-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RvGH9pSmIMOerb1xkJ1V06g8f2xuxXYG8xz4lfspPVTyqY+JlF8NL1IFsTevAYHy TAJX9XVJH+/hVB6ECXwjsA== 0000712534-03-000171.txt : 20031022 0000712534-03-000171.hdr.sgml : 20031022 20031022112705 ACCESSION NUMBER: 0000712534-03-000171 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20031022 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031022 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST MERCHANTS CORP CENTRAL INDEX KEY: 0000712534 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 351544218 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17071 FILM NUMBER: 03951197 BUSINESS ADDRESS: STREET 1: 200 E JACKSON ST STREET 2: PO BOX 792 CITY: MUNCIE STATE: IN ZIP: 47308-0792 BUSINESS PHONE: 3177471500 MAIL ADDRESS: STREET 1: 200 EAST JACKSON STREET CITY: MUNCIE STATE: IN ZIP: 47305 8-K 1 k8102203.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------------- FORM 8-K --------------------------------- CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 22, 2003 FIRST MERCHANTS CORPORATION (Exact name of registrant as specified in its charter) INDIANA (State or other jurisdiction of incorporation) 0-17071 35-1544218 (Commission File Number) (IRS Employer Identification No.) 200 East Jackson Street P.O. Box 792 Muncie, Indiana 47305-2814 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (765) 747-1500 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. Exhibit 99.1 Press Release, dated October 22, 2003, issued by First Merchants Corporation ITEM 9. REGULATION FD DISCLOSURE (INFORMATION PROVIDED UNDER ITEM 12 - RESULTS OF OPERATIONS AND FINANCIAL CONDITION). The following information is being provided under Item 12 - Results of Operations and Financial Condition. It is being furnished under Item 9 of this Form 8-K in accordance with interim guidance issued by the SEC in Release No. 33-8216. Such information, including the Exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934. On October 22, 2003, First Merchants Corporation issued a press release to report its financial results for the quarter ended September 30, 2003. The release is furnished as Exhibit 99.1 hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. By: /s/ Larry R. Helms -------------------------------------------- Larry R. Helms, Senior Vice President Dated: October 22, 2003 EXHIBIT INDEX ------------- Exhibit No. - ----------- 99.1 Description ----------- Press Release, dated October 22, 2003, issued by First Merchants Corporation. First Merchants Corporation Exhibit No. 99.1 Press Release, dated October 22, 2003 N / E / W / S R / E / L / E / A / S / E October 22, 2003 FOR IMMEDIATE RELEASE For more information, contact: Mark K. Hardwick, Senior Vice President/Chief Financial Officer 765-751-1857 http://firstmerchants.com SOURCE: First Merchants Corporation FIRST MERCHANTS ANNOUNCES 3rd QUARTER EARNINGS PER SHARE First Merchants Corporation (NASDAQ - FRME) has reported that third quarter 2003 diluted earnings per share equaled $.39, a decrease of 15.2%, from $.46 in the prior year. Net income decreased $478,000, or 6.1%, during the same period. Year-to-date diluted earnings were $1.19 per share compared to $1.31 in 2002. Year-to-date net income increased $512,000, or 2.4%, from $21,240,000 to $21,752,000. Net interest margin for the nine months ended September 30, 2003 declined 34 basis points as the Corporation's yield on earning assets declined 83 basis points and the cost of supporting liabilities declined by 49 basis points. For the quarter, net interest margin declined 47 basis points as the Corporation's yield on earning assets declined 1.03 percent and the cost of supporting liabilities declined by 56 basis points. Year-to-date gains from the sale of mortgage loans increased from $990,000 to $5,618,000, and the provision for loan losses increased from $4,297,000 to $8,430,000. For the quarter, gains from the sale of mortgage loans increased by $876,000 and the provision for loan losses decreased by $115,000. Michael L. Cox, President and Chief Executive Officer, commented that, "Changes in the yield curve, during the quarter, increased pressure on earnings as the Corporation maintains an asset sensitive interest rate risk position. This position has increased our dependence on gains generated from the sales of mortgage loans during this record low interest rate environment. The Federal Reserve Bank's reduction in the target fed funds rate of 25-basis points, during the last week of June, coupled with more than a 100-basis point increase in the 30-year treasury and mortgage rates, have proven to be challenging." Total loans outstanding reached $2.4 billion, an increase of $355 million over the prior year. Of the increase, $318 million is attributable to the acquisition of CNBC Bancorp on March 1, 2003. The remaining net increase of $37 million resulted primarily from increased commercial real estate loans outstanding of $55 million, mitigated by reductions in both residential real estate loans and individual loans for household and other personal expenditures. Total non-performing assets decreased from 1.21% of total loans in the third quarter of 2002 to 1.13% as of September 30, 2003. The Corporation's allowance for loan losses increased to 1.27% versus 1.10% during the same period last year. During the quarter, the Corporation completed a sale of non-performing loans. The sale reduced non-performing loans by $2 million and significantly reduced classified assets in one bank. Additionally, the remaining banks in the Corporation reduced non-performing loans by another $1.7 million. The Corporation's Board of Directors also authorized management to proceed with its strategic initiative of minimizing the number of regulatory agencies governing its banks. The Corporation is in the process of converting all of its state chartered banks to National Charters. The Office of the Comptroller of the Currency and the Federal Reserve Bank will be the remaining regulators once the conversion is complete. CONFERENCE CALL First Merchants Corporation will conduct a conference call at 2:30 p.m. Eastern Standard Time on Wednesday, October 22, 2003. To participate, dial 888-710-8192 and reference First Merchants Corporation's third quarter earnings release. A digital recording will be available two hours after the completion of the conference from October 22, 2003, to October 24, 2003. To access, US/Canada guests should call 800-642-1687; or for International/Local guests, call 706-645-9291 and enter the Conference I.D. 3236274. Detailed financial results are reported on the attached pages. First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. Subsidiaries of the Corporation include First Merchants Bank, NA, Madison Community Bank, First United Bank, Union County National Bank, The Randolph County Bank, First National Bank, Decatur Bank & Trust Company, Frances Slocum Bank, Lafayette Bank & Trust Company, Commerce National Bank and Merchants Trust Company. The Corporation also operates First Merchants Insurance Services, a full-service property casualty, personal lines, and healthcare insurance agency, headquartered in Muncie, Indiana, and is a majority member of Indiana Title Insurance Company, LLC, a title insurance agency. First Merchants Corporation's common stock is traded over-the-counter on the NASDAQ National Market System under the symbol FRME and is rated A+ by Standard & Poor's Corporation. Quotations are carried in daily newspapers and can be found on the company's Internet web page (http:/www.firstmerchants.com). * * * *
CONSOLIDATED BALANCE SHEETS (in thousands) September 30, 2003 2002 Assets Cash and due from banks $ 87,619 $ 73,223 Federal funds sold 0 8,750 ----------- ----------- Cash and cash equivalents 87,619 81,973 Interest-bearing time deposits 3,789 10,222 Investment securities 316,852 345,452 Mortgage loans held for sale 12,042 14,089 Loans, net of allowance for loan losses of $29,842 and $22,147 2,321,563 1,971,891 Premises and equipment 39,475 39,179 Federal Reserve and Federal Home Loan Bank stock 14,057 11,097 Interest receivable 17,139 18,622 Core deposit intangibles and goodwill 143,648 106,753 Cash surrender value of life insurance 37,536 14,143 Other assets 18,000 16,065 ----------- ----------- Total assets $ 3,011,720 $ 2,629,486 =========== =========== Liabilities Deposits Noninterest-bearing $ 316,058 $ 246,410 Interest-bearing 1,994,146 1,773,325 ----------- ----------- Total deposits 2,310,204 2,019,735 Borrowings 374,051 328,933 Interest payable 5,200 6,813 Other liabilities 21,064 14,132 ----------- ----------- Total liabilities 2,710,519 2,369,613 Stockholders' equity Preferred stock, no-par value Authorized and unissued -- 500,000 shares Common stock, $.125 stated value Authorized -- 50,000,000 shares Issued and outstanding - 18,487,974 and 17,124,914 2,311 2,141 Additional paid-in capital 149,810 116,102 Retained earnings 147,559 135,266 Accumulated other comprehensive income 1,521 6,364 ----------- ----------- Total stockholders' equity 301,201 259,873 ----------- ----------- Total liabilities and stockholders' equity $ 3,011,720 $ 2,629,486 =========== ===========
FINANCIAL HIGHLIGHTS Three Months Ended Nine Months Ended (In thousands) September 30, September 30, 2003 2002 2003 2002 NET CHARGE OFF'S $ 2,503 $ 1,637 $ 4,732 $ 4,193 AVERAGE BALANCES Total Assets $3,030,935 $2,635,606 $2,923,015 $2,319,049 Total Loans 2,348,817 1,984,323 2,258,725 1,766,879 Total Deposits 2,305,589 2,018,242 2,221,870 1,800,894 Total Stockholders' Equity 301,048 254,654 290,503 229,634 FINANCIAL RATIOS Return on Average Assets 0.97% 1.19% 0.99% 1.22% Return on Avg. Stockholders' Equity 9.76 12.40 9.98 12.45 Avg. Earning Assets to Avg. Assets 89.48 90.27 89.92 91.11 Allowance for Loan Losses as % Of Total Loans 1.26 1.10 1.26 1.10 Net Charge Off's as % Of Avg. Loans (Annualized) .43 .32 .28 .32 Dividend Payout Ratio 58.97 47.83 56.30 50.38 Avg. Stockholders' Equity to Avg. Assets 9.93 9.58 9.94 9.81 Tax Equivalent Yield on Earning Assets 5.89 6.92 6.11 6.94 Cost of Supporting Liabilities 1.93 2.49 2.01 2.50 Net Int. Margin (FTE) on Earning Assets 3.96 4.43 4.10 4.44
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share data) Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 Interest Income Loans receivable Taxable $ 35,607 $ 35,362 $106,539 $ 94,504 Tax exempt 185 169 512 403 Investment securities Taxable 1,342 2,442 4,621 6,986 Tax exempt 1,562 1,793 4,819 4,450 Federal funds sold 49 123 339 388 Deposits with financial institutions 13 53 54 159 Federal Reserve and Federal Home Loan Bank stock 201 206 610 527 -------- -------- -------- -------- Total interest income 38,959 40,148 117,494 107,417 -------- -------- -------- -------- Interest expense Deposits 8,623 10,696 26,555 29,766 Securities sold under repurchase agreements 370 517 1,273 1,558 Federal Home Loan Bank advances 2,409 2,283 7,077 5,807 Trust preferred securities 1,232 1,181 3,697 2,143 Other borrowings 451 143 1,053 355 -------- -------- -------- -------- Total interest expense 13,085 14,820 39,655 39,629 -------- -------- -------- -------- Net interest income 25,874 25,328 77,839 67,788 Provision for loan losses 1,706 1,821 8,430 4,297 -------- -------- -------- -------- Net interest income after provision for loan losses 24,168 23,507 69,409 63,491 -------- -------- -------- -------- Other income Fiduciary activities 1,547 1,651 5,133 4,771 Service charges on deposit accounts 2,861 2,626 8,388 6,635 Other customer fees 961 957 3,085 2,925 Net realized gains on sales of available-for-sale securities 512 162 950 570 Commission income 638 557 2,099 1,617 Other income 2,357 1,693 8,660 3,343 -------- -------- -------- -------- Total other income 8,876 7,646 28,315 19,861 -------- -------- -------- -------- Other expenses Salaries and employee benefits 13,206 10,606 37,885 28,301 Net occupancy expenses 1,189 999 3,480 2,699 Equipment expenses 1,996 1,880 5,856 4,848 Marketing expense 414 415 1,259 1,079 Deposit insurance expense 143 290 Outside data processing fees 1,025 1,018 3,055 2,724 Printing and office supplies 401 388 1,240 1,155 Goodwill and core deposit amortization 958 786 2,777 1,839 Other expenses 3,771 2,952 11,784 8,194 -------- -------- -------- -------- Total other expenses 22,960 19,187 67,336 51,129 -------- -------- -------- -------- Income before income tax 10,084 11,966 30,388 32,223 Income tax expense 2,735 4,139 8,636 10,983 -------- -------- -------- -------- Net income $ 7,349 $ 7,827 $ 21,752 $ 21,240 ======== ======== ======== ======== Per Share Data (1) Basic Net Income .40 .47 1.20 1.32 Diluted Net Income .39 .46 1.19 1.31 Cash Dividends Paid .23 .22 .67 .66 (1) Restated for a five percent (5%) stock dividend distributed September 2003.
CONSOLIDATED BALANCE SHEETS (in thousands) September 30, June 30, March 31, December 31, September 30, 2003 2003 2003 2002 2002 Assets Cash and due from banks $ 87,619 $ 89,126 $ 81,789 $ 87,638 $ 73,223 Federal funds sold 0 14,150 54,925 31,400 8,750 ----------- ----------- ----------- ------------ ----------- Cash and cash equivalents 87,619 103,276 136,714 119,038 81,973 Interest-bearing time deposits 3,789 8,777 5,170 3,568 10,222 Investment securities 316,852 363,103 333,692 342,062 345,452 Mortgage loans held for sale 12,042 15,151 13,558 21,545 14,089 Loans 2,351,405 2,324,576 2,291,178 2,004,377 1,994,038 Less: Allowance for loan losses (29,842) (30,639) (29,733) (22,417) (22,147) ---------- ----------- ----------- ------------ ---------- Net loans 2,321,563 2,293,937 2,261,445 1,981,960 1,971,891 Premises and equipment 39,475 39,313 38,861 38,645 39,179 Federal Reserve and Federal Home Loan Bank stock 14,057 13,933 13,912 11,409 11,097 Interest receivable 17,139 16,592 16,789 17,346 18,622 Core deposit intangibles and goodwill 143,648 144,663 141,226 107,217 106,753 Cash surrender value of life insurance 37,536 34,575 14,567 14,309 14,143 Other assets 18,000 23,641 23,088 21,588 16,065 ----------- ----------- ----------- ------------ ----------- Total assets $ 3,011,720 $ 3,056,961 $ 2,999,022 $ 2,678,687 $ 2,629,486 =========== =========== =========== ============ =========== Liabilities Deposits Noninterest-bearing $ 316,058 $ 324,735 $ 289,835 $ 272,128 $ 246,410 Interest-bearing 1,994,146 1,988,593 1,996,836 1,764,560 1,773,325 ----------- ----------- ----------- ------------ ----------- Total deposits 2,310,204 2,313,328 2,286,671 2,036,688 2,019,735 Borrowings 374,051 417,669 388,821 356,927 328,933 Interest payable 5,200 5,494 5,694 6,019 6,813 Other liabilities 21,064 19,460 28,212 17,924 14,132 ----------- ----------- ----------- ------------ ----------- Total liabilities 2,710,519 2,755,951 2,709,398 2,417,558 2,369,613 Stockholders' equity Preferred stock, no-par value Authorized and unissued -- 500,000 shares Common stock, $.125 stated value Authorized -- 50,000,000 shares Issued and outstanding 2,311 2,301 2,298 2,142 2,141 Additional paid-in capital 149,810 148,296 143,505 116,401 116,102 Retained earnings 147,559 144,457 139,743 138,110 135,266 Accumulated other comprehensive income 1,521 5,956 4,078 4,476 6,364 ----------- ----------- ----------- ------------ ----------- Total stockholders' equity 301,201 301,010 289,624 261,129 259,873 ----------- ----------- ----------- ------------ ----------- Total liabilities and stockholders' equity $ 3,011,720 $ 3,056,961 $ 2,999,022 $ 2,678,687 $ 2,629,486 =========== =========== =========== ============ ===========
NON-PERFORMING ASSETS (In thousands) September 30, June 30, March 31, December 31, September 30, 2003 2003 2003 2002 2002 90 days past due $ 4,790 $ 5,295 $ 3,552 $ 6,676 $ 9,786 Non-accrual loans 20,093 22,532 19,747 14,134 13,285 Other real estate 1,547 2,351 1,841 1,691 868 ------------ ---------- ---------- ------------ ------------ Total non-performing assets $ 26,430 $ 30,178 $ 25,140 $ 22,501 $ 23,939 ============ ========== ========== ============ ============ Average total loans for the quarter $ 2,348,817 $2,313,688 $2,111,056 $ 2,066,616 $ 1,984,323 Total non-performing assets as a percent of average total loans 1.13% 1.30% 1.19% 1.09% 1.21% Restructured loans $ 647 $ 899 $ 2,194 $ 2,508 $ 2,326
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended (in thousands, except share data) September 30, June 30, March 31, December 31, September 30, 2003 2003 2003 2002 2002 Interest Income Loans receivable Taxable $ 35,607 $ 35,759 $ 35,173 $ 34,775 $ 35,362 Tax exempt 185 162 165 235 169 Investment securities Taxable 1,342 1,600 1,679 2,100 2,442 Tax exempt 1,562 1,626 1,631 1,740 1,793 Federal funds sold 49 177 113 169 123 Deposits with financial institutions 13 19 22 38 53 Federal Reserve and Federal Home Loan Bank stock 201 211 198 208 206 -------- -------- -------- -------- -------- Total interest income 38,959 39,554 38,981 39,265 40,148 -------- -------- -------- -------- -------- Interest expense Deposits 8,623 9,048 8,884 9,934 10,696 Securities sold under repurchase agreements 370 454 449 502 517 Federal Home Loan Bank advances 2,409 2,395 2,273 2,359 2,283 Trust preferred securities 1,232 1,259 1,206 1,181 1,181 Other borrowings 451 443 159 154 143 -------- -------- -------- -------- -------- Total interest expense 13,085 13,599 12,971 14,130 14,820 -------- -------- -------- -------- -------- Net interest income 25,874 25,955 26,010 25,135 25,328 Provision for loan losses 1,706 2,123 4,601 2,877 1,821 -------- -------- -------- -------- -------- Net interest income after provision for loan losses 24,168 23,832 21,409 22,258 23,507 -------- -------- -------- -------- -------- Other income Fiduciary activities 1,547 1,889 1,697 1,487 1,651 Service charges on deposit accounts 2,861 2,743 2,784 2,695 2,626 Other customer fees 961 1,036 1,088 993 957 Net realized gains on sales of available-for-sale securities 512 67 371 169 162 Commission income 638 707 754 586 557 Other income 2,357 4,711 1,592 1,286 1,693 -------- -------- -------- -------- -------- Total other income 8,876 11,153 8,286 7,216 7,646 -------- -------- -------- -------- -------- Other expenses Salaries and employee benefits 13,206 12,902 11,777 10,849 10,606 Net occupancy expenses 1,189 1,200 1,091 933 999 Equipment expenses 1,996 2,016 1,844 1,861 1,880 Marketing expense 414 411 434 416 415 Deposit insurance expense 0 104 143 Outside data processing fees 1,025 1,102 928 940 1,018 Printing and office supplies 401 432 407 442 388 Goodwill and core deposit amortization 958 991 828 750 786 Other expenses 3,771 3,881 4,132 3,591 2,952 -------- -------- -------- -------- -------- Total other expenses 22,960 22,935 21,441 19,886 19,187 -------- -------- -------- -------- -------- Income before income tax 10,084 12,050 8,254 9,588 11,966 Income tax expense 2,735 3,305 2,596 2,998 4,139 -------- -------- -------- -------- -------- Net income $ 7,349 $ 8,745 $ 5,658 $ 6,590 $ 7,827 ======== ======== ======== ======== ======== Per Share Data(1) Basic Net Income $ .40 $ .48 $ .32 $ .38 $ .47 Diluted Net Income .39 .48 .32 .38 .46 Cash Dividends Paid .23 .22 .22 .22 ..22 (1) Restated for a five percent (5%) stock dividend distributed September 2003.
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