First Merchants Corp. Files 2023 Annual Report on Form 10-K

TL;DR

<b>First Merchants Corp. filed its 2023 10-K report detailing financial performance and structure.</b>

AI Summary

FIRST MERCHANTS CORP (FRMEP) filed a Annual Report (10-K) with the SEC on February 29, 2024. First Merchants Corp. filed its 10-K report for the fiscal year ending December 31, 2023. The company is classified under SIC code 6021 (National Commercial Banks). Incorporated in Indiana, the company's fiscal year concludes on December 31st. The filing includes data for fiscal years 2023, 2022, 2021, and 2020. Key financial statement elements such as common stock, preferred stock, retained earnings, and accumulated other comprehensive income are detailed for these periods.

Why It Matters

For investors and stakeholders tracking FIRST MERCHANTS CORP, this filing contains several important signals. This filing provides a comprehensive overview of First Merchants Corp.'s financial health and operational status for the fiscal year 2023, crucial for investors and stakeholders to assess performance and make informed decisions. The detailed breakdown of financial elements across multiple years allows for trend analysis and comparison, offering insights into the company's growth trajectory and stability within the national commercial banking sector.

Risk Assessment

Risk Level: low — FIRST MERCHANTS CORP shows low risk based on this filing. The filing is a standard annual report (10-K) and does not contain immediate red flags or urgent disclosures, indicating a routine reporting cycle.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to understand First Merchants Corp.'s performance and potential challenges.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed Period of Report)
• 2024-02-29 — Filing Date (Filed As Of Date)
• 6021 — SIC Code (National Commercial Banks)
• 2023 — Reporting Year (Data included for fiscal year 2023)
• 2022 — Previous Year (Data included for fiscal year 2022)
• 2021 — Prior Year (Data included for fiscal year 2021)
• 2020 — Earlier Year (Data included for fiscal year 2020)

Key Players & Entities

• FIRST MERCHANTS CORP (company) — Filer name
• 0000712534 (company) — Central Index Key
• 6021 (company) — Standard Industrial Classification
• IN (company) — State of Incorporation
• MUNCIE (company) — Business Address City
• 7657471500 (company) — Business Phone
• 20231231 (dollar_amount) — Conformed Period of Report
• 20240229 (dollar_amount) — Filed As Of Date

FAQ

Key Dates

• 2023-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K filing.
• 2024-02-29: Filing Date — Date the 10-K report was officially submitted to the SEC.

Glossary

10-K

An annual report required by the U.S. Securities and Exchange Commission (SEC), which gives a comprehensive summary of a company's financial performance. (This is the primary document type filed, containing the core financial and operational data for the fiscal year.)

SIC Code

Standard Industrial Classification code used to categorize businesses based on their primary activity. (Identifies First Merchants Corp. as a National Commercial Bank, providing industry context.)

Key Financial Figures

• $0.125 — ange on which registered Common Stock, $0.125 stated value per share FRME The Nasdaq
• $18.4 b — Corporation had consolidated asse ts of $18.4 billion, consolidated deposits of $14.8 b
• $14.8 billion — $18.4 billion, consolidated deposits of $14.8 billion and stockholders' equity of $2.2 billio
• $2.2 billion — 4.8 billion and stockholders' equity of $2.2 billion. HUMAN CAPITAL As of December 31, 2
• $10.17 — common stock, and (b) a cash payment of $10.17. The Corporation issued 5.6 million sha
• $79.3 million — million shares of common stock and paid $79.3 million in cash in exchange for all outstanding
• $2,500 — stock, with a liquidation preference of $2,500 per share, in exchange for the outstand

Filing Documents

• frme-20231231.htm (10-K) — 5393KB
• exhibit32-202310k.htm (EX-3.2) — 131KB
• exhibit21-202310k.htm (EX-21) — 5KB
• exhibit23-202310k.htm (EX-23) — 3KB
• exhibit24-202310k.htm (EX-24) — 13KB
• exhibit311-202310k.htm (EX-31.1) — 9KB
• exhibit312-202310k.htm (EX-31.2) — 10KB
• exhibit32-202310ka.htm (EX-32) — 9KB
• exhibit97-202310k.htm (EX-97) — 28KB
• frme-20231231_g1.jpg (GRAPHIC) — 114KB
• picture2a.jpg (GRAPHIC) — 58KB
• 0000712534-24-000071.txt (&nbsp;) — 26470KB
• frme-20231231.xsd (EX-101.SCH) — 122KB
• frme-20231231_cal.xml (EX-101.CAL) — 237KB
• frme-20231231_def.xml (EX-101.DEF) — 866KB
• frme-20231231_lab.xml (EX-101.LAB) — 1584KB
• frme-20231231_pre.xml (EX-101.PRE) — 1167KB
• frme-20231231_htm.xml (XML) — 5577KB

Risk Factors

Item 1A. Risk Factors 22

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 30

Cybersecurity

Item 1C. Cybersecurity 30

Properties

Item 2. Properties 32

Legal Proceedings

Item 3. Legal Proceedings 32

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 32 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 33

[Reserved]

Item 6. [Reserved] 35

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 36

Quantitative and Qualitative Disclosure about Market Risk

Item 7A. Quantitative and Qualitative Disclosure about Market Risk 54

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 55

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 110

Controls and Procedures

Item 9A. Controls and Procedures 110

Other Information

Item 9B. Other Information 112

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 112 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 113

Executive Compensation

Item 11. Executive Compensation 113

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 113

Certain Relationships, Related Transactions and Director Independence

Item 13. Certain Relationships, Related Transactions and Director Independence 113

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 113 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 114

Form 10-K Summary

Item 16. Form 10-K Summary 116

Signatures

Signatures 117 2 GLOSSARY OF DEFINED TERMS FIRST MERCHANTS CORPORATION 2021 CAA The 2021 Consolidated Appropriations Act, signed into law on December 27, 2020, provided the annual funding for the federal government and also contained several rules giving further COVID-19 relief ACL Allowance for Credit Losses ASC Accounting Standards Codification ASU Accounting Standards Update AOCI Accumulated Other Comprehensive Income Bank First Merchants Bank, a wholly-owned subsidiary of the Corporation BOLI Bank owned life insurance BHC Act Bank Holding Company Act of 1956 BSA Bank Secrecy Act BTFP Bank Term Funding Program created by the Federal Reserve in March 2023 CARES Act Coronavirus Aid, Relief and Economic Security Act CECL FASB Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, adopted by the Corporation on January 1, 2021. CET1 Common equity tier 1 CFPB Consumer Financial Protection Bureau CME Term SOFR A forward-looking term Secured Overnight Financing Rate, as administered by CME Group Benchmark Administration Limited. CODM Chief operating decision maker Corporation First Merchants Corporation COVID or COVID-19 2019 novel coronavirus disease, which was declared a pandemic by the World Health Organization on March 11, 2020. CRA The Community Reinvestment Act of 1977 DEI Diversity, Equity and Inclusion Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer Protection Act Economic Growth Act The Economic Growth, Regulatory Relief, and Consumer Protection Act enacted in May 2018. EITF FASB's Emerging Issues Task Force ERISA Employee Retirement Income Security Act of 1974 ERM Enterprise risk management ESG Environmental, social and governance ESPP Employee Stock Purchase Plan Exchange Act Securities Exchange Act of 1934 FASB Financial Accounting Standards Board FDIC Federal Deposit Insurance Corporation FDICIA Federal Deposit Insuran

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS The Corporation from time to time includes forward-looking statements in its oral and written communication. The Corporation may include forward-looking statements in filings with the SEC, such as its Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q, in other written materials and oral statements made by senior management to analysts, investors, representatives of the media and others. The Corporation intends these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and the Corporation is including this statement for purposes of these safe harbor provisions. Forward-looking statements can often 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 forward-looking statements include: estimates of the Corporation's risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, among other things, those discussed in Item 1A, "RISK FACTORS". Because of these and other uncertainties, the Corporation's actual future results may be materially different from the results indicated by these forward-looking statements. In addition, the Corporation's past results of operations do not necessarily indicate its future results. 4

: ITEM 1. BUSINESS

PART I: ITEM 1. BUSINESS PART I

BUSINESS

ITEM 1. BUSINESS. GENERAL The Corporation is a financial holding company headquartered in Muncie, Indiana and was organized in September 1982. The Corporation's Common Stock is traded on the Nasdaq Global Select Market under the symbol FRME. The Corporation has one full-service bank charter, First Merchants Bank, which opened for business in Muncie, Indiana, in March 1893. The Bank also operates First Merchants Private Wealth Advisors (a division of First Merchants Bank). The Bank includes 116 banking locations in Indiana, Ohio, Michigan and Illinois. In addition to its branch network, the Corporation offers comprehensive electronic and mobile delivery channels to its customers. The Corporation's business activities are currently limited to one significant business segment, which is community banking. Through the Bank, the Corporation offers a broad range of financial services, including accepting time, savings and demand deposits; making consumer, commercial, agri-business and real estate mortgage loans; providing personal and corporate trust services; offering full-service brokerage and private wealth management; and providing letters of credit, repurchase agreements and other corporate services. All inter-company transactions are eliminated during the preparation of consolidated financial statements. As of December 31, 2023, the Corporation had consolidated asse ts of $18.4 billion, consolidated deposits of $14.8 billion and stockholders' equity of $2.2 billion. HUMAN CAPITAL As of December 31, 2023, the Corporation and its subsidiaries had 2,162 full-time equivalent employees. Our stated mission to be the most attentive, knowledgeable, and high performing bank requires a dedicated and talented team of colleagues to succeed. Our employees prepare, every day, to deliver a customer and colleague experience that grows the Corporation. We seek to attract, retain and develop a team of diverse, committed colleagues who are capable of delivering a whole-ba

: ITEM 1. BUSINESS

PART I: ITEM 1. BUSINESS AVAILABLE INFORMATION The Corporation makes its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, available on its website at https://www.firstmerchants.com without charge, as soon as reasonably practicable, after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including the Corporation. Those filings are accessible on the SEC's website at http://www.sec.gov. ACQUISITION AND DIVESTITURE POLICY The Corporation anticipates that it will continue its policy of geographic expansion of its banking business through the acquisition of banks whose operations are consistent with its banking philosophy. Management routinely explores opportunities to acquire financial institutions and other financial services-related businesses and to enter into strategic alliances to expand the scope of the Corporation's services and customer base. Future acquisitions and divestitures will be driven by a disciplined financial evaluation process and will be consistent with the Corporation's strategy of community banking, client relationships and consistent quality earnings. As with previous acquisitions, the consideration paid in future acquisitions may be in the form of cash or First Merchants common stock, or a combination thereof. The amount and structure of such consideration is based on reasonable growth, synergies and economies of scale and a thorough analysis of the impact on both long- and short-term financial results. Acquisitions typically involve the payment of a premium over book and market values, and, therefore, some dilution of our tangible book value and

: ITEM 1. BUSINESS

PART I: ITEM 1. BUSINESS REGULATION AND SUPERVISION OF FIRST MERCHANTS CORPORATION AND SUBSIDIARIES The Corporation and its subsidiaries are subject to extensive regulation under federal and state laws. The regulatory framework is intended primarily for the protection of depositors, federal deposit insurance funds and the banking system as a whole and not for the protection of shareholders and creditors. Significant elements of the laws and regulations applicable to the Corporation and its subsidiaries are described below. The description is qualified in its entirety by reference to the full text of the statues, regulations and policies that are described. Also, such statutes, regulations and policies are continually under review by Congress and state legislatures and federal and state regulatory agencies. A change in statutes, regulations or regulatory policies applicable to the Corporation and its subsidiaries could have a material effect on the Corporation's business, financial condition or results of operations. Bank Holding Company Regulation The Corporation is registered as a bank holding company and has elected to be a financial holding company. It is subject to the supervision of, and regulation by the Board of Governors of the Federal Reserve under the BHC Act, as amended. Bank holding companies are required to file periodic reports with and are subject to periodic examination by the Federal Reserve. The Federal Reserve has issued regulations under the BHC Act requiring a bank holding company to serve as a source of financial and managerial strength to the Bank. Thus, it is the policy of the Federal Reserve that a bank holding company should stand ready to use its resources to provide adequate capital funds to the Bank during periods of financial stress or adversity. Additionally, under the FDICIA, a bank holding company is required to guarantee the compliance of any subsidiary bank that may become "undercapitalized" (as defined in the FDICIA sectio

: ITEM 1. BUSINESS

PART I: ITEM 1. BUSINESS Basel III prov

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View this 10-K filing on SEC EDGAR