Company: FRME
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000712534-25-000117
Chunk: 179

Company: FIRST MERCHANTS CORP
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 8
Chunk 179
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):Interest Income (FTE) / Average Earning Assets5.39 %5.65 %Interest Expense / Average Earning Assets2.17 %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 utilizing 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 2025 and 2024.  These totals equal $6,127 and $5,795 for the three months ended March 31, 2025 and 2024, respectively.  (3) Nonaccruing 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.

44

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

NONINTEREST INCOME

Noninterest income totaled $30.0 million for the three months ended March 31, 2025, a $3.4 million, or 12.8 percent, increase compared to the three months ended March 31, 2024.  The increase was primarily driven by a $1.8 million increase in net gains and fees on sales of loans and a $0.6 million increase in earnings on cash surrender value of life insurance.

NONINTEREST EXPENSE

Noninterest expense totaled $92.9 million for the three months ended March 31, 2025, a $4.0 million, or 4.2 percent, decrease from the first quarter of 2024.  There was a $3.3 million decrease in salaries and employee benefits expenses related to lower headcount driven by the voluntary early retirement program and the Illinois branch sale that both occurred in 2024. Additionally, there was a $1.0 million decrease in outside data processing fees due to digital platform conversion costs in the first quarter of 2024. 

INCOME TAXES