-----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, M7OUIlGM/nXEu1bLud5PIo2pq7KdEF3O/T7YLXhWYzJIM5AvSBP/eGT7kFlxRSoU qcDZ/HvUmbeXReqTjfH/eA== 0000712534-07-000073.txt : 20070501 0000712534-07-000073.hdr.sgml : 20070501 20070501093757 ACCESSION NUMBER: 0000712534-07-000073 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20070331 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070501 DATE AS OF CHANGE: 20070501 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: 07803669 BUSINESS ADDRESS: STREET 1: 200 E JACKSON ST STREET 2: PO BOX 792 CITY: MUNCIE STATE: IN ZIP: 47308-0792 BUSINESS PHONE: 7657471500 MAIL ADDRESS: STREET 1: 200 EAST JACKSON STREET CITY: MUNCIE STATE: IN ZIP: 47305 8-K 1 f8ker1stqtr07.txt 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): May 1, 2007 ------------------------------ FIRST MERCHANTS CORPORATION (Exact name of registrant as specified in its charter) ------------------------------- INDIANA 0-17071 35-1544218 (State or other jurisdiction (Commission file number) (IRS Employer of incorporation) 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) 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)) Page 1 of 11 ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On May 1, 2007, First Merchants Corporation issued a press release to report its financial results for the first quarter ended March 31, 2007. 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) Exhibits. Exhibit 99.1 Press Release, dated May 1, 2007, issued by First Merchants Corporation Page 2 of 11 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/ Mark K. Hardwick -------------------------------------------- Mark K. Hardwick Executive Vice President and Chief Financial Officer (Principal Financial and Principal Accounting Officer) Dated: May 1, 2007 Page 3 of 11 EXHIBIT INDEX ------------- Exhibit No. Description - ----------- ----------- 99.1 Press Release, dated May 1, 2007, issued by First Merchants Corporation. Page 4 of 11 First Merchants Corporation Exhibit No. 99.1 Press Release, dated May 1, 2007 N / E / W / S R / E / L / E / A / S / E May 1, 2007 FOR IMMEDIATE RELEASE For more information, contact: Mark K. Hardwick, Executive Vice President/Chief Financial Officer, 765-751-1857 http://firstmerchants.com SOURCE: First Merchants Corporation, Muncie, Indiana FIRST MERCHANTS CORPORATION ANNOUNCES INCREASE IN FIRST QUARTER EARNINGS PER SHARE First Merchants Corporation (NASDAQ - FRME) has reported March 31, 2007 net income of $7.77 million, a $262,000 or 3.49 percent increase over the $7.51 million earned in the first quarter of 2006. Diluted earnings per share totaled $.42, a $.01 increase over 2006 first quarter earnings per share of $.41. Total assets equaled $3.55 billion at year-end, an increase of $285 million, or 8.7 percent from March 31, 2006. Loans and investments, the Corporation's primary earning assets, totaled $3.21 billion, an increase of $272 million or 9.2 percent over the prior year. Non-interest income increased by $1,207,000 during the quarter as service charges on deposits increased by $457,000, earnings on cash surrender value of bank owned life insurance increased by $262,000 and insurance commission increased by $134,000. Net-Interest margin declined by 37 basis points from 3.87 percent in the first quarter of 2006 to 3.50 percent in 2007. As a result, net-interest income declined by $514,000 despite strong improvements in earning assets as the Corporation's volume variance totaled a positive $2.7 million mitigated by a negative rate variance of $3.2 million. The decline in net-interest margin represents $.02 in earnings per share for the quarter. Year-to-date operating expense increased by $406,000, a modest 1.7 percent as management continues the process of streamlining its operating structure. The allowance for loan losses increased during the last twelve months by $1.2 million as non-performing loans totaled 1.12 basis points of average total loans and the allowance for loan losses as a percent of total loans equaled .98 percent. Michael C. Rechin, President and Chief Executive Officer, stated that, "Growth in non-interest income of 14 percent reflects managements commitment to customer acquisition and retention and is reflective of our bankers fulfilling the service needs of our customers." Rechin also added, "As the Corporation's non-interest income, balance sheet and talent profile grows in conjunction with the completion of our strategic structural enhancements, First Merchants will position itself to meet or exceed stakeholder expectations." CONFERENCE CALL First Merchants Corporation will conduct a conference call at 2:30 p.m. Eastern Daylight Time on Tuesday, May 1, 2007. To participate, dial (Toll Free) 877-407-9210 and reference First Merchants Corporation's first quarter earnings. A replay will be available until May 8, 2007. To access replay, US/Canada participants should dial (Toll Free) 877-660-6853 or for International participants, dial 201-612-7415. The replay will require the Account # 286 and Conference ID # 238591. During the call we may make Forward Looking Statements about our relative business outlook. These Forward Looking Statements and all other statements made during the call that do not concern historical facts are subject to risks and uncertainties that may materially affect actual results. Specific Forward Looking Statements include, but are not limited to, any indications regarding the Financial Services industry, the economy and future growth of the balance sheet or income statement. 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, N.A., First Merchants Bank of Central Indiana, N.A., Lafayette Bank & Trust Company, N.A., Commerce National Bank and First Merchants Trust Company, N.A. The Corporation also operates First Merchants Insurance Services, a full-service property casualty, personal lines, and healthcare insurance agency 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. 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) March 31, 2007 2006 Assets Cash and due from banks $ 43,629 $ 59,176 Interest-bearing time deposits 6,785 9,104 Investment securities 476,199 441,651 Mortgage loans held for sale 2,732 5,170 Loans 2,731,140 2,491,488 Less: Allowance for loan losses (26,819) (25,623) ---------- ----------- Net loans 2,704,321 2,465,865 Premises and equipment 43,262 39,029 Federal Reserve and Federal Home Loan Bank stock 23,691 23,421 Interest receivable 21,941 19,035 Core deposit intangibles and goodwill 137,847 138,174 Cash surrender value of life insurance 68,360 43,964 Other assets 26,047 25,346 ----------- ----------- Total assets $ 3,554,814 $ 3,269,935 =========== =========== Liabilities Deposits Noninterest-bearing $ 325,615 $ 325,548 Interest-bearing 2,361,773 2,120,524 ----------- ----------- Total deposits 2,687,388 2,446,072 Borrowings 497,188 469,002 Interest payable 10,834 6,412 Other liabilities 30,756 31,711 ----------- ----------- Total liabilities 3,226,166 2,953,197 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 -- 18,315,624 and 18,440,316 shares 2,289 2,305 Additional paid-in capital 143,672 146,374 Retained earnings 191,476 177,975 Accumulated other comprehensive loss (8,789) (9,916) ----------- ----------- Total stockholders' equity 328,648 316,738 ----------- ----------- Total liabilities and stockholders' equity $ 3,554,814 $ 3,269,935 =========== ===========
FINANCIAL HIGHLIGHTS Three Months Ended (In thousands) March 31, 2007 2006 NET CHARGE OFF'S $ 1,320 $ 1,291 AVERAGE BALANCES Total Assets $3,522,334 $3,235,933 Total Loans 2,703,134 2,474,759 Total Deposits 2,689,908 2,407,646 Total Stockholders' Equity 328,342 316,629 FINANCIAL RATIOS Return on Average Assets .88% .93 Return on Avg. Stockholders' Equity 9.47 9.49 Avg. Earning Assets to Avg. Assets 91.13 91.27 Allowance for Loan Losses as % Of Total Loans .98 1.03 Net Charge Off's as % Of Avg. Loans (Annualized) .20 .21 Dividend Payout Ratio 54.76 56.10 Avg. Stockholders' Equity to Avg. Assets 9.32 9.78 Tax Equivalent Yield on Earning Assets 7.01 6.64 Cost of Supporting Liabilities 3.51 2.77 Net Int. Margin (FTE) on Earning Assets 3.50 3.87
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data) Three Months Ended March 31, 2007 2006 Interest income Loans receivable Taxable $ 49,645 $ 43,079 Tax exempt 201 168 Investment securities Taxable 3,282 2,726 Tax exempt 1,661 1,647 Federal funds sold 1 17 Deposits with financial institutions 123 114 Federal Reserve and Federal Home Loan Bank stock 328 311 -------- -------- Total interest income 55,241 48,062 -------- -------- Interest expense Deposits 21,806 14,419 Federal funds purchased 854 489 Securities sold under repurchase agreements 569 835 Federal Home Loan Bank advances 2,936 2,656 Subordinated debentures, revolving credit lines and term loans 2,001 1,991 Other borrowings 83 -------- -------- Total interest expense 28,166 20,473 -------- -------- Net interest income 27,075 27,589 Provision for loan losses 1,599 1,726 -------- -------- Net interest income after provision for loan losses 25,476 25,863 -------- -------- Other income Fiduciary activities 2,036 1,951 Service charges on deposit accounts 2,883 2,426 Other customer fees 1,491 1,355 Net realized gains on sales of available-for-sale securities (1) 9 Commission income 1,638 1,504 Earnings on cash surrender value of life insurance 685 423 Net gains and fees on sales of loans 532 554 Other income 540 375 -------- -------- Total other income 9,804 8,597 -------- -------- Other expenses Salaries and employee benefits 14,726 14,392 Net occupancy expenses 1,598 1,434 Equipment expenses 1,722 1,949 Marketing expense 487 400 Outside data processing fees 951 883 Printing and office supplies 299 304 Core deposit amortization 791 762 Other expenses 3,620 3,664 -------- -------- Total other expenses 24,194 23,788 -------- -------- Income before income tax 11,086 10,672 Income tax expense 3,315 3,163 -------- -------- Net income $ 7,771 $ 7,509 ======== ======== Per Share Data Basic Net Income .42 .41 Diluted Net Income .42 .41 Cash Dividends Paid .23 .23 Average Diluted Shares Outstanding (in thousands) 18,497 18,526
CONSOLIDATED BALANCE SHEETS
(in thousands) March 31, December 31, September 30, June 30, March 31, 2007 2006 2006 2006 2006 Assets Cash and due from banks $ 43,629 $ 89,957 $ 65,641 $ 71,275 $ 59,176 Interest-bearing time deposits 6,785 11,284 8,717 8,529 9,104 Investment securities 476,199 465,217 468,074 466,882 441,651 Mortgage loans held for sale 2,732 5,413 3,395 5,338 5,170 Loans 2,731,140 2,692,601 2,641,644 2,591,440 2,491,488 Less: Allowance for loan losses (26,819) (26,540) (26,975) (25,884) (25,623) ----------- ----------- ----------- ----------- ----------- Net loans 2,704,321 2,666,061 2,614,669 2,565,556 2,465,865 Premises and equipment 43,262 42,393 40,511 41,122 39,029 Federal Reserve and Federal Home Loan Bank stock 23,691 23,691 23,620 23,889 23,421 Interest receivable 21,941 24,345 23,946 19,539 19,035 Core deposit intangibles and goodwill 137,847 138,638 136,666 137,429 138,174 Cash surrender value of life insurance 68,360 64,213 63,539 44,358 43,964 Other assets 26,047 23,658 23,261 24,346 25,346 ----------- ----------- ----------- ----------- ----------- Total assets $ 3,554,814 $ 3,554,870 $ 3,472,039 $ 3,408,263 $ 3,269,935 =========== =========== =========== =========== =========== Liabilities Deposits Noninterest-bearing $ 325,615 $ 362,058 $ 324,601 $ 340,046 $ 325,548 Interest-bearing 2,361,773 2,388,480 2,369,690 2,195,354 2,120,524 ----------- ----------- ----------- ----------- ----------- Total deposits 2,687,388 2,750,538 2,694,291 2,535,400 2,446,072 Borrowings 497,188 440,764 419,146 527,347 469,002 Interest payable 10,834 9,326 10,236 6,927 6,412 Other liabilities 30,756 26,917 26,075 25,585 31,711 ----------- ----------- ----------- ----------- ----------- Total liabilities 3,226,166 3,227,545 3,149,748 3,095,259 2,953,197 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 2,289 2,305 2,292 2,282 2,305 Additional paid-in capital 143,672 146,460 143,688 142,037 146,374 Retained earnings 191,476 187,965 184,555 181,042 177,975 Accumulated other comprehensive loss (8,789) (9,405) (8,244) (12,357) (9,916) ----------- ----------- ----------- ----------- ----------- Total stockholders' equity 328,648 327,325 322,291 313,004 316,738 ----------- ----------- ----------- ----------- ----------- Total liabilities and stockholders' equity $ 3,554,814 $ 3,554,870 $ 3,472,039 $ 3,408,263 $ 3,269,935 =========== =========== =========== =========== ===========
NON-PERFORMING ASSETS (in thousands) March 31, December 31, September 30, June 30, March 31, 2007 2006 2006 2006 2006 90 days past due $ 4,554 $ 2,870 $ 4,253 $ 8,818 $ 5,188 Non-accrual loans 22,704 17,926 16,524 12,611 11,424 Other real estate 3,102 2,160 2,194 2,497 3,209 ---------- ---------- ---------- ---------- ---------- Total non-performing assets $ 30,360 $ 22,956 $ 22,971 $ 23,926 $ 19,821 ========== ========== ========== ========== ========== Average total loans for the quarter $2,703,134 $2,653,700 $2,613,805 $2,534,675 $2,474,759 Total non-performing assets as a percent of average total loans 1.12% .87% .87% .94% .80% Restructured loans $ 59 $ 84 $ 93 $ 111 $ 114
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended (in thousands, except share data) March 31, December 31, September 30, June 30, March 31, 2007 2006 2006 2006 2006 Interest Income Loans receivable Taxable $ 49,645 $ 49,293 $ 48,738 $ 45,658 $ 43,079 Tax exempt 201 240 189 231 168 Investment securities Taxable 3,282 3,219 3,289 3,082 2,726 Tax exempt 1,661 1,660 1,645 1,613 1,647 Federal funds sold 1 332 13 11 17 Deposits with financial institutions 123 110 144 132 114 Federal Reserve and Federal Home Loan Bank stock 328 318 307 320 311 -------- -------- -------- -------- -------- Total interest income 55,241 55,172 54,325 51,047 48,062 -------- -------- -------- -------- -------- Interest expense Deposits 21,806 22,690 20,291 16,914 14,419 Federal funds purchased 854 93 635 625 489 Securities sold under repurchase agreements 569 488 852 1,053 835 Federal Home Loan Bank advances 2,936 2,672 2,796 2,610 2,656 Subordinated debentures, revolving credit lines and term loans 2,001 2,046 2,067 2,020 1,991 Other borrowings 67 60 59 83 -------- -------- -------- -------- -------- Total interest expense 28,166 28,056 26,701 23,281 20,473 -------- -------- -------- -------- -------- Net interest income 27,075 27,116 27,624 27,766 27,589 Provision for loan losses 1,599 1,245 1,558 1,729 1,726 -------- -------- -------- -------- -------- Net interest income after provision for loan losses 25,476 25,871 26,066 26,037 25,863 -------- -------- -------- -------- -------- Other income Fiduciary activities 2,036 1,862 1,863 1,949 1,951 Service charges on deposit accounts 2,883 3,010 3,055 2,771 2,426 Other customer fees 1,491 1,387 1,386 1,389 1,355 Net realized gains (losses) on sales of available-for-sale securities (1) (4) (9) 9 Commission income 1,638 881 971 946 1,504 Earnings on cash surrender value of life insurance 685 712 719 432 423 Net gains and fees on sales of loans 532 613 493 511 554 Other income 540 309 348 422 375 -------- -------- -------- -------- -------- Total other income 9,804 8,770 8,835 8,411 8,597 -------- -------- -------- -------- -------- Other expenses Salaries and employee benefits 14,726 14,157 14,033 13,543 14,392 Net occupancy expenses 1,598 1,498 1,477 1,477 1,434 Equipment expenses 1,722 1,956 2,035 2,007 1,949 Marketing expense 487 508 586 438 400 Outside data processing fees 951 804 841 921 883 Printing and office supplies 299 401 367 424 304 Core deposit amortization 791 781 762 761 762 Other expenses 3,620 4,315 3,854 4,323 3,664 -------- -------- -------- -------- -------- Total other expenses 24,194 24,420 23,955 23,894 23,788 -------- -------- -------- -------- -------- Income before income tax 11,086 10,221 10,946 10,554 10,672 Income tax expense 3,315 2,562 3,207 3,263 3,163 -------- -------- -------- -------- -------- Net income $ 7,771 $ 7,659 $ 7,739 $ 7,291 $ 7,509 ======== ======== ======== ======== ======== Per Share Data Basic Net Income $ .42 $ .42 $ .42 $ .39 $ .41 Diluted Net Income .42 .42 .42 .39 .41 Cash Dividends Paid .23 .23 .23 .23 .23 Average Diluted Shares Outstanding (in thousands) 18,497 18,498 18,381 18,463 18,526 FINANCIAL RATIOS Return on Average Assets .88% .88% .90% .88% .93% Return on Avg. Stockholders' Equity 9.47 9.39 9.72 9.20 9.49 Avg. Earning Assets to Avg. Assets 91.13 90.87 91.26 91.21 91.27 Allowance for Loan Losses as % Of Total Loans .98 .99 1.02 1.00 1.03 Net Charge Off's as % Of Avg. Loans (Annualized) .20 .25 .07 .23 .21 Dividend Payout Ratio 54.76 56.10 54.76 58.97 56.10 Avg. Stockholders' Equity to Avg. Assets 9.32 9.32 9.30 9.54 9.78 Tax Equivalent Yield on Earning Assets 7.01 7.07 7.08 6.87 6.64 Cost of Supporting Liabilities 3.51 3.53 3.42 3.07 2.77 Net Int. Margin (FTE) on Earning Assets 3.50 3.54 3.66 3.80 3.87
LOANS (in thousands) March 31, December 31, September 30, June 30, March 31, 2007 2006 2006 2006 2006 Commercial and industrial loans $ 557,304 $ 537,305 $ 497,280 $ 501,238 $ 486,411 Agricultural production financing and other loans to farmers 97,784 100,098 104,147 95,352 87,433 Real estate loans: Construction 151,782 169,491 175,753 178,254 175,784 Commercial and farmland 906,726 861,429 835,403 813,171 743,905 Residential 756,316 749,921 757,116 744,552 746,410 Individuals' loans for household and other personal expenditures 210,578 223,504 215,237 208,768 202,478 Tax exempt loans 15,306 14,423 16,550 13,656 13,656 Lease financing receivables, net of unearned income 7,648 8,010 8,543 8,589 8,193 Other loans 27,696 28,420 31,615 27,860 27,218 ----------- ------------ ---------- ---------- ----------- 2,731,140 2,692,601 2,641,644 2,591,440 2,491,488 Allowance for loan losses (26,819) (26,540) (26,975) (25,884) (25,623) ----------- ------------ ---------- ---------- ----------- Total loans $2,704,321 $2,666,061 $2,614,669 $2,565,556 $2,465,865 =========== ============ ========== ========== =========== DEPOSITS (in thousands) March 31, December 31, September 30, June 30, March 31, 2007 2006 2006 2006 2006 Demand deposits $ 787,538 $ 883,294 $ 743,154 $ 758,132 $ 671,027 Savings deposits 530,692 507,431 512,112 510,878 526,554 Certificates and other time deposits of $100,000 or more 398,061 408,910 394,724 313,751 320,213 Other certificates and time deposits 971,097 950,903 1,044,301 952,639 928,278 ----------- ----------- ----------- ----------- ----------- $2,687,388 $2,750,538 $2,694,291 $2,535,400 $2,446,072 =========== =========== =========== =========== ===========
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