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): July 25, 2023

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 July 25, 2023, First Merchants Corporation issued a press release to report its financial results for the second quarter ended June 30, 2023. 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 July 25, 2023, 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: July 25, 2023

EXHIBIT INDEX

Exhibit No.    Description

99.1            Press Release, dated July 25, 2023, 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

July 25, 2023

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 SECOND QUARTER 2023 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME)

Second Quarter 2023 Highlights:

•    Net income available to common stockholders was $60.4 million and diluted earnings per common share totaled $1.02, compared to $38.5 million and $.63 in the second quarter of 2022, and $63.6 million and $1.07 in the first quarter of 2023.

•    Adjusted net income1 was $60.4 million and adjusted diluted earnings per share1 totaled $1.02, compared to $60.0 million and $1.01 in the second quarter of 2022, and $63.6 million and $1.07 in the first quarter of 2023.

•    Strong capital position with Common Equity Tier 1 Capital Ratio of 11.07 percent

•    Total loans grew $46.7 million, or 1.5 percent annualized on a linked quarter basis, and $163.2 million, or 5.4 percent annualized when excluding non-relationship based commercial loan sales that occurred during the quarter of $116.6 million.

•    Total deposits declined $122.1 million, or 3.3 percent annualized on a linked quarter basis

•    Nonaccrual loans totaled $69.2 million compared to $46.6 million on a linked quarter basis

•    The efficiency ratio totaled 52.21 percent for the quarter

Mark Hardwick, Chief Executive Officer, stated, “We are pleased to report our second quarter 2023 results. Performance remains healthy and strong and our teams continue to meet the demands of our communities and client base.”

Second Quarter Financial Results:

First Merchants Corporation (the “Corporation) has reported second quarter 2023 net income available to common stockholders of $60.4 million compared to $38.5 million during the same period in 2022. Diluted earnings per common share for the period totaled $1.02 per share compared to the second quarter of 2022 result of $.63 per share. Prior year results included acquisition costs related to the acquisition of Level One of $29.3 million resulting in a reduction of $.38 of diluted earnings per common share.

Total assets equaled $18.0 billion as of quarter-end and loans totaled $12.3 billion. During the past twelve months, total loans grew by $1.0 billion, or 9.2 percent and were offset by the non-relationship based commercial loan sale of $116.6 million and PPP loan forgiveness of $29.6 million. On a linked quarter basis, loans grew $163.2 million, or 5.4 percent, when excluding the loan sale that occurred during the quarter of $116.6 million.

Investments, totaling $3.9 billion, decreased $738.5 million, or 16.0 percent, during the last twelve months and decreased $165.9 million, or 16.4 percent annualized on a linked quarter basis. The decline during the quarter was primarily due to $101.0 million of bond sales.

Total deposits equaled $14.6 billion as of quarter-end and increased by $10.3 million over the past twelve months. Total deposits declined $122.1 million, or 3.3 percent annualized on a linked quarter basis. The loan to deposit ratio for the current quarter ended at 84.3 percent.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $221.1 million as of quarter-end, or 1.80 percent of total loans, a decrease of $5.1 million from prior year. Loan charge-offs, net of recoveries, for the quarter totaled $1.9 million. No provision expense was recorded during the quarter or during the last twelve months. Non-performing assets to total assets were 0.43 percent for the second quarter of 2023, an increase of 13 basis points compared to 0.30 percent in the second quarter of 2022.

Net-interest income, totaling $137.8 million for the quarter, declined $6.3 million, or 4.4 percent, compared to prior quarter and increased $9.2 million, or 7.1 percent compared to the second quarter of 2022. Stated net-interest margin on a tax equivalent basis, totaling 3.39 percent, declined by 19 basis points compared to the first quarter of 2023 but increased 11 basis points compared to the second quarter of 2022. Net-interest margin, excluding the impact of fair value accretion and PPP loans, totaled 3.34 percent, a decrease of 18 basis points compared to 3.52 percent for the first quarter of 2023 but an increase of 15 basis points from the second quarter of 2022. During the quarter, increased deposit costs and mix offset the increase in earning asset yields reducing net-interest margin.

Non-interest income, totaling $26.3 million for the quarter, increased $1.3 million or 5.3 percent compared to the first quarter of 2023 but decreased $2.0 million from the second quarter of 2022. The increase over first quarter of 2023 was driven primarily by higher gains on the sales of loans and BOLI death benefit gains.

Non-interest expense totaled $92.6 million for the quarter, a decline of $1.1 million from the first quarter of 2023. The decrease was from lower salaries and employee benefits, partially offset by increases in FDIC assessments and other real estate owned and foreclosure expense.

The Corporation’s total risk-based capital ratio equaled 13.48 percent, common equity tier 1 capital ratio equaled 11.07 percent, and the tangible common equity ratio totaled 7.99 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

1 See “Non-GAAP Financial Information” for reconciliation

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 11:30 a.m. (ET) on Tuesday, July 25, 2023.

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/BIc7becea7282048a2b5559e10b25ca4af)

In order to view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/athyqu7i) during the time of the call. A replay of the webcast will be available until July 25, 2024.

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 (including the ability to grow and maintain core deposits and retain large, uninsured deposits), 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)	June 30,
	2023		2022
ASSETS
Cash and due from banks	$	108,975	$	212,559
Interest-bearing deposits	219,480		136,702
Investment securities, net of allowance for credit losses of $245,000 and $245,000	3,891,491		4,630,030
Loans held for sale	27,297		9,060
Loans	12,270,233		11,397,417
Less: Allowance for credit losses - loans	(221,147)		(226,275)
Net loans	12,049,086		11,171,142
Premises and equipment	114,402		117,757
Federal Home Loan Bank stock	41,842		38,111
Interest receivable	89,784		68,728
Goodwill and other intangibles	743,465		753,649
Cash surrender value of life insurance	307,020		323,013
Other real estate owned	7,685		6,521
Tax asset, deferred and receivable	113,724		114,965
Other assets	254,161		198,255
TOTAL ASSETS	$	17,968,412	$	17,780,492
LIABILITIES
Deposits:
Noninterest-bearing	$	2,636,017	$	3,435,331
Interest-bearing	11,945,138		11,135,538
Total Deposits	14,581,155		14,570,869
Borrowings:
Federal funds purchased	—		100,000
Securities sold under repurchase agreements	152,472		186,468
Federal Home Loan Bank advances	723,480		598,865
Subordinated debentures and other borrowings	151,325		151,299
Total Borrowings	1,027,277		1,036,632
Interest payable	13,595		2,978
Other liabilities	200,820		192,372
Total Liabilities	15,822,847		15,802,851
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		25,000
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding - 59,297,148 and 59,059,866 shares	7,412		7,383
Additional paid-in capital	1,233,593		1,226,378
Retained earnings	1,097,399		917,311
Accumulated other comprehensive loss	(217,964)		(198,556)
Total Stockholders' Equity	2,145,565		1,977,641
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,968,412	$	17,780,492

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,				June 30,
	2023		2022		2023		2022
INTEREST INCOME
Loans receivable:
Taxable	$	186,256	$	106,787	$	358,609	$	185,862
Tax-exempt	7,760		5,990		15,469		11,694
Investment securities:
Taxable	8,886		10,372		17,973		18,882
Tax-exempt	14,279		17,212		30,349		33,087
Deposits with financial institutions	3,164		610		3,801		840
Federal Home Loan Bank stock	1,020		175		1,562		321
Total Interest Income	221,365		141,146		427,763		250,686
INTEREST EXPENSE
Deposits	73,201		8,485		123,886		12,779
Federal funds purchased	123		76		1,420		76
Securities sold under repurchase agreements	979		134		1,827		223
Federal Home Loan Bank advances	6,815		1,774		13,879		2,992
Subordinated debentures and other borrowings	2,412		2,016		4,797		3,675
Total Interest Expense	83,530		12,485		145,809		19,745
NET INTEREST INCOME	137,835		128,661		281,954		230,941
Provision for credit losses - loans	—		16,755		—		16,755
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	137,835		111,906		281,954		214,186
NON-INTEREST INCOME
Service charges on deposit accounts	7,813		7,690		15,172		14,109
Fiduciary and wealth management fees	7,397		7,634		15,259		14,966
Card payment fees	4,537		5,175		9,709		10,898
Net gains and fees on sales of loans	3,632		3,226		6,031		5,425
Derivative hedge fees	672		1,444		1,820		2,362
Other customer fees	742		662		1,259		1,072
Earnings on cash surrender value of life insurance	2,096		1,308		3,384		3,004
Net realized gains (losses) on sales of available for sale securities	(1,392)		90		(2,963)		656
Other income	822		1,048		1,645		1,682
Total Non-Interest Income	26,319		28,277		51,316		54,174
NON-INTEREST EXPENSES
Salaries and employee benefits	54,753		56,041		112,212		98,560
Net occupancy	6,674		6,648		13,933		12,835
Equipment	6,181		6,720		12,307		11,800
Marketing	1,102		1,414		2,411		2,150
Outside data processing fees	6,604		4,881		12,717		9,244
Printing and office supplies	434		381		817		726
Intangible asset amortization	2,182		2,303		4,379		3,669
FDIC assessments	2,740		2,924		4,136		5,116
Other real estate owned and foreclosure expenses	916		(266)		898		298
Professional and other outside services	4,660		10,267		8,358		13,220
Other expenses	6,347		6,000		14,145		12,020
Total Non-Interest Expenses	92,593		97,313		186,313		169,638
INCOME BEFORE INCOME TAX	71,561		42,870		146,957		98,722
Income tax expense	10,699		3,879		22,016		11,145
NET INCOME	60,862		38,991		124,941		87,577
Preferred stock dividends	469		469		938		469
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	60,393	$	38,522	$	124,003	$	87,108
Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.02	$	0.64	$	2.09	$	1.55
Diluted Net Income Available to Common Stockholders	$	1.02	$	0.63	$	2.09	$	1.54
Cash Dividends Paid to Common Stockholders	$	0.34	$	0.32	$	0.66	$	0.61
Average Diluted Common Shares Outstanding (in thousands)	59,448		59,308		59,446		56,516

FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
NET CHARGE-OFFS (RECOVERIES)	$	1,905		$	263		$	2,130		$	(324)
AVERAGE BALANCES:
Total Assets	$	18,170,649		$	17,778,221		$	18,096,832		$	16,627,804
Total Loans	12,369,673			11,175,188			12,253,176			10,220,860
Total Earning Assets	16,968,465			16,435,747			16,896,834			15,355,265
Total Deposits	14,719,913			14,809,528			14,572,480			13,819,111
Total Stockholders' Equity	2,139,877			2,021,123			2,111,658			1,956,532
FINANCIAL RATIOS:
Return on Average Assets	1.34		%	0.88		%	1.38		%	1.05		%
Return on Average Stockholders' Equity	11.29			7.62			11.74			8.90
Return on Tangible Common Stockholders' Equity	18.04			12.91			18.91			13.98
Average Earning Assets to Average Assets	93.38			92.45			93.37			92.35
Allowance for Credit Losses - Loans as % of Total Loans	1.80			1.98			1.80			1.98
Net Charge-offs as % of Average Loans (Annualized)	0.06			0.01			0.03			(0.01)
Average Stockholders' Equity to Average Assets	11.78			11.37			11.67			11.77
Tax Equivalent Yield on Average Earning Assets	5.36			3.58			5.21			3.42
Interest Expense/Average Earning Assets	1.97			0.30			1.73			0.26
Net Interest Margin (FTE) on Average Earning Assets	3.39			3.28			3.48			3.16
Efficiency Ratio	52.21			58.45			51.96			55.90
Tangible Common Book Value Per Share	$	23.34		$	20.45		$	23.34		$	20.45

NON-PERFORMING ASSETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2023			2023			2022			2022			2022
Non-Accrual Loans	$	69,240		$	46,576		$	42,324		$	43,508		$	45,970
Troubled Debt Restructures (TDR)	—			—			224			195			233
Non-Performing Loans (NPL)	69,240			46,576			42,548			43,703			46,203
Other Real Estate Owned and Repossessions	7,685			7,777			6,431			6,454			6,521
Non-Performing Assets (NPA)	76,925			54,353			48,979			50,157			52,724
90+ Days Delinquent	428			7,032			1,737			764			592
NPAs & 90 Day Delinquent	$	77,353		$	61,385		$	50,716		$	50,921		$	53,316
Allowance for Credit Losses - Loans	$	221,147		$	223,052		$	223,277		$	226,702		$	226,275
Quarterly Net Charge-offs (Recoveries)	1,905			225			2,674			(427)			263
NPAs / Actual Assets %	0.43		%	0.30		%	0.27		%	0.28		%	0.30		%
NPAs & 90 Day / Actual Assets %	0.43		%	0.34		%	0.28		%	0.29		%	0.30		%
NPAs / Actual Loans and OREO %	0.63		%	0.44		%	0.41		%	0.43		%	0.46		%
Allowance for Credit Losses - Loans / Actual Loans (%)	1.80		%	1.82		%	1.86		%	1.94		%	1.98		%
Net Charge-offs (Recoveries) as % of Average Loans (Annualized)	0.06		%	0.01		%	0.12		%	(0.01)		%	0.01		%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2023		2023		2022		2022		2022
ASSETS
Cash and due from banks	$	108,975	$	125,818	$	122,594	$	119,532	$	212,559
Interest-bearing deposits	219,480		352,695		126,061		179,593		136,702
Investment securities, net of allowance for credit losses	3,891,491		4,057,389		4,263,788		4,294,768		4,630,030
Loans held for sale	27,297		9,408		9,094		25,394		9,060
Loans	12,270,233		12,241,461		12,003,894		11,650,002		11,397,417
Less: Allowance for credit losses - loans	(221,147)		(223,052)		(223,277)		(226,702)		(226,275)
Net loans	12,049,086		12,018,409		11,780,617		11,423,300		11,171,142
Premises and equipment	114,402		115,857		117,118		116,306		117,757
Federal Home Loan Bank stock	41,842		41,878		38,525		38,056		38,111
Interest receivable	89,784		85,515		85,070		71,605		68,728
Goodwill and other intangibles	743,465		745,647		747,844		750,713		753,649
Cash surrender value of life insurance	307,020		309,090		308,311		306,932		323,013
Other real estate owned	7,685		7,777		6,431		6,454		6,521
Tax asset, deferred and receivable	113,724		103,070		111,222		142,110		114,965
Other assets	254,161		206,355		221,631		244,222		198,255
TOTAL ASSETS	$	17,968,412	$	18,178,908	$	17,938,306	$	17,718,985	$	17,780,492
LIABILITIES
Deposits:
Noninterest-bearing	$	2,636,017	$	2,964,355	$	3,173,417	$	3,356,651	$	3,435,331
Interest-bearing	11,945,138		11,738,932		11,209,328		11,078,174		11,135,538
Total Deposits	14,581,155		14,703,287		14,382,745		14,434,825		14,570,869
Borrowings:
Federal funds purchased	—		20		171,560		185,000		100,000
Securities sold under repurchase agreements	152,472		179,067		167,413		194,482		186,468
Federal Home Loan Bank advances	723,480		823,577		823,674		643,769		598,865
Subordinated debentures and other borrowings	151,325		151,312		151,298		151,301		151,299
Total Borrowings	1,027,277		1,153,976		1,313,945		1,174,552		1,036,632
Interest payable	13,595		11,979		7,530		4,971		2,978
Other liabilities	200,820		187,218		199,316		197,971		192,372
Total Liabilities	15,822,847		16,056,460		15,903,536		15,812,319		15,802,851
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		25,000		25,000		25,000
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding	7,412		7,407		7,396		7,393		7,383
Additional paid-in capital	1,233,593		1,231,532		1,228,626		1,226,695		1,226,378
Retained earnings	1,097,399		1,057,298		1,012,774		961,542		917,311
Accumulated other comprehensive loss	(217,964)		(198,914)		(239,151)		(314,089)		(198,556)
Total Stockholders' Equity	2,145,565		2,122,448		2,034,770		1,906,666		1,977,641
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,968,412	$	18,178,908	$	17,938,306	$	17,718,985	$	17,780,492

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,			March 31,			December 31,			September 30,			June 30,
	2023			2023			2022			2022			2022
INTEREST INCOME
Loans receivable:
Taxable	$	186,256		$	172,353		$	156,102		$	128,504		$	106,787
Tax-exempt	7,760			7,709			6,930			6,500			5,990
Investment securities:
Taxable	8,886			9,087			9,417			10,055			10,372
Tax-exempt	14,279			16,070			17,033			17,261			17,212
Deposits with financial institutions	3,164			637			959			704			610
Federal Home Loan Bank stock	1,020			542			541			314			175
Total Interest Income	221,365			206,398			190,982			163,338			141,146
INTEREST EXPENSE
Deposits	73,201			50,685			33,516			16,644			8,485
Federal funds purchased	123			1,297			808			418			76
Securities sold under repurchase agreements	979			848			541			372			134
Federal Home Loan Bank advances	6,815			7,064			4,932			3,493			1,774
Subordinated debentures and other borrowings	2,412			2,385			2,229			2,105			2,016
Total Interest Expense	83,530			62,279			42,026			23,032			12,485
NET INTEREST INCOME	137,835			144,119			148,956			140,306			128,661
Provision for credit losses - loans	—			—			—			—			16,755
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	137,835			144,119			148,956			140,306			111,906
NON-INTEREST INCOME
Service charges on deposit accounts	7,813			7,359			7,097			7,165			7,690
Fiduciary and wealth management fees	7,397			7,862			7,501			7,221			7,634
Card payment fees	4,537			5,172			4,533			4,776			5,175
Net gains and fees on sales of loans	3,632			2,399			2,087			2,543			3,226
Derivative hedge fees	672			1,148			326			700			1,444
Other customer fees	742			517			362			501			662
Earnings on cash surrender value of life insurance	2,096			1,288			1,515			6,655			1,308
Net realized gains (losses) on sales of available for sale securities	(1,392)			(1,571)			57			481			90
Other income (loss)	822			823			672			(425)			1,048
Total Non-Interest Income	26,319			24,997			24,150			29,617			28,277
NON-INTEREST EXPENSES
Salaries and employee benefits	54,753			57,459			52,331			56,002			56,041
Net occupancy	6,674			7,259			6,638			6,738			6,648
Equipment	6,181			6,126			6,148			5,997			6,720
Marketing	1,102			1,309			3,157			2,401			1,414
Outside data processing fees	6,604			6,113			5,611			6,827			4,881
Printing and office supplies	434			383			390			472			381
Intangible asset amortization	2,182			2,197			2,303			2,303			2,303
FDIC assessments	2,740			1,396			2,295			2,824			2,924
Other real estate owned and foreclosure expenses	916			(18)			197			328			(266)
Professional and other outside services	4,660			3,698			3,961			4,461			10,267
Other expenses	6,347			7,798			6,668			8,025			6,000
Total Non-Interest Expenses	92,593			93,720			89,699			96,378			97,313
INCOME BEFORE INCOME TAX	71,561			75,396			83,407			73,545			42,870
Income tax expense	10,699			11,317			12,647			9,793			3,879
NET INCOME	60,862			64,079			70,760			63,752			38,991
Preferred stock dividends	469			469			468			469			469
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	60,393		$	63,610		$	70,292		$	63,283		$	38,522
Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.02		$	1.07		$	1.20		$	1.08		$	0.64
Diluted Net Income Available to Common Stockholders	$	1.02		$	1.07		$	1.19		$	1.08		$	0.63
Cash Dividends Paid to Common Stockholders	$	0.34		$	0.32		$	0.32		$	0.32		$	0.32
Average Diluted Common Shares Outstanding (in thousands)	59,448			59,441			59,384			59,339			59,308
FINANCIAL RATIOS:
Return on Average Assets	1.34		%	1.42		%	1.59		%	1.43		%	0.88		%
Return on Average Stockholders' Equity	11.29			12.21			14.36			12.54			7.62
Return on Tangible Common Stockholders' Equity	18.04			19.82			24.21			20.85			12.91
Average Earning Assets to Average Assets	93.38			93.35			93.66			92.90			92.45
Allowance for Credit Losses - Loans as % of Total Loans	1.80			1.82			1.86			1.94			1.98
Net Charge-offs (Recoveries) as % of Average Loans (Annualized)	0.06			0.01			0.12			(0.01)			0.01
Average Stockholders' Equity to Average Assets	11.78			11.56			10.98			11.36			11.37
Tax Equivalent Yield on Average Earning Assets	5.36			5.06			4.73			4.11			3.58
Interest Expense/Average Earning Assets	1.97			1.48			1.01			0.56			0.30
Net Interest Margin (FTE) on Average Earning Assets	3.39			3.58			3.72			3.55			3.28
Efficiency Ratio	52.21			51.72			48.60			53.34			58.45
Tangible Common Book Value Per Share	$	23.34		$	22.93		$	21.45		$	19.26		$	20.45

LOANS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2023		2023		2022		2022		2022
Commercial and industrial loans	$	3,531,395	$	3,502,204	$	3,437,126	$	3,330,529	$	3,297,477
Agricultural land, production and other loans to farmers	230,003		219,598		241,793		221,954		214,904
Real estate loans:
Construction	949,918		960,979		835,582		828,923		745,983
Commercial real estate, non-owner occupied	2,379,819		2,375,410		2,407,475		2,299,272		2,423,185
Commercial real estate, owner occupied	1,179,739		1,244,117		1,246,528		1,268,567		1,264,563
Residential	2,248,473		2,185,943		2,096,655		1,990,668		1,813,297
Home equity	614,366		621,354		630,632		621,619		586,108
Individuals' loans for household and other personal expenditures	172,896		172,389		175,211		173,225		157,264
Public finance and other commercial loans	963,624		959,467		932,892		915,245		894,636
Loans	12,270,233		12,241,461		12,003,894		11,650,002		11,397,417
Allowance for credit losses - loans	(221,147)		(223,052)		(223,277)		(226,702)		(226,275)
NET LOANS	$	12,049,086	$	12,018,409	$	11,780,617	$	11,423,300	$	11,171,142

DEPOSITS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2023		2023		2022		2022		2022
Demand deposits	$	8,045,455	$	8,422,387	$	8,448,797	$	8,534,950	$	8,785,889
Savings deposits	4,530,255		4,499,487		4,657,140		5,054,490		4,875,880
Certificates and other time deposits of $100,000 or more	1,160,303		1,040,379		742,539		443,588		436,942
Other certificates and time deposits	680,965		574,886		468,712		381,365		446,973
Brokered certificates of deposits	164,177		166,148		65,557		20,432		25,185
TOTAL DEPOSITS	$	14,581,155	$	14,703,287	$	14,382,745	$	14,434,825	$	14,570,869

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	June 30, 2023						June 30, 2022
	Average Balance		Interest  Income / Expense		Average Rate		Average Balance		Interest  Income / Expense		Average Rate
ASSETS
Interest-bearing deposits	$	343,253	$	3,164	3.69	%	$	329,626	$	610	0.74	%
Federal Home Loan Bank stock	41,873		1,020		9.74		38,111		175		1.84
Investment Securities: (1)
Taxable	1,876,676		8,886		1.89		2,189,193		10,372		1.90
Tax-exempt (2)	2,336,990		18,075		3.09		2,703,629		21,788		3.22
Total Investment Securities	4,213,666		26,961		2.56		4,892,822		32,160		2.63
Loans held for sale	19,328		300		6.21		28,491		315		4.42
Loans: (3)
Commercial	8,605,339		150,766		7.01		8,134,050		85,867		4.22
Real estate mortgage	2,031,136		20,345		4.01		1,458,317		12,657		3.47
Installment	831,775		14,844		7.14		772,610		7,948		4.11
Tax-exempt (2)	882,095		9,823		4.45		781,720		7,582		3.88
Total Loans	12,369,673		196,078		6.34		11,175,188		114,369		4.09
Total Earning Assets	16,968,465		227,223		5.36	%	16,435,747		147,314		3.58	%
Total Non-Earning Assets	1,202,184						1,342,474
TOTAL ASSETS	$	18,170,649					$	17,778,221
LIABILITIES
Interest-Bearing Deposits:
Interest-bearing deposits	$	5,546,232	$	34,574	2.49	%	$	5,372,474	$	4,569	0.34	%
Money market deposits	2,766,876		18,684		2.70		3,024,560		2,130		0.28
Savings deposits	1,724,816		3,884		0.90		1,966,054		916		0.19
Certificates and other time deposits	1,883,998		16,059		3.41		948,799		870		0.37
Total Interest-Bearing Deposits	11,921,922		73,201		2.46		11,311,887		8,485		0.30
Borrowings	1,110,486		10,329		3.72		818,851		4,000		1.95
Total Interest-Bearing Liabilities	13,032,408		83,530		2.56		12,130,738		12,485		0.41
Noninterest-bearing deposits	2,797,991						3,497,641
Other liabilities	200,373						128,719
Total Liabilities	16,030,772						15,757,098
STOCKHOLDERS' EQUITY	2,139,877						2,021,123
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,170,649	83,530				$	17,778,221	12,485
Net Interest Income (FTE)			$	143,693					$	134,829
Net Interest Spread (FTE) (4)					2.80	%					3.17	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.36	%					3.58	%
Interest Expense / Average Earning Assets					1.97	%					0.30	%
Net Interest Margin (FTE) (5)					3.39	%					3.28	%
(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 2023 and 2022. These totals equal $5,858 and $6,168 for the three months ended June 30, 2023 and 2022, 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 Six Months Ended
	June 30, 2023						June 30, 2022
	Average Balance		Interest  Income / Expense		Average Rate		Average Balance		Interest  Income / Expense		Average Rate
Assets:
Interest-bearing deposits	$	258,504	$	3,801	2.94	%	$	406,698	$	840	0.41	%
Federal Home Loan Bank stock	40,821		1,562		7.65		33,040		321		1.94
Investment Securities: (1)
Taxable	1,900,247		17,973		1.89		2,074,074		18,882		1.82
Tax-exempt (2)	2,444,086		38,416		3.14		2,620,593		41,882		3.20
Total Investment Securities	4,344,333		56,389		2.60		4,694,667		60,764		2.59
Loans held for sale	21,952		660		6.01		18,181		355		3.91
Loans: (3)
Commercial	8,544,945		290,428		6.80		7,504,740		150,545		4.01
Real estate mortgage	1,972,680		38,736		3.93		1,191,075		20,497		3.44
Installment	836,088		28,785		6.89		741,994		14,465		3.90
Tax-exempt (2)	877,511		19,581		4.46		764,870		14,803		3.87
Total Loans	12,253,176		378,190		6.17		10,220,860		200,665		3.93
Total Earning Assets	16,896,834		439,942		5.21	%	15,355,265		262,590		3.42	%
Total Non-Earning Assets	1,199,998						1,272,539
Total Assets	$	18,096,832					$	16,627,804
Liabilities:
Interest-Bearing deposits:
Interest-bearing deposits	$	5,405,696	$	59,237	2.19	%	$	5,200,923	$	6,977	0.27	%
Money market deposits	2,756,519		32,261		2.34		2,770,904		3,002		0.22
Savings deposits	1,775,233		6,849		0.77		1,917,005		1,357		0.14
Certificates and other time deposits	1,676,291		25,539		3.05		813,482		1,443		0.35
Total Interest-Bearing Deposits	11,613,739		123,886		2.13		10,702,314		12,779		0.24
Borrowings	1,201,392		21,923		3.65		718,270		6,966		1.94
Total Interest-Bearing Liabilities	12,815,131		145,809		2.28		11,420,584		19,745		0.35
Noninterest-bearing deposits	2,958,741						3,116,797
Other liabilities	211,302						133,891
Total Liabilities	15,985,174						14,671,272
Stockholders' Equity	2,111,658						1,956,532
Total Liabilities and Stockholders' Equity	$	18,096,832	145,809				$	16,627,804	19,745
Net Interest Income (FTE)			$	294,133					$	242,845
Net Interest Spread (FTE) (4)					2.93	%					3.07	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.21	%					3.42	%
Interest Expense / Average Earning Assets					1.73	%					0.26	%
Net Interest Margin (FTE) (5)					3.48	%					3.16	%
(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 2023 and 2022. These totals equal $12,179 and $11,904 for the six months ended June 30, 2023 and 2022, 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										Six Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
	2023		2023		2022		2022		2022		2023		2022
Net Income Available to Common Stockholders - GAAP	$	60,393	$	63,610	$	70,292	$	63,283	$	38,522	$	124,003	$	87,108
Adjustments:
PPP loan income	(9)		(25)		(109)		(323)		(891)		(34)		(2,775)
Acquisition-related expenses	—		—		413		3,417		12,549		—		12,701
Acquisition-related provision expense	—		—		—		—		16,755		—		16,755
Tax on adjustment	2		6		(75)		(759)		(6,967)		8		(6,542)
Adjusted Net Income Available to Common Stockholders - Non-GAAP	$	60,386	$	63,591	$	70,521	$	65,618	$	59,968	$	123,977	$	107,247
Average Diluted Common Shares Outstanding (in thousands)	59,448		59,441		59,384		59,339		59,308		59,446		56,516
Diluted Earnings Per Common Share - GAAP	$	1.02	$	1.07	$	1.19	$	1.08	$	0.63	$	2.09	$	1.54
Adjustments:
PPP loan income	—		—		(0.01)		—		(0.01)		—		(0.05)
Acquisition-related expenses	—		—		0.01		0.05		0.22		—		0.22
Acquisition-related provision expense	—		—		—		—		0.30		—		0.30
Tax on adjustment	—		—		—		(0.01)		(0.13)		—		(0.12)
Adjusted Diluted Earnings Per Common Share - Non-GAAP	$	1.02	$	1.07	$	1.19	$	1.12	$	1.01	$	2.09	$	1.89

RETURN ON TANGIBLE COMMON EQUITY - NON-GAAP
(Dollars In Thousands)	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
	2023			2023			2022			2022			2022			2023			2022
Total Average Stockholders' Equity (GAAP)	$	2,139,877		$	2,083,125		$	1,958,041		$	2,018,156		$	2,021,123		$	2,111,658		$	1,956,532
Less: Average Preferred Stock	(25,125)			(25,125)			(25,125)			(25,125)			(25,125)			(25,125)			(12,625)
Less: Average Intangible Assets, Net of Tax	(737,489)			(739,190)			(741,632)			(744,069)			(745,614)			(738,334)			(656,042)
Average Tangible Common Equity, Net of Tax (Non-GAAP)	$	1,377,263		$	1,318,810		$	1,191,284		$	1,248,962		$	1,250,384		$	1,348,199		$	1,287,865
Net Income Available to Common Stockholders (GAAP)	$	60,393		$	63,610		$	70,292		$	63,283		$	38,521		$	124,003		$	87,108
Plus: Intangible Asset Amortization, Net of Tax	1,724			1,734			1,819			1,819			1,820			3,458			2,898
Tangible Net Income (Non-GAAP)	$	62,117		$	65,344		$	72,111		$	65,102		$	40,341		$	127,461		$	90,006
Return on Tangible Common Equity (Non-GAAP)	18.04		%	19.82		%	24.21		%	20.85		%	12.91		%	18.91		%	13.98		%

XML

Document and Entity Information Document	Jul. 25, 2023
Entity Listings [Line Items]
Document Type	8-K
Document Period End Date	Jul. 25, 2023
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