Company: FRME
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000712534-25-000117
Chunk: 213

Company: FIRST MERCHANTS CORP
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 2
Chunk 213
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 2024.  The 

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

FTE analysis portrays the income tax benefits associated with tax-exempt assets and helps to facilitate a comparison between taxable and tax-exempt assets.  Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully taxable equivalent 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.

Net interest margin, on an FTE basis, increased 12 basis points to 3.22 percent for the three months ended March 31, 2025  compared to 3.10 percent for the same period in 2024.

Average Balance Sheet

Average earning assets for the three months ended March 31, 2025 decreased $163.4 million compared to the same period in 2024.  The decrease for the three months ended March 31, 2025 was driven by a decrease in the average investment securities portfolio and interest-bearing deposits of $348.2 million and $281.7 million, respectively, as the Corporation repositioned the securities portfolio in the second half of 2024 by selling $268.5 million of lower-yielding securities.  Offsetting these decreases was an increase in average loan balances of $464.3 million, primarily in the commercial and tax-exempt portfolios.   

Total average deposits for the three months ended March 31, 2025 decreased $461.9 million, when compared to the same period in 2024.  The decline was primarily due to $267.4 million of deposits sold in the Illinois branch sale that closed in the fourth quarter of 2024. Average interest-bearing deposits for the three months ended March 31, 2025 decreased $245.3 million compared to the same period in 2024, with the largest decreases in certificates and other time deposits and savings deposits, partially offset by an increase in money market deposits and interest-bearing demand deposits.  Average noninterest-bearing deposits declined $216.5 million in the three months ended March 31, 2025 when compared to