Muncie-based First Merchants Corp. (Nasdaq: FRME) is reporting first quarter net income of $16.2 million, compared to $13.6 million during the same period the previous year. The bank earlier this week completed the $14.5 million acquisition of C Financial Corp. in Ohio.

April 23, 2015

News Release

Muncie, Ind. — First Merchants Corporation (NASDAQ: FRME) has reported first quarter 2015 net income of $16.2 million, compared to $13.6 million during the same period in 2014. Earnings per share for the period totaled $.43 per share, an increase of $.05 per share, or 13.2 percent over the first quarter of 2014.

Total assets equaled $5.9 billion as of quarter-end and loans were $4.0 billion. The Corporation’s loan portfolio increased $349 million during the past twelve months. Of the increase, $204 million, or 5.6 percent, was the result of organic growth and $145 million resulted from the acquisition of Community Bank of Noblesville in November 2014.

Michael C. Rechin, President and Chief Executive Officer, stated, “First quarter 2015 results continue to represent effective execution of our core banking strategy. We are focused on growing organically while maintaining an emphasis on efficiency and expense control in this low interest rate environment.” Rechin also added, “Management was pleased to close our acquisition of Cooper State Bank on April 17th and confident about completing our integration of Community Bank of Noblesville this coming weekend.”

Net-interest income totaled $47 million for the quarter, and net-interest margin remained strong during the quarter totaling 3.78 percent, as yields on earning assets totaled 4.24 percent and the cost of supporting liabilities totaled .46 percent. When adjusted down for fair value accretion, net-interest margin totaled 3.61 percent for the quarter, 22 basis points less than the first quarter of 2014 total of 3.83 percent.

Non-interest income totaled $16.2 million for the quarter, an increase from first quarter of 2014 total of $15.4 million. Gains on sale of mortgage loans increased during the quarter by $766,000 reflecting lower rates. Non-interest expense totaled $41.2 million for the quarter, a decline of $1.9 million from the prior year. Of the decline in non-interest expense, salary and benefit expense accounted for $760,000 and other real estate owned and foreclosure expense accounted for $528,000.

The Corporation did not expense a provision for loan losses during the quarter despite net charge-offs of $1.2 million due to improvements in non-performing loans of $5.1 million, which now total $45.6 million. The allowance for loan losses totaled $62.8 million, or 1.58 percent of total loans and 1.87 percent of non-purchased loans. Non-performing assets declined by $5.4 million from year-end and now total $64.7 million.

As of March 31, 2015, the Corporation’s total risk-based capital ratio equaled 15.12 percent, common equity tier 1 capital ratio equaled 11.37 percent, and tangible common equity ratio totaled 9.31 percent.

CONFERENCE CALL

First Merchants Corporation will conduct a 1st quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, April 23, 2015.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's first quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until May 24, 2015. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529 or for International participants, dial +1 412-317-0088. The replay passcode is 10062979.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme150423.html during the time of the call. A replay of the web cast will be available until April 23, 2016.

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

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation is comprised of First Merchants Bank, N.A., which also operates as Lafayette Bank & Trust, Commerce National Bank, and First Merchants Trust Company as divisions of First Merchants Bank, N.A. First Merchants Corporation also operates First Merchants Insurance Group, a full-service property casualty, personal lines, and healthcare insurance agency.

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

Source: First Merchants Corp.

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