SEC Filing | First Merchants Corporation

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2004 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-17071 A. Full title of the plan and the address of the plan, if different from that of the Issuer named below: First Merchants Corporation Retirement Savings Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal office: First Merchants Corporation 200 East Jackson Street Muncie, Indiana 47305

First Merchants Corporation Retirement Savings Plan EIN 35-1544218 PN 002 Accountants' Report and Financial Statements December 31, 2004 and 2003

First Merchants Corporation Retirement Savings Plan December 31, 2004 and 2003 Contents Independent Accountants' Report..............................................1 Financial Statements Statements of Net Assets Available for Benefits............................2 Statements of Changes in Net Assets Available for Benefits.................3 Notes to Financial Statements..............................................4 Supplemental Schedule Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at End of Year...........................................................9 Exhibit Exhibit 23, Consent of Independent Registered Public Accounting Firm......10 Signature...................................................................11

[LETTERHEAD OF BKD LLP] Administrative Committee First Merchants Corporation Retirement Savings Plan Muncie, Indiana We have audited the accompanying statements of net assets available for benefits of First Merchants Corporation Retirement Savings Plan (Plan) as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years ended December 31, 2004 and 2003. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in net assets available for benefits for the years ended December 31, 2004 and 2003 in conformity with U. S. generally accepted accounting principles. The accompanying supplemental schedule is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. /s/ BKD, LLP Indianapolis, Indiana April 26, 2005 Federal Employer Identification Number: 44-0160260

First Merchants Corporation Retirement Savings Plan Statements of Net Assets Available for Benefits December 31, 2004 and 2003 2004 2003 --------------------------- Assets Investments Common stock $ 1,030,460 $ 619,177 Mutual funds 19,364,358 15,705,757 Collective investment fund 1,189,461 1,222,302 Money market funds 513,096 433,587 ------------ ------------ Total investments 22,097,375 17,980,823 Accrued Income Receivable 9,924 353 Cash 60,744 1,464 ------------ ------------ Total assets 22,168,043 17,982,640 Liabilities Excess contributions refund 15,042 -- ------------ ------------ Net Assets Available for Benefits $ 22,153,001 $ 17,982,640 ============ ============ See Notes to Financial Statements 2

First Merchants Corporation Retirement Savings Plan Statements of Changes in Net Assets Available for Benefits Years Ended December 31, 2004 and 2003 2004 2003 -------------------------- Investment Income Net appreciation in fair value of investments $ 1,701,917 $ 2,725,365 Interest and dividends 627,209 335,636 ------------ ------------ Net investment income 2,329,126 3,061,001 ------------ ------------ Contributions Participants 1,554,532 1,415,358 Employer 241,128 220,350 Rollovers 754,966 60,813 Transfer from another plan 220,791 413,545 ------------ ------------ 2,771,417 2,110,066 ------------ ------------ Total additions 5,100,543 5,171,067 Deductions - benefits paid to participants 930,182 1,015,584 ------------ ------------ Net Increase 4,170,361 4,155,483 Net Assets Available for Benefits, Beginning of Year 17,982,640 13,827,157 ------------ ------------ Net Assets Available for Benefits, End of Year $ 22,153,001 $ 17,982,640 ============ ============ See Notes to Financial Statements 3

First Merchants Corporation Retirement Savings Plan Notes to Financial Statements December 31, 2004 and 2003 Note 1: Description of Plan The following description of First Merchants Corporation Retirement Savings Plan (Plan) provides only general information. Participants should refer to the Plan Document and Summary Plan Description for a more complete description of the Plan's provisions, which are available from the plan administrator. General The Plan is a defined-contribution plan sponsored by First Merchants Corporation (Corporation) for the benefit of all employees who are age 18 or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Merchants Trust Company is the trustee of the Plan. PrimeVest Financial Services is the custodian for a majority of the Plan's assets. Contributions The Plan permits eligible employees through a salary deferral election to have the Corporation make annual contributions of up to the limit allowed by the Internal Revenue Code. Employee rollover contributions are also permitted. The Corporation makes matching contributions of its employees' salary deferral amounts of 25% of the first 5% of employees' eligible compensation. Company profit-sharing contributions are discretionary as determined by the Company's Board of Directors. Contributions are subject to certain limitations. The Plan document also includes an automatic deferral feature whereby a participant is treated as electing to defer 3% of eligible compensation unless the participant made an affirmative election otherwise. Participant Investment Account Options Investment account options available include various funds including a Corporation common stock fund. Each participant has the option of directing his contributions into any of the separate investment accounts and may change the allocation daily. Participant Accounts Each participant's account is credited with the participant's contribution, the Corporation's contribution and plan earnings. Allocations of Plan earnings are based on participant account balances, as defined. The benefits to which a participant is entitled is the benefit that can be provided from the participant's vested account. 4

First Merchants Corporation Retirement Savings Plan Notes to Financial Statements December 31, 2004 and 2003 Vesting Participants are immediately vested in their voluntary contributions and rollover contribution accounts plus earnings thereon. Vesting in the Corporation's contribution portion of their accounts plus earnings thereon is based on years of continuous service. A participant is fully vested after five years of credited service. The nonvested balance is forfeited upon termination of service. Forefeitures are used to reduce the Corporation's contribution. Payment of Benefits Upon termination of service, participants may elect to receive a lump-sum amount or installments equal to the value of their accounts. Withdrawals other than for termination are permitted under circumstances provided by the Plan. Plan Termination Although it has not expressed any intent to do so, the Corporation has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. Note 2: Summary of Significant Accounting Policies Method of Accounting The accompanying financial statements are prepared on the accrual method of accounting. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets and changes in net assets available for benefits. Actual results could differ from those estimates. Valuation of Investments and Income Recognition Quoted market prices, if available, are used to value investments. The Federated Capital Preservation Fund is carried at contract value. Money market funds are valued at cost, which approximates market. Investment in the Corporation's unrestricted common stock is valued at the quoted market price. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. 5

First Merchants Corporation Retirement Savings Plan Notes to Financial Statements December 31, 2004 and 2003 Plan Tax Status The Plan obtained its latest determination letter in September 2001, in which the Internal Revenue Service stated that the Plan and related trust, as then designed, were in compliance with the applicable requirements of the Internal Revenue Code and therefore not subject to tax. The Plan has been amended and restated since receiving the determination letter. However, the Plan administrator believes that the Plan and related trust are currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Payment of Benefits Benefit payments to participants are recorded upon distribution. Administrative Expenses Administrative expenses may be paid by the Corporation or the Plan, at the Corporation's discretion. Note 3: Investments The Plan's investments are held by PrimeVest Financial Services, Inc. and the Corporation. The investment contract included in Plan assets may be subject to withdrawal charges upon contract termination. Crediting interest rates on the guaranteed interest portion of the investment contract are determined by the issuer. The Plan's investments (including investments bought, sold, and held during the year) appreciated in fair value as follows: 2004 Net Appreciation Fair Value in Fair Value at End During Year of Year ---------------------------- Investments at estimated fair value as determined by quoted prices in an active market Common stock $ 107,194 $ 1,030,460 Mutual funds 1,594,723 19,364,358 Investments at contract value Federated Capital Preservation Fund -- 1,189,461 Investments at cost, which approximates market Money market funds -- 513,096 ------------ ------------ $ 1,701,917 $ 22,097,375 ============ ============ 6

First Merchants Corporation Retirement Savings Plan Notes to Financial Statements December 31, 2004 and 2003 2003 Net Appreciation Fair Value in Fair Value at End During Year of Year ---------------------------- Investments at estimated fair value as determined by quoted prices in an active market Common stock $ 76,195 $ 619,177 Mutual funds 2,649,170 15,705,757 Investments at contract value Federated Capital Preservation Fund -- 1,222,302 Investments at cost, which approximates market Money market funds -- 433,587 ------------ ------------ $ 2,725,365 $ 17,980,823 ============ ============ Interest and dividends realized on the Plan's investments for the years ended 2004 and 2003 were $627,209 and $335,636, respectively. Information on the Federated Capital Preservation Fund carried at contract value is as follows: 2004 2003 -------------------------- Average yield 3.72% 4.50% Crediting interest rate at December 31 3.41% 4.02% Fair value $ 1,175,000 $ 1,262,000 ----------- ----------- The fair values of individual investments that represented 5% or more of the Plan's assets were as follows: 2004 2003 -------------------------- American Funds Amcap Fund $ 3,524,022 $ 3,037,555 Franklin Short-Intermediate U. S. Government Securities Fund 1,198,797 1,146,707 Goldman Sachs Mid Cap Fund 2,050,028 -- MFS Value Fund 3,096,735 2,565,200 Oppenheimer Main Street Income and Growth Fund 1,651,649 1,337,599 PIMCO Total Return Fund 1,918,245 1,892,358 Oppenheimer Small Cap. Value Fund 1,487,941 989,621 Federated Capital Preservation Fund (at contract value) 1,189,461 1,222,302 American Century Equity Income Fund -- 1,394,376 7

First Merchants Corporation Retirement Savings Plan Notes to Financial Statements December 31, 2004 and 2003 Note 4: Party-in-Interest Transactions Party-in-interest transactions include those with fiduciaries or employees of the Plan, any person who provides services to the Plan, an employer whose employees are covered by the Plan, an employee organization whose members are covered by the Plan, a person who owns 50 percent or more of such an employer or employee association, or relatives of such persons. The Plan invests in First Merchants Corporation common stock. Activity at fair value was as follows: First Merchants Corporation Common Stock --------------- Balance, January 1, 2003 $ 397,275 Changes 221,902 ----------- Balance, December 31, 2003 619,177 Changes 411,283 ----------- Balance, December 31, 2004 $ 1,030,460 =========== The Corporation provides certain administrative services at no cost to the Plan. Note 5: Plan Amendments In September 2003, employees of Frances Slocum Bank (Frances Slocum Bank & Trust Company Profit Sharing Plan) were added to the Plan, and assets of $413,545 were transferred into the Plan. In February 2004, participants of a Commerce National Bank subsidiary 401(k) plan were transferred into the Plan. Assets transferred totaled $220,791. Note 6: Subsequent Events Effective March 1, 2005, the Plan was amended and restated to allow the employees of Lafayette Bank and Trust Company, Commerce National Bank, First Merchants Insurance Services and Indiana Title Insurance Company to become participants in the Plan. Approximately $10,500,000 was transferred into the Plan from these 401(k) plans and approximately 400 new participants were added to the Plan. The Plan's name was also changed to First Merchants Corporation Retirement Income and Savings Plan and the employer matching contribution changed to 50% of the first 6% of employees' eligible compensation. There were also additional employer contribution provisions added to the Plan. 8

Supplemental Schedule

First Merchants Corporation Retirement Savings Plan Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at End of Year December 31, 2004 Employer Identification Number: 35-1544218 Plan Number: 002 (b) (c) (e) Identity of Issue, Description of Investment Borrower, Lessor, or Including Par or Current (a) Similar Party Maturity Value Value - ----------------------------------------------------------------------------------------------------- Common Stock *First Merchants Corporation 36,412 shares $ 1,030,460 ------------ Mutual Funds AIM Small Cap Equity Fund 34,521 shares 441,875 American Funds Amcap. Fund 193,947 shares 3,524,022 American High Income Trust Fund 30,780 shares 388,134 Federated Max-Cap Index Fund 31,545 shares 769,692 Fidelity Advisor International Capital Appreciation Fund 5,764 shares 97,005 Franklin Short-Intermediate U. S. Government Securities Fund 117,760 shares 1,198,797 Franklin Templeton Foreign Fund 23,196 shares 285,316 Goldman Sachs Mid Cap Fund 61,729 shares 2,050,028 ING Index Plus Mid Cap Fund 33,980 shares 544,018 MFS Value Fund 134,000 shares 3,096,735 MFS Mid-Cap Growth Fund 81,195 shares 722,638 Oppenheimer Main Street Income and Growth Fund 46,578 shares 1,651,649 Oppenheimer Small Cap Value Fund 47,599 shares 1,487,941 PIMCO Foreign Bond Fund 5,297 shares 55,459 PIMCO Total Return Fund 179,779 shares 1,918,245 Putnam International Voyager Fund 14,399 shares 351,059 Putnam Small Cap Growth Fund 36,209 shares 781,745 ------------ 19,364,358 ------------ Collective Investment Fund Federated Capital Preservation Fund 118,946 shares 1,189,461 ------------ Money Market Fund Federated Prime Cash Obligations Fund 513,096 shares 513,096 ------------ $ 22,097,375 ============ * Party-in-interest 9

Exhibit 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the Registration Statement of First Merchants Corporation on Form S-8 (File Number 333-50484) of our report dated April 26, 2005, of our audit on the financial statements of First Merchants Corporation Retirement Savings Plan for the year ended December 31, 2004, which report is included in its Annual Report on Form 11-K. /s/ BKD, LLP BKD, LLP Indianapolis, Indiana June 27, 2005 10

Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Date: 06/29/05 By: /s/ Kimberly J. Ellington -------- ------------------------- Kimberly J. Ellington First Merchants Corporation Retirement Savings Plan 11