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First Merchants Corporation Announces Third Quarter 2024 Earnings per Share
ソース: Nasdaq GlobeNewswire / 24 10 2024 08:00:40 America/New_York
MUNCIE, Ind., Oct. 24, 2024 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME)
Third Quarter 2024 Highlights:
- Net income available to common stockholders was $48.7 million and diluted earnings per common share totaled $0.84, compared to $55.9 million and $0.94 in the third quarter of 2023, and $39.5 million and $0.68 in the second quarter of 2024. Excluding the loss from repositioning of the available for sale securities portfolio, adjusted net income was $55.6 million or $0.95 per share for the third quarter of 2024.
- Strong capital position with Common Equity Tier 1 Capital Ratio of 11.25% and Tangible Common Equity to Tangible Assets Ratio of 8.76%.
- Net interest margin was 3.23% compared to 3.16% on a linked quarter basis.
- Total loans grew $15.5 million, or 0.5% annualized, on a linked quarter basis, and $385.1 million, or 3.1% during the last twelve months.
- Total deposits grew by $83.7 million, or 2.3% annualized, on a linked quarter basis after normalizing for $287.7 million of deposits reclassified to held for sale.
- Nonperforming assets to total assets were 35 basis points compared to 36 basis points on a linked quarter basis.
- The efficiency ratio totaled 53.76% for the quarter.
- Announced sale of five Illinois branches and certain loans and deposits to Old Second National Bank on August 27, 2024.
“We are pleased with our third quarter results and the focused momentum that we are building,” said Mark Hardwick, Chief Executive Officer. "The pending sale of five non-core Illinois branches, restructure of the securities portfolio, and successful completion of four major technology initiatives provides us with the opportunity to reprioritize our core markets and introduce innovative customer acquisition strategies.”
Third Quarter Financial Results:
First Merchants Corporation (the “Corporation”) has reported third quarter 2024 net income available to common stockholders of $48.7 million compared to $55.9 million during the same period in 2023. Diluted earnings per common share for the period totaled $0.84 compared to the third quarter of 2023 result of $0.94. Excluding the $9.1 million pre-tax loss from repositioning of the available for sale securities portfolio, adjusted net income was $55.6 million, or $0.95 diluted earnings per common share for the third quarter of 2024.
During the quarter, the Corporation signed a definitive agreement to sell five Illinois branches along with certain loans and deposits, representing an exit from suburban Chicago markets. Loans of $9.2 million, deposits of $287.7 million and fixed assets of $3.4 million have been moved to held for sale categories as of September 30, 2024. The transaction is expected to close in the fourth quarter of this year.
Total assets equaled $18.3 billion as of quarter-end and loans totaled $12.7 billion. During the past twelve months, total loans grew by $385.1 million, or 3.1%. On a linked quarter basis, loans grew $15.5 million, or 0.5%, with growth primarily in commercial & industrial loans.
Investments totaling $3.7 billion decreased $51.6 million, or 1.4%, during the last twelve months and decreased $90.9 million, or 9.7% annualized, on a linked quarter basis. The decline during the quarter was due to $158.9 million in sales of available for sale securities with a weighted average tax-equivalent yield of 2.85%, partially offset by an increase in the securities portfolio valuation.
Total deposits were $14.4 billion as of quarter-end and decreased by $281.5 million, or 1.9%, over the past twelve months. The decline was primarily due to $287.7 million of deposits being reclassified to held for sale. Excluding this impact, deposits increased by $6.2 million. On a linked quarter basis, deposits grew organically by $83.7 million or 2.3%. The loan to deposit ratio increased to 88.0% at period end from 86.8% in the prior quarter, primarily due to the reclassification of deposits to held for sale as previously described.
The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $187.8 million as of quarter-end, or 1.48% of total loans, a decrease of $1.7 million from prior quarter. Loan charge-offs, net of recoveries totaled $6.7 million and provision for loans of $5.0 million was recorded during the quarter. Reserves for unfunded commitments totaled $19.5 million and remained unchanged from the prior quarter. Non-performing assets to total assets were 35 basis points for the third quarter of 2024, a decrease of one basis point compared to 36 basis points in the prior quarter.
Net interest income totaled $131.1 million for the quarter, an increase of $2.5 million, or 2.0%, compared to prior quarter and a decrease of $2.3 million, or 1.7%, compared to the third quarter of 2023. Fully-tax equivalent net interest margin was 3.23%, an increase of 7 basis points compared to the second quarter of 2024, and a decrease of 6 basis points compared to the third quarter of 2023. The increase in net interest margin compared to the second quarter was due to higher earning asset yields.
Non-interest income totaled $24.9 million for the quarter, a decrease of $6.5 million, or 20.6%, compared to the second quarter of 2024 and a decrease of $3.0 million, or 6.7% from the third quarter of 2023. The decrease from second quarter of 2024 was driven by realized losses on sales of available for sale securities associated with the repositioning of the bond portfolio, partially offset by increases in gains on sales of mortgage loans and earnings on cash surrender value of life insurance.
Non-interest expense totaled $94.6 million for the quarter, an increase of $3.2 million from the second quarter of 2024 and an increase of $0.8 million from the third quarter of 2023. The increase from the linked quarter was from higher salaries and employee benefits primarily driven by higher incentives.
The Corporation’s total risk-based capital ratio equaled 13.18%, common equity tier 1 capital ratio equaled 11.25%, and the tangible common equity ratio totaled 8.76%. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.
CONFERENCE CALL
First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 11:30 a.m. (ET) on Thursday, October 24, 2024.
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/BI34430e309ed545808c7c8195f36e86b6)
To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/6grv3upw) during the time of the call. A replay of the webcast will be available until October 24, 2025.
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 about 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) September 30, 2024 2023 ASSETS Cash and due from banks $ 84,719 $ 125,173 Interest-bearing deposits 359,126 348,639 Investment securities, net of allowance for credit losses of $245,000 and $245,000 3,662,145 3,713,724 Loans held for sale 40,652 30,972 Loans 12,646,808 12,271,422 Less: Allowance for credit losses - loans (187,828 ) (205,782 ) Net loans 12,458,980 12,065,640 Premises and equipment 129,582 132,441 Federal Home Loan Bank stock 41,716 41,797 Interest receivable 92,055 90,011 Goodwill and other intangibles 733,601 741,283 Cash surrender value of life insurance 304,613 306,106 Other real estate owned 5,247 6,480 Tax asset, deferred and receivable 86,732 135,521 Other assets 348,384 340,476 TOTAL ASSETS $ 18,347,552 $ 18,078,263 LIABILITIES Deposits: Noninterest-bearing $ 2,334,197 $ 2,554,984 Interest-bearing 12,030,903 12,091,592 Total Deposits 14,365,100 14,646,576 Borrowings: Federal funds purchased 30,000 — Securities sold under repurchase agreements 124,894 152,537 Federal Home Loan Bank advances 832,629 713,384 Subordinated debentures and other borrowings 93,562 158,665 Total Borrowings 1,081,085 1,024,586 Deposits and other liabilities held for sale 288,476 — Interest payable 18,089 16,473 Other liabilities 292,429 297,984 Total Liabilities 16,045,179 15,985,619 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 25,000 Common Stock, $.125 stated value: Authorized -- 100,000,000 shares Issued and outstanding - 58,117,115 and 59,398,022 shares 7,265 7,425 Additional paid-in capital 1,192,683 1,234,402 Retained earnings 1,229,125 1,132,962 Accumulated other comprehensive loss (151,825 ) (307,270 ) Total Stockholders' Equity 2,302,373 2,092,644 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,347,552 $ 18,078,263 CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Nine Months Ended (Dollars In Thousands, Except Per Share Amounts) September 30, September 30, 2024 2023 2024 2023 INTEREST INCOME Loans receivable: Taxable $ 206,680 $ 191,705 $ 606,116 $ 550,314 Tax-exempt 8,622 8,288 25,242 23,757 Investment securities: Taxable 9,263 8,590 27,062 26,563 Tax-exempt 13,509 13,947 40,733 44,296 Deposits with financial institutions 2,154 5,884 11,642 9,685 Federal Home Loan Bank stock 855 719 2,569 2,281 Total Interest Income 241,083 229,133 713,364 656,896 INTEREST EXPENSE Deposits 98,856 85,551 296,292 209,437 Federal funds purchased 329 — 455 1,420 Securities sold under repurchase agreements 700 797 2,377 2,624 Federal Home Loan Bank advances 8,544 6,896 21,715 20,775 Subordinated debentures and other borrowings 1,544 2,506 5,781 7,303 Total Interest Expense 109,973 95,750 326,620 241,559 NET INTEREST INCOME 131,110 133,383 386,744 415,337 Provision for credit losses 5,000 2,000 31,500 2,000 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 126,110 131,383 355,244 413,337 NONINTEREST INCOME Service charges on deposit accounts 8,361 7,975 24,482 23,147 Fiduciary and wealth management fees 8,525 7,394 25,550 22,653 Card payment fees 5,121 4,716 14,360 14,425 Net gains and fees on sales of loans 6,764 5,517 15,159 11,548 Derivative hedge fees 736 516 1,488 2,336 Other customer fees 344 384 1,231 1,643 Earnings on cash surrender value of life insurance 2,755 1,761 6,276 5,145 Net realized losses on sales of available for sale securities (9,114 ) (1,650 ) (9,165 ) (4,613 ) Other income 1,374 1,229 3,457 2,874 Total Noninterest Income 24,866 27,842 82,838 79,158 NONINTEREST EXPENSES Salaries and employee benefits 55,223 55,566 165,730 167,778 Net occupancy 6,994 6,837 21,052 20,770 Equipment 6,949 5,698 19,774 18,005 Marketing 1,836 2,369 4,807 4,780 Outside data processing fees 7,150 6,573 21,111 19,290 Printing and office supplies 378 333 1,085 1,150 Intangible asset amortization 1,772 2,182 5,500 6,561 FDIC assessments 3,720 2,981 11,285 7,117 Other real estate owned and foreclosure expenses 942 677 1,849 1,575 Professional and other outside services 3,035 3,833 10,809 12,191 Other expenses 6,630 6,805 19,975 20,950 Total Noninterest Expenses 94,629 93,854 282,977 280,167 INCOME BEFORE INCOME TAX 56,347 65,371 155,105 212,328 Income tax expense 7,160 9,005 18,052 31,021 NET INCOME 49,187 56,366 137,053 181,307 Preferred stock dividends 468 468 1,406 1,406 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 48,719 $ 55,898 $ 135,647 $ 179,901 Per Share Data: Basic Net Income Available to Common Stockholders $ 0.84 $ 0.95 $ 2.32 $ 3.04 Diluted Net Income Available to Common Stockholders $ 0.84 $ 0.94 $ 2.31 $ 3.03 Cash Dividends Paid to Common Stockholders $ 0.35 $ 0.34 $ 1.04 $ 1.00 Average Diluted Common Shares Outstanding (in thousands) 58,289 59,503 58,629 59,465 FINANCIAL HIGHLIGHTS (Dollars in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 NET CHARGE-OFFS $ 6,709 $ 20,365 $ 48,606 $ 22,495 AVERAGE BALANCES: Total Assets $ 18,360,580 $ 18,152,239 $ 18,374,370 $ 18,115,504 Total Loans 12,680,166 12,287,632 12,592,907 12,264,787 Total Earning Assets 16,990,358 16,947,669 17,042,540 16,913,965 Total Deposits 14,702,454 14,735,592 14,826,056 14,627,448 Total Stockholders' Equity 2,251,547 2,154,232 2,232,419 2,126,005 FINANCIAL RATIOS: Return on Average Assets 1.07 % 1.24 % 0.99 % 1.33 % Return on Average Stockholders' Equity 8.66 10.38 8.10 11.28 Return on Tangible Common Stockholders' Equity 13.39 16.54 12.64 18.10 Average Earning Assets to Average Assets 92.54 93.36 92.75 93.37 Allowance for Credit Losses - Loans as % of Total Loans 1.48 1.67 1.48 1.67 Net Charge-offs as % of Average Loans (Annualized) 0.21 0.66 0.51 0.24 Average Stockholders' Equity to Average Assets 12.26 11.87 12.15 11.74 Tax Equivalent Yield on Average Earning Assets 5.82 5.55 5.72 5.32 Interest Expense/Average Earning Assets 2.59 2.26 2.56 1.90 Net Interest Margin (FTE) on Average Earning Assets 3.23 3.29 3.16 3.42 Efficiency Ratio 53.76 53.91 55.54 52.60 Tangible Common Book Value Per Share $ 26.64 $ 22.43 $ 26.64 $ 22.43 NONPERFORMING ASSETS (Dollars In Thousands) September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Nonaccrual Loans $ 59,088 $ 61,906 $ 62,478 $ 53,580 $ 53,102 Other Real Estate Owned and Repossessions 5,247 4,824 4,886 4,831 6,480 Nonperforming Assets (NPA) 64,335 66,730 67,364 58,411 59,582 90+ Days Delinquent 14,105 1,686 2,838 172 89 NPAs & 90 Day Delinquent $ 78,440 $ 68,416 $ 70,202 $ 58,583 $ 59,671 Allowance for Credit Losses - Loans $ 187,828 $ 189,537 $ 204,681 $ 204,934 $ 205,782 Quarterly Net Charge-offs 6,709 39,644 2,253 3,148 20,365 NPAs / Actual Assets % 0.35 % 0.36 % 0.37 % 0.32 % 0.33 % NPAs & 90 Day / Actual Assets % 0.43 % 0.37 % 0.38 % 0.32 % 0.33 % NPAs / Actual Loans and OREO % 0.51 % 0.53 % 0.54 % 0.47 % 0.48 % Allowance for Credit Losses - Loans / Actual Loans (%) 1.48 % 1.50 % 1.64 % 1.64 % 1.67 % Net Charge-offs as % of Average Loans (Annualized) 0.21 % 1.26 % 0.07 % 0.10 % 0.66 % CONSOLIDATED BALANCE SHEETS (Dollars In Thousands) September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 ASSETS Cash and due from banks $ 84,719 $ 105,372 $ 100,514 $ 112,649 $ 125,173 Interest-bearing deposits 359,126 168,528 410,497 436,080 348,639 Investment securities, net of allowance for credit losses 3,662,145 3,753,088 3,783,574 3,811,364 3,713,724 Loans held for sale 40,652 32,292 15,118 18,934 30,972 Loans 12,646,808 12,639,650 12,465,582 12,486,027 12,271,422 Less: Allowance for credit losses - loans (187,828 ) (189,537 ) (204,681 ) (204,934 ) (205,782 ) Net loans 12,458,980 12,450,113 12,260,901 12,281,093 12,065,640 Premises and equipment 129,582 133,245 132,706 133,896 132,441 Federal Home Loan Bank stock 41,716 41,738 41,758 41,769 41,797 Interest receivable 92,055 97,546 92,550 97,664 90,011 Goodwill and other intangibles 733,601 735,373 737,144 739,101 741,283 Cash surrender value of life insurance 304,613 306,379 306,028 306,301 306,106 Other real estate owned 5,247 4,824 4,886 4,831 6,480 Tax asset, deferred and receivable 86,732 107,080 101,121 99,883 135,521 Other assets 348,384 367,845 331,006 322,322 340,476 TOTAL ASSETS $ 18,347,552 $ 18,303,423 $ 18,317,803 $ 18,405,887 $ 18,078,263 LIABILITIES Deposits: Noninterest-bearing $ 2,334,197 $ 2,303,313 $ 2,338,364 $ 2,500,062 $ 2,554,984 Interest-bearing 12,030,903 12,265,757 12,546,220 12,321,391 12,091,592 Total Deposits 14,365,100 14,569,070 14,884,584 14,821,453 14,646,576 Borrowings: Federal funds purchased 30,000 147,229 — — — Securities sold under repurchase agreements 124,894 100,451 130,264 157,280 152,537 Federal Home Loan Bank advances 832,629 832,703 612,778 712,852 713,384 Subordinated debentures and other borrowings 93,562 93,589 118,612 158,644 158,665 Total Borrowings 1,081,085 1,173,972 861,654 1,028,776 1,024,586 Deposits and other liabilities held for sale 288,476 — — — — Interest payable 18,089 18,554 19,262 18,912 16,473 Other liabilities 292,429 329,302 327,500 289,033 297,984 Total Liabilities 16,045,179 16,090,898 16,093,000 16,158,174 15,985,619 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 25,000 Common Stock, $.125 stated value: Authorized -- 100,000,000 shares Issued and outstanding 7,265 7,256 7,321 7,428 7,425 Additional paid-in capital 1,192,683 1,191,193 1,208,447 1,236,506 1,234,402 Retained earnings 1,229,125 1,200,930 1,181,939 1,154,624 1,132,962 Accumulated other comprehensive loss (151,825 ) (211,979 ) (198,029 ) (175,970 ) (307,270 ) Total Stockholders' Equity 2,302,373 2,212,525 2,224,803 2,247,713 2,092,644 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,347,552 $ 18,303,423 $ 18,317,803 $ 18,405,887 $ 18,078,263 CONSOLIDATED STATEMENTS OF INCOME (Dollars In Thousands, Except Per Share Amounts) September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 INTEREST INCOME Loans receivable: Taxable $ 206,680 $ 201,413 $ 198,023 $ 197,523 $ 191,705 Tax-exempt 8,622 8,430 8,190 8,197 8,288 Investment securities: Taxable 9,263 9,051 8,748 8,644 8,590 Tax-exempt 13,509 13,613 13,611 13,821 13,947 Deposits with financial institutions 2,154 2,995 6,493 8,034 5,884 Federal Home Loan Bank stock 855 879 835 771 719 Total Interest Income 241,083 236,381 235,900 236,990 229,133 INTEREST EXPENSE Deposits 98,856 99,151 98,285 96,655 85,551 Federal funds purchased 329 126 — 1 — Securities sold under repurchase agreements 700 645 1,032 827 797 Federal Home Loan Bank advances 8,544 6,398 6,773 6,431 6,896 Subordinated debentures and other borrowings 1,544 1,490 2,747 3,013 2,506 Total Interest Expense 109,973 107,810 108,837 106,927 95,750 NET INTEREST INCOME 131,110 128,571 127,063 130,063 133,383 Provision for credit losses 5,000 24,500 2,000 1,500 2,000 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 126,110 104,071 125,063 128,563 131,383 NONINTEREST INCOME Service charges on deposit accounts 8,361 8,214 7,907 7,690 7,975 Fiduciary and wealth management fees 8,525 8,825 8,200 8,187 7,394 Card payment fees 5,121 4,739 4,500 4,437 4,716 Net gains and fees on sales of loans 6,764 5,141 3,254 4,111 5,517 Derivative hedge fees 736 489 263 1,049 516 Other customer fees 344 460 427 237 384 Earnings on cash surrender value of life insurance 2,755 1,929 1,592 3,202 1,761 Net realized losses on sales of available for sale securities (9,114 ) (49 ) (2 ) (2,317 ) (1,650 ) Other income (loss) 1,374 1,586 497 (152 ) 1,229 Total Noninterest Income 24,866 31,334 26,638 26,444 27,842 NONINTEREST EXPENSES Salaries and employee benefits 55,223 52,214 58,293 60,967 55,566 Net occupancy 6,994 6,746 7,312 9,089 6,837 Equipment 6,949 6,599 6,226 6,108 5,698 Marketing 1,836 1,773 1,198 2,647 2,369 Outside data processing fees 7,150 7,072 6,889 5,875 6,573 Printing and office supplies 378 354 353 402 333 Intangible asset amortization 1,772 1,771 1,957 2,182 2,182 FDIC assessments 3,720 3,278 4,287 7,557 2,981 Other real estate owned and foreclosure expenses 942 373 534 1,743 677 Professional and other outside services 3,035 3,822 3,952 3,981 3,833 Other expenses 6,630 7,411 5,934 7,552 6,805 Total Noninterest Expenses 94,629 91,413 96,935 108,103 93,854 INCOME BEFORE INCOME TAX 56,347 43,992 54,766 46,904 65,371 Income tax expense 7,160 4,067 6,825 4,425 9,005 NET INCOME 49,187 39,925 47,941 42,479 56,366 Preferred stock dividends 468 469 469 469 468 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 48,719 $ 39,456 $ 47,472 $ 42,010 $ 55,898 Per Share Data: Basic Net Income Available to Common Stockholders $ 0.84 $ 0.68 $ 0.80 $ 0.71 $ 0.95 Diluted Net Income Available to Common Stockholders $ 0.84 $ 0.68 $ 0.80 $ 0.71 $ 0.94 Cash Dividends Paid to Common Stockholders $ 0.35 $ 0.35 $ 0.34 $ 0.34 $ 0.34 Average Diluted Common Shares Outstanding (in thousands) 58,289 58,328 59,273 59,556 59,503 FINANCIAL RATIOS: Return on Average Assets 1.07 % 0.87 % 1.04 % 0.92 % 1.24 % Return on Average Stockholders' Equity 8.66 7.16 8.47 7.89 10.38 Return on Tangible Common Stockholders' Equity 13.39 11.29 13.21 12.75 16.54 Average Earning Assets to Average Assets 92.54 92.81 92.91 93.62 93.36 Allowance for Credit Losses - Loans as % of Total Loans 1.48 1.50 1.64 1.64 1.67 Net Charge-offs as % of Average Loans (Annualized) 0.21 1.26 0.07 0.10 0.66 Average Stockholders' Equity to Average Assets 12.26 12.02 12.17 11.58 11.87 Tax Equivalent Yield on Average Earning Assets 5.82 5.69 5.65 5.64 5.55 Interest Expense/Average Earning Assets 2.59 2.53 2.55 2.48 2.26 Net Interest Margin (FTE) on Average Earning Assets 3.23 3.16 3.10 3.16 3.29 Efficiency Ratio 53.76 53.84 59.21 63.26 53.91 Tangible Common Book Value Per Share $ 26.64 $ 25.10 $ 25.07 $ 25.06 $ 22.43 LOANS (Dollars In Thousands) September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Commercial and industrial loans $ 4,041,217 $ 3,949,817 $ 3,722,365 $ 3,670,948 $ 3,490,953 Agricultural land, production and other loans to farmers 238,743 239,926 234,431 263,414 233,838 Real estate loans: Construction 814,704 823,267 941,726 957,545 1,022,261 Commercial real estate, non-owner occupied 2,251,351 2,323,533 2,368,360 2,400,839 2,360,596 Commercial real estate, owner occupied 1,152,751 1,174,195 1,137,894 1,162,083 1,153,707 Residential 2,366,943 2,370,905 2,316,490 2,288,921 2,257,385 Home equity 641,188 631,104 618,258 617,571 609,352 Individuals' loans for household and other personal expenditures 158,480 162,089 161,459 168,388 176,523 Public finance and other commercial loans 981,431 964,814 964,599 956,318 966,807 Loans 12,646,808 12,639,650 12,465,582 12,486,027 12,271,422 Allowance for credit losses - loans (187,828 ) (189,537 ) (204,681 ) (204,934 ) (205,782 ) NET LOANS $ 12,458,980 $ 12,450,113 $ 12,260,901 $ 12,281,093 $ 12,065,640 DEPOSITS (Dollars In Thousands) September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Demand deposits $ 7,678,510 $ 7,757,679 $ 7,771,976 $ 7,965,862 $ 7,952,040 Savings deposits 4,302,236 4,339,161 4,679,593 4,516,433 4,572,162 Certificates and other time deposits of $100,000 or more 1,277,833 1,415,131 1,451,443 1,408,985 1,280,607 Other certificates and time deposits 802,949 889,949 901,280 849,906 761,196 Brokered certificates of deposits1 303,572 167,150 80,292 80,267 80,571 TOTAL DEPOSITS2 $ 14,365,100 $ 14,569,070 $ 14,884,584 $ 14,821,453 $ 14,646,576 1 - Total brokered deposits of $838.3 million, which includes brokered CD's of $303.6 million at September 30, 2024.
2 - Total deposits at September 30, 2024 excludes $287.7 million of deposits reclassified to Deposits and other liabilities held for sale related to the pending Illinois branch sale.CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS (Dollars in Thousands) For the Three Months Ended September 30, 2024 September 30, 2023 Average Balance Interest
Income /
ExpenseAverage
RateAverage Balance Interest
Income /
ExpenseAverage
RateASSETS Interest-bearing deposits $ 252,113 $ 2,154 3.42 % $ 502,967 $ 5,884 4.68 % Federal Home Loan Bank stock 41,730 855 8.20 41,826 719 6.88 Investment Securities: (1) Taxable 1,789,526 9,263 2.07 1,817,219 8,590 1.89 Tax-exempt (2) 2,226,823 17,100 3.07 2,298,025 17,655 3.07 Total Investment Securities 4,016,349 26,363 2.63 4,115,244 26,245 2.55 Loans held for sale 31,991 483 6.04 24,227 386 6.37 Loans: (3) Commercial 8,699,733 164,922 7.58 8,456,527 153,993 7.28 Real estate mortgage 2,183,095 24,333 4.46 2,079,067 21,618 4.16 Installment 832,222 16,942 8.14 827,318 15,708 7.59 Tax-exempt (2) 933,125 10,914 4.68 900,493 10,491 4.66 Total Loans 12,680,166 217,594 6.86 12,287,632 202,196 6.58 Total Earning Assets 16,990,358 246,966 5.82 % 16,947,669 235,044 5.55 % Total Non-Earning Assets 1,370,222 1,204,570 TOTAL ASSETS $ 18,360,580 $ 18,152,239 LIABILITIES Interest-Bearing Deposits: Interest-bearing deposits $ 5,455,298 $ 40,450 2.97 % $ 5,425,829 $ 37,780 2.79 % Money market deposits 2,974,188 25,950 3.49 2,923,798 23,607 3.23 Savings deposits 1,425,047 4,208 1.18 1,641,338 3,844 0.94 Certificates and other time deposits 2,499,655 28,248 4.52 2,106,910 20,320 3.86 Total Interest-Bearing Deposits 12,354,188 98,856 3.20 12,097,875 85,551 2.83 Borrowings 1,071,440 11,117 4.15 1,032,180 10,199 3.95 Total Interest-Bearing Liabilities 13,425,628 109,973 3.28 13,130,055 95,750 2.92 Noninterest-bearing deposits 2,348,266 2,637,717 Other liabilities 335,139 230,235 Total Liabilities 16,109,033 15,998,007 STOCKHOLDERS' EQUITY 2,251,547 2,154,232 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,360,580 109,973 $ 18,152,239 95,750 Net Interest Income (FTE) $ 136,993 $ 139,294 Net Interest Spread (FTE) (4) 2.54 % 2.63 % Net Interest Margin (FTE): Interest Income (FTE) / Average Earning Assets 5.82 % 5.55 % Interest Expense / Average Earning Assets 2.59 % 2.26 % Net Interest Margin (FTE) (5) 3.23 % 3.29 % (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 2024 and 2023. These totals equal $5,883 and $5,911 for the three months ended September 30, 2024 and 2023, 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 Nine Months Ended September 30, 2024 September 30, 2023 Average Balance Interest
Income /
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RateAverage Balance Interest
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RateASSETS Interest-bearing deposits $ 383,007 $ 11,642 4.05 % $ 340,887 $ 9,685 3.79 % Federal Home Loan Bank stock 41,748 2,569 8.20 41,160 2,281 7.39 Investment Securities: (1) Taxable 1,787,119 27,062 2.02 1,872,267 26,563 1.89 Tax-exempt (2) 2,237,759 51,561 3.07 2,394,864 56,071 3.12 Total Investment Securities 4,024,878 78,623 2.60 4,267,131 82,634 2.58 Loans held for sale 27,735 1,242 5.97 22,398 1,046 6.23 Loans: (3) Commercial 8,659,088 484,979 7.47 8,515,148 444,422 6.96 Real estate mortgage 2,159,738 70,489 4.35 2,008,852 60,354 4.01 Installment 825,060 49,406 7.98 833,133 44,492 7.12 Tax-exempt (2) 921,286 31,952 4.62 885,256 30,072 4.53 Total Loans 12,592,907 638,068 6.76 12,264,787 580,386 6.31 Total Earning Assets 17,042,540 730,902 5.72 % 16,913,965 674,986 5.32 % Total Non-Earning Assets 1,331,830 1,201,539 TOTAL ASSETS $ 18,374,370 $ 18,115,504 LIABILITIES Interest-Bearing deposits: Interest-bearing deposits $ 5,487,106 $ 120,935 2.94 % $ 5,412,482 $ 97,016 2.39 % Money market deposits 3,018,526 80,563 3.56 2,812,891 55,868 2.65 Savings deposits 1,497,620 11,485 1.02 1,730,110 10,693 0.82 Certificates and other time deposits 2,447,684 83,309 4.54 1,821,408 45,860 3.36 Total Interest-Bearing Deposits 12,450,936 296,292 3.17 11,776,891 209,437 2.37 Borrowings 990,022 30,328 4.08 1,144,368 32,122 3.74 Total Interest-Bearing Liabilities 13,440,958 326,620 3.24 12,921,259 241,559 2.49 Noninterest-bearing deposits 2,375,120 2,850,557 Other liabilities 325,873 217,683 Total Liabilities 16,141,951 15,989,499 STOCKHOLDERS' EQUITY 2,232,419 2,126,005 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,374,370 326,620 $ 18,115,504 241,559 Net Interest Income (FTE) $ 404,282 $ 433,427 Net Interest Spread (FTE) (4) 2.48 % 2.83 % Net Interest Margin (FTE): Interest Income (FTE) / Average Earning Assets 5.72 % 5.32 % Interest Expense / Average Earning Assets 2.56 % 1.90 % Net Interest Margin (FTE) (5) 3.16 % 3.42 % (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 2024 and 2023. These totals equal $17,538 and $18,090 for the nine months ended September 30, 2024 and 2023, 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 NET INCOME AND DILUTED EARNINGS PER COMMON SHARE - NON-GAAP (Dollars In Thousands, Except Per Share Amounts) Three Months Ended Nine Months Ended September 30, June 30, March 31, December 31, September 30, September 30, September 30, 2024 2024 2024 2023 2023 2024 2023 Net Income Available to Common Stockholders - GAAP $ 48,719 $ 39,456 $ 47,472 $ 42,010 $ 55,898 $ 135,647 $ 179,901 Adjustments: PPP loan income — — — (7 ) (8 ) — (42 ) Net realized losses on sales of available for sale securities 9,114 49 2 2,317 1,650 9,165 4,613 Non-core expenses1,2 — — 3,481 12,682 — 3,481 — Tax on adjustments (2,220 ) (12 ) (848 ) (3,652 ) (403 ) (3,081 ) (1,121 ) Adjusted Net Income Available to Common Stockholders - Non-GAAP $ 55,613 $ 39,493 $ 50,107 $ 53,350 $ 57,137 $ 145,212 $ 183,351 Average Diluted Common Shares Outstanding (in thousands) 58,289 58,328 59,273 59,556 59,503 58,629 59,465 Diluted Earnings Per Common Share - GAAP $ 0.84 $ 0.68 $ 0.80 $ 0.71 $ 0.94 $ 2.31 $ 3.03 Adjustments: PPP loan income — — — — — — — Net realized losses on sales of available for sale securities 0.15 — — 0.04 0.03 0.16 0.07 Non-core expenses1,2 — — 0.06 0.21 — 0.06 — Tax on adjustments (0.04 ) — (0.01 ) (0.06 ) (0.01 ) (0.05 ) (0.02 ) Adjusted Diluted Earnings Per Common Share - Non-GAAP $ 0.95 $ 0.68 $ 0.85 $ 0.90 $ 0.96 $ 2.48 $ 3.08 1 - Non-core expenses in 4Q23 included $6.3 million from early retirement and severance costs, $4.3 million from the FDIC special assessment, and $2.1 million from a lease termination.
2 - Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.NET INTEREST MARGIN ("NIM"), ADJUSTED (Dollars in Thousands, Except Per Share Amounts) Three Months Ended Nine Months Ended September 30, June 30, March 31, December 31, September 30, September 30, September 30, 2024 2024 2024 2023 2023 2024 2023 Net Interest Income (GAAP) $ 131,110 $ 128,571 $ 127,063 $ 130,063 $ 133,383 $ 386,744 $ 415,337 Fully Taxable Equivalent ("FTE") Adjustment 5,883 5,859 5,795 5,853 5,911 17,538 18,090 Net Interest Income (FTE) (non-GAAP) $ 136,993 $ 134,430 $ 132,858 $ 135,916 $ 139,294 $ 404,282 $ 433,427 Average Earning Assets (GAAP) $ 16,990,358 $ 17,013,984 $ 17,123,851 $ 17,222,714 $ 16,947,669 $ 17,042,540 $ 16,913,965 Net Interest Margin (GAAP) 3.09 % 3.02 % 2.97 % 3.02 % 3.15 % 3.03 % 3.27 % Net Interest Margin (FTE) (non-GAAP) 3.23 % 3.16 % 3.10 % 3.16 % 3.29 % 3.16 % 3.42 % RETURN ON TANGIBLE COMMON EQUITY - NON-GAAP (Dollars In Thousands) Three Months Ended Nine Months Ended September 30, June 30, March 31, December 31, September 30, September 30, September 30, 2024 2024 2024 2023 2023 2024 2023 Total Average Stockholders' Equity (GAAP) $ 2,251,547 $ 2,203,361 $ 2,242,139 $ 2,130,993 $ 2,154,232 $ 2,232,419 $ 2,126,005 Less: Average Preferred Stock (25,125 ) (25,125 ) (25,125 ) (25,125 ) (25,125 ) (25,125 ) (25,125 ) Less: Average Intangible Assets, Net of Tax (729,581 ) (730,980 ) (732,432 ) (734,007 ) (735,787 ) (730,993 ) (737,476 ) Average Tangible Common Equity, Net of Tax (Non-GAAP) $ 1,496,841 $ 1,447,256 $ 1,484,582 $ 1,371,861 $ 1,393,320 $ 1,476,301 $ 1,363,404 Net Income Available to Common Stockholders (GAAP) $ 48,719 $ 39,456 $ 47,472 $ 42,010 $ 55,898 $ 135,647 $ 179,901 Plus: Intangible Asset Amortization, Net of Tax 1,399 1,399 1,546 1,724 1,724 4,345 5,182 Tangible Net Income (Non-GAAP) $ 50,118 $ 40,855 $ 49,018 $ 43,734 $ 57,622 $ 139,992 $ 185,083 Return on Tangible Common Equity (Non-GAAP) 13.39 % 11.29 % 13.21 % 12.75 % 16.54 % 12.64 % 18.10 % For more information, contact:
Nicole M. Weaver, Vice President and Director of Corporate Administration
765-521-7619
http://www.firstmerchants.comSOURCE: First Merchants Corporation, Muncie, Indiana
