News Release Details

First Merchants Corporation Announces 2008 Earnings of $20.6 Million

02/5/2009

MUNCIE, Ind.--(BUSINESS WIRE)-- First Merchants Corporation (NASDAQ: FRME) has reported 2008 diluted earnings per share of $1.14, a decline of $.59 from the 2007 total of $1.73. Net Income for the year totaled $20.6 million compared to the 2007 total of $31.6 million.

Total assets reached a record $4.8 billion at quarter-end, an increase of $1 billion, from the December 31, 2007 total of $3.8 billion. Of the $1 billion increase, the completion of the merger with Lincoln Bancorp on December 31, 2008 accounted for $876 million of the increase.

The completion of the Lincoln Bancorp acquisition continues the corporation's direction of pursuing stronger growth markets. More importantly the board of directors and management of First Merchants Corporation believe the strategic focus on the Indianapolis marketplace through the addition of Lincoln and its 17 banking centers will accelerate First Merchants position in many of the fastest growing counties within Indiana. Lincoln's operating earnings did not impact First Merchants Corporation's net income during 2008 as the acquisition was completed on December 31, 2008. By contrast the December 31, 2008 balance sheet is consolidated to include Lincoln.

Loans and investments, the Corporation's primary earning assets, totaled $4.20 billion, an increase of $876 million, or 26.3 percent, over the prior year. Loans accounted for $846 million of the increase as investment securities increased by $31 million. Of the $876 million increase, Lincoln accounted for $637 million in loans and $122 million in investments.

The Corporation's allowance for loan losses as a percent of total loans increased from .98 percent to 1.31 during the year, a $20.7 million increase. Provision expense exceeded net charge-offs by $12 million and Lincoln Bank added $8.7 million to the Corporation's allowance for loan loss total at year-end. The increased allowance for loan losses total is comprised of a $2.4 million increase specific impairment reserves, $4.1 million in the general historical loss component and a $14.2 million increase in environmental factors. None of the increases in specific reserves were related to Lincoln as all recognized impairments were charged down to the fair value prior to closing the transaction. Total specific impairment reserves are $9.8 million or 20% of the total allowance methodology.

Non-performing loans totaled $88 million, including the addition of $34 million from Lincoln. Of the $88 million in non-performing loans, commercial real estate loans totaled $29 million, land and lot development loans totaled $20 million, 1-4 family residential properties totaled $18 million, commercial and industrial loans totaled $16 million and other loans totaled $5 million. The Corporation's exposure to land development, single-family residential development, condominium and duplex development projects is limited to $76 million.

The Corporation's total deposits increased during the year by $875 million as Lincoln Bank accounted for $655 million of the increase. Total borrowings increased by just $50 million including the $137 million increase from Lincoln Bank. As of December 31, 2008 the Corporation's tangible capital totaled 5.01%, tier 1 leverage ratio totaled 7.86%, tier 1 risk based capital totaled 7.31% and total risk based capital totaled 9.84%. The decrease in the Corporation's capital ratios for the year is primarily attributable to two factors.

The first factor of note is the decline in First Merchants other comprehensive income of $12.8 million resulting from investment security write-down's under FASB 115 totaling $1.3 million and the decline in pension plan asset valuations totaling $11.5 million during the year. The second factor is a combination of items related to the Lincoln Bancorp acquisition. The Corporation used cash of $16.8 million as part of the $77.3 million purchase price resulting in increased common equity of $60.1 million to acquire an $876 million institution. Additionally, as a result of the acquisition First Merchants added $32.3 million of intangibles from the closing of Lincoln Bancorp.

Core deposit intangibles totaled $12.4 million, while purchase accounting adjustments to Lincoln's assets and liabilities totaled $11.6 million resulting in Goodwill. The remaining $8.3 million is reflective of the premium paid by First Merchants Corporation over Lincoln Bancorp's tangible equity at year-end. The purchase accounting adjustments of $11.6 million reduced total risk based capital by 30 basis points, but they will positively accrete to income over the life of the individual instruments. When combining our thorough due diligence and pre-closing efforts, with our April 2009 integration efforts, First Merchants expects Lincoln to be accretive in year one.

The Corporation recognizes the difficulties of the economy and the importance of continuing First Merchants history of being "well capitalized". On November 12, 2008 the Corporation applied for participation in the U.S. Department of Treasury's Capital Purchase Program in an amount totaling $116 million. The application has been approved by the Corporation's primary regulator and was forwarded to the Treasury Department on January 16, 2008. The addition of $116 million in preferred stock would improve the Corporation's Total Risk Based Capital Ratio to 12.80%, comfortably above the "well capitalized" guidelines.

Net-Interest margin expanded by 29 basis points from 3.55 percent in 2007 to 3.84 percent in 2008. As a result, net-interest income increased by $16.3 million, or 14.4 percent. Net interest margin remained strong even during the forth quarter as the Federal Reserve Board lowered the target Fed Funds rate to just 25 basis points. Aggressive deposit pricing and the use of interest rate floors on over $360 million of the Corporation's rate prime indexed loans helped preserve the Corporation's net interest margin.

Provision expense totaled $27.6 million in 2008, an increase of $19.1 million over the prior. The increase in provision expense exceeded the expansion of net interest income by $2.9 million.

Total non-interest income decreased by $4.2 million in 2008. Income from changes in the cash surrender value of bank owned life insurance (BOLI) declined by $3.9 million. During the fourth quarter the corporation recorded a loss of $2.1 million due to declines in market value below the stable value wrap. BOLI losses are not tax deductible resulting in a $3.9 million decrease in Net Income. On December 18, 2008, management changed the investment elections under the separate account policy structure to more conservative investments. The Corporation also lost $1.5 million on Federal Home Loan Mortgage Corporation preferred stock. The Corporation has no additional equity exposure to FHLMC and FNMA and no remaining exposure to private label mortgage backed investment securities.

Additionally, the Corporation elected to expense $1.2 million of its $15.5 million original book balance trust preferred pooled investment exposure. The loss is attributable to a Trapeza IV pool, the only pool deemed to be other than temporarily impaired as of year-end. The remaining $13.5 million of exposure to trust preferred pools is diversified among eight FTN PreTsl investments.

Total non-interest expenses for the year increased by $7.2 million or 7% as salary and benefit expense increased by $4.5 million. The remaining increases in other expense include an increase of $1.8 million in other real estate expense and $860,000 of professional services related to loan workouts. First Merchants also sold the assets of Indiana Title Insurance Company, LLC resulting in a $560,000 loss during the month of December.

Michael C. Rechin, President and Chief Executive Officer, stated that, "First Merchants Corporation's management team is focused on five objectives in 2009 including capital & liquidity management, asset quality, net interest margin management, expense management and the success of the Lincoln acquisition. We remain confident that our people, strategies, capital, liquidity, and commitment to endure the current environment will prove successful in the short and long-term time horizon."

Rechin continued, "As complex and uncertain as the Banking environment has become, First Merchants is pleased to earn more than $20 million in net income, while improving it's allowance to loans recognizing the negative economic trends nationally and in the mid-west."

CONFERENCE CALL

First Merchants Corporation will conduct a conference call at 2:30 p.m. Eastern Time on Thursday, February 5, 2009. To participate, callers in the US/Canada should dial (Toll Free) 800-860-2442 while international participants should use +1 412-858-4600. Please reference First Merchants Corporation's fourth quarter earnings. A replay will be available until 9:00 AM ET on February 13, 2009. To access replay, US/Canada participants should dial (Toll Free) 877-344-7529, or for International participants, dial +1 412-317-0088. The replay requires a pass code of 426723.

During the call, we may make Forward-Looking Statements about our relative business outlook. These Forward-Looking Statements and all other statements made during the call that do not concern historical facts are subject to risks and uncertainties that may materially affect actual results.

Specific Forward-Looking Statements include, but are not limited to, any indications regarding the Financial Services industry, the economy and future growth of the balance sheet or income statement.

Detailed financial results are reported on the attached pages:

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

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

CONSOLIDATED BALANCE SHEETS

(in thousands)                                    December 31,

                                                  2008           2007

Assets

Cash and due from banks                           $ 84,249       $ 134,188

Federal funds sold                                66,237         495

Cash and cash equivalents                         150,486        134,683

Interest-bearing time deposits                    38,823         24,931

Investment securities                             481,984        451,167

Mortgage loans held for sale                      4,295          3,735

Loans                                             3,721,952      2,876,843

Less: Allowance for loan losses                   (48,946     )  (28,228     )

Net loans                                         3,673,006      2,848,615

Premises and equipment                            59,641         44,445

Federal Reserve and Federal Home Loan Bank stock  34,319         25,250

Interest receivable                               23,976         23,402

Core deposit intangibles and goodwill             165,974        135,856

Cash surrender value of life insurance            93,222         70,970

Other real estate owned                           18,458         2,573

Other assets                                      40,568         16,460

Total assets                                      $ 4,784,752    $ 3,782,087

Liabilities

Deposits

Noninterest-bearing                               460,519        370,397

Interest-bearing                                  3,258,292      2,473,724

Total deposits                                    3,718,811      2,844,121

Borrowings

Fed funds purchased                                              52,350

Securities sold under repurchase agreements       122,311        106,497

Federal Home Loan Bank advances                   360,217        294,101

Subordinated debentures, revolving credit

lines and term loans                              135,826        115,826

Total borrowings                                  618,354        568,774

Interest payable                                  8,844          8,325

Other liabilities                                 42,840         20,931

Total liabilities                                 4,388,849      3,442,151

Stockholders' equity

Preferred stock, no-par value

Authorized and unissued - 500,000 shares

Cumulative Preferred Stock, $1,000 par value:

Authorized - 600 shares

Issued and outstanding - 125 shares               125

Common stock, $.125 stated value

Authorized - 50,000,000 shares

Issued and outstanding - 21,178,123 and

18,002,787 shares                                 2,647          2,250

Additional paid-in capital                        202,299        137,801

Retained earnings                                 206,496        202,750

Accumulated other comprehensive loss              (15,664     )  (2,865      )

Total stockholders' equity                        395,903        339,936

Total liabilities and stockholders' equity        $ 4,784,752    $ 3,782,087



FINANCIAL HIGHLIGHTS

                        Three Months Ended           Twelve Months Ended

(in thousands)          December 31,                 December 31,

                        2008          2007           2008          2007

NET CHARGE OFF'S        $ 4,372       $ 1,857        $ 15,602      $ 6,819

AVERAGE BALANCES

Total Assets            $ 3,870,159   $ 3,735,931    $ 3,811,169   $ 3,639,772

Total Loans             3,082,061     2,873,989      3,002,628     2,794,824

Total Deposits          3,009,123     2,812,760      2,902,902     2,752,443

Total Stockholders'     353,164       335,649        349,594       330,786
Equity

FINANCIAL RATIOS

Return on Average       .02         % 1.00        %  .54         % .87         %
Assets

Return on Avg.          0.25          11.10          5.90          9.56
Stockholders' Equity

Avg. Earning Assets to  91.15         90.70          90.88         90.91
Avg. Assets

Allowance for Loan
Losses as %

of Total Loans          1.31          .98            1.31          .98

Net Charge Off's as %
of Avg. Loans

(Annualized)            .57           .26            .52           .24

Dividend Payout Ratio   2,300.00      45.10          80.70         53.18

Avg. Stockholders'      9.13          8.98           9.17          9.09
Equity to Avg. Assets

Tax Equivalent Yield    6.21          7.13           6.44          7.10
on Earning Assets

Cost of Supporting      2.33          3.47           2.60          3.55
Liabilities

Net Int. Margin (FTE)   3.88          3.66           3.84          3.55
on Earning Assets



CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share data)       Three Months Ended   Twelve Months Ended

                                        December 31,         December 31,

                                        2008       2007      2008       2007

Interest income

Loans receivable

Taxable                                 $ 48,433   $ 53,338  $198,385   $207,268

Tax exempt                              349        302       1,013      1,120

Investment securities

Taxable                                 2,907      3,487     12,046     13,744

Tax exempt                              1,511      1,623     5,855      6,548

Federal funds sold                      7          39        28         172

Deposits with financial institutions    194        194       755        582

Federal Reserve and Federal Home Loan   335        344       1,391      1,299
Bank stock

Total interest income                   53,736     59,327    219,473    230,733

Interest expense

Deposits                                15,638     22,398    67,581     89,921

Federal funds purchased                 108        692       1,856      3,589

Securities sold under repurchase        502        1,182     2,600      3,856
agreements

Federal Home Loan Bank advances         2,583      3,250     11,168     12,497

Subordinated debentures, revolving
credit lines

and term loans                          1,757      1,910     6,884      7,750

Total interest expense                  20,588     29,432    90,089     117,613

Net interest income                     33,148     29,895    129,384    113,120

Provision for loan losses               9,654      2,450     27,641     8,507

Net interest income

After provision for loan losses         23,494     27,445    101,743    104,613

Other income

Services charges on deposit accounts    3,346      3,206     13,002     12,421

Fiduciary activities                    1,831      2,094     8,031      8,372

Other customer fees                     1,634      1,686     6,776      6,479

Commission income                       1,271      1,031     5,824      5,113

Earnings on cash surrender value

of life insurance                       (2,130   ) 1,186     (267     ) 3,651

Net gains and fees on sales of loans    531        546       2,490      2,438

Net realized gains (losses) on sale of

available-for-sale securities           (914     ) 1         (2,083   )

Other income                            717        383       2,594      2,077

Total other income                      6,286      10,133    36,367     40,551

Other expenses

Salaries and employee benefits          16,219     14,738    63,345     58,843

Net occupancy                           2,299      1,619     7,711      6,647

Equipment                               1,713      1,619     6,659      6,769

Marketing                               610        505       2,311      2,205

Outside data processing fees            1,128      872       4,087      3,831

Printing and office supplies            361        329       1,214      1,410

Core deposit amortization               809        789       3,216      3,159

Write-off of unamortized underwriting                                   1,771
expense

Other expenses                          6,458      4,776     20,846     17,547

Total other expenses                    29,597     25,247    109,389    102,182

Income before income tax                183        12,331    28,721     42,982

Income tax expense                      (38      ) 3,021     8,083      11,343

Net income                              $ 221      $ 9,310   $ 20,638   $ 31,639

Per Share Data

Basic Net Income                        .01        .51       1.14       1.73

Diluted Net Income                      .01        .51       1.14       1.73

Cash Dividends Paid                     .23        .23       .92        .92

Average Diluted Shares

Outstanding (in thousands)              18,257     18,138    18,162     18,314



CONSOLIDATED
BALANCE SHEETS

(in thousands)       December     September    June 30,     March 31,    December
                     31,          30,                                    31,

                     2008         2008         2008         2008         2007

Assets

Cash and due from    $ 84,249     $ 69,846     $ 80,996     $ 89,961     $ 134,188
banks

Federal funds sold   66,237       7,818                                  495

Cash and cash        150,486      77,664       80,996       89,961       134,683
equivalents

Interest-bearing     38,823       15,623       7,267        21,280       24,931
time deposits

Investment           481,984      388,808      408,324      426,055      451,167
securities

Mortgage loans held  4,295        2,062        3,234        3,494        3,735
for sale

Loans                3,721,952    3,078,768    3,018,596    2,937,710    2,876,843

Less: Allowance for  (48,946   )  (34,985   )  (31,597   )  (29,094   )  (28,228   )
loan losses

Net loans            3,673,006    3,043,783    2,986,999    2,908,616    2,848,615

Premises and         59,641       44,402       44,232       44,526       44,445
equipment

Federal Reserve and
Federal Home Loan    34,319       25,494       25,455       25,345       25,250
Bank Stock

Interest receivable  23,976       21,569       19,680       21,212       23,402

Core deposit
intangibles and      165,974      135,701      136,230      135,056      135,856
goodwill

Cash surrender
value of life        93,222       73,448       72,948       71,663       70,970
insurance

Other real estate    18,458       16,916       17,243       7,372        2,573
owned

Other assets         40,568       18,604       19,852       12,578       16,460

Total assets         $            $            $            $            $
                     4,784,752    3,864,074    3,822,460    3,767,158    3,782,087

Liabilities

Deposits

Noninterest-bearing  460,519      384,928      403,152      380,364      370,397

Interest-bearing     3,258,292    2,529,355    2,460,483    2,432,763    2,473,724

Total deposits       3,718,811    2,914,283    2,863,635    2,813,127    2,844,121

Borrowings

Fed funds purchased               57,600       151,356      111,144      52,350

Securities sold
under repurchase     122,311      100,227      90,872       103,024      106,497
agreements

Federal Home Loan    360,217      237,225      228,196      244,468      294,101
Bank advances

Subordinated
debentures,
revolving credit,

lines and term       135,826      176,256      115,826      115,826      115,826
loans

Total borrowings     618,354      571,308      586,250      574,462      568,774

Interest payable     8,844        6,529        6,658        7,621        8,325

Other liabilities    42,840       19,861       18,525       23,107       20,931

Total liabilities    4,388,849    3,511,981    3,475,068    3,418,317    3,442,151

Stockholders'
equity

Preferred stock,
no-par value

Authorized and
unissued - 500,000
shares

Cumulative
Preferred Stock,
$1,000 par value:

Authorized - 600     125          125          125          125
shares

Issued and
outstanding

Common stock, $.125
stated value

Authorized -
50,000,000 shares

Issued and           2,647        2,266        2,258        2,247        2,250
outstanding

Additional paid-in   202,299      141,777      140,258      137,633      137,801
capital

Retained earnings    206,496      210,605      206,059      206,710      202,750

Accumulated other    (15,664   )  (2,680    )  (4,308    )  (2,126    )  (2,865    )
comprehensive loss

Total stockholders'  395,903      352,093      347,392      348,841      339,936
equity

Total liabilities    $            $            $            $            $
and stockholders'    4,784,752    3,864,074    3,822,460    3,767,158    3,782,087
equity



NON-PERFORMING
ASSETS

                  December 31,  September 30,  June 30,  March 31,  December 31,

                  2008          2008           2008      2008       2007

Non Accrual       87,546        37,879         34,410    27,465     29,031
Loans

Renegotiated      130           135            136       142        145
Loans

Non Performing    87,676        38,014         34,546    27,607     29,176
Loans (NPL)

Real Estate
Owned and         18,458        16,916         17,243    7,372      2,573
Repossessed
Assets

Non Performing    106,134       54,930         51,789    34,979     31,749
Assets (NPA)

90+ Days          5,982         8,056          3,538     4,996      3,578
Delinquent

NPAs & 90 Day     112,116       62,986         55,327    39,975     35,327
Delinquent

Loan Loss         48,946        34,985         31,597    29,094     28,228
Reserve

YTD Charge-offs   15,602        11,230         7,524     2,957      6,819

NPAs / Actual     2.22    %     1.42   %       1.35   %  0.93   %   0.84   %
Assets %

NPAs & 90 Day /   2.34    %     1.63   %       1.45   %  1.06   %   0.93   %
Actual Assets %

NPAs / Actual     2.83    %     1.77   %       1.70   %  1.19   %   1.10   %
Loans & REO (%)

Loan Loss
Reserves /        1.31    %     1.14   %       1.05   %  0.99   %   0.98   %
Actual Loans (%)

NCOs / YTD
Average Loans     0.52    %     0.38   %       0.26   %  0.10   %   0.24   %
(%)



CONSOLIDATED
STATEMENTS OF
INCOME

                    December 31,  September    June 30,   March 31,  December
                                  30,                                31,

(in thousands,      2008          2008         2008       2008       2007
except share data)

Loans receivable

Taxable             $ 48,433      $            $          $          $
                                  49,828       49,023     51,101     53,338

Tax exempt          349           321          178        165        302

Investment
securities

Taxable             2,907         2,943        2,947      3,249      3,487

Tax exempt          1,511         1,379        1,452      1,513      1,623

Federal funds sold  7             10           3          8          39

Deposits with
financial           194           146          133        282        194
institutions

Federal Reserve
and Federal Home
Loan

Bank stock          335           351          370        335        344

Total interest      53,736        54,978       54,106     56,653     59,327
income

Interest expense

Deposits            15,638        16,213       16,297     19,433     23,398

Federal funds       108           502          577        669        692
purchased

Securities sold
under repurchase    502           650          632        816        1,182
agreements

Federal Home Loan   2,583         2,724        2,825      3,036      3,250
Bank advances

Subordinated
debentures,
revolving credit

lines and term      1,757         1,635        1,602      1,890      1,910
loans

Total interest      20,588        21,724       21,933     25,844     29,432
expense

Net interest        33,148        33,254       32,173     30,809     29,895
income

Provision for loan  9,654         7,094        7,070      3,823      2,450
losses

Net interest
income

After provision     23,494        26,160       25,103     26,986     27,445
for loan losses

Other income

Service charges on  3,346         3,568        3,157      2,931      3,206
deposit accounts

Fiduciary           1,831         1,932        2,126      2,142      2,094
activities

Other customer      1,634         1,696        1,767      1,679      1,686
fees

Commission income   1,271         1,457        1,427      1,669      1,031

Earnings on cash
surrender value

of life insurance   (2,130   )    519          606        738        1,186

Net gains and fees  531           648          668        643        546
on sales of loans

Net realized gains
(losses) on sales
of

available-for-sale  (914     )    (1,255 )     13         73         1
securities

Other income        717           655          570        652        383

Total other income  6,286         9,220        10,334     10,527     10,133

Other expenses

Salaries and        16,219        15,330       15,698     16,098     14,738
employee benefits

Net occupancy       2,299         1,857        1,750      1,805      1,619

Equipment           1,713         1,649        1,643      1,654      1,619

Marketing           610           605          612        484        505

Outside data        1,128         1,068        1,009      882        872
processing fees

Printing and        361           281          291        281        329
office supplies

Core deposit        809           809          808        790        789
amortization

Other expenses      6,458         5,516        4,593      4,279      4,776

Total other         29,597        27,115       26,404     26,273     25,247
expenses

Income before       183           8,265        9,033      11,240     12,331
income tax

Income tax expense  (38      )    2,516        2,491      3,114      3,021

Net income          $ 221         $            $ 6,542    $ 8,126    $ 9,310
                                  5,749

Per Share Data

Basic Net Income    .01           .32          .37        .45        .51

Diluted Net Income  .01           .32          .36        .45        .51

Cash Dividends      .23           .23          .23        .23        .23
Paid

Average Diluted
Shares

Outstanding (in     18,257        18,196       18,159     18,055     18,138
thousands)

FINANCIAL RATIOS

Return on Average   .02      %    .60    %     .69     %  .86     %  1.00    %
Assets

Return on Average
Stockholders'       0.25          6.58         7.46       9.43       11.10
Equity

Avg. Earning
Assets to Avg.      91.15         91.02        90.94      90.38      90.70
Assets

Allowance for Loan
Losses as %

of Total Loans      1.31          1.14         1.05       .99        .98

Net Charge Off's
as % of Average
Loans

(Annualized)        .57           .49          .61        .41        .26

Dividend Payout     2,300.00      71.88        63.85      51.10      45.10
Ratio

Average
Stockholders'       9.13          9.09         9.30       9.17       8.98
Equity to Average
Assets

Tax Equivalent
Yield on Earning    6.21          6.39         6.41       6.78       7.13
Assets

Cost of Supporting  2.33          2.48         2.56       3.04       3.47
Liabilities

Net Interest
Margin (FTE) on     3.88          3.91         3.85       3.74       3.66
Earning Assets



LOANS

              December 31,  September    June 30,     March 31,    December 31,
                            30,

(in
thousands,    2008          2008         2008         2008         2007
except share
data)

Commercial
and           $ 904,646     $ 851,233    $ 815,137    $ 724,643    $662,701
industrial
loans

Agricultural
production
financing
and

other loans   135,099       136,176      125,125      123,314      114,324
to farmers

Real estate
loans:

Construction  252,487       167,512      181,598      178,171      165,425

Commercial    1,202,372     966,259      954,672      961,431      947,234
and farmland

Residential   956,245       731,065      718,065      728,956      744,627

Individuals'
loans for
household
and

other
personal      201,632       145,345      161,387      174,857      187,880
expenditures

Tax exempt    28,070        34,010       22,553       11,646       16,423
loans

Lease
financing
receivables,
net of

unearned      8,996         9,262        9,158        8,438        8,351
income

Other loans   32,405        37,906       30,901       26,254       29,878

              3,721,952     3,078,768    3,018,596    2,937,710    2,876,843

Allowance
for loan      (48,946    )  (34,985   )  (31,597   )  (29,094   )  (28,228     )
losses

Total loans   $             $            $            $            $ 2,848,615
              3,673,006     3,043,783    2,986,999    2,908,616

DEPOSITS

              December 31,  September    June 30,     March 31,    December 30,
                            30,

              2008          2008         2008         2008         2007

(in
thousands)

Demand        $1,136,267    $921,034     $932,017     $881,498     $903,380
deposits

Savings       721,387       540,596      546,951      562,942      552,379
deposits

Certificates
and other
time
deposits of

$100,000 or   509,730       469,426      444,967      459,038      470,733
more

Other
certificates  1,351,427     983,227      939,700      909,649      917,629
and time
deposits

Total         $             $            $            $            $ 2,844,121
deposits      3,718,811     2,914,283    2,863,635    2,813,127


    Source: First Merchants Corporation
Contact: First Merchants Corporation Mark K. Hardwick, 765-751-1857 Executive Vice President/Chief Financial Officer http://www.firstmerchants.com
  • First Merchants Corporation

    200 East Jackson Street
    P.O. Box 792
    Muncie, IN 47305-2814

    (765) 747-1500

  • Investor Relations Contact

    Nicole M. Weaver
    765.521.7619 or
    800.262.4261, Ext. 47619

    nweaver@firstmerchants.com

  • Shareholder Relations Contact

    Cindy Holaday
    765.741.7278 or
    800.262.4261, Ext. 27278

    shareholderrelations
    @firstmerchants.com

  • Transfer Agent

    Broadridge
    PO Box 1342
    Brentwood, NY 11717-0718
    (888) 401-4448