First Merchants Corporation

Good afternoon and welcome to the First Merchants Fourth Quarter 2020 Earnings Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, then two. This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often but not always be identified by the use of words like believe, continue, pattern, estimate, project, intend, anticipate, expect, and similar expressions are future or conditional verbs such as will, would, should, could, might, can, may, or similar expressions. These forward-looking statements include but are not limited to statements relating to first merchants' goals, intentions, and expectations, statements regarding the first merchants' business plan and growth strategies, statements regarding the asset quality of first merchants' loan and investment portfolios, and estimates of first merchants' risks and future costs and benefits. These forward-looking statements are subject to significant risks, exemptions, and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things, possible changes in economic and business conditions, the existence or exacerbation of general geopolitical instability and uncertainty associated the effects of a pandemic or other unforeseeable event, the ability of first merchants to integrate recent acquisitions and attract new customers, possible changes in monetary and fiscal policies and laws and regulations, the effects of easing restrictions on participants in the financial services industry, the cost, and other effects of legal and administrative cases, possible changes in the creditworthiness of customers, and the possible impairment of collectability of loans, fluctuations in market rates of interest, competitive factors in the banking industry, changes in the banking legislation, or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants Affiliate Bank. continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends, changes in market, economic, operational, liquidity, credit, and interest rate risks associated with the first merchant's business, and other risks and factors identified in each of first merchant's filings with the Securities and Exchange Commission. First Merchants undertakes no obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this presentation or press release. In addition, the company's past results of operations do not necessarily indicate its anticipated future results. Please note this event is being recorded. I would now like to turn the conference over to Mark Hardwick, CEO. Please go ahead. Thank you.

Good afternoon, and welcome to the first Merchants' Year-End 2020 conference call. We released our earnings today at approximately 8 a.m. Eastern, and hopefully you've all found your way to the slide presentation. But if not, you can access the slides by following the link on the second page of our earnings release. Vishnavi, we thank you for the introduction and for covering in detail that forward-looking statement. We may have to find a way to shorten that up next time. On page three, you'll see today's presenters and our bio hosts include Mike Stewart, our newly appointed president, John Martin, our chief credit officer, and Michelle Kaviaski, our newly appointed chief financial officer. On page four, we have a nice one-page snapshot of First Merchants and a few highlights and accomplishments for your review. If you turn to slide five, I'd really like to start today by introducing our new vision statement. It's simple, yet we believe impactful. Simply stated, our vision is to enhance the financial wellness of the diverse communities we serve. I love the way it introduces a higher calling of financial wellness into our daily work. And I'm thrilled to officially add diversity into our bank's vision statement to appropriately reflect our values and increasing commitment. And I'm pleased to officially bring the community back into this community bank. This vision will influence how we hire, the markets we serve, and how each line of business strives to meet the needs of our client base, not to mention driving our philanthropic efforts. It's exciting to offer our employees a vision statement that improves the lives of our customers through the value proposition that we have to offer. Now, Mike Stewart will cover the remainder of slide five and slide six.

Hey, thanks, Mark, and good afternoon to all. I do want to spend my time on this slide and the next updating you on the maturation of our go-to-market strategies and offer insights to the markets we serve. We'll start with commercial banking. Our commercial banking teams have continued to invest in our capabilities to match the needs within our markets. Leveraging the size of our balance sheet to build out segment capabilities within public finance, Structured Finance, which is working with our private equity sponsors, asset-based lending, and a syndication platform have complemented our investment real estate, middle market, treasury services, and small business efforts. Michelle and John will offer additional insights to our core organic growth, but achieving a 10% annual loan growth rate in the fourth quarter will is directly attributed to our bankers, our markets, and our expanding commercial bank product capabilities. As we move into 2021, our pipeline remains at a healthy level. Beyond even the round two of PPP, we're engaged in now, and we can discuss that further later. Our consumer banking team has been leveraging our personal service approach to further educate and activate our digital and online banking products throughout this COVID environment. We have seen an acceleration of the usage of these products, and as announced last month, we will further be investing in new and enhanced product capabilities. Mark will talk more about these specifics, but the banking center consolidations announced in December clears our focus to rebuild our employee client engagement efforts that will be supported by the additional investment in platforms. John will review our consumer mortgage activities where refinancing and new purchases remain robust in the Midwest and for first merchants. Our private wealth team is now fully integrated into each of our markets. Investing in talent across all the markets like Columbus and Indianapolis, Munster, assures we can grow in a balanced, full-service banking approach. Michelle will offer additional insights to the growth of this speed-generating line of business. So you can see with the map on page six, it represents both the demographics of a growing economic environment, the heart of the Midwest, that drives our growth and a stable source of talent to lead our business efforts. Our investments in our commercial, consumer, private wealth lines of businesses have been received well within all of our markets. I'm excited for you to listen to Michelle's comments about our balance sheet growth, our improving margins, and operating metrics. John will share the soundness of our portfolio and efforts around our deferral and current PPP activities. And Mark will offer more insight to our planned investment in our digital journey. Mark, I'll turn it back to you.