First Merchants Corporation
                             Retirement Savings Plan
                              EIN 35-1544218 PN 002

                  Accountants' Report and Financial Statements
                           December 31, 2002 and 2001




<PAGE>


                           First Merchants Corporation
                             Retirement Savings Plan
                           December 31, 2002 and 2001

<TABLE>
<CAPTION>

Contents

<S>                                                                                                              <C>

    Independent Accountants' Report...............................................................................1



    Financial Statements

        Statements of Net Assets Available for Benefits...........................................................2

        Statements of Changes in Net Assets Available for Benefits................................................3

        Notes to Financial Statements.............................................................................4



    Supplemental Schedules

        Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at End of Year.....................10

        Schedule H, Line 4j - Schedule of Reportable Transactions................................................11



    Exhibit

        Exhibit 23, Consent of Independent Accountants...........................................................13



</TABLE>

<PAGE>



                         Independent Accountants' Report


Administrative Committee
First Merchants Corporation
   Retirement Savings Plan
Muncie, Indiana


We have audited the accompanying statements of net assets available for benefits
of First Merchants Corporation  Retirement Savings Plan as of December 31,  2002
and 2001,  and the related  statements  of changes in net assets  available  for
benefits  for  the  years  then  ended.  These  financial   statements  are  the
responsibility  of the Plan's  management.  Our  responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the net assets available for benefits of First Merchants
Corporation  Retirement  Savings  Plan at  December 31,  2002 and 2001,  and the
changes in its net assets  available  for benefits for the years then ended,  in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  supplemental  schedules  of (1)  assets  held for  investment
purposes at end of year, and (2) reportable  transactions  are presented for the
purpose  of  additional  analysis  and are  not a  required  part  of the  basic
financial   statements  but  are  supplementary   information  required  by  the
Department of Labor's Rules and Regulations  for Reporting and Disclosure  under
the Employee Retirement Income Security Act of 1974. The supplemental  schedules
are the responsibility of the Plan's management. The supplemental schedules have
been  subjected  to the auditing  procedures  applied in the audits of the basic
financial  statements  and, in our opinion,  are fairly stated,  in all material
respects, in relation to the basic financial statements taken as a whole.



BKD, LLP

Indianapolis, Indiana
May 16, 2003

Federal Employer Identification Number:  44-0160260


<PAGE>


See Notes to Financial Statements

                           First Merchants Corporation
                             Retirement Savings Plan
                 Statements of Net Assets Available for Benefits
                           December 31, 2002 and 2001

<TABLE>
<CAPTION>

Assets

                                                                                 2002                 2001
                                                                         -------------------------------------------
<S>                                                                       <C>                   <C>
    Investments, at fair value
        Temporary deposit funds                                            $             --     $        880,831
        Collective investment funds                                                      --           11,295,638
        Common stock                                                                397,275              134,872
        Mutual funds                                                             12,399,376            1,089,898
        Money market funds                                                        1,012,993                   --
                                                                           ----------------     ----------------
               Total investments                                                 13,809,644           13,401,239
    Employer contributions receivable                                                    --               15,651
    Accrued income receivable                                                         4,906                2,057
    Cash                                                                             12,607                  228
                                                                           ----------------     ----------------

Net Assets Available for Benefits                                          $     13,827,157     $     13,419,175
                                                                           ================     ================


</TABLE>



<PAGE>


                           First Merchants Corporation
                             Retirement Savings Plan
           Statements of Changes in Net Assets Available for Benefits
                     Years Ended December 31, 2002 and 2001

<TABLE>
<CAPTION>
                                                                                 2002                 2001
                                                                         -------------------------------------------
<S>                                                                        <C>                  <C>
    Additions
        Investment income
           Net depreciation in fair value of investments                   $       (628,121)    $       (948,700)
           Interest and dividends                                                   199,247               65,008
                                                                           ----------------     ----------------
                                                                                   (428,874)            (883,692)
        Employee contributions                                                    1,179,439              848,547
        Employer contributions                                                      182,857              126,549
        Employee rollover contributions                                             202,273              210,367
        Transfers from other plans                                                       --            2,389,965
                                                                           ----------------     ----------------
               Total additions                                                    1,135,695            2,691,736
                                                                           ----------------     ----------------

    Deductions
        Benefits paid to participants                                               703,229              546,833
        Administrative expenses                                                      24,484               41,155
                                                                           ----------------     ----------------
               Total deductions                                                     727,713              587,988
                                                                           ----------------     ----------------

    Net Increase                                                                    407,982            2,103,748

    Net Assets Available for Benefits, Beginning of Year                         13,419,175           11,315,427
                                                                           ----------------     ----------------

    Net Assets Available for Benefits, End of Year                         $     13,827,157     $     13,419,175
                                                                           ================     ================


</TABLE>



<PAGE>



                           First Merchants Corporation
                             Retirement Savings Plan
                          Notes to Financial Statements
                           December 31, 2002 and 2001


Note 1:     Description of Plan

        The following description of First Merchants Corporation Retirement
        Savings Plan (Plan) provides only general information. Participants
        should refer to the Plan document for a more complete description of the
        Plan's provisions.


    General

        The Plan is a defined-contribution plan sponsored by First Merchants
        Corporation (Corporation) for the benefit of all employees who have
        completed one year of service and are age eighteen or older. As of July
        1, 2002, employees are eligible on their date of hire. It is subject to
        the provisions of the Employee Retirement Income Security Act of 1974
        (ERISA). First Merchants Bank, N.A. (Bank) is the trustee of the Plan.
        Effective January 1, 2003, the Corporation named Merchants Trust Company
        the trustee of the Plan. PrimeVest Financial Services is the custodian
        for a majority of the Plan's assets.


    Contributions

        The Plan permits eligible employees through a salary deferral election
        to have the Corporation make annual contributions of up to the
        limitations of the Economic Growth and Tax Relief Act of 2001 (EGTRRA).
        As discussed in Note 6, the Plan was amended during 2002 to provide for
        automatic enrollment and deferral of 3% of compensation upon a
        participant's date of hire unless they affirmatively elect to not
        participate or to contribute a different percentage to the Plan.
        Employee rollover contributions are also permitted. The Corporation
        makes matching contributions of its employees' salary deferral amounts
        of 25% of the first 5% of employees' eligible compensation. Forfeitures
        are used to reduce the Corporation's contributions.


    Participant Investment Account Options

        Investment account options available include various funds including a
        Corporation stock fund. Each participant has the option of directing his
        contributions into any of the separate investment accounts and,
        effective in 2002, may change the allocation daily.


    Participant Accounts

        Each participant's account is credited with the participant's
        contribution, allocation of the Corporation contribution and Plan
        earnings. Allocations of Plan earnings are based on participant account
        balances, as defined. The benefit to which a participant is entitled is
        the benefit that can be provided from the participant's account.


    Vesting

        Participants are immediately vested in their salary deferral and
        rollover contribution accounts plus actual earnings thereon. Vesting in
        the remainder of their accounts is based on years of continuous service.
        A participant is 100% vested after five years of credited service.

<PAGE>


                           First Merchants Corporation
                             Retirement Savings Plan
                          Notes to Financial Statements
                           December 31, 2002 and 2001



    Payment of Benefits

        Upon termination of service, participants may elect to receive a
        lump-sum amount or installments equal to the value of their accounts.
        Withdrawals other than for termination are permitted under circumstances
        provided by the Plan.


    Plan Termination

        Although it has not expressed any intent to do so, the Corporation has
        the right under the Plan to discontinue its contributions at any time
        and to terminate the Plan subject to the provisions of ERISA. In the
        event of Plan termination, participants will become 100% vested in their
        accounts.



Note 2:     Summary of Significant Accounting Policies


    Method of Accounting

        The accompanying financial statements are prepared on the accrual method
        of accounting.


    Estimates

        The preparation of financial statements in conformity with accounting
        principles generally accepted in the United States of America requires
        management to make estimates and assumptions that affect the reported
        amounts of net assets and changes in net assets available for benefits.
        Actual results could differ from those estimates.


    Investments

        Investments are valued at estimated fair value. Money market funds and
        temporary deposit funds are valued at cost, which approximates market.
        Purchases and sales of securities are recorded on a trade-date basis.


    Payment of Benefits

        Benefits are recorded when paid.


    Administrative Expenses

        Administrative expenses may be paid by the Corporation or the Plan, at
the Corporation's discretion.

<PAGE>


                           First Merchants Corporation
                             Retirement Savings Plan
                          Notes to Financial Statements
                           December 31, 2002 and 2001


Note 3:     Investments

        At December 31, 2002, the Plan's investments are held by PrimeVest
        Financial Services and the Corporation. The Plan's investments
        (including investments bought, sold, and held during the year)
        depreciated in fair value as follows:

<TABLE>
<CAPTION>

                                                                                            2002
                                                                                  Net
                                                                             Appreciation
                                                                            (Depreciation)         Fair Value
                                                                             in Fair Value           at End
                                                                              During Year            of Year
                                                                         -------------------------------------------
<S>                                                                        <C>                  <C>

           Investments at estimated fair value as determined by quoted
              prices in an active market
               Common stock                                                $        (14,413)    $        397,275
               Mutual funds                                                         137,222           12,399,376
               Money market funds                                                        --            1,012,993
           Investments at estimated fair value and cost which
              approximates market
               Collective investment funds                                         (750,930)                  --
                                                                           ----------------     ----------------

                                                                           $       (628,121)    $     13,809,644
                                                                           ================     ================


                                                                                            2001
                                                                                  Net
                                                                             Appreciation
                                                                            (Depreciation)         Fair Value
                                                                             in Fair Value           at End
                                                                              During Year            of Year
                                                                         -------------------------------------------

           Investments at estimated fair value as determined by quoted
              prices in an active market
               Common stock                                                $         11,311     $        134,872
               Mutual funds                                                         (61,186)           1,089,898
           Investments at estimated fair value and cost which
              approximates market
               Temporary deposit funds                                                   --              880,831
               Collective investment funds                                         (898,825)          11,295,638
                                                                           ----------------     ----------------

                                                                           $       (948,700)    $     13,401,239
                                                                           ================     ================
</TABLE>

<PAGE>


                           First Merchants Corporation
                             Retirement Savings Plan
                          Notes to Financial Statements
                           December 31, 2002 and 2001


        The fair values of individual investments that represented 5% or more of
the Plan's assets were as follows:
<TABLE>
<CAPTION>

                                                                                   2002                2001
                                                                           -----------------------------------------
<S>                                                                         <C>                 <C>

           Federated Prime Cash Obligations Fund                             $      1,012,993    $             --
           American Funds Amcap Fund                                                2,012,478                  --
           American Century Equity Income Fund                                        811,342                  --
           Federated Capital Preservation Fund                                        988,210                  --
           Franklin Short-Intermediate U. S. Government Securities Fund             1,016,651                  --
           MFS Value Fund                                                           1,861,145                  --
           PIMCO Total Return Fund                                                  1,754,784                  --
           Oppenheimer Main Street Income and Growth Fund                             982,942                  --
           Oppenheimer Small Cap. Value Fund                                          713,842                  --
           First Merchants Bank, N.A. Intermediate Growth Fund for Tax
              Exempt Accounts                                                              --           8,766,390
           First Merchants Bank, N.A. Intermediate Term Income Fund for
              Tax Exempt Accounts                                                          --           2,529,248
           First Merchants Bank, N.A. Temporary Fund II                                    --             880,831


Note 4:     Nonparticipant-directed Investments

        Information about the net assets and the significant components of the
        changes in net assets relating to the nonparticipant-directed
        investments, is as follows:

                                                                                   2002                2001
                                                                            ----------------------------------------

           Net Assets
               Federated Prime Cash Obligations                               $             --   $             --
               Temporary deposit funds                                                      --                 --
                                                                              ----------------   ----------------
                                                                              $              0   $              0
                                                                              ================   ================


                                                                                   2002                2001
                                                                            ----------------------------------------

           Transfers in                                                       $     12,337,615   $        880,831
           Transfers out                                                           (12,337,615)          (880,831)
                                                                              ----------------   ----------------

                                                                              $              0   $              0
                                                                              ================   ================


</TABLE>



<PAGE>


                           First Merchants Corporation
                             Retirement Savings Plan
                          Notes to Financial Statements
                           December 31, 2002 and 2001


Note 5:     Party-in-Interest Transactions

        Party-in-interest transactions include those with fiduciaries or
        employees of the Plan, any person who provides services to the Plan, an
        employer whose employees are covered by the Plan, an employee
        organization whose members are covered by the Plan, a person who owns 50
        percent or more of such an employer or employee association, or
        relatives of such persons.

        The Plan invested in First Merchants Bank, N.A. Temporary Fund II,
        Intermediate Growth Fund for Tax Exempt Account Intermediate Term Income
        Fund for Tax Exempt Accounts through July 2002. The Plan continues to
        invest in First Merchants Bank common stock.
<TABLE>
<CAPTION>

        Activity at fair value was as follows:


                                                         First Merchants      First Merchants
                                                            Bank, N.A.           Bank, N.A.
                                     First Merchants   Intermediate Growth   Intermediate Term    First Merchants
                                       Bank, N.A.          Fund for Tax       Income Fund for       Corporation
                                        Temporary             Exempt             Tax Exempt           Common
                                      Deposit Fund           Accounts             Accounts             Stock
                                   ---------------------------------------------------------------------------------
<S>                                    <C>                <C>                   <C>                 <C>
           Balance, January 1,
              2001                     $      415,194     $      8,206,877      $    2,025,591      $          --
               Changes                        465,637              559,513             503,657            134,872
                                       --------------     ----------------      --------------      -------------

           Balance, December 31,
              2001                            880,831            8,766,390           2,529,248            134,872
               Changes                       (880,831)          (8,766,390)         (2,529,248)           262,403
                                       --------------     ----------------      --------------      -------------

           Balance, December 31,
              2002                     $            0     $              0      $            0      $     397,275
                                       ==============     ================      ==============      =============
</TABLE>

        The Corporation provides certain administrative services at no cost to
        the Plan. Effective January 1, 2001, fees for certain trust and
        administrative services provided by the trustee are now paid by the Plan
        and were $24,484 and $41,155 for 2002 and 2001, respectively.



Note 6:     Tax Status

        The Internal Revenue Service has advised that the Plan constitutes a
        qualified plan under Section 401 of the Internal Revenue Code and that
        the trust established under the Plan is therefore exempt from federal
        income taxes. The Plan has been amended since receiving the
        determination letter. However, the Plan administrator believes that the
        Plan is currently designed and being operated in compliance with the
        applicable requirements of the Internal Revenue Code and that the Plan
        was qualified and the related trust was tax exempt as of the financial
        statement date.




<PAGE>


                           First Merchants Corporation
                             Retirement Savings Plan
                          Notes to Financial Statements
                           December 31, 2002 and 2001


Note 7:     Plan Changes and Restatement

        Effective January 1, 2001, employees of Decatur Bank and Trust Company
        (Decatur Bank and Trust Company 401(k) Profit Sharing Plan) were added
        to the Plan, and assets of approximately $2,390,000 were transferred
        into the Plan.

        The Plan was restated effective January 1, 1998. As of January 1, 2001,
        a Corporation stock fund was added as an investment account option, and
        the Plan eligibility age was lowered to age 18.

        Effective January 1, 2002, the Plan was amended to provide participants
        the opportunity to increase their contributions in accordance with the
        Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).

        Effective July 1, 2002, the Plan was amended to automatically enroll
        employees in the Plan as of their date of hire unless they affirmatively
        elect not to participate. Also, on July 1, 2002, the Plan was converted
        from a quarterly to a daily valuation. As part of the conversion, all of
        the previous fund options were replaced.



<PAGE>




                             Supplemental Schedules



<PAGE>


                           First Merchants Corporation
                             Retirement Savings Plan
      Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
                                 at End of Year
                                December 31, 2002
           Employer Identification Number: 35-1544218 Plan Number: 002
<TABLE>
<CAPTION>


  (a)                           (b)                                           (c)                      (e)
                         Identity of Issue,                        Description of Investment
                         Borrower, Lessor, or                          Including Par or              Current
                          Similar Party                                 Maturity Value                Value
--------------------------------------------------------------------------------------------------------------------
<S>       <C>                                                          <C>                      <C>

          Common Stock
              *First Merchants Corporation                                 17,432 shares         $        397,275

          Mutual Funds
              AIM Small Cap. Equity Fund                                   30,970 shares                  254,884
              American Funds Amcap. Fund                                  154,806 shares                2,012,478
              American Century Equity Income Fund                         124,248 shares                  811,342
              American High Income Trust Fund                              15,729 shares                  162,481
              Federated Capital Preservation Fund                          98,821 shares                  988,210
              Federated Max-Cap. Index Fund                                23,681 shares                  420,567
              Fidelity Advisor International Capital
                Appreciation Fund                                           3,830 shares                   41,519
              Franklin Short-Intermediate U. S. Government
                Securities Fund                                            96,001 shares                1,016,651
              Franklin Templeton Foreign Fund                              18,865 shares                  156,765
              MFS Value Fund                                              112,660 shares                1,861,145
              MFS Mid-Cap. Growth Fund                                     72,043 shares                  407,763
              Oppenheimer Main Street Income and Growth Fund               37,805 shares                  982,942
              Oppenheimer Small Cap. Value Fund                            36,796 shares                  713,842
              PIMCO Foreign Bond Fund                                       6,048 shares                   63,987
              PIMCO Total Return Fund                                     164,460 shares                1,754,784
              Putnam Capital Opportunities Fund                            34,409 shares                  262,198
              Putnam International Voyager Fund                             9,742 shares                  135,223
              Putnam Small Cap. Growth Fund                                28,118 shares                  352,595
                                                                                                       12,399,376

          Money Market Fund
              Federated Prime Cash Obligations Fund                     1,012,993 shares                1,012,993

                                                                                                 $     13,809,644
</TABLE>


*Party-in-interest






<PAGE>


                           First Merchants Corporation
                             Retirement Savings Plan
            Schedule H, Line 4j - Schedule of Reportable Transactions
       (Transactions in Excess of 5% of Plan Assets at Beginning of Year)
                          Year Ended December 31, 2002
           Employer Identification Number: 35-1544218 Plan Number: 002
<TABLE>
<CAPTION>

       (a)                     (b)            (c)          (d)      (e)        (f)          (g)            (h)          (i)
                                                                                                      Current Value
                                                                            Expenses                   of Asset on
Identity of Party         Description of    Purchase     Selling   Lease  Incurred With   Cost of      Transaction    Net Gain
     Involved                 Assets         Price        Price    Rental  Transaction     Asset          Date       or (Loss)
----------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                     <C>          <C>          <C>        <C>      <C>           <C>            <C>

      Issuer      Federated Prime Cash
                     Obligations Fund
                      Purchases           $ 13,350,608                                  $  13,350,608 $  13,350,608
                      Sales                            $ 12,337,615                        12,337,615    12,337,615  $         --

</TABLE>



<PAGE>
                                   Exhibit 23

                       CONSENT OF INDEPENDENT ACCOUNTANTS


We consent to the  incorporation by reference in the  Registration  Statement of
First  Merchants  Corporation on Form S-8 (File Number  333-50484) of our report
dated May 16, 2003, of our audit on the financial  statements of First Merchants
Corporation  Retirement Savings Plan for the year ended December 31, 2002, which
report is included in its Annual Report on Form 11-K.



BKD, LLP

Indianapolis, Indiana
June 25, 2003

<PAGE>


Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the Plan
Administrator  has duly caused this annual  report to be signed on its behalf by
the undersigned hereunto duly authorized.

        Date: 06/25/03    By: /s/ Kimberly J. Ellington
              --------        -------------------------
                                  Kimberly J. Ellington
                                  First Merchants Corporation
                                  Retirement Savings Plan