Company: FRME
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000712534-25-000117
Chunk: 218

Company: FIRST MERCHANTS CORP
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 2
Chunk 218
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 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

Income tax expense for the three months ended March 31, 2025 was $7.9 million on pre-tax net income of $63.2 million.  For the same period in 2024, income tax expense was $6.8 million on pre-tax income of $54.8 million.  The effective income tax rates for the first quarter of 2025 and 2024 were 12.5 percent.

The effective income tax rate for the three months ended March 31, 2025 when compared to the same period in 2024 experienced a favorable rate impact due to increased tax credits offset by tax-exempt interest income being a smaller portion of pre-tax income in 2025.

The detailed reconciliation of federal statutory to actual tax expense is shown in NOTE 11. INCOME TAX of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

CAPITAL

Preferred Stock

As part of the Level One acquisition, the Corporation issued 10,000 shares of newly created 7.5 percent non-cumulative perpetual preferred stock, with a liquidation preference of $2,500 per share, in exchange for the outstanding Level One Series B preferred stock, and as part of that exchange, each outstanding Level One depository share representing a 1/100th interest in a share of the Level One preferred stock was converted into a depository share of the Corporation representing a 1/100th interest in a share of its newly issued preferred stock.  The Corporation had $25 million of outstanding preferred stock at March 31, 2025 and December 31, 2024.  During the three months ended March 31, 2025 and 2024, the Corporation declared and paid dividends of $46.88 per share (equivalent to $0.4688 per depository share) equal to $0.5 million.  The Series A preferred stock qualifies as tier 1 capital for purposes of the regulatory capital calculations.

Stock Repurchase Program

On January 27, 2021, the Board of Directors of the Corporation approved a stock repurchase program of up to 3,333,000 shares of the Corporation's outstanding common stock; provided, however, that the total aggregate investment in shares repurchased under the program may