[Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited Consolidated Condensed Financial Statements, including Balance Sheets, Income Statements, Cash Flows, and detailed notes Consolidated Condensed Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **18,592,777** | **18,311,969** | **+1.5%** | | Net Loans | 13,101,443 | 12,661,602 | +3.5% | | Investment Securities (AFS & HTM) | 3,380,956 | 3,460,695 | -2.3% | | Goodwill | 712,002 | 712,002 | 0.0% | | **Total Liabilities** | **16,244,825** | **16,006,986** | **+1.5%** | | Total Deposits | 14,797,578 | 14,521,626 | +1.9% | | Total Borrowings | 1,161,077 | 1,158,185 | +0.2% | | **Total Stockholders' Equity** | **2,347,952** | **2,304,983** | **+1.9%** | Consolidated Condensed Statements of Income Highlights (Unaudited) | Metric ($ thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | 133,014 | 128,571 | 263,284 | 255,634 | | Provision for credit losses | 5,600 | 24,500 | 9,800 | 26,500 | | Noninterest Income | 31,303 | 31,334 | 61,351 | 57,972 | | Noninterest Expenses | 93,598 | 91,413 | 186,500 | 188,348 | | **Net Income** | **56,832** | **39,925** | **112,171** | **87,866** | | **Net Income Available to Common Stockholders** | **56,363** | **39,456** | **111,233** | **86,928** | | **Diluted EPS** | **$0.98** | **$0.68** | **$1.92** | **$1.48** | Consolidated Condensed Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity ($ thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | 115,375 | 121,875 | | Net cash provided (used) by investing activities | (329,736) | 67,294 | | Net cash provided (used) by financing activities | 208,312 | (196,446) | | **Net Change in Cash and Cash Equivalents** | **(6,049)** | **(7,277)** | [Note 3: Investment Securities](index=13&type=section&id=Note%203%3A%20Investment%20Securities) Details the investment securities portfolio, categorizing AFS and HTM, with unrealized losses primarily from interest rate changes Investment Securities Portfolio Summary (June 30, 2025) | Category | Amortized Cost ($ thousands) | Fair Value ($ thousands) | Gross Unrealized Losses ($ thousands) | | :--- | :--- | :--- | :--- | | **Available for Sale** | **1,598,205** | **1,358,130** | **(241,288)** | | U.S. Gov-sponsored agency | 91,585 | 78,239 | (13,346) | | State and municipal | 992,236 | 840,013 | (152,264) | | U.S. Gov-sponsored MBS | 503,417 | 429,461 | (75,128) | | **Held to Maturity** | **2,023,071** | **1,687,240** | **(336,090)** | | U.S. Gov-sponsored agency | 334,970 | 282,814 | (52,156) | | State and municipal | 1,076,773 | 875,364 | (201,668) | | U.S. Gov-sponsored MBS | 609,828 | 527,562 | (82,266) | - The unrealized losses in the investment portfolio were primarily caused by changes in interest rates, not a deterioration in credit quality. The Corporation expects to recover the amortized cost basis and does not intend to sell the investments before this recovery[41](index=41&type=chunk) - As of June 30, 2025, approximately **$3.3 billion** of securities were pledged to secure certain deposits, repurchase agreements, and for other legal purposes[47](index=47&type=chunk) [Note 4: Loans and Allowance for Credit Losses](index=19&type=section&id=Note%204%3A%20Loans%20and%20Allowance%20for%20Credit%20Losses) Overview of the loan portfolio and allowance for credit losses, detailing growth, ACL, and credit quality indicators Loan Portfolio Composition | Loan Class | June 30, 2025 ($ thousands) | Dec 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Commercial and industrial | 4,440,924 | 4,114,292 | | Real estate - Commercial (non-owner occupied) | 2,171,092 | 2,274,016 | | Real estate - Residential | 2,397,094 | 2,374,729 | | Public finance and other commercial | 1,144,641 | 1,059,083 | | Other | 3,143,508 | 2,932,220 | | **Total Loans** | **13,296,759** | **12,854,359** | - Total past due loans decreased by **$14.8 million** to **$101.4 million** at June 30, 2025, from **$116.2 million** at December 31, 2024[59](index=59&type=chunk) Changes in Allowance for Credit Losses - Loans (ACL) | ACL Activity ($ thousands) | Six Months Ended June 30, 2025 | | :--- | :--- | | Balance, December 31, 2024 | 192,757 | | Provision for credit losses | 9,800 | | Recoveries | 3,192 | | Loans charged off | (10,433) | | **Balance, June 30, 2025** | **195,316** | - Reserves for unfunded commitments remained stable at **$18.0 million** at both June 30, 2025, and December 31, 2024, with no provision for credit losses on these commitments during the first six months of 2025[100](index=100&type=chunk) [Note 8: Borrowings](index=39&type=section&id=Note%208%3A%20Borrowings) Outlines the Corporation's borrowing arrangements, including FHLB advances and subordinated debentures, and recent note redemptions Composition of Borrowings | Borrowing Type | June 30, 2025 ($ thousands) | Dec 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Federal funds purchased | 85,000 | 99,226 | | Securities sold under repurchase agreements | 114,758 | 142,876 | | Federal Home Loan Bank advances | 898,702 | 822,554 | | Subordinated debentures and other borrowings | 62,617 | 93,529 | | **Total Borrowings** | **1,161,077** | **1,158,185** | - The Corporation redeemed **$30.0 million** of subordinated notes from the Level One acquisition during the first quarter of 2025[145](index=145&type=chunk) - On June 9, 2025, the Corporation issued a notice to redeem the remaining **$5.0 million** of its Fixed-to-Floating Rate Senior Notes[143](index=143&type=chunk) [Note 15: Subsequent Event](index=48&type=section&id=Note%2015%3A%20Subsequent%20Event) Details a subsequent event: redemption of the remaining **$5.0 million** principal of 5.00% Fixed-to-Floating Rate Senior Notes Due 2028 - On July 30, 2025, the Corporation redeemed the remaining **$5.0 million** principal of its 5.00% Fixed-to-Floating Rate Senior Notes Due 2028. No principal remains outstanding from this issuance[171](index=171&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial performance and condition, covering net income, balance sheet, net interest margin, capital, and loan quality [Financial Highlights](index=50&type=section&id=Financial%20Highlights) Summarizes key quarterly financial data: diluted EPS, net interest margin, and return on average assets, highlighting performance trends Quarterly Financial Highlights | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Diluted EPS | $0.98 | $0.94 | $1.10 | $0.84 | $0.68 | | Net Interest Margin (FTE) | 3.25% | 3.22% | 3.28% | 3.23% | 3.16% | | Return on Average Assets | 1.23% | 1.21% | 1.39% | 1.07% | 0.87% | | Total Assets ($B) | $18.59 | $18.44 | $18.31 | $18.35 | $18.30 | [Results of Operations](index=51&type=section&id=Results%20of%20Operations) The Corporation reported increased net income for Q2 and YTD 2025, driven by growth in the total loan portfolio and deposits - Q2 2025 net income available to common stockholders rose to **$56.4 million**, or **$0.98** per diluted share, compared to **$39.5 million**, or **$0.68** per diluted share, in Q2 2024[179](index=179&type=chunk) - Total assets increased by **$280.8 million** (1.5%) to **$18.6 billion** since December 31, 2024[181](index=181&type=chunk) - The total loan portfolio grew by **$452.5 million** (7.0% annualized) since year-end 2024, while total deposits increased by **$276.0 million** (3.8% annualized)[183](index=183&type=chunk)[186](index=186&type=chunk) [Net Interest Income](index=57&type=section&id=Net%20Interest%20Income) Net interest income (FTE) increased year-over-year, with NIM expanding due to reduced funding costs offsetting declining asset yields Net Interest Margin (FTE) Analysis | Period | Net Interest Income (FTE, $ million) | Net Interest Margin (FTE) | Change in NIM (YoY) | | :--- | :--- | :--- | :--- | | **Q2 2025** | 139.2 | 3.25% | +9 bps | | **Q2 2024** | 134.4 | 3.16% | - | | **YTD 2025** | 275.6 | 3.23% | +10 bps | | **YTD 2024** | 267.3 | 3.13% | - | - The improvement in NIM was driven by a significant reduction in funding costs, as the total cost of interest-bearing liabilities decreased by **39 basis points** year-over-year in Q2 2025[212](index=212&type=chunk) [Capital](index=62&type=section&id=Capital) The Corporation maintained strong capital ratios, exceeding 'well-capitalized' standards, and initiated a new stock repurchase program - A new stock repurchase program was approved on March 18, 2025, authorizing the repurchase of up to **2,927,000 shares** or an aggregate investment of **$100.0 million**[230](index=230&type=chunk) - During Q2 2025, the Corporation repurchased **0.6 million shares** for **$22.1 million** at an average price of **$37.93** per share[230](index=230&type=chunk) Regulatory Capital Ratios (Corporation) | Ratio | June 30, 2025 | Dec 31, 2024 | Well Capitalized Minimum | | :--- | :--- | :--- | :--- | | CET1 Capital Ratio | 11.35% | 11.43% | 7.00% (Basel III Min.) | | Tier 1 Capital Ratio | 11.50% | 11.59% | 8.50% (Basel III Min.) | | Total Risk-Based Capital Ratio | 13.06% | 13.31% | 10.50% (Basel III Min.) | | Tier 1 Leverage Ratio | 10.20% | 9.96% | 4.00% | [Loan Quality and Provision for Credit Losses on Loans](index=70&type=section&id=Loan%20Quality%20and%20Provision%20for%20Credit%20Losses%20on%20Loans) Loan quality improved in H1 2025, with nonaccrual loans decreasing and the Allowance for Credit Losses (ACL) stable relative to total loans - Nonaccrual loans decreased by **$6.4 million** to **$67.4 million** at June 30, 2025, from **$73.8 million** at December 31, 2024[251](index=251&type=chunk) - The Allowance for Credit Losses (ACL) on loans was **1.47%** of total loans at June 30, 2025, down slightly from **1.50%** at year-end 2024[258](index=258&type=chunk) Provision and Net Charge-Offs | Metric ($ thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Provision for credit losses | 5,600 | 24,500 | 9,800 | 26,500 | | Net charge-offs | 2,315 | 39,644 | 7,241 | 41,897 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Addresses the Corporation's market risk, primarily interest rate risk, managed through GAP analysis and net interest income simulation modeling Net Interest Income Sensitivity Analysis | Interest Rate Scenario (Immediate Parallel Shift) | Estimated Change in NII over 12 Months (June 30, 2025) | Estimated Change in NII over 12 Months (Dec 31, 2024) | | :--- | :--- | :--- | | +200 basis points | +4.0% | +4.1% | | +100 basis points | +2.1% | +2.5% | | -100 basis points | -2.7% | -2.2% | | -200 basis points | -5.5% | -4.5% | [Item 4. Controls and Procedures](index=77&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the Corporation's disclosure controls and procedures are effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period[280](index=280&type=chunk) - There were no material changes to the Corporation's internal control over financial reporting during the last fiscal quarter[281](index=281&type=chunk) [Part II. Other Information](index=78&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=78&type=section&id=Item%201.%20Legal%20Proceedings) The Corporation is not involved in any material legal proceedings beyond routine litigation incidental to its ordinary business - The Corporation is not a party to any material legal proceedings outside of litigation incidental to the ordinary course of business[283](index=283&type=chunk) [Item 1A. Risk Factors](index=78&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Corporation's 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K[285](index=285&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the Corporation's common stock repurchases during Q2 2025 under the program approved on March 18, 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased (Program) | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 107,808 | $37.61 | | May 2025 | 439,790 | $38.01 | | June 2025 | 34,888 | $37.55 | | **Total Q2** | **582,486** | **-** |

Financial Data and Key Metrics Changes - The company reported a net income of $56.4 million for Q2 2025, an increase of $17 million or 43% from the previous year, with a return on assets of 1.23% and an efficiency ratio of 54% [4][5] - Year-to-date net income totaled $111.2 million, up $24.3 million or 28% from the first half of 2024, with earnings per share increasing by 30% to $1.92 [5] - The tangible common equity ratio stands at 8.92%, above the target level, providing optimal capital flexibility [5][18] Business Line Data and Key Metrics Changes - Commercial loan growth was strong, with $262 million for the quarter and $430 million year-to-date, reflecting over 10% annualized growth [8][19] - The consumer segment also contributed with $36 million in loan growth for the quarter, driven by residential mortgage and HELOC [9] - Total revenues in Q2 increased significantly, with net interest income rising by $2.7 million and non-interest income by $1.3 million [12] Market Data and Key Metrics Changes - The company experienced balanced loan growth across its portfolio, with a $298 million increase quarter-over-quarter, representing a 9.2% annualized growth [19] - The Midwest economies are expanding, contributing to the growth in client businesses and new relationships [8] Company Strategy and Development Direction - The company remains focused on commercial growth across its primary markets of Indiana, Michigan, and Ohio, with a strategy emphasizing organic growth before considering mergers and acquisitions [7][25] - The company has been selective in M&A, focusing on organic growth while monitoring potential acquisition opportunities [25][54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining loan growth and increasing market share activities through the third quarter, despite competitive deposit dynamics [9][16] - The company anticipates modest margin compression in the latter half of the year due to rising deposit costs, but expects to continue growing net interest income [29][62] Other Important Information - The company repurchased $22.1 million worth of shares in the quarter, totaling $31.7 million year-to-date [5] - The total cost of deposits increased by seven basis points to 2.3%, reflecting competitive pressures in the market [16] Q&A Session Summary Question: Margin outlook and funding cost pressures - Management indicated that deposit costs have risen due to strong loan growth, leading to expectations of modest margin compression in the latter half of the year [29][62] Question: Loan growth sustainability - Management confirmed that the current loan growth is core and driven by direct client needs, with some pull-through from earlier in the year due to tariff considerations [30][31] Question: Wealth management fees and total fee income outlook - Management expects non-interest income to grow in the mid-single digits in the latter half of the year, with wealth management fees remaining a primary driver [38][39] Question: Technology upgrades benefits - Management highlighted improvements in internal technology that enhance operational efficiency and customer service, contributing to future growth [40][44] Question: Capital deployment strategy - The company plans to use a third of its earnings for balance sheet growth, a third for dividends, and the remaining third for other capital activities, including share repurchases and potential acquisitions [49][50] Question: Credit and provision outlook - Management indicated that the current provision level is appropriate for anticipated growth, with adjustments based on macroeconomic forecasts [85] Question: Fixed rate loan repricing - Management noted that approximately $200 million of fixed-rate loans will reprice in the back half of 2025, with expectations for similar levels in the following year [103][104]

Financial Data and Key Metrics Changes - The company reported a net income of $56.4 million for Q2 2025, an increase of $17 million or 43% from the previous year, with a return on assets of 1.23% and an efficiency ratio of 54% [4][5] - Year-to-date net income totaled $111.2 million, up $24.3 million or 28% from the first half of 2024, with earnings per share increasing to $1.92, a rise of $0.44 or 30% [5] - The tangible common equity ratio stands at 8.92%, above the target level, providing optimal capital flexibility [5][19] Business Line Data and Key Metrics Changes - Commercial loan growth was strong, with $262 million for the quarter, representing over 10% annualized growth, and $430 million year-to-date, at 9% annualized [7] - The consumer segment contributed $36 million in loan growth for the quarter, driven by residential mortgage, HELOC, and private banking relationships [8] - Total revenues in Q2 increased, with net interest income growing by $2.7 million and non-interest income by $1.3 million [12] Market Data and Key Metrics Changes - The commercial segment was the primary driver of deposit growth, contributing $347 million in total deposits for the quarter [9] - Non-maturity deposit balances increased by $108 million year-to-date, indicating a focus on low-cost deposit categories [11] - The total cost of deposits rose by seven basis points to 2.3%, reflecting competitive deposit dynamics [16] Company Strategy and Development Direction - The company maintains a commercially focused strategy across all business segments, primarily in Indiana, Michigan, and Ohio [6] - There is a strong emphasis on organic growth, with selective mergers and acquisitions considered only when beneficial [26] - The company is focused on enhancing its technology infrastructure to improve operational efficiency and customer service [44][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining loan growth and increasing market share, supported by a strong pipeline [8][20] - The company anticipates modest margin compression in the latter half of the year due to rising deposit costs and competitive pressures [31][64] - The outlook for non-interest income is expected to grow in the mid-single digits for the second half of the year [42] Other Important Information - The company repurchased $22.1 million worth of shares in the quarter, totaling $31.7 million year-to-date [5] - The allowance for credit losses was $195.3 million, with a coverage ratio of 1.47, reflecting improvements in non-performing loans [15][19] Q&A Session Summary Question: Margin outlook and funding costs - Management noted that deposit costs have risen due to strong loan growth, leading to expectations of modest margin compression in the second half of the year [31][64] Question: Loan growth sustainability - Management views the current loan growth as core and driven by direct client needs, with some pull-through effects from earlier in the year [32][33] Question: Wealth management fees and total fee income outlook - Non-interest income is expected to grow in the mid-single digits, with wealth management fees remaining flat year-over-year [42][43] Question: Technology upgrades benefits - The company has implemented internal technology improvements to enhance efficiency and customer service, with positive early results [44][48] Question: Capital deployment strategy - The company plans to use a third of earnings for balance sheet growth, a third for dividends, and the remaining third for other capital activities, including share repurchases and potential acquisitions [53] Question: Credit and provision outlook - Management indicated that the current provision level is appropriate for anticipated growth, with adjustments made based on macroeconomic forecasts [86]

Financial Performance - Net income available to common stockholders for the second quarter of 2025 was $563 million[17], compared to $394 million in 2Q24[27], an increase of 25%[18] - Year-to-date net income available to common stockholders reached $1112 million[16], a 28% increase compared to $869 million in the same period of 2024[28] - The company's Return on Average Assets (ROAA) for the second quarter was 123%[15], and year-to-date ROAA was 122%[12] - The Return on Tangible Common Equity (ROTCE) was 1449% for the second quarter[17], and 1430% year-to-date[12] - The efficiency ratio for the second quarter was 5399%[17], and 5426% year-to-date[18] Loan and Deposit Growth - Total loans reached $133 billion[12], with a quarterly growth of $2976 million, or 91% annualized[17], and year-to-date growth of $4525 million, or 70% annualized[18] - Commercial loans experienced strong growth during the quarter of approximately $262 million, or 107%[23], and year-to-date growth of approximately $431 million, or 89%[23] - Total deposits amounted to $148 billion[12], with a quarterly increase of $3356 million, or 93% annualized[27], and year-to-date growth of $2285 million, or 38%[28] - Commercial deposits increased by approximately $347 million during the quarter[25], while consumer deposits declined by approximately $108 million[25] Capital Management - The company repurchased 582486 shares totaling $221 million during the second quarter[15] - Year-to-date, the company repurchased 818480 shares totaling $317 million[18] - The tangible common equity ratio stood at 892%[12]

This quarterly report represents an earnings surprise of +4.26%. A quarter ago, it was expected that this bank would post earnings of $0.91 per share when it actually produced earnings of $0.94, delivering a surprise of +3.3%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. First Merchants (FRME) came out with quarterly earnings of $0.98 per share, beating the Zacks Consensus Estimate of $0.94 per share. This compares to earnings of $0.68 per share a year ago. Thes ...

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) First Merchants Corporation achieved strong Q2 2025 results, marked by significant year-over-year growth in net income and diluted EPS, driven by loan and deposit expansion, margin growth, and capital strength Q2 2025 Key Financial Results | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income to Common Stockholders | $56.4 million | $39.5 million | | Diluted EPS | $0.98 | $0.68 | - CEO Mark Hardwick highlighted the strength and resilience of the business model, citing momentum in loan and deposit growth, expanding margins, disciplined expense management, and a robust capital position as key drivers for delivering **long-term shareholder value**[2](index=2&type=chunk) - Key operational achievements in Q2 2025 include: - **Loan Growth**: Total loans grew **$297.6 million**, or **9.1% annualized**, on a linked quarter basis[7](index=7&type=chunk) - **Deposit Growth**: Total deposits increased **$335.6 million**, or **9.3% annualized**, on a linked quarter basis[7](index=7&type=chunk) - **Capital Strength**: Maintained a strong Common Equity Tier 1 (CET1) Capital Ratio of **11.35%**[7](index=7&type=chunk) - **Share Repurchases**: Repurchased **582,486 shares** for **$22.1 million** during the quarter, totaling **818,480 shares** for **$31.7 million** year-to-date[7](index=7&type=chunk) [Financial Results Analysis](index=1&type=section&id=Financial%20Results%20Analysis) The corporation's financial health improved in Q2 2025, with total assets reaching $18.6 billion, driven by loan and deposit growth, increased net interest income, improved asset quality, and strong capital ratios [Balance Sheet Analysis](index=1&type=section&id=Balance%20Sheet%20Analysis) As of Q2 2025, total assets reached $18.6 billion, with loans growing to $13.3 billion and deposits to $14.8 billion, maintaining a stable loan-to-deposit ratio Key Balance Sheet Items (As of June 30, 2025) | Item | Amount | YoY Change | QoQ Change (Annualized) | | :--- | :--- | :--- | :--- | | Total Assets | $18.6 billion | - | - | | Total Loans | $13.3 billion | +5.2% | +9.1% | | Total Deposits | $14.8 billion | +1.6% | +9.3% | | Investments | $3.4 billion | -9.9% | -5.4% | - The loan-to-deposit ratio remained stable at **90.1%** at the end of the quarter[6](index=6&type=chunk) [Income Statement Analysis](index=2&type=section&id=Income%20Statement%20Analysis) Q2 2025 net interest income rose to $133.0 million, driven by a 9 basis point expansion in net interest margin to 3.25%, while noninterest income remained stable and expenses slightly increased Q2 2025 Income Statement Highlights | Metric | Q2 2025 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $133.0 million | +3.5% | +2.1% | | Net Interest Margin (FTE) | 3.25% | +9 bps | +3 bps | | Noninterest Income | $31.3 million | Stable | +$1.3 million | | Noninterest Expense | $93.6 million | - | +$0.7 million | - The expansion in net interest margin was a result of higher yields on earning assets outpacing the increased yields on interest-bearing liabilities[9](index=9&type=chunk) [Credit Quality](index=2&type=section&id=Credit%20Quality) Asset quality significantly improved in Q2 2025, with non-performing assets to total assets decreasing to 0.36% and a 1.47% Allowance for Credit Losses for loans Credit Quality Metrics (Q2 2025) | Metric | Value | | :--- | :--- | | Allowance for Credit Losses (ACL) - Loans | $195.3 million | | ACL as % of Total Loans | 1.47% | | Provision for Credit Losses | $5.6 million | | Net Charge-offs | $2.3 million | | Non-performing Assets to Total Assets | 0.36% | - The non-performing assets to total assets ratio improved by **11 basis points** on a linked-quarter basis[8](index=8&type=chunk) [Capital Position](index=2&type=section&id=Capital%20Position) The Corporation maintained a strong capital and liquidity position, evidenced by a Common Equity Tier 1 capital ratio of 11.35% and a tangible common equity ratio of 8.92% Key Capital Ratios (Q2 2025) | Ratio | Value | | :--- | :--- | | Common Equity Tier 1 (CET1) Capital Ratio | 11.35% | | Total Risk-Based Capital Ratio | 13.06% | | Tangible Common Equity Ratio | 8.92% | [Financial Statements](index=4&type=section&id=Financial%20Statements) This section provides detailed unaudited consolidated financial statements, including Balance Sheets, Statements of Income, and loan and deposit portfolio breakdowns, for a comprehensive financial overview [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached $18.6 billion, driven by increased net loans, with total liabilities at $16.2 billion and stockholders' equity at $2.35 billion Consolidated Balance Sheet Summary (in thousands) | | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$18,592,777** | **$18,303,423** | | Net Loans | $13,101,443 | $12,450,113 | | Total Deposits | $14,797,578 | $14,569,070 | | **Total Liabilities** | **$16,244,825** | **$16,090,898** | | **Total Stockholders' Equity** | **$2,347,952** | **$2,212,525** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income available to common stockholders for Q2 2025 significantly increased to $56.4 million, driven by higher net interest income and a substantially lower provision for credit losses Consolidated Income Statement Summary (Three Months Ended, in thousands) | | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net Interest Income | $133,014 | $128,571 | | Provision for credit losses | $5,600 | $24,500 | | Noninterest Income | $31,303 | $31,334 | | Noninterest Expenses | $93,598 | $91,413 | | **Net Income Available to Common Stockholders** | **$56,363** | **$39,456** | [Loan and Deposit Composition](index=9&type=section&id=Loan%20and%20Deposit%20Composition) As of June 30, 2025, the $13.3 billion loan portfolio was diversified, with commercial and industrial loans as the largest component, while the $14.8 billion deposit base was led by demand and savings deposits - The largest loan categories as of Q2 2025 were Commercial and industrial loans (**$4.4B**), Residential real estate (**$2.4B**), and Commercial real estate, non-owner occupied (**$2.2B**)[25](index=25&type=chunk) - The deposit base was led by Demand deposits (**$7.8B**) and Savings deposits (**$5.0B**), with the company holding **$1.2 billion** in total brokered deposits[26](index=26&type=chunk) [Key Financial Ratios and Metrics](index=6&type=section&id=Key%20Financial%20Ratios%20and%20Metrics) Q2 2025 saw improved profitability ratios, with ROA at 1.23% and ROE at 9.63%, expanded Net Interest Margin, and significantly reduced net charge-offs and nonperforming assets Key Financial Ratios (Q2 2025 vs Q2 2024) | Ratio | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Return on Average Assets | 1.23% | 0.87% | | Return on Average Stockholders' Equity | 9.63% | 7.16% | | Net Interest Margin (FTE) | 3.25% | 3.16% | | Efficiency Ratio | 53.99% | 53.84% | | Net Charge-offs as % of Avg Loans (Ann.) | 0.07% | 1.26% | Asset Quality Trend | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Nonperforming Assets (NPA) | $67,535 K | $86,888 K | $66,730 K | | NPAs / Actual Assets % | 0.36% | 0.47% | 0.36% | [Non-GAAP Financial Measures](index=12&type=section&id=Non-GAAP%20Financial%20Measures) The company provides non-GAAP reconciliations, showing Q2 2025 GAAP and Adjusted Diluted EPS at $0.98, with FTE Net Interest Margin at 3.25% and Return on Tangible Common Equity at 14.49% - For Q2 2025, there were minimal adjustments between GAAP and Non-GAAP Net Income, resulting in both GAAP and Adjusted Diluted EPS being **$0.98**[29](index=29&type=chunk) Key Non-GAAP Metrics (Q2 2025) | Metric | Value | | :--- | :--- | | Net Interest Margin (FTE) | 3.25% | | Return on Tangible Common Equity | 14.49% | | Efficiency Ratio (Non-GAAP) | 53.99% | [Conference Call and Company Information](index=3&type=section&id=Conference%20Call%20and%20Company%20Information) First Merchants Corporation will host a Q2 2025 earnings conference call on July 24, 2025, as a Muncie, Indiana-based financial holding company whose stock trades on NASDAQ under FRME, with standard forward-looking statement disclaimers - A conference call and webcast to discuss Q2 2025 earnings is scheduled for **9:00 a.m. (ET) on Thursday, July 24, 2025**[12](index=12&type=chunk) - First Merchants Corporation is a financial holding company based in Muncie, Indiana, operating through its full-service bank charter, First Merchants Bank[14](index=14&type=chunk) - The release contains forward-looking statements subject to significant risks and uncertainties, and the company does not undertake any obligation to update them[17](index=17&type=chunk)

Core Insights - First Merchants Corporation reported a strong financial performance in Q2 2025, with net income available to common stockholders reaching $56.4 million, up from $39.5 million in Q2 2024, and diluted earnings per share increasing to $0.98 from $0.68 [2][10]. Financial Performance - Total assets as of June 30, 2025, were $18.6 billion, with total loans amounting to $13.3 billion, reflecting a year-over-year growth of $653.6 million, or 5.2% [3][20]. - Total deposits increased to $14.8 billion, marking a $228.5 million, or 1.6% increase over the past year, and a $335.6 million, or 9.3% annualized increase on a linked quarter basis [5][10]. - Net interest income for the quarter was $133.0 million, up $2.7 million, or 2.1% from the previous quarter, and up $4.4 million, or 3.5% from Q2 2024 [7][10]. - Noninterest income totaled $31.3 million, stable compared to Q2 2024, but increased by $1.3 million from Q1 2025, driven by higher gains on loan sales and treasury management fees [8][10]. Asset Quality - The allowance for credit losses on loans was $195.3 million, representing 1.47% of total loans, with net charge-offs totaling $2.3 million for the quarter [6][19]. - Non-performing assets to total assets decreased to 0.36% from 0.47% in the previous quarter, indicating improved asset quality [6][10]. Capital Position - The Corporation maintained a robust capital position, with a common equity tier 1 capital ratio of 11.35% and a total risk-based capital ratio of 13.06% [9][10]. - Year-to-date, the Corporation repurchased 818,480 shares for a total of $31.7 million, including 582,486 shares for $22.1 million in Q2 2025 [10]. Efficiency Metrics - The efficiency ratio for the quarter was reported at 53.99%, reflecting effective cost management despite a slight increase in noninterest expenses to $93.6 million [9][10].

Core Points - First Merchants Corporation will release its second quarter 2025 financial results on July 23, 2025 [1] - A conference call and webcast will be held on July 24, 2025, at 9:00 a.m. (ET) to discuss the financial results [1] - Participants can register for the call via a provided link to receive a phone number and access code [2] Company Overview - First Merchants Corporation is a financial holding company based in Muncie, Indiana, operating one full-service bank charter, First Merchants Bank [3] - The bank also includes a division known as First Merchants Private Wealth Advisors [3] - The company's common stock is traded on the NASDAQ Global Select Market under the symbol FRME [4]

Core Points - First Merchants Corporation has amended the ex-dividend date for its cash dividend from June 5, 2025, to June 6, 2025, while the payment date remains June 20, 2025 [1] Company Overview - First Merchants Corporation is a financial holding company based in Muncie, Indiana, operating one full-service bank charter, First Merchants Bank, and a division called First Merchants Private Wealth Advisors [2] - The common stock of First Merchants Corporation is traded on the NASDAQ Global Select Market under the symbol FRME [3]

Group 1 - First Merchants Corporation (NASDAQ: FRME) has shown strong performance during the bullish outlook period [1] - The focus of Crude Value Insights is on cash flow and companies in the oil and natural gas sector, emphasizing value and growth prospects [1] - Subscribers benefit from a comprehensive stock model account, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [1]