Company: FRME
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000712534-25-000171
Chunk: 203

Company: FIRST MERCHANTS CORP
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 8
Chunk 203
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 $4.1 million improvement in customer-related fees, including an increase in net gains from loan sales, derivative hedge fees, treasury management fees and card payment fees. These increases were partially offset by a decrease in other income, in part due to reduced earnings from CRA investments.

NONINTEREST EXPENSE

Noninterest expense totaled $93.6 million for the three months ended June 30, 2025, a $2.2 million, or 2.4 percent, increase from the second quarter of 2024.  Salaries and employee benefits expense increased by $2.3 million, primarily due to higher incentives paid during the three months ended June 30, 2025. 

For the six months ended June 30, 2025, noninterest expense totaled $186.5 million, a $1.8 million, or 1.0 percent, decrease compared to the same period in 2024.  This decrease was primarily driven by a $1.0 million decrease in salaries and employee benefits, a $0.9 million decrease in outside data processing fees and a $0.8 million decrease in professional and other outside services expenses.  These decreases were partially offset by a $1.1 million increase in equipment-related expenses. 

INCOME TAXES

Income tax expense for the three months ended June 30, 2025 was $8.3 million on pre-tax income of $65.1 million.  For the same period in 2024, income tax expense was $4.1 million on pre-tax income of $44.0 million.  The effective income tax rates for the second quarter of 2025 and 2024 were 12.7 percent and 9.2 percent, respectively.

Income tax expense for the six months ended June 30, 2025 was $16.2 million on pre-tax income of $128.3 million.  For the same period in 2024, income tax expense was $10.9 million on pre-tax income of $98.8 million.  The effective income tax rates for the six months ended June 30, 2025 and 2024 were 12.6 percent and 11.0 percent, respectively.

The higher effective income tax rate for the three and six months ended June 30, 2025 when compared to the same period in 2024 was primarily a result of tax-exempt interest income being a smaller portion of pre-tax income in 2025.

On