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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- FORM 8-K ------------------------- CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 27, 2001 FIRST MERCHANTS CORPORATION (Exact name of registrant as specified in its charter) INDIANA (State or other jurisdiction of incorporation) 0-17071 35-1544218 (Commission File Number) (IRS Employer Identification No.) 200 East Jackson Street P.O. Box 792 Muncie, Indiana 47305 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (765) 747-1500

Item 5. Other Events and Regulation FD Disclosure. On October 15, 2001, First Merchants Corporation (the "Registrant") and Lafayette Bancorporation ("Lafayette") jointly announced the signing of a definitive agreement (the "Agreement") pursuant to which Lafayette will be merged with and into Registrant (the "Merger"). Registrant filed a Current Report on Form 8-K (the "Current Report") with the Securities and Exchange Commission on October 15, 2001, disclosing certain terms of the Merger. A copy of the Agreement was attached to the Current Report as an exhibit. Subject to various contingencies, the Merger is expected to be completed in the second quarter of 2002. In connection with the Merger, Registrant is filing the following financial information as exhibits hereto: (a) Audited consolidated financial statements of Lafayette as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000; (b) Unaudited consolidated financial statements of Lafayette as of September 30, 2001 and for each of the three month periods and nine month periods ended September 30, 2001 and 2000; and (c) Unaudited pro forma combined consolidated financial information for Registrant and for Lafayette giving effect to the Merger, as of September 30, 2001, for the nine month period ended September 30, 2001, and for the year ended December 31, 2000. On November 27, 2001, Registrant announced that it had executed two agreements pursuant to which it would enter the title insurance business by acquiring Delaware County Abstract Company, Inc. ("DCA") and Beebe & Smith Title Insurance Company, Inc. ("B&S") (the "Acquisitions"). A copy of the November 27, 2001 press release announcing the Acquisitions is attached hereto as an exhibit. Subject to certain contingencies, DCA and B&S are to be merged into Indiana Title Insurance Company, a wholly-owned subsidiary of the Registrant ("ITIC"), effective January 1, 2002. As part of the Acquisitions, the shareholders of DCA and B&S will receive unregistered shares of the Registrant's common stock with a value of approximately $1.1 million and $1.1 million, respectively, in consideration for their shares of DCA and B&S. In addition, the shareholders of DCA and B&S will each receive additional unregistered shares of the Registrant's common stock with a market value equal to 10% of ITIC's (or any successor thereto's) income before taxes for the year ending December 31, 2002. Following completion of the Acquisitions, it is contemplated that ITIC, MutualFirst Financial, Inc. in Muncie, Indiana ("Mutual") and Americana Bancorp in New Castle, Indiana ("Americana") will form Indiana Title Insurance Company, LLC, an Indiana limited liability 2

company (the "LLC"), to which ITIC will transfer all of the former assets of DCA and B&S which were acquired through the Acquisitions. Mutual and Americana will each contribute cash to LLC in exchange for their ownership interests. The ownership interests of the LLC held by ITIC, Mutual and Americana and the amount of the cash contributions by Mutual and Ameriana to the LLC have yet to be determined. Item 7. Financial Statements and Exhibits. (c) Exhibit Description ------- ----------- 23 Consent of Crowe, Chizek and Company LLP 99(a) Audited consolidated financial statements of Lafayette Bancorporation as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000 99(b) Unaudited consolidated financial statements of Lafayette as of September 30, 2001 and for each of the three month periods and nine month periods ended September 30, 2001 and 2000 99(c) Unaudited pro forma combined consolidated financial information for Registrant and for Lafayette giving effect to the Merger, as of September 30, 2001, for the nine month period ended September 30, 2001, and for the year ended December 31, 2000 99(d) Press release dated November 27, 2001 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 hereunto duly authorized. By: /s/ Larry R. Helms ----------------------------------- Larry R. Helms, Senior Vice President Dated: December 21, 2001 3

                                                                      EXHIBIT 23



                         Consent of Independent Auditors


     We consent to the inclusion in the Current Report on Form 8-K of First
Merchants Corporation of our report, dated January 25, 2001, on the consolidated
financial statements of Lafayette Bancorporation as of December 31, 2000 and
1999 and for each of the three years in the period ended December 31, 2000.


CROWE, CHIZEK AND COMPANY LLP
December 21, 2001
Indianapolis, Indiana

EXHIBIT 99(a) LAFAYETTE BANCORPORATION Lafayette, Indiana CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 CONTENTS REPORT OF INDEPENDENT AUDITORS CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF INCOME CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1.

REPORT OF INDEPENDENT AUDITORS Board of Directors and Shareholders Lafayette Bancorporation Lafayette, Indiana We have audited the accompanying consolidated balance sheets of Lafayette Bancorporation as of December 31, 2000 and 1999 and the related consolidated statements of income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lafayette Bancorporation as of December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with generally accepted accounting principles. Crowe, Chizek and Company LLP Indianapolis, Indiana January 25, 2001 - -------------------------------------------------------------------------------- 2.

LAFAYETTE BANCORPORATION CONSOLIDATED BALANCE SHEETS December 31, 2000 and 1999 (Dollar amounts in thousands) - -------------------------------------------------------------------------------- 2000 1999 --------- --------- ASSETS Cash and due from banks $ 26,452 $ 28,287 Interest-bearing deposits in other financial institutions 21,820 83 Federal funds sold 25,200 2,200 --------- --------- Total cash and cash equivalents 73,472 30,570 Securities available-for-sale 78,857 79,722 Securities held-to-maturity (fair value $4,580 and $4,709) 4,484 4,712 Loans held for sale 5,949 3,174 Loans 537,725 489,070 Less: Allowance for loan losses (5,071) (4,618) --------- --------- Net loans 532,654 484,452 FHLB stock, at cost 2,200 1,897 Premises, furniture and equipment, net 11,353 10,583 Intangible assets 13,007 13,747 Accrued interest receivable and other assets 19,171 16,292 --------- --------- Total assets $ 741,147 $ 645,149 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Noninterest-bearing deposits $ 70,866 $ 63,206 Interest-bearing demand and savings deposits 230,984 229,302 Interest-bearing time deposits 276,447 229,739 --------- --------- Total deposits 578,297 522,247 Short-term borrowings 55,572 27,273 FHLB advances 35,737 30,027 Note payable 11,550 12,950 Accrued interest payable and other liabilities 7,190 6,867 --------- --------- Total liabilities 688,346 599,364 Shareholders' equity Common stock, no par value: 5,000,000 shares authorized; 3,953,616 and 3,586,140 shares issued and outstanding 3,954 3,586 Additional paid-in capital 38,024 32,886 Retained earnings 11,086 11,269 Accumulated other comprehensive income (263) (1,956) --------- --------- Total shareholders' equity 52,801 45,785 --------- --------- Total liabilities and shareholders' equity $ 741,147 $ 645,149 ========= ========= - -------------------------------------------------------------------------------- See accompanying notes. 3.

LAFAYETTE BANCORPORATION CONSOLIDATED STATEMENTS OF INCOME Years ended December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- 2000 1999 1998 -------- -------- ------- INTEREST INCOME Loans, including related fees $ 46,620 $ 38,520 $29,810 Taxable securities 3,318 3,831 3,217 Tax exempt securities 1,664 1,529 991 Other 784 510 707 -------- -------- ------- Total interest income 52,386 44,390 34,725 INTEREST EXPENSE Deposits 23,016 18,024 14,906 Short-term borrowings 1,773 1,358 712 Other borrowings 2,616 2,161 1,345 -------- -------- ------- Total interest expense 27,405 21,543 16,963 -------- -------- ------- NET INTEREST INCOME 24,981 22,847 17,762 Provision for loan losses 1,200 1,060 980 -------- -------- ------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 23,781 21,787 16,782 Noninterest income Fiduciary activities 1,187 1,134 964 Service charges on deposit accounts 1,880 1,581 1,309 Net realized gain/(loss) on securities (12) (144) 6 Net gain on loan sales 659 942 1,255 Other service charges and fees 1,042 923 727 Investment product commissions 758 318 357 Other 311 371 298 -------- -------- ------- Total noninterest income 5,825 5,125 4,916 Noninterest expense Salaries and employee benefits 10,681 9,836 8,206 Occupancy, net 1,247 1,073 891 Equipment 1,731 1,314 1,054 Intangible amortization 740 597 81 Other 4,777 4,714 3,378 -------- -------- ------- Total noninterest expenses 19,176 17,534 13,610 -------- -------- ------- INCOME BEFORE INCOME TAXES 10,430 9,378 8,088 Income taxes 3,514 3,027 2,711 -------- -------- ------- NET INCOME $ 6,916 $ 6,351 $ 5,377 ======== ======== ======= Basic earnings per share $ 1.75 $ 1.61 $ 1.36 ======== ======== ======= Diluted earnings per share $ 1.74 $ 1.57 $ 1.34 ======== ======== ======= - -------------------------------------------------------------------------------- See accompanying notes. 4.

LAFAYETTE BANCORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY Years ended December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- Accumulated Additional Other Total Common Paid-in Retained Comprehensive Treasury Shareholders' Stock Capital Earnings Income Stock Equity ----- ------- -------- ------ ----- ------ Balance, January 1, 1998 $ 2,174 $ 24,555 $ 11,927 $ (90) $ (97) $ 38,469 Comprehensive income Net income 5,377 5,377 Change in net unrealized gain/ (loss) on securities available-for-sale 48 48 -------- Total comprehensive income 5,425 Issue 2,825 shares under stock option plan 2 67 69 10% Stock dividend, 217,640 shares 218 7,998 (8,216) -- Cash dividends ($.34 per share) (1,341) (1,341) Purchase 188 treasury shares (8) (8) -------- -------- -------- -------- -------- -------- Balance, December 31, 1998 2,394 32,620 7,747 (42) (105) 42,614 Comprehensive income Net income 6,351 6,351 Change in net unrealized gain/ (loss) on securities available-for-sale (1,914) (1,914) -------- Total comprehensive income 4,437 Issue 11,884 shares under stock option plan 12 266 278 3-2 stock split, 1,200,738 shares 1,201 (1,201) -- Cash dividends ($.39 per share) (1,540) (1,540) Purchase 105 treasury shares (4) (4) Retire 20,517 treasury shares (21) (88) 109 -- -------- -------- -------- -------- -------- -------- Balance, December 31, 1999 3,586 32,886 11,269 (1,956) -- 45,785 Comprehensive income Net income 6,916 6,916 Change in net unrealized gain/ (loss) on securities available-for-sale 1,693 1,693 -------- Total comprehensive income 8,609 Issue 8,448 shares under stock option plan 9 108 117 10% Stock dividend 359,043 shares 359 5,030 (5,393) (4) Cash dividends ($.43 per share) (1,706) (1,706) -------- -------- -------- -------- -------- -------- BALANCE, DECEMBER 31, 2000 $ 3,954 $ 38,024 $ 11,086 $ (263) $ -- $ 52,801 ======== ======== ======== ======== ======== ======== - -------------------------------------------------------------------------------- See accompanying notes. 5.

LAFAYETTE BANCORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2000, 1999 and 1998 (Dollar amounts in thousands) - -------------------------------------------------------------------------------- 2000 1999 1998 ---- ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 6,916 $ 6,351 $ 5,377 Adjustments to reconcile net income to net cash from operating activities Depreciation 1,339 948 646 Net amortization 722 726 311 Provision for loan losses 1,200 1,060 980 Net realized (gain)/loss on securities 12 144 (6) Net realized (gain) loss on sale of other real estate (5) -- (43) Change in assets and liabilities Loans originated for sale (56,201) (67,547) (86,291) Loans sold 53,426 74,459 83,845 Accrued interest receivable and other assets (4,410) (1,947) (1,402) Accrued interest payable and other liabilities 323 1,314 446 -------- -------- -------- Net cash from operating activities 3,322 15,508 3,863 CASH FLOWS FROM INVESTING ACTIVITIES Change in interest-bearing balances with other financial institutions -- 671 (671) Purchase of securities available-for-sale (86,815) (172,049) (54,270) Proceeds from sales of securities available-for-sale 82,375 56,027 3,592 Proceeds from maturities of securities available-for-sale 8,119 109,826 40,176 Purchase of securities held-to-maturity -- (2,000) (2,532) Proceeds from maturities of securities held-to-maturity 229 2,160 2,906 Loans made to customers, net of payments collected (49,452) (78,085) (41,804) Purchase of Federal Home Loan Bank stock (303) (358) (297) Property and equipment expenditures (2,109) (3,578) (2,416) Proceeds from sales of other real estate 470 -- 251 -------- -------- -------- Net cash from investing activities (47,486) (87,386) (55,065) - -------------------------------------------------------------------------------- (Continued) 6.

LAFAYETTE BANCORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) Years ended December 31, 2000, 1999, and 1998 (Dollar amounts in thousands) - -------------------------------------------------------------------------------- 2000 1999 1998 ---- ---- ---- CASH FLOWS FROM FINANCING ACTIVITIES Net change in deposit accounts $ 56,050 $ 9,686 $ 40,351 Cash received in branch acquisition for liabilities assumed, net of assets acquired -- 45,266 -- Net change in short-term borrowings 28,299 10,871 (3,970) Proceeds from other borrowings 22,000 30,000 4,800 Payments on other borrowings (17,690) (10,877) (832) Common stock issued 117 278 69 Dividends paid (1,706) (1,540) (1,341) Purchase of fractional shares from stock dividend (4) -- -- Purchase of treasury stock -- (4) (8) -------- -------- -------- Net cash from financing activities 87,066 83,680 39,069 -------- -------- -------- Net change in cash and cash equivalents 42,902 11,802 (12,133) Cash and cash equivalents at beginning of year 30,570 18,768 30,901 -------- -------- -------- CASH AND CASH EQUIVALENTS AT END OF YEAR $ 73,472 $ 30,570 $ 18,768 ======== ======== ======== Supplemental disclosures of cash flow information Cash paid during the period for Interest $ 26,882 $ 20,765 $ 16,824 Income taxes 3,405 3,168 2,939 Non-cash investing and financing activities Loans transferred to other real estate $ 50 $ 465 $ -- See also Note 18 regarding 1999 branch acquisition. - -------------------------------------------------------------------------------- See accompanying notes. 7.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Principles of Consolidation: The consolidated financial statements include the accounts of Lafayette Bancorporation (Corporation) and its wholly owned subsidiary, Lafayette Bank and Trust Company (Bank), after elimination of significant intercompany transactions and accounts. The Corporation provides financial services to its customers, primarily commercial and retail banking and trust services, with operations conducted through its main office and 16 branches located in Tippecanoe, White, and Jasper Counties in Indiana. The majority of the Corporation's revenue is derived from commercial and retail business lending activities and investments. Although the overall loan portfolio is diversified, the economy of Tippecanoe County is heavily dependent on Purdue University, one of the area's largest employers, and the economy of White and Jasper County is heavily dependent on the agricultural industry. The majority of the Bank's loans are secured by specific items of collateral including business assets, real property and consumer assets. Use of Estimates: Management must make estimates and assumptions in preparing financial statements that affect the amounts reported therein and the disclosures provided. These estimates and assumptions may change in the future and future results could differ from these estimates. Estimates that are more susceptible to change in the near term include the allowance for loan losses, the fair value of securities and other financial instruments, and the determination and carrying value of impaired loans. Securities: Securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Securities are classified as available-for-sale when they might be sold before maturity. Securities available-for-sale are reported at fair value, with unrealized gains or losses included in other comprehensive income. Realized gains or losses are determined based on the amortized cost of the specific security sold. Interest and dividend income, adjusted by amortization of purchase premium or discount, is included in earnings. Loans Held for Sale: The Bank sells certain fixed-rate first mortgage loans in the secondary market on a servicing-released basis. Mortgage loans held for sale are carried at the lower of cost or estimated market value determined on an aggregate basis. - -------------------------------------------------------------------------------- (Continued) 8.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Loans: Interest on real estate, commercial and most installment loans is accrued over the term of the loans based on the principal outstanding. The recognition of interest income is discontinued when, in management's judgment, the interest will not be collectible in the normal course of business. Loans are evaluated for non-accrual when the loan is impaired or payments are past due over 90 days. Interest received is recognized on the cash basis or cost recovery method until qualifying for return to accrual status. Accrual is resumed when all contractually due payments are brought current and future payments are reasonably assured. The Bank defers loan fees, net of certain direct loan origination costs. The net amount deferred is reported in the balance sheet as part of loans and is recognized into interest income over the term of the loan using a method which approximates a level-yield. Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased by the provision for loan losses and decreased by charge-offs less recoveries. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management's judgment, should be charged-off. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Loan impairment is recognized if a loan's full principal or interest payments are not expected to be received. Loans considered to be impaired are reduced to the present value of expected future cash flows using the loans' existing rate or to the fair value of collateral if repayment is expected solely from the collateral, by allocating a portion of the allowance for loan losses to such loans. Smaller-balance homogeneous loans are evaluated for impairment in total. Such loans include residential real estate loans secured by one to four family residences and installment loans to individuals for household, family and other personal expenditures. Commercial and agricultural loans are evaluated individually for impairment. Premises, Furniture and Equipment: Premises, furniture and equipment are stated at cost less accumulated depreciation. Depreciation expense is recognized over the estimated useful lives of the assets, principally on the straight-line method. Foreclosed Assets: Assets acquired through or instead of loan foreclosure are initially recorded at fair value when acquired, establishing a new cost basis. If fair value declines, a valuation allowance is recorded through expense. Holding costs after acquisition are expensed. - -------------------------------------------------------------------------------- (Continued) 9.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Long-term Assets: These assets are reviewed for impairment when events indicate their carrying amounts may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at discounted amounts. Repurchase Agreements: Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by federal deposit insurance. The Bank retains possession of and control over pledged securities. Intangibles: Intangibles include goodwill and core deposit intangibles. Goodwill is amortized on the straight-line method over 15 to 25 years, and core deposit is amortized on an accelerated method over 10 years. Intangibles are assessed for impairment based on estimated undiscounted cash flows, and written down if necessary. Stock Compensation: Expense for employee compensation under stock option plans is based on Opinion 25, with expense reported only if options are granted below market price at grant date. Pro forma disclosures of net income and earnings per share are provided as if the fair value method of Financial Accounting Standard No. 123 were used for stock-based compensation. Income Taxes: Deferred tax liabilities and assets are determined at each balance sheet date. They are measured by applying enacted tax laws to future taxable income or expense resulting from differences in the financial statement and tax basis of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Earnings Per Share: Basic earnings per share is net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effect of additional potential common shares issuable under stock options. Earnings and dividends per share are restated for all stock splits and dividends through the date of issue of the financial statements. Statement of Cash Flows: Cash and cash equivalents are defined to include cash on hand, amounts due from banks, and federal funds sold. The Corporation reports net cash flows for customer loan transactions, deposit transactions, and short-term borrowings. - -------------------------------------------------------------------------------- (Continued) 10.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Financial Instruments: Financial instruments include credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Fair Values of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed separately. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are now such matters that will have a material effect on the financial statements. Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, which are also recognized as a separate component of equity. Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the bank to the holding company or by the holding company to shareholders. Industry Segments: Internal financial information is primarily reported and aggregated in three lines of business, banking, mortgage banking and trust services. New Accounting Pronouncements: Beginning January 1, 2001, a new accounting standard will require all derivatives to be recorded at fair value. Unless designated as hedges, changes in these fair values will be recorded in the income statement. Fair value changes involving hedges will generally be recorded by offsetting gains and losses on the hedge and on the hedged item, even if the fair value of the hedged item is not otherwise recorded. Adoption of this standard on January 1, 2001 did not have a material effect on the financial statements. Reclassifications: Some items in the prior financial statements were reclassified to conform to the current presentation. - -------------------------------------------------------------------------------- (Continued) 11.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- NOTE 3 - LOANS Loans are comprised of the following as of December 31: 2000 1999 ---- ---- Commercial and agricultural loans $215,087 $192,760 Real estate construction 54,768 47,375 Residential real estate loans 212,190 197,181 Installment loans to individuals 50,696 51,754 Commercial paper 4,984 -- -------- -------- Total $537,725 $489,070 ======== ======== Non-performing loans consist of the following at December 31: 2000 1999 ---- ---- Loans past due 90 days or more $ 1,052 $ 584 Non-accrual loans 2,718 622 Restructured loans 55 114 -------- -------- Total $ 3,825 $ 1,320 ======== ======== Information regarding impaired loans is as follows: 2000 1999 ---- ---- Year-end impaired loans With no allowance for loan losses allocated $ 25 $ 70 With allowance for loan losses allocated 5,151 576 Amount of the allowance allocated 1,658 151 Average balance of impaired loans during the year 2,885 697 Interest income recognized during impairment 55 3 Cash-basis interest income recognized 41 3 The Bank had $34 and $14 of loans on non-accrual at December 31, 2000 or 1999 that management did not deem to be impaired. - -------------------------------------------------------------------------------- (Continued) 14.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- NOTE 11 - STOCK APPRECIATION RIGHTS AND STOCK OPTION PLAN The Corporation maintains an Officers' Stock Appreciation Rights Plan for granting rights to certain officers, under which all available rights have been granted. Upon exercise of a stock appreciation right, the holder may receive cash equal to the excess of the fair market value of common stock at the date of exercise over the option price. Stock appreciation rights are vested at 20% per year and must be exercised within 10 years of grant. The plan expires May 2002. Granted rights outstanding were fully vested and consisted of 38,105 at an option price of $3.66 for 2000, and 54,605 at an option price of $3.66 for 1999. In 2000, 16,500 rights were exercised when the fair market value was $23.18 per share. In 1999, 18,150 rights were exercised when the fair market value was $24.62 per share. The aforementioned amounts of rights and prices are adjusted for stock dividends and splits. Compensation expense (benefit) charged to operations in 2000, 1999 and 1998 was ($376), $14 and $450 and is based on an increase (decrease) in market value. The liability at December 31, 2000 and 1999 was $356 and $1,053. The Corporation has established two nonqualified stock option plans to provide stock options to directors and key members of management. One plan was adopted in 1995 ("1995 Plan") and the other in 1998 ("1998 Plan"). There are no shares of common stock remaining available for grant under the 1995 Plan. The total number of shares of common stock remaining available for grant to directors and management under the 1998 Plan is 4,967 and 37,675, respectively. All shares for both plans were available for grant at a price equal to the market price of the stock at the date of grant. Under the 1995 Plan, options granted to directors at the effective date are exercisable any time after the date of grant, and options granted to directors elected after the effective date are exercisable after two years. Under the 1998 Plan, options granted to directors at the effective date and directors elected after the effective date are exercisable after two years. Options granted to management under both plans become 20% exercisable after one year and 20% each subsequent year. Both plans are effective for five years and options must be exercised within ten years from the date of grant. - -------------------------------------------------------------------------------- (Continued) 21.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- NOTE 11 - STOCK APPRECIATION RIGHTS AND STOCK OPTION PLAN (Continued) A summary of the Corporation's stock option activity, and related information for the years ended December 31, follows (adjusted for stock dividends and splits): ---------2 0 0 0--------- ---------1 9 9 9-------- Weighted Weighted Average Average Exercise Exercise Options Price Options Price ------- ----- ------- ----- Outstanding beginning of year 215,337 $ 13.75 227,427 $ 12.89 Granted 20,075 15.23 14,834 24.70 Exercised (9,144) 11.37 (17,166) 11.26 Forfeited (8,441) 15.69 (9,758) 14.72 ----------- ---------- ----------- ---------- Outstanding end of year 217,827 $ 13.91 215,337 $ 13.75 =========== ========== =========== ========== Exercisable at end of year 159,867 $ 12.94 134,309 $ 12.00 =========== ========== =========== ========== Weighted average fair value per option granted during the year $ 2.19 $ 3.98 Options outstanding at December 31, 2000 include 169,479 with exercise prices ranging from $10.39 to $15.23 (weighted average exercise price of $11.77) and a weighted average remaining life of 6.23 years; and 48,348 with exercise prices ranging from $17.63 to $24.70 (weighted average exercise price of $21.40) and a weighted average remaining life of 8.27 years. Options exercisable at December 31, 2000 include 127,791 with exercise prices ranging from $10.39 to $13.34 (weighted average exercise price of $11.07); and 32,076 with exercise prices ranging from $17.63 to $24.70 (weighted average exercise price of $20.39). Pro forma information regarding net income and earnings per share has been determined as if the Corporation had accounted for its stock options under the fair value method. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for the years 2000, 1999 and 1998, respectively: risk-free interest rates of 6.7%, 5.4% and 5.6%; dividend yields of 3% for 2000 and 2% for 1999 and 1998, respectively; volatility factors of the expected market price of the Corporation's common stock of .24, .13 and .16; and a weighted average expected life of the options of five years for management options and two years for directors' options. - -------------------------------------------------------------------------------- (Continued) 22.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- NOTE 14 - CAPITAL REQUIREMENTS The Corporation and Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgements by regulators. Failure to meet capital requirements can initiate regulatory action. Quantitative measures established by regulation to ensure capital adequacy require the Corporation and Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, the institution may be required to limit capital distributions, limit asset growth and expansion, and prepare capital restoration plans. On March 12, 1999 the Corporation's wholly-owned subsidiary bank acquired three branches in Jasper County, Indiana. As a result of this transaction consolidated and bank-only capital levels were reduced. The Corporation borrowed $14,000 and contributed $13,000 to the Bank in order for the bank to maintain its well-capitalized status. As of December 31, 2000, the Bank was categorized as well-capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table. The Corporation was categorized as undercapitalized as of December 31, 1999, as the total capital ratio was slightly below the minimum required level for capital adequacy purposes. The Corporation returned to adequately capitalized status as of March 31, 2000 and has maintained that status through December 31, 2000. Although the Corporation's capital was slightly below the minimum at December 31, 1999, no corrective regulatory action was initiated by the banking regulatory authorities and management anticipates maintaining its adequately capitalized status in the foreseeable future. - -------------------------------------------------------------------------------- (Continued) 25.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000, 1999 and 1998 (Dollar amounts in thousands, except per share data) - -------------------------------------------------------------------------------- NOTE 16 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value and estimated fair values of the Corporation's financial instruments as of December 31 are as follows: -----------2 0 0 0--------- -----------1 9 9 9--------- Carrying Fair Carrying Fair Value Value Value Value ----- ----- ----- Financial assets Cash and cash equivalents $ 73,472 $ 73,472 $ 30,570 $ 30,570 Securities available-for-sale 78,857 78,857 79,722 79,722 Securities held-to-maturity 4,484 4,580 4,712 4,709 Loans held for sale 5,949 6,058 3,174 3,204 Loans, net 532,654 524,222 484,452 479,127 FHLB stock 2,200 2,200 1,897 1,897 Accrued interest receivable 7,830 7,830 6,833 6,833 Financial liabilities Deposits $ (578,297) $ (580,115) $ (522,247) $ (522,033) Short-term borrowings (55,572) (55,572) (27,273) (27,273) FHLB advances (35,737) (35,903) (30,027) (29,602) Note payable (11,550) (11,550) (12,950) (12,950) Accrued interest payable (2,772) (2,772) (2,249) (2,249) The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value. The carrying amount is considered to estimate fair value for cash and short-term instruments, demand deposits, short-term borrowings, accrued interest, and variable rate loans, deposits and note payable that re-price frequently and fully. Securities fair values are based on quoted market prices or, if no quotes are available, on the rate and term of the security and on information about the issuer. For loans held for sale, the fair value of loans held for sale is based on quoted market prices. For commercial, real estate, consumer, and other loans, fair value is estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. FHLB stock is restricted in nature and is not actively traded on a secondary market and the carrying amount is a reasonable estimate of fair value. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. For FHLB advances, fair value is estimated using rates currently available to the Corporation for debt with similar terms and remaining maturities. The estimated fair value for off-balance sheet loan commitments approximates carrying value and are not considered significant to this presentation. - -------------------------------------------------------------------------------- (Continued) 28.

EXHIBIT 99(b) LAFAYETTE BANCORPORATION CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands) - -------------------------------------------------------------------------------- (Unaudited) September 30, December 31, 2001 2000 --------- --------- ASSETS Cash and due from banks $ 22,416 $ 26,452 Interest-bearing balances with other financial institutions 14,942 21,820 Federal funds sold 8,800 25,200 --------- --------- Total cash and cash equivalents 46,158 73,472 Securities available-for-sale (at market) 94,235 78,857 Securities held-to-maturity (market value $4,095 and $4,580) 3,918 4,484 Loans held for sale 9,253 5,949 Loans 555,238 537,725 Less: Allowance for loan losses (5,445) (5,071) --------- --------- Loans, net 549,793 532,654 Federal Home Loan Bank stock (at cost) 2,344 2,200 Premises, furniture and equipment, net 10,756 11,353 Intangible assets 12,470 13,007 Accrued interest receivable and other assets 18,626 19,171 --------- --------- Total assets $ 747,553 $ 741,147 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Noninterest-bearing deposits $ 65,432 $ 70,866 Interest-bearing demand and savings deposits 259,973 230,984 Interest-bearing time deposits 278,055 276,447 --------- --------- Total deposits 603,460 578,297 Short-term borrowings 32,519 55,572 FHLB advances 35,066 35,737 Note payable 10,500 11,550 Accrued interest payable and other liabilities 7,354 7,190 --------- --------- Total liabilities 688,899 688,346 Shareholders' equity Common stock, no par value: 20,000,000 shares authorized; 3,961,589 and 3,953,616 shares issued and outstanding 3,962 3,954 Additional paid-in capital 38,119 38,024 Retained earnings 15,461 11,086 Accumulated other comprehensive income 1,112 (263) --------- --------- Total shareholders' equity 58,654 52,801 --------- --------- Total liabilities and shareholders' equity $ 747,553 $ 741,147 ========= ========= - -------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements.

LAFAYETTE BANCORPORATION CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the three months ended September 30, 2001 and 2000 (Dollar amounts in thousands, except per share data) (Unaudited) - -------------------------------------------------------------------------------- 2001 2000 -------- -------- INTEREST INCOME Loans $ 11,747 $ 12,036 Taxable securities 838 826 Tax exempt securities 427 413 Other 361 152 -------- -------- Total interest income 13,373 13,427 INTEREST EXPENSE Deposits 5,468 6,069 Short-term borrowings 393 416 Other borrowings 677 716 -------- -------- Total interest expense 6,538 7,201 -------- -------- NET INTEREST INCOME 6,835 6,226 Provision for loan losses 300 300 -------- -------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 6,535 5,926 Noninterest income Income from fiduciary activities 296 245 Service charges on deposit accounts 541 507 Net realized gain on securities -- (12) Net gain on loan sales 527 193 Other service charges and fees 267 271 Investment product commissions 93 135 Other operating income 126 64 -------- -------- Total noninterest income 1,850 1,403 -------- -------- Noninterest expense Salaries and employee benefits 3,156 2,776 Occupancy expenses, net 320 325 Equipment expenses 466 446 Intangible amortization 179 185 Other operating expenses 1,279 1,203 -------- -------- Total noninterest expense 5,400 4,935 -------- -------- INCOME BEFORE INCOME TAXES 2,985 2,394 Income taxes 966 760 -------- -------- NET INCOME 2,019 1,634 -------- -------- Other comprehensive income, net of tax: Change in unrealized gains / (losses) on securities 709 460 -------- -------- COMPREHENSIVE INCOME $ 2,728 $ 2,094 ======== ======== Basic earnings per share $ .51 $ .41 ======== ======== Diluted earnings per share $ .50 $ .41 ======== ======== Dividend per share $ .11 $ .10 ======== ======== - -------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements.

LAFAYETTE BANCORPORATION CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the nine months ended September 30, 2001 and 2000 (Dollar amounts in thousands, except per share data) (Unaudited) - -------------------------------------------------------------------------------- 2001 2000 -------- -------- INTEREST INCOME Loans $ 35,581 $ 34,276 Taxable securities 2,473 2,508 Tax exempt securities 1,279 1,239 Other 1,571 405 -------- -------- Total interest income 40,904 38,428 INTEREST EXPENSE Deposits 17,876 16,696 Short-term borrowings 1,291 1,241 Other borrowings 2,114 1,884 -------- -------- Total interest expense 21,281 19,821 -------- -------- NET INTEREST INCOME 19,623 18,607 Provision for loan losses 900 900 -------- -------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 18,723 17,707 Noninterest income Income from fiduciary activities 890 878 Service charges on deposit accounts 1,551 1,373 Net realized gain on securities -- (12) Net gain on loan sales 1,397 464 Other service charges and fees 793 796 Investment product commissions 308 574 Other operating income 376 216 -------- -------- Total noninterest income 5,315 4,289 -------- -------- Noninterest expense Salaries and employee benefits 9,226 7,806 Occupancy expenses, net 965 907 Equipment expenses 1,395 1,279 Intangible amortization 537 555 Other operating expenses 3,732 3,536 -------- -------- Total noninterest expense 15,855 14,083 -------- -------- INCOME BEFORE INCOME TAXES 8,183 7,913 Income taxes 2,580 2,674 -------- -------- NET INCOME 5,603 5,239 -------- -------- Other comprehensive income, net of tax: Change in unrealized gains / (losses) on securities 1,375 543 -------- -------- COMPREHENSIVE INCOME $ 6,978 $ 5,782 ======== ======== Basic earnings per share $ 1.41 $ 1.33 ======== ======== Diluted earnings per share $ 1.40 $ 1.31 ======== ======== Dividend per share $ .31 $ .28 ======== ======== - -------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements.

LAFAYETTE BANCORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2001 and 2000 (Dollar amounts in thousands) (Unaudited) - -------------------------------------------------------------------------------- 2001 2000 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 5,603 $ 5,239 Adjustments to reconcile net income to net cash from operating activities Depreciation 1,092 983 Net amortization 572 546 Provision for loan losses 900 900 Net realized (gain) loss on sale of: Securities -- 12 Other real estate (5) (5) Change in assets and liabilities: Loans originated for sale (93,225) (37,190) Loans sold 89,921 36,818 Accrued interest receivable and other assets (244) (1,206) Accrued interest payable and other liabilities 164 442 -------- -------- Net cash from operating activities 4,778 6,539 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of securities available-for-sale (79,877) (49,160) Proceeds from sales of securities available-for-sale -- 2,375 Proceeds from maturities of securities available-for-sale 66,746 49,520 Proceeds from maturities of securities held-to-maturity 566 229 Loans made to customers, net of payments collected (18,314) (45,687) Purchase of Federal Home Loan Bank stock (144) (303) Property and equipment expenditures (495) (1,975) Proceeds from sales of other real estate 162 470 -------- -------- Net cash from investing activities (31,356) (44,531) CASH FLOWS FROM FINANCING ACTIVITIES Net change in deposit accounts 25,163 35,434 Net change in short-term borrowings (23,053) 791 Proceeds from FHLB advances -- 17,000 Payments on FHLB advances (671) (16,204) Payments on note payable (1,050) (1,050) Common stock issued 103 98 Dividends paid (1,228) (1,113) -------- -------- Net cash from financing activities (736) 34,956 -------- -------- Net change in cash and cash equivalents (27,314) (3,036) Cash and cash equivalents at beginning of period 73,472 30,570 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 46,158 $ 27,534 ======== ======== Supplemental disclosures of cash flow information Cash paid during the period for: Interest $ 21,694 $ 19,386 Income taxes 3,040 2,610 Non-cash investing activity Loans transferred to other real estate $ 298 $ 50 - -------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements.

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2001 (Dollar amounts in thousands, except per share data) (Unaudited) - -------------------------------------------------------------------------------- NOTE 1 - BASIS OF PRESENTATION The significant accounting policies followed by Lafayette Bancorporation (the "Corporation") for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. The consolidated interim financial statements have been prepared in accordance with Generally Accepted Accounting Principles and in accordance with instructions to Form 10-Q and may not include all information and footnotes normally disclosed for full annual financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods reported have been included in the accompanying unaudited consolidated financial statements and all such adjustments are of a normal recurring nature. Certain prior period information has been reclassified to correspond with the 2001 presentation. NOTE 2 - PENDING MERGER On October 15, 2001, Lafayette Bancorporation signed a definitive agreement with First Merchants Corporation, located in Muncie, Indiana, to merge with and into First Merchants Corporation. Under the terms of the agreement, upon the closing of this transaction, Lafayette Bank and Trust Company will be a wholly-owned subsidiary of First Merchants Corporation. The transaction is subject to shareholder and regulatory approval and is expected to be effective in the first quarter of 2002. NOTE 3 - PER SHARE DATA The following illustrates the computation of basic and diluted earnings per share, and includes the weighted average number of shares used in calculating earnings and dividends per share amounts for the periods presented. The weighted average number of shares has been retroactively restated for stock dividends and splits. Nine Months Ended ------------------------------- September 30, September 30, 2001 2000 ---------- ---------- Basic earnings per share Net income $ 5,603 $ 5,239 Weighted average shares outstanding 3,958,906 3,949,445 ---------- ---------- Basic earnings per share $ 1.41 $ 1.33 ========== ========== Diluted earnings per share Net income $ 5,603 $ 5,239 Weighted average shares outstanding 3,958,906 3,949,445 Dilutive effect of assumed exercise of Stock Options 38,634 40,400 ---------- ---------- Diluted average shares outstanding 3,997,540 3,989,845 ---------- ---------- Diluted earnings per share $ 1.40 $ 1.31 ========== ==========

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2001 (Dollar amounts in thousands, except per share data) (Unaudited) - -------------------------------------------------------------------------------- Three Months Ended ------------------------------- September 30, September 30, 2001 2000 ------------- ------------- Basic earnings per share Net income $ 2,019 $ 1,634 Weighted average shares outstanding 3,961,589 3,952,256 ---------- ---------- Basic earnings per share $ .51 $ .41 ========== ========== Diluted earnings per share Net income $ 2,019 $ 1,634 Weighted average shares outstanding 3,961,589 3,952,256 Dilutive effect of assumed exercise of Stock Options 48,139 25,089 ---------- ---------- Diluted average shares outstanding 4,009,728 3,977,345 ---------- ---------- Diluted earnings per share $ .50 $ .41 ========== ========== NOTE 4 - SECURITIES The amortized cost and estimated fair values of securities are as follows at September 30, 2001: Amortized Estimated Cost Fair Value --------- ---------- Securities Available-for-Sale U.S. Government and its agencies $ 3,000 $ 3,030 Obligations of states and political subdivisions 31,352 32,109 Corporate obligations 10,108 10,534 Mortgage-backed and other asset-backed securities 45,379 45,996 Other securities 2,554 2,566 ------- ------- $92,393 $94,235 ======= ======= Securities Held-to-Maturity Obligations of states and political subdivisions $ 3,918 $ 4,095 ======= ======= The amortized cost and estimated fair values of securities are as follows at December 31, 2000: Amortized Estimated Cost Fair Value --------- ---------- Securities Available-for-Sale U.S. Government and its agencies $ 4,201 $ 4,193 Obligations of states and political subdivisions 30,880 31,012 Corporate obligations 3,953 4,001 Mortgage-backed and other asset-backed securities 37,699 37,105 Other securities 2,560 2,546 ------- ------- $79,293 $78,857 ======= ======= Securities Held-to-Maturity Obligations of states and political subdivisions $ 4,484 $ 4,580 ======= =======

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2001 (Dollar amounts in thousands, except per share data) (Unaudited) - -------------------------------------------------------------------------------- NOTE 5 - LOANS Loans are comprised of the following: September 30, December 31, 2001 2000 ------------- ------------ Commercial and agricultural loans $228,914 $215,087 Real estate construction loans 64,171 54,768 Residential real estate loans 210,843 212,190 Installment loans to individuals 46,323 50,696 Commercial paper 4,987 4,984 -------- -------- Total loans $555,238 $537,725 ======== ======== NOTE 6 - ALLOWANCE FOR LOAN LOSSES The activity in the allowance for loan losses is as follows: 2001 2000 ------- ------- Balance, January 1 $ 5,071 $ 4,618 Provision charged to operations 900 900 Loans charged-off (605) (527) Recoveries on loans previously charged-off 79 95 ------- ------- Balance, September 30 $ 5,445 $ 5,086 ======= ======= NOTE 7 - SHORT-TERM BORROWINGS Short-term borrowings are comprised of the following: September 30, December 31, 2001 2000 ------------- ------------ Repurchase agreements $29,719 $54,275 Treasury tax and loan open-end note 2,800 1,297 ------- ------- Total short-term borrowings $32,519 $55,572 ======= =======

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2001 (Dollar amounts in thousands, except per share data) (Unaudited) - -------------------------------------------------------------------------------- NOTE 8 - SEGMENT INFORMATION The Corporation's operations include three primary segments: banking, mortgage banking, and trust. Through its banking subsidiary's locations in Tippecanoe, White, and Jasper Counties, the Corporation provides traditional community banking services, such as accepting deposits and making commercial, residential and consumer loans. Mortgage banking activities include the origination of residential mortgage loans for sale on a servicing released basis to various investors. The Corporation's trust department provides both personal and corporate trust services. The Corporation's three reportable segments are determined by the products and services offered. Interest on loans, investments and deposits comprise the primary revenues and expenses of the banking operation, net gains on loans sold account for the revenues in the mortgage banking segment, and trust administration fees provide the primary revenues in the trust department. The following segment financial information has been derived from the internal profitability reporting system utilized by management to monitor and manage the financial performance of the Corporation. The accounting policies of the three segments are the same as those described in the summary of significant accounting policies of the annual report. The Corporation evaluates segment performance based on profit or loss before income taxes. The evaluation process for the mortgage banking and trust segments include only direct expenses, while certain indirect expenses, including goodwill, are absorbed by the banking operation. The difference between segment totals and consolidated totals are holding company amounts and income tax expense. Quarter ended September 30: Mortgage Total 2001 Banking Banking Trust Segments - ---- -------- -------- -------- -------- Net interest income $ 6,894 $ 81 $ -- $ 6,975 Net gain on loan sales -- 527 -- 527 Other revenue 1,027 -- 296 1,323 Noncash items: Depreciation 347 14 12 373 Provision for loan loss 300 -- -- 300 Segment profit 2,864 287 92 3,243 Segment assets 737,532 9,408 145 747,085 Mortgage Total 2000 Banking Banking Trust Segments - ---- -------- -------- -------- -------- Net interest income $ 6,434 $ 35 $ -- $ 6,469 Net gain on loan sales -- 193 -- 193 Other revenue 965 -- 245 1,210 Noncash items: Depreciation 324 13 12 349 Provision for loan loss 300 -- -- 300 Segment profit 2,646 (21) 62 2,687 Segment assets 682,097 3,700 191 685,988

LAFAYETTE BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2001 (Dollar amounts in thousands, except per share data) (Unaudited) - -------------------------------------------------------------------------------- Nine months ended September 30: Mortgage Total 2001 Banking Banking Trust Segments - ---- -------- -------- -------- -------- Net interest income $ 19,912 $ 207 $ -- $ 20,119 Net gain on loan sales -- 1,397 -- 1,397 Other revenue 3,027 1 890 3,918 Noncash items: Depreciation 1,013 43 36 1,092 Provision for loan loss 900 -- -- 900 Segment profit 8,018 692 230 8,940 Segment assets 737,532 9,408 145 747,085 Mortgage Total 2000 Banking Banking Trust Segments - ---- -------- -------- -------- -------- Net interest income $ 19,201 $ 105 $ -- $ 19,306 Net gain on loan sales -- 464 -- 464 Other revenue 2,941 6 878 3,825 Noncash items: Depreciation 912 35 36 983 Provision for loan loss 900 -- -- 900 Segment profit 7,993 85 312 8,390 Segment assets 682,097 3,700 191 685,988 NOTE 9 - NEW ACCOUNTING PRONOUNCEMENT In 2001, new accounting guidance was issued that will, beginning in 2002, revise the accounting for goodwill and intangible assets. Intangible assets with indefinite lives and goodwill will no longer be amortized, but will periodically be reviewed for impairment and written down if impaired. Additional disclosures about intangibles assets and goodwill may be required. An initial goodwill impairment test is required during the first six months of 2002. The Corporation's management is currently evaluating the impact of this new guidance.

EXHIBIT 99(c) UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION The following is the unaudited pro forma combined consolidated financial information for First Merchants Corporation ("First Merchants") and for Lafayette Bancorporation ("Lafayette") giving effect to the merger of Lafayette with and into First Merchants. The information is presented under two separate assumptions relating to the level of shares of Lafayette common stock which are exchanged for First Merchants common stock. The financial information listed for "Assumption A" was compiled assuming 100% of the outstanding shares of Lafayette common stock are exchanged for shares of First Merchants common stock through the merger. The financial information listed for "Assumption B" was compiled assuming 60% of the outstanding shares of Lafayette common stock are exchanged for shares of First Merchants common stock and 40% of the outstanding shares of Lafayette common stock are exchanged for cash, as financed through the issuance of First Merchants trust preferred securities. The balance sheet information presented gives effect to the merger and, under Assumption B, the related issuance of the First Merchants trust preferred securities, as if each occurred on September 30, 2001. The income statement information presented gives effect to the merger and, under Assumption B, the related issuance of the First Merchants trust preferred securities as if each occurred on the first day of each period presented. The pro forma combined figures are simply arithmetical combinations of First Merchants' and Lafayette's separate financial results in order to assist you in analyzing the future prospects of First Merchants. The pro forma combined figures illustrate the possible scope of the change in First Merchants' historical figures caused by the merger. You should not assume that First Merchants and Lafayette would have achieved the pro forma combined results if the merger had actually occurred during the periods presented. The combined company expects to achieve merger benefits in the form of operating cost savings. The pro forma earnings, which do not reflect any potential savings that are expected to result from the consolidation of the operations of First Merchants and Lafayette, are not indicative of the results of future operations. No assurances can be given with respect to the ultimate level of expense savings. The pro forma information reflects the "purchase" method of accounting, with Lafayette's assets and liabilities recorded at their estimated fair values as of September 30, 2001. The actual fair value adjustments to the assets and the liabilities of Lafayette will be made on the basis of appraisals and evaluations that will be made as of the date the merger is completed. Thus, the actual fair value adjustments may differ significantly from those reflected in these pro forma financial statements. In the opinion of First Merchants' management, the estimates used in the preparation of these pro forma financial statements are reasonable under the circumstances. You should read the unaudited pro forma combined consolidated financial information in conjunction with the accompanying notes.

UNAUDITED PROFORMA COMBINED CONSOLIDATED CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 2001 ASSUMPTION A--100% STOCK ISSUED (Dollar Amounts in Thousands) First Proforma Proforma Merchants Lafayette Adjustments Combined ----------- ----------- ----------- ----------- Assets Cash and due from banks .......................... $ 46,149 $ 22,416 $ (1,400)(1) $ 69,064 (400)(2) 3,303 (3) (1,004)(4) Interest-bearing deposits ........................ 14,942 14,942 Federal funds sold ............................... 18,525 8,800 27,325 ----------- ----------- ----------- ----------- Cash and cash equivalents ...................... 64,674 46,158 499 111,331 Interest-bearing time deposits ................... 3,119 3,119 Investment securities Available for sale ............................. 241,080 94,235 335,315 Held to maturity ............................... 8,942 3,918 177 (5) 13,037 ----------- ----------- ----------- ----------- Total investment securities .................. 250,022 98,153 177 348,352 Mortgage loans held for sale ..................... 830 9,253 165 (5) 10,248 Loans, net of allowance .......................... 1,346,731 549,793 3,140 (5) 1,899,664 Premises and equipment ........................... 27,184 10,756 9,441 (6) 47,381 Federal Reserve and FHLB stock ................... 7,856 2,344 10,200 Interest Receivable .............................. 13,556 7,411 20,967 Core deposit intangible and goodwill ............. 32,795 12,470 30,156 (7) 79,151 (12,470)(8) 16,200 (9) Other assets ..................................... 14,904 11,215 755 (10) 34,914 9,957 (11) (1,917)(15) ----------- ----------- ----------- ----------- Total assets ................................ $ 1,761,671 $ 747,553 $ 56,103 $ 2,565,327 =========== =========== =========== =========== Liabilities Deposits Noninterest-bearing ............................ $ 163,689 $ 65,432 $ 229,121 Interest-bearing ............................... 1,224,881 538,028 4,799 (5) 1,767,708 ----------- ----------- ----------- ----------- Total deposits .............................. 1,388,570 603,460 4,799 1,996,829 Borrowings ....................................... 182,455 78,085 509 (5) 261,049 Trust preferred Other liabilities ................................ 13,061 7,354 139 (16) 20,554 ----------- ----------- ----------- ----------- Total liabilities .......................... 1,584,086 688,899 5,447 2,278,432 Stockholders' equity Preferred stock-no par value Common stock ................................... 1,584 3,962 (3,962)(13) 2,166 582 (14) Additional paid in capital ..................... 50,817 38,119 (38,119)(13) 159,545 108,728 (14) Retained earnings .............................. 121,711 15,461 (15,461)(13) 121,711 Accumulated comprehensive income ............... 3,473 1,112 (1,112)(13) 3,473 ----------- ----------- ----------- ----------- Total stockholders' equity ................. 177,585 58,654 50,656 286,895 ----------- ----------- ----------- ----------- Total liabilities and stockholder's equity .. $ 1,761,671 $ 747,553 $ 56,103 $ 2,565,327 =========== =========== =========== =========== The accompanying notes are an integral part of the unaudited proforma combined consolidated financial information.

UNAUDITED PROFORMA COMBINED CONSOLIDATED CONDENSED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2000 ASSUMPTION A--100% STOCK ISSUED (Dollar Amounts in Thousands, except Share and Per Share Amounts) First Proforma Proforma Merchants Lafayette Adjustments Combined ----------- ----------- ----------- ----------- Interest Income Loans receivable ............................ $ 96,109 $ 46,620 $ (648)(17) $ 142,081 Investment securities ....................... 19,065 4,982 (39)(17) 24,008 Other ....................................... 1,354 784 2,138 ----------- ----------- ----------- ----------- Total interest income .................... 116,528 52,386 (687) 168,227 ----------- ----------- ----------- ----------- Interest Expense Deposits .................................... 49,607 23,016 (4,799)(17) 67,824 Securities sold under repurchase agreements . 4,263 1,773 6,036 Federal Home Loan Bank advances & other ..... 6,676 2,616 (339)(17) 8,953 ----------- ----------- ----------- ----------- Total interest expense ................... 60,546 27,405 (5,138) 82,813 ----------- ----------- ----------- ----------- Net Interest Income .............................. 55,982 24,981 4,451 85,414 Provision for loan losses ................... 2,625 1,200 3,825 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 53,357 23,781 4,451 81,589 ----------- ----------- ----------- ----------- Other Income Fiduciary activities ........................ 4,972 1,187 6,159 Service charges on deposit accounts ......... 4,776 1,880 6,656 Other customer fees ......................... 3,519 1,042 4,561 Net realized losses on sales of available-for-sale securities ............ (107) (12) (119) Commission income ........................... 1,950 758 2,708 Other income ................................ 1,524 970 2,494 ----------- ----------- ----------- ----------- Total other income ....................... 16,634 5,825 22,459 ----------- ----------- ----------- ----------- Other expenses Salaries and employee benefits .............. 21,418 10,681 32,099 Net occupancy expenses ...................... 2,471 1,247 236 (18) 3,954 Equipment expenses .......................... 4,299 1,731 6,030 Goodwill and core deposit amortization ...... 896 740 3,600 (20) 4,496 (740)(22) Other expenses .............................. 10,999 4,777 15,776 ----------- ----------- ----------- ----------- Total other expenses ..................... 40,083 19,176 3,096 62,355 ----------- ----------- ----------- ----------- Income before income tax ......................... 29,908 10,430 1,355 41,693 Income tax expense ............................... 9,968 3,514 549 (19) 14,031 ----------- ----------- ----------- ----------- Net income ....................................... $ 19,940 $ 6,916 $ 806 $ 27,662 =========== =========== =========== =========== Per Share Data Basic earnings per common share ............ $ 1.67 $ 1.75 $ 1.67 Diluted earnings per common share .......... 1.66 1.74 1.66 Average common shares-basic ................ 11,909,457 3,950,297 16,564,912 Average common shares-diluted .............. 11,992,231 3,985,521 16,647,686 The accompanying notes are an integral part of the unaudited proforma combined consolidated financial information.

UNAUDITED PROFORMA COMBINED CONSOLIDATED CONDENSED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 ASSUMPTION A--100% STOCK ISSUED (Dollar Amounts in Thousands, except Share and Per Share Amounts) First Proforma Proforma Merchants Lafayette Adjustments Combined ----------- ----------- ----------- ----------- Interest Income Loans receivable ............................ $ 77,632 $ 35,581 $ (486)(17) $ 112,727 Investment securities ....................... 12,426 3,752 (30)(17) 16,148 Other ....................................... 855 1,571 2,426 ----------- ----------- ----------- ----------- Total interest income .................... 90,913 40,904 (516) 131,301 Interest Expense Deposits .................................... 35,817 17,876 (3,599)(17) 50,094 Securities sold under repurchase agreements . 2,665 1,291 3,956 Federal Home Loan Bank advances and other ... 5,209 2,114 (255)(17) 7,068 ----------- ----------- ----------- ----------- Total interest expense ................... 43,691 21,281 (3,854) 61,118 ----------- ----------- ----------- ----------- Net Interest Income .............................. 47,222 19,623 3,338 70,183 Provision for loan losses ................... 2,371 900 3,271 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 44,851 18,723 3,338 66,912 ----------- ----------- ----------- ----------- Other Income Fiduciary activities ........................ 4,117 890 5,007 Service charges on deposit accounts ......... 4,106 1,551 5,657 Other customer fees ......................... 231 793 1,024 Net realized losses on sales of available-for-sale securities ............ (167) (167) Commission income ........................... 1,465 308 1,773 Other income ................................ 3,890 1,773 5,663 ----------- ----------- ----------- ----------- Total other income ....................... 13,642 5,315 18,957 ----------- ----------- ----------- ----------- Other expenses Salaries and employee benefits .............. 18,094 9,226 27,320 Net occupancy expenses ...................... 2,037 965 177 (18) 3,179 Equipment expenses .......................... 3,282 1,395 4,677 Goodwill and core deposit amortization ...... 1,181 537 2,700 (20) 3,881 (537)(22) Other expenses .............................. 8,365 3,732 12,097 ----------- ----------- ----------- ----------- Total other expenses ..................... 32,959 15,855 2,340 51,154 ----------- ----------- ----------- ----------- Income before income tax ......................... 25,534 8,183 998 34,714 Income tax expense .......................... 8,834 2,580 404 (19) 11,818 ----------- ----------- ----------- ----------- Net income ....................................... $ 16,700 $ 5,603 $ 594 $ 22,897 =========== =========== =========== =========== Per Share Data Basic earnings per common share ............ $ 1.36 $ 1.41 $ 1.35 Diluted earnings per common share .......... 1.35 1.40 1.34 Average common shares-basic ................ 12,306,708 3,958,906 16,962,163 Average common shares-diluted .............. 12,390,142 3,997,540 17,045,597 The accompanying notes are an integral part of the unaudited proforma combined consolidated financial information.

UNAUDITED PROFORMA COMBINED CONSOLIDATED CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 2001 ASSUMPTION B-60% STOCK ISSUED (Dollar Amounts in Thousands) First Proforma Proforma Merchants Lafayette Adjustments Combined ----------- ----------- ----------- ----------- Assets Cash and due from banks .......................... $ 46,149 $ 22,416 $ (1,400)(1) $ 69,064 (400)(2) 3,303 (3) (1,004)(4) Interest-bearing deposits ........................ 14,942 14,942 Federal funds sold ............................... 18,525 8,800 4,871 (12) 32,196 ----------- ----------- ----------- ----------- Cash and cash equivalents ...................... 64,674 46,158 5,370 116,202 Interest-bearing time deposits ................... 3,119 3,119 Investment securities Available for sale ............................. 241,080 94,235 335,315 Held to maturity ............................... 8,942 3,918 177 (5) 13,037 ----------- ----------- ----------- ----------- Total investment securities .................. 250,022 98,153 177 348,352 Mortgage loans held for sale ..................... 830 9,253 165(5) 10,248 Loans, net of allowance .......................... 1,346,731 549,793 3,140(5) 1,899,664 Premises and equipment ........................... 27,184 10,756 9,441(6) 47,381 Federal Reserve and FHLB stock ................... 7,856 2,344 10,200 Interest Receivable .............................. 13,556 7,411 20,967 Core deposit intangible and goodwill ............. 32,795 12,470 36,761 (7) 85,756 (12,470)(8) 16,200 (9) Other assets ..................................... 14,904 11,215 755 (10) 34,914 9,957 (11) (1,917)(15) ----------- ----------- ----------- ----------- Total assets ................................ $ 1,761,671 $ 747,553 $ 67,579 $ 2,576,803 =========== =========== =========== =========== Liabilities Deposits Noninterest-bearing ............................ $ 163,689 $ 65,432 $ 229,121 Interest-bearing ............................... 1,224,881 538,028 4,799 (5) 1,767,708 ----------- ----------- ----------- ----------- Total deposits .............................. 1,388,570 603,460 4,799 1,996,829 Borrowings ....................................... 182,455 78,085 509 (5) 261,049 Trust preferred 55,200 (12) 55,200 Other liabilities ................................ 13,061 7,354 139 (16) 20,554 ----------- ----------- ----------- ----------- Total liabilities .......................... 1,584,086 688,899 60,647 2,333,632 Stockholders' equity Preferred stock-no par value ................... Common stock ................................... 1,584 3,962 (3,962)(13) 1,933 349 (14) Additional paid in capital ..................... 50,817 38,119 (38,119)(13) 116,054 65,237 (14) Retained earnings .............................. 121,711 15,461 (15,461)(13) 121,711 Accumulated comprehensive income ............... 3,473 1,112 (1,112)(13) 3,473 ----------- ----------- ----------- ----------- Total stockholders' equity ................. 177,585 58,654 6,932 243,171 ----------- ----------- ----------- ----------- Total liabilities and stockholders' equity . $ 1,761,671 $ 747,553 $ 67,579 $ 2,576,803 =========== =========== =========== =========== The accompanying notes are an integral part of the unaudited proforma combined consolidated financial information.

UNAUDITED PROFORMA COMBINED CONSOLIDATED CONDENSED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2000 ASSUMPTION B--60% STOCK ISSUED (Dollar Amounts in Thousands, except Share and Per Share Amounts) First Proforma Proforma Merchants Lafayette Adjustments Combined ----------- ----------- ----------- ----------- Interest Income Loans receivable $ 96,109 $ 46,620 $ (648)(17) $ 142,081 Investment securities 19,065 4,982 (39)(17) 24,008 Other 1,354 784 73 (23) 2,211 ----------- ----------- ----------- ----------- Total interest income 116,528 52,386 (614) 168,300 ----------- ----------- ----------- ----------- Interest Expense Deposits 49,607 23,016 (4,799)(17) 67,824 Securities sold under repurchase agreements 4,263 1,773 6,036 Federal Home Loan Bank advances & other 6,676 2,616 (339)(17) 8,953 Trust Preferred 4,964 (21) 4,964 ----------- ----------- ----------- ----------- Total interest expense 60,546 27,405 (174) 87,777 ----------- ----------- ----------- ----------- Net Interest Income 55,982 24,981 (440) 80,523 Provision for loan losses 2,625 1,200 3,825 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 53,357 23,781 (440) 76,698 ----------- ----------- ----------- ----------- Other Income Fiduciary activities 4,972 1,187 6,159 Service charges on deposit accounts 4,776 1,880 6,656 Other customer fees 3,519 1,042 4,561 Net realized losses on sales of available-for-sale securities (107) (12) (119) Commission income 1,950 758 2,708 Other income 1,524 970 2,494 ----------- ----------- ----------- ----------- Total other income 16,634 5,825 22,459 ----------- ----------- ----------- ----------- Other expenses Salaries and employee benefits 21,418 10,681 32,099 Net occupancy expenses 2,471 1,247 236 (18) 3,954 Equipment expenses 4,299 1,731 6,030 Goodwill and core deposit amortization 896 740 3,600 (20) 4,496 (740)(22) Other expenses 10,999 4,777 15,776 ----------- ----------- ----------- ----------- Total other expenses 40,083 19,176 3,096 62,355 ----------- ----------- ----------- ----------- Income before income tax 29,908 10,430 (3,536) 36,802 Income tax expense 9,968 3,514 (1,433)(19) 12,049 ----------- ----------- ----------- ----------- Net income $ 19,940 $ 6,916 $ (2,103) $ 24,753 =========== =========== =========== =========== Per Share Data Basic earnings per common share $ 1.67 $ 1.75 $ 1.68 Diluted earnings per common share 1.66 1.74 1.67 Average common shares-basic 11,909,457 3,950,297 14,702,730 Average common shares-diluted 11,992,231 3,985,521 14,785,504 The accompanying notes are an integral part of the unaudited proforma combined consolidated financial information.

UNAUDITED PROFORMA COMBINED CONSOLIDATED CONDENSED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 ASSUMPTION B--60% STOCK ISSUED (Dollar Amounts in Thousands, except Share and Per Share Amounts) First Proforma Proforma Merchants Lafayette Adjustments Combined ----------- ----------- ----------- ----------- Interest Income Loans receivable $ 77,632 $ 35,581 $ (486)(17) $ 112,727 Investment securities 12,426 3,752 (30)(17) 16,148 Other 855 1,571 55 (23) 2,481 ----------- ----------- ----------- ----------- Total interest income 90,913 40,904 (461) 131,356 ----------- ----------- ----------- ----------- Interest Expense Deposits 35,817 17,876 (3,599)(17) 50,094 Securities sold under repurchase agreements 2,665 1,291 3,956 Federal Home Loan Bank advances and other 5,209 2,114 (255)(17) 7,068 Trust Preferred 3,723 (21) 3,723 ----------- ----------- ----------- ----------- Total interest expense 43,691 21,281 (131) 64,841 ----------- ----------- ----------- ----------- Net Interest Income 47,222 19,623 (330) 66,515 Provision for loan losses 2,371 900 3,271 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 44,851 18,723 (330) 63,244 ----------- ----------- ----------- ----------- Other Income Fiduciary activities 4,117 890 5,007 Service charges on deposit accounts 4,106 1,551 5,657 Other customer fees 231 793 1,024 Net realized losses on sales of available-for-sale securities (167) -- (167) Commission income 1,465 308 1,773 Other income 3,890 1,773 5,663 ----------- ----------- ----------- ----------- Total other income 13,642 5,315 18,957 ----------- ----------- ----------- ----------- Other expenses Salaries and employee benefits 18,094 9,226 27,320 Net occupancy expenses 2,037 965 177 (18) 3,179 Equipment expenses 3,282 1,395 4,677 Goodwill and core deposit amortization 1,181 537 2,700 (20) 3,881 (537)(22) Other expenses 8,365 3,732 12,097 Total other expenses 32,959 15,855 2,340 51,154 ----------- ----------- ----------- ----------- Income before income tax 25,534 8,183 (2,670) 31,047 Income tax expense 8,834 2,580 (1,082)(19) 10,332 ----------- ----------- ----------- ----------- Net income $ 16,700 $ 5,603 $ (1,588) $ 20,755 =========== =========== =========== =========== Per Share Data Basic earnings per common share $ 1.36 $ 1.41 $ 1.37 Diluted earnings per common share 1.35 1.40 1.36 Average common shares-basic 12,306,708 3,958,906 15,099,981 Average common shares-diluted 12,390,142 3,997,540 15,183,415 The accompanying notes are an integral part of the unaudited proforma combined consolidated financial information.

Notes to Unaudited Pro Forma Combined Consolidated Financial Information Note 1 - Basis of Presentation First Merchants has agreed to acquire Lafayette for a fixed exchange ratio of 1.11 shares of First Merchants Corporation stock for each share of Lafayette stock, subject to possible upward or downward adjustment as provided for in the Merger Agreement, or a fixed payment of $30.00 per share for each share of Lafayette stock up to 1,677,642 shares. The acquisition will be accounted for under the purchase method of accounting and, accordingly, the assets and liabilities of Lafayette have been marked to estimated fair value based upon conditions as of September 30, 2001. Since these are proforma statements, we cannot assure that the amounts reflected in these financial statements would have been representative of the actual amounts earned had the companies been combined at the time. Note 2 - Pro Forma Adjustments (1) To record payment by Lafayette for estimated transaction costs. (2) To record payment by First Merchants for estimated transaction costs. (3) To record receipt of cash for stock options exercised. (4) To record payment of stock appreciation rights. (5) To adjust interest-earning assets and interest-bearing liabilities of Lafayette to estimated fair value. (6) To record premises and equipment at estimated fair value. (7) To record goodwill for the cost of acquisition over the estimated fair value of net assets acquired as follows: Assumption A Assumption B ------------ ------------ Purchase Price: Common stock $ 582 $ 349 Additional paid in capital 108,728 65,237 Acquisition costs 400 400 Cash paid to Lafayette stockholders 50,329 --------- --------- Total purchase price paid 109,710 116,315 --------- --------- Allocated to: Historical book value of Lafayette's assets and liabilities 58,654 58,654 Record transaction costs of Lafayette (1,400) (1,400) Record payment of stock appreciation rights (1,004) (1,004) Cash received for stock options exercised 3,303 3,303 Write off of Lafayette's historical goodwill and core deposit intangible (12,470) (12,470) --------- --------- Adjusted book value of Lafayette 47,083 47,083 --------- --------- Core deposit intangible 16,200 16,200 Adjustments to record assets and liabilities at fair value: Securities 177 177 Mortgage loans held for sale 165 165 Loans 3,140 3,140 Premises and equipment 9,441 9,441 Other assets 755 755 Deposits (4,799) (4,799) Borrowings (509) (509) Deferred taxes 9,957 9,957 Pension assets/Liability (2,056) (2,056) --------- --------- Total allocation 32,471 32,471 --------- --------- Goodwill $ 30,156 $ 36,761 ========= =========

Notes to Unaudited Pro Forma Combined Consolidated Financial Information (continued) (8) To eliminate Lafayette's historical goodwill and core deposit intangible. (9) To record core deposit intangible. (10) To record other assets at fair value. (11) To record deferred taxes on the purchase accounting adjustments. (12) To record issuance of the trust preferred securities by First Merchants and investing of excess funds. (13) To eliminate Lafayette's equity accounts. (14) To record issuance of 4,655,455 shares of First Merchants' stock under Assumption A and the issuance of 2,793,273 shares of First Merchants' stock under Assumption B. (15) To eliminate Lafayette's prepaid pension costs. (16) To recognize Lafayette's pension liability. (17) To record effect of amortization of purchase accounting adjustments in a manner that approximates the level yield method. (18) To record amortization of purchase accounting adjustment related to premises and equipment. (19) To record tax effect of purchase accounting adjustments at an effective rate of 40.525%. (20) To record amortization of core deposit premium intangible. (21) To record interest expense on the trust preferred securities issued by First Merchants. (22) To eliminate Lafayette's goodwill and core deposit intangible amortization expense. (23) To record interest income on investment of excess proceeds from issuance of trust preferred securities.

EXHIBIT 99(d) N / E / W / S R / E / L / E / A / S / E November 27, 2001 FOR IMMEDIATE RELEASE For more information, contact: James J. Thrash, Senior Vice President/Chief Financial Officer 765-747-1390, http://firstmerchants.com SOURCE: First Merchants Corporation EAST CENTRAL INDIANA FINANCIAL INSTITUTIONS FORM TITLE INSURANCE JOINT VENTURE Michael L. Cox, President and Chief Executive Officer of First Merchants Corporation, announced today that First Merchants has structured an agreement to enter the title service business. First Merchants will acquire the stock of Delaware County Abstract Company and Beebe & Smith Title Company, Inc., the two largest title companies in Delaware County. Upon completion of these transactions, it is intended that Mutual First Financial, Inc. in Muncie, Indiana, and Americana Bancorp in New Castle, Indiana, will join First Merchants and become members of the Indiana Title Insurance Company, LLC that will operate the title business. R. Donn Roberts, CEO of Mutual First Financial, Harry J. Bailey, CEO of Americana Bancorp, and Michael Cox began exploring this business opportunity several months ago. As major financial institutions in the central and northern Indiana markets generating both residential and commercial mortgages, the title service business will be a strategic adjunct to their lending activities. James W. Trulock, owner of Delaware County Abstract, and James W. Smith, owner of Beebe & Smith Title Company, Inc., will be the principal managers of the ongoing business. Both of these individuals are attorneys and have been in the title business for many years. Both companies have been fixtures in Muncie for nearly 100 years and have the only full Indiana Land Title Association certified title plants in Delaware County. As the business develops, it is expected to expand throughout central Indiana. The closing of this transaction is expected on or about December 15, 2001, with an effective date of January 1, 2002. First Merchants Corporation is an East Central Indiana Financial Holding Company. Its subsidiaries include First Merchants Bank in Delaware County and Hamilton Counties, the

Madison Community Bank in Madison County, First United Bank in Henry County, Union County National Bank, The Randolph County Bank, the First National Bank of Portland in Jay County, Decatur Bank & Trust Company in Adams County, and Frances Slocum Bank in Wabash. The corporation previously announced the pending acquisition of Lafayette Bancorporation. The Corporation also operates First Merchants Insurance Services, a full-service property casualty, personal lines and healthcare insurer, headquartered in Muncie, Indiana. Mutual Federal Savings Bank is a wholly owned subsidiary of Mutual First Financial, Inc. and primarily services Delaware, Randolph, Kosciusko and Grant Counties in Indiana. The company stock is traded on the NASDAQ National Market under the symbol "MFSF". Americana Bancorp is a bank holding company. Through its wholly owned subsidiary, Americana Bank and Trust, the company offers an extensive line of banking services and provides a range of investments and securities products through branches in central Indiana and in the greater Cincinnati, Ohio area. As its name implies, Americana Bank and Trust also offers trust and investment management services, has an interest in Family Financial Life Insurance Company, and owns Americana Insurance Agency, a full-service insurance agency.