First Merchants Corporation Announces First Quarter 2025 Earnings Per Share

/EIN News/ -- 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.

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