-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FkIRer1b5tDKvgZsLj41MnLdUehfWSQcqqJ2m6wQ3JhCYfqzDBojsQAix3CThdQG B9HyOs65hvPkeGszpjM7ag== 0000712534-04-000004.txt : 20040121 0000712534-04-000004.hdr.sgml : 20040121 20040121105223 ACCESSION NUMBER: 0000712534-04-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040121 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST MERCHANTS CORP CENTRAL INDEX KEY: 0000712534 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 351544218 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17071 FILM NUMBER: 04534062 BUSINESS ADDRESS: STREET 1: 200 E JACKSON ST STREET 2: PO BOX 792 CITY: MUNCIE STATE: IN ZIP: 47308-0792 BUSINESS PHONE: 3177471500 MAIL ADDRESS: STREET 1: 200 EAST JACKSON STREET CITY: MUNCIE STATE: IN ZIP: 47305 8-K 1 k8012104pr.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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): January 21, 2004 FIRST MERCHANTS CORPORATION (Exact name of registrant as specified in its charter) INDIANA (State or other jurisdiction of incorporation) 0-17071 35-1544218 (Commission File Number) (IRS Employer Identification No.) 200 East Jackson Street P.O. Box 792 Muncie, Indiana 47305-2814 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (765) 747-1500 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. Exhibit 99.1 Press Release, dated January 21, 2004, issued by First Merchants Corporation ITEM 9. REGULATION FD DISCLOSURE (INFORMATION PROVIDED UNDER ITEM 12 - RESULTS OF OPERATIONS AND FINANCIAL CONDITION). The following information is being provided under Item 12 - Results of Operations and Financial Condition. It is being furnished under Item 9 of this Form 8-K in accordance with interim guidance issued by the SEC in Release No. 33-8216. Such information, including the Exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934. On January 21, 2004, First Merchants Corporation issued a press release to report its financial results for the year ended December 31, 2003. The release is furnished as Exhibit 99.1 hereto. 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. By: /s/ Larry R. Helms -------------------------------------------- Larry R. Helms, Senior Vice President Dated: January 21, 2004 EXHIBIT INDEX ------------- Exhibit No. - ----------- 99.1 Description ----------- Press Release, dated January 21, 2004, issued by First Merchants Corporation. First Merchants Corporation Exhibit No. 99.1 Press Release, dated January 21, 2004 N / E / W / S R / E / L / E / A / S / E January 21, 2004 FOR IMMEDIATE RELEASE For more information, contact: Mark K. Hardwick, Senior Vice President/Chief Financial Officer, 765-751-1857 http://firstmerchants.com SOURCE: First Merchants Corporation, Muncie, Indiana FIRST MERCHANTS CORPORATION ANNOUNCES 2003 RESULTS First Merchants Corporation (NASDAQ - FRME) has reported 2003 diluted earnings per share of $1.50, down from $1.69 recorded in 2002. Net income during the period equaled $27.6 million compared to $27.8 million in 2002. Net Interest Margin equaled 4.01 percent for the year, down 38 basis points from 4.39 in 2002. The decline in Net Interest Margin amounted to $.33 on an earnings per share basis. Non-performing loans as a percentage of total loans equaled 1.17 percent, up from 1.09 percent in 2002. The Corporation's allowance for loan losses equaled 1.08 percent of total loans as of year-end. Michael L. Cox, President and Chief Executive Officer, stated that, "First Merchants Corporation's management team is disappointed the legacy of 27 consecutive years of improved earnings per share has come to an end in 2003. Management has always taken pride in its ability to manage through interest rate cycles and various economic environments. However, the fact that our first down year in 28 years occurred during a 40-year low interest rate cycle and a stressed Indiana economy resulting in significant margin compression and higher charge-off's than normal is of some consolation." Cox also stated that, "We maintained a long-term focus throughout a difficult year in 2003 by not sacrificing balance sheet credit quality or asset duration in search of current year earnings. Management believes the balance sheet is positioned for the coming years." 2003 accomplishments included the formation of Merchants Trust Company on January 1st, the acquisition of CNBC Bancorp, Worthington Ohio, on March 1st, the formation of two tax advantaged investment subsidiaries on May 29th and the integration of Lafayette Bank and Trust Company's core processing system on November 7th. Additionally, in order to bring consistency of application and interpretation of all applicable banking regulations, the Corporation successfully converted six state bank charters to national charters effective January 1, 2004. All ten of the Corporation's banks are now nationally chartered bringing enhanced efficiency and consistency to the regulatory process. CONFERENCE CALL First Merchants Corporation will conduct a conference call at 2:30 p.m. Eastern Time on Thursday, January 21, 2004. To participate dial 888-710-8192 and reference First Merchants Corporation's fourth quarter earnings release. A digital recording will be available two hours after the completion of the conference from January 21, 2004, to January 23, 2004. To access, US/Canada participants should call 800-642-1687 or for International/Local participants, call 706-645-9291 and enter the Conference I.D. 4799031. Detailed financial results are reported on the attached pages. First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. Subsidiaries of the Corporation include First Merchants Bank, NA, Madison Community Bank, First United Bank, Union County National Bank, The Randolph County Bank, First National Bank, Decatur Bank & Trust Company, Frances Slocum Bank, Lafayette Bank & Trust Company, Commerce National Bank and Merchants Trust Company. The Corporation also operates First Merchants Insurance Services, a full-service property casualty, personal lines, and healthcare insurance agency, headquartered in Muncie, Indiana, and is a majority member of Indiana Title Insurance Company, LLC, a title insurance agency. First Merchants Corporation's common stock is traded over-the-counter on the NASDAQ National Market System under the symbol FRME and is rated A+ by Standard & Poor's Corporation. Quotations are carried in daily newspapers and can be found on the company's Internet web page (http:/www.firstmerchants.com). * * * *
CONSOLIDATED BALANCE SHEETS (in thousands) December 31, 2003 2002 Assets Cash and due from banks $ 77,112 $ 87,638 Federal funds sold 32,415 31,400 ----------- ----------- Cash and cash equivalents 109,527 119,038 Interest-bearing time deposits 8,141 3,568 Investment securities 356,797 342,062 Mortgage loans held for sale 3,043 21,545 Loans 2,353,503 2,004,377 Less: Allowance for loan losses (25,493) (22,417) ----------- ----------- Net loans 2,328,010 1,981,960 Premises and equipment 39,639 38,645 Federal Reserve and Federal Home Loan Bank stock 15,502 11,409 Interest receivable 16,840 17,346 Core deposit intangibles and goodwill 142,723 107,217 Cash surrender value of life insurance 37,927 14,309 Other assets 18,663 21,588 ----------- ----------- Total assets $ 3,076,812 $ 2,678,687 =========== =========== Liabilities Deposits Noninterest-bearing $ 338,201 $ 272,128 Interest-bearing 2,023,900 1,764,560 ----------- ----------- Total deposits 2,362,101 2,036,688 Borrowings 383,170 356,927 Interest payable 4,680 6,019 Other liabilities 22,896 17,924 ----------- ----------- Total liabilities 2,772,847 2,417,558 Stockholders' equity Preferred stock, no-par value Authorized and unissued -- 500,000 shares Common stock, $.125 stated value Authorized -- 50,000,000 shares Issued and outstanding -- 18,512,834 and 17,138,885 shares 2,314 2,142 Additional paid-in capital 150,310 116,401 Retained earnings 149,096 138,110 Accumulated other comprehensive income 2,245 4,476 ----------- ----------- Total stockholders' equity 303,965 261,129 ----------- ----------- Total liabilities and stockholders' equity $ 3,076,812 $ 2,678,687 =========== ===========
FINANCIAL HIGHLIGHTS
Three Months Ended Year Ended (In thousands) December 31, December 31, 2003 2002 2003 2002 NET CHARGE OFF'S $ 5,396 $ 2,607 $ 10,128 $ 6,800 AVERAGE BALANCES Total Assets $3,070,523 $2,665,016 $2,960,195 $2,406,251 Total Loans 2,349,536 2,066,616 2,281,614 1,842,429 Total Deposits 2,361,544 2,023,698 2,257,075 1,857,053 Total Stockholders' Equity 302,803 261,139 293,603 237,575 FINANCIAL RATIOS Return on Average Assets .76% .99% .93% 1.16% Return on Avg. Stockholders' Equity 7.69 10.10 9.39 11.72 Avg. Earning Assets to Avg. Assets 90.19 92.11 89.99 91.38 Allowance for Loan Losses as % Of Total Loans 1.08 1.11 1.08 1.11 Net Charge Off's as % Of Avg. Loans (Annualized) .92 .50 .44 .37 Dividend Payout Ratio 74.19 57.89 60.00 50.89 Avg. Stockholders' Equity to Avg. Assets 9.86 9.80 9.92 9.87 Tax Equivalent Yield on Earning Assets 5.62 6.57 5.98 6.83 Cost of Supporting Liabilities 1.84 2.30 1.97 2.44 Net Int. Margin (FTE) on Earning Assets 3.78 4.27 4.01 4.39
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share data) Three Months Ended Year Ended December 31, December 31, 2003 2002 2003 2002 Interest income Loans receivable Taxable $ 34,697 $ 34,775 $ 141,236 $ 129,279 Tax exempt 195 235 707 638 Investment securities Taxable 1,484 2,100 6,105 9,086 Tax exempt 1,451 1,740 6,270 6,190 Federal funds sold 148 169 487 557 Deposits with financial institutions 22 38 76 197 Federal Reserve and Federal Home Loan Bank stock 39 208 649 735 -------- -------- -------- -------- Total interest income 38,036 39,265 155,530 146,682 -------- -------- -------- -------- Interest expense Deposits 8,303 9,934 34,858 39,700 Securities sold under repurchase agreements 248 502 1,521 2,060 Federal Home Loan Bank advances 2,362 2,359 9,439 8,166 Trust preferred securities 1,234 1,181 4,931 3,324 Other borrowings 586 154 1,639 509 -------- -------- -------- -------- Total interest expense 12,733 14,130 52,388 53,759 -------- -------- -------- -------- Net interest income 25,303 25,135 103,142 92,923 Provision for loan losses 1,047 2,877 9,477 7,174 -------- -------- -------- -------- Net interest income after provision for loan losses 24,256 22,258 93,665 85,749 -------- -------- -------- -------- Other income Fiduciary activities 1,603 1,487 6,736 6,258 Service charges on deposit accounts 2,717 2,695 11,105 9,330 Other customer fees 1,039 993 4,124 3,918 Net realized gains (losses)on sales of available-for-sale securities 0 169 950 739 Commission income 569 586 2,668 2,203 Earnings on cash surrender value of life insurance 446 200 1,347 689 Net gains and fees on sales of loans 770 722 6,388 1,712 Other income 443 364 2,584 2,228 -------- -------- -------- -------- Total other income 7,587 7,216 35,902 27,077 -------- -------- -------- -------- Other expenses Salaries and employee benefits 12,599 10,849 50,484 39,150 Net occupancy expenses 1,414 933 4,894 3,632 Equipment expenses 2,217 1,861 8,073 6,709 Marketing expense 538 416 1,797 1,495 Outside data processing fees 1,063 940 4,118 3,664 Printing and office supplies 466 442 1,706 1,597 Goodwill and core deposit amortization 923 750 3,700 2,589 Other expenses 4,623 3,695 16,507 12,173 -------- -------- -------- -------- Total other expenses 23,843 19,886 91,279 71,009 -------- -------- -------- -------- Income before income tax 8,000 9,588 38,288 41,817 Income tax expense 2,181 2,998 10,717 13,981 -------- -------- -------- -------- Net income $ 5,819 $ 6,590 $ 27,571 $ 27,836 ======== ======== ======== ======== Per Share Data (1) Basic Net Income .31 .38 1.51 1.70 Diluted Net Income .31 .38 1.50 1.69 Cash Dividends Paid .23 .22 .90 .86 (1) Restated for a five percent (5%) stock dividend distributed September 2003.
CONSOLIDATED BALANCE SHEETS (in thousands) December 31, September 30, June 30, March 31, December 31, 2003 2003 2003 2003 2002 Assets Cash and due from banks $ 77,112 $ 87,619 $ 89,126 $ 81,789 $ 87,638 Federal funds sold 32,415 0 14,150 54,925 31,400 ----------- ----------- ----------- ----------- ------------ Cash and cash equivalents 109,527 87,619 103,276 136,714 119,038 Interest-bearing time deposits 8,141 3,789 8,777 5,170 3,568 Investment securities 356,797 316,852 363,103 333,692 342,062 Mortgage loans held for sale 3,043 12,042 15,151 13,558 21,545 Loans 2,353,503 2,351,405 2,324,576 2,291,178 2,004,377 Less: Allowance for loan losses (25,493) (29,842) (30,639) (29,733) (22,417) ---------- ---------- ----------- ----------- ------------ Net loans 2,328,010 2,321,563 2,293,937 2,261,445 1,981,960 Premises and equipment 39,639 39,475 39,313 38,861 38,645 Federal Reserve and Federal Home Loan Bank stock 15,502 14,057 13,933 13,912 11,409 Interest receivable 16,840 17,139 16,592 16,789 17,346 Core deposit intangibles and goodwill 142,723 143,648 144,663 141,226 107,217 Cash surrender value of life insurance 37,927 37,536 34,575 14,567 14,309 Other assets 18,663 18,000 23,641 23,088 21,588 ----------- ----------- ----------- ----------- ------------ Total assets $ 3,076,812 $ 3,011,720 $ 3,056,961 $ 2,999,022 $ 2,678,687 =========== =========== =========== =========== ============ Liabilities Deposits Noninterest-bearing $ 338,201 $ 316,058 $ 324,735 $ 289,835 $ 272,128 Interest-bearing 2,023,900 1,994,146 1,988,593 1,996,836 1,764,560 ----------- ----------- ----------- ----------- ------------ Total deposits 2,362,101 2,310,204 2,313,328 2,286,671 2,036,688 Borrowings 383,170 374,051 417,669 388,821 356,927 Interest payable 4,680 5,200 5,494 5,694 6,019 Other liabilities 22,896 21,064 19,460 28,212 17,924 ----------- ----------- ----------- ----------- ------------ Total liabilities 2,772,847 2,710,519 2,755,951 2,709,398 2,417,558 Stockholders' equity Preferred stock, no-par value Authorized and unissued -- 500,000 shares Common stock, $.125 stated value Authorized -- 50,000,000 shares Issued and outstanding 2,314 2,311 2,301 2,298 2,142 Additional paid-in capital 150,310 149,810 148,296 143,505 116,401 Retained earnings 149,096 147,559 144,457 139,743 138,110 Accumulated other comprehensive income 2,245 1,521 5,956 4,078 4,476 ----------- ----------- ----------- ----------- ------------ Total stockholders' equity 303,965 301,201 301,010 289,624 261,129 ----------- ----------- ----------- ----------- ------------ Total liabilities and stockholders' equity $ 3,076,812 $ 3,011,720 $ 3,056,961 $ 2,999,022 $ 2,678,687 =========== =========== =========== =========== ============
NON-PERFORMING ASSETS (In thousands) December 31, September 30, June 30, March 31, December 31, 2003 2003 2003 2003 2002 90 days past due $ 6,530 $ 4,790 $ 5,295 $ 3,552 $ 6,676 Non-accrual loans 19,453 20,093 22,532 19,747 14,134 Other real estate 1,399 1,547 2,351 1,841 1,691 ------------ ------------ ---------- ---------- ------------ Total non-performing assets $ 27,382 $ 26,430 $ 30,178 $ 25,140 $ 22,501 ============ ============ ========== ========== ============ Average total loans for the quarter $ 2,349,536 $ 2,348,817 $2,313,688 $2,111,056 $ 2,066,616 Total non-performing assets as a percent of average total loans 1.17% 1.13% 1.30% 1.19% 1.09% Restructured loans $ 641 $ 647 $ 899 $ 2,194 $ 2,508
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended (in thousands, except share data) December 31, September 30, June 30, March 31, December 31, 2003 2003 2003 2003 2002 Interest Income Loans receivable Taxable $ 34,697 $ 35,607 $ 35,759 $ 35,173 $ 34,775 Tax exempt 195 185 162 165 235 Investment securities Taxable 1,484 1,342 1,600 1,679 2,100 Tax exempt 1,451 1,562 1,626 1,631 1,740 Federal funds sold 148 49 177 113 169 Deposits with financial institutions 22 13 19 22 38 Federal Reserve and Federal Home Loan Bank stock 39 201 211 198 208 -------- -------- -------- -------- -------- Total interest income 38,036 38,959 39,554 38,981 39,265 -------- -------- -------- -------- -------- Interest expense Deposits 8,303 8,623 9,048 8,884 9,934 Securities sold under repurchase agreements 248 370 454 449 502 Federal Home Loan Bank advances 2,362 2,409 2,395 2,273 2,359 Trust preferred securities 1,234 1,232 1,259 1,206 1,181 Other borrowings 586 451 443 159 154 -------- -------- -------- -------- -------- Total interest expense 12,733 13,085 13,599 12,971 14,130 -------- -------- -------- -------- -------- Net interest income 25,303 25,874 25,955 26,010 25,135 Provision for loan losses 1,047 1,706 2,123 4,601 2,877 -------- -------- -------- -------- -------- Net interest income after provision for loan losses 24,256 24,168 23,832 21,409 22,258 -------- -------- -------- -------- -------- Other income Fiduciary activities 1,603 1,547 1,889 1,697 1,487 Service charges on deposit accounts 2,717 2,861 2,743 2,784 2,695 Other customer fees 1,039 961 1,036 1,088 993 Net realized gains on sales of available-for-sale securities 0 512 67 371 169 Commission income 569 638 707 754 586 Earnings on cash surrender value of life insurance 446 498 204 199 200 Net gains and fees on sales of loans 770 1,332 3,351 935 722 Other income 443 527 1,156 458 364 -------- -------- -------- -------- ------- Total other income 7,587 8,876 11,153 8,286 7,216 -------- -------- -------- -------- ------- Other expenses Salaries and employee benefits 12,599 13,206 12,902 11,777 10,849 Net occupancy expenses 1,414 1,189 1,200 1,091 933 Equipment expenses 2,217 1,996 2,016 1,844 1,861 Marketing expense 538 414 411 434 416 Outside data processing fees 1,063 1,025 1,102 928 940 Printing and office supplies 466 401 432 407 442 Goodwill and core deposit amortization 923 958 991 828 750 Other expenses 4,623 3,771 3,881 4,232 3,695 -------- -------- -------- -------- -------- Total other expenses 23,843 22,960 22,935 21,541 19,886 -------- -------- -------- -------- -------- Income before income tax 8,000 10,084 12,050 8,154 9,588 Income tax expense 2,181 2,735 3,305 2,496 2,998 -------- -------- -------- -------- -------- Net income $ 5,819 $ 7,349 $ 8,745 $ 5,658 $ 6,590 ======== ======== ======== ======== ======== Per Share Data(1) Basic Net Income $ .31 $ .40 $ .48 $ .32 $ .38 Diluted Net Income .31 .39 .48 .32 .38 Cash Dividends Paid .23 .23 .22 .22 .22 (1) Restated for a five percent (5%) stock dividend distributed September 2003.
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