Company: FRME
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000712534-25-000197
Chunk: 199

Company: FIRST MERCHANTS CORP
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 8
Chunk 199
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 industry to present net interest margin and net interest income on an FTE basis.  Therefore, management believes these measures provide useful information for both management 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 September 30, 2025 and 2024

Total average earning assets increased $292.5 million, or 1.7 percent, to $17.3 billion for the three months ended September 30, 2025, compared to the same period in 2024.  This increase was primarily driven by a $722.2 million, or 5.7 percent, increase in average total loans, which reached $13.4 billion. Average commercial loans and tax-exempt loans increased  $465.5 million and $209.1 million, respectively. These increases were partially offset by a $412.4 million decline in average investment securities and a $22.8 million decline in interest-bearing deposits, reflecting a strategic shift away from lower-yielding assets.

Total average deposits increased $205.4 million year-over-year. Total average interest-bearing deposits increased $396.0 million, primarily due to increases in money market deposits and interest-bearing demand deposits, partially offset by reductions in certificates and other time deposits and savings deposits. Average noninterest-bearing deposits declined $190.6 million, as clients continued to migrate balances into interest-bearing products in response to the rate environment.

Average borrowings remained relatively flat, as a $29.0 million increase in FHLB advances was offset by a $30.7 million decline in subordinated debt. The decline reflects the Corporation’s redemption of $30.0 million of Level One subordinated notes in the first quarter of 2025. 

Nine months ended September 30, 2025 and 2024

Total average earning assets remained relatively flat at $17.1 billion for the nine months ended September 30, 2025, compared to the same period in 2024. Average loans increased $593.9 million, or 4.7 percent, to $13.2 billion, driven by growth of $323.1 million in commercial and $217.5 million in tax-exempt loans. This loan growth was offset by a $380.8 million decline