First Merchants Corporation (NASDAQ – FRME) has reported first quarter 2021 net income of $49.5 million compared to $34.3 million during the same period in 2020. Earnings per share for the period totaled $.91 per share compared to the first quarter of 2020 result of $.62 per share, an increase of $.29, or 47 percent.

Total assets equaled $14.6 billion as of quarter-end and loans totaled $9.3 billion. The Corporation’s loan portfolio increased by $711 million, or 8.3 percent, during the past twelve months. The increase was primarily due to Paycheck Protection Program (“PPP”) loans which accounted for $742 million of the quarter-end loan balance. Investments increased $1 billion, or 37.2 percent, during the year and now total $3.7 billion. Total deposits equaled $12.0 billion as of quarter-end and increased by $2.1 billion, or 21.1 percent over the same period in 2020.

On January 1, 2021, the Corporation adopted the current expected credit losses (“CECL”) model for calculating the allowance for credit losses. The impact of the adoption was an increase to Allowance for Credit Losses – Loans of $74.1 million and the establishment of an Allowance for Credit Losses – Investments of $245,000. Net charge-offs totaled $3.6 million for the quarter and no provision expense was recorded. As a result, the quarter end Allowance for Credit Losses – Loans balance was $201.1 million, or 2.16% of total loans. Non-accrual loans totaled $57.9 million as of quarter-end.

Mark Hardwick, Chief Executive Officer, stated, “We have returned to the office and have reopened our lobbies to serve our customers in a more personal way. The vaccination progress and improved case numbers in our markets are cause for optimism. Our first quarter results were strong and I’m especially pleased to have produced a return on assets of 1.39 percent, return on tangible common equity of 15.87 percent and efficiency ratio of 50.23 percent. The current balance sheet and financial performance positions First Merchants to capitalize on future growth opportunities.”

Net-interest income totaling $100.4 million for the quarter, continued to grow with an increase of $6.6 million, or 7.0 percent compared to the first quarter of 2020. Net-interest margin on a tax equivalent basis, totaling 3.23 percent, declined by 23 basis points compared to the first quarter of 2020. Yield on earning assets for the first quarter totaled 3.52 percent and cost of supporting liabilities totaled 0.29 percent. Fair value accretion contributed less to margin as it accounted for 6 basis points in the first quarter of 2021, compared to 12 basis points in the first quarter of 2020. PPP loans contributed 13 basis points to margin during the first quarter of 2021 as unamortized SBA fees were recognized upon loan forgiveness.

Non-interest income totaled $24.1 million for the quarter, a $5.7 million decline from the first quarter of 2020. Customer-specific line items accounted for $2.8 million of the decrease driven by lower derivative hedge fees and the impact of the Durbin Amendment adoption on card payment fees. Additionally, gains on the sale of securities decreased by $2.8 million during the quarter. Non-interest expense totaled $66.1 million for the quarter and was stable compared to the 2020 first quarter expense total of $66.2 million.

The effective tax rate was 15.3 percent in the first quarter of 2021, compared to 9.2 percent in the first quarter of 2020. The CARES Act provided an opportunity to carry back net operating losses to pre-tax reform income tax rates in the first quarter of 2020. The result was a decline in income tax expense of $1.2 million and a lower-than-normal effective tax rate.
The loan-to-deposit ratio totals 78.0 percent and loan-to-asset ratio totals 63.7 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 14.33 percent, the common equity tier 1 capital ratio equaled 11.99 percent, and the tangible common equity ratio totaled 8.78 percent. These ratios reflect the Corporation’s strong liquidity and capital positions.


First Merchants Corporation will conduct a first quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, April 22, 2021.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation’s first quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until May 22, 2021. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529, Canada participants should dial 855-669-9658, or for International participants, dial +1 412-317-0088. The replay access code is 10153171.

In order to view the web cast and presentation slides, please go to during the time of the call. A replay of the web cast will be available until April 22, 2022.

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 (

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.