Company: FRME
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000712534-25-000171
Chunk: 243

Company: FIRST MERCHANTS CORP
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 2
Chunk 243
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 point decrease in asset yields to 5.45 percent. The Corporation recognized $2.1 million of fair value accretion income on purchased loans, contributing approximately 2 basis points to NIM in the six months ended June 30, 2025.  This compares to $2.9 million, or 3 basis points, in the same period of 2024.

Interest income on an FTE basis decreased $19.4 million year-over-year, primarily due to lower yields on variable rate loans following the Federal Open Market Committee's 100 basis point rate reduction in the second half of 2024. New and renewed loans yielded 7.01 percent for the six months ended June 30, 2025 compared to 8.14 percent for the same period in 2024.  

Interest expense on deposits decreased $32.6 million, reflecting lower rates across all deposit categories. The total cost of interest-bearing liabilities decreased 44 basis points, to 2.78 percent for the six months ended June 30, 2025, down from 3.22 percent for the same period in 2024. This reduction in funding costs more than offset the decline in asset yields and resulted in a 22 basis point improvement in the FTE net interest spread, which increased to 2.67 percent from 2.45 percent. 

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

The following tables present the Corporation’s average balance sheet, interest income/interest expense, and the average rate as a percent of average earning assets/liabilities for the three and six months ended June 30, 2025 and 2024.

 (Dollars in Thousands)Three Months EndedJune 30, 2025June 30, 2024Average BalanceInterest Income /ExpenseAverageRateAverage BalanceInterest Income /ExpenseAverageRateAssets: Interest-bearing deposits$252,613 $1,892 3.00 %$322,647 $2,995 3.71 %Federal Home Loan Bank stock46,598 1,083 9.30 41,749 879 8.42 Investment Securities: (1)Taxable1,605,718 8,266 2.06 1,788,749 9,051 2.02 Tax-Exempt (2)2,042,