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First Merchants Corporation Announces First Quarter 2020 Earnings per Share

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MUNCIE, Ind., April 23, 2020 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME) has reported first quarter 2020 net income of $34.3 million compared to $38.8 million during the same period in 2019. Earnings per share for the period totaled $.62 per share compared to the first quarter of 2019 result of $.78 per share.

Total assets equaled $12.7 billion as of quarter-end and loans totaled $8.6 billion. The Corporation’s loan portfolio increased by $1.3 billion, or 17.9 percent, during the past twelve months. Total deposits equaled $9.9 billion as of quarter-end and increased by $1.8 billion, or 22.6 percent over the same period in 2019. Of the increases, our acquisition of Monroe Bank & Trust (“MBT”), which closed on September 1, 2019, accounted for $733 million of loan growth and $1.1 billion of deposit growth. The resulting loan-to-deposit ratio of 87.2 percent and loan-to-asset ratio of 67.8 percent provides for fortress balance sheet levels of liquidity.

The Corporation’s provision for loan losses totaled $19.8 million and net charge-offs for the quarter totaled just $582,000. The allowance for loan losses totaled $99.5 million as of March 31, 2020, up from $80.9 million as of March 31, 2019. The increase of $18.6 million, or 22.9 percent, primarily reflects our view of increased credit risk related to the COVID-19 pandemic. Non-accrual loans totaled just $15.6 million as of quarter-end and the allowance plus fair value marks on acquired loans totals 1.54 percent of total loans. As of March 31, 2020, the Corporation’s total risk-based capital ratio equaled 13.80 percent, the common equity tier 1 capital ratio equaled 11.58 percent, and the tangible common equity ratio totaled 9.91 percent, providing fortress balance sheet levels of capital.

Michael C. Rechin, President and Chief Executive Officer, stated, “It’s humbling to lead an organization that has such a positive impact on our communities. The resiliency of our employees and our customers is a testament to the strength of the human spirit. The transformation of our business to remote work, drive-up consumer business and serving our customers through the processing of loan modifications and Paycheck Protection Program loans in the thousands is spectacular.” Rechin also added, “Our profitability levels were negatively impacted by margin compression and provision for loan losses; however, the strength of our fee income businesses provided a positive contribution to earnings. We believe our pre-tax, pre-provision earnings remain best-in-class.”

Net-interest income totaled $93.9 million for the quarter, an increase of $9 million, or 10.6 percent compared to the first quarter of 2019. Net-interest margin on a tax equivalent basis, totaling 3.46 percent, declined by 38 basis points compared to the first quarter of 2019. Yields on earning assets declined by 51 basis points and totaled 4.38 percent. The cost of supporting liabilities decreased by 13 basis points and totaled .92 percent. Fair value accretion had a favorable impact on net interest margin of 12 basis points in the first quarter of 2020, compared to 9 basis points in the first quarter of 2019.

Non-interest income totaled $29.8 million for the quarter, an $11.1 million increase from the first quarter of 2019. Gains on the sale of securities increased by $3.5 million as we took advantage of rebalancing opportunities within the investment portfolio. Additionally, gains from the sale of loans increased by $2.1 million driven by lower mortgage loan interest rates. Derivative hedge fees increased by $1.2 million as borrowers chose to lock in long-term interest rates. In addition to the highlighted items above, most line items increased due to the MBT acquisition in September 2019. Non-interest expense totaled $66.2 million in the first quarter of 2020, compared to $56.6 million in the same period of 2019. Of the $9.6 million increase, nearly all can be attributed to the acquisition of MBT in September 2019.

The effective tax rate was 9.2 percent in the first quarter of 2020, compared to 15.2 percent in the first quarter of 2019. $1.2 million of the decline is attributable to the CARES Act providing the opportunity to carryback net operating losses to pre-tax reform income tax rates.

CONFERENCE CALL

First Merchants Corporation will conduct a first quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, April 23, 2020.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's first quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until May 23, 2020. 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 10139922.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme200423.html during the time of the call. A replay of the web cast will be available until April 30, 2021.

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)

March 31,

2020

2019

ASSETS

Cash and cash equivalents

$

127,731

$

115,878

Interest-bearing time deposits

132,944

70,672

Investment securities

2,697,954

1,862,659

Loans held for sale

5,039

3,330

Loans

8,606,849

7,299,320

Less: Allowance for loan losses

(99,454

)

(80,902

)

Net loans

8,507,395

7,218,418

Premises and equipment

114,045

91,863

Federal Home Loan Bank stock

28,736

24,588

Interest receivable

47,489

40,931

Goodwill and other intangibles

577,366

468,256

Cash surrender value of life insurance

289,574

225,928

Other real estate owned

7,972

1,877

Tax asset, deferred and receivable

9,497

16,094

Other assets

147,776

70,431

TOTAL ASSETS

$

12,693,518

$

10,210,925

LIABILITIES

Deposits:

Noninterest-bearing

$

1,688,205

$

1,381,183

Interest-bearing

8,182,279

6,666,615

Total Deposits

9,870,484

8,047,798

Borrowings:

Federal funds purchased

47,000

20,000

Securities sold under repurchase agreements

183,317

111,783

Federal Home Loan Bank advances

480,995

345,013

Subordinated debentures and term loans

128,741

138,519

Total Borrowings

840,053

615,315

Interest payable

7,746

7,313

Other liabilities

197,275

84,651

Total Liabilities

10,915,558

8,755,077

STOCKHOLDERS' EQUITY

Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:

Authorized -- 600 shares

Issued and outstanding - 125 shares

125

125

Common Stock, $.125 stated value:

Authorized -- 100,000,000 shares

Issued and outstanding - 53,754,137 and 49,428,468 shares

6,719

6,179

Additional paid-in capital

1,000,942

839,919

Retained earnings

716,518

611,220

Accumulated other comprehensive income (loss)

53,656

(1,595

)

Total Stockholders' Equity

1,777,960

1,455,848

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

12,693,518

$

10,210,925


CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

(Dollars In Thousands, Except Per Share Amounts)

March 31,

2020

2019

INTEREST INCOME

Loans receivable:

Taxable

$

96,652

$

90,481

Tax-exempt

5,315

4,153

Investment securities:

Taxable

7,631

6,095

Tax-exempt

9,335

6,871

Deposits with financial institutions

575

875

Federal Home Loan Bank stock

299

338

Total Interest Income

119,807

108,813

INTEREST EXPENSE

Deposits

21,748

19,594

Federal funds purchased

111

93

Securities sold under repurchase agreements

352

330

Federal Home Loan Bank advances

1,774

1,814

Subordinated debentures and term loans

1,945

2,116

Total Interest Expense

25,930

23,947

NET INTEREST INCOME

93,877

84,866

Provision for loan losses

19,752

1,200

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

74,125

83,666

OTHER INCOME

Service charges on deposit accounts

5,970

5,095

Fiduciary and wealth management fees

5,985

3,818

Card payment fees

5,907

4,826

Net gains and fees on sales of loans

3,363

1,295

Derivative hedge fees

1,939

781

Other customer fees

398

439

Earnings on cash surrender value of life insurance

1,360

989

Net realized gains on sales of available for sale securities

4,612

1,140

Other income

265

330

Total Other Income

29,799

18,713

OTHER EXPENSES

Salaries and employee benefits

39,243

33,028

Net occupancy

5,801

5,027

Equipment

4,344

3,642

Marketing

1,443

1,074

Outside data processing fees

4,199

3,684

Printing and office supplies

387

315

Intangible asset amortization

1,514

1,528

FDIC assessments

1,523

707

Other real estate owned and foreclosure expenses

505

1,165

Professional and other outside services

2,258

1,884

Other expenses

4,954

4,567

Total Other Expenses

66,171

56,621

INCOME BEFORE INCOME TAX

37,753

45,758

Income tax expense

3,490

6,941

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

$

34,263

$

38,817

Per Share Data:

Basic Net Income Available to Common Stockholders

$

0.63

$

0.79

Diluted Net Income Available to Common Stockholders

$

0.62

$

0.78

Cash Dividends Paid

$

0.26

$

0.22

Average Diluted Shares Outstanding (in thousands)

54,918

49,541


FINANCIAL HIGHLIGHTS

(Dollars in thousands)

Three Months Ended

March 31,

2020

2019

NET CHARGE-OFFS

$

582

$

850

AVERAGE BALANCES:

Total Assets

$

12,573,238

$

10,080,142

Total Loans

8,526,571

7,230,119

Total Earning Assets

11,292,430

9,132,129

Total Deposits

9,886,273

7,936,656

Total Stockholders' Equity

1,816,418

1,429,739

FINANCIAL RATIOS:

Return on Average Assets

1.09

%

1.54

%

Return on Average Stockholders' Equity

7.55

10.86

Return on Average Common Stockholders' Equity

7.55

10.86

Average Earning Assets to Average Assets

89.81

90.60

Allowance for Loan Losses as % of Total Loans

1.15

1.11

Net Charge-offs as % of Average Loans (Annualized)

0.03

0.05

Average Stockholders' Equity to Average Assets

14.45

14.18

Tax Equivalent Yield on Average Earning Assets

4.38

4.89

Interest Expense/Average Earning Assets

0.92

1.05

Net Interest Margin (FTE) on Average Earning Assets

3.46

3.84

Efficiency Ratio

52.17

51.18

Tangible Common Book Value Per Share

$

22.46

$

20.07


NON-PERFORMING ASSETS

(Dollars In Thousands)

March 31,

December 31,

September 30,

June 30,

March 31,

2020

2019

2019

2019

2019

Non-Accrual Loans

$

15,649

$

15,949

$

22,728

$

25,635

$

27,949

Renegotiated Loans

665

841

576

640

709

Non-Performing Loans (NPL)

16,314

16,790

23,304

26,275

28,658

Other Real Estate Owned and Repossessions

8,017

7,527

7,156

1,131

1,877

Non-Performing Assets (NPA)

24,331

24,317

30,460

27,406

30,535

90+ Days Delinquent

312

69

82

209

134

NPAs & 90 Day Delinquent

$

24,643

$

24,386

$

30,542

$

27,615

$

30,669

Allowance for Loan Losses

$

99,454

$

80,284

$

80,571

$

81,274

$

80,902

Quarterly Net Charge-offs

582

787

1,303

128

850

NPAs / Actual Assets %

0.19

%

0.20

%

0.25

%

0.26

%

0.30

%

NPAs & 90 Day / Actual Assets %

0.19

%

0.20

%

0.25

%

0.26

%

0.30

%

NPAs / Actual Loans and OREO %

0.28

%

0.29

%

0.37

%

0.36

%

0.42

%

Allowance for Loan Losses / Actual Loans (%)

1.15

%

0.95

%

0.97

%

1.08

%

1.11

%

Net Charge-offs as % of Average Loans (Annualized)

0.03

%

0.04

%

0.07

%

0.01

%

0.05

%


CONSOLIDATED BALANCE SHEETS

(Dollars In Thousands)

March 31,

December 31,

September 30,

June 30,

March 31,

2020

2019

2019

2019

2019

ASSETS

Cash and cash equivalents

$

127,731

$

177,201

$

202,383

$

128,185

$

115,878

Interest-bearing time deposits

132,944

118,263

230,101

129,614

70,672

Investment securities

2,697,954

2,596,063

2,489,420

2,092,924

1,862,659

Loans held for sale

5,039

9,037

7,910

5,854

3,330

Loans

8,606,849

8,459,310

8,299,260

7,511,370

7,299,320

Less: Allowance for loan losses

(99,454

)

(80,284

)

(80,571

)

(81,274

)

(80,902

)

Net loans

8,507,395

8,379,026

8,218,689

7,430,096

7,218,418

Premises and equipment

114,045

113,055

113,446

91,767

91,863

Federal Home Loan Bank stock

28,736

28,736

28,736

24,588

24,588

Interest receivable

47,489

48,901

45,923

45,150

40,931

Goodwill and other intangibles

577,366

578,880

579,751

466,736

468,256

Cash surrender value of life insurance

289,574

288,206

286,747

226,241

225,928

Other real estate owned

7,972

7,527

7,156

1,131

1,877

Tax asset, deferred and receivable

9,497

12,165

15,187

12,340

16,094

Other assets

147,776

100,194

99,612

83,231

70,431

TOTAL ASSETS

$

12,693,518

$

12,457,254

$

12,325,061

$

10,737,857

$

10,210,925

LIABILITIES

Deposits:

Noninterest-bearing

$

1,688,205

$

1,736,396

$

1,777,365

$

1,353,165

$

1,381,183

Interest-bearing

8,182,279

8,103,560

7,988,086

6,966,163

6,666,615

Total Deposits

9,870,484

9,839,956

9,765,451

8,319,328

8,047,798

Borrowings:

Federal funds purchased

47,000

55,000

75,000

20,000

Securities sold under repurchase agreements

183,317

187,946

191,603

119,674

111,783

Federal Home Loan Bank advances

480,995

351,072

354,609

460,042

345,013

Subordinated debentures and term loans

128,741

138,685

138,630

138,574

138,519

Total Borrowings

840,053

732,703

684,842

793,290

615,315

Interest payable

7,746

6,754

7,855

6,740

7,313

Other liabilities

197,275

91,404

117,901

116,863

84,651

Total Liabilities

10,915,558

10,670,817

10,576,049

9,236,221

8,755,077

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

6,719

6,921

6,918

6,182

6,179

Additional paid-in capital

1,000,942

1,054,997

1,053,148

841,365

839,919

Retained earnings

716,518

696,520

663,173

639,362

611,220

Accumulated other comprehensive income (loss)

53,656

27,874

25,648

14,602

(1,595

)

Total Stockholders' Equity

1,777,960

1,786,437

1,749,012

1,501,636

1,455,848

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

12,693,518

$

12,457,254

$

12,325,061

$

10,737,857

$

10,210,925


CONSOLIDATED STATEMENTS OF INCOME

(Dollars In Thousands, Except Per Share Amounts)

March 31,

December 31,

September 30,

June 30,

March 31,

2020

2019

2019

2019

2019

INTEREST INCOME

Loans receivable:

Taxable

$

96,652

$

102,617

$

96,850

$

92,824

$

90,481

Tax-exempt

5,315

4,671

4,500

4,244

4,153

Investment securities:

Taxable

7,631

7,993

6,729

6,998

6,095

Tax-exempt

9,335

8,995

8,335

7,454

6,871

Deposits with financial institutions

575

1,203

1,363

784

875

Federal Home Loan Bank stock

299

342

355

335

338

Total Interest Income

119,807

125,821

118,132

112,639

108,813

INTEREST EXPENSE

Deposits

21,748

24,074

24,830

23,087

19,594

Federal funds purchased

111

26

15

117

93

Securities sold under repurchase agreements

352

367

385

342

330

Federal Home Loan Bank advances

1,774

1,776

1,894

1,692

1,814

Subordinated debentures and term loans

1,945

1,994

2,076

2,123

2,116

Total Interest Expense

25,930

28,237

29,200

27,361

23,947

NET INTEREST INCOME

93,877

97,584

88,932

85,278

84,866

Provision for loan losses

19,752

500

600

500

1,200

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

74,125

97,084

88,332

84,778

83,666

OTHER INCOME

Service charges on deposit accounts

5,970

6,312

6,107

5,437

5,095

Fiduciary and wealth management fees

5,985

5,384

4,429

3,931

3,818

Card payment fees

5,907

5,430

5,158

4,829

4,826

Net gains and fees on sales of loans

3,363

2,633

2,227

1,736

1,295

Derivative hedge fees

1,939

1,405

1,684

1,487

781

Other customer fees

398

434

450

341

439

Earnings on cash surrender value of life insurance

1,360

1,458

1,144

946

989

Net realized gains on sales of available for sale securities

4,612

1,039

393

1,843

1,140

Other income

265

150

524

1,064

330

Total Other Income

29,799

24,245

22,116

21,614

18,713

OTHER EXPENSES

Salaries and employee benefits

39,243

39,358

38,942

32,709

33,028

Net occupancy

5,801

5,311

4,777

4,469

5,027

Equipment

4,344

4,429

4,030

4,117

3,642

Marketing

1,443

1,492

1,332

2,752

1,074

Outside data processing fees

4,199

4,428

4,435

3,929

3,684

Printing and office supplies

387

484

312

334

315

Intangible asset amortization

1,514

1,590

1,356

1,520

1,528

FDIC assessments

1,523

(668

)

678

707

Other real estate owned and foreclosure expenses

505

66

294

903

1,165

Professional and other outside services

2,258

2,899

8,251

2,376

1,884

Other expenses

4,954

5,144

4,293

3,800

4,567

Total Other Expenses

66,171

65,201

67,354

57,587

56,621

INCOME BEFORE INCOME TAX

37,753

56,128

43,094

48,805

45,758

Income tax expense

3,490

8,298

6,337

7,749

6,941

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

$

34,263

$

47,830

$

36,757

$

41,056

$

38,817

Per Share Data:

Basic Net Income Available to Common Stockholders

$

0.63

$

0.87

$

0.71

$

0.83

$

0.79

Diluted Net Income Available to Common Stockholders

$

0.62

$

0.87

$

0.71

$

0.83

$

0.78

Cash Dividends Paid

$

0.26

$

0.26

$

0.26

$

0.26

$

0.22

Average Diluted Shares Outstanding (in thousands)

54,918

55,520

51,570

49,550

49,541

FINANCIAL RATIOS:

Return on Average Assets

1.09

%

1.53

%

1.30

%

1.56

%

1.54

%

Return on Average Stockholders' Equity

7.55

10.82

9.21

11.10

10.86

Return on Average Common Stockholders' Equity

7.55

10.82

9.21

11.10

10.86

Average Earning Assets to Average Assets

89.81

89.71

90.37

90.66

90.60

Allowance for Loan Losses as % of Total Loans

1.15

0.95

0.97

1.08

1.11

Net Charge-offs as % of Average Loans (Annualized)

0.03

0.04

0.07

0.01

0.05

Average Stockholders' Equity to Average Assets

14.45

14.17

14.16

14.09

14.18

Tax Equivalent Yield on Average Earning Assets

4.38

4.63

4.77

4.86

4.89

Interest Expense/Average Earning Assets

0.92

1.01

1.15

1.15

1.05

Net Interest Margin (FTE) on Average Earning Assets

3.46

3.62

3.62

3.71

3.84

Efficiency Ratio

52.17

51.07

57.60

51.00

51.18

Tangible Common Book Value Per Share

$

22.46

$

21.94

$

21.26

$

21.01

$

20.07


LOANS

(Dollars In Thousands)

March 31,

December 31,

September 30,

June 30,

March 31,

2020

2019

2019

2019

2019

Commercial and industrial loans

$

2,199,226

$

2,109,879

$

2,034,311

$

1,877,042

$

1,788,628

Agricultural production financing and other loans to farmers

87,421

93,861

90,462

83,452

80,357

Real estate loans:

Construction

643,674

787,568

670,138

624,548

542,501

Commercial and farmland

3,268,168

3,052,698

3,144,649

2,821,689

2,838,798

Residential

1,121,556

1,143,217

1,155,403

993,802

976,668

Home equity

570,398

588,984

601,335

548,006

536,208

Individuals' loans for household and other personal expenditures

129,765

135,989

131,246

98,384

108,216

Public finance and other commercial loans

586,641

547,114

471,716

464,447

427,944

Loans

8,606,849

8,459,310

8,299,260

7,511,370

7,299,320

Allowance for loan losses

(99,454

)

(80,284

)

(80,571

)

(81,274

)

(80,902

)

NET LOANS

$

8,507,395

$

8,379,026

$

8,218,689

$

7,430,096

$

7,218,418


DEPOSITS

(Dollars In Thousands)

March 31,

December 31,

September 30,

June 30,

March 31,

2020

2019

2019

2019

2019

Demand deposits

$

5,293,200

$

5,250,568

$

5,183,971

$

4,309,473

$

4,101,156

Savings deposits

2,962,821

2,896,177

2,808,745

2,358,720

2,338,266

Certificates and other time deposits of $100,000 or more

694,062

736,843

731,693

720,536

670,199

Other certificates and time deposits

717,723

741,759

811,780

729,392

704,527

Brokered deposits

202,678

214,609

229,262

201,207

233,650

TOTAL DEPOSITS

$

9,870,484

$

9,839,956

$

9,765,451

$

8,319,328

$

8,047,798


CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS

(Dollars in Thousands)

For the Three Months Ended

March 31, 2020

March 31, 2019

Average Balance

Interest
Income /
Expense

Average
Rate

Average Balance

Interest
Income /
Expense

Average
Rate

Assets:

Interest-bearing time deposits

$

159,859

$

575

1.44

%

$

145,935

$

875

2.40

%

Federal Home Loan Bank stock

28,737

299

4.16

24,588

338

5.50

Investment Securities: (1)

Taxable

1,368,546

7,631

2.23

902,402

6,095

2.70

Tax-Exempt (2)

1,208,717

11,816

3.91

829,085

8,697

4.20

Total Investment Securities

2,577,263

19,447

3.02

1,731,487

14,792

3.42

Loans held for sale

17,217

193

4.48

9,703

112

4.62

Loans: (3)

Commercial

6,235,336

76,952

4.94

5,309,998

72,758

5.48

Real Estate Mortgage

870,654

10,402

4.78

743,736

8,321

4.48

Installment

759,614

9,105

4.79

665,050

9,290

5.59

Tax-Exempt (2)

643,750

6,728

4.18

501,632

5,257

4.19

Total Loans

8,526,571

103,380

4.85

7,230,119

95,738

5.30

Total Earning Assets

11,292,430

123,701

4.38

%

9,132,129

111,743

4.89

%

Net unrealized gain (loss) on securities available for sale

48,656

(5,015

)

Allowance for loan losses

(81,160

)

(80,907

)

Cash and cash equivalents

159,757

117,224

Premises and equipment

113,812

93,236

Other assets

1,039,743

823,475

Total Assets

$

12,573,238

$

10,080,142

Liabilities:

Interest-bearing deposits:

Interest-bearing deposits

$

3,589,240

$

8,276

0.92

%

$

2,689,797

$

7,019

1.04

%

Money market deposits

1,535,844

3,783

0.99

1,139,062

2,782

0.98

Savings deposits

1,425,054

1,827

0.51

1,150,725

2,267

0.79

Certificates and other time deposits

1,666,642

7,862

1.89

1,565,578

7,526

1.92

Total Interest-bearing Deposits

8,216,780

21,748

1.06

6,545,162

19,594

1.20

Borrowings

748,185

4,182

2.24

635,058

4,353

2.74

Total Interest-bearing Liabilities

8,964,965

25,930

1.16

7,180,220

23,947

1.33

Noninterest-bearing deposits

1,669,493

1,391,494

Other liabilities

122,362

78,689

Total Liabilities

10,756,820

8,650,403

Stockholders' Equity

1,816,418

1,429,739

Total Liabilities and Stockholders' Equity

$

12,573,238

25,930

$

10,080,142

23,947

Net Interest Income (FTE)

$

97,771

$

87,796

Net Interest Spread (FTE) (4)

3.22

%

3.56

%

Net Interest Margin (FTE):

Interest Income (FTE) / Average Earning Assets

4.38

%

4.89

%

Interest Expense / Average Earning Assets

0.92

%

1.05

%

Net Interest Margin (FTE) (5)

3.46

%

3.84

%

(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 2020 and 2019. These totals equal $3,894 and $2,930 for the three months ended March 31, 2020 and 2019, 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

SOURCE: First Merchants Corporation