The following is a summary of the First Merchants Corporation (FRME) Q1 2024 Earnings Call Transcript:
Financial Performance:
First Merchants Corporation's assets, loans, and deposits for Q1 2024 were reported at $18.3 billion, $12.5 billion, and $14.9 billion, respectively.
The Q1 2024 earnings per share were reported at $0.80, adjusted to $0.85 for $3.5 million of non-core items.
The company purchased 30 million of shares and redeemed $40 million of sub-debt as part of its buyback plans.
The margin remained stable with new and renewed loan yields for the quarter at 8.15%.
Despite a choppy trend in loan growth, with a decline in the commercial portfolio balanced by increases in the commercial and industrial portfolio, the company expects mid-to-high single digit growth for the remainder of the year.
The corporation maintains strong capital ratios with tangible common equity over 8% and continues active buyback plans due to the sub-10-price-to-sales ratio.
Predictions for non-interest income are around 28 to 29 per quarter, slightly down from the previous forecast, with reports of expenses offsetting some of the reduction in non-interest income.
Additional digital platform conversion costs for Q2 are estimated at $2.5 million.
Business Progress:
The company successfully implemented three of four major technology initiatives, including in-branch account opening, online/mobile, and private wealth platforms.
The business strategy focuses on organic loan growth, deposit growth, fee growth, and digital delivery channel investment.
The sustainable C&I strength is accredited to investments in Michigan markets and corporate executives investing in plant, equipment, or strategic acquisitions.
The company is actively planning to form new lending relationships and expecting loan growth in the mid-to-high single digits.
There is likely an increase in the loan deposit ratio.
The company plans to redeem $25 million of sub-debt by the end of the month.
Focused strategies have been developed to manage funding costs by making modest rate reductions across all business lines.
More details: First Merchants IR
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