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 ...

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 ...

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 ...

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us. You can see the current list of Zacks #1 Rank Stocks here >>> Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the u ...

First Merchants (FRME) came out with quarterly earnings of $0.68 per share, missing the Zacks Consensus Estimate of $0.78 per share. This compares to earnings of $1.02 per share a year ago. These figures are adjusted for non-recurring items. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. While First Merchants has underperformed the market so far this year, t ...