First Merchants Corporation Announces First Quarter 2025 Earnings Per Share

2 days ago

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 expenses^1,2		—			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 expenses^1,2		—			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 Expenses^1,2		—			(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

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