FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549



          [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2005

                                       OR
         [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

                        SECURITIES EXCHANGE ACT OF 1934

               For the Transition Period from _______ to _______

                         Commission File Number 0-17071

                           First Merchants Corporation

             (Exact name of registrant as specified in its charter)

           Indiana                                               35-1544218

(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

   200 East Jackson Street
         Muncie, IN                                                47305-2814

(Address of principal executive offices)                           (Zip code)

                                 (765) 747-1500

              (Registrant's telephone number, including area code)

                                 Not Applicable

               (Former name, former address and former fiscal year,
                         if changed since last report)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.  Yes [X] No [ ]

Indicate by checkmark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act).  Yes [X] No [ ]

Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  Yes [ ] No [X]

As of October 17, 2005, there were 18,508,305 outstanding common shares, without
par value, of the registrant.



<PAGE>


                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

                                      INDEX

                                                                        Page No.


PART I.  Financial Information:

 Item 1.          Financial Statements:

                  Consolidated Condensed Balance Sheets........................3

                  Consolidated Condensed Statements of Income..................4

                  Consolidated Condensed Statements of
                  Comprehensive Income.........................................5

                  Consolidated Condensed Statements of
                  Stockholders' Equity.........................................6

                  Consolidated Condensed Statements of Cash Flows..............7

                  Notes to Consolidated Condensed Financial Statements.........8

 Item 2.          Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.........................14

 Item 3.          Quantitative and Qualitative Disclosures About
                  Market Risk.................................................24

 Item 4.          Controls and Procedures.....................................24

PART II. Other Information:

 Item 1.          Legal Proceedings...........................................25

 Item 2.          Unregistered Sales of Equity
                  Securities and Use of Proceeds..............................25

 Item 3.          Defaults Upon Senior Securities.............................25

 Item 4.          Submission of Matters to a Vote of Security Holders.........25

 Item 5.          Other Information...........................................25

 Item 6.          Exhibits....................................................26

 Signatures...................................................................27

 Index to Exhibits............................................................28


                                                                          Page 2
<PAGE>


                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
                          PART I. FINANCIAL INFORMATION
                          Item 1. FINANCIAL STATEMENTS
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                (Dollars in thousands, except per share amounts)
<TABLE>

                                                                   September 30,   December 31,
                                                                        2005          2004
                                                                   ------------   ------------
                                                                    (Unaudited)
  <S>                                                               <C>            <C>
  ASSETS:
  Cash and due from banks .......................................   $    81,310    $    69,960
  Interest-bearing deposits......................................        10,708          9,343
  Investment securities available for sale ......................       424,818        416,177
  Investment securities held to maturity ........................        11,976          5,358
  Mortgage loans held for sale...................................         5,026          3,367
  Loans, net of allowance for loan losses of $25,149 and $22,548.     2,418,782      2,405,503
  Premises and equipment ........................................        38,473         38,254
  Federal Reserve and Federal Home Loan Bank stock...............        23,165         22,858
  Interest receivable ...........................................        19,561         17,318
  Goodwill ......................................................       121,266        120,615
  Core deposit intangibles ......................................        18,331         20,669
  Cash surrender value of life insurance.........................        43,230         42,061
  Other assets ..................................................        21,792         20,185
                                                                    -----------    -----------
      Total assets ..............................................   $ 3,238,438    $ 3,191,668
                                                                    ===========    ===========
  LIABILITIES:
  Deposits:
    Noninterest-bearing .........................................   $   346,318    $   330,685
    Interest-bearing ............................................     2,118,975      2,077,465
                                                                    -----------    -----------
      Total deposits ............................................     2,465,293      2,408,150
  Borrowings ....................................................       423,959        440,891
  Interest payable ..............................................         5,643          4,411
  Other liabilities..............................................        25,153         23,613
                                                                    -----------    -----------
      Total liabilities .........................................     2,920,048      2,877,065

  COMMITMENTS AND CONTINGENT LIABILITIES

  STOCKHOLDERS' EQUITY:
  Perferred stock, no-par value:
    Authorized and unissued - 500,000 shares
  Common Stock, $.125 stated value:
    Authorized --- 50,000,000 shares
    Issued and outstanding - 18,507,970 and 18,573,997 shares....         2,313          2,322
  Additional paid-in capital ....................................       148,004        150,862
  Retained earnings .............................................       171,419        161,459
  Accumulated other comprehensive income (loss)..................        (3,346)           (40)
                                                                    -----------    -----------
      Total stockholders' equity ................................       318,390        314,603
                                                                    -----------    -----------
      Total liabilities and stockholders' equity ................   $ 3,238,438    $ 3,191,668
                                                                    ===========    ===========
</TABLE>

  See notes to consolidated condensed financial statements.




                                                                          Page 3
<PAGE>



                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                (Dollars in thousands, except per share amounts)
                                   (Unaudited)
<TABLE>

                                                                    Three Months Ended       Nine Months Ended
                                                                       September 30,           September 30,
                                                                   --------------------    ---------------------
                                                                     2005        2004        2005         2004
                                                                   -------     -------     --------     --------
<S>                                                                <C>          <C>        <C>          <C>
Interest Income:
  Loans receivable
    Taxable ...................................................    $40,853     $35,342     $116,506     $103,590
    Tax exempt ................................................        160         143          483          443
  Investment securities
    Taxable ...................................................      2,427       2,146        7,132        6,147
    Tax exempt ................................................      1,595       1,679        4,702        4,529
  Federal funds sold ..........................................         51          18          190           73
  Deposits with financial institutions ........................        185         154          493          388
  Federal Reserve and Federal Home Loan Bank stock ............        296         319          889          954
                                                                   -------     -------     --------     --------
    Total interest income .....................................     45,567      39,801      130,395      116,124
                                                                   -------     -------     --------     --------
Interest expense:
  Deposits ....................................................     12,172       8,487       32,707       24,556
  Borrowings ..................................................      5,255       4,522       14,685       13,297
                                                                   -------     -------      -------      -------
    Total interest expense ....................................     17,427      13,009       47,392       37,853
                                                                   -------     -------      -------      -------
Net Interest Income ...........................................     28,140      26,792       83,003       78,271
Provision for loan losses .....................................      1,794       1,380        6,409        4,472
                                                                   -------     -------      -------      -------
Net Interest Income After Provision for Loan Losses ...........     26,346      25,412       76,594       73,799
                                                                   -------     -------      -------      -------
Other Income:
  Net realized gains on sales of available-for-sale securities.         16         332           22          732
  Other income ................................................      8,764       8,079       26,566       25,151
                                                                   -------     -------      -------      -------
Total other income ............................................      8,780       8,411       26,588       25,883
                                                                   -------     -------      -------      -------
Other expenses:
  Salaries and benefits .......................................     13,384      13,087       41,463       39,170
  Other expenses ..............................................      9,917       9,703       29,268       28,806
                                                                   -------     -------      -------      -------
Total other expenses ..........................................     23,301      22,790       70,731       67,976
                                                                   -------     -------      -------      -------
Income before income tax ......................................     11,825      11,033       32,451       31,706
Income tax expense ............................................      3,605       3,380        9,743        9,763
                                                                   -------     -------      -------      -------
Net Income ....................................................    $ 8,220     $ 7,653      $22,708      $21,943
                                                                   =======     =======      =======      =======


Per share:

    Basic .....................................................    $   .45     $   .41      $ 1.23       $ 1.18
    Diluted ...................................................        .44         .41        1.22         1.18
    Dividends .................................................        .23         .23         .69          .69

</TABLE>
See notes to consolidated condensed financial statements.
                                                                          Page 4
<PAGE>


                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
           CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
                             (Dollars in thousands)
                                   (Unaudited)

<TABLE>
                                                                                   Three Months Ended        Nine Months Ended
                                                                                      September 30              September 30
                                                                                 ----------------------    ----------------------
                                                                                    2005         2004        2005         2004
                                                                                 ---------    ---------    ---------    ---------
<S>                                                                              <C>          <C>          <C>          <C>
Net Income...................................................................... $  8,220     $  7,653     $ 22,708     $ 21,943

Other comprehensive income, net of tax:
  Unrealized gains (losses) on securities available for sale:
    Unrealized holding gains (losses) arising during the period, net of
      income tax (expense) benefit of $589, $(3,104), $2,195 and $(359).........     (883)       4,656       (3,293)         539
    Less:  Reclassification adjustment for gains included
      in net income, net of income tax expense of $6, $133, $9 and $293.........       10          199           13          439
                                                                                 ---------    ---------    ---------    ---------
                                                                                     (893)       4,457       (3,306)         100
                                                                                 ---------    ---------    ---------    ---------
Comprehensive income ........................................................... $  7,327     $ 12,110     $ 19,402     $ 22,043
                                                                                 =========    =========    =========    =========

</TABLE>
See notes to consolidated condensed financial statements.







                                                                          Page 5
<PAGE>



                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
            CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
                             (Dollars in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                       2005         2004
                                                                    ---------    ---------
<S>                                                                  <C>          <C>
Balances, January 1 ............................................   $ 314,603    $ 303,965

Net income .....................................................      22,708       21,943

Cash dividends .................................................     (12,748)     (12,777)

Other comprehensive income (loss), net of tax...................      (3,306)         100

Stock issued under employee benefit plans.......................         913          903

Stock issued under dividend reinvestment and stock purchase plan         638          977

Stock options exercised ........................................       2,114          981

Stock redeemed .................................................      (6,970)      (2,430)

Issuance of stock in acquisition................................         438
                                                                   ---------    ---------
Balances, September 30 .........................................   $ 318,390    $ 313,662
                                                                   =========    =========
</TABLE>
   See notes to consolidated condensed financial statements.
                                                                          Page 6
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)
<TABLE>

                                                                                              Nine Months Ended
                                                                                                September 30,
                                                                                      ----------------------------------
                                                                                            2005               2004
                                                                                      ----------------   ---------------
<S>                                                                                   <C>                <C>
Cash Flows From Operating Activities:
  Net income........................................................................  $       22,708     $       21,943
  Adjustments to reconcile net income to net cash provided by operating activities
    Provision for loan losses.......................................................           6,409              4,472
    Depreciation and amortization...................................................           3,829              3,810
    Mortgage loans originated for sale..............................................         (55,065)           (66,111)
    Proceeds from sales of mortgage loans...........................................          53,406             66,439
    Change in interest receivable...................................................          (2,243)              (754)
    Change in interest payable......................................................           1,232              1,026
    Other adjustments...............................................................           3,397              2,557
                                                                                      ---------------    ---------------
      Net cash provided by operating activities.....................................  $       33,673     $       33,382
                                                                                      ---------------    ---------------


Cash Flows From Investing Activities:
  Net change in interest-bearing deposits...........................................  $       (1,365)    $       (4,063)
  Purchases of securities available for sale........................................         (77,867)          (170,719)
  Proceeds from maturities of securities available for sale.........................          54,770             76,414
  Proceeds from sales of securities available for sale..............................           2,023             32,336
  Purchase of Federal Reserve and Federal Home Loan Bank Stock......................            (307)            (7,248)
  Net change in loans...............................................................         (19,688)           (46,525)
  Other adjustments.................................................................          (4,048)            (4,768)
                                                                                      ---------------    ---------------
      Net cash used by investing activities.........................................  $      (46,482)    $     (124,573)
                                                                                      ---------------    ---------------

Cash Flows From Financing Activities:
  Net change in
    Demand and savings deposits.....................................................  $     (171,585)    $       20,514
    Certificates of deposit and other time deposits.................................         228,729             74,204
    Borrowings......................................................................          99,151             (4,641)
    Repayment of borrowings.........................................................        (116,083)
  Cash dividends....................................................................         (12,748)           (12,777)
  Stock issued under employee benefit plans.........................................             913                903
  Stock issued under dividend reinvestment and stock purchase plans.................             638                977
  Stock options exercised...........................................................           2,114                981
  Stock redeemed....................................................................          (6,970)            (2,430)
                                                                                      ---------------    ---------------
      Net cash provided by financing activities.....................................          24,159             77,731
                                                                                      ---------------    ---------------
Net Change in Cash and Cash Equivalents.............................................          11,350            (13,460)
Cash and Cash Equivalents, January 1................................................          69,960            109,527
                                                                                      ---------------    ---------------
Cash and Cash Equivalents, September 30.............................................  $       81,310     $       96,067
                                                                                      ===============    ===============

</TABLE>
See notes to consolidated condensed financial statements.
                                                                          Page 7

<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                          (Table dollars in thousands)
                                   (Unaudited)

NOTE 1.  General

     The significant accounting policies followed by First Merchants Corporation
("Corporation")   and  its  wholly  owned  subsidiaries  for  interim  financial
reporting  are  consistent  with the  accounting  policies  followed  for annual
financial reporting.  All adjustments which are of a normal recurring nature and
are in the opinion of management  necessary for a fair  statement of the results
for the periods  reported  have been included in the  accompanying  consolidated
condensed financial statements.

     The consolidated condensed  balance sheet of the Corporation as of December
31, 2004 has been derived  from the audited  consolidated  balance  sheet of the
Corporation as of that date. Certain  information and note disclosures  normally
included in the Corporation's annual financial statements prepared in accordance
with accounting  principles  generally  accepted in the United States of America
have  been  condensed  or  omitted.   These  consolidated   condensed  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes  thereto  included in the  Corporation's  Form 10-K annual
report filed with the Securities and Exchange Commission.

     The  results  of  operations  for  the  three and  nine month periods ended
September 30, 2005 are not necessarily  indicative of the results to be expected
for the year.

     Stock  options  are  granted  for a fixed  number of shares  to  employees.
The  Corporation's  stock  option plans are  accounted  for in  accordance  with
Accounting  Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued
to  Employees,  and related  interpretations.  APB No. 25 requires  compensation
expense  for stock  options to be  recognized  only if the  market  price of the
underlying  stock exceeds the exercise  price on the date of the grant.  For all
grants, no stock-based employee compensation cost is reflected in net income, as
options  granted  under those  plans had an  exercise  price equal to the market
value of the underlying common stock on the grant date.

     During  the  three  months  ended  September  30,  2005,   the  Corporation
accelerated the vesting of options  previously  granted,  and the vesting period
for 2005 grants was  established  so that those  grants would be fully vested by
year-end.  The  term  of the  acceleration  is  such  that  no  expense  will be
recognized  by the  Corporation  on those  grants,  although it will continue to
report  the  impact  of the  acceleration  in its  proforma  disclosures  of the
earnings per share.

     The  following table  illustrates the effect on net income and earnings per
share if the Corporation has applied the fair value provisions of FASB Statement
No. 123,  Accounting  for  Stock-Based  Compensation,  to  stock-based  employee
compensation.

<TABLE>
<CAPTION>
                                                                    Three Months Ended         Nine Months Ended
                                                                       September 30,              September 30,
                                                                 -----------------------   ------------------------
                                                                     2005         2004        2005          2004
                                                                 ----------   ----------   ----------    ----------
<S>                                                             <C>           <C>          <C>           <C>
Net income, as reported .....................................   $    8,220    $    7,653   $   22,708    $   21,943
Add:  Total stock-based employee compensation
   cost included in reported net income, net
   of income taxes...........................................

Less:  Total stock-based employee compensation
   cost determined under the fair value based
   method, net of income taxes ..............................       (1,083)         (140)      (1,630)         (599)
                                                                ----------    ----------   ----------    ----------
Pro forma net income ........................................   $    7,137    $    7,513   $   21,078    $   21,344
                                                                ==========    ==========   ==========    ==========

Earnings per share:
   Basic - as reported ......................................   $      .45    $      .41   $     1.23    $     1.18
   Basic - pro forma ........................................          .39           .41         1.14          1.15
   Diluted - as reported ....................................          .44           .41         1.22          1.18
   Diluted - pro forma ......................................          .38           .40         1.13          1.14
</TABLE>

                                                                          Page 8

<PAGE>
                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                          (Table dollars in thousands)
                                   (Unaudited)

NOTE 1.  General (continued)

     The Corporation makes its Annual Report on Form 10-K,  Quarterly Reports on
Form 10-Q,  Current Reports on Form 8-K and amendments to those reports filed or
furnished  pursuant to Section 13(a) or 15(d) of the Securities  Exchange Act of
1934,  as amended,  available on its website at  www.firstmerchants.com  without
charge, as soon as reasonably  practicable after such reports are electronically
filed  with,  or  furnished  to,  the   Securities   and  Exchange   Commission.
Additionally,  upon request the Corporation  will also provide without charge, a
copy of its Form 10-Q to any shareholder by mail. Requests should be sent to Mr.
Brian Edwards, Shareholder Relations Officer, First Merchants Corporation,  P.O.
Box 792, Muncie, IN 47308-0792.

NOTE 2.  Impact of Accounting Changes

     In June 2005, the FASB Board decided not to provide additional guidance  on
the meaning of other-than-temporary  impairment,  but directed the FASB staff to
issue a staff  position  (FSP) which will be retitled  FSP 115-1 "The Meaning of
Other-Than-Temporary  Impairment and Its Application to Certain  Investments".
The  final  FSP  will   supersede   EITF  Issue  No.   03-1,   "The  Meaning  of
Other-Than-Temporary Impairment and Its Application to Certain Investments," and
EITF Topic No. D-44,  "Recognition of  Other-Than-Temporary  Impairment upon the
Planned Sale of a Security  Whose Cost Exceeds Fair Value."FSP FAS 115-1 will
replace  guidance  in EITF Issue 03-1 on loss  recognition  with  references  to
existing  other-than-temporary  impairment guidance,  such as FASB Statement No.
115,  "Accounting for Certain  Investments in Debt and Equity  Securities".  FSP
FAS 115-1 will clarify that an investor  should  recognize an impairment loss no
later  than  when the  impairment  is deemed  other  than  temporary,  even if a
decision to sell has not been made.

     FSP  FAS  115-1  will  be  effective  for  other-than-temporary  impairment
analysis   conducted  in  periods   beginning  after  September  15,  2005.  The
Corporation has consistently  followed the loss recognition guidance in SFAS No.
115, so the  adoption of FSP FAS 115-1 will not have any  significant  impact on
the Corporation's financial condition or results of operation.

     On April 14, 2005, the SEC amended  the compliance date for SFAS No. 123(R)
from the  beginning of the first interim or annual period that begins after June
15, 2005 to the next fiscal year beginning  after June 15, 2005.  Early adoption
is permitted in periods in which financial  statements have not yet been issued.
The  Corporation  expects  to adopt SFAS No.  123(R) as of January 1, 2006.  The
effect on the  Corporation's  results of operations  will depend on the level of
future  option  grants  and the  calculation  of the fair  value of the  options
granted at such future date,  as well as the vesting  periods  provided,  and so
cannot currently be predicted for future awards.

     The  FASB  has  issued a proposed  amendment to  SFAS No. 128, Earnings per
Share, to clarify guidance for mandatorily convertible instruments, the treasury
stock method, contingently issuable shares, and contracts that may be settled in
cash or shares.  The primary impact on the Corporation of the proposed Statement
is the change to the treasury stock method for year-to-date diluted earnings per
share.

     Currently  SFAS  No. 128  requires  that  the  number of incremental shares
included in the  denominator be determined by computing a year-to-date  weighted
average of the number of incremental  shares included in each quarterly  diluted
EPS computation. Under this proposed Statement, the number of incremental shares
included in year-to-date diluted earnings  per share would be computed using the
average market price of common shares for the year-to-date  period,  independent
of the quarterly computations. This computational change is not expected to have
a significant impact on the Corporation's diluted earnings per share.

                                                                         Page 9
<PAGE>



                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                          (Table dollars in thousands)
                                   (Unaudited)


<TABLE>
NOTE 3.  Investment Securities
                                                          Gross       Gross
                                             Amortized  Unrealized  Unrealized    Fair
                                                Cost       Gains      Losses     Value
<S>                                          <C>         <C>        <C>        <C>
Available for sale at September 30, 2005
  U.S. Treasury ........................     $  1,495              $     (1)  $  1,494
  U.S. Government-sponsored
    agency securities...................       78,002   $              (965)    77,037
  State and municipal ..................      162,982      3,325       (427)   165,880
  Mortgage-backed securities ...........      173,121        213     (3,400)   169,934
  Other asset-backed securities.........           16                               16
  Marketable equity securities..........       10,870                  (413)    10,457
                                             --------   --------   --------   --------
      Total available for sale .........      426,486      3,538     (5,206)   424,818
                                             --------   --------   --------   --------


Held to maturity at September 30, 2005
  State and municipal...................       11,933        399       (275)    12,057
  Mortgage-backed securities............           43                               43
                                             --------   --------   --------   --------
      Total held to maturity ...........       11,976        399       (275)    12,100
                                             --------   --------   --------   --------
      Total investment securities ......     $438,462   $  3,937   $ (5,481)  $436,918
                                             ========   ========   ========   ========

</TABLE>

<TABLE>
<CAPTION>
                                                           Gross       Gross
                                              Amortized  Unrealized  Unrealized   Fair
                                                Cost       Gains       Losses    Value
<S>                                             <C>       <C>        <C>       <C>
Available for sale at December 31, 2004
  U.S. Treasury ........................       $  1,745             $     (1) $  1,744
  U.S. Government-sponsored
    agency securities ..................         65,325  $     73       (332)   65,066
  State and municipal ..................        150,284     5,243        (82)  155,445
  Mortgage-backed securities ...........        183,200       485     (1,980)  181,705
  Other asset-backed securities.........             18                             18
  Marketable equity securities .........         12,191         8               12,199
                                               --------  --------   --------  --------
     Total available for sale ..........        412,763     5,809     (2,395)  416,177
                                               --------  --------   --------  --------

Held to maturity at December 31, 2004
  State and municipal ..................          5,306       162                5,468
  Mortgage-backed securities ...........             52                             52
                                               --------  --------   --------  --------
     Total held to maturity ............          5,358       162                5,520
                                               --------  --------   --------  --------
     Total investment securities .......       $418,121  $  5,971   $ (2,395) $421,697
                                               ========  ========   ========  ========


</TABLE>

                                                                         Page 10
<PAGE>



                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                          (Table dollars in thousands)
                                   (Unaudited)

NOTE 4.  Loans and Allowance
<TABLE>
                                                                                    September 30,  December 31,
                                                                                        2005          2004
                                                                                   -----------    -----------
<S>                                                                                <C>            <C>
Loans:
  Commercial and industrial loans ..............................................   $   476,010    $   451,227
  Agricultural production financing and other loans to farmers .................        94,262         98,902
  Real estate loans:
    Construction ...............................................................       171,667        164,738
    Commercial and farmland ....................................................       719,154        709,163
    Residential ................................................................       746,777        761,163
  Individuals' loans for household and other personal expenditures .............       186,792        198,532
  Tax-exempt loans .............................................................        12,439          8,203
  Lease financing receivables, net of unearned income...........................         9,538         11,311
  Other loans ..................................................................        27,292         24,812
                                                                                   -----------    -----------
                                                                                     2,443,931      2,428,051
  Allowance for loan losses.....................................................       (25,149)       (22,548)
                                                                                   -----------    -----------
      Total Loans...............................................................   $ 2,418,782    $ 2,405,503
                                                                                   ===========    ===========

                                                                                        Nine Months Ended
                                                                                          September 30,

                                                                                       2005           2004
                                                                                   -----------    -----------
Allowance for loan losses:
  Balances, January 1 ..........................................................   $    22,548    $    25,493

  Provision for losses .........................................................         6,409          4,472

  Recoveries on loans ..........................................................         1,436          1,234

  Loans charged off ............................................................        (5,244)        (5,956)
                                                                                   -----------    -----------
  Balances, September 30 .......................................................   $    25,149    $    25,243
                                                                                   ===========    ===========
</TABLE>

Information on nonaccruing, contractually
past due 90 days or more other than
nonaccruing and restructured loans is              September 30,    December 31,
summarized below:                                      2005            2004
================================================================================

Non-accrual loans................................    $ 11,757       $ 15,355

Loans contractually past due 90 days
  or more other than nonaccruing.................       3,560          1,907

Restructured loans...............................         454          2,019
                                                     --------       --------
    Total........................................    $ 15,771       $ 19,281
                                                     ========       ========

                                                                         Page 11
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                          (Table dollars in thousands)
                                   (Unaudited)

NOTE 5.  Net Income Per Share
<TABLE>
                                                                     Three Months Ended September 30,
                                                           2005                                           2004
                                        -------------------------------------------    -------------------------------------------
                                                        Weighted-                                      Weighted-
                                                         Average        Per Share                       Average        Per Share
                                         Income           Shares         Amount         Income           Shares         Amount
                                         ------           ------         ------         ------           ------         ------
<S>                                      <C>            <C>             <C>             <C>            <C>             <C>
Basic net income per share:
  Net income available to
    common stockholders................. $    8,220        18,478,154    $     .45      $    7,653        18,548,041    $     .41
                                                                         ==========                                     ==========
Effect of dilutive stock options........                      111,880                                        110,418
                                         ----------       ------------                  ----------       ------------
Diluted net income per share:
  Net income available to
    common stockholders
    and assumed conversions............. $    8,220        18,590,034    $     .44      $    7,653        18,658,459    $     .41
                                         ==========       ============   ==========     ==========       ============   ==========

</TABLE>
Options to  purchase  207,349  and  415,186  shares for the three  months  ended
September  30,  2005 and 2004  were  not  included  in the  earnings  per  share
calculation because the exercise price exceeded the average market price.
<TABLE>
<CAPTION>

                                                                  Nine Months Ended September 30,
                                                          2005                                       2004
                                        ---------------------------------------    ---------------------------------------
                                                        Weighted-                                  Weighted-
                                                         Average      Per Share                     Average      Per Share
                                         Income          Shares         Amount         Income       Shares         Amount
                                         ----------   ------------   ----------     ----------   ------------   ----------
<S>                                      <C>          <C>            <C>             <C>          <C>           <C>
Basic net income per share:
  Net income available to
    common stockholders................. $   22,708    18,490,866    $    1.23      $   21,943    18,525,947    $    1.18
                                                                     ==========                                 ==========
Effect of dilutive stock options........                  115,042                                    123,632
                                         ----------   ------------                  ----------   ------------
Diluted net income per share:
  Net income available to
    common stockholders
    and assumed conversions............. $   22,708    18,605,908    $    1.22      $   21,943    18,649,579    $    1.18
                                         ==========   ============   ==========     ==========   ============   ==========


</TABLE>
Options  to  purchase  170,312  and  295,025  shares for the nine  months  ended
September  30,  2005 and 2004  were  not  included  in the  earnings  per  share
calculation because the exercise price exceeded the average market price.


                                                                         Page 12
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                          (Table dollars in thousands)
                                   (Unaudited)

Note 6.  Defined Benefit Pension Costs

     The Corporation has defined  benefit  pension plans covering  substantially
all  employees.  The plans  provide  benefits  that are based on the  employees'
compensation and years of service. The Corporation uses an actuarial calculation
to determine pension plan costs.

     In  January  2005,  the  Board of  Directors  of the  Corporation  approved
the  curtailment of the  accumulation  of defined  benefits for future  services
provided by certain participants in the First Merchants  Corporation  Retirement
Pension  Plan (the  "Plan").  Employees  of the  Corporation  and certain of its
subsidiaries  who are  participants in the Plan were notified that, on and after
March 1, 2005,  no additional  pension  benefits will be earned by employees who
have not both attained the age of fifty-five  (55) and accrued at least ten (10)
years of "Vesting Service". As a result of this action, the Corporation recorded
a $1,630,000  pension  curtailment loss to record previously  unrecognized prior
service  costs in  accordance  with  SFAS No.  88,  "Employers'  Accounting  for
Settlements  and  Curtailments  of  Defined  Benefit  Plans and for  Termination
Benefits." This loss was recognized and recorded by the Corporation in the first
quarter of 2005.

     The  following represents  the  pension  cost for the three and nine months
ended September 30, 2005.

<TABLE>
<CAPTION>
                                                               Three Months Ended             Nine Months Ended
                                                                  September 30,                 September 30,
                                                           ------------------------       ------------------------
                                                              2005          2004             2005          2004
                                                           ----------    ----------       ----------    ----------
Pension Cost
------------
<S>                                                        <C>           <C>              <C>           <C>
Service cost............................................   $      145    $      480       $      434    $    1,440

Interest cost ..........................................          658           697            1,974         2,091

Expected return on plan assets .........................         (768)         (701)          (2,305)       (2,103)

Amortization of the transition asset....................           (7)          (37)             (20)         (113)

Amortization of prior service cost......................            1            34                4           103

Amortization of the net loss............................           24            88               70           264

Curtailment loss........................................                                       1,630
                                                           ----------    ----------       ----------    ----------
      Total Pension Cost................................   $       53    $      561       $    1,787    $    1,682
                                                           ==========    ==========       ==========    ==========

</TABLE>

                                                                        Page 13
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
--------------

FORWARD-LOOKING STATEMENTS

     The Corporation  from  time  to time includes forward-looking statements in
its oral and written communication.  The Corporation may include forward-looking
statements in filings with the Securities and Exchange Commission,  such as this
Form 10-Q, in other  written  materials  and in oral  statements  made by senior
management to analysts, investors,  representatives of the media and others. The
Corporation intends these  forward-looking  statements to be covered by the safe
harbor  provisions  for  forward-looking  statements  contained  in the  Private
Securities  Litigation Reform Act of 1995, and the Corporation is including this
statement  for  purposes  of  these  safe  harbor  provisions.   Forward-looking
statements  can  often  be  identified  by the  use  of  words  like  "believe",
"continue",  "pattern",  "estimate", "project", "intend", "anticipate", "expect"
and similar expressions or future or conditional verbs such as "will",  "would",
"should",  "could",  "might",  "can",  "may",  or  similar  expressions.   These
forward-looking statements include:

     *  statements of the Corporation's goals, intentions and expectations;

     *  statements regarding the Corporation's business plan and growth
        strategies;

     *  statements regarding the asset quality of the Corporation's loan and
        investment portfolios; and

     *  estimates of the Corporation's risks and future costs and benefits.

     These   forward-looking  statements  are  subject  to  significant   risks,
assumptions  and  uncertainties,  including,  among other things,  the following
important factors which could affect the actual outcome of future events:

     *  fluctuations in market rates of interest and loan and deposit pricing,
        which could negatively affect the Corporation's net interest margin,
        asset valuations and expense expectations;

     *  adverse changes in the economy, which might affect the Corporation's
        business prospects and could cause credit-related losses and expenses;

     *  adverse developments in the Corporation's loan and investment
        portfolios;

     *  competitive factors in the banking industry, such as the trend towards
        consolidation in the Corporation's market;

     *  changes in the banking legislation or the regulatory requirements of
        federal and state agencies applicable to bank holding companies and
        banks like the Corporation's affiliate banks;

     *  acquisitions  of other businesses by the Corporation and integration of
        such acquired businesses;

     *  changes in market, economic, operational, liquidity, credit and interest
        rate risks  associated  with the  Corporation's business; and

     *  the  continued availability of  earnings and  excess  capital sufficient
        for the lawful and prudent declaration and payment of cash dividends.

     Because of these  and other uncertainties,  the Corporation's actual future
results may be materially different from the results indicated by these forward-
looking statements. In addition, the Corporation's past results of operations do
not necessarily indicate its future results.

                                                                         Page 14
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations  continued
------------------------

CRITICAL ACCOUNTING POLICIES

      Generally  accepted   accounting   principles   are  complex  and  require
management to apply significant  judgments to various accounting,  reporting and
disclosure  matters.  Management of the  Corporation  must use  assumptions  and
estimates to apply these principles where actual  measurement is not possible or
practical. For a complete discussion of the Corporation's significant accounting
policies,   see  "Notes  to  the  Consolidated   Financial  Statements"  in  the
Corporation's  2004 Annual  Report.  Certain  policies are  considered  critical
because  they  are  highly  dependent  upon  subjective  or  complex  judgments,
assumptions  and  estimates.  Changes in such  estimates  may have a significant
impact on the financial  statements.  Management has reviewed the application of
these policies with the Audit Committee of the Corporation's Board of Directors.
For a  discussion  of  applying  critical  accounting  policies,  see  "Critical
Accounting  Policies"  within the  Corporation's  2004  Annual Report.

BUSINESS SUMMARY

      The Corporation is a financial  holding company  headquartered in  Muncie,
Indiana.  Since its organization in 1982, the Corporation has grown to include 9
affiliate banks with 65 locations in 17 Indiana and 3 Ohio counties. In addition
to its branch network,  the Corporation's  delivery channels include ATMs, check
cards, interactive voice response systems and internet technology.

      The  Corporation's  business  activities  are  currently  limited  to  one
significant  business  segment,  which is community  banking.  The Corporation's
financial  service  affiliates  include  9  nationally  chartered  banks:  First
Merchants Bank, N.A., The Madison Community Bank, N.A., First United Bank, N.A.,
United  Communities  National Bank, First National Bank,  Decatur Bank and Trust
Company,  N.A.,  Frances Slocum Bank & Trust Company,  N.A.,  Lafayette Bank and
Trust Company, N.A. and Commerce National Bank. The banks provide commercial and
retail  banking  services.   In  addition,   the  Corporation's  trust  company,
multi-line  insurance  company and title company provide trust asset  management
services,  retail and commercial  insurance  agency services and title services,
respectively.

      Management believes that its  mission, guiding  principles  and  strategic
initiatives produce profitable growth for stockholders. Our vision is to satisfy
all the financial needs of our customers,  help them succeed  financially and be
recognized as the premier financial services company in our markets. Our primary
strategy  to  achieve  this  vision is to  increase  product  usage and focus on
providing  each customer  with all of the financial  products that fulfill their
needs. Our cross-sell strategy and diversified  business model facilitate growth
in strong and weak economic cycles.

      Management  believes  it  is  important  to  maintain  a  well  controlled
environment  as we continue to grow our  businesses.  Sound credit  policies are
maintained  and  have  resulted  in  declining   nonperforming   loans  and  net
charge-offs as a percentage of loans outstanding from the prior period. Interest
rate and market risks  inherent in our asset and liability  balances are managed
within  prudent  ranges,  while  ensuring  adequate  liquidity and funding.  Our
stockholder value has continued to increase due to customer satisfaction and the
balanced way we manage our business risk.

RESULTS OF OPERATIONS

        Net income for the three  months   ended   September  30, 2005,  equaled
$8,220,000,  compared to $7,653,000 in the same period of 2004. Diluted earnings
per share were $.44,  an increase of 7.3 percent from the $.41  reported for the
third quarter 2004.  The increase in earnings is primarily due to an increase in
net interest  margin,  which is partially offset by an increase of the provision
for loan  losses  during the period.  These  factors  are  discussed  within the
respective  sections  of  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations.

        Net  income  for  the  nine months  ended  September  30, 2005,  equaled
$22,708,000,  compared to  $21,943,000  during the same period in 2004.  Diluted
earnings per share were $1.22, a 3.4 percent increase from the $1.18 reported in
2004.  The increase in earnings is primarily  due to an increase in net interest
margin,  which is  partially  offset by an  increase of the  provision  for loan
losses  during the period.  These factors are  discussed  within the  respective
sections of  Management's  Discussion  and Analysis of Financial  Condition  and
Results of Operations.

        Annualized  returns  on average  assets and average stockholders' equity
for the three  months  ended  September  30,  2005,  were 1.03 percent and 10.38
percent,  respectively,  compared with .98 percent and 9.88 percent for the same
period of 2004.

                                                                         Page 15
<PAGE>
                           FIRST MERCHANTS CORPORATION
                                    FORM 10-Q

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations  continued
------------------------

RESULTS OF OPERATIONS  (continued)

        Annualized  returns  on  average assets and average stockholders' equity
for the nine months ended  September 30, 2005 were .95 percent and 9.62 percent,
respectively,  compared with .95 percent and 9.50 percent for the same period of
2004.

CAPITAL

         The Corporation's  regulatory  capital continues  to exceed  regulatory
"well  capitalized"  standards.  Tier I regulatory capital consists primarily of
total stockholders' equity and subordinated debentures issued to business trusts
categorized as qualifying borrowings,  less non-qualifying intangible assets and
unrealized net securities  gains.  The  Corporation's  Tier I capital to average
assets ratio was 7.7 percent at  September  30, 2005 and 7.5 percent at year end
2004.  In  addition,  at  September  30,  2005,  the  Corporation  had a  Tier I
risk-based  capital ratio of 9.8 percent and total  risk-based  capital ratio of
11.9 percent.  Regulatory capital guidelines require a Tier I risk-based capital
ratio of 4.0 percent and a total risk-based capital ratio of 8.0 percent.

         The  Corporation's  GAAP  capital ratio, defined as total stockholders'
equity to total  assets,  equaled  9.8  percent at  September  30,  2005 and 9.9
percent at December 31, 2004. When the Corporation  acquires other companies for
stock, GAAP capital increases by the entire amount of the purchase price.

         The   Corporation's   tangible   capital   ratio,   defined   as  total
stockholders'   equity  less  intangibles  net  of  tax  to  total  assets  less
intangibles  net of tax,  equaled 6.0 percent as of September 30, 2005,  and 5.9
percent at December 31, 2004.

         Management believes that all of the above capital ratios are meaningful
measurements  for  evaluating  the  safety  and  soundness  of the  Corporation.
Additionally, management  believes  the following  table is also meaningful when
considering  performance measures of  the  Corporation. The  table  details  and
reconciles tangible earnings per share, return on tangible capital and  tangible
assets to traditional GAAP measures.

                                             September 30,  December 31,
(Dollars in thousands)                           2005           2004

Average Goodwill ..........................  $   112,281    $   112,281
Average Core Deposit Intangible (CDI) .....       19,382         22,164
Average Deferred Tax on CDI ...............       (7,097)        (8,105)
                                             -----------    -----------
  Intangible Adjustment ...................  $   124,566    $   126,340
                                             ===========    ===========

Average Stockholders' Equity (GAAP Capital)  $   314,856    $   310,004
Intangible Adjustment .....................     (124,566)      (126,340)
                                             -----------    -----------
  Average Tangible Capital ................  $   190,290    $   183,664
                                             ===========    ===========

Average Assets ............................  $ 3,185,815    $ 3,109,104
Intangible Adjustment .....................     (124,566)      (126,340)
                                             -----------    -----------
  Average Tangible Assets .................  $ 3,061,249    $ 2,982,764
                                             ===========    ===========

Net Income ................................  $    22,708    $    29,411
CDI Amortization, net of tax ..............        1,474          2,133
                                             -----------    -----------
  Tangible Net Income .....................  $    24,182    $    31,544
                                             ===========    ===========

Diluted Earnings per Share ................  $      1.22    $      1.58
Diluted Tangible Earnings per Share .......  $      1.30    $      1.69

Return on Average GAAP Capital ............         9.62%          9.49%
Return on Average Tangible Capital ........        16.94%         17.49%

Return on Average Assets ..................         0.95%          0.95%
Return on Average Tangible Assets .........         1.05%          1.06%

                                                                         Page 16
<PAGE>
                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q


ASSET QUALITY/PROVISION FOR LOAN LOSSES

         The  Corporation's  primary  business focus is middle market commercial
and residential real estate,  auto and small consumer lending,  which results in
portfolio  diversification.  Management  ensures  that  appropriate  methods  to
understand and underwrite risk are utilized.  Commercial  loans are individually
underwritten and judgmentally  risk rated.  They are periodically  monitored and
prompt  corrective  actions are taken on deteriorating  loans.  Retail loans are
typically  underwritten with statistical  decision-making  tools and are managed
throughout their life cycle on a portfolio basis.

         The  allowance  for loan  losses  is maintained  through the  provision
for loan losses,  which is a charge against  earnings.  The amount  provided for
loan losses and the  determination of the adequacy of the allowance are based on
a continuous review of the loan portfolio,  including an internally administered
loan  "watch"  list and an  ongoing  loan  review.  The  evaluation  takes  into
consideration  identified credit problems,  as well as the possibility of losses
inherent in the loan portfolio that are not specifically identified.

         At  September 30,  2005,  non-performing  loans  totaled   $15,771,000,
a decrease of  $3,510,000  from December 31, 2004, as noted in Note 4. Loans and
Allowance,  included  within  the  Notes  to  Consolidated  Condensed  Financial
Statements of this Form 10-Q.

         At September 30, 2005, impaired loans totaled  $43,357,000, a  decrease
of  $6,054,000  from  December 31, 2004. At September 30, 2005, an allowance for
losses was not deemed necessary for impaired loans totaling $34,818,000,  but an
allowance of $2,427,000 was recorded for the remaining balance of impaired loans
of $8,538,000 and is included in the Corporation's allowance for loan losses.

         At December 31, 2004, impaired loans totaled $49,411,000.  An allowance
for losses was not deemed necessary for impaired loans totaling $41,683,000, but
an allowance of $1,673,000  was recorded for the  remaining  balance of impaired
loans of  $7,728,000  and is included in the  Corporation's  allowance  for loan
losses. The average balance of impaired loans for 2004 was $59,568,000.

         At September 30, 2005, the  allowance for loan  losses was $25,149,000,
an  increase  of  $2,601,000  from year end 2004.  As a  percent  of loans,  the
allowance was 1.03 percent at September 30, 2005 and .93 percent at December 31,
2004.  The allowance for loan losses  increased due to additional  provision for
loan losses expense recorded, which is discussed below.

         The  provision for  loan  losses  for  the  first nine  months of  2005
was $6,409,000, an increase of $1,937,000 from $4,472,000 for the same period in
2004. The Corporation's  provision for loan losses increased primarily due to an
increase in the five-year  rolling  historical  loan  charge-off  ratio utilized
within the Corporation's allowance for loan losses calculation.
                                                                         Page 17

<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
LIQUIDITY

      Liquidity management  is the process by which the Corporation ensures that
adequate liquid funds are available for the  Corporation  and its  subsidiaries.
These funds are necessary in order for the Corporation  and its  subsidiaries to
meet  financial  commitments  on  a  timely  basis.  These  commitments  include
withdrawals by  depositors,  funding  credit  obligations  to borrowers,  paying
dividends  to   shareholders,   paying  operating   expenses,   funding  capital
expenditures,  and  maintaining  deposit  reserve  requirements.   Liquidity  is
monitored  and  closely  managed  by  the  asset/liability  committees  at  each
subsidiary and by the Corporation's asset/liability committee.

      The  liquidity  of  the  Corporation  is  dependent  upon  the  receipt of
dividends from its bank  subsidiaries,  which are subject to certain  regulatory
limitations and access to other funding sources.  Liquidity of the Corporation's
bank  subsidiaries  is derived  primarily  from core deposit  growth,  principal
payments received on loans, the sale and maturity of investment securities,  net
cash provided by operating activities,  and access to other funding sources.

      The most stable  source of  liability-funded liquidity  for both the long-
term and short-term is deposit growth and retention in the core deposit base. In
addition,  the  Corporation  utilizes  advances from the Federal Home Loan Bank.
("FHLB")  and a revolving  line of credit  with  LaSalle  Bank,  N.A. as funding
sources.   At  September  30,  2005,   total   borrowings  from  the  FHLB  were
$231,448,000.  The Corporation's bank subsidiaries have pledged certain mortgage
loans and  certain  investments  to the  FHLB.  The  total  available  remaining
borrowing  capacity from the FHLB at September  30, 2005,  was  $90,126,000.  At
September 30, 2005, the Corporation's  revolving line of credit had a balance of
$13,500,000 and a remaining borrowing capacity of $6,500,000.

      The principal  source  of asset-funded  liquidity is investment securities
classified   as   available-for-sale,   the  market   values  of  which  totaled
$424,818,000  at September  30, 2005,  an increase of  $8,641,000 or 2.1 percent
over  December 31, 2004.  Securities  classified  as  held-to-maturity  that are
maturing  within a short  period  of time can  also be a  source  of  liquidity.
Securities  classified as held-to-maturity  and that are maturing in one year or
less totaled  $1,053,000  at September  30,  2005.  In addition,  other types of
assets  such as cash and due  from  banks,  federal  funds  sold and  securities
purchased under agreements to resell,  and loans and  interest-bearing  deposits
with other banks maturing within one year are sources of liquidity.

      In the  normal  course of business, the Corporation is a party to a number
of  other  off-balance   sheet  activities  that  contain  credit,   market  and
operational risk that are not reflected in whole or in part in the Corporation's
consolidated   financial  statements.   Such  activities  include:   traditional
off-balance  sheet  credit-related  financial  instruments,   commitments  under
operating leases and long-term debt.

     The  Corporation  provides  customers with off-balance sheet credit support
through   loan   commitments   and   standby   letters  of  credit.   Summarized
credit-related financial instruments at September 30, 2005 are as follows:

                                                                At September 30,
(Dollars in thousands)                                                2005
================================================================================
Amounts of commitments:
Loan commitments to extend credit ............................... $  546,209
Standby letters of credit .......................................     27,462
                                                                  ----------
                                                                  $  573,671
                                                                  ==========

      Since  many  of  the  commitments are expected to expire unused or be only
partially  used, the total amount of unused  commitments in the preceding  table
does not necessarily represent future cash requirements.

     In addition to owned banking facilities, the Corporation has entered into a
number of long-term  leasing  arrangements to support the ongoing  activities of
the Corporation. The required payments under such commitments and long-term debt
at September 30, 2005 are as follows:
<TABLE>
<CAPTION>
                                2005       2006       2007       2008       2009      2010       Total
(Dollars in thousands)       remaining                                              and after
=======================================================================================================
<S>                          <C>        <C>        <C>        <C>        <C>        <C>        <C>
Operating leases .........   $    438   $  1,515   $  1,144   $    880   $    829   $  2,286   $  7,092
Long-term debt ...........     99,555     48,859     32,495     31,882     11,385    199,783    423,959
                             --------   --------   --------   --------   --------   --------   --------
Total ....................   $ 99,993   $ 50,374   $ 33,639   $ 32,762   $ 12,214   $202,069   $431,051
                             ========   ========   ========   ========   ========   ========   ========
</TABLE>
                                                                         Page 18
<PAGE>
                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

INTEREST SENSITIVITY AND DISCLOSURES ABOUT MARKET RISK

         Asset/Liability   Management  has  been  an  important  factor  in  the
Corporation's  ability to record  consistent  earnings growth through periods of
interest rate volatility and product  deregulation.  Management and the Board of
Directors monitor the Corporation's liquidity and interest sensitivity positions
at regular meetings to review how changes in interest rates may affect earnings.
Decisions regarding  investment and the pricing of loan and deposit products are
made after analysis of reports designed to measure liquidity,  rate sensitivity,
the Corporation's  exposure to changes in net interest income given various rate
scenarios and the economic and competitive environments.

         It  is  the  objective  of the  Corporation to monitor and  manage risk
exposure to net interest  income caused by changes in interest  rates. It is the
goal of the Corporation's Asset Liability function to provide optimum and stable
net interest  income.  To accomplish  this,  management uses two asset liability
tools.  GAP/Interest Rate Sensitivity Reports and Net Interest Income Simulation
Modeling are both constructed, presented, and monitored quarterly.

         Management  believes  that  the  Corporation's  liquidity  and interest
sensitivity  position  at  September  30,  2005,  remained  adequate to meet the
Corporation's  primary goal of achieving optimum interest margins while avoiding
undue interest rate risk.

         The  Corporation  places  its  greatest credence in net interest income
simulation modeling. The GAP/Interest Rate Sensitivity Report is believed by the
Corporation's  management to have two major  shortfalls.  The GAP/Interest  Rate
Sensitivity Report fails to precisely gauge how often an interest rate sensitive
product reprices, nor is it able to measure the  magnitude  of potential  future
rate movements.

         Net interest  income simulation modeling, or earnings-at-risk, measures
the sensitivity of net interest income to various  interest rate movements.  The
Corporation's  asset liability  process  monitors  simulated net interest income
under  three  separate  interest  rate  scenarios;  base,  rising  and  falling.
Estimated net interest  income for each  scenario is calculated  over a 12-month
horizon.  The immediate  and parallel  changes to the base case scenario used in
the  model  are  presented  below.  The  interest  rate  scenarios  are used for
analytical purposes and do not necessarily represent management's view of future
market movements.  Rather, these are intended to provide a measure of the degree
of  volatility  interest rate  movements may introduce  into the earnings of the
Corporation.

         The base  scenario is highly dependent on numerous assumptions embedded
in the model,  including assumptions related to future interest rates. While the
base sensitivity  analysis  incorporates  management's best estimate of interest
rate and balance sheet dynamics under various market rate movements,  the actual
behavior and resulting  earnings  impact will likely differ from that projected.
For  mortgage-related  assets,  the base simulation  model captures the expected
prepayment  behavior under changing interest rate environments.  Assumptions and
methodologies  regarding the interest rate or balance  behavior of indeterminate
maturity products,  e.g., savings, money market, NOW and demand deposits reflect
management's best estimate of expected future behavior.

                                                                         Page 19
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

     The comparative  rising and  falling  scenarios for the period ended August
31, 2006 assume further interest rate changes in addition to the base simulation
discussed  above.  These changes are immediate and parallel  changes to the base
case scenario.  In addition,  total rate movements (beginning point minus ending
point) to each of the various  driver rates  utilized by  management in the base
simulation for the period ended August 31, 2006 are as follows:

Driver Rates            RISING             FALLING
=============================================================
Prime                   200 Basis Points   (200) Basis Points
Federal Funds           200                (200)
One-Year CMT            200                (200)
Two-Year CMT            200                (200)
CD's                    200                 (91)
FHLB Advances           200                (200)

     Results for  the base,  rising  and falling  interest  rate  scenarios  are
listed below, based upon the Corporation's rate sensitive assets and liabilities
at August 31, 2005.  The net interest  income shown  represents  cumulative  net
interest income over a 12-month time horizon. Balance sheet assumptions used for
the base scenario are the same for the rising and falling simulations.

                                              BASE     RISING    FALLING
                                                (Dollars in thousands)
=========================================================================
Net Interest Income                         $106,411  $110,914   $100,179

Variance from base                                    $  4,504   $ (6,232)

Percent of change from base                               4.2%     (5.9)%

     The comparative rising and falling  scenarios for the period ended December
31, 2005 assume further interest rate changes in addition to the base simulation
discussed  above.  These changes are immediate and parallel  changes to the base
case scenario.  In addition,  total rate movements (beginning point minus ending
point) to each of the various  driver rates  utilized by  management in the base
simulation for the period ended December 31, 2005 are as follows:

Driver Rates            RISING             FALLING
=============================================================
Prime                   200 Basis Points   (200) Basis Points
Federal Funds           200                (200)
One-Year CMT            200                (200)
Two-Year CMT            200                (200)
CD's                    200                 (74)
FHLB Advances           200                (200)

     Results for the base, rising and falling interest rate scenarios are listed
below. The net interest income shown  represents  cumulative net interest income
over a  12-month  time  horizon.  Balance  sheet  assumptions  used for the base
scenario are the same for the rising and falling simulations.

                                              BASE     RISING    FALLING
                                                (Dollars in thousands)
=========================================================================
Net Interest Income                         $109,311  $117,212   $ 97,757

Variance from base                                    $  7,901   $(11,554)

Percent of change from base                                7.2%     (10.6)%

                                                                         Page 20
<PAGE>


                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

EARNING ASSETS

     The  following  table  presents  the  earning  asset  mix  as  of September
30, 2005, and December 31, 2004.

     Loans  increased  approximately  $8,641,000  from  December  31,  2004   to
September  30,  2005,  and  investment  securities  increased  by  approximately
$15,259,000  during the same  period.  Real  estate  construction,  real  estate
commercial and farmland,  commercial and industrial  loans, tax exempt loans and
other loans increased approximately  $48,419,000 during the first nine months of
2005 as  compared  to the  balances  outstanding  at December  31,  2004.  These
increases  were  offset  by  a  $30,880,000   decline  in  agricultural   loans,
residential real estate loans, leases and loans to individuals.

<TABLE>

----------------------------------------------------------------------------------------------------
EARNING ASSETS
(Dollars in thousands)                                         September 30,            December 31,
                                                                   2005                     2004
----------------------------------------------------------------------------------------------------
<S>                                                            <C>                     <C>
Federal funds sold and interest-bearing time deposits          $   10,708               $    9,343

Investment securities available for sale ............             424,818                  416,177

Investment securities held to maturity ..............              11,976                    5,358

Mortgage loans held for sale ........................               5,026                    3,367

Loans ...............................................           2,443,931                2,428,051

Federal Reserve and Federal Home Loan Bank stock                   23,165                   22,858
                                                               ----------               ----------

                     Total ..........................          $2,919,624               $2,885,154
                                                               ==========               ==========

</TABLE>
--------------------------------------------------------------------------------
DEPOSITS AND BORROWINGS

         The  table  below  reflects  the  level of  deposits and borrowed funds
(federal  funds  purchased;   repurchase  agreements;  Federal  Home  Loan  Bank
advances;  and subordinated  debentures,  revolving credit lines and term loans)
based on period ending amounts as of September 30, 2005 and December 31, 2004.

(Dollars in thousands)                             September 30,   December 31,
                                                       2005           2004
                                                    ----------     ----------
Deposits ........................................   $2,465,293     $2,408,150
Federal funds purchased..........................       19,450         32,550
Securities sold under repurchase agreements......       70,605         87,472
Federal Home Loan Bank advances .................      231,448        223,663
Subordinated debentures, revolving credit lines
   and term loans................................      102,456         97,206
                                                    ----------     ----------
                                                    $2,889,252     $2,849,041
                                                    ==========     ==========

The Corporation has continued to leverage its capital position with Federal Home
Loan Bank advances,  as well as repurchase  agreements which are pledged against
acquired  investment  securities as collateral for the borrowings.  The interest
rate risk is included as part of the Corporation's interest simulation discussed
in  Management's  Discussion and Analysis of Financial  Condition and Results of
Operations  under  the  headings  "LIQUIDITY"  and  "INTEREST   SENSITIVITY  AND
DISCLOSURES ABOUT MARKET RISK".

                                                                         Page 21
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

NET INTEREST INCOME

         Net  Interest  Income  is  the  primary  source  of  the  Corporation's
earnings.  It is a  function  of net  interest  margin  and the level of average
earning  assets.  The table  below  presents  the  Corporation's  asset  yields,
interest expense, and net interest income as a percent of average earning assets
for the three and nine months ended September 30, 2005 and 2004.

         During the nine months ended September 30, 2005, asset yields increased
44 basis points (FTE) and interest costs increased 37 basis points resulting  in
a seven  basis point (FTE)  increase in net  interest  income as compared to the
same period in 2004. The improvement in margin was primarily a result of five 25
basis point  overnight  federal funds rate  increases by the Federal Open Market
Committee during this period. As a result, the Corporation's prime lending rates
increased  accordingly,  while  offsetting  deposit  rate  increases  were  less
significant.


<TABLE>
                                                            Three Months Ended         Nine Months Ended
                                                               September 30,             September 30,
                                                        ------------------------    ------------------------
(Dollars in Thousands)                                      2005          2004          2005          2004
                                                        ----------    ----------    ----------    ----------
<S>                                                     <C>           <C>           <C>           <C>
Annualized Net Interest Income........................  $  112,560    $  107,168    $  110,670    $  104,362

Annualized FTE Adjustment.............................  $    3,781    $    3,924    $    3,723    $    3,569

Annualized Net Interest Income
  On a Fully Taxable Equivalent Basis.................  $  116,341    $  111,092    $  114,393    $  107,931

Average Earning Assets................................  $2,908,431    $2,818,392    $2,891,142    $2,772,189

Interest Income (FTE) as a Percent
  of Average Earning Assets...........................        6.40%         5.79%         6.15%         5.71%

Interest Expense as a Percent
  of Average Earning Assets...........................        2.40%         1.85%         2.19%         1.82%

Net Interest Income (FTE) as a Percent
  of Average Earning Assets...........................        4.00%         3.94%         3.96%         3.89%


Average earning assets include the average  balance of securities  classified as
available for sale,  computed based on the average of the  historical  amortized
cost  balances  without the effects of the fair value  adjustment.  In addition,
annualized amounts are computed utilizing a 30/360 day basis.

</TABLE>

                                                                         Page 22
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
OTHER INCOME

         Other income in the third quarter of 2005  was $369,000 or 4.4  percent
higher than the same  quarter of 2004.  Most of the increase  was  related to an
increase in fees for debit card usage.

         Other  income  in  the  first nine months of  2005  was $705,000 or 2.7
percent higher than the same period of 2004.

Four items primarily account for the change:

1.       Insurance commissions increased by $714,000, due to the receipt of
         larger profit sharing payments from insurance underwriters, as compared
         to the same period in 2004.

2.       An increase of $542,000 in fees for debit card usage.

3.       A cash payment was received of approximately $232,000, related to the
         Corporation's membership in a credit card network that was merged with
         another card network.

4.       Gains on loan sales decreased by $697,000 or 32.4 percent from the
         same period in 2004 as stabilizing mortgage rates caused reduced volume
         from refinancing of mortgage loans.

OTHER EXPENSES

         Total  other  expenses   represent   non-interest   expenses   of   the
Corporation.  Total other  expenses  during the third  quarter of 2005 increased
from the third quarter of 2004 by $511,000 or 2.2 percent.

         Other  expense  in the first  nine months of 2005 was $2,755,000 or 4.1
percent higher than the same period in 2004.

Two areas account for most of the change:

1.       A pension accounting loss, totaling approximately $1,630,000, recorded
         during the first quarter of 2005.  The loss resulted from the
         curtailment of the accumulation of defined benefits in the
         Corporation's defined benefit pension plan.

2.       In 2004, the Corporation reversed an accrual of $260,000 on a claim
         that was settled for less than the accrued amount causing a reduction
         in other expenses in the second quarter of 2004.

                                                                         Page 23
<PAGE>


                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

INCOME TAXES

         Income  tax  expense, for  the nine  months  ended  September 30, 2005,
decreased by $20,000 from the same period in 2004.  The  effective  tax rate was
30.0 and 30.8 percent for the 2005 and 2004 periods.

OTHER

         The  Securities  and  Exchange  Commission  maintains  a Web  site that
contains  reports,  proxy  and  information  statements  and  other  information
regarding  registrants that file electronically  with the Commission,  including
the Corporation, and that address is (http://www.sec.gov).


Item 3.  Quantitative and Qualitative Disclosures About Market Risk
-------------------------------------------------------------------

         The  information  required  under  this  item  is  included  as part of
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations,  under  the  headings  "LIQUIDITY"  and  "INTEREST  SENSITIVITY  AND
DISCLOSURES ABOUT MARKET RISK".

Item 4.  Controls and Procedures
-------------------------------------------------------------------

         At  the  end  of  the  period  covered  by this report, the Corporation
carried out an evaluation,  under the supervision and with the  participation of
the  Corporation's  management,  including  the  Corporation's  Chief  Executive
Officer and Chief  Financial  Officer,  of the  effectiveness  of the design and
operation  of  it's  disclosure   controls  and  procedures.   Based  upon  that
evaluation,  the  Corporation's  Chief  Executive  Officer  and Chief  Financial
Officer concluded that the Corporation's  disclosure controls and procedures are
effective.  Disclosure  controls and procedures are controls and procedures that
are designed to ensure that information  required to be disclosed in Corporation
reports  filed  or  submitted  under  the  Securities  Exchange  Act of  1934 is
recorded,  processed,  summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms.

         There have been no changes in the Corporation's internal  controls over
financial  reporting  identified in connection  with the  evaluation  referenced
above that  occurred  during the  Corporation's  last fiscal  quarter  that have
materially  affected,   or  is  reasonably  likely  to  materially  affect,  the
Corporation's internal control over financial reporting.

                                                                         Page 24
<PAGE>
                           FIRST MERCHANTS CORPORATION
                                    FORM 10-Q
                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings
--------------------------

         None

Item 2.  Unregistered Sales of Equity
         Securities and Use of Proceeds
---------------------------------------------------

         a.  On September 1, 2005, the Corporation issued 16,762 unregistered
             shares of its common stock pursuant to a Merger Agreement dated
             September 1, 2005, between the Corporation, First Merchants
             Insurance Services, Inc. and Trustcorp Financial Services of
             Greenville, Inc. ("Trustcorp").  The Corporation issued the
             unregistered shares to the shareholders of Trustcorp, at a value of
             $25.95 per share, in exchange for all the common stock of
             Trustcorp.  The issuance by the Corporation of its shares of common
             stock were not registered under the Securities Act of 1933, as
             amended ("Securities Act").  The shares were issued pursuant to the
             exemption contemplated in Section 4 (2) of the Securities Act, for
             transactions not involving a public offering.

         b.  None

         c.  Issuer Purchases of Equity Securities

The following table presents information relating to the Corporation's purchases
of its equity  securities  during the  quarter  ended  September  30,  2005,  as
follows(1):
<TABLE>
<CAPTION>
                                                                                              MAXIMUM NUMBER OF
                                                                   TOTAL NUMBER OF           SHARES THAT MAY YET
                        TOTAL NUMBER OF     AVERAGE PRICE     SHARES PURCHASED AS PART        BE PURCHASED UNDER
      PERIOD            SHARES PURCHASED    PAID PER SHARE    OF BOARD AUTHORIZATION(1)      BOARD AUTHORIZATION(1)
      ------            ----------------    --------------    -------------------------    ------------------------
<S>                     <C>                 <C>               <C>                          <C>
07/01/05 - 07/31/05           5,967(2)          $26.67                    0                           0
08/01/05 - 08/31/05             693(2)          $26.00                    0                           0
09/01/05 - 09/30/05               0                0                      0                           0
</TABLE>

(1) On  February 8, 2005,  the  Corporation's  Board  authorized  management  to
repurchase up to 250,000 shares of the  Corporation's  Common Stock. On June 14,
2005 and  August 9, 2005,  the  Corporation's  Board  authorized  management  to
repurchase  additional shares of the Corporation's Common Stock,  totaling 6,500
and  243,500  shares,  respectively.  These  authorizations  were  not  publicly
announced and expire February 14, 2006. There were 243,500 remaining shares that
may yet be purchased pursuant to such authorizations as of September 30, 2005.

(2) All  shares  were  purchased  in  connection  with the  exercise  of certain
outstanding options.

Item 3.  Defaults Upon Senior Securities
----------------------------------------

         None

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

         None

Item 5.  Other Information
--------------------------

         a.  None

         b.  None
                                                                        Page 25
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

                           PART II. OTHER INFORMATION


Item 6.  Exhibits
-----------------------------------------

             Exhibit No.:       Description of Exhibit:      Form 10-Q Page No.:
             ------------       -------------------------    -------------------

                31.1            Certification of Chief               29
                                Executive Officer Pursuant
                                to Section 302 of the
                                Sarbanes - Oxley Act of
                                2002

                31.2            Certification of Chief               30
                                Financial Officer Pursuant
                                to Section 302 of the
                                Sarbanes - Oxley Act of
                                2002

                32              Certifications Pursuant to           31
                                18 U.S.C. Section 1350, as
                                Adopted Pursuant to Section
                                906 of the Sarbanes-Oxley
                                Act of 2002


                                                                         Page 26


<PAGE>


                          FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

                                   SIGNATURES

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

                                          First Merchants Corporation
                                          ---------------------------
                                                   (Registrant)


Date: November 9, 2005                  by /s/ Michael L. Cox
     --------------------------            -------------------------------------
                                           Michael L. Cox
                                           President and Chief Executive Officer


Date: November 9, 2005                  by /s/ Mark K. Hardwick
     --------------------------            -------------------------------------
                                           Mark K. Hardwick
                                           Senior Vice President and
                                           Chief Financial Officer
                                           (Principal Financial and Chief
                                           Accounting Officer)


                                                                         Page 27

<PAGE>
                          FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

                               INDEX TO EXHIBITS

INDEX TO EXHIBITS

      (a)3.  Exhibits:

             Exhibit No.:       Description of Exhibit:      Form 10-Q Page No.:
             ------------       -------------------------    -------------------

                31.1            Certification of Chief               29
                                Executive Officer Pursuant
                                to Section 302 of the
                                Sarbanes - Oxley Act of
                                2002

                31.2            Certification of Chief               30
                                Financial Officer Pursuant
                                to Section 302 of the
                                Sarbanes - Oxley Act of
                                2002

                32              Certifications Pursuant to           31
                                18 U.S.C. Section 1350, as
                                Adopted Pursuant to Section
                                906 of the Sarbanes-Oxley
                                Act of 2002


                                                                         Page 28

<PAGE>

                                  EXHIBIT-31.1

                           FIRST MERCHANTS CORPORATION

                                   FORM 10-Q
                           CERTIFICATIONS PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION
-------------

I, Michael L. Cox,  President  and Chief  Executive  Officer of First  Merchants
Corporation, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of First Merchants
       Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement
       of a material fact or omit to state a material fact necessary to make the
       statements made, in light of the circumstances under which such
       statements were made, not misleading with respect to the period covered
       by this report;

3.     Based on my knowledge, the financial statements, and other financial
       information included in this report, fairly present in all material
       respects the financial condition, results of operations and cash flows of
       the registrant as of, and for, the periods presented in this report;

4.     The registrant's other certifying officer and I are responsible for
       establishing and maintaining disclosure controls and procedures (as
       defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
       control over financial reporting (as defined in the Exchange Act Rules
       13a-15(f) and 15d-15(f)) for the registrant and have:

       (a) Designed such disclosure controls and procedures, or caused such
           disclosure controls and procedures to be designed under our
           supervision, to ensure that material information relating to the
           registrant, including its consolidated subsidiaries, is made known to
           us by others within those entities, particularly during the period in
           which this report is being prepared;

       (b) Designed such internal control over financial reporting, or caused
           such internal control over financial reporting to be designed under
           our supervision, to provide reasonable assurance regarding the
           reliability of financial reporting and the preparation of financial
           statements for external purposes in accordance with generally
           accepted accounting principles;

       (c) Evaluated the effectiveness of the registrant's disclosure controls
           and procedures and presented in this report our conclusions about the
           effectiveness of the disclosure controls and procedures, as of the
           end of the period covered by this report, based on such evaluation;
           and

       (d) Disclosed in this report any change in the registrant's internal
           control over financial reporting that occurred during the
           registrant's most recent fiscal quarter (the registrant's fourth
           fiscal quarter in the case of an annual report) that has materially
           affected, or is reasonably likely to materially affect, the
           registrant's internal control over financial reporting; and

5.     The registrant's other certifying officer and I have disclosed, based on
       our most recent evaluation of internal control over financial reporting,
       to the registrant's auditors and the audit committee of the registrant's
       board or directors (or persons performing the equivalent functions):

       (a) All significant deficiencies and material weaknesses in the design or
           operation of internal control over financial reporting which are
           reasonably likely to adversely affect the registrant's ability to
           record, process, summarize and report financial information; and

       (b) Any fraud, whether or not material, that involves management or other
           employees who have a significant role in the registrant's internal
           control over financial reporting.

Date: November 9, 2005                  /s/Michael L. Cox
                                        ----------------------------------------
                                           Michael L. Cox
                                           President and Chief Executive Officer

                                                                         Page 29
<PAGE>
                                  EXHIBIT-31.2

                           FIRST MERCHANTS CORPORATION

                                   FORM 10-Q
                           CERTIFICATIONS PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION
-------------

I, Mark K. Hardwick,  Senior Vice President and Chief Financial Officer of First
Merchants Corporation, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of First Merchants
       Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement
       of a material fact or omit to state a material fact necessary to make the
       statements made, in light of the circumstances under which such
       statements were made, not misleading with respect to the period covered
       by this report;

3.     Based on my knowledge, the financial statements, and other financial
       information included in this report, fairly present in all material
       respects the financial condition, results of operations and cash flows of
       the registrant as of, and for, the periods presented in this report;

4.     The registrant's other certifying officer and I are responsible for
       establishing and maintaining disclosure controls and procedures (as
       defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
       control over financial reporting (as defined in the Exchange Act Rules
       13a-15(f) and 15d-15(f)) for the registrant and have:

       (a) Designed such disclosure controls and procedures, or caused such
           disclosure controls and procedures to be designed under our
           supervision, to ensure that material information relating to the
           registrant, including its consolidated subsidiaries, is made known to
           us by others within those entities, particularly during the period in
           which this report is being prepared;

       (b) Designed such internal control over financial reporting, or caused
           such internal control over financial reporting to be designed under
           our supervision, to provide reasonable assurance regarding the
           reliability of financial reporting and the preparation of financial
           statements for external purposes in accordance with generally
           accepted accounting principles;

       (c) Evaluated the effectiveness of the registrant's disclosure controls
           and procedures and presented in this report our conclusions about the
           effectiveness of the disclosure controls and procedures, as of the
           end of the period covered by this report, based on such evaluation;
           and

       (d) Disclosed in this report any change in the registrant's internal
           control over financial reporting that occurred during the
           registrant's most recent fiscal quarter (the registrant's fourth
           fiscal quarter in the case of an annual report) that has materially
           affected, or is reasonably likely to materially affect, the
           registrant's internal control over financial reporting; and

5.     The registrant's other certifying officer and I have disclosed, based on
       our most recent evaluation of internal control over financial reporting,
       to the registrant's auditors and the audit committee of the registrant's
       board or directors (or persons performing the equivalent functions):

       (a) All significant deficiencies and material weaknesses in the design or
           operation of internal control over financial reporting which are
           reasonably likely to adversely affect the registrant's ability to
           record, process, summarize and report financial information; and

       (b) Any fraud, whether or not material, that involves management or other
           employees who have a significant role in the registrant's internal
           control over financial reporting.

Date: November 9, 2005                  /s/Mark K. Hardwick
                                        ----------------------------------------
                                           Mark K. Hardwick
                                           Senior Vice President and
                                           Chief Financial Officer
                                           (Principal Financial  and Chief
                                           Accounting Officer)

                                                                         Page 30
<PAGE>

                                  EXHIBIT-32

                           CERTIFICATIONS PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection  with the quarterly  report of First  Merchants  Corporation  (the
"Corporation")  on Form 10-Q for the period  ending  September 30, 2005 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"), I
Michael L. Cox,  President and Chief Executive  Officer of the  Corporation,  do
hereby certify,  in accordance with 18 U.S.C.  Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:

        (1) The Report fully complies with the requirements of  section 13(a) or
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o (d)); and

        (2) The  information  contained  in  the  Report fairly presents, in all
material  respects,  the  financial  condition  and results of operations of the
Corporation.

Date: November 9, 2005                  by /s/ Michael L. Cox
    ---------------------------            -------------------------------------
                                           Michael L. Cox
                                           President and Chief Executive Officer

A  signed  copy of this  written  statement  required  by  Section  906 has been
provided to First Merchants  Corporation and will be retained by First Merchants
Corporation and furnished to the Securities and Exchange Commission or its staff
upon request.



In connection  with the quarterly  report of First  Merchants  Corporation  (the
"Corporation")  on Form 10-Q for the period  ending  September 30, 2005 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"), I
Mark K.  Hardwick,  Senior Vice  President  and Chief  Financial  Officer of the
Corporation,  do hereby certify,  in accordance with 18 U.S.C.  Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

        (1) The Report fully  complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o (d)); and

        (2) The  information  contained  in  the  Report fairly presents, in all
material  respects,  the  financial  condition  and results of operations of the
Corporation.

Date: November 9, 2005                  by /s/ Mark K. Hardwick
    ---------------------------            -------------------------------------
                                           Mark K. Hardwick
                                           Senior Vice President and
                                           Chief Financial Officer
                                           (Principal Financial and Chief
                                           Accounting Officer)

A  signed  copy of this  written  statement  required  by  Section  906 has been
provided to First Merchants  Corporation and will be retained by First Merchants
Corporation and furnished to the Securities and Exchange Commission or its staff
upon request.


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