8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 25, 2022

FIRST MERCHANTS CORPORATION

(Exact name of registrant as specified in its charter)

Indiana
(State or other jurisdiction of incorporation)
001-41342	35-1544218
(Commission File Number)	(IRS Employer Identification No.)

200 East Jackson Street

P.O. Box 792

Muncie, IN 47305-2814

(Address of principal executive offices, including zip code)

(765) 747-1500

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.125 stated value per share	FRME	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/100th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A	FRMEP	The Nasdaq Stock Market LLC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On October 25, 2022, First Merchants Corporation issued a press release to report its financial results for the third quarter ended September 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report on Form 8-K, including Exhibit No. 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a)    Not applicable.

(b)    Not applicable.

(c)    Not applicable.

(d)    Exhibits.

Exhibit 99.1 Press Release, dated October 25, 2022, issued by First Merchants Corporation

Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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.

	First Merchants Corporation
	(Registrant)
	By: /s/ Michele M. Kawiecki Michele M. Kawiecki Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)
Dated: October 25, 2022

EXHIBIT INDEX

Exhibit No.    Description

99.1            Press Release, dated October 25, 2022, issued by First Merchants Corporation

104            Cover Page Interactive Data File (embedded within the Inline XBRL document)

EX-99.1

N / E / W / S R / E / L / E / A / S / E

October 25, 2022

FOR IMMEDIATE RELEASE

For more information, contact:

Nicole M. Weaver, Vice President and Director of Corporate Administration

765-521-7619

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES THIRD QUARTER 2022 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME)

Third Quarter 2022 Highlights:

•Net income available to common stockholders was $63.3 million and diluted earnings per common share totaled $1.08, compared to $52.8 million and $.98 in the third quarter of 2021, and $38.5 million and $.63 in the second quarter of 2022.

•Completed system integration for the acquisition of Level One Bancorp, Inc. (“Level One”) during the quarter.

•Adjusted net income available to common stockholders1 for the third quarter was $65.6 million and adjusted diluted earnings per common share1 totaled $1.12, compared to $46.6 million and $.87 in the third quarter of 2021, and $60.0 million and $1.01 in the second quarter of 2022.

•Total loans grew $290.6 million, or 10.2% annualized on a linked quarter basis, excluding the forgiveness of $21.7 million in Paycheck Protection Program (“PPP”) loans.

•Total deposits declined $136.0 million, or 3.7% annualized on a linked quarter basis.

•Nonaccrual loans totaled $43.5 million compared to $46.0 million on a linked quarter basis

•Net interest income totaled $140.3 million, an increase of $11.6 million, or 9.0% on a linked quarter basis

Mark Hardwick, Chief Executive Officer, stated, “Despite high inflation and volatility in both the bond and stock markets, our performance continues to be steady and strong. Margins are expanding, loan growth continues, and asset quality metrics remain at historical lows. We believe our balance sheet mix, allowance coverage and capital levels are well positioned for an uncertain economic environment.”

Third Quarter Financial Results

First Merchants Corporation (the “Corporation) has reported third quarter 2022 net income available to common stockholders of $63.3 million compared to $52.8 million during the same period in 2021. Diluted earnings per common share for the period totaled $1.08 per share compared to the third quarter of 2021 result of $.98 per share. Current quarter results included integration costs from the acquisition of Level One and severance expense totaling $4.0 million.

Total assets equaled $17.7 billion as of quarter-end and loans totaled $11.7 billion. Total loans increased $2.6 billion during the past twelve months. The acquisition of Level One contributed $1.6 billion of loans. Excluding acquired loans, the Corporation experienced organic loan growth of $1.2 billion, or 13.8 percent, during the past twelve months. This was offset by the forgiveness of PPP loans of $230.3 million. PPP loans accounted for $11.2 million of the period end loan portfolio balance. Investments decreased $150.7 million, or 3.4 percent, during the last twelve months and now total $4.3 billion.

Total deposits equaled $14.4 billion as of quarter-end and increased by $2.1 billion over the past twelve months. The acquisition of Level One contributed $1.9 billion in deposits resulting in $155.3 million or 1.3% in organic deposit growth. The balance sheet growth mix resulted in an increase in the loan to deposit ratio of 7.6% over the past twelve months with the current quarter ratio ending at 80.9 percent.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $226.7 million as of quarter-end, or 1.94 percent of total loans, an increase of $26.7 million over prior year due to the acquisition of Level One. Net loan recoveries for the quarter totaled $0.4 million. No provision expense was recorded during the quarter or during the last twelve months other than CECL Day 1 expense of $16.8 million due to the acquisition of Level One. Non-performing assets to total assets were 0.28% for the third quarter of 2022, a decrease of seven basis points compared to 0.35% in the third quarter of 2021.

Net-interest income totaling $140.3 million for the quarter, continued to grow with an increase of $11.6 million, or 9 percent, over prior quarter, and an increase of $35.6 million, or 34 percent compared to the third quarter of 2021. Stated net-interest margin on a tax equivalent basis, totaling 3.55 percent, increased by 27 basis points compared to the second quarter of 2022 and 35 basis points compared to the third quarter of 2021. Net-interest margin excluding the impact of fair value accretion and PPP loans totaled 3.47%, an increase of 28 basis points compared to 3.19% for the second quarter of 2022 and an increase of 48 basis points from the third quarter of 2021. During the quarter, the yield on earning assets expanded 53 basis points from higher loan and investment portfolio yields as well as organic loan growth, offset by a 26 basis point increase in funding costs.

Non-interest income, totaling $29.6 million for the quarter, increased $1.3 million or 4.7% compared to the second quarter of 2022. The increase was driven by higher earnings on cash surrender value of life insurance offset by lower customer related fees and other income. Non-interest income increased $1.1 million from the third quarter of 2021 also due to higher earnings on cash surrender value of life insurance offset by lower gains on the sale of securities and other income. The decline in other income was due to a write-down of an equity investment of $1.9 million.

Non-interest expense totaled $96.4 million for the quarter, a decrease of $0.9 million from the second quarter of 2022, and an increase of $25.0 million over the third quarter of 2021. Integration costs and severance expense totaling $4.0 million were incurred during the quarter.

The Corporation’s total risk-based capital ratio equaled 12.84 percent, common equity tier 1 capital ratio equaled 10.40 percent, and the tangible common equity ratio totaled 6.66 percent. These ratios continue to reflect the Corporation’s strong capital position.

1 See “Non-GAAP Financial Information” for reconciliation

CONFERENCE CALL

First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 10:30 a.m. (ET) on Tuesday, October 25, 2022.

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/BI33d38f63624949c49527aaa096d2e146)

In order to view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/988gy9uu) during the time of the call. A replay of the webcast will be available until October 25, 2023.

Detailed financial results are reported on the attached pages.

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank).

First Merchants Corporation’s common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company’s Internet web page (http://www.firstmerchants.com).

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.

Forward-Looking Statements

This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These statements include statements of First Merchants’ goals, intentions and expectations; statements regarding the First Merchants’ business plan and growth strategies; statements regarding the asset quality of First Merchants’ loan and investment portfolios; and estimates of First Merchants’ risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit worthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants’ affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity, credit and interest rate risks associated with the First Merchants’ business; and other risks and factors identified in each of First Merchants’ filings with the Securities and Exchange Commission. First Merchants does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this press release. In addition, First Merchants’ past results of operations do not necessarily indicate its anticipated future results.

* * * *

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	September 30,
	2022		2021
ASSETS
Cash and due from banks	$	119,532	$	169,261
Interest-bearing deposits	179,593		369,447
Investment securities, net of allowance for credit losses of $245,000 and $245,000	4,294,768		4,445,516
Loans held for sale	25,394		5,990
Loans	11,650,002		9,041,576
Less: Allowance for credit losses - loans	(226,702)		(199,972)
Net loans	11,423,300		8,841,604
Premises and equipment	116,306		104,814
Federal Home Loan Bank stock	38,056		28,736
Interest receivable	71,605		53,079
Goodwill and other intangibles	750,713		572,323
Cash surrender value of life insurance	306,932		291,825
Other real estate owned	6,454		698
Tax asset, deferred and receivable	142,110		39,504
Other assets	244,222		137,928
TOTAL ASSETS	$	17,718,985	$	15,060,725
LIABILITIES
Deposits:
Noninterest-bearing	$	3,356,651	$	2,554,323
Interest-bearing	11,078,174		9,794,366
Total Deposits	14,434,825		12,348,689
Borrowings:
Federal funds purchased	185,000		—
Securities sold under repurchase agreements	194,482		183,589
Federal Home Loan Bank advances	643,769		334,149
Subordinated debentures and other borrowings	151,301		118,558
Total Borrowings	1,174,552		636,296
Interest payable	4,971		3,736
Other liabilities	197,971		203,914
Total Liabilities	15,812,319		13,192,635
STOCKHOLDERS' EQUITY
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
Issued and outstanding - 10,000 non-cumulative perpetual shares	25,000		—
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding - 59,145,414 and 53,510,745 shares	7,393		6,689
Additional paid-in capital	1,226,695		988,659
Retained earnings	961,542		832,728
Accumulated other comprehensive income (loss)	(314,089)		39,889
Total Stockholders' Equity	1,906,666		1,868,090
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,718,985	$	15,060,725

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Nine Months Ended
(Dollars In Thousands, Except Per Share Amounts)	September 30,				September 30,
	2022		2021		2022		2021
INTEREST INCOME
Loans receivable:
Taxable	$	128,504	$	85,319	$	314,366	$	257,426
Tax-exempt	6,500		5,591		18,194		16,475
Investment securities:
Taxable	10,055		7,788		28,937		21,923
Tax-exempt	17,261		14,464		50,348		39,920
Deposits with financial institutions	704		218		1,544		461
Federal Home Loan Bank stock	314		168		635		434
Total Interest Income	163,338		113,548		414,024		336,639
INTEREST EXPENSE
Deposits	16,644		5,707		29,423		17,730
Federal funds purchased	418		—		494		4
Securities sold under repurchase agreements	372		77		595		239
Federal Home Loan Bank advances	3,493		1,389		6,485		4,283
Subordinated debentures and other borrowings	2,105		1,660		5,780		4,976
Total Interest Expense	23,032		8,833		42,777		27,232
NET INTEREST INCOME	140,306		104,715		371,247		309,407
Provision for credit losses - loans	—		—		16,755		—
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	140,306		104,715		354,492		309,407
NON-INTEREST INCOME
Service charges on deposit accounts	7,165		6,249		21,274		17,109
Fiduciary and wealth management fees	7,221		7,352		22,187		21,284
Card payment fees	4,776		4,156		15,674		12,682
Net gains and fees on sales of loans	2,543		3,955		7,968		16,266
Derivative hedge fees	700		1,028		3,062		2,288
Other customer fees	501		393		1,573		1,129
Earnings on cash surrender value of life insurance	6,655		2,468		9,659		5,009
Net realized gains on sales of available for sale securities	481		1,756		1,137		5,316
Other income (loss)	(425)		1,144		1,257		2,393
Total Non-Interest Income	29,617		28,501		83,791		83,476
NON-INTEREST EXPENSES
Salaries and employee benefits	56,002		43,314		154,562		124,563
Net occupancy	6,738		5,576		19,573		17,682
Equipment	5,997		4,529		17,797		14,407
Marketing	2,401		1,676		4,551		3,922
Outside data processing fees	6,827		4,794		16,071		13,736
Printing and office supplies	472		265		1,198		861
Intangible asset amortization	2,303		1,463		5,972		4,284
FDIC assessments	2,824		1,552		7,940		4,381
Other real estate owned and foreclosure expenses	328		(91)		626		821
Professional and other outside services	4,461		2,767		17,681		8,286
Other expenses	8,025		5,539		20,045		13,834
Total Non-Interest Expenses	96,378		71,384		266,016		206,777
INCOME BEFORE INCOME TAX	73,545		61,832		172,267		186,106
Income tax expense	9,793		9,062		20,938		28,308
NET INCOME	63,752		52,770		151,329		157,798
Preferred stock dividends	469		—		938		—
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	63,283	$	52,770	$	150,391	$	157,798
Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.08	$	0.98	$	2.63	$	2.93
Diluted Net Income Available to Common Stockholders	$	1.08	$	0.98	$	2.62	$	2.92
Cash Dividends Paid to Common Stockholders	$	0.32	$	0.29	$	0.93	$	0.84
Average Diluted Common Shares Outstanding (in thousands)	59,339		53,960		57,468		54,093

FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
NET CHARGE-OFFS (RECOVERIES)	$	(427)		$	(197)		$	(751)		$	4,731
AVERAGE BALANCES:
Total Assets	$	17,770,623		$	15,006,087		$	17,012,930		$	14,672,596
Total Loans	11,488,203			9,089,648			10,647,950			9,202,327
Total Earning Assets	16,508,914			13,741,196			15,744,040			13,419,310
Total Deposits	14,577,532			12,350,336			14,074,696			12,017,335
Total Stockholders' Equity	2,018,156			1,889,037			1,977,299			1,858,680
FINANCIAL RATIOS:
Return on Average Assets	1.43		%	1.41		%	1.19		%	1.43		%
Return on Average Stockholders' Equity	12.54			11.17			10.14			11.32
Return on Average Common Stockholders' Equity	12.70			11.17			10.23			11.32
Average Earning Assets to Average Assets	92.90			91.57			92.54			91.46
Allowance for Credit Losses - Loans as % of Total Loans	1.94			2.21			1.94			2.21
Net Charge-offs as % of Average Loans (Annualized)	(0.01)			(0.01)			(0.01)			0.07
Average Stockholders' Equity to Average Assets	11.36			12.59			11.62			12.67
Tax Equivalent Yield on Average Earning Assets	4.11			3.46			3.66			3.49
Interest Expense/Average Earning Assets	0.56			0.26			0.36			0.27
Net Interest Margin (FTE) on Average Earning Assets	3.55			3.20			3.30			3.22
Efficiency Ratio	53.34			51.18			54.95			50.10
Tangible Common Book Value Per Share	$	19.26		$	24.31		$	19.26		$	24.31

NON-PERFORMING ASSETS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2022			2022			2022			2021			2021
Non-Accrual Loans	$	43,508		$	45,970		$	42,698		$	43,062		$	51,502
Renegotiated Loans	195			233			141			329			439
Non-Performing Loans (NPL)	43,703			46,203			42,839			43,391			51,941
Other Real Estate Owned and Repossessions	6,454			6,521			6,271			558			698
Non-Performing Assets (NPA)	50,157			52,724			49,110			43,949			52,639
90+ Days Delinquent	764			592			2,085			963			157
NPAs & 90 Day Delinquent	$	50,921		$	53,316		$	51,195		$	44,912		$	52,796
Allowance for Credit Losses - Loans	$	226,702		$	226,275		$	195,984		$	195,397		$	199,972
Quarterly Net Charge-offs (Recoveries)	(427)			263			(587)			4,575			(197)
NPAs / Actual Assets %	0.28		%	0.30		%	0.32		%	0.28		%	0.35		%
NPAs & 90 Day / Actual Assets %	0.29		%	0.30		%	0.33		%	0.29		%	0.35		%
NPAs / Actual Loans and OREO %	0.43		%	0.46		%	0.52		%	0.47		%	0.58		%
Allowance for Credit Losses - Loans / Actual Loans (%)	1.94		%	1.98		%	2.09		%	2.11		%	2.21		%
Net Charge-offs as % of Average Loans (Annualized)	(0.01)		%	0.01		%	(0.03)		%	0.20		%	(0.01)		%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	September 30,		June 30,		March 31,		December 31,		September 30,
	2022		2022		2022		2021		2021
ASSETS
Cash and due from banks	$	119,532	$	212,559	$	148,277	$	167,146	$	169,261
Interest-bearing deposits	179,593		136,702		395,262		474,154		369,447
Investment securities, net of allowance for credit losses	4,294,768		4,630,030		4,489,263		4,524,353		4,445,516
Loans held for sale	25,394		9,060		3,938		11,187		5,990
Loans	11,650,002		11,397,417		9,356,241		9,241,861		9,041,576
Less: Allowance for credit losses - loans	(226,702)		(226,275)		(195,984)		(195,397)		(199,972)
Net loans	11,423,300		11,171,142		9,160,257		9,046,464		8,841,604
Premises and equipment	116,306		117,757		105,883		105,655		104,814
Federal Home Loan Bank stock	38,056		38,111		26,422		28,736		28,736
Interest receivable	71,605		68,728		56,081		57,187		53,079
Goodwill and other intangibles	750,713		753,649		569,494		570,860		572,323
Cash surrender value of life insurance	306,932		323,013		291,881		291,041		291,825
Other real estate owned	6,454		6,521		6,271		558		698
Tax asset, deferred and receivable	142,110		114,965		73,422		35,641		39,504
Other assets	244,222		198,255		138,807		140,167		137,928
TOTAL ASSETS	$	17,718,985	$	17,780,492	$	15,465,258	$	15,453,149	$	15,060,725
LIABILITIES
Deposits:
Noninterest-bearing	$	3,356,651	$	3,435,331	$	2,745,235	$	2,709,646	$	2,554,323
Interest-bearing	11,078,174		11,135,538		10,160,718		10,022,931		9,794,366
Total Deposits	14,434,825		14,570,869		12,905,953		12,732,577		12,348,689
Borrowings:
Federal funds purchased	185,000		100,000		—		—		—
Securities sold under repurchase agreements	194,482		186,468		169,697		181,577		183,589
Federal Home Loan Bank advances	643,769		598,865		308,960		334,055		334,149
Subordinated debentures and other borrowings	151,301		151,299		118,677		118,618		118,558
Total Borrowings	1,174,552		1,036,632		597,334		634,250		636,296
Interest payable	4,971		2,978		3,589		2,762		3,736
Other liabilities	197,971		192,372		150,749		170,989		203,914
Total Liabilities	15,812,319		15,802,851		13,657,625		13,540,578		13,192,635
STOCKHOLDERS' EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 cumulative shares
Issued and outstanding - 125 cumulative shares	125		125		125		125		125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized -- 10,000 non-cumulative perpetual shares
Issued and outstanding - 10,000 non-cumulative perpetual shares	25,000		25,000		—		—		—
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding	7,393		7,383		6,678		6,676		6,689
Additional paid-in capital	1,226,695		1,226,378		987,404		985,818		988,659
Retained earnings	961,542		917,311		897,818		864,839		832,728
Accumulated other comprehensive income (loss)	(314,089)		(198,556)		(84,392)		55,113		39,889
Total Stockholders' Equity	1,906,666		1,977,641		1,807,633		1,912,571		1,868,090
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,718,985	$	17,780,492	$	15,465,258	$	15,453,149	$	15,060,725

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	September 30,			June 30,			March 31,			December 31,			September 30,
	2022			2022			2022			2021			2021
INTEREST INCOME
Loans receivable:
Taxable	$	128,504		$	106,787		$	79,075		$	80,583		$	85,319
Tax-exempt	6,500			5,990			5,704			5,635			5,591
Investment securities:
Taxable	10,055			10,372			8,510			8,028			7,788
Tax-exempt	17,261			17,212			15,875			15,411			14,464
Deposits with financial institutions	704			610			230			173			218
Federal Home Loan Bank stock	314			175			146			163			168
Total Interest Income	163,338			141,146			109,540			109,993			113,548
INTEREST EXPENSE
Deposits	16,644			8,485			4,294			5,589			5,707
Federal funds purchased	418			76			—			1			—
Securities sold under repurchase agreements	372			134			89			75			77
Federal Home Loan Bank advances	3,493			1,774			1,218			1,389			1,389
Subordinated debentures and other borrowings	2,105			2,016			1,659			1,666			1,660
Total Interest Expense	23,032			12,485			7,260			8,720			8,833
NET INTEREST INCOME	140,306			128,661			102,280			101,273			104,715
Provision for credit losses - loans	—			16,755			—			—			—
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	140,306			111,906			102,280			101,273			104,715
NON-INTEREST INCOME
Service charges on deposit accounts	7,165			7,690			6,419			6,462			6,249
Fiduciary and wealth management fees	7,221			7,634			7,332			7,078			7,352
Card payment fees	4,776			5,175			5,723			3,937			4,156
Net gains and fees on sales of loans	2,543			3,226			2,199			3,423			3,955
Derivative hedge fees	700			1,444			918			1,562			1,028
Other customer fees	501			662			410			361			393
Earnings on cash surrender value of life insurance	6,655			1,308			1,696			2,051			2,468
Net realized gains on sales of available for sale securities	481			90			566			358			1,756
Other income (loss)	(425)			1,048			634			615			1,144
Total Non-Interest Income	29,617			28,277			25,897			25,847			28,501
NON-INTEREST EXPENSES
Salaries and employee benefits	56,002			56,041			42,519			42,432			43,314
Net occupancy	6,738			6,648			6,187			5,644			5,576
Equipment	5,997			6,720			5,080			4,994			4,529
Marketing	2,401			1,414			736			1,840			1,676
Outside data processing fees	6,827			4,881			4,363			4,581			4,794
Printing and office supplies	472			381			345			356			265
Intangible asset amortization	2,303			2,303			1,366			1,463			1,463
FDIC assessments	2,824			2,924			2,192			1,862			1,552
Other real estate owned and foreclosure expenses	328			(266)			564			171			(91)
Professional and other outside services	4,461			10,267			2,953			3,627			2,767
Other expenses	8,025			6,000			6,020			5,466			5,539
Total Non-Interest Expenses	96,378			97,313			72,325			72,436			71,384
INCOME BEFORE INCOME TAX	73,545			42,870			55,852			54,684			61,832
Income tax expense	9,793			3,879			7,266			6,951			9,062
NET INCOME	63,752			38,991			48,586			47,733			52,770
Preferred stock dividends	469			469			—			—			—
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	63,283		$	38,522		$	48,586		$	47,733		$	52,770
Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.08		$	0.64		$	0.91		$	0.89		$	0.98
Diluted Net Income Available to Common Stockholders	$	1.08		$	0.63		$	0.91		$	0.89		$	0.98
Cash Dividends Paid to Common Stockholders	$	0.32		$	0.32		$	0.29		$	0.29		$	0.29
Average Diluted Common Shares Outstanding (in thousands)	59,339			59,308			53,616			53,660			53,960
FINANCIAL RATIOS:
Return on Average Assets	1.43		%	0.88		%	1.26		%	1.25		%	1.41		%
Return on Average Stockholders' Equity	12.54			7.62			10.28			10.10			11.17
Return on Average Common Stockholders' Equity	12.70			7.72			10.28			10.10			11.17
Average Earning Assets to Average Assets	92.90			92.45			92.23			91.86			91.57
Allowance for Credit Losses - Loans as % of Total Loans	1.94			1.98			2.09			2.11			2.21
Net Charge-offs (Recoveries) as % of Average Loans (Annualized)	(0.01)			0.01			(0.03)			0.20			(0.01)
Average Stockholders' Equity to Average Assets	11.36			11.37			12.23			12.36			12.59
Tax Equivalent Yield on Average Earning Assets	4.11			3.58			3.23			3.29			3.46
Interest Expense/Average Earning Assets	0.56			0.30			0.20			0.25			0.26
Net Interest Margin (FTE) on Average Earning Assets	3.55			3.28			3.03			3.04			3.20
Efficiency Ratio	53.34			58.45			52.79			53.49			51.18
Tangible Common Book Value Per Share	$	19.26		$	20.45		$	23.26		$	25.21		$	24.31

LOANS
(Dollars In Thousands)	September 30,		June 30,		March 31,		December 31,		September 30,
	2022		2022		2022		2021		2021
Commercial and industrial loans	$	3,330,529	$	3,297,477	$	2,826,660	$	2,714,565	$	2,573,615
Agricultural land, production and other loans to farmers	221,954		214,904		209,077		246,442		240,686
Real estate loans:
Construction	828,923		745,983		552,975		523,066		521,889
Commercial real estate, non-owner occupied	2,299,272		2,423,185		2,073,197		2,135,459		2,150,387
Commercial real estate, owner occupied	1,268,567		1,264,563		974,521		986,720		952,441
Residential	1,990,668		1,813,297		1,226,695		1,159,127		1,154,373
Home equity	621,619		586,108		512,641		523,754		531,307
Individuals' loans for household and other personal expenditures	173,225		157,264		147,593		146,092		135,093
Public finance and other commercial loans	915,245		894,636		832,882		806,636		781,785
Loans	11,650,002		11,397,417		9,356,241		9,241,861		9,041,576
Allowance for credit losses - loans	(226,702)		(226,275)		(195,984)		(195,397)		(199,972)
NET LOANS	$	11,423,300	$	11,171,142	$	9,160,257	$	9,046,464	$	8,841,604

DEPOSITS
(Dollars In Thousands)	September 30,		June 30,		March 31,		December 31,		September 30,
	2022		2022		2022		2021		2021
Demand deposits	$	8,534,950	$	8,785,889	$	7,806,033	$	7,704,190	$	7,317,399
Savings deposits	5,054,490		4,875,880		4,444,417		4,334,802		4,301,483
Certificates and other time deposits of $100,000 or more	443,588		436,942		252,033		273,379		283,396
Other certificates and time deposits	381,365		446,973		380,293		389,752		404,010
Brokered deposits	20,432		25,185		23,177		30,454		42,401
TOTAL DEPOSITS	$	14,434,825	$	14,570,869	$	12,905,953	$	12,732,577	$	12,348,689

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	September 30, 2022						September 30, 2021
	Average Balance		Interest  Income / Expense		Average Rate		Average Balance		Interest  Income / Expense		Average Rate
Assets:
Interest-bearing deposits	$	190,434	$	704	1.48	%	$	539,377	$	218	0.16	%
Federal Home Loan Bank stock	38,089		314		3.30		28,736		168		2.34
Investment Securities: (1)
Taxable	2,091,608		10,055		1.92		1,843,026		7,788		1.69
Tax-Exempt (2)	2,700,580		21,849		3.24		2,240,409		18,309		3.27
Total Investment Securities	4,792,188		31,904		2.66		4,083,435		26,097		2.56
Loans held for sale	20,039		266		5.74		17,426		158		3.63
Loans: (3)
Commercial	8,177,895		103,227		5.05		6,745,303		70,442		4.18
Real Estate Mortgage	1,666,173		14,701		3.53		886,469		8,142		3.67
Installment	813,112		10,310		5.07		690,093		6,576		3.81
Tax-Exempt (2)	810,984		8,228		4.06		750,357		7,078		3.77
Total Loans	11,488,203		136,732		4.76		9,089,648		92,396		4.07
Total Earning Assets	16,508,914		169,654		4.11	%	13,741,196		118,879		3.46	%
Total Non-Earning Assets	1,261,709						1,264,891
Total Assets	$	17,770,623					$	15,006,087
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	5,184,087	$	8,723	0.67	%	$	4,799,624	$	3,606	0.30	%
Money market deposits	3,096,423		5,390		0.70		2,459,205		764		0.12
Savings deposits	1,978,596		1,538		0.31		1,788,281		486		0.11
Certificates and other time deposits	857,033		993		0.46		758,565		851		0.45
Total Interest-bearing Deposits	11,116,139		16,644		0.60		9,805,675		5,707		0.23
Borrowings	1,013,893		6,388		2.52		619,768		3,126		2.02
Total Interest-bearing Liabilities	12,130,032		23,032		0.76		10,425,443		8,833		0.34
Noninterest-bearing deposits	3,461,393						2,544,661
Other liabilities	161,042						146,946
Total Liabilities	15,752,467						13,117,050
Stockholders' Equity	2,018,156						1,889,037
Total Liabilities and Stockholders' Equity	$	17,770,623	23,032				$	15,006,087	8,833
Net Interest Income (FTE)			$	146,622					$	110,046
Net Interest Spread (FTE) (4)					3.35	%					3.12	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					4.11	%					3.46	%
Interest Expense / Average Earning Assets					0.56	%					0.26	%
Net Interest Margin (FTE) (5)					3.55	%					3.20	%
(1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2022 and 2021. These totals equal $6,316 and $5,331 for the three months ended September 30, 2022 and 2021, respectively.
(3) Non accruing loans have been included in the average balances.
(4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
(5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Nine Months Ended
	September 30, 2022						September 30, 2021
	Average Balance		Interest  Income / Expense		Average Rate		Average Balance		Interest  Income / Expense		Average Rate
Assets:
Interest-bearing deposits	$	333,818	$	1,544	0.62	%	$	509,153	$	461	0.12	%
Federal Home Loan Bank stock	34,742		635		2.44		28,736		434		2.01
Investment Securities: (1)
Taxable	2,079,983		28,937		1.85		1,689,697		21,923		1.73
Tax-Exempt (2)	2,647,547		63,732		3.21		1,989,397		50,532		3.39
Total Investment Securities	4,727,530		92,669		2.61		3,679,094		72,455		2.63
Loans held for sale	19,020		622		4.36		19,360		551		3.79
Loans: (3)
Commercial	7,731,591		253,770		4.38		6,857,968		210,502		4.09
Real Estate Mortgage	1,350,969		35,199		3.47		924,652		26,917		3.88
Installment	765,960		24,775		4.31		674,696		19,456		3.84
Tax-Exempt (2)	780,410		23,030		3.93		725,651		20,854		3.83
Total Loans	10,647,950		337,396		4.22		9,202,327		278,280		4.03
Total Earning Assets	15,744,040		432,244		3.66	%	13,419,310		351,630		3.49	%
Total Non-Earning Assets	1,268,890						1,253,286
Total Assets	$	17,012,930					$	14,672,596
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	5,195,249	$	15,699	0.40	%	$	4,721,267	$	10,875	0.31	%
Money market deposits	2,880,603		8,392		0.39		2,295,589		2,395		0.14
Savings deposits	1,937,761		2,895		0.20		1,730,149		1,424		0.11
Certificates and other time deposits	828,158		2,437		0.39		809,721		3,036		0.50
Total Interest-bearing Deposits	10,841,771		29,423		0.36		9,556,726		17,730		0.25
Borrowings	817,894		13,354		2.18		646,326		9,502		1.96
Total Interest-bearing Liabilities	11,659,665		42,777		0.49		10,203,052		27,232		0.36
Noninterest-bearing deposits	3,232,925						2,460,609
Other liabilities	143,041						150,255
Total Liabilities	15,035,631						12,813,916
Stockholders' Equity	1,977,299						1,858,680
Total Liabilities and Stockholders' Equity	$	17,012,930	42,777				$	14,672,596	27,232
Net Interest Income (FTE)			$	389,467					$	324,398
Net Interest Spread (FTE) (4)					3.17	%					3.13	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					3.66	%					3.49	%
Interest Expense / Average Earning Assets					0.36	%					0.27	%
Net Interest Margin (FTE) (5)					3.30	%					3.22	%
(1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2022 and 2021. These totals equal $18,220 and $14,991 for the nine months ended September 30, 2022 and 2021, respectively.
(3) Non accruing loans have been included in the average balances.
(4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
(5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.

ADJUSTED EPS EXCLUDING PAYCHECK PROTECTION PROGRAM ("PPP") AND ACQUISITION-RELATED EXPENSES - NON-GAAP
(Dollars In Thousands, Except Per Share Amounts)	Three Months Ended										Nine Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
	2022		2022		2022		2021		2021		2022		2021
Net Income Available to Common Stockholders - GAAP	$	63,283	$	38,522	$	48,586	$	47,733	$	52,770	$	150,391	$	157,798
Adjustments:
PPP loan income	(323)		(891)		(1,884)		(3,721)		(8,211)		(3,098)		(27,179)
Acquisition-related expenses	3,417		12,549		152		—		—		16,118		—
Acquisition-related provision expense	—		16,755		—		—		—		16,755		—
Tax on adjustment	(759)		(6,967)		425		912		2,013		(7,301)		6,664
Adjusted Net Income Available to Common Stockholders - Non-GAAP	$	65,618	$	59,968	$	47,279	$	44,924	$	46,572	$	172,865	$	137,283
Average Diluted Common Shares Outstanding (in thousands)	59,339		59,308		53,616		53,660		53,960		57,468		54,093
Diluted Earnings Per Common Share - GAAP	$	1.08	$	0.63	$	0.91	$	0.89	$	0.98	$	2.62	$	2.92
Adjustments:
PPP loan income	—		(0.01)		(0.04)		(0.07)		(0.15)		(0.05)		(0.50)
Acquisition-related expenses	0.05		0.22		—		—		—		0.27		—
Acquisition-related provision expense	—		0.30		—		—		—		0.30		—
Tax on adjustment	(0.01)		-0.13		0.01		0.02		0.04		(0.13)		0.12
Adjusted Diluted Earnings Per Common Share - Non-GAAP	$	1.12	$	1.01	$	0.88	$	0.84	$	0.87	$	3.01	$	2.54

XML

Document and Entity Information Document	Oct. 25, 2022
Entity Listings [Line Items]
Document Type	8-K
Document Period End Date	Oct. 25, 2022
Entity Registrant Name	FIRST MERCHANTS CORP
Entity Incorporation, State or Country Code	IN
Entity File Number	001-41342
Entity Tax Identification Number	35-1544218
Entity Address, Address Line One	200 East Jackson Street
Entity Address, Address Line Two	P.O. Box 792
Entity Address, City or Town	Muncie
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	47305-2814
City Area Code	765
Local Phone Number	747-1500
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000712534
Amendment Flag	false
Common Stock, $0.125 stated value per share
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock, $0.125 stated value per share
Trading Symbol	FRME
Security Exchange Name	NASDAQ
Depositary Shares, each representing a 1/100th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A
Entity Listings [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/100th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A
Trading Symbol	FRMEP
Security Exchange Name	NASDAQ