News Release Details

First Merchants Corporation Announces 21 Percent Increase in Fourth Quarter Earnings Per Share

01/23/2008

MUNCIE, Ind.--(BUSINESS WIRE)--

First Merchants Corporation (NASDAQ: FRME) has reported fourth quarter 2007 earnings per share of $.51, a 21.4% increase over $.42 earned in the fourth quarter of 2006. Net income for the quarter totaled $9,310,000 compared to $7,659,000 in fourth quarter of 2006.

2007 earnings per share totaled $1.73, a 5.5% increase over the $1.64 earned in 2006. Included in the year-to-date results are two strategic non-recurring expenses.

The first non-recurring expense is related to the early redemption of the Corporation's subordinated debentures payable to First Merchants Capital Trust I and subsequent redemption by First Merchants Capital Trust I of it's outstanding common and preferred fixed rate securities (NASDAQ-FRMEP) as reported on Form 8-K on April 26, 2007. The early redemption of the debentures required the Corporation to accelerate the recognition of the remaining unamortized underwriting fee of approximately $1.8 million, or $.06 per share.

Additionally, in a January 24, 2007 press release, the Corporation announced its plan to integrate the data operations of its Columbus, Ohio, bank into the corporate operations center. The company also announced its plan to re-brand four bank charters into First Merchants Bank, NA. The successful completion of these actions cost $1.1 million during 2007.

The combination of these non-recurring expenses totaled $2.9 million, or $.10 per share. Excluding these non-recurring expenses, earnings per share improved by $.19, or 11.6 percent over 2006.

Total assets equaled $3.78 billion at year-end, an increase of $227 million, or 6.4 percent, over December 31, 2006. Loans and investments, the Corporation's primary earning assets, totaled $3.33 billion, an increase of $169 million, or 5.3 percent, over the same period last year.

Year-to-date net interest margin totaled 3.55 percent, a 16 basis point decline from the prior year total of 3.71 percent. The decline is meaningful, however, the Corporation's net interest margin did increase in the fourth quarter of 2007 as the Federal Reserve lowered its benchmark fed funds rate by 1 percent.

Total other income increased by $5.9 million, or 17.2 percent. All reported line items produced increases ranging from a low of 9.8 percent to a high of 59.7 percent reflecting the Corporation's focus on fee for service business.

Total other expenses increased by $6.1 million, or 6.4 percent, absent the non-recurring expenses totaling $2.9 million, non-interest expense increased by $3.2 million, or 3.4 percent.

The provision for loan losses increased by $2.2 million to $8.5 million, or 30 basis points based on the Corporation's continued evaluation of the adequacy of the allowance for loan losses. The increased provision in 2007 is reflective of net-charge off's totaling $6.8 million, or 24 basis points, and increased non-performing assets of $11.6 million. The reserve for loan losses increased by $1.7 million in 2007 to $28.2 million and the allowance for loan losses as a percentage of total loans outstanding remained at .98 percent.

Michael C. Rechin, President and Chief Executive Officer, stated that, "The tactical execution of our strategic plan during 2007 is reflective of the commitment our employees have to First Merchants Corporation. Given the distractions of a volatile market and a slowing economy, we believe that our employees have remained focused on meeting our customers' needs and providing great service as evidenced by our loan growth and our non-interest income growth." Rechin also added, "2007 was a turbulent year in the banking sector and this management team is pleased with the momentum our company continues to build. We are committed to our culture statement whereby we expect superior results from our company and ourselves. We are very aware of the economic and credit environment that our industry faces in 2008, but are confident in our ability to show continued progress."

CONFERENCE CALL

First Merchants Corporation will conduct a conference call at 2:30 p.m. Eastern Standard Time on Wednesday, January 23, 2008. To participate, dial (Toll Free) 800-860-2442 and reference First Merchants Corporation's fourth quarter earnings. A replay will be available until January 31, 2008. To access replay, US/Canada participants should dial (Toll Free) 877-344-7529 or for International participants, dial 412-317-0088. The replay passcode is 414887#.

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 and First Merchants Trust Company, N.A. The Corporation also operates First Merchants Insurance Services, a full-service property casualty, personal lines, and healthcare insurance agency and is a majority member of Indiana Title Insurance Company, LLC, a title insurance agency.

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

CONSOLIDATED BALANCE SHEETS

(in thousands)                                      December 31,
                                                  2007        2006
Assets
   Cash and due from banks                       $134,683     $89,957
   Interest-bearing time deposits                  24,931      11,284
   Investment securities                          451,167     465,217
   Mortgage loans held for sale                     3,735       5,413
   Loans                                        2,876,843   2,692,601
      Less: Allowance for loan losses             (28,228)    (26,540)
                                               ----------  ----------
        Net loans                               2,848,615   2,666,061
   Premises and equipment                          44,445      42,393
   Federal Reserve and Federal Home Loan Bank
    stock                                          25,250      23,691
   Interest receivable                             23,402      24,345
   Core deposit intangibles and goodwill          135,856     138,638
   Cash surrender value of life insurance          70,970      64,213
   Other assets                                    19,033      23,658
                                               ----------  ----------
           Total assets                        $3,782,087  $3,554,870
                                               ==========  ==========
Liabilities
   Deposits
     Noninterest-bearing                         $370,397    $362,058
     Interest-bearing                           2,473,724   2,388,480
                                               ----------  ----------
           Total deposits                       2,844,121   2,750,538
   Borrowings                                     568,774     440,764
   Interest payable                                 8,325       9,326
   Other liabilities                               20,931      26,917
                                               ----------  ----------
           Total liabilities                    3,442,151   3,227,545
Stockholders' equity
   Preferred stock, no-par value
      Authorized and unissued -- 500,000
       shares
   Common stock, $.125 stated value
      Authorized -- 50,000,000 shares
      Issued and outstanding -- 18,002,787 and
       18,439,843 shares                            2,250       2,305
   Additional paid-in capital                     137,801     146,460
   Retained earnings                              202,750     187,965
   Accumulated other comprehensive loss            (2,865)     (9,405)
                                               ----------  ----------
        Total stockholders' equity                339,936     327,325
                                               ----------  ----------
        Total liabilities and stockholders'
         equity                                $3,782,087  $3,554,870
                                               ==========  ==========
FINANCIAL HIGHLIGHTS

                         Three Months Ended          Year Ended
(In thousands)              December 31,            December 31,
                          2007        2006        2007        2006

NET CHARGE OFF'S           $1,857      $1,680      $6,819      $4,906

AVERAGE BALANCES
  Total Assets         $3,735,931  $3,499,774  $3,639,772  $3,371,386
  Total Loans           2,873,989   2,653,700   2,794,824   2,569,847
  Total Deposits        2,812,760   2,755,145   2,752,443   2,568,070
  Total Stockholders'
   Equity                 335,649     326,158     330,786     319,519

FINANCIAL RATIOS
  Return on Average
   Assets                    1.00%        .88%        .87%        .90%
  Return on Avg.
   Stockholders' Equity     11.10        9.39        9.56        9.45
  Avg. Earning Assets
   to Avg. Assets           90.70       90.87       90.91       91.15
  Allowance for Loan
   Losses as %
  Of Total Loans              .98         .99         .98         .99
  Net Charge Off's as %
   Of Avg. Loans
  (Annualized)                .26         .25         .24         .19
  Dividend Payout Ratio     45.10       56.10       53.18       56.10
  Avg. Stockholders'
   Equity to Avg.
   Assets                    8.98        9.32        9.09        9.48
  Tax Equivalent Yield
   on Earning Assets         7.13        7.07        7.10        6.92
  Cost of Supporting
   Liabilities               3.47        3.53        3.55        3.21
  Net Int. Margin (FTE)
   on Earning Assets         3.66        3.54        3.55        3.71
CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share
 data)                           Three Months Ended     Year Ended
                                    December 31,       December 31,
                                   2007      2006     2007     2006
Interest income
   Loans receivable
     Taxable                       $53,338 $49,293  $207,268 $186,768
     Tax exempt                        302     240     1,120      828
   Investment securities
     Taxable                         3,487   3,219    13,744   12,316
     Tax exempt                      1,623   1,660     6,548    6,565
   Federal funds sold                   39     332       172      373
   Deposits with financial
    institutions                       194     110       582      500
   Federal Reserve and Federal
    Home Loan Bank stock               344     318     1,299    1,256
                                 --------- -------  -------- --------
        Total interest income       59,327  55,172   230,733  208,606
                                 --------- -------  -------- --------
Interest expense
   Deposits                         22,398  22,690    89,921   74,314
   Federal funds purchased             692      93     3,589    1,842
   Securities sold under
    repurchase agreements            1,182     488     3,856    3,228
   Federal Home Loan Bank
    advances                         3,250   2,672    12,497   10,734
   Subordinated debentures,
    revolving credit lines and
    term loans                       1,910   2,046     7,750    8,124
   Other borrowings                      -      67         -      269
                                 --------- -------  -------- --------
        Total interest expense      29,432  28,056   117,613   98,511
                                 --------- -------  -------- --------
Net interest income                 29,895  27,116   113,120  110,095
   Provision for loan losses         2,450   1,245     8,507    6,258
                                 --------- -------  -------- --------


Net interest income after
 provision for loan losses          27,445  25,871   104,613  103,837
                                 --------- -------  -------- --------
Other income
   Fiduciary activities              2,094   1,862     8,372    7,625
   Service charges on deposit
    accounts                         3,206   3,010    12,421   11,262
   Other customer fees               1,686   1,387     6,479    5,517
   Net realized gains (losses)
    on sales of available-for-
    sale securities                      1      (4)        -       (4)
   Commission income                 1,031     881     5,113    4,302
   Earnings on cash surrender
    value of life insurance          1,186     712     3,651    2,286
   Net gains and fees on sales
    of loans                           546     613     2,438    2,171
   Other income                        383     309     2,077    1,454
                                 --------- -------  -------- --------
        Total other income          10,133   8,770    40,551   34,613
                                 --------- -------  -------- --------

Other expenses
   Salaries and employee
    benefits                        14,738  14,157    58,843   56,125
   Net occupancy expenses            1,619   1,498     6,647    5,886
   Equipment expenses                1,619   1,956     6,769    7,947
   Marketing expense                   505     508     2,205    1,932
   Outside data processing fees        872     804     3,831    3,449
   Printing and office supplies        329     401     1,410    1,496
   Core deposit amortization           789     781     3,159    3,066
   Write-off of unamortized
    underwriting expense                 -       -     1,771        -
   Other expenses                    4,776   4,315    17,547   16,156
                                 --------- -------  -------- --------
        Total other expenses        25,247  24,420   102,182   96,057
                                 --------- -------  -------- --------

Income before income tax            12,331  10,221    42,982   42,393
   Income tax expense                3,021   2,562    11,343   12,195
                                 --------- -------  -------- --------
Net income                          $9,310  $7,659   $31,639  $30,198
                                 ========= =======  ======== ========

Per Share Data

   Basic Net Income                    .51     .42      1.73     1.64
   Diluted Net Income                  .51     .42      1.73     1.64
   Cash Dividends Paid                 .23     .23       .92      .92
   Average Diluted Shares
     Outstanding (in thousands)     18,144  18,498    18,307   18,467
CONSOLIDATED BALANCE SHEETS



(in thousands)                    Dec. 31,    Sept. 30,    June 30,
                                    2007         2007        2007
Assets
   Cash and due from banks         $134,683      $85,645     $80,921
   Interest-bearing time deposits    24,931       22,295       8,898
   Investment securities            451,167      474,613     479,281
   Mortgage loans held for sale       3,735        4,328       2,842
   Loans                          2,876,843    2,869,001   2,806,068
     Less: Allowance for loan
      losses                        (28,228)     (27,635)    (27,608)
                                 ----------  -----------  ----------
        Net loans                 2,848,615    2,841,366   2,778,460
   Premises and equipment            44,445       44,255      44,126
   Federal Reserve and Federal
    Home Loan Bank stock             25,250       25,050      23,822
   Interest receivable               23,402       25,954      21,615
   Core deposit intangibles and
    goodwill                        135,856      136,266     137,056
   Cash surrender value of life
    insurance                        70,970       70,082      69,111
   Other assets                      19,033       24,446      23,383
                                 ----------  -----------  ----------
        Total assets             $3,782,087  $ 3,754,300  $3,669,515
                                 ==========  ===========  ==========
Liabilities
   Deposits
     Noninterest-bearing           $370,397    $ 355,339    $362,083
     Interest-bearing             2,473,724    2,403,836   2,357,518
                                 ----------  -----------  ----------
        Total deposits            2,844,121    2,759,175   2,719,601
   Borrowings                       568,774      620,469     587,574
   Interest payable                   8,325        9,170      10,417
   Other liabilities                 20,931       32,745      24,543
                                 ----------  -----------  ----------
        Total liabilities         3,442,151    3,421,559   3,342,135
Stockholders' equity
   Preferred stock, no-par value
      Authorized and unissued --
       500,000 shares
   Common stock, $.125 stated
    value
      Authorized -- 50,000,000
       shares
      Issued and outstanding          2,250        2,269       2,286
   Additional paid-in capital       137,801      140,642     143,317
   Retained earnings                202,750      197,609     193,460
   Accumulated other
    comprehensive loss               (2,865)      (7,779)    (11,683)
                                 ----------  -----------  ----------
        Total stockholders'
         equity                     339,936      332,741     327,380
                                 ----------  -----------  ----------
        Total liabilities and
         stockholders' equity    $3,782,087  $ 3,754,300  $3,669,515
                                 ==========  ===========  ==========



(in thousands)                                  March 31,   Dec. 31,
                                                  2007        2006
Assets
   Cash and due from banks                        $43,629     $89,957
   Interest-bearing time deposits                   6,785      11,284
   Investment securities                          476,199     465,217
   Mortgage loans held for sale                     2,732       5,413
   Loans                                        2,731,140   2,692,601
     Less: Allowance for loan losses              (26,819)    (26,540)
                                               ----------  ----------
        Net loans                               2,704,321   2,666,061
   Premises and equipment                          43,262      42,393
   Federal Reserve and Federal Home Loan Bank
    stock                                          23,691      23,691
   Interest receivable                             21,941      24,345
   Core deposit intangibles and goodwill          137,847     138,638
   Cash surrender value of life insurance          68,360      64,213
   Other assets                                    26,047      23,658
                                               ----------  ----------
        Total assets                           $3,554,814  $3,554,870
                                               ==========  ==========
Liabilities
   Deposits
     Noninterest-bearing                         $325,615    $362,058
     Interest-bearing                           2,361,773   2,388,480
                                               ----------  ----------
        Total deposits                          2,687,388   2,750,538
   Borrowings                                     497,188     440,764
   Interest payable                                10,834       9,326
   Other liabilities                               30,756      26,917
                                               ----------  ----------
        Total liabilities                       3,226,166   3,227,545
Stockholders' equity
   Preferred stock, no-par value
      Authorized and unissued -- 500,000
       shares
   Common stock, $.125 stated value
      Authorized -- 50,000,000 shares
      Issued and outstanding                        2,289       2,305
   Additional paid-in capital                     143,672     146,460
   Retained earnings                              191,476     187,965
   Accumulated other comprehensive loss            (8,789)     (9,405)
                                               ----------  ----------
        Total stockholders' equity                328,648     327,325
                                               ----------  ----------
        Total liabilities and stockholders'
         equity                                $3,554,814  $3,554,870
                                               ==========  ==========
NON PERFORMING ASSETS

(in         December 31, September 30, June 30, March 31, December 31,
 thousands)     2007         2007        2007     2007        2006

Non Accrual
 Loans           $29,031       $30,165  $30,820   $22,704      $17,926
Renegotiated
 Loans               145            58       58        59           84
            ------------ ------------- -------- --------- ------------

Non
 Performing
 Loans (NPL)      29,176        30,223   30,878    22,763       18,010
Real Estate
 Owned and
 Repossessed
 Assets            2,573         2,081    2,274     3,102        2,160
            ------------ ------------- -------- --------- ------------

Non
 Performing
 Assets
 (NPA)            31,749        32,304   33,152    25,865       20,170
90+ Days
 Delinquent        3,578         3,132    5,203     4,554        2,870
            ------------ ------------- -------- --------- ------------

NPAs & 90
 Day
 Delinquent       35,327        35,436   38,355    30,419       23,040

Loan Loss
 Reserve          28,228        27,635   27,608    26,819       26,540
YTD Charge-
 offs              6,819         4,962    2,179     1,320        4,906
NPAs /
 Actual
 Assets %          0.84%         0.86%    0.90%     0.73%        0.57%
NPAs & 90
 day /
 Actual
 Assets %          0.93%         0.94%    1.05%     0.86%        0.65%
NPAs /
 Actual
 Loans & REO
 (%)               1.10%         1.12%    1.18%     0.95%        0.75%
Loan Loss
 Reserves /
 Actual
 Loans (%)         0.98%         0.96%    0.98%     0.98%        0.98%
NCOs / YTD
 Average
 Loans (%)         0.24%         0.18%    0.08%     0.05%        0.19%
CONSOLIDATED STATEMENTS OF INCOME



                                           Three Months Ended
(in thousands, except share data)  December 31, September 30 June 30,
                                       2007         2007       2007
Interest Income
   Loans receivable
     Taxable                           $53,338      $53,081  $51,204
     Tax exempt                            302          368      249
   Investment securities
     Taxable                             3,487        3,581    3,394
     Tax exempt                          1,623        1,613    1,651
   Federal funds sold                       39           41       91
   Deposits with financial
    institutions                           194          145      120
   Federal Reserve and Federal Home
    Loan Bank stock                        344          328      299
                                   -----------  -----------  -------
       Total interest income            59,327       59,157   57,008
                                   -----------  -----------  -------
Interest expense
   Deposits                             22,398       23,327   22,390
   Federal funds purchased                 692          996    1,047
   Securities sold under repurchase
    agreements                           1,182        1,195      910
   Federal Home Loan Bank advances       3,250        3,302    3,009
   Subordinated debentures,
    revolving credit lines and term
    loans                                1,910        1,802    2,037
   Other borrowings                          -            -        -
                                   -----------  -----------  -------
        Total interest expense          29,432       30,622   29,393
                                   -----------  -----------  -------
Net interest income                     29,895       28,535   27,615
   Provision for loan losses             2,450        2,810    1,648
                                   -----------  -----------  -------


Net interest income after provision
 for loan losses                        27,445       25,725   25,967
                                   -----------  -----------  -------
Other income
   Fiduciary activities                  2,094        1,985    2,257
   Service charges on deposit
    accounts                             3,206        3,241    3,091
   Other customer fees                   1,686        1,767    1,535
   Net realized gains (losses) on
    sales of available-for-sale
    securities                               1            -        -
   Commission income                     1,031        1,175    1,269
   Earnings on cash surrender value
    of life insurance                    1,186          998      782
   Net gains and fees on sales of
    loans                                  546          749      611
   Other income                            383          933      221
                                   -----------  -----------  -------
        Total other income              10,133       10,848    9,766
                                   -----------  -----------  -------

Other expenses
   Salaries and employee benefits       14,738       14,583   14,796
   Net occupancy expenses                1,619        1,818    1,612
   Equipment expenses                    1,619        1,645    1,783
   Marketing expense                       505          560      653
   Outside data processing fees            872          972    1,036
   Printing and office supplies            329          394      388
   Core deposit amortization               789          789      790
   Write-off of unamortized
    underwriting expense                     -            -    1,771
   Other expenses                        4,776        4,241    4,910
                                   -----------  -----------  -------
        Total other expenses            25,247       25,002   27,739
                                   -----------  -----------  -------

Income before income tax                12,331       11,571    7,994
   Income tax expense                    3,021        3,221    1,786
                                   -----------  -----------  -------
Net income                              $9,310       $8,350   $6,208
                                   ===========  ===========  =======

Per Share Data

   Basic Net Income                       $.51         $.46     $.34
   Diluted Net Income                      .51          .46      .34
   Cash Dividends Paid                     .23          .23      .23
   Average Diluted Shares
     Outstanding (in thousands)         18,144       18,276   18,369

FINANCIAL RATIOS
  Return on Average Assets                1.00%         .90%     .69%
  Return on Avg. Stockholders'
   Equity                                11.10        10.14     7.53
  Avg. Earning Assets to Avg.
   Assets                                90.70        90.88    90.96
  Allowance for Loan Losses as %
  Of Total Loans                           .98          .96      .98
  Net Charge Off's as % Of Avg.
   Loans
  (Annualized)                             .26          .39      .23
  Dividend Payout Ratio                  45.10        50.00    67.65
  Avg. Stockholders' Equity to Avg.
   Assets                                 8.98         8.91     9.15
  Tax Equivalent Yield on Earning
   Assets                                 7.13         7.17     7.09
  Cost of Supporting Liabilities          3.47         3.65     3.59
  Net Int. Margin (FTE) on Earning
   Assets                                 3.66         3.52     3.50



                                                 Three Months Ended
(in thousands, except share data)               March 31, December 31,
                                                  2007        2006
Interest Income
   Loans receivable
     Taxable                                     $49,645      $49,293
     Tax exempt                                      201          240
   Investment securities
     Taxable                                       3,282        3,219
     Tax exempt                                    1,661        1,660
   Federal funds sold                                  1          332
   Deposits with financial institutions              123          110
   Federal Reserve and Federal Home Loan Bank
    stock                                            328          318
                                                --------  -----------
       Total interest income                      55,241       55,172
                                                --------  -----------
Interest expense
   Deposits                                       21,806       22,690
   Federal funds purchased                           854           93
   Securities sold under repurchase agreements       569          488
   Federal Home Loan Bank advances                 2,936        2,672
   Subordinated debentures, revolving credit
    lines and term loans                           2,001        2,046
   Other borrowings                                    -           67
                                                --------  -----------
        Total interest expense                    28,166       28,056
                                                --------  -----------
Net interest income                               27,075       27,116
   Provision for loan losses                       1,599        1,245
                                                --------  -----------


Net interest income after provision for loan
 losses                                           25,476       25,871
                                                --------  -----------
Other income
   Fiduciary activities                            2,036        1,862
   Service charges on deposit accounts             2,883        3,010
   Other customer fees                             1,491        1,387
   Net realized gains (losses) on sales of
    available-for-sale securities                     (1)          (4)
   Commission income                               1,638          881
   Earnings on cash surrender value of life
    insurance                                        685          712
   Net gains and fees on sales of loans              532          613
   Other income                                      540          309
                                                --------  -----------
        Total other income                         9,804        8,770
                                                --------  -----------

Other expenses
   Salaries and employee benefits                 14,726       14,157
   Net occupancy expenses                          1,598        1,498
   Equipment expenses                              1,722        1,956
   Marketing expense                                 487          508
   Outside data processing fees                      951          804
   Printing and office supplies                      299          401
   Core deposit amortization                         791          781
   Write-off of unamortized underwriting
    expense                                            -            -
   Other expenses                                  3,620        4,315
                                                --------  -----------
        Total other expenses                      24,194       24,420
                                                --------  -----------

Income before income tax                          11,086       10,221
   Income tax expense                              3,315        2,562
                                                --------  -----------
Net income                                        $7,771       $7,659
                                                ========  ===========

Per Share Data

   Basic Net Income                                 $.42         $.42
   Diluted Net Income                                .42          .42
   Cash Dividends Paid                               .23          .23
   Average Diluted Shares
     Outstanding (in thousands)                   18,497       18,498

FINANCIAL RATIOS
  Return on Average Assets                           .88%         .88%
  Return on Avg. Stockholders' Equity               9.47         9.39
  Avg. Earning Assets to Avg. Assets               91.13        90.87
  Allowance for Loan Losses as %
  Of Total Loans                                     .98          .99
  Net Charge Off's as % Of Avg. Loans
  (Annualized)                                       .20          .25
  Dividend Payout Ratio                            54.76        56.10
  Avg. Stockholders' Equity to Avg. Assets          9.32         9.32
  Tax Equivalent Yield on Earning Assets            7.01         7.07
  Cost of Supporting Liabilities                    3.51         3.53
  Net Int. Margin (FTE) on Earning Assets           3.50         3.54
LOANS



(in thousands)                     Dec. 31,    Sept. 30,   June 30,
                                     2007        2007        2007

Commercial and industrial loans     $662,701    $626,301    $590,345
Agricultural production financing
 and other loans to farmers          114,324     113,132     103,713
Real estate loans:
  Construction                       165,425     160,624     172,247
  Commercial and farmland            947,234     912,063     895,301
  Residential                        744,627     769,890     768,392
Individuals' loans for household
 and other personal expenditures     187,880     194,181     206,435
Tax exempt loans                      16,423      28,726      23,181
Lease financing receivables, net
 of unearned income                    8,351       8,932       7,906
Other loans                           29,878      55,152      38,548
                                  ----------  ----------  ----------
                                   2,876,843   2,869,001   2,806,068
Allowance for loan losses            (28,228)    (27,635)    (27,608)
                                  ----------  ----------  ----------
     Total loans                  $2,848,615  $2,841,366  $2,778,460
                                  ==========  ==========  ==========



(in thousands)                                  March 31,   Dec. 31,
                                                  2007        2006

Commercial and industrial loans                  $557,304    $537,305
Agricultural production financing and other
 loans to farmers                                  97,784     100,098
Real estate loans:
  Construction                                    151,782     169,491
  Commercial and farmland                         906,726     861,429
  Residential                                     756,316     749,921
Individuals' loans for household and other
 personal expenditures                            210,578     223,504
Tax exempt loans                                   15,306      14,423
Lease financing receivables, net of unearned
 income                                             7,648       8,010
Other loans                                        27,696      28,420
                                               ----------  ----------
                                                2,731,140   2,692,601
Allowance for loan losses                         (26,819)    (26,540)
                                               ----------  ----------
     Total loans                               $2,704,321  $2,666,061
                                               ==========  ==========
DEPOSITS


(in thousands)   Dec. 31,  Sept. 30,   June 30,  March 31,   Dec. 31,
                   2007       2007       2007       2007       2006

Demand deposits   $903,380   $825,185   $855,458   $787,538   $883,294
Savings
 deposits          552,379    508,139    494,738    530,692    507,431
Certificates
 and other time
 deposits of
 $100,000 or
 more              470,733    472,842    443,355    398,061    408,910
Other
 certificates
 and time
 deposits          917,629    953,009    926,050    971,097    950,903
                ---------- ---------- ---------- ---------- ----------
     Total
      deposits  $2,844,121$2,759,175$2,719,601$2,687,388$2,750,538
                ========== ========== ========== ========== ==========

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