Company: FRME
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000712534-25-000197
Chunk: 245

Company: FIRST MERCHANTS CORP
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 2
Chunk 245
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 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 in investment securities and a $124.6 million decline in interest-bearing cash balances, consistent with the Corporation’s strategy to reallocate assets toward higher-yielding loans.

Total average deposits declined modestly by $171.2 million, or 1.2 percent, year-over-year to $14.7 billion. While average interest-bearing deposits were essentially flat, the deposit mix shifted in line with the Corporation's funding strategy. Money market balances grew by $614.8 million, while certificates and other time deposits decreased $451.3 million due to intentional pricing