SEC Comment Letter for FIRST MERCHANTS CORP (FRME, FRMEP) (CIK 0000712534) (FRME) — Aug 8, 2017
FIRST MERCHANTS CORP (FRME, FRMEP) (CIK 0000712534)
Date: Aug. 8, 2017 · CIK: 0000712534 · Accession: 0000000000-17-028017
AI Filing Summary & Sentiment
Letter
Mail Stop 4720 August 8, 2017 Mark K. Hardwick Chief Financial Officer First Merchants Corporation 200 East Jackson Street Muncie, Indiana 47305 -2814
Re: First Merchants Corporation Form 10-K for the Fiscal Year Ended December 31, 2016 Filed March 1, 2017 Form s 8-K Filed July 27, 2017 and July 31, 2017 File No. 000 -17071
Dear Mr. Hardwick :
We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten busine ss days b y providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments , we may have additional comments.
Form 8 -K filed July 27, 2017
Item 9.01 Financial Statements And Exhibits
Exhibit 99.1 Press Release, dated July 27, 2017, issued by First Merchants Corporation
1. Please tell us the nature of the net interest margin adjusted for fair value accretion. If the adjustment excludes the effect of acquisition accounting, rather than an adjustment that may try to reflect true organic growth, the adjustment would not be appropriate as it represents a tailored a ccounting principle. Please confirm that you will no longer present this type of non -GAAP adjustment in future presentations, if true.
Mark K. Hardwick First Merchants Corporation August 8, 2017 Page 2
Form 8 -K filed July 31, 2017
Item 9.01 Financial Statements And Exhibits
Exhibit 99.1 First Merchants Corporation Inv estor Presentation
2. You present a non -GAAP metric of the Allowance for loan losses plus Fair Value Adjustment (FVA) as a Percentage of Total Loans plus FVA (non -GAAP) in the Appendix titled Non -GAAP Reconciliation. The addition of acquisition accounting adjustments to the allowance for loan losses to derive a total allowance represents a tailored accounting principle that is prohibited by Regulation G since the acquisition accounting adjustments are recognized in interest income. In addition, this non -GAAP metric implies that the acquisition accounting adjustments are available to the entire loan population that includes non -acquired and acquired loans when the adjustments are only available for the acquired loans. Please remove this non -GAAP measure from fu ture presentations.
We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
You may contact Chris Harley at (202) 551 -3695 or me at (202) 551 -3752 with any questions.
Sincerely,
/s/ Gus Rodriguez
Show Raw Text
Mail Stop 4720
August 8, 2017
Mark K. Hardwick
Chief Financial Officer
First Merchants Corporation
200 East Jackson Street
Muncie, Indiana 47305 -2814
Re: First Merchants Corporation
Form 10-K for the Fiscal Year Ended December 31, 2016
Filed March 1, 2017
Form s 8-K
Filed July 27, 2017 and July 31, 2017
File No. 000 -17071
Dear Mr. Hardwick :
We have limited our review of your filing to the financial statements and related
disclosures and have the following comments. In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten busine ss days b y providing the requested
information or advis e us as soon as possible when you will respond. If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments , we may have additional comments.
Form 8 -K filed July 27, 2017
Item 9.01 Financial Statements And Exhibits
Exhibit 99.1 Press Release, dated July 27, 2017, issued by First Merchants Corporation
1. Please tell us the nature of the net interest margin adjusted for fair value accretion. If the
adjustment excludes the effect of acquisition accounting, rather than an adjustment that
may try to reflect true organic growth, the adjustment would not be appropriate as it
represents a tailored a ccounting principle. Please confirm that you will no longer present
this type of non -GAAP adjustment in future presentations, if true.
Mark K. Hardwick
First Merchants Corporation
August 8, 2017
Page 2
Form 8 -K filed July 31, 2017
Item 9.01 Financial Statements And Exhibits
Exhibit 99.1 First Merchants Corporation Inv estor Presentation
2. You present a non -GAAP metric of the Allowance for loan losses plus Fair Value
Adjustment (FVA) as a Percentage of Total Loans plus FVA (non -GAAP) in the
Appendix titled Non -GAAP Reconciliation. The addition of acquisition accounting
adjustments to the allowance for loan losses to derive a total allowance represents a
tailored accounting principle that is prohibited by Regulation G since the acquisition
accounting adjustments are recognized in interest income. In addition, this non -GAAP
metric implies that the acquisition accounting adjustments are available to the entire loan
population that includes non -acquired and acquired loans when the adjustments are only
available for the acquired loans. Please remove this non -GAAP measure from fu ture
presentations.
We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
You may contact Chris Harley at (202) 551 -3695 or me at (202) 551 -3752 with any
questions.
Sincerely,
/s/ Gus Rodriguez
Gus Rodriguez
Accounting Branch Chief
Office of Financial Services