Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 204

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7
Chunk 204
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 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. 

Net interest margin, on an FTE basis, decreased 16 basis points to 3.19 percent for the year ended December 31, 2024 compared to 3.35 percent for the same period in 2023.

Average Balance Sheet

Average earning assets for the year ended December 31, 2024 increased $62.5 million compared to the same period in 2023.  The increase for the year ended December 31, 2024 when compared to the same period in 2023 was driven by a $336.4 million increase in average loans as a result of organic loan growth primarily within the commercial and residential real estate loan portfolios, the average balances of which increased $167.9 million and $123.3 million, respectively.  The increase in average loans was partially offset by a $260.9 million decrease in average investment securities as the Corporation repositioned the securities portfolio by selling $268.5 million of lower-yielding securities.

Average total deposits increased $95.1 million, or 0.6 percent, for the year ended December 31, 2024 compared to the year ended December 31, 2023.  The increase was due to a $508.1 million, or 4.3 percent, increase in average interest-bearing deposits partially offset by a $413.0 million, or 14.8 percent, decrease in average noninterest-bearing deposits.  The increase in the average balance of interest-bearing deposits was driven by certificates and other time deposits, money market deposits and interest-bearing deposits, which increased $490.6 million, $177.2 million and $70.8 million, respectively but was partially offset by a $230.5 million decrease in the average balance of savings deposits.  The decrease in the average balance of noninterest-bearing deposits reflects clients moving funds from noninterest-bearing accounts into interest-bearing deposit products.  

Average borrowings decreased $106.5 million, or 9.6 percent, for the year ended December 31, 2024 compared to the same period of 2023. This decrease was primarily driven by decreases of $53.8 million, $35.3 million and $