First Merchants Corporation Announces Second Quarter 2025 Earnings Per Share

MUNCIE, Ind., July 23, 2025 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME)

Second Quarter 2025 Highlights:

• Net income available to common stockholders was $56.4 million and diluted earnings per common share totaled $0.98 in the second quarter of 2025, compared to $39.5 million and $0.68 in the second quarter of 2024, and $54.9 million and $0.94 in the first quarter of 2025.
• Robust capital position with Common Equity Tier 1 Capital Ratio of 11.35%.
• Repurchased 818,480 shares totaling $31.7 million year-to-date; Repurchased 582,486 shares totaling $22.1 million during the second quarter.
• Total loans grew $297.6 million, or 9.1% annualized, on a linked quarter basis, and $653.6 million, or 5.2%, during the last twelve months.
• Total deposits increased $335.6 million, or 9.3% annualized, on a linked quarter basis.
• Nonperforming assets to total assets were 36 basis points compared to 47 basis points on a linked quarter basis.
• The efficiency ratio totaled 53.99% for the quarter.

"Our strong balance sheet and earnings growth in the first half of the year underscore the strength and resilience of our business model," said Mark Hardwick, Chief Executive Officer of First Merchants Bank. "With continued momentum in loan and deposit growth, expanding margins, disciplined expense management, and a robust capital position, we are well-positioned to deliver long-term value for our shareholders. We remain committed to supporting our clients and communities while navigating a dynamic economic environment with confidence and clarity."

Second Quarter Financial Results:

First Merchants Corporation (the "Corporation) reported second quarter 2025 net income available to common stockholders of $56.4 million compared to $39.5 million during the same period in 2024. Diluted earnings per common share for the period totaled $0.98 per share compared to the second quarter of 2024 result of $0.68 per share.

Total assets equaled $18.6 billion as of quarter-end and loans totaled $13.3 billion. During the past twelve months, total loans grew by $653.6 million, or 5.2%. On a linked quarter basis, loans grew $297.6 million, or 9.1% with growth primarily in Commercial & Industrial loans.

Investments, totaling $3.4 billion, decreased $372.1 million, or 9.9%, during the last twelve months and decreased $46.2 million, or 5.4% 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.

Total deposits equaled $14.8 billion as of quarter-end and increased by $228.5 million, or 1.6%, over the past twelve months. Total deposits increased $335.6 million, or 9.3% annualized, on a linked quarter basis. The loan to deposit ratio of 90.1% at period end remained stable on a linked quarter basis.

The Corporation's Allowance for Credit Losses – Loans (ACL) totaled $195.3 million as of quarter-end, or 1.47% of total loans. Net charge-offs totaled $2.3 million and provision for credit losses of $5.6 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 0.36% for the second quarter of 2025, a decrease of 11 basis points compared to 0.47% in the linked quarter.

Net interest income, totaling $133.0 million for the quarter, increased $2.7 million, or 2.1%, compared to prior quarter and increased $4.4 million, or 3.5% compared to the second quarter of 2024. Fully taxable equivalent net interest margin was 3.25%, an increase of three basis points compared to the first quarter of 2025 and an increase of nine basis points compared to the second quarter of 2024. During the quarter, higher yields on earnings assets outpaced increased yields on interest bearing liabilities resulting in margin expansion.

Noninterest income totaled $31.3 million for the quarter, an increase of $1.3 million, compared to the first quarter of 2025 and was stable compared to the second quarter of 2024. The increase over first quarter of 2025 was driven primarily by higher gains on the sales of loans, treasury management fees, derivative hedge fees, and card payment fees offset by a decrease in other income associated with CRA investments.

Noninterest expense totaled $93.6 million for the quarter, an increase of $0.7 million from the first quarter of 2025. The increase was from higher marketing and data processing costs.

The Corporation's total risk-based capital ratio equaled 13.06%, the common equity tier 1 capital ratio equaled 11.35%, and the tangible common equity ratio totaled 8.92%. These ratios continue to reflect the Corporation's strong liquidity and capital positions.

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 9:00 a.m. (ET) on Thursday, July 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/BI605c2e360ce04cfc9c4221bda7f67a49)

To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/ced58zg3) during the time of the call. A replay of the webcast will be available until July 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 statements, 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)	June 30,
		2025				2024
ASSETS
Cash and due from banks	$	81,567			$	105,372
Interest-bearing deposits		223,343				168,528
Investment securities available for sale		1,358,130				1,618,893
Investment securities held to maturity, net of allowance for credit losses		2,022,826				2,134,195
Loans held for sale		28,783				32,292
Loans		13,296,759				12,639,650
Less: Allowance for credit losses - loans		(195,316	)			(189,537	)
Net loans		13,101,443				12,450,113
Premises and equipment		122,808				133,245
Federal Home Loan Bank stock		47,290				41,738
Interest receivable		93,258				97,546
Goodwill		712,002				712,002
Other intangibles		16,797				23,371
Cash surrender value of life insurance		305,695				306,379
Other real estate owned		177				4,824
Tax asset, deferred and receivable		97,749				107,080
Other assets		380,909				367,845
TOTAL ASSETS	$	18,592,777			$	18,303,423
LIABILITIES
Deposits:
Noninterest-bearing	$	2,197,416			$	2,303,313
Interest-bearing		12,600,162				12,265,757
Total Deposits		14,797,578				14,569,070
Borrowings:
Federal funds purchased		85,000				147,229
Securities sold under repurchase agreements		114,758				100,451
Federal Home Loan Bank advances		898,702				832,703
Subordinated debentures and other borrowings		62,617				93,589
Total Borrowings		1,161,077				1,173,972
Interest payable		16,174				18,554
Other liabilities		269,996				329,302
Total Liabilities		16,244,825				16,090,898
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 - 57,272,433 and 58,045,653 shares		7,159				7,256
Additional paid-in capital		1,163,170				1,191,193
Retained earnings		1,342,473				1,200,930
Accumulated other comprehensive loss		(189,975	)			(211,979	)
Total Stockholders' Equity		2,347,952				2,212,525
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,592,777			$	18,303,423

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended								Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,								June 30,
		2025				2024				2025				2024
INTEREST INCOME
Loans:
Taxable	$	195,173			$	201,413			$	382,901			$	399,436
Tax-exempt		10,805				8,430				21,337				16,620
Investment securities:
Taxable		8,266				9,051				16,638				17,799
Tax-exempt		12,516				13,613				25,033				27,224
Deposits with financial institutions		1,892				2,995				4,264				9,488
Federal Home Loan Bank stock		1,083				879				2,080				1,714
Total Interest Income		229,735				236,381				452,253				472,281
INTEREST EXPENSE
Deposits		84,241				99,151				164,788				197,436
Federal funds purchased		965				126				1,777				126
Securities sold under repurchase agreements		663				645				1,405				1,677
Federal Home Loan Bank advances		9,714				6,398				19,078				13,171
Subordinated debentures and other borrowings		1,138				1,490				1,921				4,237
Total Interest Expense		96,721				107,810				188,969				216,647
NET INTEREST INCOME		133,014				128,571				263,284				255,634
Provision for credit losses		5,600				24,500				9,800				26,500
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		127,414				104,071				253,484				229,134
NONINTEREST INCOME
Service charges on deposit accounts		8,566				8,214				16,638				16,121
Fiduciary and wealth management fees		8,831				8,825				17,475				17,025
Card payment fees		4,932				4,739				9,458				9,239
Net gains and fees on sales of loans		5,849				5,141				10,871				8,395
Derivative hedge fees		831				489				1,235				752
Other customer fees		401				460				816				887
Earnings on cash surrender value of life insurance		1,913				1,929				4,092				3,521
Net realized losses on sales of available for sale securities		(1	)			(49	)			(8	)			(51	)
Other income (loss)		(19	)			1,586				774				2,083
Total Noninterest Income		31,303				31,334				61,351				57,972
NONINTEREST EXPENSES
Salaries and employee benefits		54,527				52,214				109,509				110,507
Net occupancy		6,845				6,746				14,061				14,058
Equipment		6,927				6,599				13,935				12,825
Marketing		1,997				1,773				3,350				2,971
Outside data processing fees		7,107				7,072				13,036				13,961
Printing and office supplies		272				354				619				707
Intangible asset amortization		1,505				1,771				3,031				3,728
FDIC assessments		3,552				3,278				7,200				7,565
Other real estate owned and foreclosure expenses		29				373				629				907
Professional and other outside services		3,741				3,822				7,002				7,774
Other expenses		7,096				7,411				14,128				13,345
Total Noninterest Expenses		93,598				91,413				186,500				188,348
INCOME BEFORE INCOME TAX		65,119				43,992				128,335				98,758
Income tax expense		8,287				4,067				16,164				10,892
NET INCOME		56,832				39,925				112,171				87,866
Preferred stock dividends		469				469				938				938
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	56,363			$	39,456			$	111,233			$	86,928
PER SHARE DATA:
Basic Net Income Available to Common Stockholders	$	0.98			$	0.68			$	1.93			$	1.48
Diluted Net Income Available to Common Stockholders	$	0.98			$	0.68			$	1.92			$	1.48
Cash Dividends Paid to Common Stockholders	$	0.36			$	0.35			$	0.71			$	0.69
Tangible Common Book Value Per Share	$	27.90			$	25.10			$	27.90			$	25.10
Average Diluted Common Shares Outstanding (in thousands)		57,773				58,328				58,005				58,800

FINANCIAL HIGHLIGHTS
(Dollars In Thousands)	Three Months Ended										Six Months Ended
	June 30,										June 30,
	2025					2024					2025					2024
NET CHARGE-OFFS	$	2,315				$	39,644				$	7,241				$	41,897
AVERAGE BALANCES:
Total Assets	$	18,508,785				$	18,332,159				$	18,425,723				$	18,381,340
Total Loans		13,211,729					12,620,530					13,077,288					12,548,798
Total Earning Assets		17,158,984					17,013,984					17,060,278					17,068,917
Total Deposits		14,632,113					14,895,867					14,526,314					14,888,536
Total Stockholders' Equity		2,340,010					2,203,361					2,340,440					2,222,750
FINANCIAL RATIOS:
Return on Average Assets		1.23		%			0.87		%			1.22		%			0.96		%
Return on Average Stockholders' Equity		9.63					7.16					9.51					7.82
Return on Tangible Common Stockholders' Equity		14.49					11.29					14.30					12.26
Average Earning Assets to Average Assets		92.71					92.81					92.59					92.86
Allowance for Credit Losses - Loans as % of Total Loans		1.47					1.50					1.47					1.50
Net Charge-offs as % of Average Loans (Annualized)		0.07					1.26					0.11					0.67
Average Stockholders' Equity to Average Assets		12.64					12.02					12.70					12.09
Tax Equivalent Yield on Average Earning Assets		5.50					5.69					5.45					5.67
Interest Expense/Average Earning Assets		2.25					2.53					2.22					2.54
Net Interest Margin (FTE) on Average Earning Assets		3.25					3.16					3.23					3.13
Efficiency Ratio		53.99					53.84					54.26					56.47

ASSET QUALITY
(Dollars In Thousands)	June 30,					March 31,					December 31,					September 30,					June 30,
	2025					2025					2024					2024					2024
Nonaccrual Loans	$	67,358				$	81,922				$	73,773				$	59,088				$	61,906
Other Real Estate Owned and Repossessions		177					4,966					4,948					5,247					4,824
Nonperforming Assets (NPA)		67,535					86,888					78,721					64,335					66,730
90+ Days Delinquent		4,443					4,280					5,902					14,105					1,686
NPAs & 90 Day Delinquent	$	71,978				$	91,168				$	84,623				$	78,440				$	68,416
Allowance for Credit Losses - Loans	$	195,316				$	192,031				$	192,757				$	187,828				$	189,537
Quarterly Net Charge-offs		2,315					4,926					771					6,709					39,644
NPAs / Actual Assets %		0.36		%			0.47		%			0.43		%			0.35		%			0.36		%
NPAs & 90 Day / Actual Assets %		0.39		%			0.49		%			0.46		%			0.43		%			0.37		%
NPAs / Actual Loans and OREO %		0.51		%			0.67		%			0.61		%			0.51		%			0.53		%
Allowance for Credit Losses - Loans / Actual Loans (%)		1.47		%			1.47		%			1.50		%			1.48		%			1.50		%
Quarterly Net Charge-offs as % of Average Loans (Annualized)		0.07		%			0.15		%			0.02		%			0.21		%			1.26		%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,				March 31,				December 31,				September 30,				June 30,
		2025				2025				2024				2024				2024
ASSETS
Cash and due from banks	$	81,567			$	86,113			$	87,616			$	84,719			$	105,372
Interest-bearing deposits		223,343				331,534				298,891				359,126				168,528
Investment securities available for sale		1,358,130				1,378,489				1,386,475				1,553,496				1,618,893
Investment securities held to maturity, net of allowance for credit losses		2,022,826				2,048,632				2,074,220				2,108,649				2,134,195
Loans held for sale		28,783				23,004				18,663				40,652				32,292
Loans		13,296,759				13,004,905				12,854,359				12,646,808				12,639,650
Less: Allowance for credit losses - loans		(195,316	)			(192,031	)			(192,757	)			(187,828	)			(189,537	)
Net loans		13,101,443				12,812,874				12,661,602				12,458,980				12,450,113
Premises and equipment		122,808				128,749				129,743				129,582				133,245
Federal Home Loan Bank stock		47,290				45,006				41,690				41,716				41,738
Interest receivable		93,258				88,352				91,829				92,055				97,546
Goodwill		712,002				712,002				712,002				712,002				712,002
Other intangibles		16,797				18,302				19,828				21,599				23,371
Cash surrender value of life insurance		305,695				304,918				304,906				304,613				306,379
Other real estate owned		177				4,966				4,948				5,247				4,824
Tax asset, deferred and receivable		97,749				87,665				92,387				86,732				107,080
Other assets		380,909				369,181				387,169				348,384				367,845
TOTAL ASSETS	$	18,592,777			$	18,439,787			$	18,311,969			$	18,347,552			$	18,303,423
LIABILITIES
Deposits:
Noninterest-bearing	$	2,197,416			$	2,185,057			$	2,325,579			$	2,334,197			$	2,303,313
Interest-bearing		12,600,162				12,276,921				12,196,047				12,030,903				12,265,757
Total Deposits		14,797,578				14,461,978				14,521,626				14,365,100				14,569,070
Borrowings:
Federal funds purchased		85,000				185,000				99,226				30,000				147,229
Securities sold under repurchase agreements		114,758				122,947				142,876				124,894				100,451
Federal Home Loan Bank advances		898,702				972,478				822,554				832,629				832,703
Subordinated debentures and other borrowings		62,617				62,619				93,529				93,562				93,589
Total Borrowings		1,161,077				1,343,044				1,158,185				1,081,085				1,173,972
Deposits and other liabilities held for sale		—				—				—				288,476				—
Interest payable		16,174				13,304				16,102				18,089				18,554
Other liabilities		269,996				289,247				311,073				292,429				329,302
Total Liabilities		16,244,825				16,107,573				16,006,986				16,045,179				16,090,898
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		7,159				7,226				7,247				7,265				7,256
Additional paid-in capital		1,163,170				1,183,263				1,188,768				1,192,683				1,191,193
Retained earnings		1,342,473				1,306,911				1,272,528				1,229,125				1,200,930
Accumulated other comprehensive loss		(189,975	)			(190,311	)			(188,685	)			(151,825	)			(211,979	)
Total Stockholders' Equity		2,347,952				2,332,214				2,304,983				2,302,373				2,212,525
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,592,777			$	18,439,787			$	18,311,969			$	18,347,552			$	18,303,423

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,					March 31,					December 31,					September 30,					June 30,
	2025					2025					2024					2024					2024
INTEREST INCOME
Loans:
Taxable	$	195,173				$	187,728				$	197,536				$	206,680				$	201,413
Tax-exempt		10,805					10,532					9,020					8,622					8,430
Investment securities:
Taxable		8,266					8,372					9,024					9,263					9,051
Tax-exempt		12,516					12,517					12,754					13,509					13,613
Deposits with financial institutions		1,892					2,372					5,350					2,154					2,995
Federal Home Loan Bank stock		1,083					997					958					855					879
Total Interest Income		229,735					222,518					234,642					241,083					236,381
INTEREST EXPENSE
Deposits		84,241					80,547					89,835					98,856					99,151
Federal funds purchased		965					812					26					329					126
Securities sold under repurchase agreements		663					742					680					700					645
Federal Home Loan Bank advances		9,714					9,364					8,171					8,544					6,398
Subordinated debentures and other borrowings		1,138					783					1,560					1,544					1,490
Total Interest Expense		96,721					92,248					100,272					109,973					107,810
NET INTEREST INCOME		133,014					130,270					134,370					131,110					128,571
Provision for credit losses		5,600					4,200					4,200					5,000					24,500
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		127,414					126,070					130,170					126,110					104,071
NONINTEREST INCOME
Service charges on deposit accounts		8,566					8,072					8,124					8,361					8,214
Fiduciary and wealth management fees		8,831					8,644					8,665					8,525					8,825
Card payment fees		4,932					4,526					4,957					5,121					4,739
Net gains and fees on sales of loans		5,849					5,022					5,681					6,764					5,141
Derivative hedge fees		831					404					1,594					736					489
Other customer fees		401					415					316					344					460
Earnings on cash surrender value of life insurance		1,913					2,179					2,188					2,755					1,929
Net realized losses on sales of available for sale securities		(1	)				(7	)				(11,592	)				(9,114	)				(49	)
Gain on branch sale		—					—					19,983					—					—
Other income (loss)		(19	)				793					2,826					1,374					1,586
Total Noninterest Income		31,303					30,048					42,742					24,866					31,334
NONINTEREST EXPENSES
Salaries and employee benefits		54,527					54,982					55,437					55,223					52,214
Net occupancy		6,845					7,216					7,335					6,994					6,746
Equipment		6,927					7,008					7,028					6,949					6,599
Marketing		1,997					1,353					2,582					1,836					1,773
Outside data processing fees		7,107					5,929					6,029					7,150					7,072
Printing and office supplies		272					347					377					378					354
Intangible asset amortization		1,505					1,526					1,771					1,772					1,771
FDIC assessments		3,552					3,648					3,744					3,720					3,278
Other real estate owned and foreclosure expenses		29					600					227					942					373
Professional and other outside services		3,741					3,261					3,777					3,035					3,822
Other expenses		7,096					7,032					7,982					6,630					7,411
Total Noninterest Expenses		93,598					92,902					96,289					94,629					91,413
INCOME BEFORE INCOME TAX		65,119					63,216					76,623					56,347					43,992
Income tax expense		8,287					7,877					12,274					7,160					4,067
NET INCOME		56,832					55,339					64,349					49,187					39,925
Preferred stock dividends		469					469					469					468					469
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	56,363				$	54,870				$	63,880				$	48,719				$	39,456
PER SHARE DATA:
Basic Net Income Available to Common Stockholders	$	0.98				$	0.95				$	1.10				$	0.84				$	0.68
Diluted Net Income Available to Common Stockholders	$	0.98				$	0.94				$	1.10				$	0.84				$	0.68
Cash Dividends Paid to Common Stockholders	$	0.36				$	0.35				$	0.35				$	0.35				$	0.35
Tangible Common Book Value Per Share	$	27.90				$	27.34				$	26.78				$	26.64				$	25.10
Average Diluted Common Shares Outstanding (in thousands)		57,773					58,242					58,247					58,289					58,328
FINANCIAL RATIOS:
Return on Average Assets		1.23		%			1.21		%			1.39		%			1.07		%			0.87		%
Return on Average Stockholders' Equity		9.63					9.38					11.05					8.66					7.16
Return on Tangible Common Stockholders' Equity		14.49					14.12					16.75					13.39					11.29
Average Earning Assets to Average Assets		92.71					92.47					92.48					92.54					92.81
Allowance for Credit Losses - Loans as % of Total Loans		1.47					1.47					1.50					1.48					1.50
Net Charge-offs as % of Average Loans (Annualized)		0.07					0.15					0.02					0.21					1.26
Average Stockholders' Equity to Average Assets		12.64					12.76					12.51					12.26					12.02
Tax Equivalent Yield on Average Earning Assets		5.50					5.39					5.63					5.82					5.69
Interest Expense/Average Earning Assets		2.25					2.17					2.35					2.59					2.53
Net Interest Margin (FTE) on Average Earning Assets		3.25					3.22					3.28					3.23					3.16
Efficiency Ratio		53.99					54.54					48.48					53.76					53.84

LOANS
(Dollars In Thousands)	June 30,				March 31,				December 31,				September 30,				June 30,
		2025				2025				2024				2024				2024
Commercial and industrial loans	$	4,440,924			$	4,306,597			$	4,114,292			$	4,041,217			$	3,949,817
Agricultural land, production and other loans to farmers		265,172				243,864				256,312				238,743				239,926
Real estate loans:
Construction		836,033				793,175				792,144				814,704				823,267
Commercial real estate, non-owner occupied		2,171,092				2,177,869				2,274,016				2,251,351				2,323,533
Commercial real estate, owner occupied		1,226,797				1,214,739				1,157,944				1,152,751				1,174,195
Residential		2,397,094				2,389,852				2,374,729				2,366,943				2,370,905
Home equity		673,961				650,499				659,811				641,188				631,104
Individuals' loans for household and other personal expenditures		141,045				140,954				166,028				158,480				162,089
Public finance and other commercial loans		1,144,641				1,087,356				1,059,083				981,431				964,814
Loans		13,296,759				13,004,905				12,854,359				12,646,808				12,639,650
Allowance for credit losses - loans		(195,316	)			(192,031	)			(192,757	)			(187,828	)			(189,537	)
NET LOANS	$	13,101,443			$	12,812,874			$	12,661,602			$	12,458,980			$	12,450,113
DEPOSITS
(Dollars In Thousands)	June 30,				March 31,				December 31,				September 30,				June 30,
		2025				2025				2024				2024				2024
Demand deposits	$	7,798,695			$	7,786,554			$	7,980,061			$	7,678,510			$	7,757,679
Savings deposits		4,984,659				4,791,874				4,522,758				4,302,236				4,339,161
Certificates and other time deposits of $100,000 or less		617,857				625,203				692,068				802,949				889,949
Certificates and other time deposits of $100,000 or more		891,139				896,143				1,043,068				1,277,833				1,415,131
Brokered certificates of deposits1		505,228				362,204				283,671				303,572				167,150
TOTAL DEPOSITS	$	14,797,578			$	14,461,978			$	14,521,626			$	14,365,100			$	14,569,070
1 - Total brokered deposits of $1.2 billion, which includes brokered CD's of $505.2 million at June 30, 2025.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars In Thousands)
	Three Months Ended
	June 30, 2025												June 30, 2024
	Average Balance				Interest Income / Expense				Average Rate				Average Balance				Interest Income / Expense				Average Rate
ASSETS
Interest-bearing deposits	$	252,613			$	1,892			3.00		%		$	322,647			$	2,995			3.71		%
Federal Home Loan Bank stock		46,598				1,083			9.30					41,749				879			8.42
Investment Securities: (1)
Taxable		1,605,718				8,266			2.06					1,788,749				9,051			2.02
Tax-exempt (2)		2,042,326				15,843			3.10					2,240,309				17,232			3.08
Total Investment Securities		3,648,044				24,109			2.64					4,029,058				26,283			2.61
Loans held for sale		25,411				389			6.12					28,585				431			6.03
Loans: (3)
Commercial		9,006,650				154,108			6.84					8,691,746				160,848			7.40
Real estate mortgage		2,200,521				25,062			4.56					2,150,591				23,799			4.43
HELOC and installment		834,901				15,614			7.48					823,417				16,335			7.94
Tax-exempt (2)		1,144,246				13,677			4.78					926,191				10,670			4.61
Total Loans		13,211,729				208,850			6.32					12,620,530				212,083			6.72
Total Earning Assets		17,158,984				235,934			5.50		%			17,013,984				242,240			5.69		%
Total Non-Earning Assets		1,349,801												1,318,175
TOTAL ASSETS	$	18,508,785											$	18,332,159
LIABILITIES
Interest-Bearing Deposits:
Interest-bearing deposits	$	5,545,158			$	35,303			2.55		%		$	5,586,549			$	40,994			2.94		%
Money market deposits		3,613,952				28,714			3.18					3,036,398				27,230			3.59
Savings deposits		1,282,951				2,513			0.78					1,508,734				3,476			0.92
Certificates and other time deposits		2,003,682				17,711			3.54					2,414,967				27,451			4.55
Total Interest-Bearing Deposits		12,445,743				84,241			2.71					12,546,648				99,151			3.16
Borrowings		1,250,519				12,480			3.99					885,919				8,659			3.91
Total Interest-Bearing Liabilities		13,696,262				96,721			2.82					13,432,567				107,810			3.21
Noninterest-bearing deposits		2,186,370												2,349,219
Other liabilities		286,143												347,012
Total Liabilities		16,168,775												16,128,798
STOCKHOLDERS' EQUITY		2,340,010												2,203,361
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,508,785											$	18,332,159
Net Interest Income (FTE)					$	139,213											$	134,430
Net Interest Spread (FTE) (4)									2.68		%										2.48		%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets									5.50		%										5.69		%
Interest Expense / Average Earning Assets									2.25		%										2.53		%
Net Interest Margin (FTE) (5)									3.25		%										3.16		%
(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 2025 and 2024. These totals equal $6,199 and $5,859 for the three months ended June 30, 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.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars In Thousands)
	Six Months Ended
	June 30, 2025												June 30, 2024
	Average Balance				Interest Income / Expense				Average Rate				Average Balance				Interest Income / Expense				Average Rate
ASSETS
Interest-bearing deposits	$	273,200			$	4,264			3.12		%		$	449,173			$	9,488			4.22		%
Federal Home Loan Bank stock		45,296				2,080			9.18					41,757				1,714			8.21
Investment Securities: (1)
Taxable		1,620,005				16,638			2.05					1,785,903				17,799			1.99
Tax-exempt (2)		2,044,489				31,687			3.10					2,243,286				34,461			3.07
Total Investment Securities		3,664,494				48,325			2.64					4,029,189				52,260			2.59
Loans held for sale		23,190				708			6.11					25,184				759			6.03
Loans: (3)
Commercial		8,889,119				301,880			6.79					8,644,927				320,057			7.40
Real estate mortgage		2,195,988				49,508			4.51					2,140,769				46,156			4.31
HELOC and installment		831,904				30,805			7.41					822,616				32,464			7.89
Tax-exempt (2)		1,137,087				27,009			4.75					915,302				21,038			4.60
Total Loans		13,077,288				409,910			6.27					12,548,798				420,474			6.70
Total Earning Assets		17,060,278				464,579			5.45		%			17,068,917				483,936			5.67		%
Total Non-Earning Assets		1,365,445												1,312,423
TOTAL ASSETS	$	18,425,723											$	18,381,340
LIABILITIES
Interest-Bearing deposits:
Interest-bearing deposits	$	5,533,858			$	69,909			2.53		%		$	5,503,185			$	80,484			2.92		%
Money market deposits		3,526,461				54,666			3.10					3,040,938				54,613			3.59
Savings deposits		1,291,133				4,958			0.77					1,534,305				7,277			0.95
Certificates and other time deposits		1,975,923				35,255			3.57					2,421,413				55,062			4.55
Total Interest-Bearing Deposits		12,327,375				164,788			2.67					12,499,841				197,436			3.16
Borrowings		1,256,688				24,181			3.85					948,866				19,211			4.05
Total Interest-Bearing Liabilities		13,584,063				188,969			2.78					13,448,707				216,647			3.22
Noninterest-bearing deposits		2,198,939												2,388,695
Other liabilities		302,281												321,188
Total Liabilities		16,085,283												16,158,590
STOCKHOLDERS' EQUITY		2,340,440												2,222,750
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,425,723											$	18,381,340
Net Interest Income (FTE)					$	275,610											$	267,289
Net Interest Spread (FTE) (4)									2.67		%										2.45		%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets									5.45		%										5.67		%
Interest Expense / Average Earning Assets									2.22		%										2.54		%
Net Interest Margin (FTE) (5)									3.23		%										3.13		%
(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 2025 and 2024. These totals equal $12,326 and $11,655 for the six months ended June 30, 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																									Six Months Ended
	June 30,					March 31,					December 31,					September 30,					June 30,					June 30,					June 30,
	2025					2025					2024					2024					2024					2025					2024
Net Income Available to Common Stockholders - GAAP	$	56,363				$	54,870				$	63,880				$	48,719				$	39,456				$	111,233				$	86,928
Adjustments:
Net realized losses on sales of available for sale securities		1					7					11,592					9,114					49					8					51
Gain on branch sale		—					—					(19,983	)				—					—					—					—
Non-core expenses1,2		—					—					762					—					—					—					3,481
Tax on adjustments		—					(2	)				1,851					(2,220	)				(12	)				(2	)				(860	)
Adjusted Net Income Available to Common Stockholders - Non-GAAP	$	56,364				$	54,875				$	58,102				$	55,613				$	39,493				$	111,239				$	89,600
Average Diluted Common Shares Outstanding (in thousands)		57,773					58,242					58,247					58,289					58,328					58,005					58,800
Diluted Earnings Per Common Share - GAAP	$	0.98				$	0.94				$	1.10				$	0.84				$	0.68				$	1.92				$	1.48
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	$	0.98				$	0.94				$	1.00				$	0.95				$	0.68				$	1.92				$	1.53
1 - Non-core expenses in the Three Months Ended December 31, 2024 included $0.8 million of costs directly related to the branch sale.
2 - Non-core expenses in the Six Months Ended June 30, 2024 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																									Six Months Ended
	June 30,					March 31,					December 31,					September 30,					June 30,					June 30,					June 30,
	2025					2025					2024					2024					2024					2025					2024
Net Interest Income (GAAP)	$	133,014				$	130,270				$	134,370				$	131,110				$	128,571				$	263,284				$	255,634
Fully Taxable Equivalent ("FTE") Adjustment		6,199					6,127					5,788					5,883					5,859					12,326					11,655
Net Interest Income (FTE) (non-GAAP)	$	139,213				$	136,397				$	140,158				$	136,993				$	134,430				$	275,610				$	267,289
Average Earning Assets (GAAP)	$	17,158,984				$	16,960,475				$	17,089,198				$	16,990,358				$	17,013,984				$	17,060,278				$	17,068,917
Net Interest Margin (GAAP)		3.10		%			3.07		%			3.15		%			3.09		%			3.02		%			3.09		%			3.00		%
FTE Adjustment		0.15		%			0.15		%			0.13		%			0.14		%			0.14		%			0.14		%			0.13		%
Net Interest Margin (FTE) (non-GAAP)		3.25		%			3.22		%			3.28		%			3.23		%			3.16		%			3.23		%			3.13		%

RETURN ON TANGIBLE COMMON EQUITY - NON-GAAP
(Dollars In Thousands)	Three Months Ended																									Six Months Ended
	June 30,					March 31,					December 31,					September 30,					June 30,					June 30,					June 30,
	2025					2025					2024					2024					2024					2025					2024
Total Average Stockholders' Equity (GAAP)	$	2,340,010				$	2,340,874				$	2,312,270				$	2,251,547				$	2,203,361				$	2,340,440				$	2,222,750
Less: Average Preferred Stock		(25,125	)				(25,125	)				(25,125	)				(25,125	)				(25,125	)				(25,125	)				(25,125	)
Less: Average Intangible Assets, Net of Tax		(725,813	)				(726,917	)				(728,218	)				(729,581	)				(730,980	)				(726,362	)				(731,706	)
Average Tangible Common Equity, Net of Tax (Non-GAAP)	$	1,589,072				$	1,588,832				$	1,558,927				$	1,496,841				$	1,447,256				$	1,588,953				$	1,465,919
Net Income Available to Common Stockholders (GAAP)	$	56,363				$	54,870				$	63,880				$	48,719				$	39,456				$	111,233				$	86,928
Plus: Intangible Asset Amortization, Net of Tax		1,188					1,206					1,399					1,399					1,399					2,394					2,945
Tangible Net Income (Non-GAAP)	$	57,551				$	56,076				$	65,279				$	50,118				$	40,855				$	113,627				$	89,873
Return on Tangible Common Equity (Non-GAAP)		14.49		%			14.12		%			16.75		%			13.39		%			11.29		%			14.30		%			12.26		%
EFFICIENCY RATIO - NON-GAAP
(Dollars In Thousands)	Three Months Ended																									Six Months Ended
	June 30,					March 31,					December 31,					September 30,					June 30,					June 30,					June 30,
	2025					2025					2024					2024					2024					2025					2024
Noninterest Expense (GAAP)	$	93,598				$	92,902				$	96,289				$	94,629				$	91,413				$	186,500				$	188,348
Less: Intangible Asset Amortization		(1,505	)				(1,526	)				(1,771	)				(1,772	)				(1,771	)				(3,031	)				(3,728	)
Less: OREO and Foreclosure Expenses		(29	)				(600	)				(227	)				(942	)				(373	)				(629	)				(907	)
Adjusted Noninterest Expense (Non-GAAP)	$	92,064				$	90,776				$	94,291				$	91,915				$	89,269				$	182,840				$	183,713
Net Interest Income (GAAP)	$	133,014				$	130,270				$	134,370				$	131,110				$	128,571				$	263,284				$	255,634
Plus: Fully Taxable Equivalent Adjustment		6,199					6,127					5,788					5,883					5,859					12,326					11,655
Net Interest Income on a Fully Taxable Equivalent Basis (Non-GAAP)	$	139,213				$	136,397				$	140,158				$	136,993				$	134,430				$	275,610				$	267,289
Noninterest Income (GAAP)	$	31,303				$	30,048				$	42,742				$	24,866				$	31,334				$	61,351				$	57,972
Less: Investment Securities (Gains) Losses		1					7					11,592					9,114					49					8					51
Adjusted Noninterest Income (Non-GAAP)	$	31,304				$	30,055				$	54,334				$	33,980				$	31,383				$	61,359				$	58,023
Adjusted Revenue (Non-GAAP)	$	170,517				$	166,452				$	194,492				$	170,973				$	165,813				$	336,969				$	325,312
Efficiency Ratio (Non-GAAP)		53.99		%			54.54		%			48.48		%			53.76		%			53.84		%			54.26		%			56.47		%
Adjusted Noninterest Expense (Non-GAAP)	$	92,064				$	90,776				$	94,291				$	91,915				$	89,269				$	182,840				$	183,713
Less: Non-core Expenses1,2		—					—					(762	)				—					—					—					(3,481	)
Adjusted Noninterest Expense Excluding Non-core Expenses (Non-GAAP)	$	92,064				$	90,776				$	93,529				$	91,915				$	89,269				$	182,840				$	180,232
Adjusted Revenue (Non-GAAP)	$	170,517				$	166,452				$	194,492				$	170,973				$	165,813				$	336,969				$	325,312
Less: Gain on Branch Sale		—					—					(19,983	)				—					—					—					—
Adjusted Revenue Excluding Gain on Branch Sale (Non-GAAP)	$	170,517				$	166,452				$	174,509				$	170,973				$	165,813				$	336,969				$	325,312
Adjusted Efficiency Ratio (Non-GAAP)		53.99		%			54.54		%			53.60		%			53.76		%			53.84		%			54.26		%			55.40		%
1 - Non-core expenses in the Three Months Ended December 31, 2024 included $0.8 million of costs directly related to the branch sale.
2 - Non-core expenses in the Six Months Ended June 30, 2024 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, First Vice President and Director of Corporate Administration

765-521-7619

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana