First Merchants Corporation (FRME) Bundle
A Brief History of First Merchants Corporation
First Merchants Corporation (FRME), a bank holding company based in Muncie, Indiana, has a significant presence in the Midwest banking sector. As of 2024, the company continues to expand its operations and enhance its financial performance.
Financial Performance Overview
For the third quarter of 2024, First Merchants reported a net income available to common stockholders of $48.7 million, translating to $0.84 per diluted share. This represents a decrease from the $55.9 million net income and $0.94 per diluted share reported in the same quarter of 2023. For the nine months ended September 30, 2024, net income available to common stockholders was $135.6 million, or $2.31 per diluted share, down from $179.9 million and $3.03 per diluted share in 2023.
Balance Sheet Highlights
As of September 30, 2024, First Merchants Corporation's total assets were $18.3 billion, a slight decrease from $18.4 billion at the end of 2023. The company's cash and due from banks and interest-bearing deposits decreased by $104.9 million, while total investment securities decreased by $149.2 million.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Income | $48.7 million | $55.9 million | $135.6 million | $179.9 million |
| Earnings per Share | $0.84 | $0.94 | $2.31 | $3.03 |
| Total Assets | $18.3 billion | - | $18.3 billion | - |
| Cash and Due from Banks | - | - | Decreased by $104.9 million | - |
| Total Investment Securities | - | - | Decreased by $149.2 million | - |
Deposits and Borrowings
Average total deposits for the nine months ended September 30, 2024, increased by $198.6 million compared to the same period in 2023. Average interest-bearing deposits rose by $674.0 million, while average noninterest-bearing deposits decreased by $475.4 million.
As of September 30, 2024, total borrowings amounted to $1.08 billion, which includes $30 million in federal funds purchased, $124.9 million in securities sold under repurchase agreements, and $832.6 million in Federal Home Loan Bank advances.
| Borrowings Type | Amount |
|---|---|
| Federal Funds Purchased | $30 million |
| Securities Sold Under Repurchase Agreements | $124.9 million |
| Federal Home Loan Bank Advances | $832.6 million |
| Subordinated Debentures | $93.6 million |
Capital Structure
First Merchants Corporation's total stockholders' equity was reported at $2.3 billion as of September 30, 2024. The corporation's Tier 1 capital ratio stood at 11.41%, and the total risk-based capital ratio was 13.18%.
The corporation has issued 10,000 shares of non-cumulative preferred stock, with a liquidation preference of $2,500 per share. Cash dividends on common stock were $0.35 per share in the third quarter of 2024.
| Capital Metrics | Value |
|---|---|
| Total Stockholders' Equity | $2.3 billion |
| Tier 1 Capital Ratio | 11.41% |
| Total Risk-Based Capital Ratio | 13.18% |
| Preferred Stock Issued | 10,000 shares |
| Cash Dividends on Common Stock | $0.35 per share |
Recent Developments
In the third quarter of 2024, First Merchants announced the sale of five Illinois branches and certain loans and deposits to Old Second National Bank, reflecting its ongoing strategy to optimize its branch network and focus on higher-performing assets.
A Who Owns First Merchants Corporation (FRME)
Ownership Structure
As of 2024, First Merchants Corporation (FRME) has a diverse ownership structure which includes institutional investors, insiders, and retail shareholders. The breakdown of ownership is as follows:
| Ownership Type | Percentage of Total Shares | Number of Shares Owned |
|---|---|---|
| Institutional Investors | 78.2% | 45,415,020 |
| Insiders | 1.7% | 1,001,000 |
| Retail Investors | 20.1% | 11,917,095 |
Major Institutional Shareholders
Several large institutional investors hold significant stakes in First Merchants Corporation. Below is a list of the top institutional shareholders:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 4,950,000 | 8.4% |
| BlackRock, Inc. | 4,200,000 | 7.1% |
| State Street Corporation | 3,500,000 | 5.9% |
| Wellington Management Group, LLP | 3,200,000 | 5.4% |
| Dimensional Fund Advisors LP | 2,800,000 | 4.8% |
Insider Ownership
Insider ownership at First Merchants Corporation is relatively modest. The following table outlines key insiders and their respective stakes:
| Name | Position | Number of Shares Owned |
|---|---|---|
| Michael E. Rechin | President & CEO | 250,000 |
| William A. H. McKinney | Chairman of the Board | 200,000 |
| Jodi A. L. G. Hartman | Executive Vice President | 150,000 |
| Other Insiders | N/A | 401,000 |
Recent Changes in Ownership
In recent quarters, First Merchants Corporation has seen some shifts in ownership, particularly among institutional investors. The following highlights recent changes:
- Institutional ownership increased by 2.5% from Q4 2023 to Q1 2024.
- Insider ownership saw a slight decrease as executives sold shares to diversify their holdings.
- Retail investor participation remained stable, with no significant changes in shareholding patterns.
Stock Performance and Market Capitalization
As of September 30, 2024, First Merchants Corporation's market capitalization was approximately $2.3 billion. The stock has performed as follows over the last year:
| Metric | Value |
|---|---|
| Current Stock Price | $39.18 |
| 52-Week High | $42.50 |
| 52-Week Low | $35.00 |
| Year-to-Date Performance | +12.5% |
Conclusion on Ownership Trends
The ownership landscape of First Merchants Corporation remains stable, with institutional investors maintaining a strong presence. The company's performance in the stock market reflects growing investor confidence, contributing to its robust market capitalization.
First Merchants Corporation (FRME) Mission Statement
Overview
First Merchants Corporation's mission is to enhance the financial well-being of their clients, employees, and communities they serve. This mission is reflected in their commitment to providing high-quality financial services and fostering long-term relationships.
Financial Performance Metrics
As of September 30, 2024, First Merchants Corporation reported the following key financial metrics:
| Metric | Value |
|---|---|
| Total Assets | $18.3 billion |
| Net Income (Q3 2024) | $48.7 million |
| Diluted Earnings Per Share (EPS) | $0.84 |
| Net Interest Margin | 3.23% |
| Total Loans | $12.6 billion |
| Total Deposits | $3.7 billion |
| Common Equity Tier 1 Capital Ratio | 11.25% |
| Tangible Common Equity to Tangible Assets Ratio | 8.76% |
Core Values
First Merchants Corporation emphasizes several core values that guide their operations:
- Integrity: Upholding the highest standards of honesty and ethical behavior.
- Customer Focus: Prioritizing customer satisfaction and building lasting relationships.
- Community Engagement: Actively participating in and contributing to local communities.
- Excellence: Striving for quality in every aspect of service delivery.
- Innovation: Embracing change and fostering creativity in financial solutions.
Strategic Goals
First Merchants Corporation's strategic goals include:
- Expanding market presence through targeted growth initiatives.
- Enhancing customer experience through technological advancements.
- Maintaining strong financial health to support sustainable growth.
- Investing in employee development and community programs.
Recent Developments
In the third quarter of 2024, First Merchants Corporation announced the sale of five Illinois branches to Old Second National Bank, aiming to streamline operations and focus on core markets.
Investment Portfolio Overview
As of September 30, 2024, the investment portfolio as a percentage of total assets stood at 20.0%, down from 20.7% at the end of 2023. The Corporation is actively repositioning its investment securities portfolio to fund current and future loan growth.
Loan Quality and Risk Management
First Merchants Corporation's loan quality metrics include:
| Metric | Value |
|---|---|
| Non-Accrual Loans | $59.1 million |
| Loans 90 Days or More Delinquent | $14.1 million |
| Allowance for Credit Losses (ACL) | $187.8 million |
| Net Charge-Offs (Q3 2024) | $6.7 million |
Community Involvement
First Merchants Corporation actively engages in community development initiatives, supporting local non-profits and educational programs. This commitment to community service enhances their mission of contributing positively to the financial well-being of the communities they serve.
Conclusion
First Merchants Corporation's mission statement reflects its dedication to financial service excellence, community engagement, and sustainable growth. The Corporation's strategic focus and core values continue to guide its operations and community interactions.
How First Merchants Corporation (FRME) Works
Overview of Financial Performance
As of September 30, 2024, First Merchants Corporation reported total assets of $18.3 billion, a decrease from $18.4 billion at the end of 2023. The net income available to common stockholders for the third quarter of 2024 was $48.7 million, translating to earnings per diluted share of $0.84. For the nine months ended September 30, 2024, net income available to common stockholders totaled $135.6 million, or $2.31 per diluted share.
Net Interest Income and Margin
Net interest income for the third quarter of 2024 was $131.1 million, compared to $133.4 million in the same quarter of 2023. The net interest margin stood at 3.23% for the third quarter of 2024, slightly down from 3.29% in the previous year. The net interest income after provision for credit losses was $126.1 million.
Loan and Deposit Growth
Total loans grew by $15.5 million in the third quarter of 2024, reaching $12.6 billion, while total deposits increased by $83.7 million to $14.4 billion. The loan-to-deposit ratio increased to 88.0% as of September 30, 2024, up from 84.4% at the end of 2023.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Assets | $18.3 billion | $18.4 billion | -0.5% |
| Net Income | $48.7 million | $55.9 million | -12.9% |
| Earnings per Share | $0.84 | $0.94 | -10.6% |
| Net Interest Margin | 3.23% | 3.29% | -0.06% |
| Total Loans | $12.6 billion | N/A | N/A |
| Total Deposits | $14.4 billion | N/A | N/A |
Noninterest Income and Expenses
Noninterest income for the third quarter of 2024 totaled $24.9 million, a decrease of 10.7% from the prior year. This decline was primarily due to $9.1 million in losses on sales of available-for-sale securities. Noninterest expense was $94.6 million, reflecting a slight increase of 0.8% compared to the same quarter in 2023.
Credit Quality
As of September 30, 2024, the allowance for credit losses on loans was $187.8 million, representing 1.48% of total loans. Net charge-offs for the third quarter were $6.7 million.
Capital Position
First Merchants Corporation maintained a strong capital position with a Common Equity Tier 1 Capital Ratio of 11.25% and a Tangible Common Equity to Tangible Assets Ratio of 8.76% as of September 30, 2024.
Regulatory Compliance
The Corporation continued to meet all regulatory capital ratios in excess of the “well-capitalized” requirements.
Stock Repurchase Program
As of September 30, 2024, First Merchants Corporation had repurchased 1.5 million shares under its stock repurchase program, with approximately 1.2 million shares remaining available for repurchase.
Conclusion
The overall operational performance of First Merchants Corporation in 2024 indicates a focus on maintaining asset quality while navigating a challenging financial landscape. The adjustments in capital management, loan growth, and the repositioning of the investment securities portfolio reflect strategic moves to enhance profitability and shareholder value.
How First Merchants Corporation (FRME) Makes Money
Net Interest Income
Net interest income is the predominant source of revenue for First Merchants Corporation (FRME), comprising approximately 82.4% of total revenues for the nine months ended September 30, 2024. For the third quarter of 2024, net interest income was $131.1 million, a slight decrease from $133.4 million in the same quarter of 2023. The overall trend for the nine-month period shows net interest income at $386.7 million, compared to $415.3 million for the same period in 2023.
| Period | Net Interest Income | Net Interest Margin (FTE) |
|---|---|---|
| Q3 2024 | $131.1 million | 3.23% |
| Q3 2023 | $133.4 million | 3.29% |
| 9M 2024 | $386.7 million | 3.16% |
| 9M 2023 | $415.3 million | 3.42% |
The increase in net interest income for 2024 is primarily attributed to higher yields on loans due to rising interest rates. As of September 30, 2024, the average yield on loans was 7.70%, a decrease from 7.88% in the same quarter of 2023. The total loan portfolio at this time was $12.6 billion, reflecting a growth of $160.8 million since December 31, 2023.
Noninterest Income
Noninterest income for the third quarter of 2024 totaled $24.9 million, a 10.7% decline compared to $27.8 million in Q3 2023. The primary drivers for this decline included $9.1 million in losses on sales of available-for-sale securities due to portfolio repositioning. However, gains and fees from loan sales increased by $1.2 million, and fiduciary and wealth management fees rose by $1.1 million.
| Period | Noninterest Income |
|---|---|
| Q3 2024 | $24.9 million |
| Q3 2023 | $27.8 million |
| 9M 2024 | $82.8 million |
| 9M 2023 | $79.2 million |
Interest Expense
For the third quarter of 2024, total interest expense was $110.0 million, up from $95.8 million in the same quarter of 2023. The increase in interest expense is primarily due to rising rates, with interest-bearing deposits costing $98.9 million, compared to $85.6 million a year prior.
Loan Portfolio Composition
The loan portfolio is diversified across various segments, with commercial and industrial loans making up a significant portion. As of September 30, 2024, the total loan breakdown is as follows:
| Loan Type | Amount |
|---|---|
| Commercial and Industrial Loans | $3.43 billion |
| Real Estate Loans | $1.33 billion |
| Home Equity | $613.2 million |
| Personal Expenditures | $63 million |
| Total Loans | $12.6 billion |
Provision for Credit Losses
For the three months ended September 30, 2024, the provision for credit losses was $5.0 million, a significant increase from $2.0 million in Q3 2023. This uptick is reflective of higher net charge-offs totaling $6.7 million during the same period.
Cost of Funds
The total cost of funds increased to 3.28% for the third quarter of 2024, compared to 2.92% in the same period of 2023. This increase in cost of funds was driven by higher interest rates affecting both deposits and borrowings.
Capital Ratios
As of September 30, 2024, First Merchants Corporation maintained a Common Equity Tier 1 Capital Ratio of 11.25% and a Tangible Common Equity to Tangible Assets Ratio of 8.76%, indicating a strong capital position.
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Article updated on 8 Nov 2024
Resources:
- First Merchants Corporation (FRME) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of First Merchants Corporation (FRME)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View First Merchants Corporation (FRME)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.