First Merchants Corporation

MUNCIE, Ind., April 24, 2025 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME)

First Quarter 2025 Highlights:

Net income available to common stockholders was $54.9 million and diluted earnings per common share totaled $0.94 compared to adjusted net income and diluted earnings per common share1 of $50.1 million and $0.85 in the first quarter of 2024. Adjusted net income and diluted earnings per common share1 in the fourth quarter of 2024 were $58.1 million and $1.00, respectively. Robust capital position with Common Equity Tier 1 Capital Ratio of 11.50%. Repurchased 246,751 shares totaling $10 million year-to-date; Redeemed $30 million of sub debt. Total loans grew $154.9 million, or 4.8% annualized, on a linked quarter basis, and $547.2 million, or 4.4%, during the last twelve months.  Total deposits declined $59.6 million, or 1.6% annualized, on a linked quarter basis, and declined $422.6 million, or 2.8%, during the last twelve months primarily due to the sale of five Illinois branches with $267.4 million in deposits to Old Second National Bank on December 6, 2024. Nonperforming assets to total assets were 47 basis points compared to 43 basis points on a linked quarter basis. The efficiency ratio totaled 54.54% for the quarter.

"The first quarter was a strong start to the year with healthy loan growth and increasing profitability," said Mark Hardwick, Chief Executive Officer of First Merchants Bank. "Our 2025 priorities continue to focus on organic loan growth funded by low-cost core deposits, margin stabilization, fee income growth, expense management and credit quality. Given the market volatility and headlines, we are closely monitoring our clients and our markets but have yet to see any signs of stress."

First Quarter Financial Results:

First Merchants Corporation (the “Corporation”) reported first quarter 2025 net income available to common stockholders of $54.9 million compared to adjusted net income available to common stockholders1 of $50.1 million during the same period in 2024. Diluted earnings per common share for the period totaled $0.94 compared to the first quarter of 2024 adjusted diluted earnings per common share1 of $0.85 per share.

Total assets equaled $18.4 billion as of quarter-end and loans totaled $13.0 billion. During the past twelve months, total loans grew by $547.2 million, or 4.4%. On a linked quarter basis, loans grew $154.9 million, or 4.8% annualized.

Investment securities, totaling $3.4 billion, decreased $356.5 million, or 9.4%, during the last twelve months and decreased $33.6 million, or 3.9% annualized on a linked quarter basis. The decline in the last twelve months reflected sales of available for sale securities in 2024 totaling $268.5 million.

Story Continues

Total deposits equaled $14.5 billion as of quarter-end and decreased by $422.6 million, or 2.8%, over the past twelve months. The decline reflected the sale of the Illinois branches during the prior quarter which included $267.4 million in deposits. Total deposits decreased $59.6 million, or 1.6% annualized on a linked quarter basis. The loan to deposit ratio increased to 90.1% at period end from 88.6% in the prior quarter.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $192.0 million as of quarter-end, or 1.47% of total loans, a decrease of $0.7 million from prior quarter. Net charge-offs totaled $4.9 million and provision for loans of $4.2 million was recorded during the quarter. Reserves for unfunded commitments totaling $18.0 million remain unchanged from the previous quarter. Non-performing assets to total assets were 0.47% for the first quarter of 2025, an increase of four basis points compared to 0.43% in the prior quarter.

Net interest income totaled $130.3 million for the quarter, a decrease of $4.1 million, or 3.1%, compared to prior quarter and increased $3.2 million, or 2.5%, compared to the first quarter of 2024. Fully taxable equivalent net interest margin was 3.22%, a decrease of six basis points compared to the fourth quarter of 2024 and an increase of 12 basis points compared to the first quarter of 2024. The lower day count in the quarter caused a decline of five basis points in net interest margin from the prior quarter.

Noninterest income totaled $30.0 million for the quarter, a decrease of $12.7 million, compared to the fourth quarter of 2024 and an increase of $3.4 million compared to the first quarter of 2024. Customer-related fees declined by $2.3 million from the previous quarter due to lower derivative hedge fees, gains on sales of mortgage loans and card payment fees. Non-customer-related fees declined $10.4 million from the prior quarter primarily due to the gain on the Illinois branch sale, partially offset by realized losses on the sales of securities recorded in the prior quarter.

Noninterest expense totaled $92.9 million for the quarter, a decrease of $3.4 million from the fourth quarter of 2024 and a decrease of $4.0 million from the first quarter of 2024. The decrease from the fourth quarter of 2024 was due primarily to a decline in marketing expenses, and lower professional fees and employee incentives.

The Corporation’s total risk-based capital ratio totaled 13.22%, common equity tier 1 capital ratio totaled 11.50%, and the tangible common equity ratio totaled 8.90%. These ratios continue to demonstrate the Corporation’s strong capital position.

1 See “Non-GAAP Financial Information” for reconciliation

CONFERENCE CALL

First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 11:30 a.m. (ET) on Thursday, April 24, 2025.

To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: (https://register-conf.media-server.com/register/BI4ae3a07cb07a47258d30e4f3dba2448b)

To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/uqvoojku) during the time of the call. A replay of the webcast will be available until April 24, 2026.

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 (http://www.firstmerchants.com).

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

Forward-Looking Statements

This release 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 or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These statements include statements about 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, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: 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 credit worthiness 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 (including the ability to grow and maintain core deposits and retain large, uninsured deposits), credit and interest rate risks associated with the First Merchants’ business; and other risks and factors identified in each of First Merchants’ filings with the Securities and Exchange Commission. First Merchants does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this press release. In addition, First Merchants’ past results of operations do not necessarily indicate its anticipated future results.

CONSOLIDATED BALANCE SHEETS  (Dollars In Thousands) March 31, 2025  2024 ASSETS  Cash and due from banks $ 86,113   $ 100,514  Interest-bearing deposits  331,534    410,497  Investment securities available for sale  1,378,489    1,620,213  Investment securities held to maturity, net of allowance for credit losses  2,048,632    2,163,361  Loans held for sale  23,004    15,118  Loans  13,004,905    12,465,582  Less: Allowance for credit losses - loans  (192,031 )   (204,681 ) Net loans  12,812,874    12,260,901  Premises and equipment  128,749    132,706  Federal Home Loan Bank stock  45,006    41,758  Interest receivable  88,352    92,550  Goodwill  712,002    712,002  Other intangibles  18,302    25,142  Cash surrender value of life insurance  304,918    306,028  Other real estate owned  4,966    4,886  Tax asset, deferred and receivable  87,665    101,121  Other assets  369,181    331,006  TOTAL ASSETS $ 18,439,787   $ 18,317,803  LIABILITIES  Deposits:  Noninterest-bearing $ 2,185,057   $ 2,338,364  Interest-bearing  12,276,921    12,546,220  Total Deposits  14,461,978    14,884,584  Borrowings:  Federal funds purchased  185,000    —  Securities sold under repurchase agreements  122,947    130,264  Federal Home Loan Bank advances  972,478    612,778  Subordinated debentures and other borrowings  62,619    118,612  Total Borrowings  1,343,044    861,654  Interest payable  13,304    19,262  Other liabilities  289,247    327,500  Total Liabilities  16,107,573    16,093,000  STOCKHOLDERS' EQUITY  Preferred Stock, $1,000 par value, $1,000 liquidation value:  Authorized -- 600 cumulative shares  Issued and outstanding - 125 cumulative shares  125    125  Preferred Stock, Series A, no par value, $2,500 liquidation preference:  Authorized -- 10,000 non-cumulative perpetual shares  Issued and outstanding - 10,000 non-cumulative perpetual shares  25,000    25,000  Common Stock, $.125 stated value:  Authorized -- 100,000,000 shares  Issued and outstanding - 57,810,232 and 58,564,819 shares  7,226    7,321  Additional paid-in capital  1,183,263    1,208,447  Retained earnings  1,306,911    1,181,939  Accumulated other comprehensive loss  (190,311 )   (198,029 ) Total Stockholders' Equity  2,332,214    2,224,803  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,439,787   $ 18,317,803

CONSOLIDATED STATEMENTS OF INCOME Three Months Ended (Dollars In Thousands, Except Per Share Amounts) March 31, 2025  2024 INTEREST INCOME  Loans:  Taxable $ 187,728   $ 198,023  Tax-exempt  10,532    8,190  Investment securities:  Taxable  8,372    8,748  Tax-exempt  12,517    13,611  Deposits with financial institutions  2,372    6,493  Federal Home Loan Bank stock  997    835  Total Interest Income  222,518    235,900  INTEREST EXPENSE  Deposits  80,547    98,285  Federal funds purchased  812    —  Securities sold under repurchase agreements  742    1,032  Federal Home Loan Bank advances  9,364    6,773  Subordinated debentures and other borrowings  783    2,747  Total Interest Expense  92,248    108,837  NET INTEREST INCOME  130,270    127,063  Provision for credit losses  4,200    2,000  NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES  126,070    125,063  NONINTEREST INCOME  Service charges on deposit accounts  8,072    7,907  Fiduciary and wealth management fees  8,644    8,200  Card payment fees  4,526    4,500  Net gains and fees on sales of loans  5,022    3,254  Derivative hedge fees  404    263  Other customer fees  415    427  Earnings on cash surrender value of life insurance  2,179    1,592  Net realized losses on sales of available for sale securities  (7 )   (2 ) Other income  793    497  Total Noninterest Income  30,048    26,638  NONINTEREST EXPENSES  Salaries and employee benefits  54,982    58,293  Net occupancy  7,216    7,312  Equipment  7,008    6,226  Marketing  1,353    1,198  Outside data processing fees  5,929    6,889  Printing and office supplies  347    353  Intangible asset amortization  1,526    1,957  FDIC assessments  3,648    4,287  Other real estate owned and foreclosure expenses  600    534  Professional and other outside services  3,261    3,952  Other expenses  7,032    5,934  Total Noninterest Expenses  92,902    96,935  INCOME BEFORE INCOME TAX  63,216    54,766  Income tax expense  7,877    6,825  NET INCOME  55,339    47,941  Preferred stock dividends  469    469  NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 54,870   $ 47,472  Per Share Data:  Basic Net Income Available to Common Stockholders $ 0.95   $ 0.80  Diluted Net Income Available to Common Stockholders $ 0.94   $ 0.80  Cash Dividends Paid to Common Stockholders $ 0.35   $ 0.34  Tangible Common Book Value Per Share $ 27.34   $ 25.07  Average Diluted Common Shares Outstanding (in thousands)  58,242    59,273

FINANCIAL HIGHLIGHTS  (Dollars in thousands) Three Months Ended March 31, 2025  2024 NET CHARGE-OFFS $ 4,926   $ 2,253   AVERAGE BALANCES:  Total Assets $ 18,341,738   $ 18,430,521  Total Loans  12,941,353    12,477,066  Total Earning Assets  16,960,475    17,123,851  Total Deposits  14,419,338    14,881,205  Total Stockholders' Equity  2,340,874    2,242,139   FINANCIAL RATIOS:  Return on Average Assets  1.21 %   1.04 % Return on Average Stockholders' Equity  9.38    8.47  Return on Tangible Common Stockholders' Equity  14.12    13.21  Average Earning Assets to Average Assets  92.47    92.91  Allowance for Credit Losses - Loans as % of Total Loans  1.47    1.64  Net Charge-offs as % of Average Loans (Annualized)  0.15    0.07  Average Stockholders' Equity to Average Assets  12.76    12.17  Tax Equivalent Yield on Average Earning Assets  5.39    5.65  Interest Expense/Average Earning Assets  2.17    2.55  Net Interest Margin (FTE) on Average Earning Assets  3.22    3.10  Efficiency Ratio  54.54    59.21

NONPERFORMING ASSETS  (Dollars In Thousands) March 31,  December 31,  September 30,  June 30,  March 31, 2025  2024  2024  2024  2024 Nonaccrual Loans $ 81,922   $ 73,773   $ 59,088   $ 61,906   $ 62,478  Other Real Estate Owned and Repossessions  4,966    4,948    5,247    4,824    4,886  Nonperforming Assets (NPA)  86,888    78,721    64,335    66,730    67,364  90+ Days Delinquent  4,280    5,902    14,105    1,686    2,838  NPAs & 90 Day Delinquent $ 91,168   $ 84,623   $ 78,440   $ 68,416   $ 70,202   Allowance for Credit Losses - Loans $ 192,031   $ 192,757   $ 187,828   $ 189,537   $ 204,681  Quarterly Net Charge-offs  4,926    771    6,709    39,644    2,253  NPAs / Actual Assets %  0.47 %   0.43 %   0.35 %   0.36 %   0.37 % NPAs & 90 Day / Actual Assets %  0.49 %   0.46 %   0.43 %   0.37 %   0.38 % NPAs / Actual Loans and OREO %  0.67 %   0.61 %   0.51 %   0.53 %   0.54 % Allowance for Credit Losses - Loans / Actual Loans (%)  1.47 %   1.50 %   1.48 %   1.50 %   1.64 % Net Charge-offs as % of Average Loans (Annualized)  0.15 %   0.02 %   0.21 %   1.26 %   0.07 %

CONSOLIDATED BALANCE SHEETS  (Dollars In Thousands) March 31,  December 31,  September 30,  June 30,  March 31, 2025  2024  2024  2024  2024 ASSETS  Cash and due from banks $ 86,113   $ 87,616   $ 84,719   $ 105,372   $ 100,514  Interest-bearing deposits  331,534    298,891    359,126    168,528    410,497  Investment securities available for sale  1,378,489    1,386,475    1,553,496    1,618,893    1,620,213  Investment securities held to maturity, net of allowance for credit losses  2,048,632    2,074,220    2,108,649    2,134,195    2,163,361  Loans held for sale  23,004    18,663    40,652    32,292    15,118  Loans  13,004,905    12,854,359    12,646,808    12,639,650    12,465,582  Less: Allowance for credit losses - loans  (192,031 )   (192,757 )   (187,828 )   (189,537 )   (204,681 ) Net loans  12,812,874    12,661,602    12,458,980    12,450,113    12,260,901  Premises and equipment  128,749    129,743    129,582    133,245    132,706  Federal Home Loan Bank stock  45,006    41,690    41,716    41,738    41,758  Interest receivable  88,352    91,829    92,055    97,546    92,550  Goodwill  712,002    712,002    712,002    712,002    712,002  Other intangibles  18,302    19,828    21,599    23,371    25,142  Cash surrender value of life insurance  304,918    304,906    304,613    306,379    306,028  Other real estate owned  4,966    4,948    5,247    4,824    4,886  Tax asset, deferred and receivable  87,665    92,387    86,732    107,080    101,121  Other assets  369,181    387,169    348,384    367,845    331,006  TOTAL ASSETS $ 18,439,787   $ 18,311,969   $ 18,347,552   $ 18,303,423   $ 18,317,803  LIABILITIES  Deposits:  Noninterest-bearing $ 2,185,057   $ 2,325,579   $ 2,334,197   $ 2,303,313   $ 2,338,364  Interest-bearing  12,276,921    12,196,047    12,030,903    12,265,757    12,546,220  Total Deposits  14,461,978    14,521,626    14,365,100    14,569,070    14,884,584  Borrowings:  Federal funds purchased  185,000    99,226    30,000    147,229    —  Securities sold under repurchase agreements  122,947    142,876    124,894    100,451    130,264  Federal Home Loan Bank advances  972,478    822,554    832,629    832,703    612,778  Subordinated debentures and other borrowings  62,619    93,529    93,562    93,589    118,612  Total Borrowings  1,343,044    1,158,185    1,081,085    1,173,972    861,654  Deposits and other liabilities held for sale  —    —    288,476    —    —  Interest payable  13,304    16,102    18,089    18,554    19,262  Other liabilities  289,247    311,073    292,429    329,302    327,500  Total Liabilities  16,107,573    16,006,986    16,045,179    16,090,898    16,093,000  STOCKHOLDERS' EQUITY  Preferred Stock, $1,000 par value, $1,000 liquidation value:  Authorized -- 600 cumulative shares  Issued and outstanding - 125 cumulative shares  125    125    125    125    125  Preferred Stock, Series A, no par value, $2,500 liquidation preference:  Authorized -- 10,000 non-cumulative perpetual shares  Issued and outstanding - 10,000 non-cumulative perpetual shares  25,000    25,000    25,000    25,000    25,000  Common Stock, $.125 stated value:  Authorized -- 100,000,000 shares  Issued and outstanding  7,226    7,247    7,265    7,256    7,321  Additional paid-in capital  1,183,263    1,188,768    1,192,683    1,191,193    1,208,447  Retained earnings  1,306,911    1,272,528    1,229,125    1,200,930    1,181,939  Accumulated other comprehensive loss  (190,311 )   (188,685 )   (151,825 )   (211,979 )   (198,029 ) Total Stockholders' Equity  2,332,214    2,304,983    2,302,373    2,212,525    2,224,803  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,439,787   $ 18,311,969   $ 18,347,552   $ 18,303,423   $ 18,317,803

CONSOLIDATED STATEMENTS OF INCOME  (Dollars In Thousands, Except Per Share Amounts) March 31,  December 31,  September 30,  June 30,  March 31, 2025  2024  2024  2024  2024 INTEREST INCOME  Loans:  Taxable $ 187,728   $ 197,536   $ 206,680   $ 201,413   $ 198,023  Tax-exempt  10,532    9,020    8,622    8,430    8,190  Investment securities:  Taxable  8,372    9,024    9,263    9,051    8,748  Tax-exempt  12,517    12,754    13,509    13,613    13,611  Deposits with financial institutions  2,372    5,350    2,154    2,995    6,493  Federal Home Loan Bank stock  997    958    855    879    835  Total Interest Income  222,518    234,642    241,083    236,381    235,900  INTEREST EXPENSE  Deposits  80,547    89,835    98,856    99,151    98,285  Federal funds purchased  812    26    329    126    —  Securities sold under repurchase agreements  742    680    700    645    1,032  Federal Home Loan Bank advances  9,364    8,171    8,544    6,398    6,773  Subordinated debentures and other borrowings  783    1,560    1,544    1,490    2,747  Total Interest Expense  92,248    100,272    109,973    107,810    108,837  NET INTEREST INCOME  130,270    134,370    131,110    128,571    127,063  Provision for credit losses  4,200    4,200    5,000    24,500    2,000  NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES  126,070    130,170    126,110    104,071    125,063  NONINTEREST INCOME  Service charges on deposit accounts  8,072    8,124    8,361    8,214    7,907  Fiduciary and wealth management fees  8,644    8,665    8,525    8,825    8,200  Card payment fees  4,526    4,957    5,121    4,739    4,500  Net gains and fees on sales of loans  5,022    5,681    6,764    5,141    3,254  Derivative hedge fees  404    1,594    736    489    263  Other customer fees  415    316    344    460    427  Earnings on cash surrender value of life insurance  2,179    2,188    2,755    1,929    1,592  Net realized losses on sales of available for sale securities  (7 )   (11,592 )   (9,114 )   (49 )   (2 ) Gain on branch sale  —    19,983    —    —    —  Other income  793    2,826    1,374    1,586    497  Total Noninterest Income  30,048    42,742    24,866    31,334    26,638  NONINTEREST EXPENSES  Salaries and employee benefits  54,982    55,437    55,223    52,214    58,293  Net occupancy  7,216    7,335    6,994    6,746    7,312  Equipment  7,008    7,028    6,949    6,599    6,226  Marketing  1,353    2,582    1,836    1,773    1,198  Outside data processing fees  5,929    6,029    7,150    7,072    6,889  Printing and office supplies  347    377    378    354    353  Intangible asset amortization  1,526    1,771    1,772    1,771    1,957  FDIC assessments  3,648    3,744    3,720    3,278    4,287  Other real estate owned and foreclosure expenses  600    227    942    373    534  Professional and other outside services  3,261    3,777    3,035    3,822    3,952  Other expenses  7,032    7,982    6,630    7,411    5,934  Total Noninterest Expenses  92,902    96,289    94,629    91,413    96,935  INCOME BEFORE INCOME TAX  63,216    76,623    56,347    43,992    54,766  Income tax expense  7,877    12,274    7,160    4,067    6,825  NET INCOME  55,339    64,349    49,187    39,925    47,941  Preferred stock dividends  469    469    468    469    469  NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 54,870   $ 63,880   $ 48,719   $ 39,456   $ 47,472  Per Share Data:  Basic Net Income Available to Common Stockholders $ 0.95   $ 1.10   $ 0.84   $ 0.68   $ 0.80  Diluted Net Income Available to Common Stockholders $ 0.94   $ 1.10   $ 0.84   $ 0.68   $ 0.80  Cash Dividends Paid to Common Stockholders $ 0.35   $ 0.35   $ 0.35   $ 0.35   $ 0.34  Tangible Common Book Value Per Share $ 27.34   $ 26.78   $ 26.64   $ 25.10   $ 25.07  Average Diluted Common Shares Outstanding (in thousands)  58,242    58,247    58,289    58,328    59,273  FINANCIAL RATIOS:  Return on Average Assets  1.21 %   1.39 %   1.07 %   0.87 %   1.04 % Return on Average Stockholders' Equity  9.38    11.05    8.66    7.16    8.47  Return on Tangible Common Stockholders' Equity  14.12    16.75    13.39    11.29    13.21  Average Earning Assets to Average Assets  92.47    92.48    92.54    92.81    92.91  Allowance for Credit Losses - Loans as % of Total Loans  1.47    1.50    1.48    1.50    1.64  Net Charge-offs as % of Average Loans (Annualized)  0.15    0.02    0.21    1.26    0.07  Average Stockholders' Equity to Average Assets  12.76    12.51    12.26    12.02    12.17  Tax Equivalent Yield on Average Earning Assets  5.39    5.63    5.82    5.69    5.65  Interest Expense/Average Earning Assets  2.17    2.35    2.59    2.53    2.55  Net Interest Margin (FTE) on Average Earning Assets  3.22    3.28    3.23    3.16    3.10  Efficiency Ratio  54.54    48.48    53.76    53.84    59.21

LOANS  (Dollars In Thousands) March 31,  December 31,  September 30,  June 30,  March 31, 2025  2024  2024  2024  2024 Commercial and industrial loans $ 4,306,597   $ 4,114,292   $ 4,041,217   $ 3,949,817   $ 3,722,365  Agricultural land, production and other loans to farmers  243,864    256,312    238,743    239,926    234,431  Real estate loans:  Construction  793,175    792,144    814,704    823,267    941,726  Commercial real estate, non-owner occupied  2,177,869    2,274,016    2,251,351    2,323,533    2,368,360  Commercial real estate, owner occupied  1,214,739    1,157,944    1,152,751    1,174,195    1,137,894  Residential  2,389,852    2,374,729    2,366,943    2,370,905    2,316,490  Home equity  650,499    659,811    641,188    631,104    618,258  Individuals' loans for household and other personal expenditures  140,954    166,028    158,480    162,089    161,459  Public finance and other commercial loans  1,087,356    1,059,083    981,431    964,814    964,599  Loans  13,004,905    12,854,359    12,646,808    12,639,650    12,465,582  Allowance for credit losses - loans  (192,031 )   (192,757 )   (187,828 )   (189,537 )   (204,681 ) NET LOANS $ 12,812,874   $ 12,661,602   $ 12,458,980   $ 12,450,113   $ 12,260,901

DEPOSITS  (Dollars In Thousands) March 31,  December 31,  September 30,  June 30,  March 31, 2025  2024  2024  2024  2024 Demand deposits $ 7,786,554  $ 7,980,061  $ 7,678,510  $ 7,757,679  $ 7,771,976 Savings deposits  4,791,874   4,522,758   4,302,236   4,339,161   4,679,593 Certificates and other time deposits of $100,000 or more  896,143   1,043,068   1,277,833   1,415,131   1,451,443 Certificates and other time deposits of $100,000 or less  625,203   692,068   802,949   889,949   901,280 Brokered certificates of deposits1  362,204   283,671   303,572   167,150   80,292 TOTAL DEPOSITS $ 14,461,978  $ 14,521,626  $ 14,365,100  $ 14,569,070  $ 14,884,584  1 - Total brokered deposits of $1.1 billion, which includes brokered CD's of $362.2 million at March 31, 2025.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS  (Dollars in Thousands)  For the Three Months Ended March 31, 2025  March 31, 2024 Average
 Balance  Interest
 Income /
Expense  Average
Rate  Average
 Balance  Interest
 Income /
Expense  Average
Rate ASSETS  Interest-bearing deposits $ 294,016  $ 2,372  3.23 %  $ 575,699  $ 6,493  4.51 % Federal Home Loan Bank stock  43,980   997  9.07    41,764   835  8.00  Investment Securities: (1)  Taxable  1,634,452   8,372  2.05    1,783,057   8,748  1.96  Tax-exempt (2)  2,046,674   15,844  3.10    2,246,265   17,229  3.07  Total Investment Securities  3,681,126   24,216  2.63    4,029,322   25,977  2.58  Loans held for sale  20,965   319  6.09    21,782   328  6.02  Loans: (3)  Commercial  8,770,282   147,772  6.74    8,598,110   159,209  7.41  Real estate mortgage  2,191,384   24,446  4.46    2,130,947   22,357  4.20  HELOC and installment  828,874   15,191  7.33    821,815   16,129  7.85  Tax-exempt (2)  1,129,848   13,332  4.72    904,412   10,367  4.59  Total Loans  12,941,353   201,060  6.21    12,477,066   208,390  6.68  Total Earning Assets  16,960,475   228,645  5.39 %   17,123,851   241,695  5.65 % Total Non-Earning Assets  1,381,263       1,306,670  TOTAL ASSETS $ 18,341,738      $ 18,430,521  LIABILITIES  Interest-Bearing Deposits:  Interest-bearing deposits $ 5,522,434  $ 34,606  2.51 %  $ 5,419,821  $ 39,491  2.91 % Money market deposits  3,437,998   25,952  3.02    3,045,478   27,383  3.60  Savings deposits  1,299,405   2,445  0.75    1,559,877   3,801  0.97  Certificates and other time deposits  1,947,854   17,544  3.60    2,427,859   27,610  4.55  Total Interest-Bearing Deposits  12,207,691   80,547  2.64    12,453,035   98,285  3.16  Borrowings  1,262,926   11,701  3.71    1,011,812   10,552  4.17  Total Interest-Bearing Liabilities  13,470,617   92,248  2.74    13,464,847   108,837  3.23  Noninterest-bearing deposits  2,211,647       2,428,170  Other liabilities  318,600       295,365  Total Liabilities  16,000,864       16,188,382  STOCKHOLDERS' EQUITY  2,340,874       2,242,139  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,341,738   92,248    $ 18,430,521   108,837  Net Interest Income (FTE)   $ 136,397      $ 132,858  Net Interest Spread (FTE) (4)     2.65 %      2.42 %  Net Interest Margin (FTE):  Interest Income (FTE) / Average Earning Assets     5.39 %      5.65 % Interest Expense / Average Earning Assets     2.17 %      2.55 % Net Interest Margin (FTE) (5)     3.22 %      3.10 %  (1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis. (2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2024 and 2023. These totals equal $6,127 and $5,795 for the three months ended March 31, 2025 and 2024, respectively. (3) Non accruing loans have been included in the average balances. (4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities. (5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.

ADJUSTED NET INCOME AND DILUTED EARNINGS PER COMMON SHARE - NON-GAAP (Dollars In Thousands, Except Per Share Amounts) Three Months Ended March 31,  December 31,  September 30,  June 30,  March 31, 2025  2024  2024  2024  2024 Net Income Available to Common Stockholders - GAAP $ 54,870   $ 63,880   $ 48,719   $ 39,456   $ 47,472  Adjustments:  Net realized losses on sales of available for sale securities  7    11,592    9,114    49    2  Gain on branch sale  —    (19,983 )   —    —    —  Non-core expenses1,2  —    762    —    —    3,481  Tax on adjustments  (2 )   1,851    (2,220 )   (12 )   (848 ) Adjusted Net Income Available to Common Stockholders - Non-GAAP $ 54,875   $ 58,102   $ 55,613   $ 39,493   $ 50,107   Average Diluted Common Shares Outstanding (in thousands)  58,242    58,247    58,289    58,328    59,273   Diluted Earnings Per Common Share - GAAP $ 0.94   $ 1.10   $ 0.84   $ 0.68   $ 0.80  Adjustments:  Net realized losses on sales of available for sale securities  —    0.20    0.15    —    —  Gain on branch sale  —    (0.34 )   —    —    —  Non-core expenses1,2  —    0.01    —    —    0.06  Tax on adjustments  —    0.03    (0.04 )   —    (0.01 ) Adjusted Diluted Earnings Per Common Share - Non-GAAP $ 0.94   $ 1.00   $ 0.95   $ 0.68   $ 0.85   1 - Non-core expenses in 4Q24 included $0.8 million of costs directly related to the branch sale. 2 - Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.

NET INTEREST MARGIN ("NIM"), ADJUSTED (Dollars in Thousands) Three Months Ended March 31,  December 31,  September 30,  June 30,  March 31, 2025  2024  2024  2024  2024 Net Interest Income (GAAP) $ 130,270   $ 134,370   $ 131,110   $ 128,571   $ 127,063  Fully Taxable Equivalent ("FTE") Adjustment  6,127    5,788    5,883    5,859    5,795  Net Interest Income (FTE) (non-GAAP) $ 136,397   $ 140,158   $ 136,993   $ 134,430   $ 132,858   Average Earning Assets (GAAP) $ 16,960,475   $ 17,089,198   $ 16,990,358   $ 17,013,984   $ 17,123,851  Net Interest Margin (GAAP)  3.07 %   3.15 %   3.09 %   3.02 %   2.97 % Net Interest Margin (FTE) (non-GAAP)  3.22 %   3.28 %   3.23 %   3.16 %   3.10 %

RETURN ON TANGIBLE COMMON EQUITY - NON-GAAP (Dollars In Thousands) Three Months Ended March 31,  December 31,  September 30,  June 30,  March 31, 2025  2024  2024  2024  2024 Total Average Stockholders' Equity (GAAP) $ 2,340,874   $ 2,312,270   $ 2,251,547   $ 2,203,361   $ 2,242,139  Less: Average Preferred Stock  (25,125 )   (25,125 )   (25,125 )   (25,125 )   (25,125 ) Less: Average Intangible Assets, Net of Tax  (726,917 )   (728,218 )   (729,581 )   (730,980 )   (732,432 ) Average Tangible Common Equity, Net of Tax (Non-GAAP) $ 1,588,832   $ 1,558,927   $ 1,496,841   $ 1,447,256   $ 1,484,582   Net Income Available to Common Stockholders (GAAP) $ 54,870   $ 63,880   $ 48,719   $ 39,456   $ 47,472  Plus: Intangible Asset Amortization, Net of Tax  1,206    1,399    1,399    1,399    1,546  Tangible Net Income (Non-GAAP) $ 56,076   $ 65,279   $ 50,118   $ 40,855   $ 49,018   Return on Tangible Common Equity (Non-GAAP)  14.12 %   16.75 %   13.39 %   11.29 %   13.21 %

EFFICIENCY RATIO - NON-GAAP  (Dollars In Thousands) Three Months Ended March 31,  December 31,  September 30,  June 30,  March 31, 2025  2024  2024  2024  2024 Non Interest Expense (GAAP) $ 92,902   $ 96,289   $ 94,629   $ 91,413   $ 96,935  Less: Intangible Asset Amortization  (1,526 )   (1,771 )   (1,772 )   (1,771 )   (1,957 ) Less: OREO and Foreclosure Expenses  (600 )   (227 )   (942 )   (373 )   (534 ) Adjusted Non Interest Expense (Non-GAAP) $ 90,776   $ 94,291   $ 91,915   $ 89,269   $ 94,444   Net Interest Income (GAAP) $ 130,270   $ 134,370   $ 131,110   $ 128,571   $ 127,063  Plus: Fully Taxable Equivalent Adjustment  6,127    5,788    5,883    5,859    5,795  Net Interest Income on a Fully Taxable Equivalent Basis (Non-GAAP) $ 136,397   $ 140,158   $ 136,993   $ 134,430   $ 132,858   Non Interest Income (GAAP) $ 30,048   $ 42,742   $ 24,866   $ 31,334   $ 26,638  Less: Investment Securities (Gains) Losses  7    11,592    9,114    49    2  Adjusted Non Interest Income (Non-GAAP) $ 30,055   $ 54,334   $ 33,980   $ 31,383   $ 26,640  Adjusted Revenue (Non-GAAP) $ 166,452   $ 194,492   $ 170,973   $ 165,813   $ 159,498  Efficiency Ratio (Non-GAAP)  54.54 %   48.48 %   53.76 %   53.84 %   59.21 %  Adjusted Non Interest Expense (Non-GAAP) $ 90,776   $ 94,291   $ 91,915   $ 89,269   $ 94,444  Less: Non-core Expenses1,2  —    (762 )   —    —    (3,481 ) Adjusted Non Interest Expense Excluding Non-core Expenses (Non-GAAP) $ 90,776   $ 93,529   $ 91,915   $ 89,269   $ 90,963   Adjusted Revenue (Non-GAAP) $ 166,452   $ 194,492   $ 170,973   $ 165,813   $ 159,498  Less: Gain on Branch Sale  —    (19,983 )   —    —    —  Adjusted Revenue Excluding Gain on Branch Sale (Non-GAAP) $ 166,452   $ 174,509   $ 170,973   $ 165,813   $ 159,498  Adjusted Efficiency Ratio (Non-GAAP)  54.54 %   53.60 %   53.76 %   53.84 %   57.03 % 1 - Non-core expenses in 4Q24 included $0.8 million of costs directly related to the branch sale. 2 - Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.

For more information, contact:
Nicole M. Weaver, Vice President and Director of Corporate Administration
765-521-7619
http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

View Comments