectations and my colleagues are focused on delivering our aspirational 2022 plan. The completion of our merger with Level One on April 1st is a milestone in First Merchants history that will propel our Bank into the future. I am proud of our new teammates and the professional winning attitude they exude.”

First Quarter Financial Results:

First Merchants Corporation (the “Corporation) has reported first quarter 2022 net income of $48.6 million compared to $49.5 million during the same period in 2021. Earnings per share for the period totaled $.91 per share compared to the first quarter of 2021 result of $.91 per share.

Total assets equaled $15.5 billion as of March 31, 2022 and loans totaled $9.4 billion. The Corporation experienced organic loan growth of $730.6 million, or 8.5 percent, during the past twelve months. This was offset by the forgiveness of Paycheck Protection Program (“PPP”) loans of $693.1 million, resulting in net loan growth of $37.5 million. PPP loans accounted for $48.7 million of the period end loan portfolio balance. Investments increased $788.4 million, or 21.3 percent, during the year and now total $4.5 billion. Total deposits equaled $12.9 billion as of quarter-end and increased by $954.2 million, or 8.0 percent over the same period in 2021.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $196.0 million as of quarter-end, or 2.09 percent of total loans. Net loan recoveries for the quarter totaled $0.6 million and no provision expense was recorded during the quarter or during the last twelve months. Non-performing assets to total assets were 0.32% for the first quarter of 2022, a decrease of eight basis points compared to 0.40% in the first quarter of 2021.

Net-interest income totaling $102.3 million for the quarter, continued to grow with an increase of $1.0 million, or 4.0 percent, over prior quarter and an increase of $1.9 million, or 1.8 percent compared to the first quarter of 2021. Stated net-interest margin on a tax equivalent basis, totaling 3.03 percent, declined by one basis point compared to the fourth quarter of 2021 and twenty basis points compared to the first quarter of 2021. Net-interest margin excluding the impact of fair value accretion and PPP loans totaled 2.97%, an increase of five basis points compared to 2.92% for the fourth quarter of 2021 and a decline of seven basis points from the first quarter of 2021. During the quarter, net-interest margin expanded nine basis points from growth in the loan and investment portfolios, higher investment portfolio yield and lower funding costs, offset by a decline of four basis points from the impact of a lower day count in the quarter.

Non-interest income, totaling $25.9 million for the quarter, was stable compared to the fourth quarter of 2021 and increased $1.8 million from the first quarter of 2021. Customer-specific line items accounted for $2.3 million of the increase over the first quarter of 2021 driven by higher service charges on deposits, fiduciary and wealth management fees and card payment fees. This was offset by a decline on gains on the sale of loans of $1.8 million driven by lower origination volume.

Non-interest expense totaled $72.3 million for the quarter, a decline of $0.1 million from the fourth quarter of 2021, and an increase of $6.3 million or 9.4% over the first quarter of 2021. The increase over the first quarter of 2021 was primarily due to higher salaries and employee benefits as well as higher FDIC assessments.

The Corporation’s loan to deposit ratio totals 73 percent and loan to asset ratio totals 61 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 13.85 percent, common equity tier 1 capital ratio equaled 11.63 percent, and the tangible common equity ratio totaled 8.31 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

¹ See “Non-GAAP Financial Information” for reconciliation

CONFERENCE CALL

First Merchants Corporation will conduct a first quarter earnings conference call and web cast at 10:00 a.m. (ET) on Tuesday, April 26, 2022.

To participate, dial (Toll Free) 877-806-2932 and reference Conference ID 6838926. International callers please call +1 478-219-0639.

In order to view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/vucpzk7j) during the time of the call. A replay of the webcast will be available until April 26, 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 and Level One Bank (as divisions 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)	March 31,
		2022				2021
ASSETS
Cash and due from banks	$	148,277			$	187,901
Interest-bearing deposits		395,262				392,806
Investment securities, net of allowance for credit losses of $245,000 and $245,000		4,489,263				3,700,857
Loans held for sale		3,938				4,430
Loans		9,356,241				9,318,228
Less: Allowance for credit losses - loans		(195,984	)			(201,082	)
Net loans		9,160,257				9,117,146
Premises and equipment		105,883				109,432
Federal Home Loan Bank stock		26,422				28,736
Interest receivable		56,081				54,662
Goodwill and other intangibles		569,494				571,536
Cash surrender value of life insurance		291,881				293,766
Other real estate owned		6,271				604
Tax asset, deferred and receivable		73,422				40,163
Other assets		138,807				127,027
TOTAL ASSETS	$	15,465,258			$	14,629,066
LIABILITIES
Deposits:
Noninterest-bearing	$	2,745,235			$	2,494,891
Interest-bearing		10,160,718				9,456,889
Total Deposits		12,905,953				11,951,780
Borrowings:
Securities sold under repurchase agreements		169,697				185,721
Federal Home Loan Bank advances		308,960				359,337
Subordinated debentures and other borrowings		118,677				118,439
Total Borrowings		597,334				663,497
Interest payable		3,589				4,020
Other liabilities		150,749				203,913
Total Liabilities		13,657,625				12,823,210
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 - 53,424,823 and 53,953,723 shares		6,678				6,744
Additional paid-in capital		987,404				1,007,300
Retained earnings		897,818				755,877
Accumulated other comprehensive income		(84,392	)			35,810
Total Stockholders' Equity		1,807,633				1,805,856
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	15,465,258			$	14,629,066

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended
(Dollars In Thousands, Except Per Share Amounts)	March 31,
		2022			2021
INTEREST INCOME
Loans receivable:
Taxable	$	79,075		$	85,105
Tax-exempt		5,704			5,339
Investment securities:
Taxable		8,510			6,695
Tax-exempt		15,875			12,385
Deposits with financial institutions		230			114
Federal Home Loan Bank stock		146			178
Total Interest Income		109,540			109,816
INTEREST EXPENSE
Deposits		4,294			6,200
Federal funds purchased		—			2
Securities sold under repurchase agreements		89			87
Federal Home Loan Bank advances		1,218			1,442
Subordinated debentures and other borrowings		1,659			1,657
Total Interest Expense		7,260			9,388
NET INTEREST INCOME		102,280			100,428
Provision for credit losses - loans		—			—
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		102,280			100,428
OTHER INCOME
Service charges on deposit accounts		6,419			5,264
Fiduciary and wealth management fees		7,332			6,422
Card payment fees		5,723			4,367
Net gains and fees on sales of loans		2,199			3,986
Derivative hedge fees		918			317
Other customer fees		410			368
Earnings on cash surrender value of life insurance		1,696			1,336
Net realized gains on sales of available for sale securities		566			1,799
Other income		634			232
Total Other Income		25,897			24,091
OTHER EXPENSES
Salaries and employee benefits		42,519			38,811
Net occupancy		6,187			6,491
Equipment		5,080			5,030
Marketing		736			1,124
Outside data processing fees		4,363			4,244
Printing and office supplies		345			283
Intangible asset amortization		1,366			1,357
FDIC assessments		2,192			1,368
Other real estate owned and foreclosure expenses		564			734
Professional and other outside services		2,953			2,543
Other expenses		6,020			4,113
Total Other Expenses		72,325			66,098
INCOME BEFORE INCOME TAX		55,852			58,421
Income tax expense		7,266			8,952
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	48,586		$	49,469
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.91		$	0.92
Diluted Net Income Available to Common Stockholders	$	0.91		$	0.91
Cash Dividends Paid	$	0.29		$	0.26
Average Diluted Shares Outstanding (in thousands)		53,616			54,134

FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended
	March 31,
		2022				2021
NET CHARGE-OFFS (RECOVERIES)	$	(587	)		$	3,621
AVERAGE BALANCES:
Total Assets	$	15,464,605			$	14,244,739
Total Loans		9,255,928				9,236,421
Total Earning Assets		14,262,777				13,023,318
Total Deposits		12,817,690				11,567,918
Total Stockholders' Equity		1,891,223				1,840,432
FINANCIAL RATIOS:
Return on Average Assets		1.26	%			1.39	%
Return on Average Stockholders' Equity		10.28				10.75
Return on Average Common Stockholders' Equity		10.28				10.75
Average Earning Assets to Average Assets		92.23				91.43
Allowance for Credit Losses - Loans as % of Total Loans		2.09				2.16
Net Charge-offs as % of Average Loans (Annualized)		(0.03	)			0.16
Average Stockholders' Equity to Average Assets		12.23				12.92
Tax Equivalent Yield on Average Earning Assets		3.23				3.52
Interest Expense/Average Earning Assets		0.20				0.29
Net Interest Margin (FTE) on Average Earning Assets		3.03				3.23
Efficiency Ratio		52.79				50.23
Tangible Common Book Value Per Share	$	23.26			$	22.98

NON-PERFORMING ASSETS
(Dollars In Thousands)	March 31,				December 31,				September 30,				June 30,				March 31,
		2022				2021				2021				2021				2021
Non-Accrual Loans	$	42,698			$	43,062			$	51,502			$	57,556			$	57,923
Renegotiated Loans		141				329				439				629				655
Non-Performing Loans (NPL)		42,839				43,391				51,941				58,185				58,578
Other Real Estate Owned and Repossessions		6,271				558				698				601				604
Non-Performing Assets (NPA)		49,110				43,949				52,639				58,786				59,182
90+ Days Delinquent		2,085				963				157				183				1,093
NPAs & 90 Day Delinquent	$	51,195			$	44,912			$	52,796			$	58,969			$	60,275
Allowance for Credit Losses - Loans	$	195,984			$	195,397			$	199,972			$	199,775			$	201,082
Quarterly Net Charge-offs (Recoveries)		(587	)			4,575				(197	)			1,307				3,621
NPAs / Actual Assets %		0.32	%			0.28	%			0.35	%			0.39	%			0.40	%
NPAs & 90 Day / Actual Assets %		0.33	%			0.29	%			0.35	%			0.40	%			0.41	%
NPAs / Actual Loans and OREO %		0.52	%			0.47	%			0.58	%			0.64	%			0.63	%
Allowance for Credit Losses - Loans / Actual Loans (%)		2.09	%			2.11	%			2.21	%			2.19	%			2.16	%
Net Charge-offs as % of Average Loans (Annualized)	(0.03		)%			0.20	%		(0.01		)%			0.06	%			0.16	%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	March 31,				December 31,				September 30,				June 30,				March 31,
		2022				2021				2021				2021				2021
ASSETS
Cash and due from banks	$	148,277			$	167,146			$	169,261			$	167,596			$	187,901
Interest-bearing deposits		395,262				474,154				369,447				438,863				392,806
Investment securities, net of allowance for credit losses		4,489,263				4,524,353				4,445,516				4,148,314				3,700,857
Loans held for sale		3,938				11,187				5,990				18,582				4,430
Loans		9,356,241				9,241,861				9,041,576				9,121,250				9,318,228
Less: Allowance for credit losses - loans		(195,984	)			(195,397	)			(199,972	)			(199,775	)			(201,082	)
Net loans		9,160,257				9,046,464				8,841,604				8,921,475				9,117,146
Premises and equipment		105,883				105,655				104,814				103,822				109,432
Federal Home Loan Bank stock		26,422				28,736				28,736				28,736				28,736
Interest receivable		56,081				57,187				53,079				54,173				54,662
Goodwill and other intangibles		569,494				570,860				572,323				573,786				571,536
Cash surrender value of life insurance		291,881				291,041				291,825				294,462				293,766
Other real estate owned		6,271				558				698				601				604
Tax asset, deferred and receivable		73,422				35,641				39,504				36,924				40,163
Other assets		138,807				140,167				137,928				135,763				127,027
TOTAL ASSETS	$	15,465,258			$	15,453,149			$	15,060,725			$	14,923,097			$	14,629,066
LIABILITIES
Deposits:
Noninterest-bearing	$	2,745,235			$	2,709,646			$	2,554,323			$	2,479,853			$	2,494,891
Interest-bearing		10,160,718				10,022,931				9,794,366				9,723,547				9,456,889
Total Deposits		12,905,953				12,732,577				12,348,689				12,203,400				11,951,780
Borrowings:
Securities sold under repurchase agreements		169,697				181,577				183,589				146,904				185,721
Federal Home Loan Bank advances		308,960				334,055				334,149				334,243				359,337
Subordinated debentures and other borrowings		118,677				118,618				118,558				118,498				118,439
Total Borrowings		597,334				634,250				636,296				599,645				663,497
Interest payable		3,589				2,762				3,736				2,929				4,020
Other liabilities		150,749				170,989				203,914				245,323				203,913
Total Liabilities		13,657,625				13,540,578				13,192,635				13,051,297				12,823,210
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		6,678				6,676				6,689				6,747				6,744
Additional paid-in capital		987,404				985,818				988,659				1,009,182				1,007,300
Retained earnings		897,818				864,839				832,728				795,666				755,877
Accumulated other comprehensive income		(84,392	)			55,113				39,889				60,080				35,810
Total Stockholders' Equity		1,807,633				1,912,571				1,868,090				1,871,800				1,805,856
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	15,465,258			$	15,453,149			$	15,060,725			$	14,923,097			$	14,629,066

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	March 31,				December 31,				September 30,				June 30,				March 31,
		2022				2021				2021				2021				2021
INTEREST INCOME
Loans receivable:
Taxable	$	79,075			$	80,583			$	85,319			$	87,002			$	85,105
Tax-exempt		5,704				5,635				5,591				5,545				5,339
Investment securities:
Taxable		8,510				8,028				7,788				7,440				6,695
Tax-exempt		15,875				15,411				14,464				13,071				12,385
Deposits with financial institutions		230				173				218				129				114
Federal Home Loan Bank stock		146				163				168				88				178
Total Interest Income		109,540				109,993				113,548				113,275				109,816
INTEREST EXPENSE
Deposits		4,294				5,589				5,707				5,823				6,200
Federal funds purchased		—				1				—				2				2
Securities sold under repurchase agreements		89				75				77				75				87
Federal Home Loan Bank advances		1,218				1,389				1,389				1,452				1,442
Subordinated debentures and other borrowings		1,659				1,666				1,660				1,659				1,657
Total Interest Expense		7,260				8,720				8,833				9,011				9,388
NET INTEREST INCOME		102,280				101,273				104,715				104,264				100,428
Provision for credit losses - loans		—				—				—				—				—
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		102,280				101,273				104,715				104,264				100,428
OTHER INCOME
Service charges on deposit accounts		6,419				6,462				6,249				5,596				5,264
Fiduciary and wealth management fees		7,332				7,078				7,352				7,510				6,422
Card payment fees		5,723				3,937				4,156				4,159				4,367
Net gains and fees on sales of loans		2,199				3,423				3,955				8,325				3,986
Derivative hedge fees		918				1,562				1,028				943				317
Other customer fees		410				361				393				368				368
Earnings on cash surrender value of life insurance		1,696				2,051				2,468				1,205				1,336
Net realized gains on sales of available for sale securities		566				358				1,756				1,761				1,799
Other income		634				615				1,144				1,017				232
Total Other Income		25,897				25,847				28,501				30,884				24,091
OTHER EXPENSES
Salaries and employee benefits		42,519				42,432				43,314				42,438				38,811
Net occupancy		6,187				5,644				5,576				5,615				6,491
Equipment		5,080				4,994				4,529				4,848				5,030
Marketing		736				1,840				1,676				1,122				1,124
Outside data processing fees		4,363				4,581				4,794				4,698				4,244
Printing and office supplies		345				356				265				313				283
Intangible asset amortization		1,366				1,463				1,463				1,464				1,357
FDIC assessments		2,192				1,862				1,552				1,461				1,368
Other real estate owned and foreclosure expenses		564				171				(91	)			178				734
Professional and other outside services		2,953				3,627				2,767				2,976				2,543
Other expenses		6,020				5,466				5,539				4,182				4,113
Total Other Expenses		72,325				72,436				71,384				69,295				66,098
INCOME BEFORE INCOME TAX		55,852				54,684				61,832				65,853				58,421
Income tax expense		7,266				6,951				9,062				10,294				8,952
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	48,586			$	47,733			$	52,770			$	55,559			$	49,469
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.91			$	0.89			$	0.98			$	1.03			$	0.92
Diluted Net Income Available to Common Stockholders	$	0.91			$	0.89			$	0.98			$	1.03			$	0.91
Cash Dividends Paid	$	0.29			$	0.29			$	0.29			$	0.29			$	0.26
Average Diluted Shares Outstanding (in thousands)		53,616				53,660				53,960				54,184				54,134
FINANCIAL RATIOS:
Return on Average Assets		1.26	%			1.25	%			1.41	%			1.51	%			1.39	%
Return on Average Stockholders' Equity		10.28				10.10				11.17				12.04				10.75
Return on Average Common Stockholders' Equity		10.28				10.10				11.17				12.04				10.75
Average Earning Assets to Average Assets		92.23				91.86				91.57				91.87				91.43
Allowance for Credit Losses - Loans as % of Total Loans		2.09				2.11				2.21				2.19				2.16
Net Charge-offs (Recoveries) as % of Average Loans (Annualized)		(0.03	)			0.20				(0.01	)			0.06				0.16
Average Stockholders' Equity to Average Assets		12.23				12.36				12.59				12.51				12.92
Tax Equivalent Yield on Average Earning Assets		3.23				3.29				3.46				3.49				3.52
Interest Expense/Average Earning Assets		0.20				0.25				0.26				0.27				0.29
Net Interest Margin (FTE) on Average Earning Assets		3.03				3.04				3.20				3.22				3.23
Efficiency Ratio		52.79				53.49				51.18				48.91				50.23
Tangible Common Book Value Per Share	$	23.26			$	25.21			$	24.31			$	24.15			$	22.98

LOANS
(Dollars In Thousands)	March 31,				December 31,				September 30,				June 30,				March 31,
		2022				2021				2021				2021				2021
Commercial and industrial loans	$	2,826,660			$	2,714,565			$	2,573,615			$	2,671,076			$	2,876,212
Agricultural land, production and other loans to farmers		209,077				246,442				240,686				235,020				245,631
Real estate loans:
Construction		552,975				523,066				521,889				491,200				541,224
Commercial real estate, non-owner occupied		2,073,197				2,135,459				2,150,387				2,263,497				2,178,832
Commercial real estate, owner occupied		974,521				986,720				952,441				953,501				950,038
Residential		1,226,695				1,159,127				1,154,373				1,127,442				1,239,925
Home equity		512,641				523,754				531,307				489,997				482,229
Individuals' loans for household and other personal expenditures		147,593				146,092				135,093				130,819				126,387
Public finance and other commercial loans		832,882				806,636				781,785				758,698				677,750
Loans		9,356,241				9,241,861				9,041,576				9,121,250				9,318,228
Allowance for credit losses - loans		(195,984	)			(195,397	)			(199,972	)			(199,775	)			(201,082	)
NET LOANS	$	9,160,257			$	9,046,464			$	8,841,604			$	8,921,475			$	9,117,146

DEPOSITS
(Dollars In Thousands)	March 31,				December 31,				September 30,				June 30,				March 31,
		2022				2021				2021				2021				2021
Demand deposits	$	7,806,033			$	7,704,190			$	7,317,399			$	7,261,603			$	7,245,850
Savings deposits		4,444,417				4,334,802				4,301,483				4,157,552				3,857,624
Certificates and other time deposits of $100,000 or more		252,033				273,379				283,396				304,394				332,745
Other certificates and time deposits		380,293				389,752				404,010				423,922				449,655
Brokered deposits		23,177				30,454				42,401				55,929				65,906
TOTAL DEPOSITS	$	12,905,953			$	12,732,577			$	12,348,689			$	12,203,400			$	11,951,780

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	March 31, 2022									March 31, 2021
	Average Balance			Interest Income / Expense			Average Rate			Average Balance			Interest Income / Expense			Average Rate
Assets:
Interest-bearing deposits	$	484,626		$	230		0.19	%		$	441,254		$	114		0.10	%
Federal Home Loan Bank stock		27,914			146		2.09				28,736			178		2.48
Investment Securities:(1)
Taxable		1,957,675			8,510		1.74				1,494,008			6,695		1.79
Tax-Exempt(2)		2,536,634			20,095		3.17				1,822,899			15,677		3.44
Total Investment Securities		4,494,309			28,605		2.55				3,316,907			22,372		2.70
Loans held for sale		4,352			40		3.68				16,139			156		3.87
Loans:(3)
Commercial		6,868,438			64,679		3.77				6,876,818			69,174		4.02
Real Estate Mortgage		924,268			7,840		3.39				975,262			9,286		3.81
Installment		711,038			6,516		3.67				674,307			6,489		3.85
Tax-Exempt(2)		747,832			7,220		3.86				693,895			6,758		3.90
Total Loans		9,255,928			86,295		3.73				9,236,421			91,863		3.98
Total Earning Assets		14,262,777			115,276		3.23	%			13,023,318			114,527		3.52	%
Total Non-Earning Assets		1,201,828									1,221,421
Total Assets	$	15,464,605								$	14,244,739
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	5,027,466		$	2,408		0.19	%		$	4,616,988		$	3,709		0.32	%
Money market deposits		2,514,429			872		0.14				2,086,322			835		0.16
Savings deposits		1,867,411			441		0.09				1,660,528			476		0.11
Certificates and other time deposits		676,661			573		0.34				859,334			1,180		0.55
Total Interest-bearing Deposits		10,085,967			4,294		0.17				9,223,172			6,200		0.27
Borrowings		616,572			2,966		1.92				675,117			3,188		1.89
Total Interest-bearing Liabilities		10,702,539			7,260		0.27				9,898,289			9,388		0.38
Noninterest-bearing deposits		2,731,723									2,344,746
Other liabilities		139,120									161,272
Total Liabilities		13,573,382									12,404,307
Stockholders' Equity		1,891,223									1,840,432
Total Liabilities and Stockholders' Equity	$	15,464,605			7,260					$	14,244,739			9,388
Net Interest Income (FTE)				$	108,016								$	105,139
Net Interest Spread (FTE)(4)							2.96	%								3.14	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets							3.23	%								3.52	%
Interest Expense / Average Earning Assets							0.20	%								0.29	%
Net Interest Margin (FTE)(5)							3.03	%								3.23	%
(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 $5,736 and $4,711 for the three months ended March 31, 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") - NON-GAAP
(Dollars In Thousands, Except Per Share Amounts)
	March 31,				December 31,				September 30,				June 30,				March 31,
		2022				2021				2021				2021				2021
Net Income Available to Common Shareholders - GAAP	$	48,586			$	47,733			$	52,770			$	55,559			$	49,469
Adjustments:
PPP loan income		(1,884	)			(3,721	)			(8,211	)			(9,725	)			(9,243	)
Tax on adjustment		462				912				2,013				2,385				2,266
Adjust Net Income Available to Common Stockholders - Non-GAAP	$	47,164			$	44,924			$	46,572			$	48,219			$	42,492
Average Diluted Shares Outstanding (in thousands)		53,616				53,660				53,960				54,184				54,134
Diluted Earnings Per Share - GAAP	$	0.91			$	0.89			$	0.98			$	1.03			$	0.91
Adjustments:
PPP loan income		(0.04	)			(0.07	)			(0.15	)			(0.18	)			(0.17	)
Tax on adjustment		0.01				0.02				0.04				0.04				0.04
Adjusted Diluted Earnings Per Share - Non-GAAP	$	0.88			$	0.84			$	0.87			$	0.89			$	0.78

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

FAQ

What were First Merchants Corporation's earnings for Q1 2022?

First Merchants Corporation reported a net income of $48.6 million and diluted earnings per share of $0.91 for Q1 2022.

How much did First Merchants Corporation's loans grow in Q1 2022?

Total loans, excluding PPP loans, grew by $165 million or 7.2% in Q1 2022.

What was the total deposit growth for First Merchants Corporation in Q1 2022?

Total deposits increased by $173.4 million or 5.4% on a linked quarter basis in Q1 2022.

When did First Merchants Corporation complete the acquisition of Level One Bancorp?

The acquisition of Level One Bancorp was completed on April 1, 2022.

What was the non-interest income for First Merchants Corporation in Q1 2022?

Non-interest income for Q1 2022 totaled $25.9 million.