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First Merchants Corporation Announces First Quarter 2025 Earnings Per Share

1. FRME reported Q1 2025 net income of $54.9 million, up 9.5% year-over-year. 2. Total loans grew by $154.9 million, or 4.8% annualized in Q1 2025. 3. Total deposits decreased by $422.6 million, or 2.8%, due to branch sales. 4. Nonperforming assets rose slightly to 0.47% of total assets. 5. Efficiency ratio improved to 54.54% compared to prior quarters.

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Why Bullish?

The positive earnings and loan growth indicate financial strength. Historical patterns suggest stock price typically rises with strong earnings reports.

How important is it?

Strong earnings and loan growth directly affect investor perception and confidence in FRME.

Why Short Term?

Earnings are likely to influence stock price immediately; however, deposit challenges may impact future growth.

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MUNCIE, Ind., April 24, 2025 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME) First Quarter 2025 Highlights: Net income available to common stockholders was $54.9 million and diluted earnings per common share totaled $0.94 compared to adjusted net income and diluted earnings per common share1 of $50.1 million and $0.85 in the first quarter of 2024. Adjusted net income and diluted earnings per common share1 in the fourth quarter of 2024 were $58.1 million and $1.00, respectively.Robust capital position with Common Equity Tier 1 Capital Ratio of 11.50%.Repurchased 246,751 shares totaling $10 million year-to-date; Redeemed $30 million of sub debt.Total loans grew $154.9 million, or 4.8% annualized, on a linked quarter basis, and $547.2 million, or 4.4%, during the last twelve months. Total deposits declined $59.6 million, or 1.6% annualized, on a linked quarter basis, and declined $422.6 million, or 2.8%, during the last twelve months primarily due to the sale of five Illinois branches with $267.4 million in deposits to Old Second National Bank on December 6, 2024.Nonperforming assets to total assets were 47 basis points compared to 43 basis points on a linked quarter basis.The efficiency ratio totaled 54.54% for the quarter. "The first quarter was a strong start to the year with healthy loan growth and increasing profitability," said Mark Hardwick, Chief Executive Officer of First Merchants Bank. "Our 2025 priorities continue to focus on organic loan growth funded by low-cost core deposits, margin stabilization, fee income growth, expense management and credit quality. Given the market volatility and headlines, we are closely monitoring our clients and our markets but have yet to see any signs of stress." First Quarter Financial Results: First Merchants Corporation (the “Corporation”) reported first quarter 2025 net income available to common stockholders of $54.9 million compared to adjusted net income available to common stockholders1 of $50.1 million during the same period in 2024. Diluted earnings per common share for the period totaled $0.94 compared to the first quarter of 2024 adjusted diluted earnings per common share1 of $0.85 per share. Total assets equaled $18.4 billion as of quarter-end and loans totaled $13.0 billion. During the past twelve months, total loans grew by $547.2 million, or 4.4%. On a linked quarter basis, loans grew $154.9 million, or 4.8% annualized. Investment securities, totaling $3.4 billion, decreased $356.5 million, or 9.4%, during the last twelve months and decreased $33.6 million, or 3.9% annualized on a linked quarter basis. The decline in the last twelve months reflected sales of available for sale securities in 2024 totaling $268.5 million. Total deposits equaled $14.5 billion as of quarter-end and decreased by $422.6 million, or 2.8%, over the past twelve months. The decline reflected the sale of the Illinois branches during the prior quarter which included $267.4 million in deposits. Total deposits decreased $59.6 million, or 1.6% annualized on a linked quarter basis. The loan to deposit ratio increased to 90.1% at period end from 88.6% in the prior quarter. The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $192.0 million as of quarter-end, or 1.47% of total loans, a decrease of $0.7 million from prior quarter. Net charge-offs totaled $4.9 million and provision for loans of $4.2 million was recorded during the quarter. Reserves for unfunded commitments totaling $18.0 million remain unchanged from the previous quarter. Non-performing assets to total assets were 0.47% for the first quarter of 2025, an increase of four basis points compared to 0.43% in the prior quarter. Net interest income totaled $130.3 million for the quarter, a decrease of $4.1 million, or 3.1%, compared to prior quarter and increased $3.2 million, or 2.5%, compared to the first quarter of 2024. Fully taxable equivalent net interest margin was 3.22%, a decrease of six basis points compared to the fourth quarter of 2024 and an increase of 12 basis points compared to the first quarter of 2024. The lower day count in the quarter caused a decline of five basis points in net interest margin from the prior quarter. Noninterest income totaled $30.0 million for the quarter, a decrease of $12.7 million, compared to the fourth quarter of 2024 and an increase of $3.4 million compared to the first quarter of 2024. Customer-related fees declined by $2.3 million from the previous quarter due to lower derivative hedge fees, gains on sales of mortgage loans and card payment fees. Non-customer-related fees declined $10.4 million from the prior quarter primarily due to the gain on the Illinois branch sale, partially offset by realized losses on the sales of securities recorded in the prior quarter. Noninterest expense totaled $92.9 million for the quarter, a decrease of $3.4 million from the fourth quarter of 2024 and a decrease of $4.0 million from the first quarter of 2024. The decrease from the fourth quarter of 2024 was due primarily to a decline in marketing expenses, and lower professional fees and employee incentives. The Corporation’s total risk-based capital ratio totaled 13.22%, common equity tier 1 capital ratio totaled 11.50%, and the tangible common equity ratio totaled 8.90%. These ratios continue to demonstrate the Corporation’s strong capital position. 1 See “Non-GAAP Financial Information” for reconciliation CONFERENCE CALL First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 11:30 a.m. (ET) on Thursday, April 24, 2025. 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-conf.media-server.com/register/BI4ae3a07cb07a47258d30e4f3dba2448b) To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/uqvoojku) during the time of the call. A replay of the webcast will be available until April 24, 2026. 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 about 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)March 31, 2025 2024ASSETS   Cash and due from banks$86,113  $100,514 Interest-bearing deposits 331,534   410,497 Investment securities available for sale 1,378,489   1,620,213 Investment securities held to maturity, net of allowance for credit losses 2,048,632   2,163,361 Loans held for sale 23,004   15,118 Loans 13,004,905   12,465,582 Less: Allowance for credit losses - loans (192,031)  (204,681)Net loans 12,812,874   12,260,901 Premises and equipment 128,749   132,706 Federal Home Loan Bank stock 45,006   41,758 Interest receivable 88,352   92,550 Goodwill 712,002   712,002 Other intangibles 18,302   25,142 Cash surrender value of life insurance 304,918   306,028 Other real estate owned 4,966   4,886 Tax asset, deferred and receivable 87,665   101,121 Other assets 369,181   331,006 TOTAL ASSETS$18,439,787  $18,317,803 LIABILITIES   Deposits:   Noninterest-bearing$2,185,057  $2,338,364 Interest-bearing 12,276,921   12,546,220 Total Deposits 14,461,978   14,884,584 Borrowings:   Federal funds purchased 185,000   — Securities sold under repurchase agreements 122,947   130,264 Federal Home Loan Bank advances 972,478   612,778 Subordinated debentures and other borrowings 62,619   118,612 Total Borrowings 1,343,044   861,654 Interest payable 13,304   19,262 Other liabilities 289,247   327,500 Total Liabilities 16,107,573   16,093,000 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 - 57,810,232 and 58,564,819 shares 7,226   7,321 Additional paid-in capital 1,183,263   1,208,447 Retained earnings 1,306,911   1,181,939 Accumulated other comprehensive loss (190,311)  (198,029)Total Stockholders' Equity 2,332,214   2,224,803 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$18,439,787  $18,317,803    CONSOLIDATED STATEMENTS OF INCOMEThree Months Ended(Dollars In Thousands, Except Per Share Amounts)March 31, 2025 2024INTEREST INCOME   Loans:   Taxable$187,728  $198,023 Tax-exempt 10,532   8,190 Investment securities:   Taxable 8,372   8,748 Tax-exempt 12,517   13,611 Deposits with financial institutions 2,372   6,493 Federal Home Loan Bank stock 997   835 Total Interest Income 222,518   235,900 INTEREST EXPENSE   Deposits 80,547   98,285 Federal funds purchased 812   — Securities sold under repurchase agreements 742   1,032 Federal Home Loan Bank advances 9,364   6,773 Subordinated debentures and other borrowings 783   2,747 Total Interest Expense 92,248   108,837 NET INTEREST INCOME 130,270   127,063 Provision for credit losses 4,200   2,000 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 126,070   125,063 NONINTEREST INCOME   Service charges on deposit accounts 8,072   7,907 Fiduciary and wealth management fees 8,644   8,200 Card payment fees 4,526   4,500 Net gains and fees on sales of loans 5,022   3,254 Derivative hedge fees 404   263 Other customer fees 415   427 Earnings on cash surrender value of life insurance 2,179   1,592 Net realized losses on sales of available for sale securities (7)  (2)Other income 793   497 Total Noninterest Income 30,048   26,638 NONINTEREST EXPENSES   Salaries and employee benefits 54,982   58,293 Net occupancy 7,216   7,312 Equipment 7,008   6,226 Marketing 1,353   1,198 Outside data processing fees 5,929   6,889 Printing and office supplies 347   353 Intangible asset amortization 1,526   1,957 FDIC assessments 3,648   4,287 Other real estate owned and foreclosure expenses 600   534 Professional and other outside services 3,261   3,952 Other expenses 7,032   5,934 Total Noninterest Expenses 92,902   96,935 INCOME BEFORE INCOME TAX 63,216   54,766 Income tax expense 7,877   6,825 NET INCOME 55,339   47,941 Preferred stock dividends 469   469 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$54,870  $47,472 Per Share Data:   Basic Net Income Available to Common Stockholders$0.95  $0.80 Diluted Net Income Available to Common Stockholders$0.94  $0.80 Cash Dividends Paid to Common Stockholders$0.35  $0.34 Tangible Common Book Value Per Share$27.34  $25.07 Average Diluted Common Shares Outstanding (in thousands) 58,242   59,273      FINANCIAL HIGHLIGHTS   (Dollars in thousands)Three Months Ended March 31, 2025 2024NET CHARGE-OFFS$4,926  $2,253     AVERAGE BALANCES:   Total Assets$18,341,738  $18,430,521 Total Loans 12,941,353   12,477,066 Total Earning Assets 16,960,475   17,123,851 Total Deposits 14,419,338   14,881,205 Total Stockholders' Equity 2,340,874   2,242,139     FINANCIAL RATIOS:   Return on Average Assets 1.21%  1.04%Return on Average Stockholders' Equity 9.38   8.47 Return on Tangible Common Stockholders' Equity 14.12   13.21 Average Earning Assets to Average Assets 92.47   92.91 Allowance for Credit Losses - Loans as % of Total Loans 1.47   1.64 Net Charge-offs as % of Average Loans (Annualized) 0.15   0.07 Average Stockholders' Equity to Average Assets 12.76   12.17 Tax Equivalent Yield on Average Earning Assets 5.39   5.65 Interest Expense/Average Earning Assets 2.17   2.55 Net Interest Margin (FTE) on Average Earning Assets 3.22   3.10 Efficiency Ratio 54.54   59.21            NONPERFORMING ASSETS         (Dollars In Thousands)March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024Nonaccrual Loans$81,922  $73,773  $59,088  $61,906  $62,478 Other Real Estate Owned and Repossessions 4,966   4,948   5,247   4,824   4,886 Nonperforming Assets (NPA) 86,888   78,721   64,335   66,730   67,364 90+ Days Delinquent 4,280   5,902   14,105   1,686   2,838 NPAs & 90 Day Delinquent$91,168  $84,623  $78,440  $68,416  $70,202           Allowance for Credit Losses - Loans$192,031  $192,757  $187,828  $189,537  $204,681 Quarterly Net Charge-offs 4,926   771   6,709   39,644   2,253 NPAs / Actual Assets % 0.47%  0.43%  0.35%  0.36%  0.37%NPAs & 90 Day / Actual Assets % 0.49%  0.46%  0.43%  0.37%  0.38%NPAs / Actual Loans and OREO % 0.67%  0.61%  0.51%  0.53%  0.54%Allowance for Credit Losses - Loans / Actual Loans (%) 1.47%  1.50%  1.48%  1.50%  1.64%Net Charge-offs as % of Average Loans (Annualized) 0.15%  0.02%  0.21%  1.26%  0.07%           CONSOLIDATED BALANCE SHEETS         (Dollars In Thousands)March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024ASSETS         Cash and due from banks$86,113  $87,616  $84,719  $105,372  $100,514 Interest-bearing deposits 331,534   298,891   359,126   168,528   410,497 Investment securities available for sale 1,378,489   1,386,475   1,553,496   1,618,893   1,620,213 Investment securities held to maturity, net of allowance for credit losses 2,048,632   2,074,220   2,108,649   2,134,195   2,163,361 Loans held for sale 23,004   18,663   40,652   32,292   15,118 Loans 13,004,905   12,854,359   12,646,808   12,639,650   12,465,582 Less: Allowance for credit losses - loans (192,031)  (192,757)  (187,828)  (189,537)  (204,681)Net loans 12,812,874   12,661,602   12,458,980   12,450,113   12,260,901 Premises and equipment 128,749   129,743   129,582   133,245   132,706 Federal Home Loan Bank stock 45,006   41,690   41,716   41,738   41,758 Interest receivable 88,352   91,829   92,055   97,546   92,550 Goodwill 712,002   712,002   712,002   712,002   712,002 Other intangibles 18,302   19,828   21,599   23,371   25,142 Cash surrender value of life insurance 304,918   304,906   304,613   306,379   306,028 Other real estate owned 4,966   4,948   5,247   4,824   4,886 Tax asset, deferred and receivable 87,665   92,387   86,732   107,080   101,121 Other assets 369,181   387,169   348,384   367,845   331,006 TOTAL ASSETS$18,439,787  $18,311,969  $18,347,552  $18,303,423  $18,317,803 LIABILITIES         Deposits:         Noninterest-bearing$2,185,057  $2,325,579  $2,334,197  $2,303,313  $2,338,364 Interest-bearing 12,276,921   12,196,047   12,030,903   12,265,757   12,546,220 Total Deposits 14,461,978   14,521,626   14,365,100   14,569,070   14,884,584 Borrowings:         Federal funds purchased 185,000   99,226   30,000   147,229   — Securities sold under repurchase agreements 122,947   142,876   124,894   100,451   130,264 Federal Home Loan Bank advances 972,478   822,554   832,629   832,703   612,778 Subordinated debentures and other borrowings 62,619   93,529   93,562   93,589   118,612 Total Borrowings 1,343,044   1,158,185   1,081,085   1,173,972   861,654 Deposits and other liabilities held for sale —   —   288,476   —   — Interest payable 13,304   16,102   18,089   18,554   19,262 Other liabilities 289,247   311,073   292,429   329,302   327,500 Total Liabilities 16,107,573   16,006,986   16,045,179   16,090,898   16,093,000 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 7,226   7,247   7,265   7,256   7,321 Additional paid-in capital 1,183,263   1,188,768   1,192,683   1,191,193   1,208,447 Retained earnings 1,306,911   1,272,528   1,229,125   1,200,930   1,181,939 Accumulated other comprehensive loss (190,311)  (188,685)  (151,825)  (211,979)  (198,029)Total Stockholders' Equity 2,332,214   2,304,983   2,302,373   2,212,525   2,224,803 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$18,439,787  $18,311,969  $18,347,552  $18,303,423  $18,317,803            CONSOLIDATED STATEMENTS OF INCOME         (Dollars In Thousands, Except Per Share Amounts)March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024INTEREST INCOME         Loans:         Taxable$187,728  $197,536  $206,680  $201,413  $198,023 Tax-exempt 10,532   9,020   8,622   8,430   8,190 Investment securities:         Taxable 8,372   9,024   9,263   9,051   8,748 Tax-exempt 12,517   12,754   13,509   13,613   13,611 Deposits with financial institutions 2,372   5,350   2,154   2,995   6,493 Federal Home Loan Bank stock 997   958   855   879   835 Total Interest Income 222,518   234,642   241,083   236,381   235,900 INTEREST EXPENSE         Deposits 80,547   89,835   98,856   99,151   98,285 Federal funds purchased 812   26   329   126   — Securities sold under repurchase agreements 742   680   700   645   1,032 Federal Home Loan Bank advances 9,364   8,171   8,544   6,398   6,773 Subordinated debentures and other borrowings 783   1,560   1,544   1,490   2,747 Total Interest Expense 92,248   100,272   109,973   107,810   108,837 NET INTEREST INCOME 130,270   134,370   131,110   128,571   127,063 Provision for credit losses 4,200   4,200   5,000   24,500   2,000 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 126,070   130,170   126,110   104,071   125,063 NONINTEREST INCOME         Service charges on deposit accounts 8,072   8,124   8,361   8,214   7,907 Fiduciary and wealth management fees 8,644   8,665   8,525   8,825   8,200 Card payment fees 4,526   4,957   5,121   4,739   4,500 Net gains and fees on sales of loans 5,022   5,681   6,764   5,141   3,254 Derivative hedge fees 404   1,594   736   489   263 Other customer fees 415   316   344   460   427 Earnings on cash surrender value of life insurance 2,179   2,188   2,755   1,929   1,592 Net realized losses on sales of available for sale securities (7)  (11,592)  (9,114)  (49)  (2)Gain on branch sale —   19,983   —   —   — Other income 793   2,826   1,374   1,586   497 Total Noninterest Income 30,048   42,742   24,866   31,334   26,638 NONINTEREST EXPENSES         Salaries and employee benefits 54,982   55,437   55,223   52,214   58,293 Net occupancy 7,216   7,335   6,994   6,746   7,312 Equipment 7,008   7,028   6,949   6,599   6,226 Marketing 1,353   2,582   1,836   1,773   1,198 Outside data processing fees 5,929   6,029   7,150   7,072   6,889 Printing and office supplies 347   377   378   354   353 Intangible asset amortization 1,526   1,771   1,772   1,771   1,957 FDIC assessments 3,648   3,744   3,720   3,278   4,287 Other real estate owned and foreclosure expenses 600   227   942   373   534 Professional and other outside services 3,261   3,777   3,035   3,822   3,952 Other expenses 7,032   7,982   6,630   7,411   5,934 Total Noninterest Expenses 92,902   96,289   94,629   91,413   96,935 INCOME BEFORE INCOME TAX 63,216   76,623   56,347   43,992   54,766 Income tax expense 7,877   12,274   7,160   4,067   6,825 NET INCOME 55,339   64,349   49,187   39,925   47,941 Preferred stock dividends 469   469   468   469   469 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$54,870  $63,880  $48,719  $39,456  $47,472 Per Share Data:         Basic Net Income Available to Common Stockholders$0.95  $1.10  $0.84  $0.68  $0.80 Diluted Net Income Available to Common Stockholders$0.94  $1.10  $0.84  $0.68  $0.80 Cash Dividends Paid to Common Stockholders$0.35  $0.35  $0.35  $0.35  $0.34 Tangible Common Book Value Per Share$27.34  $26.78  $26.64  $25.10  $25.07 Average Diluted Common Shares Outstanding (in thousands) 58,242   58,247   58,289   58,328   59,273 FINANCIAL RATIOS:         Return on Average Assets 1.21%  1.39%  1.07%  0.87%  1.04%Return on Average Stockholders' Equity 9.38   11.05   8.66   7.16   8.47 Return on Tangible Common Stockholders' Equity 14.12   16.75   13.39   11.29   13.21 Average Earning Assets to Average Assets 92.47   92.48   92.54   92.81   92.91 Allowance for Credit Losses - Loans as % of Total Loans 1.47   1.50   1.48   1.50   1.64 Net Charge-offs as % of Average Loans (Annualized) 0.15   0.02   0.21   1.26   0.07 Average Stockholders' Equity to Average Assets 12.76   12.51   12.26   12.02   12.17 Tax Equivalent Yield on Average Earning Assets 5.39   5.63   5.82   5.69   5.65 Interest Expense/Average Earning Assets 2.17   2.35   2.59   2.53   2.55 Net Interest Margin (FTE) on Average Earning Assets 3.22   3.28   3.23   3.16   3.10 Efficiency Ratio 54.54   48.48   53.76   53.84   59.21            LOANS         (Dollars In Thousands)March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024Commercial and industrial loans$4,306,597  $4,114,292  $4,041,217  $3,949,817  $3,722,365 Agricultural land, production and other loans to farmers 243,864   256,312   238,743   239,926   234,431 Real estate loans:         Construction 793,175   792,144   814,704   823,267   941,726 Commercial real estate, non-owner occupied 2,177,869   2,274,016   2,251,351   2,323,533   2,368,360 Commercial real estate, owner occupied 1,214,739   1,157,944   1,152,751   1,174,195   1,137,894 Residential 2,389,852   2,374,729   2,366,943   2,370,905   2,316,490 Home equity 650,499   659,811   641,188   631,104   618,258 Individuals' loans for household and other personal expenditures 140,954   166,028   158,480   162,089   161,459 Public finance and other commercial loans 1,087,356   1,059,083   981,431   964,814   964,599 Loans 13,004,905   12,854,359   12,646,808   12,639,650   12,465,582 Allowance for credit losses - loans (192,031)  (192,757)  (187,828)  (189,537)  (204,681)NET LOANS$12,812,874  $12,661,602  $12,458,980  $12,450,113  $12,260,901  DEPOSITS         (Dollars In Thousands)March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024Demand deposits$7,786,554 $7,980,061 $7,678,510 $7,757,679 $7,771,976Savings deposits 4,791,874  4,522,758  4,302,236  4,339,161  4,679,593Certificates and other time deposits of $100,000 or more 896,143  1,043,068  1,277,833  1,415,131  1,451,443Certificates and other time deposits of $100,000 or less 625,203  692,068  802,949  889,949  901,280Brokered certificates of deposits1 362,204  283,671  303,572  167,150  80,292TOTAL DEPOSITS$14,461,978 $14,521,626 $14,365,100 $14,569,070 $14,884,584 1 - Total brokered deposits of $1.1 billion, which includes brokered CD's of $362.2 million at March 31, 2025.        CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS      (Dollars in Thousands)            For the Three Months Ended March 31, 2025 March 31, 2024 Average Balance Interest Income /Expense AverageRate Average Balance Interest Income /Expense AverageRateASSETS           Interest-bearing deposits$294,016 $2,372 3.23% $575,699 $6,493 4.51%Federal Home Loan Bank stock 43,980  997 9.07   41,764  835 8.00 Investment Securities: (1)           Taxable 1,634,452  8,372 2.05   1,783,057  8,748 1.96 Tax-exempt (2) 2,046,674  15,844 3.10   2,246,265  17,229 3.07 Total Investment Securities 3,681,126  24,216 2.63   4,029,322  25,977 2.58 Loans held for sale 20,965  319 6.09   21,782  328 6.02 Loans: (3)           Commercial 8,770,282  147,772 6.74   8,598,110  159,209 7.41 Real estate mortgage 2,191,384  24,446 4.46   2,130,947  22,357 4.20 HELOC and installment 828,874  15,191 7.33   821,815  16,129 7.85 Tax-exempt (2) 1,129,848  13,332 4.72   904,412  10,367 4.59 Total Loans 12,941,353  201,060 6.21   12,477,066  208,390 6.68 Total Earning Assets 16,960,475  228,645 5.39%  17,123,851  241,695 5.65%Total Non-Earning Assets 1,381,263      1,306,670    TOTAL ASSETS$18,341,738     $18,430,521    LIABILITIES           Interest-Bearing Deposits:           Interest-bearing deposits$5,522,434 $34,606 2.51% $5,419,821 $39,491 2.91%Money market deposits 3,437,998  25,952 3.02   3,045,478  27,383 3.60 Savings deposits 1,299,405  2,445 0.75   1,559,877  3,801 0.97 Certificates and other time deposits 1,947,854  17,544 3.60   2,427,859  27,610 4.55 Total Interest-Bearing Deposits 12,207,691  80,547 2.64   12,453,035  98,285 3.16 Borrowings 1,262,926  11,701 3.71   1,011,812  10,552 4.17 Total Interest-Bearing Liabilities 13,470,617  92,248 2.74   13,464,847  108,837 3.23 Noninterest-bearing deposits 2,211,647      2,428,170    Other liabilities 318,600      295,365    Total Liabilities 16,000,864      16,188,382    STOCKHOLDERS' EQUITY 2,340,874      2,242,139    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$18,341,738  92,248   $18,430,521  108,837  Net Interest Income (FTE)  $136,397     $132,858  Net Interest Spread (FTE) (4)    2.65%     2.42%            Net Interest Margin (FTE):           Interest Income (FTE) / Average Earning Assets    5.39%     5.65%Interest Expense / Average Earning Assets    2.17%     2.55%Net Interest Margin (FTE) (5)    3.22%     3.10%            (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 2024 and 2023. These totals equal $6,127 and $5,795 for the three months ended March 31, 2025 and 2024, 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 NET INCOME AND DILUTED EARNINGS PER COMMON SHARE - NON-GAAP(Dollars In Thousands, Except Per Share Amounts)Three Months Ended March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024Net Income Available to Common Stockholders - GAAP$54,870  $63,880  $48,719  $39,456  $47,472 Adjustments:         Net realized losses on sales of available for sale securities 7   11,592   9,114   49   2 Gain on branch sale —   (19,983)  —   —   — Non-core expenses1,2 —   762   —   —   3,481 Tax on adjustments (2)  1,851   (2,220)  (12)  (848)Adjusted Net Income Available to Common Stockholders - Non-GAAP$54,875  $58,102  $55,613  $39,493  $50,107           Average Diluted Common Shares Outstanding (in thousands) 58,242   58,247   58,289   58,328   59,273           Diluted Earnings Per Common Share - GAAP$0.94  $1.10  $0.84  $0.68  $0.80 Adjustments:         Net realized losses on sales of available for sale securities —   0.20   0.15   —   — Gain on branch sale —   (0.34)  —   —   — Non-core expenses1,2 —   0.01   —   —   0.06 Tax on adjustments —   0.03   (0.04)  —   (0.01)Adjusted Diluted Earnings Per Common Share - Non-GAAP$0.94  $1.00  $0.95  $0.68  $0.85  1 - Non-core expenses in 4Q24 included $0.8 million of costs directly related to the branch sale.2 - Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.      NET INTEREST MARGIN ("NIM"), ADJUSTED(Dollars in Thousands) Three Months Ended March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024Net Interest Income (GAAP)$130,270  $134,370  $131,110  $128,571  $127,063 Fully Taxable Equivalent ("FTE") Adjustment 6,127   5,788   5,883   5,859   5,795 Net Interest Income (FTE) (non-GAAP)$136,397  $140,158  $136,993  $134,430  $132,858           Average Earning Assets (GAAP)$16,960,475  $17,089,198  $16,990,358  $17,013,984  $17,123,851 Net Interest Margin (GAAP) 3.07%  3.15%  3.09%  3.02%  2.97%Net Interest Margin (FTE) (non-GAAP) 3.22%  3.28%  3.23%  3.16%  3.10% RETURN ON TANGIBLE COMMON EQUITY - NON-GAAP(Dollars In Thousands)Three Months Ended March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024Total Average Stockholders' Equity (GAAP)$2,340,874  $2,312,270  $2,251,547  $2,203,361  $2,242,139 Less: Average Preferred Stock (25,125)  (25,125)  (25,125)  (25,125)  (25,125)Less: Average Intangible Assets, Net of Tax (726,917)  (728,218)  (729,581)  (730,980)  (732,432)Average Tangible Common Equity, Net of Tax (Non-GAAP)$1,588,832  $1,558,927  $1,496,841  $1,447,256  $1,484,582           Net Income Available to Common Stockholders (GAAP)$54,870  $63,880  $48,719  $39,456  $47,472 Plus: Intangible Asset Amortization, Net of Tax 1,206   1,399   1,399   1,399   1,546 Tangible Net Income (Non-GAAP)$56,076  $65,279  $50,118  $40,855  $49,018           Return on Tangible Common Equity (Non-GAAP) 14.12%  16.75%  13.39%  11.29%  13.21% EFFICIENCY RATIO - NON-GAAP         (Dollars In Thousands)Three Months Ended March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024Non Interest Expense (GAAP)$92,902  $96,289  $94,629  $91,413  $96,935 Less: Intangible Asset Amortization (1,526)  (1,771)  (1,772)  (1,771)  (1,957)Less: OREO and Foreclosure Expenses (600)  (227)  (942)  (373)  (534)Adjusted Non Interest Expense (Non-GAAP)$90,776  $94,291  $91,915  $89,269  $94,444           Net Interest Income (GAAP)$130,270  $134,370  $131,110  $128,571  $127,063 Plus: Fully Taxable Equivalent Adjustment 6,127   5,788   5,883   5,859   5,795 Net Interest Income on a Fully Taxable Equivalent Basis (Non-GAAP)$136,397  $140,158  $136,993  $134,430  $132,858           Non Interest Income (GAAP)$30,048  $42,742  $24,866  $31,334  $26,638 Less: Investment Securities (Gains) Losses 7   11,592   9,114   49   2 Adjusted Non Interest Income (Non-GAAP)$30,055  $54,334  $33,980  $31,383  $26,640 Adjusted Revenue (Non-GAAP)$166,452  $194,492  $170,973  $165,813  $159,498 Efficiency Ratio (Non-GAAP) 54.54%  48.48%  53.76%  53.84%  59.21%          Adjusted Non Interest Expense (Non-GAAP)$90,776  $94,291  $91,915  $89,269  $94,444 Less: Non-core Expenses1,2 —   (762)  —   —   (3,481)Adjusted Non Interest Expense Excluding Non-core Expenses (Non-GAAP)$90,776  $93,529  $91,915  $89,269  $90,963           Adjusted Revenue (Non-GAAP)$166,452  $194,492  $170,973  $165,813  $159,498 Less: Gain on Branch Sale —   (19,983)  —   —   — Adjusted Revenue Excluding Gain on Branch Sale (Non-GAAP)$166,452  $174,509  $170,973  $165,813  $159,498 Adjusted Efficiency Ratio (Non-GAAP) 54.54%  53.60%  53.76%  53.84%  57.03%1 - Non-core expenses in 4Q24 included $0.8 million of costs directly related to the branch sale.2 - Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.  For more information, contact:Nicole M. Weaver, Vice President and Director of Corporate Administration765-521-7619http://www.firstmerchants.com SOURCE: First Merchants Corporation, Muncie, Indiana

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