Company: FRME
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000712534-25-000171
Chunk: 239

Company: FIRST MERCHANTS CORP
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 2
Chunk 239
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 Ended June 30, 2025202420252024Noninterest expense (GAAP)$93,598 $91,413 $186,500 $188,348 Less:  Intangible asset amortization(1,505)(1,771)(3,031)(3,728)Less:  OREO and foreclosure expenses(29)(373)(629)(907)Adjusted noninterest expense (non-GAAP)$92,064 $89,269 $182,840 $183,713 Net interest income (GAAP)$133,014 $128,571 $263,284 $255,634 Plus:  Fully taxable equivalent adjustment6,199 5,859 12,326 11,655 Net interest income on a fully taxable equivalent basis (non-GAAP)$139,213 $134,430 $275,610 $267,289 Noninterest income (GAAP)$31,303 $31,334 $61,351 $57,972 Less:  Investment securities (gains) losses1 49 8 51 Adjusted noninterest income (non-GAAP)$31,304 $31,383 $61,359 $58,023 Adjusted revenue (non-GAAP)$170,517 $165,813 $336,969 $325,312 Efficiency ratio (non-GAAP)53.99 %53.84 %54.26 %56.47 %

44

PART I: FINANCIAL INFORMATIONITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

NET INTEREST INCOME

Net interest income is the most significant component of our earnings, comprising 81.1 percent of total revenue for the six months ended June 30, 2025.  Net interest income and net interest margin are influenced by the volume and mix of earning assets and funding sources, as well as prevailing interest rate conditions. Other factors include accretion income on purchased loans, prepayment activity and the composition and maturity of earning assets and interest-bearing liabilities.  Loans typically generate more interest income than investment securities with similar maturities.  Funding from customer deposits generally costs less than wholesale funding sources. Factors such as general economic activity, Federal Reserve Board monetary policy, and price volatility of competing alternative investments, can also exert significant influence on our ability to optimize the mix of assets and funding