Company: FRME
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000712534-25-000171
Chunk: 195

Company: FIRST MERCHANTS CORP
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 8
Chunk 195
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 and investors by allowing them to make peer comparisons.  For reconciliations of GAAP net interest margin to the corresponding non-GAAP measures provided below, refer to the "NON-GAAP FINANCIAL MEASURES" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Average Balance Sheet

Three months ended June 30, 2025 and 2024

Total average earning assets increased $145.0 million, or 0.9 percent, to $17.2 billion for the three months ended June 30, 2025, compared to the same period in 2024.  This increase was primarily driven by a $591.2 million, or 4.7 percent, increase in average total loans, which reached $13.2 billion. The growth in loans was led by a $314.9 million increase in commercial loans and a $218.1 million increase in tax-exempt loans. These increases were partially offset by a $381.0 million decline in average investment securities and a $70.0 million decline in interest-bearing deposits, reflecting a strategic shift away from lower-yielding assets.

Total average deposits decreased $263.8 million year-over-year. Average interest-bearing deposits decreased $100.9 million, primarily due to reductions in certificates and other time deposits and savings deposits, partially offset by an increase in money market deposits. Average noninterest-bearing deposits declined $162.8 million, as clients continued to migrate balances into interest-bearing products in response to the rate environment.

Average borrowings increased $364.6 million, driven by a $318.6 million increase in FHLB advances and a $76.2 million increase in federal funds purchased. These increases were partially offset by a $38.5 million decline in subordinated debt, reflecting the Corporation’s redemption of $30.0 million in the first quarter of 2025 and the redemption of $25.0 million of subordinated debt in April of 2024.

Six months ended June 30, 2025 and 2024

Total average earning assets remained relatively flat at $17.1 billion for the six months ended June 30, 2025, compared to the same period in 2024. Average loans increased $528.5 million, or 4.2 percent, to $13.1 billion, driven by growth of $244.2 million and $221.8 million in commercial and tax-exempt loans, respectively. This increase was offset by a $364