SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

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

                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2003

                                       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 office)                            (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 [ ]

As of October 31, 2003, there were 18,489,892 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.........................16

 Item 3.          Quantitative and Qualitative Disclosures About
                  Market Risk.................................................27

 Item 4.          Controls and Procedures.....................................27

PART II. Other Information:

 Item 1.          Legal Proceedings...........................................28

 Item 2.          Changes in Securities and Use of Proceeds...................28

 Item 3.          Defaults Upon Senior Securities.............................28

 Item 4.          Submission of Matters to a Vote of Security Holders.........28

 Item 5.          Other Information...........................................28

 Item 6.          Exhibits and Reports of Form 8-K............................29

 Signatures...................................................................31

 Exhibit Index................................................................32


                                                                          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,
                                                                       2003           2002
                                                                   ------------   ------------
                                                                    (Unaudited)
  <S>                                                               <C>            <C>
  ASSETS:
  Cash and due from banks .......................................   $    87,619    $    87,638
  Federal funds sold ............................................                       31,400
                                                                    -----------    -----------
    Cash and cash equivalents ...................................        87,619        119,038
  Interest-bearing deposits......................................         3,789          3,568
  Investment securities available for sale ......................       308,832        332,925
  Investment securities held to maturity ........................         8,020          9,137
  Mortgage loans held for sale...................................        12,042         21,545
  Loans, net of allowance for loan losses of $29,842 and $22,417.     2,321,563      1,981,960
  Premises and equipment ........................................        39,475         38,645
  Federal Reserve and Federal Home Loan Bank Stock...............        14,057         11,409
  Interest receivable ...........................................        17,139         17,346
  Goodwill ......................................................       118,679         87,640
  Core deposit intangibles ......................................        24,969         19,577
  Cash surrender value of life insurance.........................        37,536         14,309
  Other assets ..................................................        18,000         21,588
                                                                    -----------    -----------
      Total assets ..............................................   $ 3,011,720    $ 2,678,687
                                                                    ===========    ===========
  LIABILITIES:
  Deposits:
    Noninterest-bearing .........................................   $   316,058    $   272,128
    Interest-bearing ............................................     1,994,146      1,764,560
                                                                    -----------    -----------
      Total deposits ............................................     2,310,204      2,036,688
  Borrowings ....................................................       374,051        356,927
  Interest payable ..............................................         5,200          6,019
  Other liabilities..............................................        21,064         17,924
                                                                    -----------    -----------
      Total liabilities .........................................     2,710,519      2,417,558

  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 - 18,487,974 and 17,138,885 shares....         2,311          2,142
  Additional paid-in capital ....................................       149,810        116,401
  Retained earnings .............................................       147,559        138,110
  Accumulated other comprehensive income ........................         1,521          4,476
                                                                    -----------    -----------
      Total stockholders' equity ................................       301,201        261,129
                                                                    -----------    -----------
      Total liabilities and stockholders' equity .                  $ 3,011,720    $ 2,678,687
                                                                    ===========    ===========
</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,
<S>                                                               <C>          <C>
                                                                    2003        2002         2003        2002
Interest Income:
  Loans receivable
    Taxable ...................................................   $35,607     $35,362     $106,539     $94,504
    Tax exempt ................................................       185         169          512         403
  Investment securities
    Taxable ...................................................     1,342       2,442        4,621       6,986
    Tax exempt ................................................     1,562       1,793        4,819       4,450
  Federal funds sold ..........................................        49         123          339         388
  Deposits with financial institutions ........................        13          53           54         159
  Federal Reserve and Federal Home Loan Bank stock ............       201         206          610         527
                                                                  -------     -------     --------     -------
      Total interest income ...................................    38,959      40,148      117,494     107,417
                                                                  -------     -------     --------     -------
Interest expense:
  Deposits ....................................................     8,623      10,696       26,555      29,766
  Borrowings ..................................................     4,462       4,124       13,100       9,863
                                                                  -------     -------      -------     -------
    Total interest expense ....................................    13,085      14,820       39,655      39,629
                                                                  -------     -------      -------     -------
Net Interest Income ...........................................    25,874      25,328       77,839      67,788
Provision for loan losses .....................................     1,706       1,821        8,430       4,297
                                                                  -------     -------      -------     -------
Net Interest Income After Provision for Loan Losses ...........    24,168      23,507       69,409      63,491
                                                                  -------     -------      -------     -------
Other Income:
  Net realized gains on sales of available-for-sale securities.       512         162          950         570
  Other income ................................................     8,364       7,484       27,365      19,291
                                                                  -------     -------      -------     -------
Total other income ............................................     8,876       7,646       28,315      19,861
Total other expenses ..........................................    22,960      19,187       67,336      51,129
                                                                  -------     -------      -------     -------
Income before income tax ......................................    10,084      11,966       30,388      32,223
Income tax expense ............................................     2,735       4,139        8,636      10,983
                                                                  -------     -------      -------     -------
Net Income ....................................................   $ 7,349     $ 7,827      $21,752     $21,240
                                                                  =======     =======      =======     =======

Per share:(1)

    Basic .....................................................   $   .40     $   .47      $  1.20     $  1.32
    Diluted ...................................................       .39         .46         1.19        1.31
    Dividends .................................................       .23         .22          .67         .66

(1) Prior period per share amounts have been restated for the 5% stock  dividend
paid in September, 2003.

</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
                                                                                 ----------------------       ----------------------
                                                                                    2003         2002           2003         2002
                                                                                 ---------    ---------       ---------    ---------
<S>                                                                              <C>          <C>            <C>          <C>
Net Income...................................................................... $  7,349     $  7,827       $21,752      $ 21,240

Other comprehensive income, net of tax:
  Unrealized gains on securities available for sale:
    Unrealized holding gains (losses) arising during the period, net of
      income tax (expense) benefit of $2,753, $(1,563), $1,590, and $(2,739)....   (4,129)       2,345        (2,385)        4,109
    Less:  Reclassification adjustment for gains included
      in net income, net of income tax expense of $205 $65, $380 and $228.......      307           97           570           342
                                                                                 ---------    ---------      ---------    ---------
                                                                                   (4,436)       2,248        (2,955)        3,767
                                                                                 ---------    ---------      ---------    ---------
Comprehensive income............................................................ $  2,913     $ 10,075       $18,797      $ 25,007
                                                                                 =========    =========      =========    =========

</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>
                                                                      2003         2002
                                                                   ---------    ---------
<S>                                                                <C>          <C>
Balances, January 1 ............................................   $ 261,129    $ 179,128

Net income .....................................................      21,752       21,240

Cash dividends .................................................     (12,302)     (10,243)

Other comprehensive income (loss), net of tax...................      (2,955)       3,767

Stock issued under employee benefits plans......................         819          658

Stock issued under dividend reinvestment and stock purchase plan         887          686

Stock options exercised ........................................         838          458

Stock Redeemed .................................................        (301)      (4,333)

Issuance of stock in acquisitions...............................      31,218       68,547

Cash paid in lieu of fractional shares..........................         116          (35)
                                                                   ---------    ---------

Balances, September 30 .........................................   $ 301,201    $ 259,873
                                                                   =========    =========
</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,
                                                                                     ----------------------------------
                                                                                          2003               2002
                                                                                     ----------------   ---------------
<S>                                                                                  <C>                <C>
Cash Flows From Operating Activities:
  Net income........................................................................  $       21,752    $        21,240
  Adjustments to reconcile net income to net cash provided by operating activities
    Provision for loan losses.......................................................           8,430              4,297
    Depreciation and amortization...................................................           3,495              4,969
    Mortgage loans originated for sale..............................................        (190,639)           (78,607)
    Proceeds from sales of mortgage loans...........................................         200,142             72,384
    Change in interest receivable...................................................           1,069               (513)
    Change in interest payable......................................................          (1,175)              (524)
    Other adjustments   ............................................................             564             (6,657)
                                                                                      ----------------  ----------------
      Net cash provided by operating activities.....................................  $       43,638    $        16,589
                                                                                      ----------------  ----------------


Cash Flows From Investing Activities:
  Net change in interest-bearing deposits...........................................            (221)             4,075
  Purchases of
    Securities available for sale...................................................        (188,244)          (105,594)
  Proceeds from maturities of
    Securities available for sale...................................................         144,172             91,640
    Securities held to maturity.....................................................                              2,935
  Proceeds from sales of
    Securities available for sale...................................................          58,245             16,908
  Net change in loans...............................................................         (49,331)           (87,704)
  Net cash received (paid) in acquisitions..........................................          (7,793)           (12,532)
  Other adjustments.................................................................          (3,207)            (4,582)
                                                                                      ----------------  ----------------
    Net cash provided (used) by investing activities................................  $      (46,379)   $       (94,854)
                                                                                      ----------------  ----------------

Cash Flows From Financing Activities:
  Net change in
    Demand and savings deposits.....................................................  $        7,023    $       (27,333)
    Certificates of deposit and other time deposits.................................          (5,044)            18,536
    Borrowings......................................................................         (20,713)            78,816
  Cash dividends....................................................................         (12,604)           (10,243)
  Stock issued under employee benefit plans.........................................             887                658
  Stock issued under dividend reinvestment and stock purchase plan..................             838                686
  Stock options exercised...........................................................             819                458
  Stock repurchased.................................................................                             (4,333)
  Cash paid in lieu of fractional shares............................................             116                (35)
                                                                                      ----------------  ----------------
   Net cash provided (used) by financing activities.................................         (28,678)            57,210
                                                                                      ----------------  ----------------
Net Change in Cash and Cash Equivalents.............................................         (31,419)           (21,055)
Cash and Cash Equivalents, January 1................................................         119,038            103,028
                                                                                      ----------------  ----------------
Cash and Cash Equivalents, September 30.............................................  $       87,619    $        81,973
                                                                                      ================  ================

</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,
2002 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 period 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.  Accordingly,  the
Corporation recognized compensation expense of $2,000 for the three months ended
September  30, 2003 and $12,000 for the nine months  ended  September  30, 2003,
related to  specific  grants in which the market  price  exceeded  the  exercise
price. For all remaining  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.

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,
                                                                     2003         2002            2003         2002
                                                                -------------------------     -------------------------
<S>                                                             <C>           <C>             <C>           <C>
Net income, as reported .....................................   $    7,349    $    7,827      $   21,752    $   21,240
Add:  Total stock-based employee compensation
   cost included in reported net income, net
   of income taxes...........................................            2             6              12            18

Less:  Total stock-based employee compensation
   cost determined under the fair value based
   method, net of income taxes ..............................         (149)         (197)           (641)         (542)
                                                                ----------    ----------      ----------    ----------
Pro forma net income ........................................   $    7,202    $    7,636      $   21,123    $   20,716
                                                                ==========    ==========      ==========    ==========

Earnings per share:
   Basic - as reported ......................................   $      .40    $      .47      $     1.20    $     1.32
   Basic - pro forma ........................................          .39           .45            1.16          1.29
   Diluted - as reported ....................................          .39           .46            1.19          1.31
   Diluted - pro forma ......................................          .39           .44            1.16          1.27
</TABLE>
Options to  purchase  167,483  and  237,534  shares for the three  months  ended
September 30, 2003 and 2002 and options to purchase  289,909 and 134,341  shares
for the nine months ended  September  30, 2003 were not included in the earnings
per share  calculation  because the exercise  price  exceeded the average market
price.
                                                                          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.  Accounting Matters

Statement of Financial  Accounting  Standards No. 150,  "Accounting  for Certain
Financial  Instruments with  Characteristics of both Liabilities and Equity" was
issued in May of 2003 and is effective for financial instruments entered into or
modified  after May 31, 2003.  This statement  establishes  standards for how an
issuer   classifies   and   measures   certain   financial    instruments   with
characteristics  of both  liabilities  and equity.  It  requires  that an issuer
classify a financial  instrument  that is within its scope as a  liability.  The
Corporation  currently  classifies its obligated  mandatory  redeemable  capital
securities and cumulative trust preferred securities as liabilities.  Therefore,
this pronouncement has no impact on the Corporation's financial statements.

                                                                          Page 9


<PAGE>

                           FIRST MERCHANTS CORPORATION

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

NOTE 3.  Business Combinations

On March 1, 2003, the Corporation acquired 100% of the outstanding stock of CNBC
Bancorp,  the holding company of Commerce  National Bank ("Commerce  National"),
CNBC Retirement  Services,  Inc.  ("CRS,  Inc.") and CNBC Statutory Trust I (the
"Trust").  Commerce  National is a national  chartered bank located in Columbus,
Ohio.  CNBC  Bancorp  was merged into the  Corporation,  and  Commerce  National
maintained its national charter as a wholly-owned subsidiary of the Corporation.
CRS, Inc. and the Trust are also maintained as wholly-owned  subsidiaries of the
Corporation. The Corporation issued approximately 1,166,897 shares of its common
stock and  approximately  $24,562,000 in cash to complete the transaction.  As a
result of the acquisition,  the Corporation will have an opportunity to increase
its customer base and continue to increase its market share.  The purchase had a
recorded  acquisition  price of $55,729,000,  including  goodwill of $30,291,000
none of  which  is  deductible  for tax  purposes.  Additionally,  core  deposit
intangibles  totaling  $8,171,000  were recognized and will be amortized over 10
years using the 150% declining balance method.

The combination  was accounted for under the purchase method of accounting.  All
assets and  liabilities  were recorded at their fair values as of March 1, 2003.
The  purchase  accounting  adjustments  will be  amortized  over the life of the
respective  asset or liability.  Commerce  National's  results of operations are
included in the Corporation's  consolidated  income statement beginning March 1,
2003.  The following  table  summarizes  the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition.

        Investments.......................     $ 12,500
        Loans.............................      298,702
        Premises and equipment............        1,293
        Core deposit intangibles..........        8,171
        Goodwill..........................       30,291
        Other.............................       20,789
                                               --------
           Total assets acquired..........      371,746
                                               --------
        Deposits..........................      271,537
        Other.............................       44,480
                                               --------
           Total liabilities acquired.....      316,017
                                               --------
           Net assets acquired............     $ 55,729
                                               ========

The  following  proforma  disclosures,  including  the  effect  of the  purchase
accounting  adjustments,  depict the  results of  operations  as though the CNBC
Bancorp merger had taken place at the beginning of each period.
<TABLE>
<CAPTION>

                                                Three Months Ended      Nine Months Ended
                                                  September 30,           September 30,
                                                2003          2002      2003          2002
                                               ------        ------    ------        ------
<S>                                           <C>           <C>       <C>           <C>

        Net Interest Income...........        $25,874       $27,714   $79,453       $75,121

        Net Income....................          7,349         8,145    17,871        22,652

        Per Share - combined:
           Basic Net Income...........            .40           .41       .97          1.31
           Diluted Net Income.........            .39           .41       .96          1.30

</TABLE>

Effective  January 1, 2003,  the  Corporation  formed  Merchants  Trust Company,
National  Association  ("MTC"),  a wholly-owned  subsidiary of the  Corporation,
through a capital contribution totaling approximately  $2,038,000. On January 1,
2003, MTC purchased the trust  operations of First  Merchants Bank, N.A.,  First
National Bank and Lafayette Bank and Trust Company for a fair value  acquisition
price of $20,687,000.  MTC unites the trust and asset management services of all
affiliate banks of the  Corporation.  All intercompany  transactions  related to
this  purchase  by  MTC  have  been  eliminated  in the  consolidated  condensed
financial statements of the Corporation.

                                                                         Page 10
<PAGE>

                           FIRST MERCHANTS CORPORATION

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

NOTE 4.  Investment Securities
                                                    Gross       Gross
                                       Amortized  Unrealized  Unrealized    Fair
                                          Cost       Gains      Losses     Value
<S>                                    <C>         <C>        <C>        <C>

Available for sale at September 30, 2003
  U.S. Treasury ....................   $  1,497   $                     $  1,497
  Federal agencies..................     25,024        251   $    (46)    25,229
  State and municipal ..............    124,422      5,932        (38)   130,316
  Mortgage-backed securities .......    132,600        891     (2,604)   130,887
  Other asset-backed securities.....      3,115         14                 3,129
  Corporate obligations.............        999         24                 1,023
  Marketable equity securities......     16,790         15        (54)    16,751
                                       --------   --------   --------   --------
      Total available for sale .....    304,447      7,127     (2,742)   308,832
                                       --------   --------   --------   --------


Held to maturity at September 30, 2003
  State and municipal...............      7,933        449                 8,382
  Mortgage-backed securities........         87                               87
                                       --------   --------   --------   --------
      Total held to maturity .......      8,020        449                 8,469
                                       --------   --------   --------   --------
      Total investment securities ..   $312,467   $  7,576   $ (2,742)  $317,301
                                       ========   ========   ========   ========


</TABLE>

                                                                         Page 11
<PAGE>



                           FIRST MERCHANTS CORPORATION

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

<TABLE>

                                                        Gross       Gross
                                           Amortized  Unrealized  Unrealized    Fair
                                              Cost       Gains      Losses     Value
<S>                                        <C>         <C>        <C>        <C>
Available for sale at December 31, 2002
   U.S. Treasury .......................   $    125                          $    125
   Federal agencies ....................     27,630    $    814   $     (8)    28,436
   State and municipal .................    135,715       5,787       (178)   141,324
   Mortgage-backed securities ..........    117,724       2,448        (54)   120,118
   Other asset-backed securities .......      1,000                             1,000
   Corporate obligations ...............     12,101         465                12,566
   Marketable equity securities ........     29,452          20       (116)    29,356
                                           --------    --------   --------   --------
      Total available for sale .........    323,747       9,534       (356)   332,925
                                           --------    --------   --------   --------

Held to maturity at December 31, 2002
   State and municipal .................      9,013         448                 9,461
   Mortgage-backed securities ..........        124                               124
                                           --------    --------   --------   --------
      Total held to maturity ...........      9,137         448                 9,585
                                           --------    --------   --------   --------
      Total investment securities ......   $332,884    $  9,982   $   (356)  $342,510
                                           ========    ========   ========   ========


</TABLE>

                                                                         Page 12
<PAGE>



                           FIRST MERCHANTS CORPORATION

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

NOTE 5.  Loans and Allowance
<TABLE>
                                                                                    September 30, December 31,
                                                                                        2003         2002
                                                                                        ----         ----
<S>                                                                                <C>            <C>
Loans:
  Commercial and industrial loans ..............................................   $   425,945    $   406,644
  Agricultural production financing and other loans to farmers .................       100,734         85,059
  Real estate loans:
    Construction ...............................................................       149,456        133,896
    Commercial and farmland ....................................................       558,407        401,561
    Residential ................................................................       852,333        746,349
  Individuals' loans for household and other personal expenditures .............       196,439        206,083
  Tax-exempt loans .............................................................        20,542         12,615
  Other loans ..................................................................        47,549         12,170
                                                                                   -----------    -----------
                                                                                     2,351,405      2,004,377
  Allowance for loan losses.....................................................       (29,842)       (22,417)
                                                                                   -----------    -----------
      Total Loans...............................................................   $ 2,321,563    $ 1,981,960
                                                                                   ===========    ===========

                                                                                       Nine Months Ended
                                                                                         September 30

                                                                                       2003           2002
                                                                                   -----------    -----------
Allowance for loan losses:
  Balances, January 1 ..........................................................   $    22,417    $    15,141

  Allowance acquired in acquisition.............................................         3,727          6,902

  Provision for losses .........................................................         8,430          4,297

  Recoveries on loans ..........................................................         1,539            959

  Loans charged off ............................................................        (6,271)        (5,152)
                                                                                   -----------    -----------
  Balances, September 30........................................................   $    29,842    $    22,147
                                                                                   ===========    ===========
</TABLE>

Information on nonaccruing, contractually
past due 90 days or more other than
nonaccruing and restructured loans is               September 30,   December 31,
summarized below:                                      2003            2002
================================================================================
As of:
Non-accrual loans................................    $ 20,093       $ 14,134

Loans contractually past due 90 days
  or more other than nonaccruing.................       4,790          6,676

Restructured loans...............................         647          2,508
                                                     --------       --------
    Total........................................    $ 25,530       $ 23,318
                                                     ========       ========

                                                                         Page 13
<PAGE>

                           FIRST MERCHANTS CORPORATION

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

NOTE 6.  Net Income Per Share
<TABLE>

                                                                     Three Months Ended September 30,
                                                           2003                                           2002
                                        -------------------------------------------    --------------------------------------------
                                                        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................. $    7,349        18,466,678    $     .40      $    7,827        17,079,298    $     .47
                                                                         ==========                                     ==========
Effect of dilutive stock options........                      155,628                                        145,060
                                         ----------       ------------                  ----------       ------------
Diluted net income per share:
  Net income available to
    common stockholders
    and assumed conversions............. $    7,349        18,622,306    $     .39      $    7,827        17,224,358    $     .46
                                         ==========       ============   ==========     ==========       ============   ==========

</TABLE>
Options  to  purchase  167,483  and  237,534  share for the three  months  ended
September  30,  2003 and 2002  were  not  included  in the  earnings  per  share
calculation because the exercise price exceded the average market price.

<TABLE>
<CAPTION>
                                                                    Nine Months Ended September 30,
                                                           2003                                          2002
                                        -------------------------------------------   -------------------------------------------
                                                        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................. $   21,752        18,144,970    $    1.20     $   21,240        16,107,554    $    1.32
                                                                         ==========                                    ==========
Effect of dilutive stock options........                      128,352                                       142,159
                                         ----------       ------------                 ----------       ------------
Diluted net income per share:
  Net income available to
    common stockholders
    and assumed conversions............. $   21,752        18,273,322    $    1.19     $   21,240        16,249,713    $    1.31
                                         ==========       ============   ==========    ==========       ============   ==========

</TABLE>
Options  to  purchase  289,909  and  134,341  share  for the nine  months  ended
September  30,  2003 and 2002  were  not  included  in the  earnings  per  share
calculation because the exercise price exceded the average market price.

                                                                         Page 14
<PAGE>

                           FIRST MERCHANTS CORPORATION

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

Note 7. Borrowings

CUMULATIVE TRUST PREFERRED SECURITIES

In April 2002,  the  Corporation  and FMC Trust I (the "Trust")  entered into an
Underwriting  Agreement with Stifel,  Nicolaus & Company,  Incorporated  and RBC
Dain Rauscher,  Inc. for themselves and as co-representatives  for several other
underwriters (the "Underwriting Agreement").  In April 2002, and pursuant to the
Underwriting  Agreement,  the Trust  issued  2,127,500  8.75%  Cumulative  Trust
Preferred  Securities  (liquidation  amount  $25 per  Preferred  Security)  (the
"Preferred Securities") with an aggregate liquidation value of $53,187,500.  The
proceeds from the sale of the Preferred Securities were invested by the Trust in
the Corporation's  8.75% Junior  Subordinated  Debentures due June 30, 2032 (the
"Debentures").  The  Preferred  Securities  are  recorded as  borrowings  in the
Corporation's consolidated September 30, 2003, balance sheet and treated as Tier
1 Capital for regulatory  capital  purposes.  The Debentures will mature and the
Preferred Securities must be redeemed on June 30, 2032. The Trust has the option
of  shortening  the  maturity  date to a date not  earlier  than June 30,  2007,
requiring  prior  approval  of the Board of  Governors  of the  Federal  Reserve
System.

OBLIGATED MANDATORY REDEEMABLE CAPITAL SECURITIES

As part of the March 1, 2003,  acquisition of CNBC Bancorp ("CNBC"),  referenced
in Note 3 to the consolidated  condensed financial  statements,  the Corporation
assumed $4.0 million of 10.20% fixed rate obligated mandatory redeemable capital
securities issued in February 2001 through a subsidiary trust of CNBC as part of
a pooled offering.  The Corporation may redeem them, in whole or in part, at its
option  commencing  February 22, 2011,  at a redemption  price of 105.10% of the
outstanding  principal  amount  and,  thereafter,  at a premium  which  declines
annually.  On or after February 22, 2021, the securities may be redeemed at face
value with prior  approval  of the Board of  Governors  of the  Federal  Reserve
System.   The  securities  are  recorded  as  borrowings  in  the  Corporation's
consolidated September 30, 2003, balance sheet and treated as Tier 1 Capital for
regulatory capital purposes.

SUBORDINATED DEBENTURES, REVOLVING CREDIT LINES AND TERM LOANS

On  September  30,  2003,  other  borrowed  funds  included   $40,594,000  which
represents the  outstanding  balance of a Loan and  Subordinated  Debenture Loan
Agreement  entered into with LaSalle Bank, N.A. on March 25, 2003. The Agreement
includes three credit facilities:

        *  The Term Loan of  $5,000,000  matures on March 25, 2010.  Interest is
           calculated  at a  floating  rate  equal to the lender's prime rate or
           LIBOR plus 1.50%.  The  Term  Loan  is secured  by 100% of the common
           stock of First Merchants Bank, National  Association, Muncie, Indiana
           and 100% of the common  stock  of  Lafayette  Bank and Trust Company,
           Lafayette,  Indiana.   The  Agreement  contains  several  restrictive
           covenants, including  the  maintenance  of  various  capital adequacy
           levels,  asset  quality   and  profitability   ratios,  and   certain
           restrictions on dividends and other indebtedness.
        *  The  Revolving  Loan  had a  balance  of $10,594,000 at September 30,
           2003.   Interest  is  payable  quarterly  based  on  LIBOR  plus  1%.
           Principal and interest are due on or before March 23, 2004. The total
           principal  amount  outstanding   at  any  one  time  may  not  exceed
           $20,000,000.
        *  The  Subordinated  Debt of $25,000,000   matures  on  March 25, 2010.
           Interest  is  calculated  at  a  floating  rate  equal  to,  at  the
           Corporation's  option, either  the lender's  prime rate or LIBOR plus
           2.50%.  The Agreement is secured by 100% of the common stock of First
           Merchants Bank, National Association, Muncie, Indiana and 100% of the
           common stock of Lafayette Bank and Trust Company, Lafayette, Indiana.
           The Agreement  contains  several restrictive covenants, including the
           maintenance of various capital  adequacy  levels, asset  quality  and
           profitability ratios, and certain restrictions on dividends and other
           indebtedness.  The Subordinated Debentures are recorded as borrowings
           in  the  Corporation's  consolidated  balance  sheet  and  treated as
           Tier 2 capital for regulatory capital purposes.

                                                                         Page 15

<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  "estimate,"
"project,"  "intend,"  "anticipate,"  "expect"  and 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 Indiana and Ohio economies, 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; and

     *  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.

     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 16
<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  2002  Annual  Report  on pages  23 to 27.  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" on page 4 in the Corporation's  2002 Annual
Report.


RESULTS OF OPERATIONS

        Net  income  for  the  three  months  ended  September 30, 2003, equaled
$7,349,000,  compared to $7,827,000 in the same period of 2002. Diluted earnings
per share were $.39 a  decrease  of $.07 from the $.46  reported  for the  third
quarter 2002.

        Net  income  for  the  nine  months  ended  September 30, 2003,  equaled
$21,752,000,  compared to  $21,240,000  during the same period in 2002.  Diluted
earnings per share were $1.19, a 8.6% decrease from $1.31 in 2002.

        Annualized  returns  on  average assets and average stockholders' equity
for nine months  ended  September  30,  2003 were .99 percent and 9.98  percent,
respectively,  compared  with 1.22 percent and 12.45 percent for the same period
of 2002.

        The declines in diluted earnings per share, return on equity  and return
on assets are  primarily due to increased  provision  for loan losses,  which is
discussed  in  the  "ASSET   QUALITY/PROVISION   FOR  LOAN  LOSSES"  section  of
Management's  Discussion  &  Analysis  of  Financial  Condition  and  Results of
Operations.

                                                                         Page 17
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

CAPITAL

         The Corporation's capital  continues  to exceed regulatory minimums and
management  believes that its capital levels continue to be a distinct advantage
in the competitive environment in which the Corporation operates.

         The  Corporation's  Tier  I  capital  to  average  assets ratio was 7.9
percent at year-end 2002 and 7.3 percent at September 30, 2003. At September 30,
2003, the Corporation  had a Tier I risk-based  capital ratio of 9.3 percent and
total risk-based  capital ratio of 11.7 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. Banks with Tier I risk-based capital ratios of 6.0
percent and total risk-based capital ratios of 10.0 percent are considered "well
capitalized."

ASSET QUALITY/PROVISION FOR LOAN LOSSES

         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  independent  loan  review  provided  by an  outside
accounting  firm.  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.  (See the "CRITICAL  ACCOUNTING POLICIES"
section of Management's Discussion & Analysis of Financial Condition and Results
of Operations).

      At September  30,  2003, non-performing  loans   totaled  $25,530,000,  an
increase during the period of $2,212,000 from December 31, 2002, as noted in the
table on the  following  page.  This  increase  was  primarily  due to two loans
totaling  $7,167,000,  related  to  declining  collateral  values  of  a  single
borrower, being placed on non-accrual status, while loans 90 days past due other
than non-accrual and restructured loans decreased by $3,747,000.

      At September 30, 2003, impaired loans totaled $44,905,000, an increase  of
$554,000  from December 31, 2002. At September 30, 2003, an allowance for losses
was not  deemed  necessary  for  impaired  loans  totaling  $30,364,000,  but an
allowance of $7,510,000 was recorded for the remaining balance of impaired loans
of $14,541,000 and is included in the  Corporation's  allowance for loan losses.
The  average  balance of  impaired  loans for the first nine  months of 2003 was
$49,537,000.

      At December 31, 2002,  impaired loans  totaled $44,351,000.  An  allowance
for losses was not deemed necessary for impaired loans totaling $27,450,000, but
an allowance of $7,299,000  was recorded for the  remaining  balance of impaired
loans of  $16,901,000  and is included in the  Corporation's  allowance for loan
losses. The average balance of impaired loans for 2002 was $49,663,000.

      At September 30, 2003,  the   allowance for loan  losses was  $29,842,000,
an  increase  of  $7,695,000  from year end 2002.  As a  percent  of loans,  the
allowance  was 1.26 percent at September  30, 2003 compared with 1.11 percent at
December 31, 2002.
                                                                         Page 18

<PAGE>
                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

      The  provision for  loan  losses  for  the  first nine  months of 2003 was
$8,430,000,  an increase of $4,133,000  from  $4,297,000  for the same period in
2002.  The  Corporation's  adequacy of the  allowance  for loan losses  reflects
increased  non-performing  loans,  increased  specific  reserves  and  increased
impaired loans,  resulting in increased  provision expense.  Of the $4.1 million
increase,  $2.8  million is  due to  declining   collateral  values  of a single
commercial borrower,  with the remaining based on the regular ongoing evaluation
of  the  loan  portfolios  of  the  Corporation's  bank  subsidiaries.   Current
non-performing  and impaired  loan  balances  indicate that some decline in loan
asset quality has  occurred,  which  management  believes is a result of current
economic conditions.

The following table summarizes the non-accrual,  contractually  past due 90 days
or more other than non-accruing and restructured loans for the Corporation.

(dollars in thousands)                                September 30, December 31,
                                                          2003         2002
================================================================================

Non-accrual loans ..............................         $20,093     $14,134

Loans contractually
   past due 90 days or more
   other than non-accruing .....................           4,790       6,676

Restructured loans .............................             647       2,508
                                                         -------     -------

   Total non-performing loans ..................         $25,530     $23,318
                                                         =======     =======
<TABLE>

                                                               Nine Months Ended
                                                                 September 30,
                                                               ------------------
                                                               2003          2002
                                                               ----          ----
                                                             (Dollars in Thousands)
<S>                                                          <C>           <C>
  Balance at beginning of period .........................   $22,417       $15,141
                                                             -------       -------
  Chargeoffs .............................................     6,271         5,152
  Recoveries .............................................     1,539           959
                                                             -------       -------
  Net chargeoffs .........................................     4,732         4,193
  Provision for loan losses ..............................     8,430         4,297
  Allowance acquired in acquisition.......................     3,727         6,902
                                                             -------       -------
  Balance at end of period ...............................   $29,842       $22,147
                                                             =======       =======

Ratio of net chargeoffs during the period to average loans
  outstanding during the period (1).......................       .28%          .32%


(1)    First nine months annualized



</TABLE>
                                                                         Page 19
<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 a funding
source. At September 30, 2003, total borrowings from the FHLB were $211,369,000.
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, 2003, was $203,255,000. At September 30,
2003,  the  Corporation's  revolving line of credit had a balance of $10,594,000
and a  remaining  borrowing  capacity of  $9,406,000.  The  principal  source of
asset-funded     liquidity    is    investment    securities    classified    as
available-for-sale, the market values of which totaled $308,832,000 at September
30, 2003, a decrease of $24,093,000  or 6.5% over December 31, 2002.  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  $1,415,000 at September 30, 2003.
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, 2003 are as follows:

                                                                At September 30,
(Dollars in thousands)                                                2003
================================================================================
Amounts of commitments:
Loan commitments to extend credit ............................... $  429,284
Standby letters of credit .......................................     24,716
                                                                  ----------
                                                                  $  454,000
                                                                  ==========

      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, 2003 are as follows:
<TABLE>
<CAPTION>
                                2003       2004       2005       2006       2007      2008       Total
(Dollars in thousands)       remaining                                              and after
=======================================================================================================
<S>                          <C>        <C>        <C>        <C>        <C>        <C>        <C>
Operating leases .........   $    224   $    795   $    533   $    567   $    345   $    324   $  2,788
Trust preferred securities                                                            57,188     57,188
Long-term debt ...........     60,300     42,594     23,000     22,403     14,495    154,071    316,863
                             --------   --------   --------   --------   --------   --------   --------
Total ....................   $ 60,524   $ 43,389   $ 23,533   $ 22,970   $ 14,840   $211,583   $376,839
                             ========   ========   ========   ========   ========   ========   ========
</TABLE>
                                                                         Page 20
<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,  2003,  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 21
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

The comparative rising and falling  scenarios for the period ended September 30,
2004 assume  further  interest  rate changes in addition to the base  simulation
discussed  above.  These changes are immediate and parallel  changes to the base
case senario.  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 September 30, 2004 are as follows:

Driver Rates                      RISING              FALLING
================================================================================
Prime                              200 Basis Points     (50) Basis Points
Federal Funds                      200                  (50)
One-Year T-Bill                    200                  (25)
Two-Year T-Bill                    200                  (25)
Three-Year T-Bill                  200                  (25)
Interest Checking                  100                   --
MMIA Savings                       100                   --
First Flex                         100                  (25)
CD's                               200                  (50)
FHLB Advances                      200                  (50)

Results for the base,  rising and falling  interest  rate  scenarios  are listed
below, based upon the Corporation's rate sensitive assets at September 30, 2003.
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
================================================================================
Net Interest Income (dollars in thousands)    $112,043    $116,290    $109,678

Variance from base                                        $  4,247    $ (2,365)

Percent of change from base                                   3.79%      (2.11)%

The comparative  rising and falling  scenarios for the period ended December 31,
2003 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, 2003 are as follows:

Driver Rates                      RISING              FALLING
================================================================================
Prime                             200 Basis Points    (50) Basis Points
Federal Funds                     200                 (50)
One-Year T-Bill                   200                 (20)
Two-Year T-Bill                   200                 (59)
Interest Checking                 100                  --
MMIA Savings                      100                  --
First Flex                        100                 (25)
CD's                              200                 (53)
FHLB Advances                     200                 (66)

Results for the base,  rising and falling  interest  rate  scenarios  are listed
below,  based upon the Corporation's rate sensitive assets at December 31, 2002.
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
===============================================================================
Net Interest Income (dollars in thousands)  $105,138  $113,855   $ 98,793

Variance from base                                    $  8,717   $ (6,345)

Percent of change from base                               8.29%    (6.03)%

                                                                         Page 22
<PAGE>


                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

EARNING ASSETS

         The following table presents  the earning asset mix as of September 30,
2003, and December 31, 2002.

         Loans  grew  approximately  $347  million  from  December 31,  2002  to
September  30, 2003,  while  investment  securities  decreased by $25.2  million
during the same period.  $309.5 million of the increase in loans is attributable
to the March 1, 2003 acquisition of CNBC Bancorp. Excluding increases related to
this acquisition,  loans increased by $37.5 million and investments decreased by
$38 million during the nine month period.

<TABLE>

----------------------------------------------------------------------------------------------------
EARNING ASSETS
(Dollars in Millions)                                          September 30,           December 31,
                                                                   2003                   2002
---------------------------------------------------------------------------------------------------
<S>                                                            <C>                     <C>
Federal funds sold and interest-bearing deposits               $     3.8               $     35.0

Investment securities available for sale .......                   308.8                    332.9

Investment securities held to maturity .........                     8.0                      9.1

Mortgage loans held for sale ...................                    12.0                     21.5

Loans ..........................................                 2,351.4                  2,004.4

Federal Reserve and Federal Home Loan Bank stock                    14.0                     11.4
                                                               ----------              ----------

                     Total .....................               $ 2,698.0               $  2,414.3
                                                               ==========              ==========

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

         The following  table  presents the level of deposits and borrowed funds
(Federal funds purchased,  repurchase  agreements,  U.S.  Treasury demand notes,
Federal Home Loan Bank advances,  trust preferred  securities and other borrowed
funds)at September 30, 2003, and December 31, 2002.

--------------------------------------------------------------------------------
<TABLE>

(Dollars in Millions)                              September 30,       December 31,
                                                       2003                2002
                                                    ----------         ------------
<S>                                                 <C>                 <C>
Deposits ........................................   $  2,310.2          $  2,036.7
Securities sold under repurchase agreements......         63.3                89.6
FFP and U.S. Treasury demand notes...............
Federal Home Loan Bank advances .................        211.4               184.7
Trust preferred securities.......................         57.2                53.2
Subordinated debentures, revolving credit lines
   and term loans................................         40.6                19.3
Other borrowed funds ............................          1.6                10.2

</TABLE>

         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.
Trust preferred securities are classified as Tier I Capital and the Subordinated
Debenture of  $25,000,000  is classified as Tier II Capital when  computing risk
based capital ratios due to the long-term nature of the investment. The interest
rate risk is included as part of the Corporation's interest simulation discussed
in  Management's  Discussion  and Analysis  under the headings  "LIQUIDITY"  and
"INTEREST SENSITIVITY AND DISCLOSURES ABOUT MARKET RISK".

                                                                         Page 23
<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, 2003 and 2002.

         Annualized net interest income (FTE)for the nine months ended September
30, 2003  increased  by $13.7  million,  or 14.6 percent over the same period in
2002, due to an increase in average earning assets of over $516 million. For the
same  period  interest  income  and  interest  expense,  as a percent of average
earning assets, decreased 83 basis points and 49 basis points respectively.

<TABLE>
                                                            Three Months Ended             Nine Months Ended
                                                               September 30,                  September 30,
<S>                                                     <C>           <C>              <C>            <C>
(Dollars in Thousands)                                      2003          2002             2003          2002

Annualized Net Interest Income........................  $  103,496    $  101,312       $  103,785    $   90,383

Annualized FTE Adjustment.............................  $    3,809    $    4,224       $    3,827    $    3,484

Annualized Net Interest Income
  On a Fully Taxable Equivalent Basis.................  $  107,305    $  105,536       $  107,612    $   93,867

Average Earning Assets................................  $2,712,070    $2,379,092       $2,628,319    $2,112,777

Interest Income (FTE) as a Percent
  of Average Earning Assets...........................        5.89%         6.92%            6.11%         6.94%

Interest Expense as a Percent
  of Average Earning Assets...........................        1.93%         2.49%            2.01%         2.50%

Net Interest Income (FTE) as a Percent
  of Average Earning Assets...........................        3.96%         4.43%            4.10%         4.44%


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 24
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q
OTHER INCOME

         The  Corporation  has  placed  emphasis  on the  growth of non-interest
income in recent  years by  offering a wide  range of  fee-based  services.  Fee
schedules  are  regularly  reviewed  by a pricing  committee  to ensure that the
products and services  offered by the  Corporation  are priced to be competitive
and profitable.

         Other income in the third  quarter of 2003 exceeded the same quarter in
the prior year by $1,230,000, or 16.1 percent.

         One major area  accounts for  most of the increase.  Gains  on sales of
mortgage loans  included in other income  increased by $876,000 due to increased
mortgage volume. In addition,  decreasing mortgage loan rates caused an increase
in refinancing volume, which facilitated an increase in loan sales activity.

         Other income for the first nine months of 2003 exceeded the same period
in the prior year by $8,454,000 or 42.6 percent.

Five major areas account for most of the increase:

1.       Gains on sales of mortgage loans included in other income increased by
         $4,628,000 due to increased mortgage volume.  In addition, decreasing
         mortgage loan rates caused an increase in refinancing volume, which
         facilitated an increase in loan sales activity.

2.       Service charges on deposit accounts increased $1,753,000 or 26.4
         percent due to increased number of accounts, price adjustments and
         approximately $948,000 of additional service charge income related to
         April 1, 2002 acquisition of Lafayette.

3.       A gain on life insurance proceeds included in other income was $535,000
         for the first nine months of 2003 compared to $0 for the same period
         last year. The gain represented the net insurance proceeds received.

4.       Insurance Commissions increased by $483,000 or 37.9 percent primarily
         as a result of the September 6, 2002 acquisition of Stephenson
         Insurance Services, Inc.

5.       Revenues from fiduciary activities increased $362,000 or 7.6 percent
         due primarily to the additional fees related to the acquisition of
         Lafayette.


                                                                         Page 25
<PAGE>

                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

OTHER EXPENSES

         Total other expenses represent  non-interest  operating expenses of the
Corporation. Total other expense during the third  quarter  of 2003 exceeded the
same period of the prior year by $3,773,000, or 19.7 percent.

Two major areas account for most of the increase:

1.       Salaries and benefit expense grew $2,601,000 or 24.5 percent, due to
         normal salary increases, staff additions and additional salary cost
         related to the March 1, 2003 acquisition of Commerce National Bank.

2.       Net occupancy expenses increased by $190,000 or 19.0 percent primarily
         due to the acquisition of Commerce National Bank.

         Total other expenses during the first nine  months in 2003 exceeded the
same period of the prior year by $16,207,000, or 31.7 percent.

Six major areas account for most of the increase:

1.       Salaries and benefit expense grew $9,585,000 or 33.9 percent, due to
         normal salary increases, staff additions and additional salary cost
         related to the April 1, 2002 acquisition of Lafayette and the March 1,
         2003 acquisition of Commerce National Bank.

2.       Net occupancy expenses increased by $781,000 or 28.9 percent primarily
         due to the acquisitions of Lafayette and Commerce National Bank.

3.       Equipment expense increased by $1,008,000 or 20.8 percent primarily due
         to the acquisitions of Lafayette and Commerce National Bank.

4.       Core deposit intangible amortization increased by $940,000, due to
         utilization of the purchase method of accounting for the Corporation
         related to the acquisitions of Lafayette and Commerce National Bank.

5.       The Corporation accrued $460,000 in anticipation of a settlement from a
         claim made against First Merchants Corporation, which is presently
         being negotiated.

6.       Prepayment penalties for early prepayment of FHLB advances increased
         by $340,000 for the first nine months of 2003 over the same period in
         2002.
                                                                         Page 26
<PAGE>


                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

INCOME TAXES

         Income tax expense, for the  nine  months  ended  September  30,  2003,
decreased by $1,247,000 from the same period in 2002. The effective tax rate was
28.4 and 34.1 percent for the 2003 and 2002 periods.  Most of this decrease is a
result of  increases  in tax exempt  earnings  from  bank-owned  life  insurance
contracts,  tax exempt interest  income and reduced state taxes,  resulting from
the effect of state income apportionment.

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 27
<PAGE>


                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

                           PART II. OTHER INFORMATION

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

         None

Item 2.  Changes in Securities and Use of Proceeds
--------------------------------------------------

         a.  None

         b.  None

         c.  None

         d.  None

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

         None

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

         None

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

         None
                                                                         Page 28

<PAGE>
                           FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

                           PART II. OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

         a.  Exhibits

             Exhibit No.:       Description of Exhibit:      Form 10-Q Page No.:
             ------------       -------------------------    -------------------
                31.1            Certification of Chief               33
                                Executive Officer Pursuant
                                to Section 302 of the
                                Sarbanes - Oxley Act of
                                2002

                31.2            Certification of Chief               34
                                Financial Officer Pursuant
                                to Section 302 of the
                                Sarbanes - Oxley Act of
                                2002

                32              Certifications Pursuant to           35
                                18 U.S.C. Section 1350, as
                                Adopted Pursuant to Section
                                906 of the Sarbanes-Oxley
                                Act of 2002


                                                                         Page 29
<PAGE>
                          FIRST MERCHANTS CORPORATION

                                    FORM 10-Q

                           PART II. OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K continued
---------------------------------------------------

         b.  Reports on Form 8-K

             A report on Form 8-K, dated July 21, 2003, was filed on
             July 21, 2003 under report items number 9 and 7, concerning the
             Press Release announcing second quarter 2003 earnings.

             Under report item number 7, the following exhibit was included in
             this Form 8-K.

             (c) Exhibit

                      (99)  Press Release, dated July 21, 2003, issued by
                            First Merchants Corporation

             A report on Form 8-K, dated August 15, 2003, was filed on August
             15, 2003 under report item number 5, concerning the Corporation's
             declaration of a five percent (5%) stock dividend on its shares of
             common stock.  The dividend was payable to shareholders of record
             on August 29, 2003.  The date of delivery of shares to be issued
             pursuant to the stock dividend was September 12, 2003.

             Under report item number 7, the following exhibit was included in
             the Form 8-K.

             (c) Exhibit

                      (99)  Press release dated August 15, 2003.


                                                                         Page 30

<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   11/14/03                         by /s/ Michael L. Cox
    ---------------------------            -------------------------------------
                                           Michael L. Cox
                                           President and Chief Executive Officer


Date   11/14/03                         by /s/ Mark K. Hardwick
    ---------------------------            -------------------------------------
                                           Mark K. Hardwick
                                           Senior Vice President and
                                           Chief Financial Officer
                                           (Principal Financial and Chief
                                           Accounting Officer)


                                                                         Page 31

<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               33
                                Executive Officer Pursuant
                                to Section 302 of the
                                Sarbanes - Oxley Act of
                                2002

                31.2            Certification of Chief               34
                                Financial Officer Pursuant
                                to Section 302 of the
                                Sarbanes - Oxley Act of
                                2002

                32              Certifications Pursuant to           35
                                18 U.S.C. Section 1350, as
                                Adopted Pursuant to Section
                                906 of the Sarbanes-Oxley
                                Act of 2002


                                                                         Page 32
<PAGE>

                                  Exhibit 31.1

                  CERTIFICATION PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


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 quarterly 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)) 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) 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

       (c) 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 14, 2003                 /s/Michael L. Cox
                                        ----------------------------------------
                                           Michael L. Cox
                                           President and Chief Executive Officer

                                                                         Page 33
<PAGE>
                                  Exhibit 31.2

                  CERTIFICATION PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


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 quarterly 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)) 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) 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

       (c) 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 14, 2003                 /s/Mark K. Hardwick
                                        ----------------------------------------
                                           Mark K. Hardwick
                                           Senior Vice President and
                                           Chief Financial Officer
                                           (Principal Financial  and Chief
                                           Accounting Officer)


                                                                         Page 34
<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, 2003 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  11/14/03                          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, 2003 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  11/14/03                          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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