Capital Adequacy - Common Equity Tier 1 Capital Ratio stands at 11.25% and Tangible Common Equity to Tangible Assets Ratio at 8.76%[205] - As of September 30, 2024, the total risk-based capital ratio for First Merchants Corporation is 13.18%, while First Merchants Bank's ratio is 12.66%[267] - First Merchants Corporation's Tier 1 capital to risk-weighted assets ratio stands at 11.41%, and First Merchants Bank's ratio is 11.41% as of September 30, 2024[267] - The common equity tier 1 capital ratio for First Merchants Corporation is 11.35%, and for First Merchants Bank, it is 11.80% as of September 30, 2024[267] - The tangible common equity to tangible assets ratio for First Merchants Corporation improved to 8.76% at September 30, 2024, up from 8.40% at December 31, 2023[269] - The Corporation's total risk-based capital was $1,994,480 thousand as of September 30, 2024, with net risk-weighted assets of $15,132,640 thousand[267] - The Corporation began a five-year phase-out of $13.0 million in tier 2 capital as defined in the Basel III capital rules[263] Financial Performance - Net income available to common stockholders for Q3 2024 was $48.7 million, or $0.84 per diluted share, down from $55.9 million, or $0.94 per diluted share in Q3 2023[207] - Adjusted earnings per diluted share for Q3 2024 totaled $0.95, compared to $0.96 in Q3 2023 and $0.68 in Q2 2024[208] - Noninterest income for the three months ended September 30, 2024, totaled $24.9 million, a decrease of $3.0 million or 10.7% compared to the same period in 2023, primarily due to $9.1 million in losses on sales of available for sale securities[246] - For the nine months ended September 30, 2024, noninterest income increased to $82.8 million, a rise of $3.7 million or 4.6% compared to the same period in 2023, driven by increases in net gains and fees on sales of loans and fiduciary and wealth management fees[247] - Noninterest expense for the nine months ended September 30, 2024, totaled $283.0 million, an increase of $2.8 million or 1.0% compared to the same period in 2023, with FDIC assessments rising by $4.2 million[249] Asset and Loan Quality - Total loans amounted to $12.65 billion, with commercial and industrial loans at $3.43 billion, agricultural loans at $199.83 million, and real estate loans totaling $8.55 billion[274][276] - Non-accrual loans increased to $59.1 million, up $5.5 million from December 31, 2023, primarily due to a $11.4 million rise in non-accrual balances in commercial real estate, non-owner occupied[278] - Loans 90 days or more delinquent and still accruing rose to $14.1 million, an increase of $13.9 million from December 31, 2023, driven mainly by one relationship totaling $13.0 million[279] - Net charge-offs for the three months ended September 30, 2024, totaled $6.7 million, compared to $20.4 million for the same period in 2023[286] - The provision for credit losses for the nine months ended September 30, 2024, was $31.5 million, compared to $2.0 million for the same period in 2023[286] - The total nonperforming assets, including non-accrual loans and loans 90 days or more delinquent, amounted to $78.44 million, up from $58.58 million at December 31, 2023[281][282] Deposits and Borrowings - Total deposits decreased by $456.4 million, or 4.1% annualized, from December 31, 2023, primarily due to $287.7 million of deposits reclassified as held for sale[215] - Average account balance within the deposit portfolio was $34,000 as of September 30, 2024[216] - Total borrowings increased by $52.3 million as of September 30, 2024, primarily due to an increase in federal funds purchased and FHLB advances[217] - Average interest-bearing deposits increased by $674.0 million for the nine months ended September 30, 2024 compared to the same period in 2023[234] - Total available remaining borrowing capacity from the FHLB and Federal Reserve at September 30, 2024, was $762.6 million and $1.1 billion, respectively[291] Interest Income and Margin - Net interest margin for Q3 2024 is 3.23%, compared to 3.16% in Q2 2024 and 3.29% in Q3 2023[205][224] - Net interest income accounted for 82.4% of revenues for the nine months ended September 30, 2024[228] - Interest expense on deposits increased by $86.9 million for the nine months ended September 30, 2024, or 80 basis points compared to the same period in 2023[240] - Average earning assets increased by $42.7 million for the three months ended September 30, 2024, driven by average loan growth of $392.5 million[231] - The Corporation's net interest income simulation modeling indicates a 4.4% increase for a rising 200 basis points scenario compared to a 4.0% increase as of December 31, 2023[302] - For a rising 100 basis points scenario, the estimated net interest income is projected to increase by 3.3% as of September 30, 2024, up from 2.1% as of December 31, 2023[302] - In a falling 100 basis points scenario, the Corporation anticipates a decrease of (1.7)% in net interest income as of September 30, 2024, compared to a decrease of (5.0)% as of December 31, 2023[302] - The projected decrease in net interest income for a falling 200 basis points scenario is (3.5)% as of September 30, 2024, compared to (7.8)% as of December 31, 2023[302] Liquidity Management - The Corporation's liquidity is primarily derived from core deposit growth, loan principal payments, and the sale and maturity of investment securities[289] - The Corporation's liquidity and interest sensitivity position as of September 30, 2024, is deemed adequate to achieve optimum interest margins while mitigating interest rate risk[296] - Management utilizes GAP/Interest Rate Sensitivity Reports and Net Interest Income Simulation Modeling, which are constructed and monitored quarterly[296] - The interest rate scenarios used for analysis do not necessarily reflect management's view of future market movements but measure potential volatility in earnings[297] - The Corporation's asset liability process evaluates simulated net interest income under three interest rate scenarios: base, rising, and falling[297] Taxation - Income tax expense for the three months ended September 30, 2024, was $7.2 million on pre-tax net income of $56.3 million, compared to $9.0 million on pre-tax income of $65.4 million for the same period in 2023[250] - The effective income tax rate for the three months ended September 30, 2024, was 12.7%, down from 13.8% in the same period in 2023, primarily due to a larger portion of tax-exempt interest income[252] Internal Controls - There have been no material changes in the Corporation's internal control over financial reporting during the last fiscal quarter[308]

Financial Data and Key Metrics Changes - Total assets reached $18.3 billion, total loans at $12.7 billion, total deposits at $14.4 billion, and assets under advisement at $5.6 billion [5] - Earnings per share for the quarter totaled $0.84, or $0.95 after adjusting for a $9.1 million loss from the sale of securities [5] - Tangible book value per share increased by $4.21 or 19% year-over-year, reaching $26.64 [6] - Adjusted net interest margin improved by 7 basis points quarter-over-quarter, supporting a sub-55% efficiency ratio for the quarter [6] Business Line Data and Key Metrics Changes - Total loans grew by 0.5% on an annualized basis during the quarter, with commercial and industrial (C&I) loans growing by 1% [8][9] - The investment real estate portfolio declined over 11% throughout 2024, with a slowdown in the decline to just over $20 million in Q3 [10] - The consumer portfolio grew more than 1.5%, driven primarily by private banking and HELOC portfolios [12] Market Data and Key Metrics Changes - Total deposits grew at a 2.3% annualized rate for the quarter, with a decline of only 1.5% for the full year [13] - The commercial segment saw deposit growth despite a reduction of over $170 million in public fund balances [13] Company Strategy and Development Direction - The company is focused on organic growth in 2025 and is open to well-priced inorganic growth opportunities [4] - Completed four major technology initiatives to enhance customer acquisition strategies and improve client experiences [7] - The strategy includes a shift towards core deposit accounts, reducing focus on higher-cost public funds and time deposits [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth momentum and the potential for higher earnings in the future due to balance sheet restructuring [5][6] - The company anticipates a $20 million to $25 million gain from the sale of branches in Q4, which will support future growth [5] - Management remains cautious about the impact of interest rate cuts on net interest income but is focused on maintaining growth [30][31] Other Important Information - The company has a strong capital position with a common equity Tier 1 ratio of 11.25% and a tangible common equity ratio of 8.76% [21] - The allowance for credit losses at quarter-end was $187.8 million, with a coverage ratio of 1.48% [18] Q&A Session Summary Question: Impact of security sales on net interest income for 2025 - Management is still budgeting for 2025 and will provide better guidance in January, but expects some margin compression in a declining rate environment [30] Question: Loan growth expectations for Q4 and 2025 - C&I growth is expected to continue in Q4, with overall loan growth projected in the mid-single digits for 2025 [39][41] Question: Increase in classified loans - The increase was primarily in investment real estate and some pressure within the C&I portfolio due to higher rates [44] Question: M&A environment and potential targets - The company is interested in banks in Indiana, Iowa, and Michigan that are underperforming and have potential for growth post-acquisition [61] Question: Tax rate expectations - The tax rate is expected to be between 13% and 14% going forward [64]

First Merchants (FRME) reported $155.98 million in revenue for the quarter ended September 2024, representing a year-over-year decline of 3.3%. EPS of $0.95 for the same period compares to $0.94 a year ago.The reported revenue represents a surprise of -2.85% over the Zacks Consensus Estimate of $160.55 million. With the consensus EPS estimate being $0.91, the EPS surprise was +4.40%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to d ...

First Merchants (FRME) came out with quarterly earnings of $0.95 per share, beating the Zacks Consensus Estimate of $0.91 per share. This compares to earnings of $0.94 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 4.40%. A quarter ago, it was expected that this bank would post earnings of $0.78 per share when it actually produced earnings of $0.68, delivering a surprise of -12.82%.Over the last four quarters, the company has ...

Financial Performance - Net income available to common stockholders for Q3 2024 was $48.7 million, down from $55.9 million in Q3 2023, with diluted earnings per share at $0.84 compared to $0.94 in the prior year[1][2] - Net Income for the quarter was $49,187, up from $56,366 in September 2023, a decrease of 12.7%[16] - Basic Net Income Available to Common Stockholders was $0.84 per share in Q3 2024, compared to $0.95 per share in Q3 2023, a decline of 11.6%[12] - Adjusted net income available to common stockholders for the three months ended September 30, 2024, was $55,613, an increase of 40.83% from $39,493 in the previous quarter[24] - Net Income Available to Common Stockholders (GAAP) rose to $48,719,000 for the three months ended September 30, 2024, from $42,010,000 for the three months ended December 31, 2023[25] Loans and Deposits - Total loans increased by $15.5 million, or 0.5% annualized, on a linked quarter basis, and grew by $385.1 million, or 3.1% year-over-year[1][3] - Total loans rose to $12,680,166,000 in Q3 2024, compared to $12,287,632,000 in Q3 2023, an increase of 3.2%[13] - Total deposits reached $14.4 billion, with a linked quarter increase of $83.7 million, or 2.3% annualized, after normalizing for $287.7 million of deposits reclassified to held for sale[1][4] - Total deposits decreased to $14,365,100 million in September 2024 from $14,646,576 million in September 2023, a decline of 1.9%[15] - Net loans increased slightly to $12,458,980 million in September 2024 from $12,065,640 million in September 2023, reflecting a growth of 3.3%[15] Asset Quality - Non-performing assets to total assets improved to 35 basis points, down from 36 basis points in the previous quarter[1][5] - Nonaccrual loans increased to $62,478 million in 2024 from $53,580 million in 2023, reflecting a rise of 16.5%[14] - Nonperforming assets (NPA) totaled $67,364 million in 2024, up from $58,411 million in 2023, indicating a year-over-year increase of 15.5%[14] - The ratio of NPAs to actual assets was 0.37% in 2024, compared to 0.33% in 2023, indicating a slight deterioration in asset quality[14] - The net charge-offs as a percentage of average loans (annualized) decreased to 0.21% in 2024 from 0.66% in 2023, showing improved loan performance[14] Interest Income and Expenses - Net interest income for the quarter was $131.1 million, a 2.0% increase from the prior quarter, but a 1.7% decrease compared to Q3 2023[1][6] - Total Interest Income for Q3 2024 was $241,083,000, an increase from $229,133,000 in Q3 2023, representing a growth of 4%[12] - Net Interest Income after Provision for Credit Losses decreased to $126,110,000 in Q3 2024 from $131,383,000 in Q3 2023, a decline of 4%[12] - The net interest margin (FTE) was 3.23% for the current period, slightly down from 3.29% in the previous year[19] - Interest expense as a percentage of average earning assets increased to 2.59% from 2.26% year-over-year[19] Capital Ratios - The total risk-based capital ratio was 13.18%, with a Common Equity Tier 1 Capital Ratio of 11.25%[1][7] - Stockholders' equity rose to $2,302,373 million in September 2024, up from $2,092,644 million in September 2023, an increase of 10.0%[15] - Total Average Stockholders' Equity (GAAP) increased to $2,251,547,000 for the three months ended September 30, 2024, from $2,130,993,000 for the three months ended December 31, 2023[25] Operational Efficiency - The efficiency ratio for the quarter was 53.76%, indicating operational efficiency[1] - The Efficiency Ratio was reported at 53.76%, slightly improved from 53.91% in the same quarter last year[16] Strategic Initiatives - The Corporation announced the sale of five non-core Illinois branches, expected to close in Q4 2024, as part of a strategic market repositioning[1][3]

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 ...

MUNCIE, Ind., Oct. 03, 2024 (GLOBE NEWSWIRE) -- First Merchants Corporation (Nasdaq:FRME) will report third quarter 2024 financial results on October 24, 2024. The Corporation will host a third quarter 2024 earnings conference call and webcast 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) In ...

First Merchants (FRME) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. The power of a cha ...

Earnings of First Merchants Corporation (NASDAQ: FRME ) will likely drop this year before recovering next year. Margin pressure will likely hold earnings back, while loan growth will lift earnings. Overall, I'm expecting earnings to fall by 11% to $3.31 per share in 2024, and increase Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expre ...

First Merchants (FRME) closed the last trading session at $35.82, gaining 10.2% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $46.60 indicates a 30.1% upside potential. The mean estimate comprises five short-term price targets with a standard deviation of $2.07. While the lowest estimate of $45 indicates a 25.6% increase from the current price level, the most optimistic analyst e ...