First Merchants (US:FRME)2025-02-24 17:07Credit Losses and Provisions - The allowance for credit losses on loans decreased by $12.2 million during the year ended December 31, 2024, primarily due to $49.4 million in net charge-offs[129]. - The provision for credit losses on loans recorded in 2024 was $37.2 million, resulting in a net provision expense of $35.7 million after a reserve release of $1.5 million[129]. - Net charge-offs for 2024 amounted to $49.4 million, with two commercial relationships accounting for $42.7 million of these charge-offs[129]. - The ratio of net charge-offs to average loans outstanding for 2024 was 0.39%, compared to 0.21% in 2023[124]. - As of December 31, 2024, the total allowance for credit losses on loans was $192.8 million, down from $204.9 million in 2023[129]. - The allowance for credit losses on loans was reported at $192.8 million as of December 31, 2024, reflecting management's estimates of expected future losses[334]. - The total allowance for credit losses (ACL) on loans is adjusted quarterly, reflecting the expected credit losses based on historical data and economic forecasts[465]. - The net provision expense for credit losses on loans for the year ended December 31, 2024, was $35.7 million, after recording a provision of $37.2 million offset by a release in reserve of $1.5 million[476]. - The total ACL - Loans balance as of December 31, 2024, was $192.757 million, down from $204.934 million as of December 31, 2023[477]. - The Corporation's loan commitments to extend credit amounted to $5,006.085 million as of December 31, 2024, compared to $5,025.790 million in 2023[481]. Financial Performance - Total Interest Income for 2024 reached $948,006, an increase of 6.4% from $893,886 in 2023[340]. - Net Interest Income after Provision for Credit Losses decreased to $485,414 in 2024, down from $541,900 in 2023, reflecting a decline of 10.4%[340]. - Noninterest Income increased to $125,580 in 2024, up 18.9% from $105,602 in 2023[340]. - Total Noninterest Expenses decreased to $379,266 in 2024, a reduction of 2.3% compared to $388,270 in 2023[340]. - Net Income available to Common Stockholders for 2024 was $199,527, down 10.1% from $221,911 in 2023[340]. - Basic Net Income per Share for 2024 was $3.42, a decrease of 8.6% from $3.74 in 2023[340]. - Comprehensive Income for 2024 was $188,687, a decline of 34.3% from $286,967 in 2023[341]. - The net income for the year ended December 31, 2024, is $201,402,000, a decrease from $223,786,000 in 2023[343]. - The total comprehensive income for the year ended December 31, 2024, is $188,685,000, compared to a comprehensive income of $239,151,000 in 2023[343]. Loans and Loan Portfolio - The company's net loans increased to $12,661,602,000 in 2024 from $12,281,093,000 in 2023, showing growth in the loan portfolio[338]. - The loan portfolio reached $12,854,359 million as of December 31, 2024, up from $12,486,027 million in 2023, indicating an increase of about 2.9%[443]. - Commercial and industrial loans increased to $4,114,292 million in 2024 from $3,670,948 million in 2023, marking a growth of approximately 12.1%[443]. - Total loans across all categories reached $12,854,359, an increase from $1,733,843, representing a growth of about 641%[447]. - Total commercial and industrial loans reached $1,693,245, an increase from $539,311 in the previous year, representing a growth of approximately 213%[447]. - Total residential loans amounted to $2,374,729, compared to $417,417 in the previous year, reflecting a growth of about 469%[447]. - Home equity loans increased to $659,811 from $4,354, marking a growth of approximately 15,116%[447]. - The total current period gross charge-offs were $54,243, a decrease from $40,529 in the previous period[447]. Deposits and Borrowings - The total short-term borrowings as of December 31, 2024, were $338.3 million, an increase from $218.5 million in 2023[137]. - Total deposits decreased to $14,521,626,000 in 2024 from $14,821,453,000 in 2023, indicating a decline in customer deposits[338]. - The Corporation's total deposits decreased by $299.8 million from December 31, 2023, primarily due to the sale of Illinois branch deposits amounting to $267.4 million, resulting in total deposits of $14.5 billion as of December 31, 2024[498]. - Total borrowings increased from $1.03 billion in 2023 to $1.16 billion in 2024, with Federal Home Loan Bank advances rising from $712.9 million to $822.6 million[500]. Asset Management and Investments - The fair value of assets acquired in previous acquisitions was $2,510,576, with liabilities assumed totaling $2,168,863[347]. - The amortized cost of investment securities available for sale was $1.624 billion as of December 31, 2024, with a fair value of $1.386 billion[423]. - The total held-to-maturity investment securities amounted to $2.074 billion, with a fair value of $1.723 billion as of December 31, 2024[424]. - The total investment securities available for sale reported at less than historical cost was $1,353.744 million as of December 31, 2024, with gross unrealized losses of $238.853 million, representing 97.6% of the Corporation's investments available for sale in an unrealized loss position[435]. - The fair value of investment securities available for sale at December 31, 2024 was $1,353.744 million, down from a historical cost of $1,592.597 million[435]. Shareholder and Equity Information - The total stockholders' equity rose to $2,304,983,000 in 2024, compared to $2,247,713,000 in 2023, reflecting an increase in retained earnings[338]. - Cash Dividends Paid to Common Stockholders increased to $1.39 in 2024, up from $1.34 in 2023[340]. - The company repurchased 1,648,466 shares of common stock in 2024, resulting in a total cost of $56,168,000[343]. - The total number of common shares outstanding as of December 31, 2024, is 57,974,535, a decrease from 59,424,122 shares in 2023[343]. - The accumulated other comprehensive income (loss) as of December 31, 2024, is $(188,685,000), compared to $(175,970,000) in 2023[343]. Risk Management and Credit Quality - Nonperforming loans and credit quality indicators are actively monitored, with management tracking trends in criticized commercial loans and net charge-offs[444]. - The corporation's risk grading system includes categories from Pass to Loss, with all large commercial credit grades reviewed at least annually[445]. - The Corporation maintained a strong focus on credit quality, with no allowance for credit losses recorded on investment securities available for sale due to unrealized losses being attributed to interest rate changes[358]. - The Corporation's investment securities portfolio is monitored quarterly for credit quality through the use of credit ratings[429]. Accounting and Regulatory Compliance - The Corporation adopted new accounting standards in 2024, including ASU No. 2023-02 for tax credit structures, which did not significantly impact financial statements[395]. - The Corporation is assessing the impact of new accounting pronouncements, including ASU No. 2023-09 on income tax disclosures, expected to be effective after December 15, 2024[400]. - The Corporation's income tax expense includes current year tax due and changes in deferred tax assets and liabilities, with no uncertain tax positions identified[390].