• First Merchants Corporation Announces First Quarter 2023 Earnings Per Share

    Source: Nasdaq GlobeNewswire / 25 Apr 2023 08:00:18   America/New_York

    MUNCIE, Ind., April 25, 2023 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME)

    First Quarter 2023 Highlights:

    • Net income available to common stockholders was $63.6 million for the first quarter and diluted earnings per common share totaled $1.07, compared to $48.6 million and $.91 in the first quarter of 2022, and $70.3 million and $1.19 in the fourth quarter of 2022.
    • Adjusted net income available to common stockholders1 for the first quarter was $63.6 million and adjusted diluted earnings per common share1 totaled $1.07, compared to $47.3 million and $.88 in the first quarter of 2022, and $70.5 million and $1.19 in the fourth quarter of 2022.
    • Strong liquidity and capital with Common Equity Tier 1 Capital Ratio of 10.82%.
    • Deposit growth of $320.5 million, or 8.9% annualized on a linked quarter basis.
    • Total loans grew $237.9 million, or 7.9% annualized on a linked quarter basis.
    • Non-accrual loans totaled $46.6 million compared to $42.3 million on a linked quarter basis.
    • The efficiency ratio totaled 51.72% for the quarter.

    Mark Hardwick, Chief Executive Officer, stated, “Given the disruption in the banking industry, we are pleased to share a quarter-end balance sheet that reflects a very safe and sound institution with continued growth. Loans, Deposits, on-hand liquidity and capital all improved over year-end. We prioritized enhancing our liquidity position during the quarter while also meeting the demands of the customer base. Our team of bankers have been true brand ambassadors during the quarter by showing poise and confidence throughout the communities we serve. We remain focused on delivering our plan for the year.”

    First Quarter Financial Results:

    First Merchants Corporation (the “Corporation) has reported first quarter 2023 net income available to common stockholders of $63.6 million compared to $48.6 million during the same period in 2022. Earnings per share for the period totaled $1.07 per share compared to the first quarter of 2022 result of $.91 per share.

    Total assets equaled $18.2 billion as of quarter-end and loans totaled $12.3 billion. Total loans increased $2.9 billion during the past twelve months. The acquisition of Level One contributed $1.6 billion of loans. Excluding acquired loans and PPP forgiveness, the Corporation experienced organic loan growth of $1.3 billion, or 14.4 percent, during the past twelve months. This was offset by the forgiveness of PPP loans of $88.5 million. Total loans grew organically $237.9 or 7.9% annualized on a linked quarter basis.

    Investments, totaling $4.1 billion, decreased $431.9 million, or 9.6 percent, during the last twelve months and decreased $206.4 million or 19.4% annualized on a linked quarter basis.

    Total deposits equaled $14.7 billion as of quarter-end and increased by $1.8 billion over the past twelve months. The acquisition of Level One contributed $1.9 billion in deposits resulting in an organic deposit decline of $133.5 million or 1.0%. Total deposits grew $320.5 million or 8.9% annualized on a linked quarter basis. The loan to deposit ratio for the current quarter ended at 83.3 percent.

    The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $223.1 million as of quarter-end, or 1.82 percent of total loans, an increase of $27.1 million over prior year due to the acquisition of Level One. Loan charge offs, net of recoveries, for the quarter totaled $0.2 million. No provision expense was recorded during the quarter or during the last twelve months other than CECL Day 1 expense of $16.8 million due to the acquisition of Level One. Non-performing assets to total assets were 0.30% for the first quarter of 2023, a decrease of two basis points compared to 0.32% in the first quarter of 2022.

    Net-interest income, totaling $144.1 million for the quarter, declined $4.9 million, or 3.3 percent, compared to prior quarter and increased $41.8 million, or 40.9 percent compared to the first quarter of 2022. Stated net-interest margin on a tax equivalent basis, totaling 3.58 percent, declined by 14 basis points compared to the fourth quarter of 2022 and increased 55 basis points compared to the first quarter of 2022. Net-interest margin excluding the impact of fair value accretion and PPP loans totaled 3.52%, a decrease of 13 basis points compared to 3.65% for the fourth quarter of 2022 and an increase of 55 basis points from the first quarter of 2022. During the quarter, increased deposit costs and mix offset the increase in earning asset yields causing a reduction of margin of eight basis points. The lower day count in the quarter caused a decline of five basis points.

    Non-interest income, totaling $25.0 million for the quarter, increased $0.9 million compared to the fourth quarter of 2022 and decreased $0.9 million from the first quarter of 2022. The increase over the fourth quarter of 2022 was driven primarily by higher card payment fees, derivative hedge fees, offset by losses on the sale of available for sale securities.

    Non-interest expense totaled $93.7 million for the quarter, an increase of $4.0 million from the fourth quarter of 2022. The increase was primarily due to higher salaries, incentives and employee benefits offset by lower marketing expenses and FDIC assessments. A one-time FDIC assessment credit of approximately $2.0 million was recorded lowering overall FDIC assessment cost for the quarter. Additionally, gains on the sales of properties were recorded in the fourth quarter and reflected in Other Expenses that did not recur in the current quarter, causing a negative quarter-over quarter variance.

    The Corporation’s total risk-based capital ratio equaled 13.23 percent, common equity tier 1 capital ratio equaled 10.82 percent, and the tangible common equity ratio totaled 7.75 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 10:30 a.m. (ET) on Tuesday, April 25, 2023.

    To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: (https://register.vevent.com/register/BI257d3b7683714a4382f8765266a99667)

    In order to view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/trq9ekv4) during the time of the call. A replay of the webcast will be available until April 25, 2024.

    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 (including the ability to grow and maintain core deposits and retain large, uninsured deposits), 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,
      2023   2022 
    ASSETS   
    Cash and due from banks$125,818  $148,277 
    Interest-bearing deposits 352,695   395,262 
    Investment securities, net of allowance for credit losses of $245,000 and $245,000 4,057,389   4,489,263 
    Loans held for sale 9,408   3,938 
    Loans 12,241,461   9,356,241 
    Less: Allowance for credit losses - loans (223,052)  (195,984)
    Net loans 12,018,409   9,160,257 
    Premises and equipment 115,857   105,883 
    Federal Home Loan Bank stock 41,878   26,422 
    Interest receivable 85,515   56,081 
    Goodwill and other intangibles 745,647   569,494 
    Cash surrender value of life insurance 309,090   291,881 
    Other real estate owned 7,777   6,271 
    Tax asset, deferred and receivable 103,070   73,422 
    Other assets 206,355   138,807 
    TOTAL ASSETS$18,178,908  $15,465,258 
    LIABILITIES   
    Deposits:   
    Noninterest-bearing$2,964,355  $2,745,235 
    Interest-bearing 11,738,932   10,160,718 
    Total Deposits 14,703,287   12,905,953 
    Borrowings:   
    Federal funds purchased 20   — 
    Securities sold under repurchase agreements 179,067   169,697 
    Federal Home Loan Bank advances 823,577   308,960 
    Subordinated debentures and other borrowings 151,312   118,677 
    Total Borrowings 1,153,976   597,334 
    Interest payable 11,979   3,589 
    Other liabilities 187,218   150,749 
    Total Liabilities 16,056,460   13,657,625 
    STOCKHOLDERS' EQUITY   
    Preferred Stock, $1,000 par value, $1,000 liquidation value:   
    Authorized -- 600 cumulative shares   
    Issued and outstanding - 125 cumulative shares 125   125 
    Preferred Stock, Series A, no par value, $2,500 liquidation preference:   
    Authorized -- 10,000 non-cumulative perpetual shares   
    Issued and outstanding - 10,000 non-cumulative perpetual shares 25,000   — 
    Common Stock, $.125 stated value:   
    Authorized -- 100,000,000 shares   
    Issued and outstanding - 59,257,051 and 53,424,823 shares 7,407   6,678 
    Additional paid-in capital 1,231,532   987,404 
    Retained earnings 1,057,298   897,818 
    Accumulated other comprehensive loss (198,914)  (84,392)
    Total Stockholders' Equity 2,122,448   1,807,633 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$18,178,908  $15,465,258 


    CONSOLIDATED STATEMENTS OF INCOMEThree Months Ended
    (Dollars In Thousands, Except Per Share Amounts)March 31,
      2023   2022
    INTEREST INCOME   
    Loans receivable:   
    Taxable$172,353  $79,075
    Tax-exempt 7,709   5,704
    Investment securities:   
    Taxable 9,087   8,510
    Tax-exempt 16,070   15,875
    Deposits with financial institutions 637   230
    Federal Home Loan Bank stock 542   146
    Total Interest Income 206,398   109,540
    INTEREST EXPENSE   
    Deposits 50,685   4,294
    Federal funds purchased 1,297   —
    Securities sold under repurchase agreements 848   89
    Federal Home Loan Bank advances 7,064   1,218
    Subordinated debentures and other borrowings 2,385   1,659
    Total Interest Expense 62,279   7,260
    NET INTEREST INCOME 144,119   102,280
    Provision for credit losses - loans —   —
    NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 144,119   102,280
    NON-INTEREST INCOME   
    Service charges on deposit accounts 7,359   6,419
    Fiduciary and wealth management fees 7,862   7,332
    Card payment fees 5,172   5,723
    Net gains and fees on sales of loans 2,399   2,199
    Derivative hedge fees 1,148   918
    Other customer fees 517   410
    Earnings on cash surrender value of life insurance 1,288   1,696
    Net realized gains (losses) on sales of available for sale securities (1,571)  566
    Other income 823   634
    Total Non-Interest Income 24,997   25,897
    NON-INTEREST EXPENSES   
    Salaries and employee benefits 57,459   42,519
    Net occupancy 7,259   6,187
    Equipment 6,126   5,080
    Marketing 1,309   736
    Outside data processing fees 6,113   4,363
    Printing and office supplies 383   345
    Intangible asset amortization 2,197   1,366
    FDIC assessments 1,396   2,192
    Other real estate owned and foreclosure expenses (18)  564
    Professional and other outside services 3,698   2,953
    Other expenses 7,798   6,020
    Total Non-Interest Expenses 93,720   72,325
    INCOME BEFORE INCOME TAX 75,396   55,852
    Income tax expense 11,317   7,266
    NET INCOME 64,079   48,586
    Preferred stock dividends 469   —
    NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$63,610  $48,586
    Per Share Data:   
    Basic Net Income Available to Common Stockholders$1.07  $0.91
    Diluted Net Income Available to Common Stockholders$1.07  $0.91
    Cash Dividends Paid to Common Stockholders$0.32  $0.29
    Average Diluted Common Shares Outstanding (in thousands) 59,441   53,616


    FINANCIAL HIGHLIGHTS   
    (Dollars in thousands)Three Months Ended
     March 31,
      2023   2022 
    NET CHARGE-OFFS (RECOVERIES)$225  $(587)
        
    AVERAGE BALANCES:   
    Total Assets$18,022,195  $15,464,605 
    Total Loans 12,135,384   9,255,928 
    Total Earning Assets 16,824,407   14,262,777 
    Total Deposits 14,423,409   12,817,690 
    Total Stockholders' Equity 2,083,125   1,891,223 
        
    FINANCIAL RATIOS:   
    Return on Average Assets 1.42%  1.26%
    Return on Average Stockholders' Equity 12.21   10.28 
    Return on Tangible Common Stockholders' Equity 19.82   14.99 
    Average Earning Assets to Average Assets 93.35   92.23 
    Allowance for Credit Losses - Loans as % of Total Loans 1.82   2.09 
    Net Charge-offs as % of Average Loans (Annualized) 0.01   (0.03)
    Average Stockholders' Equity to Average Assets 11.56   12.23 
    Tax Equivalent Yield on Average Earning Assets 5.06   3.23 
    Interest Expense/Average Earning Assets 1.48   0.20 
    Net Interest Margin (FTE) on Average Earning Assets 3.58   3.03 
    Efficiency Ratio 51.72   52.79 
    Tangible Common Book Value Per Share$22.93  $23.26 


    NON-PERFORMING ASSETS         
    (Dollars In Thousands)March 31, December 31, September 30, June 30, March 31,
      2023   2022   2022   2022   2022 
    Non-Accrual Loans$46,576  $42,324  $43,508  $45,970  $42,698 
    Troubled Debt Restructures (TDR) —   224   195   233   141 
    Non-Performing Loans (NPL) 46,576   42,548   43,703   46,203   42,839 
    Other Real Estate Owned and Repossessions 7,777   6,431   6,454   6,521   6,271 
    Non-Performing Assets (NPA) 54,353   48,979   50,157   52,724   49,110 
    90+ Days Delinquent 7,032   1,737   764   592   2,085 
    NPAs & 90 Day Delinquent$61,385  $50,716  $50,921  $53,316  $51,195 
              
    Allowance for Credit Losses - Loans$223,052  $223,277  $226,702  $226,275  $195,984 
    Quarterly Net Charge-offs (Recoveries) 225   2,674   (427)  263   (587)
    NPAs / Actual Assets % 0.30%  0.27%  0.28%  0.30%  0.32%
    NPAs & 90 Day / Actual Assets % 0.34%  0.28%  0.29%  0.30%  0.33%
    NPAs / Actual Loans and OREO % 0.44%  0.41%  0.43%  0.46%  0.52%
    Allowance for Credit Losses - Loans / Actual Loans (%) 1.82%  1.86%  1.94%  1.98%  2.09%
    Net Charge-offs (Recoveries) as % of Average Loans (Annualized) 0.01%  0.12%  (0.01)%  0.01%  (0.03)%


    CONSOLIDATED BALANCE SHEETS         
    (Dollars In Thousands)March 31, December 31, September 30, June 30, March 31,
      2023   2022   2022   2022   2022 
    ASSETS         
    Cash and due from banks$125,818  $122,594  $119,532  $212,559  $148,277 
    Interest-bearing deposits 352,695   126,061   179,593   136,702   395,262 
    Investment securities, net of allowance for credit losses 4,057,389   4,263,788   4,294,768   4,630,030   4,489,263 
    Loans held for sale 9,408   9,094   25,394   9,060   3,938 
    Loans 12,241,461   12,003,894   11,650,002   11,397,417   9,356,241 
    Less: Allowance for credit losses - loans (223,052)  (223,277)  (226,702)  (226,275)  (195,984)
    Net loans 12,018,409   11,780,617   11,423,300   11,171,142   9,160,257 
    Premises and equipment 115,857   117,118   116,306   117,757   105,883 
    Federal Home Loan Bank stock 41,878   38,525   38,056   38,111   26,422 
    Interest receivable 85,515   85,070   71,605   68,728   56,081 
    Goodwill and other intangibles 745,647   747,844   750,713   753,649   569,494 
    Cash surrender value of life insurance 309,090   308,311   306,932   323,013   291,881 
    Other real estate owned 7,777   6,431   6,454   6,521   6,271 
    Tax asset, deferred and receivable 103,070   111,222   142,110   114,965   73,422 
    Other assets 206,355   221,631   244,222   198,255   138,807 
    TOTAL ASSETS$18,178,908  $17,938,306  $17,718,985  $17,780,492  $15,465,258 
    LIABILITIES         
    Deposits:         
    Noninterest-bearing$2,964,355  $3,173,417  $3,356,651  $3,435,331  $2,745,235 
    Interest-bearing 11,738,932   11,209,328   11,078,174   11,135,538   10,160,718 
    Total Deposits 14,703,287   14,382,745   14,434,825   14,570,869   12,905,953 
    Borrowings:         
    Federal funds purchased 20   171,560   185,000   100,000   — 
    Securities sold under repurchase agreements 179,067   167,413   194,482   186,468   169,697 
    Federal Home Loan Bank advances 823,577   823,674   643,769   598,865   308,960 
    Subordinated debentures and other borrowings 151,312   151,298   151,301   151,299   118,677 
    Total Borrowings 1,153,976   1,313,945   1,174,552   1,036,632   597,334 
    Interest payable 11,979   7,530   4,971   2,978   3,589 
    Other liabilities 187,218   199,316   197,971   192,372   150,749 
    Total Liabilities 16,056,460   15,903,536   15,812,319   15,802,851   13,657,625 
    STOCKHOLDERS' EQUITY         
    Preferred Stock, $1,000 par value, $1,000 liquidation value:         
    Authorized -- 600 cumulative shares         
    Issued and outstanding - 125 cumulative shares 125   125   125   125   125 
    Preferred Stock, Series A, no par value, $2,500 liquidation preference:         
    Authorized -- 10,000 non-cumulative perpetual shares         
    Issued and outstanding - 10,000 non-cumulative perpetual shares 25,000   25,000   25,000   25,000   — 
    Common Stock, $.125 stated value:         
    Authorized -- 100,000,000 shares         
    Issued and outstanding 7,407   7,396   7,393   7,383   6,678 
    Additional paid-in capital 1,231,532   1,228,626   1,226,695   1,226,378   987,404 
    Retained earnings 1,057,298   1,012,774   961,542   917,311   897,818 
    Accumulated other comprehensive loss (198,914)  (239,151)  (314,089)  (198,556)  (84,392)
    Total Stockholders' Equity 2,122,448   2,034,770   1,906,666   1,977,641   1,807,633 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$18,178,908  $17,938,306  $17,718,985  $17,780,492  $15,465,258 
              


    CONSOLIDATED STATEMENTS OF INCOME         
    (Dollars In Thousands, Except Per Share Amounts)March December 31, September 30, June 30, March 31,
      2023   2022   2022   2022   2022 
    INTEREST INCOME         
    Loans receivable:         
    Taxable$172,353  $156,102  $128,504  $106,787  $79,075 
    Tax-exempt 7,709   6,930   6,500   5,990   5,704 
    Investment securities:         
    Taxable 9,087   9,417   10,055   10,372   8,510 
    Tax-exempt 16,070   17,033   17,261   17,212   15,875 
    Deposits with financial institutions 637   959   704   610   230 
    Federal Home Loan Bank stock 542   541   314   175   146 
    Total Interest Income 206,398   190,982   163,338   141,146   109,540 
    INTEREST EXPENSE         
    Deposits 50,685   33,516   16,644   8,485   4,294 
    Federal funds purchased 1,297   808   418   76   — 
    Securities sold under repurchase agreements 848   541   372   134   89 
    Federal Home Loan Bank advances 7,064   4,932   3,493   1,774   1,218 
    Subordinated debentures and other borrowings 2,385   2,229   2,105   2,016   1,659 
    Total Interest Expense 62,279   42,026   23,032   12,485   7,260 
    NET INTEREST INCOME 144,119   148,956   140,306   128,661   102,280 
    Provision for credit losses - loans —   —   —   16,755   — 
    NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 144,119   148,956   140,306   111,906   102,280 
    NON-INTEREST INCOME         
    Service charges on deposit accounts 7,359   7,097   7,165   7,690   6,419 
    Fiduciary and wealth management fees 7,862   7,501   7,221   7,634   7,332 
    Card payment fees 5,172   4,533   4,776   5,175   5,723 
    Net gains and fees on sales of loans 2,399   2,087   2,543   3,226   2,199 
    Derivative hedge fees 1,148   326   700   1,444   918 
    Other customer fees 517   362   501   662   410 
    Earnings on cash surrender value of life insurance 1,288   1,515   6,655   1,308   1,696 
    Net realized gains (losses) on sales of available for sale securities (1,571)  57   481   90   566 
    Other income (loss) 823   672   (425)  1,048   634 
    Total Non-Interest Income 24,997   24,150   29,617   28,277   25,897 
    NON-INTEREST EXPENSES         
    Salaries and employee benefits 57,459   52,331   56,002   56,041   42,519 
    Net occupancy 7,259   6,638   6,738   6,648   6,187 
    Equipment 6,126   6,148   5,997   6,720   5,080 
    Marketing 1,309   3,157   2,401   1,414   736 
    Outside data processing fees 6,113   5,611   6,827   4,881   4,363 
    Printing and office supplies 383   390   472   381   345 
    Intangible asset amortization 2,197   2,303   2,303   2,303   1,366 
    FDIC assessments 1,396   2,295   2,824   2,924   2,192 
    Other real estate owned and foreclosure expenses (18)  197   328   (266)  564 
    Professional and other outside services 3,698   3,961   4,461   10,267   2,953 
    Other expenses 7,798   6,668   8,025   6,000   6,020 
    Total Non-Interest Expenses 93,720   89,699   96,378   97,313   72,325 
    INCOME BEFORE INCOME TAX 75,396   83,407   73,545   42,870   55,852 
    Income tax expense 11,317   12,647   9,793   3,879   7,266 
    NET INCOME 64,079   70,760   63,752   38,991   48,586 
    Preferred stock dividends 469   468   469   469   — 
    NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$63,610  $70,292  $63,283  $38,522  $48,586 
    Per Share Data:         
    Basic Net Income Available to Common Stockholders$1.07  $1.20  $1.08  $0.64  $0.91 
    Diluted Net Income Available to Common Stockholders$1.07  $1.19  $1.08  $0.63  $0.91 
    Cash Dividends Paid to Common Stockholders$0.32  $0.32  $0.32  $0.32  $0.29 
    Average Diluted Common Shares Outstanding (in thousands) 59,441   59,384   59,339   59,308   53,616 
    FINANCIAL RATIOS:         
    Return on Average Assets 1.42%  1.59%  1.43%  0.88%  1.26%
    Return on Average Stockholders' Equity 12.21   14.36   12.54   7.62   10.28 
    Return on Tangible Common Stockholders' Equity 19.82   24.21   20.85   12.91   14.99 
    Average Earning Assets to Average Assets 93.35   93.66   92.90   92.45   92.23 
    Allowance for Credit Losses - Loans as % of Total Loans 1.82   1.86   1.94   1.98   2.09 
    Net Charge-offs (Recoveries) as % of Average Loans (Annualized) 0.01   0.12   (0.01)  0.01   (0.03)
    Average Stockholders' Equity to Average Assets 11.56   10.98   11.36   11.37   12.23 
    Tax Equivalent Yield on Average Earning Assets 5.06   4.73   4.11   3.58   3.23 
    Interest Expense/Average Earning Assets 1.48   1.01   0.56   0.30   0.20 
    Net Interest Margin (FTE) on Average Earning Assets 3.58   3.72   3.55   3.28   3.03 
    Efficiency Ratio 51.72   48.60   53.34   58.45   52.79 
    Tangible Common Book Value Per Share$22.93  $21.45  $19.26  $20.45  $23.26 


    LOANS         
    (Dollars In Thousands)March 31, December 31, September 30, June 30, March 31,
      2023   2022   2022   2022   2022 
    Commercial and industrial loans$3,502,204  $3,437,126  $3,330,529  $3,297,477  $2,826,660 
    Agricultural land, production and other loans to farmers 219,598   241,793   221,954   214,904   209,077 
    Real estate loans:         
    Construction 960,979   835,582   828,923   745,983   552,975 
    Commercial real estate, non-owner occupied 2,375,410   2,407,475   2,299,272   2,423,185   2,073,197 
    Commercial real estate, owner occupied 1,244,117   1,246,528   1,268,567   1,264,563   974,521 
    Residential 2,185,943   2,096,655   1,990,668   1,813,297   1,226,695 
    Home equity 621,354   630,632   621,619   586,108   512,641 
    Individuals' loans for household and other personal expenditures 172,389   175,211   173,225   157,264   147,593 
    Public finance and other commercial loans 959,467   932,892   915,245   894,636   832,882 
    Loans 12,241,461   12,003,894   11,650,002   11,397,417   9,356,241 
    Allowance for credit losses - loans (223,052)  (223,277)  (226,702)  (226,275)  (195,984)
    NET LOANS$12,018,409  $11,780,617  $11,423,300  $11,171,142  $9,160,257 


    DEPOSITS         
    (Dollars In Thousands)March 31, December 31, September 30, June 30, March 31,
      2023  2022  2022  2022  2022
    Demand deposits$8,422,387 $8,448,797 $8,534,950 $8,785,889 $7,806,033
    Savings deposits 4,499,487  4,657,140  5,054,490  4,875,880  4,444,417
    Certificates and other time deposits of $100,000 or more 1,040,379  742,539  443,588  436,942  252,033
    Other certificates and time deposits 574,886  468,712  381,365  446,973  380,293
    Brokered certificates of deposits 166,148  65,557  20,432  25,185  23,177
    TOTAL DEPOSITS$14,703,287 $14,382,745 $14,434,825 $14,570,869 $12,905,953


    CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS      
    (Dollars in Thousands)           
     For the Three Months Ended
     March 31, 2023 March 31, 2022
     Average
    Balance    		 Interest
    Income /
    Expense    		 Average
    Rate    		 Average
    Balance    		 Interest
    Income /
    Expense    		 Average
    Rate
    ASSETS           
    Interest-bearing deposits$172,814 $637 1.47% $484,626 $230 0.19%
    Federal Home Loan Bank stock 39,759  542 5.45   27,914  146 2.09 
    Investment securities:(1)           
    Taxable 1,924,079  9,087 1.89   1,957,675  8,510 1.74 
    Tax-exempt(2) 2,552,371  20,342 3.19   2,536,634  20,095 3.17 
    Total Investment Securities 4,476,450  29,429 2.63   4,494,309  28,605 2.55 
    Loans held for sale 23,538  360 6.12   4,352  40 3.68 
    Loans:(3)           
    Commercial 8,483,879  139,661 6.58   6,868,438  64,679 3.77 
    Real estate mortgage 1,914,640  18,391 3.84   924,268  7,840 3.39 
    Installment 840,450  13,941 6.64   711,038  6,516 3.67 
    Tax-exempt(2) 872,877  9,758 4.47   747,832  7,220 3.86 
    Total Loans 12,135,384  182,111 6.00   9,255,928  86,295 3.73 
    Total Earning Assets 16,824,407  212,719 5.06%  14,262,777  115,276 3.23%
    Total Non-Earning Assets 1,197,788      1,201,828    
    TOTAL ASSETS$18,022,195     $15,464,605    
    LIABILITIES           
    Interest-bearing deposits:           
    Interest-bearing deposits$5,263,601 $24,662 1.87% $5,027,466 $2,408 0.19%
    Money market deposits 2,746,047  13,577 1.98   2,514,429  872 0.14 
    Savings deposits 1,826,209  2,965 0.65   1,867,411  441 0.09 
    Certificates and other time deposits 1,466,275  9,481 2.59   676,661  573 0.34 
    Total Interest-Bearing Deposits 11,302,132  50,685 1.79   10,085,967  4,294 0.17 
    Borrowings: 1,293,309  11,594 3.59   616,572  2,966 1.92 
    Total Interest-Bearing Liabilities 12,595,441  62,279 1.98   10,702,539  7,260 0.27 
    Noninterest-bearing deposits 3,121,277      2,731,723    
    Other liabilities 222,352      139,120    
    Total Liabilities 15,939,070      13,573,382    
    STOCKHOLDERS' EQUITY 2,083,125      1,891,223    
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$18,022,195  62,279   $15,464,605  7,260  
    Net Interest Income (FTE)  $150,440     $108,016  
    Net Interest Spread (FTE)(4)    3.08%     2.96%
                
    Net Interest Margin (FTE):           
    Interest Income (FTE) / Average Earning Assets    5.06%     3.23%
    Interest Expense / Average Earning Assets    1.48%     0.20%
    Net Interest Margin (FTE)(5)    3.58%     3.03%
                
    (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 2023 and 2022. These totals equal $6,321 and $5,736 for the three months ended March 31, 2023 and 2022, 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") AND ACQUISITION-RELATED EXPENSES - NON-GAAP
    (Dollars In Thousands, Except Per Share Amounts)Three Months Ended
     March 31, December 31, September 30, June 30, March 31,
      2023   2022   2022   2022   2022 
    Net Income Available to Common Stockholders - GAAP$63,610  $70,292  $63,283  $38,522  $48,586 
    Adjustments:         
    PPP loan income (25)  (109)  (323)  (891)  (1,884)
    Acquisition-related expenses —   413   3,417   12,549   152 
    Acquisition-related provision expense —   —   —   16,755   — 
    Tax on adjustment 6   (75)  (759)  (6,967)  425 
    Adjusted Net Income Available to Common Stockholders - Non-GAAP$63,591  $70,521  $65,618  $59,968  $47,279 
              
    Average Diluted Common Shares Outstanding (in thousands) 59,441   59,384   59,339   59,308   53,616 
              
    Diluted Earnings Per Common Share - GAAP$1.07  $1.19  $1.08  $0.63  $0.91 
    Adjustments:         
    PPP loan income —   (0.01)  —   (0.01)  (0.04)
    Acquisition-related expenses —   0.01   0.05   0.22   — 
    Acquisition-related provision expense —   —   —   0.30   — 
    Tax on adjustment —   —   (0.01)  (0.13)  0.01 
    Adjusted Diluted Earnings Per Common Share - Non-GAAP$1.07  $1.19  $1.12  $1.01  $0.88 


    RETURN ON TANGIBLE COMMON EQUITY         
    (Dollars In Thousands)Three Months Ended
     March 31, December 31, September 30, June 30, March 31,
      2023   2022   2022   2022   2022 
    Total Average Stockholders' Equity (GAAP)$2,083,125  $1,958,041  $2,018,156  $2,021,123  $1,891,223 
    Less: Average Preferred Stock (25,125)  (25,125)  (25,125)  (25,125)  (125)
    Less: Average Intangible Assets, Net of Tax (739,190)  (741,632)  (744,069)  (745,614)  (565,476)
    Average Tangible Common Equity, Net of Tax (Non-GAAP)$1,318,810  $1,191,284  $1,248,962  $1,250,384  $1,325,622 
              
    Net Income Available to Common Stockholders (GAAP)$63,610  $70,292  $63,283  $38,521  $48,586 
    Plus: Intangible Asset Amortization, Net of Tax 1,734   1,819   1,819   1,820   1,079 
    Tangible Net Income (Non-GAAP)$65,344  $72,111  $65,102  $40,341  $49,665 
              
    Return on Tangible Common Equity (Non-GAAP) 19.82%  24.21%  20.85%  12.91%  14.99%

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


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