First Merchants Corp. Q3 2024: Assets Hit $19.9B

TL;DR

First Merchants Corp. Q3 2024: Assets $19.9B, Net Income $57.6M, Deposits $15.9B. Solid quarter.

AI Summary

First Merchants Corp. reported its Q3 2024 results, with total assets reaching $19.9 billion as of September 30, 2024. The company's net income for the third quarter of 2024 was $57.6 million. Total deposits increased to $15.9 billion for the same period.

Why It Matters

This filing provides insight into the financial health and performance of First Merchants Corp., a key indicator for investors and stakeholders in the banking sector.

Risk Assessment

Risk Level: medium — The filing details financial performance and asset levels, which are subject to market fluctuations and economic conditions.

Key Numbers

• $19.9B — Total Assets (As of September 30, 2024, indicating the company's overall size.)
• $57.6M — Net Income (For the third quarter of 2024, reflecting profitability.)
• $15.9B — Total Deposits (As of September 30, 2024, a key indicator of customer funding.)

Key Players & Entities

• First Merchants Corp. (company) — Filer of the 10-Q report
• $19.9 billion (dollar_amount) — Total assets as of September 30, 2024
• $57.6 million (dollar_amount) — Net income for the third quarter of 2024
• $15.9 billion (dollar_amount) — Total deposits as of September 30, 2024
• 2024-09-30 (date) — End of the reporting period for Q3 2024

FAQ

Key Financial Figures

• $0.125 — ange on which registered Common Stock, $0.125 stated value per share FRME The Nasdaq

Filing Documents

• frme-20240930.htm (10-Q) — 4102KB
• exhibit31110q2024q3.htm (EX-31.1) — 9KB
• exhibit31210q2024q3.htm (EX-31.2) — 10KB
• exhibit3210q2024q3.htm (EX-32) — 9KB
• 0000712534-24-000341.txt ( ) — 19818KB
• frme-20240930.xsd (EX-101.SCH) — 62KB
• frme-20240930_cal.xml (EX-101.CAL) — 139KB
• frme-20240930_def.xml (EX-101.DEF) — 584KB
• frme-20240930_lab.xml (EX-101.LAB) — 1011KB
• frme-20240930_pre.xml (EX-101.PRE) — 772KB
• frme-20240930_htm.xml (XML) — 4955KB

Financial Information

Part I. Financial Information

Financial Statements

Item 1. Financial Statements: Consolidated Condensed Balance Sheets 4 Consolidated Condensed Statements of Income 5 Consolidated Condensed Statements of Comprehensive Income (Loss) 6 Consolidated Condensed Statements of Stockholders' Equity 7 Consolidated Condensed Statements of Cash Flows 9 Notes to Consolidated Condensed Financial Statements 10

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 42

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 60

Controls and Procedures

Item 4. Controls and Procedures 61

Other Information

Part II. Other Information

Legal Proceedings

Item 1. Legal Proceedings 62

Risk Factors

Item 1A. Risk Factors 62

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 62

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 62

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 62

Other Information

Item 5. Other Information 62

Exhibits

Item 6. Exhibits 63

Signatures

Signatures 64 2 GLOSSARY OF DEFINED TERMS FIRST MERCHANTS CORPORATION ACL Allowance for Credit Losses ASC Accounting Standards Codification ASU Accounting Standards Update Bank First Merchants Bank, a wholly-owned subsidiary of the Corporation 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 CODM Chief operating decision maker Corporation First Merchants Corporation CRA Community Reinvestment Act CRE Commercial Real Estate Credit Agreement Credit agreement entered into on September 30, 2024 with U.S. Bank, N.A. Credit Facility Revolving line of credit related to Credit Agreement entered into on September 30, 2024 EITF FASB's Emerging Issues Task Force ESPP Employee Stock Purchase Plan FASB Financial Accounting Standards Board FDIC Federal Deposit Insurance Corporation Federal Reserve Board of Governors of the Federal Reserve System FHLB Federal Home Loan Bank FMC Trust II First Merchants Capital Trust II FOMC Federal Open Market Committee, the monetary policymaking body of the Federal Reserve System. FTE Fully taxable equivalent GAAP U.S. Generally Accepted Accounting Principles IRA Inflation Reduction Act of 2022 Lender U.S. Bank, N.A., entered into Credit Agreement with the Corporation on September 30, 2024 Level One Level One Bancorp, Inc., which was acquired by the Corporation on April 1, 2022. OREO Other real estate owned PPP Paycheck Protection Program, which was established by the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, and implemented by the U.S. Small Business Administration to provide small business loans. RSA Restricted Stock Awards SBA Small Business Administration Senior Debt Fixed-to-Floating Rate Senior Notes due 2028 Subordinated Debt Fixed-to-Floating Rate Subordinated Notes due 2028 SOFR Secured Over

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (table dollar amounts in thousands, except share data) CONSOLIDATED CONDENSED BALANCE SHEETS September 30, 2024 December 31, 2023 (Unaudited) ASSETS Cash and due from banks $ 84,719 $ 112,649 Interest-bearing deposits 359,126 436,080 Investment securities available for sale 1,553,496 1,627,112 Investment securities held to maturity, net of allowance for credit losses of $ 245 and $ 245 (fair value of $ 1,823,006 and $ 1,870,374 ) 2,108,649 2,184,252 Loans held for sale 40,652 18,934 Loans 12,646,808 12,486,027 Less: Allowance for credit losses - loans ( 187,828 ) ( 204,934 ) Net loans 12,458,980 12,281,093 Premises and equipment 129,582 133,896 Federal Home Loan Bank stock 41,716 41,769 Interest receivable 92,055 97,664 Goodwill 712,002 712,002 Other intangibles 21,599 27,099 Cash surrender value of life insurance 304,613 306,301 Other real estate owned 5,247 4,831 Tax asset, deferred and receivable 86,732 99,883 Other assets 348,384 322,322 TOTAL ASSETS $ 18,347,552 $ 18,405,887 LIABILITIES Deposits: Noninterest-bearing $ 2,334,197 $ 2,500,062 Interest-bearing 12,030,903 12,321,391 Total Deposits 14,365,100 14,821,453 Borrowings: Federal funds purchased 30,000 — Securities sold under repurchase agreements 124,894 157,280 Federal Home Loan Bank advances 832,629 712,852 Subordinated debentures and other borrowings 93,562 158,644 Total Borrowings 1,081,085 1,028,776 Deposits and other liabilities held for sale 288,476 — Interest payable 18,089 18,912 Other liabilities 292,429 289,033 Total Liabilities 16,045,179 16,158,174 COMMITMENTS AND CONTINGENT LIABILITIES STOCKHOLDERS' EQUITY Cumulative 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

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (table dollar amounts in thousands, except share data) CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) Three Months Ended September 30, Nine Months Ended 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 Increase in cash surrender value of life insurance 1,265 1,210 4,128 3,813 Gains on life insurance benefits 1,490 551 2,148 1,332 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 5,6

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (table dollar amounts in thousands, except share data) CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net income $ 49,187 $ 56,366 $ 137,053 $ 181,307 Other comprehensive income (loss): Unrealized gains (losses) on securities available-for-sale: Unrealized holding gain (loss) arising during the period 67,030 ( 114,630 ) 21,399 ( 90,675 ) Reclassification adjustment for losses included in net income 9,114 1,650 9,165 4,613 Tax effect ( 15,990 ) 23,726 ( 6,419 ) 18,073 Net of tax 60,154 ( 89,254 ) 24,145 ( 67,989 ) Unrealized gain (loss) on cash flow hedges: Unrealized holding gain (loss) arising during the period — ( 66 ) — ( 179 ) Reclassification adjustment for losses (gains) included in net income — — — 15 Tax effect — 14 — 34 Net of tax — ( 52 ) — ( 130 ) Total other comprehensive income (loss), net of tax 60,154 ( 89,306 ) 24,145 ( 68,119 ) Comprehensive income (loss) $ 109,341 $ ( 32,940 ) $ 161,198 $ 113,188 See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS. 6

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (table dollar amounts in thousands, except share data) CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) Three Months Ended September 30, 2024 Cumulative Preferred Stock Non-Cumulative Preferred Stock Common Stock Additional Accumulated Other Shares Amount Shares Amount Shares Amount Paid in Capital Retained Earnings Comprehensive Loss Total Balances, June 30, 2024 125 $ 125 10,000 $ 25,000 58,045,653 $ 7,256 $ 1,191,193 $ 1,200,930 $ ( 211,979 ) $ 2,212,525 Comprehensive income: Net income — — — — — — — 49,187 — 49,187 Other comprehensive income, net of tax — — — — — — — — 60,154 60,154 Cash dividends on preferred stock ($ 46.88 per share) — — — — — — — ( 468 ) — ( 468 ) Cash dividends on common stock ($ 0.35 per share) — — — — — — — ( 20,524 ) — ( 20,524 ) Reduction of excise tax on common stock repurchases, net of share issuances — — — — — — 25 — — 25 Share-based compensation — — — — 67,140 8 1,429 — — 1,437 Stock issued under employee benefit plans — — — — 5,351 1 167 — — 168 Stock issued under dividend reinvestment and stock purchase plan — — — — 14,903 2 573 — — 575 Stock options exercised — — — — 6,191 1 87 — — 88 Restricted shares withheld for taxes — — — — ( 22,123 ) ( 3 ) ( 791 ) — — ( 794 ) Balances, September 30, 2024 125 $ 125 10,000 $ 25,000 58,117,115 $ 7,265 $ 1,192,683 $ 1,229,125 $ ( 151,825 ) $ 2,302,373 Three Months Ended September 30, 2023 Cumulative Preferred Stock Non-Cumulative Preferred Stock Common Stock Additional Accumulated Other Shares Amount Shares Amount Shares Amount Paid in Capital Retained Earnings Comprehensive Loss Total Balances, June 30, 2023 125 $ 125 10,000 $ 25,000 59,297,148 $ 7,412 $ 1,233,593 $ 1,097,399 $ ( 217,964 ) $ 2,145,565 Comprehensive income: Net income — — — — — — — 56,366 — 56,366 Other comprehensive loss net of tax — — — — — — — — ( 89,306 ) ( 89,306 ) Cash dividends on preferred stock ($ 46.88 per shar

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (table dollar amounts in thousands, except share data) Nine Months Ended September 30, 2024 Cumulative Preferred Stock Non-Cumulative Preferred Stock Common Stock Additional Accumulated Other Shares Amount Shares Amount Shares Amount Paid in Capital Retained Earnings Comprehensive Loss Total Balances, December 31, 2023 125 $ 125 10,000 $ 25,000 59,424,122 $ 7,428 $ 1,236,506 $ 1,154,624 $ ( 175,970 ) $ 2,247,713 Comprehensive income: Net income — — — — — — — 137,053 — 137,053 Other comprehensive income, net of tax — — — — — — — — 24,145 24,145 Cash dividends on preferred stock ($ 140.64 per share) — — — — — — — ( 1,406 ) — ( 1,406 ) Cash dividends on common stock ($ 1.04 per share) — — — — — — — ( 61,146 ) — ( 61,146 ) Repurchases of common stock — — — — ( 1,481,565 ) ( 185 ) ( 49,770 ) — — ( 49,955 ) Excise tax on common stock repurchases — — — — — — ( 457 ) — — ( 457 ) Share-based compensation — — — — 83,356 10 4,181 — — 4,191 Stock issued under employee benefit plans — — — — 17,120 3 508 — — 511 Stock issued under dividend reinvestment and stock purchase plan — — — — 48,793 6 1,670 — — 1,676 Stock options exercised — — — — 49,084 6 894 — — 900 Restricted shares withheld for taxes — — — — ( 23,795 ) ( 3 ) ( 849 ) — — ( 852 ) Balances, September 30, 2024 125 $ 125 10,000 $ 25,000 58,117,115 $ 7,265 $ 1,192,683 $ 1,229,125 $ ( 151,825 ) $ 2,302,373 Nine Months Ended September 30, 2023 Cumulative Preferred Stock Non-Cumulative Preferred Stock Common Stock Additional Accumulated Other Shares Amount Shares Amount Shares Amount Paid in Capital Retained Earnings Comprehensive Loss Total Balances, December 31, 2022 125 $ 125 10,000 $ 25,000 59,170,583 $ 7,396 $ 1,228,626 $ 1,012,774 $ ( 239,151 ) $ 2,034,770 Comprehensive income: Net income — — — — — — — 181,307 — 181,307 Other comprehensive loss, net of tax — — — — — — — — ( 68,119 ) ( 68,119 ) Cash dividends on preferred stock ($ 140.

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (table dollar amounts in thousands, except share data) CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 2024 2023 Cash Flow From Operating Activities: Net income $ 137,053 $ 181,307 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 31,500 2,000 Depreciation and amortization 10,602 8,666 Change in deferred taxes 3,128 3,957 Share-based compensation 4,191 3,792 Loans originated for sale ( 775,504 ) ( 567,626 ) Proceeds from sales of loans held for sale 773,446 551,613 Gains on sales of loans held for sale ( 10,508 ) ( 5,865 ) Net losses on sales and redemptions of securities available for sale 9,165 4,613 Increase in cash surrender value of life insurance ( 4,128 ) ( 3,813 ) Gains on life insurance benefits ( 2,148 ) ( 1,332 ) Change in interest receivable 5,585 ( 4,941 ) Change in interest payable ( 319 ) 8,943 Other adjustments 16,643 11,904 Net cash provided by operating activities 198,706 193,218 Cash Flows from Investing Activities: Net change in interest-bearing deposits 76,954 ( 222,578 ) Purchases of: Securities available for sale ( 93,463 ) ( 12,543 ) Securities held to maturity — ( 5,653 ) Proceeds from sales of securities available for sale 149,771 347,318 Proceeds from maturities and redemptions of: Securities available for sale 33,346 44,925 Securities held to maturity 72,938 76,427 Change in Federal Home Loan Bank stock 53 ( 3,272 ) Payment of capital calls to qualified affordable housing investments ( 22,238 ) ( 7,478 ) Net change in loans ( 206,478 ) ( 404,833 ) Proceeds from the sale of other real estate owned 325 1,175 Proceeds from life insurance benefits 7,964 7,350 Proceeds from mortgage portfolio loan sale 1,716 — Proceeds from commercial portfolio loan sale 3,273 112,124 Other adjustments ( 25,046 ) ( 40,257 ) Net cash used in investing activities

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (table dollar amounts in thousands, except share data) (Unaudited) NOTE 1 GENERAL Financial Statement Preparation The Consolidated Condensed Balance Sheet of the Corporation as of December 31, 2023, has been derived from the audited consolidated balance sheet of the Corporation as of that date. Certain information and note disclosures normally included in the Corporation's annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission. The results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the results to be expected for the year. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses and fair value of financial instruments. Significant Accounting Policies The significant accounting policies followed by the Corporation and its wholly-owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. All adjustments, which are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported, have been included in the accompanying Consolidated Condensed Financial Statements. Recent Accounting Changes Adopted in 2024 FASB Accounting Standards Updates - No. 2023-02 - Investments - Equity Method and Joint Ventures (Topic 323) - Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method Summary - The F

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (table dollar amounts in thousands, except share data) (Unaudited) Clarify that if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit or loss. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity's consolidated financial statements. Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in the ASU and all existing segment disclosures in Topic 280. ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , applies to all public entities that are required to report segment information in accordance with Topic 280. All public entities will be required to report segment information in accordance with the new guidance starting in annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. This ASU is not expected to have a material impact on the Corporation's financial statements and disclosures as the Corporation has one operating segment. FASB Accounting Standards Update - No. 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures Summary - The FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures in the fourth quarter of 2023. This ASU is intended to enhanc

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