News Release Details

First Merchants Corporation (NASDAQ – FRME) has reported that 2001 cash basis diluted earnings per share increased 7.5% to $1.86 up from $1.73 in the prior year. GAAP basis diluted earnings per share amounted to $1.78, 7.2% above 2000 at $1.66.

For the quarter, cash basis diluted earnings reached $.44 per share compared to $.41 in 2000, a 7.3% increase. GAAP basis diluted earnings per share amounted to $.43, 10.3% ahead of $.39 reported in the same quarter in 2000.

Reflecting on the year, Michael L. Cox, President and Chief Executive Officer, noted several accomplishments. Net interest margin improved 21 basis points to 4.24%, despite 11 interest rate reductions by the Federal Reserve Board. Robust loan activity, especially in commercial and mortgage lending contributed to the result.

Non interest revenues grew 11.5%. Income from mortgage banking activity grew 98% to $1.235 million, and despite weakness in the financial markets, trust revenues grew 9.2% to nearly $5.5 million.

The company completed its acquisition of Frances Slocum Bank, operating in four markets in north central Indiana, and announced plans to acquire the Lafayette Bank and Trust Company, a $750 million bank located in the attractive Lafayette, Indiana market.

First Merchants common stock continued to receive an A+ rating from Standard and Poors. Cox noted that, “the rating reflects our consistent record of earnings growth and dividend increases, and results from our operating philosophy which emphasizes balanced attention to efficiency, growth, and asset quality.”

Detailed financial results are reported on the attached pages.

First Merchants Corporation, a financial holding company based in Muncie, Indiana, was organized in September 1982 as the bank holding company for Merchants National Bank of Muncie, now First Merchants Bank, N.A. Since its organization, First Merchants Corporation has grown to include eight affiliate banks a multi-line insurance agency, and a recently organized title insurance company. Through it's affiliates, First Merchants offers a full range of commercial, consumer, insurance, investment, and trust products. The company offers internet banking services and operates an extensive branch and ATM network. Upon completion of the Lafayette Bank acquisition, First Merchants will be operating from 66 locations in nineteen Indiana counties, and one county in southwestern Ohio.

First Merchants Corporation common stock is traded over-the-counter on the NASDAQ National Market System under the symbol FRME and is rated A+ by Standard and Poor's Corporation. Quotations are carried in daily newspapers and can be found on the corporation's Internet Web page. (http://firstmerchants.com). Nine brokerage firms make a market in First Merchants Corporation stock: Herzog, Heine, Geduld, Inc.; Hill, Thompson, Magid & Co.; Howe Barnes Investments, Inc.; Knight Securities L.P.; Midwest Research First Tennessee; Natcity Investments Inc.; RBC Capital Markets; Sherwood Securities Corp.; and Spear, Leeds & Kellogg.