First Merchants Corporation Announces Second Quarter 2021 Earnings Per Share

Rhea-AI Summary

First Merchants Corporation (NASDAQ - FRME) announced a robust second quarter of 2021, reporting a net income of $55.6 million, up from $33 million year-over-year. Earnings per share rose to $1.03 from $0.62. Year-to-date net income stands at $105 million, compared to $67.3 million in 2020. Total assets reached $14.9 billion, with loans totaling $9.1 billion. Despite a 1.9% decrease in loans due to PPP loan forgiveness, deposits surged 11.3% year-over-year. The corporation's capital ratios remained strong, with a total risk-based capital ratio of 14.23%.

Positive

• Net income increased by 68% year-over-year to $55.6 million.
• Earnings per share rose to $1.03, up from $0.62 in Q2 2020.
• Year-to-date net income is $105 million, compared to $67.3 million in 2020.
• Total deposits grew by $1.2 billion, or 11.3%, from the previous year.
• Net interest income increased by 12.1% to $104.3 million.

Negative

• Loan portfolio decreased by $177.3 million, or 1.9%, due to PPP loan forgiveness.

MUNCIE, Ind., July 26, 2021 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME) has reported second quarter 2021 net income of $55.6 million compared to $33 million during the same period in 2020. Earnings per share for the period totaled $1.03 per share compared to the second quarter of 2020 result of $.62 per share. Year-to-date net income totaled $105 million compared to $67.3 million during the six months ended June 30, 2020. Year-to-date earnings per share totaled $1.94 compared to $1.24 during the same period in 2020.

Total assets equaled $14.9 billion as of the quarter-ended June 30, 2021 and loans totaled $9.1 billion. The Corporation experienced organic loan growth of $289.6 million, or 3.4 percent during the last twelve months, offset by the forgiveness of Paycheck Protection Program (“PPP”) loans which accounted for a decline of $466.9 million. As a result, the loan portfolio decreased by $177.3 million, or 1.9 percent, during that period. Organic loan growth, on an annualized basis, was 6.7 percent in the second quarter 2021. Investments increased $1.4 billion, or 48.7 percent, during the last twelve months and now total $4.1 billion. Total deposits equaled $12.2 billion as of quarter-end and increased by $1.2 billion, or 11.3 percent, from the same period in 2020.
  
The Corporation’s Allowance for Credit Losses – Loans totaled $199.8 million as of quarter-end, or 2.19% of total loans. Net charge-offs for the quarter totaled $1.3 million and no provision expense was recorded. Provision expense taken during the three and six months ended June 30, 2020 of $21.9 million and $41.6 million, respectively, reflected our view of increased credit risk related to the COVID-19 pandemic. Non-accrual loans as of quarter-end totaled $57.6 million.

Mark Hardwick, Chief Executive Officer, stated, “Our management team is pleased with our record setting second quarter net income. It’s very satisfying to achieve great financial results while serving our clients and communities. Our healthy levels of loan growth, earning asset growth, credit quality, capital levels and efficiency will lead us into the future. I am proud of our teammates for staying focused on our goals and continuously finding ways to win for our stakeholders.”

Net-interest income for the quarter totaled $104.3 million, an increase of $11.2 million from the second quarter of 2020, or 12.1 percent. Net interest margin, on a tax equivalent basis, totaling 3.22 percent, increased by 3 basis points compared to the second quarter of 2020. Yields on earning assets for the second quarter totaled 3.49 percent and cost of supporting liabilities totaled 27 basis points. Fair value accretion contributed less to margin as it accounted for 7 basis points in the second quarter of 2021, compared to 12 basis points in the second quarter of 2020. PPP loans contributed 15 basis points to margin during the second quarter of 2021, but subtracted 6 basis points from margin in the same quarter of 2020.

Non-interest income totaled $30.9 million for the quarter, a $4.4 million increase over the second quarter of 2020. Gains from the sale of mortgage loans were exceptionally strong and enhanced by a large portfolio mortgage loan sale contributing a gain of $2.9 million during the quarter. Fiduciary and wealth management fees increased $1.9 million over the second quarter of 2020, which was offset by a decline in card payment fees due to the adoption of the Durbin Amendment. Non-interest expense totaled $69.3 million for the quarter compared to $60 million in the second quarter of 2020 and $66.1 million in the first quarter of 2021. Total expenses in the second quarter of 2020 were unusually low and reflected a $2.3 million deferral of salary expense related to PPP loan originations, a $1.1 million reduction in bonus accruals and a $1.6 million decrease in processing fees related to termination of a debit card rewards program. Total expenses increased on a linked quarter basis primarily due to increased salaries and incentives.

The loan to deposit ratio now totals 74.9 percent and loan to asset ratio totals 61.3 percent. As of June 30, 2021, the Corporation’s total risk-based capital ratio equaled 14.23 percent, the common equity tier 1 capital ratio equaled 11.94 percent, and the tangible common equity ratio totaled 9.04 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 2:30 p.m. (ET) on Monday, July 26, 2021.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's second quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until August 26, 2021. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529, Canada participants should dial 855-669-9658, or for International participants, dial +1 412-317-0088. The replay access code is 10157361.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme210726.html during the time of the call. A replay of the web cast will be available until July 26, 2022.

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)	June 30,
	2021				2020
ASSETS
Cash and cash equivalents	$	167,596			$	229,759
Interest-bearing deposits	438,863				380,021
Investment securities, net of allowance for credit losses of $245,000 and $0	4,148,314				2,789,379
Loans held for sale	18,582				901
Loans	9,121,250				9,298,541
Less: Allowance for credit losses - loans	(199,775		)		(121,119		)
Net loans	8,921,475				9,177,422
Premises and equipment	103,822				112,548
Federal Home Loan Bank stock	28,736				28,736
Interest receivable	54,173				57,063
Goodwill and other intangibles	573,786				575,855
Cash surrender value of life insurance	294,462				290,715
Other real estate owned	601				7,367
Tax asset, deferred and receivable	36,924				13,126
Other assets	135,763				156,486
TOTAL ASSETS	$	14,923,097			$	13,819,378
LIABILITIES
Deposits:
Noninterest-bearing	$	2,479,853			$	2,260,351
Interest-bearing	9,723,547				8,705,637
Total Deposits	12,203,400				10,965,988
Borrowings:
Securities sold under repurchase agreements	146,904				181,150
Federal Home Loan Bank advances	334,243				400,817
Subordinated debentures and other borrowings	118,498				285,197
Total Borrowings	599,645				867,164
Interest payable	2,929				5,587
Other liabilities	245,323				171,544
Total Liabilities	13,051,297				12,010,283
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 - 53,972,386 and 53,795,500 shares	6,747				6,724
Additional paid-in capital	1,009,182				1,002,962
Retained earnings	795,666				735,439
Accumulated other comprehensive income	60,080				63,845
Total Stockholders' Equity	1,871,800				1,809,095
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	14,923,097			$	13,819,378

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended								Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,								June 30,
	2021				2020				2021				2020
INTEREST INCOME
Loans receivable:
Taxable	$	87,002			$	87,312			$	172,107			$	183,964
Tax-exempt	5,545				5,359				10,884				10,674
Investment securities:
Taxable	7,440				6,147				14,135				13,778
Tax-exempt	13,071				10,019				25,456				19,354
Deposits with financial institutions	129				134				243				709
Federal Home Loan Bank stock	88				281				266				580
Total Interest Income	113,275				109,252				223,091				229,059
INTEREST EXPENSE
Deposits	5,823				12,707				12,023				34,455
Federal funds purchased	2				2				4				113
Securities sold under repurchase agreements	75				92				162				444
Federal Home Loan Bank advances	1,452				1,794				2,894				3,568
Subordinated debentures and other borrowings	1,659				1,639				3,316				3,584
Total Interest Expense	9,011				16,234				18,399				42,164
NET INTEREST INCOME	104,264				93,018				204,692				186,895
Provision for credit losses - loans	—				21,895				—				41,647
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	104,264				71,123				204,692				145,248
OTHER INCOME
Service charges on deposit accounts	5,596				4,312				10,860				10,282
Fiduciary and wealth management fees	7,510				5,601				13,932				11,586
Card payment fees	4,159				6,097				8,526				12,004
Net gains and fees on sales of loans	8,325				3,674				12,311				7,037
Derivative hedge fees	943				1,042				1,260				2,981
Other customer fees	368				333				736				731
Earnings on cash surrender value of life insurance	1,205				1,326				2,541				2,686
Net realized gains on sales of available for sale securities	1,761				3,068				3,560				7,680
Other income	1,017				1,028				1,249				1,293
Total Other Income	30,884				26,481				54,975				56,280
OTHER EXPENSES
Salaries and employee benefits	42,438				35,698				81,249				74,941
Net occupancy	5,615				5,447				12,106				11,248
Equipment	4,848				4,489				9,878				8,833
Marketing	1,122				2,092				2,246				3,535
Outside data processing fees	4,698				2,618				8,942				6,817
Printing and office supplies	313				279				596				666
Intangible asset amortization	1,464				1,511				2,821				3,025
FDIC assessments	1,461				1,472				2,829				2,995
Other real estate owned and foreclosure expenses	178				684				912				1,189
Professional and other outside services	2,976				1,553				5,519				3,811
Other expenses	4,182				4,146				8,295				9,100
Total Other Expenses	69,295				59,989				135,393				126,160
INCOME BEFORE INCOME TAX	65,853				37,615				124,274				75,368
Income tax expense	10,294				4,623				19,246				8,113
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	55,559			$	32,992			$	105,028			$	67,255
Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.03			$	0.62			$	1.95			$	1.24
Diluted Net Income Available to Common Stockholders	$	1.03			$	0.62			$	1.94			$	1.24
Cash Dividends Paid	$	0.29			$	0.26			$	0.55			$	0.52
Average Diluted Shares Outstanding (in thousands)	54,184				53,943				54,159				54,430

FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2021				2020				2021				2020
NET CHARGE-OFFS	$	1,307			$	230			$	4,928			$	812
AVERAGE BALANCES:
Total Assets	$	14,758,597			$	13,655,322			$	14,503,087			$	13,114,280
Total Loans	9,282,524				9,180,610				9,259,600				8,853,591
Total Earning Assets	13,558,956				12,187,442				13,292,617				11,739,936
Total Deposits	12,125,153				10,789,909				11,848,075				10,338,091
Total Stockholders' Equity	1,846,037				1,795,509				1,843,250				1,805,963
FINANCIAL RATIOS:
Return on Average Assets	1.51		%		0.97		%		1.45		%		1.03		%
Return on Average Stockholders' Equity	12.04				7.35				11.40				7.45
Return on Average Common Stockholders' Equity	12.04				7.35				11.40				7.45
Average Earning Assets to Average Assets	91.87				89.25				91.65				89.52
Allowance for Credit Losses - Loans as % of Total Loans	2.19				1.30				2.19				1.30
Net Charge-offs as % of Average Loans (Annualized)	0.06				0.01				0.11				0.02
Average Stockholders' Equity to Average Assets	12.51				13.15				12.71				13.77
Tax Equivalent Yield on Average Earning Assets	3.49				3.72				3.51				4.04
Interest Expense/Average Earning Assets	0.27				0.53				0.28				0.72
Net Interest Margin (FTE) on Average Earning Assets	3.22				3.19				3.23				3.32
Efficiency Ratio	48.91				47.95				49.54				50.09
Tangible Common Book Value Per Share	$	24.15			$	23.04			$	24.15			$	23.04

NON-PERFORMING ASSETS
(Dollars In Thousands)	June 30,				March 31,				December 31,				September 30,				June 30,
	2021				2021				2020				2020				2020
Non-Accrual Loans	$	57,556			$	57,923			$	61,471			$	56,739			$	50,102
Renegotiated Loans	629				655				3,240				2,677				1,086
Non-Performing Loans (NPL)	58,185				58,578				64,711				59,416				51,188
Other Real Estate Owned and Repossessions	601				604				940				6,984				7,409
Non-Performing Assets (NPA)	58,786				59,182				65,651				66,400				58,597
90+ Days Delinquent	183				1,093				746				1,330				4,981
NPAs & 90 Day Delinquent	$	58,969			$	60,275			$	66,397			$	67,730			$	63,578
Allowance for Credit Losses - Loans	$	199,775			$	201,082			$	130,648			$	126,726			$	121,119
Quarterly Net Charge-offs	1,307				3,621				560				6,937				230
NPAs / Actual Assets %	0.39		%		0.40		%		0.47		%		0.48		%		0.42		%
NPAs & 90 Day / Actual Assets %	0.40		%		0.41		%		0.47		%		0.49		%		0.46		%
NPAs / Actual Loans and OREO %	0.64		%		0.63		%		0.71		%		0.72		%		0.63		%
Allowance for Credit Losses - Loans / Actual Loans (%)	2.19		%		2.16		%		1.41		%		1.37		%		1.30		%
Net Charge-offs as % of Average Loans (Annualized)	0.06		%		0.16		%		0.02		%		0.30		%		0.01		%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,				March 31,				December 31,				September 30,				June 30,
	2021				2021				2020				2020				2020
ASSETS
Cash and cash equivalents	$	167,596			$	187,901			$	192,896			$	164,632			$	229,759
Interest-bearing deposits	438,863				392,806				392,305				273,936				380,021
Investment securities, net of allowance for credit losses	4,148,314				3,700,857				3,146,787				2,933,286				2,789,379
Loans held for sale	18,582				4,430				3,966				3,183				901
Loans	9,121,250				9,318,228				9,243,174				9,243,833				9,298,541
Less: Allowance for credit losses - loans	(199,775		)		(201,082		)		(130,648		)		(126,726		)		(121,119		)
Net loans	8,921,475				9,117,146				9,112,526				9,117,107				9,177,422
Premises and equipment	103,822				109,432				111,062				112,959				112,548
Federal Home Loan Bank stock	28,736				28,736				28,736				28,736				28,736
Interest receivable	54,173				54,662				53,948				52,992				57,063
Goodwill and other intangibles	573,786				571,536				572,893				574,369				575,855
Cash surrender value of life insurance	294,462				293,766				292,745				291,543				290,715
Other real estate owned	601				604				940				6,942				7,367
Tax asset, deferred and receivable	36,924				40,163				12,340				21,762				13,126
Other assets	135,763				127,027				146,066				155,903				156,486
TOTAL ASSETS	$	14,923,097			$	14,629,066			$	14,067,210			$	13,737,350			$	13,819,378
LIABILITIES
Deposits:
Noninterest-bearing	$	2,479,853			$	2,494,891			$	2,298,138			$	2,187,607			$	2,260,351
Interest-bearing	9,723,547				9,456,889				9,063,472				8,718,546				8,705,637
Total Deposits	12,203,400				11,951,780				11,361,610				10,906,153				10,965,988
Borrowings:
Federal funds purchased	—				—				—				80,000				—
Securities sold under repurchase agreements	146,904				185,721				177,102				187,732				181,150
Federal Home Loan Bank advances	334,243				359,337				389,430				399,522				400,817
Subordinated debentures and other borrowings	118,498				118,439				118,380				118,320				285,197
Total Borrowings	599,645				663,497				684,912				785,574				867,164
Interest payable	2,929				4,020				3,287				5,038				5,587
Other liabilities	245,323				203,913				141,756				206,929				171,544
Total Liabilities	13,051,297				12,823,210				12,191,565				11,903,694				12,010,283
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	6,747				6,744				6,740				6,736				6,724
Additional paid-in capital	1,009,182				1,007,300				1,005,366				1,003,777				1,002,962
Retained earnings	795,666				755,877				788,578				757,550				735,439
Accumulated other comprehensive income	60,080				35,810				74,836				65,468				63,845
Total Stockholders' Equity	1,871,800				1,805,856				1,875,645				1,833,656				1,809,095
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	14,923,097			$	14,629,066			$	14,067,210			$	13,737,350			$	13,819,378

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30				March 31,				December 31,				September 30,				June 30,
	2021				2021				2020				2020				2020
INTEREST INCOME
Loans receivable:
Taxable	$	87,002			$	85,105			$	90,138			$	84,162			$	87,312
Tax-exempt	5,545				5,339				5,414				5,395				5,359
Investment securities:
Taxable	7,440				6,695				5,263				5,399				6,147
Tax-exempt	13,071				12,385				12,056				10,931				10,019
Deposits with financial institutions	129				114				139				90				134
Federal Home Loan Bank stock	88				178				214				248				281
Total Interest Income	113,275				109,816				113,224				106,225				109,252
INTEREST EXPENSE
Deposits	5,823				6,200				7,509				9,776				12,707
Federal funds purchased	2				2				2				5				2
Securities sold under repurchase agreements	75				87				77				83				92
Federal Home Loan Bank advances	1,452				1,442				1,656				1,749				1,794
Subordinated debentures and other borrowings	1,659				1,657				1,669				1,691				1,639
Total Interest Expense	9,011				9,388				10,913				13,304				16,234
NET INTEREST INCOME	104,264				100,428				102,311				92,921				93,018
Provision for credit losses - loans	—				—				4,482				12,544				21,895
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	104,264				100,428				97,829				80,377				71,123
OTHER INCOME
Service charges on deposit accounts	5,596				5,264				5,508				5,209				4,312
Fiduciary and wealth management fees	7,510				6,422				6,251				5,910				5,601
Card payment fees	4,159				4,367				3,502				3,996				6,097
Net gains and fees on sales of loans	8,325				3,986				5,393				5,841				3,674
Derivative hedge fees	943				317				2,281				1,715				1,042
Other customer fees	368				368				394				372				333
Earnings on cash surrender value of life insurance	1,205				1,336				1,283				1,171				1,326
Net realized gains on sales of available for sale securities	1,761				1,799				2,398				1,817				3,068
Other income	1,017				232				473				132				1,028
Total Other Income	30,884				24,091				27,483				26,163				26,481
OTHER EXPENSES
Salaries and employee benefits	42,438				38,811				41,809				39,187				35,698
Net occupancy	5,615				6,491				9,653				5,855				5,447
Equipment	4,848				5,030				5,555				4,956				4,489
Marketing	1,122				1,124				1,763				1,311				2,092
Outside data processing fees	4,698				4,244				3,839				3,776				2,618
Printing and office supplies	313				283				307				331				279
Intangible asset amortization	1,464				1,357				1,476				1,486				1,511
FDIC assessments	1,461				1,368				1,560				1,249				1,472
Other real estate owned and foreclosure expenses	178				734				(1,576		)		717				684
Professional and other outside services	2,976				2,543				2,836				2,254				1,553
Other expenses	4,182				4,113				5,314				3,587				4,146
Total Other Expenses	69,295				66,098				72,536				64,709				59,989
INCOME BEFORE INCOME TAX	65,853				58,421				52,776				41,831				37,615
Income tax expense	10,294				8,952				7,641				5,621				4,623
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	55,559			$	49,469			$	45,135			$	36,210			$	32,992
Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.03			$	0.92			$	0.83			$	0.67			$	0.62
Diluted Net Income Available to Common Stockholders	$	1.03			$	0.91			$	0.83			$	0.67			$	0.62
Cash Dividends Paid	$	0.29			$	0.26			$	0.26			$	0.26			$	0.26
Average Diluted Shares Outstanding (in thousands)	54,184				54,134				54,050				53,971				53,943
FINANCIAL RATIOS:
Return on Average Assets	1.51		%		1.39		%		1.29		%		1.06		%		0.97		%
Return on Average Stockholders' Equity	12.04				10.75				9.72				7.91				7.35
Return on Average Common Stockholders' Equity	12.04				10.75				9.72				7.91				7.35
Average Earning Assets to Average Assets	91.87				91.43				90.66				90.34				89.25
Allowance for Credit Losses - Loans as % of Total Loans	2.19				2.16				1.41				1.37				1.30
Net Charge-offs as % of Average Loans (Annualized)	0.06				0.16				0.02				0.30				0.01
Average Stockholders' Equity to Average Assets	12.51				12.92				13.29				13.41				13.15
Tax Equivalent Yield on Average Earning Assets	3.49				3.52				3.72				3.58				3.72
Interest Expense/Average Earning Assets	0.27				0.29				0.34				0.43				0.53
Net Interest Margin (FTE) on Average Earning Assets	3.22				3.23				3.38				3.15				3.19
Efficiency Ratio	48.91				50.23				55.01				51.40				47.95
Tangible Common Book Value Per Share	$	24.15			$	22.98			$	24.27			$	23.48			$	23.04

LOANS
(Dollars In Thousands)	June 30,				March 31,				December 31,				September 30,				June 30,
	2021				2021				2020				2020				2020
Commercial and industrial loans	$	2,671,076			$	2,876,212			$	2,776,699			$	2,875,331			$	2,898,329
Agricultural land, production and other loans to farmers	235,020				245,631				281,884				301,192				316,815
Real estate loans:
Construction	491,200				541,224				484,723				622,084				640,560
Commercial real estate, non-owner occupied	2,263,497				2,178,832				2,220,949				2,098,589				2,097,767
Commercial real estate, owner occupied	953,501				950,038				958,501				931,815				919,254
Residential	1,127,442				1,239,925				1,234,741				1,146,406				1,145,187
Home equity	489,997				482,229				508,259				527,458				532,314
Individuals' loans for household and other personal expenditures	130,819				126,387				129,479				125,411				123,611
Public finance and other commercial loans	758,698				677,750				647,939				615,547				624,704
Loans	9,121,250				9,318,228				9,243,174				9,243,833				9,298,541
Allowance for credit losses - loans	(199,775		)		(201,082		)		(130,648		)		(126,726		)		(121,119		)
NET LOANS	$	8,921,475			$	9,117,146			$	9,112,526			$	9,117,107			$	9,177,422

DEPOSITS
(Dollars In Thousands)	June 30,				March 31,				December 31,				September 30,				June 30,
	2021				2021				2020				2020				2020
Demand deposits	$	7,261,603			$	7,245,850			$	6,821,152			$	6,279,554			$	6,288,360
Savings deposits	4,157,552				3,857,624				3,661,713				3,518,286				3,278,156
Certificates and other time deposits of $100,000 or more	304,394				332,745				346,194				467,610				607,474
Other certificates and time deposits	423,922				449,655				459,168				542,919				669,119
Brokered deposits	55,929				65,906				73,383				97,784				122,879
TOTAL DEPOSITS	$	12,203,400			$	11,951,780			$	11,361,610			$	10,906,153			$	10,965,988

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	June 30, 2021											June 30, 2020
	Average Balance				Interest  Income / Expense				Average Rate			Average Balance				Interest  Income / Expense				Average Rate
Assets:
Interest-bearing deposits	$	545,752			$	129			0.09	%		$	378,489			$	134			0.14	%
Federal Home Loan Bank stock	28,736				88				1.22			28,736				281				3.91
Investment Securities: (1)
Taxable	1,732,367				7,440				1.72			1,282,080				6,147				1.92
Tax-Exempt (2)	1,969,577				16,546				3.36			1,317,527				12,682				3.85
Total Investment Securities	3,701,944				23,986				2.59			2,599,607				18,829				2.90
Loans held for sale	25,039				237				3.79			12,630				131				4.15
Loans: (3)
Commercial	6,953,227				70,886				4.08			6,890,010				69,463				4.03
Real Estate Mortgage	912,662				9,488				4.16			887,257				10,122				4.56
Installment	659,515				6,391				3.88			724,165				7,596				4.20
Tax-Exempt (2)	732,081				7,019				3.84			666,548				6,784				4.07
Total Loans	9,282,524				94,021				4.05			9,180,610				94,096				4.10
Total Earning Assets	13,558,956				118,224				3.49	%		12,187,442				113,340				3.72	%
Net unrealized gain (loss) on securities available for sale	44,250											56,807
Allowance for credit losses	(201,051		)									(106,858		)
Cash and cash equivalents	171,489											303,491
Premises and equipment	107,369											113,528
Other assets	1,077,584											1,100,912
Total Assets	$	14,758,597										$	13,655,322
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	4,745,181			$	3,560			0.30	%		$	3,951,819			$	4,186			0.42	%
Money market deposits	2,337,143				796				0.14			1,673,104				1,696				0.41
Savings deposits	1,740,233				462				0.11			1,521,312				596				0.16
Certificates and other time deposits	812,370				1,005				0.49			1,498,002				6,229				1.66
Total Interest-bearing Deposits	9,634,927				5,823				0.24			8,644,237				12,707				0.59
Borrowings	644,702				3,188				1.98			909,258				3,527				1.55
Total Interest-bearing Liabilities	10,279,629				9,011				0.35			9,553,495				16,234				0.68
Noninterest-bearing deposits	2,490,226											2,145,672
Other liabilities	142,705											160,646
Total Liabilities	12,912,560											11,859,813
Stockholders' Equity	1,846,037											1,795,509
Total Liabilities and Stockholders' Equity	$	14,758,597			9,011							$	13,655,322			16,234
Net Interest Income (FTE)					$	109,213										$	97,106
Net Interest Spread (FTE) (4)									3.14	%										3.04	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets									3.49	%										3.72	%
Interest Expense / Average Earning Assets									0.27	%										0.53	%
Net Interest Margin (FTE) (5)									3.22	%										3.19	%
(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 2021 and 2020. These totals equal $4,949 and $4,088 for the three months ended June 30, 2021 and 2020, 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 Six Months Ended
	June 30, 2021											June 30, 2020
	Average Balance				Interest  Income / Expense				Average Rate			Average Balance				Interest  Income / Expense				Average Rate
Assets:
Interest-bearing deposits	$	493,791			$	243			0.10	%		$	269,174			$	709			0.53	%
Federal Home Loan Bank stock	28,736				266				1.85			28,736				580				4.04
Investment Securities: (1)
Taxable	1,613,847				14,135				1.75			1,325,313				13,778				2.08
Tax-Exempt (2)	1,896,643				32,223				3.40			1,263,122				24,499				3.88
Total Investment Securities	3,510,490				46,358				2.64			2,588,435				38,277				2.96
Loans held for sale	20,572				393				3.82			14,924				324				4.34
Loans: (3)
Commercial	6,915,234				140,060				4.05			6,562,673				146,415				4.46
Real Estate Mortgage	943,830				18,774				3.98			878,956				20,524				4.67
Installment	666,870				12,880				3.86			741,889				16,701				4.50
Tax-Exempt (2)	713,094				13,777				3.86			655,149				13,511				4.12
Total Loans	9,259,600				185,884				4.01			8,853,591				197,475				4.46
Total Earning Assets	13,292,617				232,751				3.51	%		11,739,936				237,041				4.04	%
Net unrealized gain on securities available for sale	49,922											52,732
Allowance for credit losses	(202,693		)									(94,009		)
Cash and cash equivalents	168,647											231,624
Premises and equipment	109,170											113,670
Other assets	1,085,424											1,070,327
Total Assets	$	14,503,087										$	13,114,280
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	4,681,439			$	7,269			0.31	%		$	3,770,530			$	12,461			0.66	%
Money market deposits	2,212,425				1,631				0.15			1,604,474				5,479				0.68
Savings deposits	1,700,601				938				0.11			1,473,183				2,424				0.33
Certificates and other time deposits	835,722				2,185				0.52			1,582,322				14,091				1.78
Total Interest-bearing Deposits	9,430,187				12,023				0.25			8,430,509				34,455				0.82
Borrowings	659,826				6,376				1.93			828,721				7,709				1.86
Total Interest-bearing Liabilities	10,090,013				18,399				0.36			9,259,230				42,164				0.91
Noninterest-bearing deposits	2,417,888											1,907,582
Other liabilities	151,936											141,505
Total Liabilities	12,659,837											11,308,317
Stockholders' Equity	1,843,250											1,805,963
Total Liabilities and Stockholders' Equity	$	14,503,087			18,399							$	13,114,280			42,164
Net Interest Income (FTE)					$	214,352										$	194,877
Net Interest Spread (FTE) (4)									3.15	%										3.13	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets									3.51	%										4.04	%
Interest Expense / Average Earning Assets									0.28	%										0.72	%
Net Interest Margin (FTE) (5)									3.23	%										3.32	%
(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 2021 and 2020. These totals equal $9,660 and $7,982 for the six months ended June 30, 2021 and 2020, 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.

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

FAQ

What are the earnings results for First Merchants Corporation in Q2 2021?

First Merchants Corporation reported a net income of $55.6 million and earnings per share of $1.03 for Q2 2021.

How much did First Merchants Corporation's net income grow in 2021?

Net income grew by 68% from $33 million in Q2 2020 to $55.6 million in Q2 2021.

What was the total assets reported by First Merchants Corporation as of June 30, 2021?

Total assets reached $14.9 billion as of June 30, 2021.

What is the loan growth percentage for First Merchants Corporation in Q2 2021?

Organic loan growth was 6.7% on an annualized basis during Q2 2021.

When is the next earnings conference call for First Merchants Corporation?

The earnings conference call is scheduled for 2:30 p.m. ET on July 26, 2021.