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First Merchants Corporation announces 2021 record results

First Merchants Corporation (NASDAQ - FRME) has reported fourth quarter 2021 net income of $47.7 million compared to $45.1 million during the same period in 2020. Earnings per share for the period totaled $.89 per share compared to the fourth quarter 2020 result of $.83 per share. Net income for the year ended December 31, 2021 totaled $205.5 million, compared to $148.6 million during the same period in 2020. Year-to-date earnings per share totaled $3.81 compared to $2.74 in 2020.


Total assets equaled $15.5 billion as of year-end and loans totaled $9.3 billion. The Corporation experienced organic loan growth of $566 million, or 6.6 percent, during 2021. This was offset by the forgiveness of Paycheck Protection Program (“PPP”) loans of $560 million, resulting in net loan growth of $6 million. Investments increased $1.4 billion, or 43.8 percent, during the year and now total $4.5 billion. Total deposits equaled $12.7 billion as of year-end and increased by $1.4 billion, or 12.1 percent, during 2021.


The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $195.4 million as of year-end, or 2.11 percent of total loans. Net charge-offs for the quarter totaled $4.6 million and no provision expense was recorded during the quarter or during the year ended 2021. Provision expense taken during the three and twelve months ended December 31, 2020 of $4.5 million and $58.7 million, respectively, reflected our view of increased credit risk in 2020 related to the COVID-19 pandemic. An increase of $74.1 million in the ACL was also recorded on January 1, 2021 reflecting the adoption of the current expected credit losses (CECL) model. Non-accrual loans totaled $43.1 million as of year-end.


Mark Hardwick, Chief Executive Officer, stated, “2021 proved to be a record year on many levels, including total assets, loans, deposits, net income and earnings per share. Our employees, customers and communities showed an incredible amount of toughness, determination, teamwork and compassion for one another during a difficult year. First Merchants’ future is bright because of this special combination of heart and grit.” Hardwick also added, “It’s an honor to lead this First Merchants team and to be part of the dynamic markets that we serve.”


Net-interest income totaled $410.7 million for the year, an increase of $28.6 million or 7.5 percent, in the face of a net-interest margin decline of 11 basis points to 3.18 percent, reflecting an asset sensitive balance sheet. Yield on earning assets declined by 40 basis points totaling 3.44 percent offset by a decline of 29 basis points in the cost of supporting liabilities, which totaled 26 basis points for the year-ended 2021. Yield on earning assets for the fourth quarter totaled 3.29 percent with cost of supporting liabilities totaling 25 basis points, resulting in a margin of 3.04 percent. PPP loans contributed 8 basis points to margin during the fourth quarter of 2021, which was a decline of 9 basis points from the third quarter 2021 and a decline of 8 basis points from the fourth quarter of 2020, as the pace of PPP loan forgiveness slowed.


Non-interest income totaled $109.3 million for the year, a $0.6 million decline from 2020. Customer-related line items accounted for an increase of $2.6 million, or 3 percent, and was offset by a decline of $6.2 million on the gains on sales of securities. Fiduciary and wealth management fees hit a record high of $28.4 million for 2021, which included an increase of $1 million from the acquisition of Hoosier Trust Company. This was offset by the headwinds of the full year impact of the Durbin Amendment adoption on card payment fees which was effective July of 2020.


Non-interest expense totaled $279.2 million for the year ended 2021, a $15.8 million increase from 2020. The increase is primarily due to higher salaries, incentives, and employee benefits costs.


The Corporation’s loan to deposit ratio now totals 73 percent and loan to asset ratio totals 60 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 13.92 percent, common equity tier 1 capital ratio equaled 11.68 percent, and the tangible common equity ratio totaled 9.01 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.


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 (