UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 8-K


                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                         ------------------------------

        DATE OF REPORT (Date of earliest event reported): March 21, 2008

                         ------------------------------

                           FIRST MERCHANTS CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

                         -------------------------------

         INDIANA                     0-17071                 35-1544218
(State or other jurisdiction   (Commission File Number)     (IRS Employer
        of incorporation)                                 Identification No.)


                             200 East Jackson Street
                                  P.O. Box 792
                              Muncie, IN 47305-2814
          (Address of Principal Executive Offices, including Zip Code)


                                 (765) 747-1500
              (Registrant's Telephone Number, including Area Code)


         Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)

[ ] Soliciting material pursuant to  Rule 14a-12 under  the Exchange Act (17 CFR
    240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))


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N / E / W / S     R / E / L / E / A / S / E

March 21, 2008

FOR IMMEDIATE RELEASE
For more information, contact:
Mark K. Hardwick, Executive Vice President/Chief Financial Officer, 765-751-1857
http://www.firstmerchants.com

SOURCE: First Merchants Corporation (Nasdaq: FRME), Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES SALE OF INTEREST RATE FLOOR AGREEMENTS

On March 19, 2008, First Merchants Corporation received $5,216,000 in connection
with the  termination  of its three  interest rate floor  agreements.  The three
interest rate floors, which had an aggregate notional amount of $250 million and
strike  rates  ranging  from 6% to 7%,  were  purchased  on  August  1, 2006 for
$553,500.  The contractual maturity of the floors was August 1, 2009. During the
life of the floors,  pre-tax gains of approximately  $4,662,500 were deferred in
accumulated other comprehensive income (AOCI) in accordance with cash flow hedge
accounting  rules  established  by  SFAS  No.  133,  Accounting  for  Derivative
Instruments and Hedging  Activities (as amended).  The amounts  deferred in AOCI
will be  reclassified  out of equity into earnings  over the  remaining  sixteen
months of the original contract. SFAS 133 requires that amounts deferred in AOCI
be  reclassified  into earnings in the same periods  during which the originally
hedged  cash  flows  (prime-based  interest  payments  on loan  assets)  affects
earnings,  as long as the  originally  hedged  cash  flows  remain  probable  of
occurring (i.e. the principal  amount of designated  prime-based  loans match or
exceed the notional  amount of the terminated  floor through August 1, 2009). If
the  principal  amount of the  originally  hedged loans falls below the notional
amount of the terminate floors,  then amounts in AOCI could be accelerated.  The
Corporation  decided to terminate the interest rate floor  agreements only after
considering the impact of the transaction on its risk management  objectives and
after  alternative  strategies  were in place to mitigate the adverse  impact of
falling interest rates on its net interest margin.

About First Merchants Corporation

First  Merchants  Corporation is a financial  holding company  headquartered  in
Muncie,  Indiana.  Subsidiaries of the Corporation include First Merchants Bank,
N.A.,  First  Merchants Bank of Central  Indiana,  N.A.,  Lafayette Bank & Trust
Company,  N.A.,  Commerce National Bank and First Merchants Trust Company,  N.A.
The Corporation also operates First Merchants Insurance Services, a full-service
property  casualty,  personal lines,  and healthcare  insurance  agency and is a
majority  member of Indiana  Title  Insurance  Company,  LLC, a title  insurance
agency.

First Merchants  Corporation's  common stock is traded  over-the-counter  on the
NASDAQ National  Market System under the symbol FRME.  Quotations are carried in
daily  newspapers  and  can  be  found  on  the  company's   Internet  web  page
(http://www.firstmerchants.com).

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